United States Cold Storage v. City of La Vista

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	579
Cite as 285 Neb. 579
to reimbursement for the expense of the surgery itself. An
appellate court is not obligated to engage in an analysis
that is not necessary to adjudicate the case and controversy
before it.16
CONCLUSION
Because Gammel’s opinions, along with other evidence, pro-
vided sufficient competent evidence to support a finding that
Pearson’s knee replacement surgery was not the result of the
work-related accident, the Workers’ Compensation Court did
not err in finding that Pearson’s surgery was not compensable
under § 48-120. In so holding, the compensation court was not
acting contrary to the original award but was enforcing the
award’s plain language. Finding no error, we affirm the order
of the review panel affirming the denial of compensation for
Pearson’s knee replacement surgery.
A ffirmed.
16 Selma Development v. Great Western Bank, ante p. 37, 825 N.W.2d 215
(2013).
United StAteS C old StorAge, inC., A new JerSey CorporAtion,
individUAlly And on behAlf of All otherS SimilArly
SitUAted, Appellee And CroSS-AppellAnt, v. C ity of
lA viStA, A nebrASkA mUniCipAl CorporAtion,
et Al., AppelleeS And CroSS-AppelleeS, And
SAnitAry And improvement diStriCt no. 59
of SArpy C oUnty, nebrASkA, A nebrASkA
mUniCipAl CorporAtion, AppellAnt.
831 N.W.2d 23
Filed March 29, 2013. 	No. S-12-267.
1. Annexation: Ordinances: Equity: Appeal and Error. An action to determine
the validity of an annexation ordinance and enjoin its enforcement sounds in
equity. On appeal from an equity action, an appellate court decides factual ques-
tions de novo on the record and, as to questions of both fact and law, is obligated
to reach a conclusion independent of the trial court’s determination.
2. Statutes: Appeal and Error. Statutory interpretation is a question of law, which
an appellate court resolves independently of the trial court.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:39 AM CST

580 	285 NEBRASKA REPORTS
3. Constitutional Law: Appeal and Error. A constitutional issue not presented to
or passed upon by the trial court is not appropriate for consideration on appeal.
4. Municipal Corporations: Annexation. A municipality may not annex property
for revenue purposes only.
5. Equity: Appeal and Error. In an equity action, when credible evidence is in
conflict on material issues of fact, an appellate court considers and may give
weight to the fact the trial court observed the witnesses and accepted one version
of the facts over another.
6. Legislature. The Legislature is free to create and abolish rights so long as no
vested right is disturbed.
7. Constitutional Law: Words and Phrases. The type of right that vests can be
generally described as an interest which it is proper for the state to recognize and
protect and of which the individual may not be deprived arbitrarily without injus-
tice. To be considered a vested right, the right must be fixed, settled, absolute,
and not contingent upon anything.
8. Constitutional Law: Property. With respect to property, a right is considered
to be vested if it involves an immediate fixed right of present or future enjoy-
ment and an immediate right of present enjoyment, or a present fixed right of
future enjoyment.
9. Constitutional Law: Property: Legislature. A vested right must be something
more than a mere expectation based upon an anticipated continuance of the exist-
ing law; it must have become a title, legal or equitable, to the present or future
enjoyment of property. In essence, whether the Legislature acted beyond its
power in affecting a right can only be determined after examining the nature of
the alleged right and the character of the change in the law.
10. Constitutional Law: Statutes: Intent: Presumptions. A vested right can be cre-
ated by statute. But it is presumed that a statutory scheme is not intended to create
vested rights, and a party claiming otherwise must overcome that presumption.
11. 	Constitutional Law: Taxation. As a general rule, exemptions from taxation do
not confer vested rights.
12. Contracts: Statutes: Legislature: Intent: Presumptions. Although a statute
can be the source of a contractual right, a contract will be found to exist only
if the statutory language evinces a clear and unmistakable indication that the
Legislature intends to bind itself contractually. The general rule is that rights
conferred by statute are presumed not to be contractual.
13. Appeal and Error. An appellate court may, at its option, notice plain error.
14. Appeal and Error: Words and Phrases. Plain error exists where there is an
error, plainly evident from the record but not complained of at trial, which preju-
dicially affects a substantial right of a litigant and is of such a nature that to leave
it uncorrected would cause a miscarriage of justice or result in damage to the
integrity, reputation, and fairness of the judicial process.
Appeal from the District Court for Sarpy County: mAx
kelCh, Judge. Affirmed.
Robert J. Huck and Scott D. Jochim, of Croker, Huck, Kasher,
DeWitt, Anderson & Gonderinger, L.L.C., for appellant.

