Berrington Corp. v. State

to do business here and therefore are member insurers of the
Guaranty Association. Future First was not, and its PRA’s are
not covered by the Act.
Our conclusion that Future First is not a “member insurer”
under the Act is dispositive of this appeal, and therefore,
we need not address the Guaranty Association’s remaining
assignments of error on cross-appeal or plaintiffs’ assignments
of error.
CONCLUSION
[7] We conclude that the district court erred in concluding
that Future First was a “member insurer” under the Act. But
where the record adequately demonstrates that the decision of
the trial court is correct, although such correctness is based
on a ground or reason different from that assigned by the
trial court, an appellate court will affirm.23 Based on the fore-
going reasons, we affirm the district court’s order granting the
Guaranty Association’s motion for summary judgment.
A ffirmed.
miller-lermAn, J., participating on briefs.
Wright, J., not participating.
23 In re Estate of Lamplaugh, 270 Neb. 941, 708 N.W.2d 645 (2006).
BeRRINGtON CORP. v. StAte 	765
Cite as 277 Neb. 765
Berrington C orporAtion, doing Business As eldorAdo
hills golf C luB, AppellAnt, v. stAte of neBrAskA
depArtment of revenue And douglAs A. eWAld,
neBrAskA stAte tAx C ommissioner , Appellees.
765 N.W.2d 448
Filed May 15, 2009. 	No. S-08-580.
1. Administrative Law: Final Orders: Appeal and Error. Under the Administrative
Procedure Act, Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 2008), an appellate
court may reverse, vacate, or modify a district court’s judgment or final order for
errors appearing on the record.
2. Administrative Law: Judgments: Appeal and Error. When reviewing an order
of a district court under the Administrative Procedure Act for errors appearing on
the record, the inquiry is whether the decision conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious, nor unreasonable.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:52 AM CST

3. Administrative Law: Statutes: Appeal and Error. the interpretation of statutes
and regulations presents questions of law, in connection with which an appellate
court has an obligation to reach an independent conclusion irrespective of the
decision made by the court below.
4. Taxation: Presumptions: Proof. An exemption from taxation is never presumed,
and the burden of showing entitlement to a tax exemption is on the party claiming
the exemption.
5. Estoppel: Words and Phrases. equitable estoppel is a bar which precludes a
party from denying or asserting anything to the contrary of those matters estab-
lished as the truth by his own deeds, acts, or representations.
6. Political Subdivisions: Estoppel: Equity. the State and its political subdivi-
sions can be equitably estopped, but the doctrine of equitable estoppel will not
be invoked against a governmental entity except under compelling circumstances
where right and justice so demand; in such cases, the doctrine is to be applied
with caution and only for the purpose of preventing manifest injustice.
7. Estoppel. the elements of equitable estoppel are, as to the party estopped: (1)
conduct which amounts to a false representation or concealment of material facts,
or at least which is calculated to convey the impression that the facts are other-
wise than, and inconsistent with, those which the party subsequently attempts to
assert; (2) the intention, or at least the expectation, that such conduct shall be
acted upon by, or influence, the other party or other persons; and (3) knowledge,
actual or constructive, of the real facts. As to the other party, the elements are: (1)
lack of knowledge and of the means of knowledge of the truth as to the facts in
question; (2) reliance, in good faith, upon the conduct or statements of the party
to be estopped; and (3) action or inaction based thereon of such a character as
to change the position or status of the party claiming the estoppel, to his or her
injury, detriment, or prejudice.
Appeal from the District Court for Lancaster County: steven
d. Burns, Judge. Affirmed.
David L. Buelt, George t. Blazek, and Carlos e. Noel, of
ellick, Jones, Buelt, Blazek & Longo, for appellant.
Jon 	Bruning, Attorney 	General, 	and 	L. 	Jay 	Bartel 	for
appellees.
heAviCAn, C.J., Wright, C onnolly, gerrArd, stephAn, and
mCC ormACk, JJ.
stephAn, J.
Under Nebraska law, admission charges are subject to sales
tax, but membership dues are not.1 the principal issue in this
1 See, Neb. Rev. Stat. § 77-2703 (Cum. Supp. 2004); 316 Neb. Admin.
Code, ch. 1, §§ 044.01 and 044.02 (1993).
766 	277 NeBRASkA RePORtS