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	581
Cite as 285 Neb. 579
Bryan S. Hatch, of Stinson, Morrison & Hecker, L.L.P., for
appellee United States Cold Storage, Inc.
Gerald 	L. 	Friedrichsen 	and 	William 	M. 	Bradshaw, 	of
Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., for
appellees City of La Vista et al.
heAviCAn, C.J., wright, C onnolly, StephAn, mCC ormACk,
and CASSel, JJ.
StephAn, J.
In this appeal, United States Cold Storage, Inc. (Cold
Storage), and Sanitary and Improvement District No. 59 of
Sarpy County (SID 59) contend that the district court for Sarpy
County erred in rejecting their challenges to separate annexa-
tion ordinances enacted by the City of La Vista. We affirm the
judgment of the district court.
I. BACKGROUND
Cold Storage is a New Jersey corporation that owns and
operates a public refrigerator warehouse facility located in
Sarpy County, Nebraska. The City of La Vista is a Nebraska
municipal corporation of the first class located in Sarpy County.
Doug Kindig is the mayor of La Vista, and Brenda Carlisle,
Ron Sheehan, Alan Ronan, Mark Ellerbeck, Mike Crawford,
Terrilyn Quick, Kelly Sell, and Anthony Gowan are members
of the La Vista City Council. We shall refer to the city and its
officers collectively as “La Vista.”
In 1969, the owner of a contiguous 210-acre tract of
land in Sarpy County petitioned the Sarpy County Board of
Commissioners to designate the tract as an industrial area and
the board complied.1 Under § 13-1111, an industrial area is
land “used or reserved for the location of industry.” At the time
of the designation, La Vista’s zoning jurisdiction did not reach
any part of the industrial area tract. By 1970, the industrial area
had an assessed value of more than $100,000. Cold Storage
acquired four lots in the industrial area in 1971 and has oper-
ated its business there since that time.
1 See Neb. Rev. Stat. §§ 13-1111 to 13-1120 (Reissue 2012) (formerly Neb.
Rev. Stat. §§ 19-2501 to 19-2508 (Cum. Supp. 1969)).

582 	285 NEBRASKA REPORTS
SID 59 was created in 1971 to provide utilities and services
to the industrial area. The area of SID 59 is greater than, but
includes, the entire industrial area.
On October 6, 2009, La Vista resolved to annex SID 59. On
October 8, it sent written notices to the property owners within
SID 59 of an October 22 city planning commission public
hearing on the proposed annexation. On November 3, La Vista
sent written notice to the property owners within SID 59 of a
November 17 city council hearing also regarding the annexa-
tion of SID 59. On December 1, after conducting the public
hearings, La Vista approved an ordinance (ordinance 1107)
purporting to annex SID 59 in its entirety.
On December 16, 2009, Cold Storage filed a class action
complaint challenging the validity of ordinance 1107 on behalf
of itself and all landowners in SID 59. Named defendants were
La Vista and SID 59. The complaint alleged that ordinance
1107 was invalid because (1) La Vista failed to comply with
statutory notice requirements when adopting it, (2) the annexa-
tion was for revenue purposes only, and (3) state law prohib-
ited the annexation of the industrial area within SID 59.
On January 18, 2011, while Cold Storage’s challenge to
the validity of ordinance 1107 was pending in district court,
La Vista directed its planning commission to consider the
annexation of only a portion of SID 59; specifically, that por-
tion that did not include the industrial area. On April 19, after
giving proper statutory notice of this proposed annexation,
La Vista adopted an ordinance (ordinance 1142) purporting
to annex the portion of SID 59 that did not include the indus-
trial area.
On April 27, 2011, SID 59 filed a cross-claim in the original
action filed by Cold Storage. The cross-claim named La Vista
as defendant and challenged the validity of ordinance 1142.
Specifically, the cross-claim asserted that La Vista was barred
by Neb. Rev. Stat. § 31-765 (Reissue 2008) from attempting
a partial annexation of SID 59 via ordinance 1142 while Cold
Storage’s challenge to the validity of La Vista’s total annexation
of SID 59 via ordinance 1107 was pending in the courts.
A bench trial on all claims was held in January 2012. On
March 6, the district court entered orders finding in favor of

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	583
Cite as 285 Neb. 579
La Vista on all claims. Both Cold Storage and SID 59 filed
timely notices of appeal, and we granted SID 59’s petition to
bypass the Court of Appeals. Because SID 59 filed the initial
notice of appeal, Cold Storage is designated as an appel-
lee asserting a cross-appeal pursuant to Neb. Ct. R. App. P.
§ 2-101(C) (rev. 2010).
II. ASSIGNMENTS OF ERROR
SID 59 assigns, restated and consolidated, that ordinance
1142 is invalid because § 31-765 prohibits a city from pass-
ing a partial annexation ordinance involving the same area
already included within a prior total annexation ordinance
when the validity of the prior ordinance has not been finally
determined.
Cold Storage assigns that the district court, with respect to
ordinance 1107, erred in (1) finding La Vista properly com-
plied with the statutory notice provisions, (2) not finding Neb.
Rev. Stat. § 19-5001(5) (Reissue 2012) unconstitutional, (3)
finding La Vista could annex the industrial area without the
consent of a majority in value of its property owners, (4) fail-
ing to find a 1991 amendment to § 13-1115 unconstitutional as
special legislation, and (5) failing to find that La Vista annexed
SID 59 for revenue purposes only.
III. STANDARD OF REVIEW
[1] An action to determine the validity of an annexation
ordinance and enjoin its enforcement sounds in equity.2 On
appeal from an equity action, an appellate court decides factual
questions de novo on the record and, as to questions of both
fact and law, is obligated to reach a conclusion independent of
the trial court’s determination.3
[2] Statutory interpretation is a question of law, which an
appellate court resolves independently of the trial court.4
2 County of Sarpy v. City of Papillion, 277 Neb. 829, 765 N.W.2d 456
(2009); City of Elkhorn v. City of Omaha, 272 Neb. 867, 725 N.W.2d 792
(2007).
3 Id.
4 Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012); Engler
v. State, 283 Neb. 985, 814 N.W.2d 387 (2012).

584 	285 NEBRASKA REPORTS
IV. ANALYSIS
1. ordinAnCe 1107
In its cross-appeal, Cold Storage asserts five reasons why
the district court erred in upholding the validity of ordinance
1107, by which La Vista sought to annex the entirety of SID
59. We shall address each in turn.
(a) Statutory Notice Requirements
Cold 	Storage 	contends 	that 	ordinance 	1107 	is 	invalid
because La Vista failed to comply with the statutory notice
requirements set forth in § 19-5001. These requirements were
enacted in 2009.5 The city’s community development director
testified that prior law did not require notice to landowners
prior to the commencement of annexation proceedings and
that this was her first attempt to comply with the new statu-
tory requirements.
According to § 19-5001(1), “A city of the first or second
class or village shall provide written notice of a proposed
annexation to the owners of property within the area proposed
for annexation . . . .” Section 19-5001(2) requires that notice
be sent “by regular United States mail” postmarked “at least
ten working days prior to the planning commission’s public
hearing” on the annexation and that a “certified letter” be
sent to the clerk of any affected sanitary and improvement
district. Section 19-5001(2) requires that such notice include
“the telephone number of the pertinent city or village official
and an electronic mail or Internet address if available.” Section
19-5001(3) requires that a second notice be sent to the same
parties “postmarked at least ten working days prior to the pub-
lic hearing of the city council or village board on the annexa-
tion.” This notice also must include the telephone number “and
an electronic mail or Internet address if available.”
It is undisputed that La Vista did not strictly comply with
these notice requirements. It sent notices of the public hear-
ing of the planning commission on October 8, 2009, which
date was fewer than 10 working days prior to the hearing on
October 22. It then sent notices of the city council meeting
5 See 2009 Neb. Laws, L.B. 495.

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	585
Cite as 285 Neb. 579
on November 3, which date was fewer than 10 working days
prior to the meeting on November 17. La Vista also sent the
certified letter to an individual that was not the clerk of SID
59. In addition, the notices included the telephone number of
the pertinent city official but did not also include an electronic
mail or Internet address.
At trial, city officials explained that the notices were slightly
late because they relied on an electronic calendar to deter-
mine the 10-day notice period and that the calendar used did
not consider either the Columbus Day holiday on October 12
or the Veterans Day holiday on November 11. La Vista also
presented evidence that the clerk of SID 59 had actual notice
of the planning commission hearing and attended it. And the
community development director testified that she misread the
statute and thought it required a telephone number or an e-mail
or Internet address.
La Vista contends that its failure to strictly comply with
the 	requirements 	of 	§ 	19-5001(1) 	to 	(3) 	is 	forgiven 	by
§ 19-5001(5), which provides in part:
Except for a willful or deliberate failure to cause notice
to be given, no annexation decision made by a city of
the first or second class or village to accept or reject a
proposed annexation, either in whole or in part, shall be
void, invalidated, or affected in any way because of any
irregularity, defect, error, or failure on the part of the city
or village or its employees to cause notice to be given as
required by this section if a reasonable attempt to comply
with this section was made.
The district court accepted this argument, finding the evidence
showed that La Vista’s actions were not deliberate or will-
ful and that it made reasonable efforts to comply with the
notice provisions.
Based upon our de novo review of the record, we agree.
La Vista offered a reasonable explanation as to why the
notices were not sent 10 working days prior to the hearings. It
is also clear that the notices were sent 9 working days prior to
the hearing, and thus everyone affected had reasonable notice.
Although the clerk of SID 59 did not receive the proper writ-
ten notice, he had actual notice of and attended the planning