case is whether amounts paid by members of the eldorado
Hills Golf Club (eldorado Hills) in Norfolk, Nebraska, to the
corporation which operates that facility are admission charges
or membership dues under applicable regulatory definitions.
BACkGROUND
Berrington Corporation (Berrington) is an S corporation
with offices in Omaha, Nebraska. It operates eldorado Hills, an
18-hole golf course and club with a related restaurant, lounge,
snack bar, and golf shop located in Norfolk. the general pub-
lic pays green fees to play the golf course, and eldorado Hills
offers family, individual, senior, student, and other categories
of “memberships.”
At all relevant times, Berrington’s shareholders were eric
and Anne Waddington and Mark and Marjorie Mooberry. the
Waddingtons owned 70 percent of Berrington’s stock, and the
Mooberrys owned the remaining 30 percent. No other person
held an equity or ownership interest in the corporation. the
Waddingtons and the Mooberrys were the sole members of
Berrington’s board of directors. No person other than these
four individuals participated in the election of the board of
directors during the audit period. eric Waddington was the
president and treasurer of the corporation, and Mark Mooberry
was the secretary. Mark Mooberry was given authority by
Berrington’s board of directors to oversee and manage all
aspects of the operation of eldorado Hills. All operating obli-
gations and expenses were paid from a bank account held
by Berrington. Only eric Waddington and Mark Mooberry
had signatory authority on the account. Berrington adopted
corporate bylaws, which could only be amended by action of
the shareholders.
Persons who paid membership dues voted for and elected
other members to serve on an advisory board, which served
as a means by which persons considered to be members of
eldorado Hills could communicate with Berrington on various
issues involving the operation of the golf course and related
facilities. the advisory board was unincorporated and had no
operating bylaws or constitution. It did, however, participate at
least in part in the adoption and amendment of the eldorado
Hills’ rules and regulations.
BeRRINGtON CORP. v. StAte 	767
Cite as 277 Neb. 765

the advisory board, on behalf of the members, also worked
closely with Berrington with respect to various issues pertain-
ing to the operation of eldorado Hills. the advisory board
participated in the budget process, helped set the amounts for
membership dues, and assisted in the creation of the schedule
for the golf course. the advisory board also assisted Berrington
in determining the sequence and pace of improvements to the
golf course and facilities and helped maintain and beautify the
golf course. the advisory board influenced Berrington’s deci-
sion to permit member-owned golf carts, despite the fact that
the use of such carts affected Berrington’s revenue from cart
rentals. the advisory board was involved in recruitment and
retention of members and collection of delinquent member-
ship dues.
After conducting an audit, the Nebraska Department of
Revenue 	issued 	a 	deficiency 	determination 	to 	Berrington
for the period March 1, 2002, through February 28, 2005.
Berrington was assessed $40,894.88 in back taxes, interest in
the amount of $3,925.12, and a penalty of $4,309.92, for a total
of $49,129.92. the major component of the deficiency was
the auditor’s determination that membership dues received by
Berrington were actually admission charges which were subject
to sales tax. Berrington filed a petition for redetermination,
protesting the deficiency determination and asserting a claim
for refund of sales taxes it had paid on snack food not intended
for consumption on its premises.
After an evidentiary hearing conducted by a Department
of Revenue hearing officer, the tax Commissioner affirmed
the 	deficiency 	assessment, 	reasoning 	that 	the 	“member-
ships” were actually taxable admissions because members of
eldorado Hills had no authority to hold office in Berrington,
to vote for officers of Berrington, or to change the constitu-
tion and bylaws of Berrington. the commissioner rejected
Berrington’s claim that the department was equitably estopped
from taxing eldorado Hills memberships, as Berrington had
contended that the department had taken an inconsistent posi-
tion in a 1994 audit of an Omaha golf club in which Rick
Waddington had held an ownership interest. Finally, the com-
missioner denied Berrington’s claim for a refund of sales tax
768 	277 NeBRASkA RePORtS