586 	285 NEBRASKA REPORTS
commission hearing, and thus there was no prejudice to SID
59. In addition, the items that were omitted from the notices,
including e-mail and Internet addresses, were relatively minor,
in that a telephone number was provided and thus there was
an expedient way to contact the relevant official. Although
clearly La Vista made numerous errors with respect to the
notices, nothing in the evidence supports any finding that
it did so willfully or deliberately. The situation before us
appears to be precisely the type of notice disparity meant
to be resolved by § 19-5001(5). We therefore conclude that
ordinance 1107 is not void for lack of notice to the affected
property owners.
(b) Constitutionality of § 19-5001(5)
[3] In its brief on cross-appeal, Cold Storage argues that
§ 19-5001(5) is unconstitutional because it allows a city to
annex an area without strictly complying with the annexation
statutes. It argues that a municipal corporation has only that
power provided by legislative enactment to extend its bound-
aries and that La Vista thus has to strictly comply with the
notice statutes in order to exercise its annexation powers. We
need not address this argument, as it was not presented to or
decided by the district court. A constitutional issue not pre-
sented to or passed upon by the trial court is not appropriate for
consideration on appeal.6
(c) Annexation for Revenue Purposes
[4] Cold Storage argues that the district court erred in reject-
ing its claim that La Vista enacted ordinance 1107 solely for the
purpose of obtaining revenue. A municipality may not annex
property for revenue purposes only.7 As the party attacking
6 Shepherd v. Chambers, 281 Neb. 57, 794 N.W.2d 678 (2011); Niemoller v.
City of Papillion, 276 Neb. 40, 752 N.W.2d 132 (2008).
7 SID No. 57 v. City of Elkhorn, 248 Neb. 486, 536 N.W.2d 56 (1995),
disapproved on other grounds, Adam v. City of Hastings, 267 Neb. 641,
676 N.W.2d 710 (2004); S.I.D. No. 95 v. City of Omaha, 221 Neb. 272,
376 N.W.2d 767 (1985). See, also, United States v. City of Bellevue,
Nebraska, 334 F. Supp. 881 (D. Neb. 1971), affirmed 474 F.2d 473 (8th
Cir. 1973).

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	587
Cite as 285 Neb. 579
ordinance 1107, Cold Storage had the burden of proving that
La Vista acted pursuant to this impermissible purpose.8
Our cases recognize that the legal proscription against
annexation for revenue purposes only does not mean that a
municipality cannot consider potential revenues in deciding
whether to proceed with an annexation. As we noted in SID
No. 57 v. City of Elkhorn,9 “[p]rudent annexation planning
compels the City to consider any revenue to be engendered
by annexation, in light of the liabilities to be incurred.” In
that case, we rejected a claim that the annexation was solely
for revenue purposes, noting that the city would incur “sub-
stantial obligations” as a result of the annexation.10 Similarly,
in S.I.D. No. 95 v. City of Omaha,11 we determined that the
record did not support a claim that “the city’s only objec-
tive in annexing the land . . . was to become the recipient of
increased revenues, free of corresponding obligations,” noting
that because the sanitary and improvement district was fully
developed, the city would assume all of its bonded indebted-
ness and the responsibility to provide “necessary improve-
ments and services.”
In this case, the record reflects that prior to enacting
ordinance 1107, La Vista amended its comprehensive plan
to include a new chapter entitled “Annexation Plan.” The
annexation plan sets forth general considerations for annexa-
tion of land within La Vista’s extraterritorial jurisdiction and
adopts specific annexation policies. Those policies include
that La Vista will pursue an annexation program that “adds
to the economic stability of the city, protects and enhances its
quality of life, and protects its environmental resources.” The
annexation policies also include the promotion of “orderly
growth and the provision of municipal services” and pres-
ervation of the city’s “fiscal position.” The annexation plan
8 See Swedlund v. City of Hastings, 243 Neb. 607, 501 N.W.2d 302 (1993).
9 SID No. 57 v. City of Elkhorn, supra note 7, 248 Neb. at 489, 536 N.W.2d
at 61.
10 Id.
11 S.I.D. No. 95 v. City of Omaha, supra note 7, 221 Neb. at 278-79, 376
N.W.2d at 772.

588 	285 NEBRASKA REPORTS
specifies an annexation study process which includes the prep-
aration of “a plan with complete information on [La Vista’s]
intentions for extending city services to the land proposed
for annexation.”
Pursuant 	to 	this 	annexation 	plan 	and 	Neb. 	Rev. 	Stat.
§ 16-117(4) (Reissue 2012), the city’s community develop-
ment director prepared a staff report for the proposed annexa-
tion of SID 59 which was submitted to the city council on
October 6, 2009. The report identified the street and sewer
improvements La Vista would become responsible for in the
event of annexation and estimated the maintenance expenses
related to those improvements. The report also analyzed how
police and fire services would be provided by La Vista to the
area under consideration for annexation. It noted that with
additional staff, police response time to the annexed areas
would improve, and that fire service could be provided with
current staff.
In a section titled “Annexation Suitability,” the report noted:
“[SID 59] is bordered by the City limits on several sides of
its perimeter. Annexation would be a logical extension of the
city.” The city administrator testified that SID 59 was “a big
SID” situated “sort of as an island in the city’s area.” She
noted that this had resulted in some confusion about who was
responsible for providing certain services such as law enforce-
ment and snow removal. She also explained that annexation
of SID 59 was a component of the orderly growth of the city,
noting that a portion of SID 59 had been previously annexed
and that the city was already providing some services to areas
within SID 59.
The report included an analysis of the fiscal impact of
annexation prepared by the city’s finance director. She testified
that upon annexation, the city would assume all debts and obli-
gations of SID 59, including approximately $2.1 million in net
bonded debt, and would incur the expense of providing public
services to the annexed area. The finance director’s analysis
included a comparison of the revenue stream which the city
would realize from annexation compared to the expense it
would incur in the assumption of SID 59’s indebtedness. This
analysis was favorable to the city, in that it reduced its net

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	589
Cite as 285 Neb. 579
debt-to-valuation ratio which was beneficial to the city’s ability
to issue bonds.
[5] The district court concluded that Cold Storage had failed
to meet its burden of proving that the annexation was solely for
the purpose of obtaining revenue, noting that “[t]he evidence
indicates that several factors other than revenue were consid-
ered and used by La Vista when it decided to proceed forward
with the annexation of SID 59.” Based upon our review of the
evidence, we agree. Revenue was surely a factor, but other
factors included the indebtedness which the city would assume
by annexation; La Vista’s objective of orderly growth; and the
perception that annexation of SID 59’s territory, which was
already surrounded by the city, would improve the provision
of services by eliminating jurisdictional issues. Cold Storage
argues that the testimony of city officials was inconsistent and
therefore should not be given weight. Although our review
of this equity matter is de novo, when credible evidence is in
conflict on material issues of fact, an appellate court considers
and may give weight to the fact the trial court observed the
witnesses and accepted one version of the facts over another.12
We conclude that the district court did not err in concluding
that La Vista did not undertake the annexation of SID 59 solely
for the purpose of obtaining revenue.
(d) Due Process
Cold Storage also argues that as the owner of property desig-
nated as an industrial area, its right to substantive due process
would be violated by annexation pursuant to ordinance 1107.
(i) Applicable Statutes
The argument is premised on current and former Nebraska
statutes13 authorizing the creation of an “[i]ndustrial area,”
which is defined by Nebraska law as “a tract of land used or
reserved for the location of industry.”14 Pursuant to § 13-1111,
12 See, American Amusements Co. v. Nebraska Dept. of Rev., 282 Neb. 908,
807 N.W.2d 492 (2011); Schauer v. Grooms, 280 Neb. 426, 786 N.W.2d
909 (2010).
13 See §§ 13-1111 to 13-1120 (Reissue 2012) and 13-1115 (Reissue 1987).
14 § 13-1111.

590 	285 NEBRASKA REPORTS
The owner or owners of any contiguous tract of real
estate containing twenty acres or more, no part of which
is within the boundaries of any incorporated city or vil-
lage, except cities of the metropolitan or primary class,
may file or cause to be filed with the county clerk of the
county in which the greater portion of such real estate is
situated if situated in more than one county, an applica-
tion requesting the county board of such county to desig-
nate such contiguous tract as an industrial area.
Upon the filing of such an application, the county clerk “shall
notify such municipal legislative bodies in whose area of zon-
ing jurisdiction” the proposed industrial area is located and
“request approval or disapproval” of the designation of the
tract as an industrial area.15 The approval “may be conditioned
upon terms agreed to between the city and county,” and if
formal reply is not received within 30 days, “the county board
shall construe such inaction as approval of such designation.”16
Prior to 1991, § 13-1115 (Reissue 1987) provided that if a
tract designated as an industrial area
shall have an actual valuation of more than two hundred
eighty-six thousand dollars, it shall not be subject to
inclusion within the boundaries of any incorporated first-
or second-class city or village unless so stipulated in the
terms and conditions agreed upon between the county and
the city or village in any agreement entered into pursuant
to section 13-1112 or unless the owners of a majority in
value of the property in such tract as shown upon the last
preceding county assessment roll shall consent to such
inclusion in writing or shall petition the city council or
village board to annex such area.
But in 1991, § 13-1115 was amended to add a third circum-
stance which would permit annexation of an industrial area.
The new language provided that an industrial area “regardless
of actual valuation may be annexed if (1) it is located in a
county with a population in excess of one hundred thousand
persons and the city or village did not approve the original
15 § 13-1112.
16 Id.