on snack foods, finding that there was no showing that the
snack foods were intended to be consumed off the premises
of eldorado Hills.
Pursuant to the judicial review provisions in the Administrative
Procedure Act,2 Berrington petitioned for review in the district
court for Lancaster County. that court affirmed the reasoning
and decision of the tax Commissioner, and Berrington filed
this timely appeal. We moved the appeal to our docket pursuant
to our statutory authority to regulate the caseloads of the appel-
late courts of this state.3
ASSIGNMeNtS OF eRROR
Berrington assigns, restated and consolidated, that the dis-
trict court erred in finding (1) that the membership dues
were admission charges subject to sales tax, (2) that equitable
estoppel does not apply to the facts of this case, and (3) that
Berrington was not entitled to a refund for sales tax it paid on
snack food.
StANDARD OF ReVIeW
[1,2] Under the Administrative Procedure Act,4 an appellate
court may reverse, vacate, or modify a district court’s judg-
ment or final order for errors appearing on the record.5 When
reviewing an order of a district court under the Administrative
Procedure Act for errors appearing on the record, the inquiry
is whether the decision conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.6
[3] the interpretation of statutes and regulations presents
questions of law, in connection with which an appellate court
2 See Neb. Rev. Stat. § 84-917 (Reissue 2008).
3 Neb. Rev. Stat. § 24-1106(3) (Reissue 2008).
4 See Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 2008).
5 Intralot, Inc. v. Nebraska Dept. of Rev., 276 Neb. 708, 757 N.W.2d 182
(2008); Orchard Hill Neighborhood v. Orchard Hill Mercantile, 274 Neb.
154, 738 N.W.2d 820 (2007).
6 Walsh v. State, 276 Neb. 1034, 759 N.W.2d 100 (2009); Nothnagel v. Neth,
276 Neb. 95, 752 N.W.2d 149 (2008).
BeRRINGtON CORP. v. StAte 	769
Cite as 277 Neb. 765

has an obligation to reach an independent conclusion irrespec-
tive of the decision made by the court below.7
ANALYSIS
A re memBerships tAxABle?
We note that the applicable tax statutes have been amended
without substantive change during the time period covered by
the audit; thus, we will cite to the most current version in effect
on February 28, 2005, which is the end of the audit period.8
During the years covered by the Berrington audit, Nebraska
imposed a sales tax on “gross receipts,”9 defined to include
“the sale of admissions which means the right or privilege to
have access to or to use a place or location.”10 Although the
statutory language was silent on the taxability of “member-
ships,” the Department of Revenue duly adopted and promul-
gated regulations which distinguished taxable admissions from
nontaxable memberships as follows:
044.01 the term “admission”, as used herein, means
the right or privilege to have access to or use a place or
location where amusement, entertainment or recreation
is provided. the gross receipts from the sale of admis-
sions, including surcharges, are subject to sales tax. this
includes season or subscription tickets for specific occa-
sions or for multiple occasions, either limited or unlimited
during a period of time.
044.02 the term “membership”, as used herein, means
having all the participation rights of belonging to an
organization which shall include, but are not necessarily
limited to, the voting for officers, the holding of office,
and the ability to change the constitution and bylaws. the
payment or receipt of membership dues [is] exempted
from the sales and use tax. Membership shall not include
7 State ex rel. Musil v. Woodman, 271 Neb. 692, 716 N.W.2d 32 (2006).
8 See, Tyson Fresh Meats v. State, 270 Neb. 535, 704 N.W.2d 788 (2005);
Lackawanna Leather Co. v. Nebraska Dept. of Rev., 259 Neb. 100, 608
N.W.2d 177 (2000).
9 § 77-2703(1).
10 Neb. Rev. Stat. § 77-2701.16(11) (Cum. Supp. 2004).
770 	277 NeBRASkA RePORtS