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	591
Cite as 285 Neb. 579
designation of such tract as an industrial area pursuant to sec-
tion 13-1112.”17
Both conditions of § 13-1115(1) are met in this case. The
parties have stipulated that Sarpy County, in which the indus-
trial area is located, had a population in excess of 100,000 in
both 1990 and 2010. Section 13-1112 provides that municipal
legislative bodies “in whose area of zoning jurisdiction an
industrial tract is located” must be given an opportunity to
approve or disapprove of the formation of an industrial area.
Because the property was not within the city’s zoning jurisdic-
tion at the time that the industrial area was formed, La Vista
could not and therefore did not approve of the formation
within the meaning of §§ 13-1112 and 13-1115. Accordingly,
we agree with the district court that § 13-1115(1) would permit
the annexation contemplated by ordinance 1107 if that statute
can be constitutionally applied in this case. We turn, now, to
that question.
(ii) Vested Right
It is undisputed that under § 13-1115 as it was written prior
to 1991, La Vista could not have annexed the industrial area
within SID 59, because the area had an actual valuation of
more than $286,000 and there was neither a stipulation pursu-
ant to § 13-1112 nor consent of the owners of a majority in
value of the property. But as we have noted, the 1991 amend-
ment to § 13-1115 would permit annexation of the industrial
area at issue here without either the stipulation or the consent
of the property owners. Cold Storage contends that it had a
vested right under pre-1991 law that its property could not be
annexed without its consent and that therefore, application of
the 1991 amendment to § 13-1115 to justify annexation of the
industrial area would deprive it of substantive due process.
[6-10] The Legislature is free to create and abolish rights
so long as no vested right is disturbed.18 Thus, the question
presented here is whether § 13-1115 as it was written prior
17 See 1991 Neb. Laws, L.B. 76, § 1.
18 Staley v. City of Omaha, 271 Neb. 543, 713 N.W.2d 457 (2006); Peterson
v. Cisper, 231 Neb. 450, 436 N.W.2d 533 (1989).

592 	285 NEBRASKA REPORTS
to the 1991 amendment created a constitutionally protected
“vested right.” The type of right that “vests” can be gener-
ally described as “an interest which it is proper for the state
to recognize and protect and of which the individual may not
be deprived arbitrarily without injustice.”19 To be considered
a vested right, the right must be “fixed, settled, absolute, and
not contingent upon anything.”20 With respect to property, a
right is considered to be “vested” if it involves “an immediate
fixed right of present or future enjoyment and an immediate
right of present enjoyment, or a present fixed right of future
enjoyment.”21 A vested right “must be something more than
a mere expectation based upon an anticipated continuance of
the existing law; it must have become a title, legal or equi-
table, to the present or future enjoyment of property.”22 In
essence, whether the Legislature acted beyond its power in
affecting a right can only be determined after examining the
nature of the alleged right and the character of the change in
the law.23 A vested right can be created by statute.24 But it is
presumed that a statutory scheme is not intended to create
vested rights, and a party claiming otherwise must overcome
that presumption.25
Cold Storage argues that its claimed right to be free from
annexation is analogous to a property owner’s right not to
have existing zoning ordinances changed in a manner that
alters the permissible use of the property. We have held that a
zoning ordinance cannot take away a vested property right.26
19 16B Am. Jur. 2d Constitutional Law § 746 at 190 (2009).
20 Id. at 191.
21 Id.
22 Id., § 748 at 193.
23 See id., § 746.
24 Id., § 747.
25 Id. See, Koster v. City of Davenport, Iowa, 183 F.3d 762 (8th Cir. 1999);
Doe v. California Dept. of Justice, 173 Cal. App. 4th 1095, 93 Cal. Rptr.
3d 736 (2009).
26 City of Omaha v. Glissmann, 151 Neb. 895, 39 N.W.2d 828 (1949); Cassel
Realty Co. v. City of Omaha, 144 Neb. 753, 14 N.W.2d 600 (1944); Baker
v. Somerville, 138 Neb. 466, 293 N.W. 326 (1940).

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	593
Cite as 285 Neb. 579
Specifically, once a property owner has put property to a use
authorized by existing zoning laws, the zoning laws cannot be
changed to disallow that use.27 But subjecting Cold Storage’s
property to annexation does not affect its use. As the district
court noted, annexation would not change the permissible use
of the property in question. Thus, we do not view the 1991
statutory amendment at issue here as analogous to a change in
zoning laws.
The principal effect of annexation on Cold Storage is that its
property would no longer be subject to taxation by SID 59, but
would instead become subject to taxation by La Vista. Thus,
the true nature of the vested right claimed by Cold Storage is
the “benefit,” specifically lower taxes, accruing from not being
subject to taxation by La Vista. The question, then, is whether
a right to what is in essence a partial statutory exemption from
taxation is a vested right which cannot be subsequently taken
away by the Legislature.
[11] As a general rule, exemptions from taxation do not
confer vested rights.28 We addressed the issue in State, ex rel.
Spelts, v. Rowe.29 There, at the time a landowner mortgaged
his land, a 1911 statute valued his taxable interest in the land
at $412.50. In 1919, the statute was amended so that his tax-
able interest became $16,250. He claimed that the amendment
could not be applied to him, arguing in part that to do so would
destroy a vested right. In rejecting this argument, this court
reasoned that the power of taxation is a necessary attribute of
sovereignty and that it was vested in the Legislature without
limit. We further noted that in the 1911 statute, the Legislature
did not contract or agree that the tax conditions would not
change. We held:
[W]here a part of the property within the state is not
being taxed, in whole or in part, there is no pledge or
agreement, expressed or implied, that the laws shall not
be repealed or amended by a subsequent legislature to
27 See id.
28 16A C.J.S. Constitutional Law § 395 (2005).
29 State, ex rel. Spelts, v. Rowe, 108 Neb. 232, 188 N.W. 107 (1922).

594 	285 NEBRASKA REPORTS
meet the conditions which exempted the property from
taxation and the placing of it on the tax list.30
We reasoned that the 1911 statute was “general in its effect,
and was subject to repeal or amendment at legislative will.”31
The Supreme Court of Iowa addressed an analogous case
in Shiner v. Jacobs et al., Township Trustees.32 An Iowa law
provided that for every acre of forest trees planted on land,
the landowner would receive a tax exemption of $100 for 10
years. After a landowner planted trees on his land, the law
was amended to provide that the exemption could not exceed
“‘one-half of the valuation of the realty’” upon which it was
claimed.33 The landowner sued, arguing the amendment could
not apply to him “because, when he accepted the terms of the
original statute and complied with its requirements, his right
to exemption from taxation to the extent of $100 per acre for
ten years became complete.”34 The Supreme Court of Iowa
rejected the argument, reasoning that the exemption was pro-
vided for in an act of general legislation that was applicable to
all lands in the state. It found that the law was not in any man-
ner a contract between the state and a landowner that availed
himself of its provisions and reasoned it was “well settled”
that “where an exemption from taxation is provided for by
the general laws of the state, any subsequent legislature is not
thereby deprived of the power to alter the law and remove
the exemption.”35
The U.S. Supreme Court has addressed a similar situation.
In Salt Company v. East Saginaw,36 a Michigan law passed
in 1859 provided that all corporations formed for the purpose
of boring for and manufacturing salt would be exempt from
30 Id. at 237, 188 N.W. at 109.
31 Id.
32 Shiner v. Jacobs et al., Township Trustees, 62 Iowa 392, 17 N.W. 613
(1883).
33 Id. at 393, 17 N.W. at 613.
34 Id.
35 Id. at 393-94, 17 N.W. at 613.
36 Salt Company v. East Saginaw, 80 U.S. 373, 374, 20 L. Ed. 611 (1871).

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	595
Cite as 285 Neb. 579
paying taxes on “‘[a]ll property, real and personal’” “‘for
any purpose.’” The law also paid a “‘bounty’” of 10 cents
for each bushel of salt produced once 5,000 bushels were
manufactured.37 In 1861, the act was amended to limit the tax
exemption to a period of 5 years and limited the total bounty
possible to $5,000. A company that had organized and operated
under the 1859 law sued, arguing the amendments could not be
applied to it. The Supreme Court disagreed, reasoning the law
was simply “a general law, regulative of the internal economy
of the State” and, as such, subject to repeal and alteration at the
whim of the legislature.38
We find nothing in the language of the pre-1991 version of
§ 13-1115 which would constitute a pledge by the Legislature
that the circumstances under which property in an industrial
area could be annexed would never be altered by an amend-
ment to the statute. Accordingly, the former statute created no
constitutionally protected vested right which would preclude
application of the amended statute.
(iii) Impairment of Contract
[12] Cold Storage makes a related argument that the annexa-
tion would impair its contractual right arising from the pre-
1991 version of § 13-1115. Although a statute can be the
source of a contractual right, a contract will be found to exist
only if the statutory language “evince[s] a clear and unmis-
takable indication that the legislature intends to bind itself
contractually.”39 The general rule is that rights conferred by
statute are presumed not to be contractual.40
For the same reason that we concluded the prior version of
the statute created no vested right, we conclude it created no
contractual right. We find nothing in the statutory language
indicating intent on the part of the Legislature to be contrac-
tually bound with the landowners in a designated industrial
37 Id.
38 Id., 80 U.S. at 378.
39 16B Am. Jur. 2d, supra note 19, § 770 at 214.
40 Id.

596 	285 NEBRASKA REPORTS
area, or any corresponding duty on the part of landowners in
the industrial area that could be construed as the landowners’
part of the contract with the state.
(iv) Retroactivity
We find no merit in Cold Storage’s argument that § 13-1115
cannot be applied retroactively to authorize the annexation
of its property. As noted, the Legislature had the authority to
change the law in 1991 and that change applies to Cold Storage
because it had no vested or contractual right prior to that
change. Applying a change in the law that was made in 1991
to an annexation ordinance adopted in 2009 does not constitute
a retroactive application. What Cold Storage characterizes as
a retroactivity argument is subsumed within the question of
whether application of § 13-1115 as amended would deprive
Cold Storage of a vested or contractual right. For the reasons
discussed above, we conclude that it would not.
(e) Special Legislation
On appeal, Cold Storage argues that to the extent the 1991
amendment to § 13-1115 can be read to authorize the annexa-
tion of its property without its consent, the statute is void
as unconstitutional special legislation, in violation of arti-
cle III, § 18, of the Nebraska Constitution. But this argument
is not properly preserved for our review. In its complaint, Cold
Storage did not challenge the 1991 amendment to § 13-1115
as unconstitutional special legislation. At trial, Cold Storage
did not advise the court that it was challenging § 13-1115 as
unconstitutional special legislation. And not surprisingly, the
district court did not address any issue of special legislation in
its order dismissing the complaint. A constitutional issue not
presented to or passed upon by the trial court is not appropriate
for consideration on appeal.41
For completeness, we note that in its answer to the com-
plaint, La Vista asserted that §§ 13-1111 to 13-1120, including
§ 13-1115, are special legislation. However, this claim appears
41 Shepherd v. Chambers, supra note 6; Niemoller v. City of Papillion, supra
note 6.