any charge that is intended to allow admission to a place
or event, or series of events, rather than to confer partici-
pation rights.11
Applying 	these 	regulations, 	the 	department 	concluded
that memberships sold by eldorado Hills were taxable as
“admissions,” because the memberships did not grant con-
current rights to vote for officers of Berrington, to hold
office in Berrington, or to change the constitution and bylaws
of Berrington. Berrington contends that the focus of this
inquiry should be on the members’ relationship with eldorado
Hills, not with Berrington. Berrington contends, restated, that
because members, through their advisory board, have a close
working relationship with eldorado Hills management and are
able to influence policies and operations, they have participa-
tion rights which distinguish their memberships from taxable
admission fees.
the key language of the applicable regulation is “all the par-
ticipation rights of belonging to an organization.” the “orga-
nization” in this case can only be Berrington, the recipient
of revenue generated by the operation of eldorado Hills and
the party liable for any sales tax payable on such revenue.
eldorado Hills has no separate legal organization or identity
distinct from Berrington. the advisory board has no separate
legal identity and is not the recipient of membership dues.
thus, the question turns on whether persons considered “mem-
bers” of eldorado Hills have participation rights with respect
to Berrington. It is clear from the record that they do not. the
payment of “membership” dues does not entitle a member to
hold office in Berrington, vote for officers of Berrington, or
change Berrington’s organizational documents. the members’
collective ability to influence management decisions through
the advisory board does not constitute a right to participate in
the legal or business affairs of Berrington. While it is no doubt
a sound business practice for Berrington to accommodate the
wishes of eldorado Hills members whenever possible, it is
under no legal obligation to do so. Persons paying membership
dues acquire certain rights to use the golf course and facilities
11 316 Neb. Admin. Code, ch. 1, §§ 044.01 and 044.02 (emphasis supplied).
BeRRINGtON CORP. v. StAte 	771
Cite as 277 Neb. 765

at eldorado Hills, but they acquire no legally cognizable par-
ticipation rights with respect to Berrington. For example, mem-
bers whose dues give them the right to use the golf course
might unanimously agree that certain improvements should be
made to the course, but they would have no right or power to
require Berrington to undertake the improvements if it chose
not to do so.
Berrington argues that we should consider a 2005 amend-
ment to § 77-2701.16(11) as an aid to interpreting the regula-
tion upon which the department based its determination. the
amendment added in part the following language to the statute:
“An admission includes a membership that allows access to
or use of a place or location, but which membership does not
include the right to hold office, vote, or change the policies
of the organization.”12 this amendment did not become effec-
tive until after the audit period at issue in this case, and we
therefore do not consider it. the regulation which was properly
adopted and filed at the time of the audit period had the effect
of statutory law13 and constitutes the substantive law appli-
cable to this case. Under its plain language, the amounts paid
by eldorado Hills members to Berrington constitute taxable
admission charges, not exempt membership dues.
[4] Berrington also argues that the audit was arbitrary and
capricious and that the department and the district court failed
to independently analyze the pertinent facts, thereby placing
upon Berrington “the burden to prove the assessment wrong.”14
We need not comment upon the manner in which the audit
was conducted, because it is clear that a full factual record
was made upon Berrington’s petition for redetermination, and
it is likewise clear that both the department and the district
court conducted a reasoned analysis of the issues presented
based upon the facts included in that record. Moreover, there
is no merit to Berrington’s argument that some deficiency
in the audit unfairly shifted the burden of proof. Under the
applicable regulation, “[t]he payment or receipt of membership
12 2005 Neb. Laws, L.B. 216, § 4.
13 See Lackawanna Leather Co. v. Nebraska Dept. of Rev., supra note 8.
14 Brief for appellant at 26.
772 	277 NeBRASkA RePORtS

dues [is] exempted from the sales and use tax.”15 An exemp-
tion from taxation is never presumed, and the burden of show-
ing entitlement to a tax exemption is on the party claiming
the exemption.16
is depArtment equitABly estopped from C lAiming
thAt memBership dues A re tAxABle?
Berrington argues that the district court erred in reject-
ing its claim that the department is estopped from taxing
the dues paid by members of eldorado Hills based upon the
department’s prior determination that membership dues paid
to another golf club were not taxable. Berrington contends that
the two organizations have essentially the same legal struc-
ture. the tax Commissioner and the district court determined
that there were significant differences in the structure of the
two organizations.
[5,6] We need not compare and contrast the two organiza-
tional structures. even if we assume arguendo that they are
the same or similar and the department made inconsistent
determinations of taxability, the elements of equitable estoppel
are not established on this record. equitable estoppel is a bar
which precludes a party from denying or asserting anything
to the contrary of those matters established as the truth by his
own deeds, acts, or representations.17 the State and its politi-
cal subdivisions can be equitably estopped, but the doctrine of
equitable estoppel will not be invoked against a governmental
entity except under compelling circumstances where right and
justice so demand; in such cases, the doctrine is to be applied
with caution and only for the purpose of preventing mani-
fest injustice.18
15 316 Neb. Admin. Code, ch. 1, § 044.02.
16 See, Lackawanna Leather Co. v. Nebraska Dept. of Rev., supra note
8; Pittman v. Sarpy Cty. Bd. of Equal., 258 Neb. 390, 603 N.W.2d 447
(1999).
17 State on behalf of Hopkins v. Batt, 253 Neb. 852, 573 N.W.2d 425
(1998).
18 See, Rauscher v. City of Lincoln, 269 Neb. 267, 691 N.W.2d 844 (2005);
Estate of McElwee v. Omaha Transit Auth., 266 Neb. 317, 664 N.W.2d 461
(2003).
BeRRINGtON CORP. v. StAte 	773
Cite as 277 Neb. 765

[7] the elements of equitable estoppel are, as to the party
estopped: (1) conduct which amounts to a false representation
or concealment of material facts, or at least which is calculated
to convey the impression that the facts are otherwise than, and
inconsistent with, those which the party subsequently attempts
to assert; (2) the intention, or at least the expectation, that such
conduct shall be acted upon by, or influence, the other party or
other persons; and (3) knowledge, actual or constructive, of the
real facts.19 As to the other party, the elements are: (1) lack of
knowledge and of the means of knowledge of the truth as to
the facts in question; (2) reliance, in good faith, upon the con-
duct or statements of the party to be estopped; and (3) action
or inaction based thereon of such a character as to change the
position or status of the party claiming the estoppel, to his or
her injury, detriment, or prejudice.20
there is nothing in the record to suggest that any action of
the department during the prior audit was a false representation
or concealment of material facts, nor was any action “calcu-
lated to convey” an impression that the regulations would be
applied in a similar manner at eldorado Hills. Nor does the
record reflect the inability of Berrington to ascertain the truth
or falsity of any pertinent facts. the record thus supports the
determination of the district court that Berrington failed to
carry the burden of proof on its equitable estoppel claim.
is Berrington entitled to refund of
sAles tAx pAid on snACk foods?
Berrington claimed it was entitled to a refund of $3,228.04
due to taxes it erroneously paid on the sale of snacks that
were not intended for immediate consumption. the applicable
Department of Revenue regulations provided:
087.01A(4) Snack Foods. Snack foods are exempt
unless the snack foods are sold by an eating establish-
ment, concessionaire, or vending machine or are a part
19 J.R. Simplot Co. v. Jelinek, 275 Neb. 548, 748 N.W.2d 17 (2008); Pennfield
Oil Co. v. Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006).
20 Id.
774 	277 NeBRASkA RePORtS

of a meal. examples of snack foods are potato chips, soft
drinks, candy, chewing gum, cookies, and donuts.
. . . .
087.02A(1) Any food sold through a vending machine
is taxed.
. . . .
087.02A(3) Any food sold by a concessionaire is
taxed, except for certain sales by schools and school
groups . . . .21
In support of its refund claim, Berrington’s accountant pre-
pared an “estimated Sales tax Overpayment Analysis For
Years ended December 31, 2002, 2003 & 2004.” the esti-
mate was based on six invoices which did not identify what
products were sold, whether they were sold for immediate
consumption, where they were sold, or even whether they
were sold by Berrington at all. the district court found that
Berrington did not carry its burden of proving that the snack
foods were not sold through its restaurant as part of a meal, by
its snack shop, or through a vending machine. We agree that
these facts essential to the refund claim were not established
by the evidence.
CONCLUSION
For the reasons discussed, we conclude that the decision
of the district court affirming the determination of the tax
Commissioner in all respects conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious,
nor unreasonable. Accordingly, we affirm the judgment of the
district court.
A ffirmed.
miller-lermAn, J., participating on briefs.
21 316 Neb. Admin. Code, ch. 1, §§ 087.01A and 087.02A (1998).
BeRRINGtON CORP. v. StAte 	775
Cite as 277 Neb. 765