UNITED STATES COLD STORAGE v. CITY OF LA VISTA 	597
Cite as 285 Neb. 579
to have been abandoned by the time of trial and, in any event,
does not raise the specific constitutional issue which Cold
Storage now asks us to decide. Accordingly, we conclude that
Cold Storage, as the party which would have had the burden of
proving the statute unconstitutional, did not present the ques-
tion to the district court for disposition and has not preserved
the issue for appeal.
[13,14] An appellate court may, at its option, notice plain
error.42 Plain error exists where there is an error, plainly evi-
dent from the record but not complained of at trial, which
prejudicially affects a substantial right of a litigant and is of
such a nature that to leave it uncorrected would cause a miscar-
riage of justice or result in damage to the integrity, reputation,
and fairness of the judicial process.43 We find no such error in
this case. Accordingly, we do not reach Cold Storage’s special
legislation claim.
(f) Summary
For the reasons discussed above, we find no merit in any
of the assignments of error asserted by Cold Storage in its
cross-appeal.
2. ordinAnCe 1142
The appeal of SID 59 is focused solely on ordinance 1142,
by which La Vista sought to annex that portion of SID 59
that did not include the industrial area. SID 59 contends that
ordinance 1142 is void because La Vista purported to adopt it
while Cold Storage’s challenge to ordinance 1107 was pending
in the court.
The argument is premised on § 31-765, which must be read
in context with other statutes relating to the annexation of
sanitary and improvement districts. Neb. Rev. Stat. § 31-763
(Reissue 2008) details what is to occur “[w]henever any city
or village annexes all the territory within the boundaries of any
sanitary and improvement district . . . .” In that circumstance,
42 Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).
43 Worth v. Kolbeck, 273 Neb. 163, 728 N.W.2d 282 (2007); Zwygart v. State,
270 Neb. 41, 699 N.W.2d 362 (2005).

598 	285 NEBRASKA REPORTS
§ 31-763 provides that the sanitary and improvement dis-
trict “shall merge” with the city or village. Section 31-765
then explains:
The merger shall be effective thirty days after the
effective date of the ordinance annexing the territory
within the district; Provided, if the validity of the ordi-
nance annexing the territory is challenged by a proceed-
ing in a court of competent jurisdiction, the effective date
of the merger shall be thirty days after the final determi-
nation of the validity of the ordinance. . . . [T]he trustees
or administrator of a sanitary and improvement district
shall continue in possession and conduct the affairs of the
district until the effective date of the merger, but shall not
during such period levy any special assessments after the
effective date of annexation.
(Emphasis supplied.) Neb. Rev. Stat. § 31-766 (Reissue 2008)
sets forth the procedures for dividing assets, liabilities, main-
tenance, and other obligations of the district and for changing
the district’s boundaries if “only a part of the territory within
any sanitary and improvement district” “is annexed by a city
or village.”
SID 59 contends that in the circumstances of this case,
where ordinance 1107 was pending in court, the italicized
language of § 31-765 imposed an affirmative statutory limita-
tion on La Vista’s power to annex. La Vista contends that the
language simply stays any proposed merger until a court can
determine the validity of the challenged ordinance and does
not in any way impose an additional statutory limitation on its
power to annex.
The district court concluded La Vista was correct. And based
on the plain language of § 31-765, read in light of that entire
section and its placement in the statutes governing annexations
of sanitary and improvement districts, we agree. It is quite clear
that the purpose of the language in § 31-765 is simply to stay
the effect of the proposed merger—here, the one effectuated
by ordinance 1107—until a court can make a determination on
the merits. Section 31-765 does not void ordinance 1142. Of
course, because we have upheld the validity of ordinance 1107,

VKGS v. PLANET BINGO 	599
Cite as 285 Neb. 599
the validity and implementation of ordinance 1142 may be a
moot point.
V. CONCLUSION
For the reasons discussed, we conclude that the district
court did not err in upholding the validity of both ordinance
1107 and ordinance 1142 adopted by La Vista for the annexa-
tion of SID 59. We therefore affirm the judgments of the dis-
trict court.
A ffirmed.
miller-lermAn, J., participating on briefs.
vkgS, llC, doing bUSineSS AS video king, A delAwAre
limited liAbility CompAny, AppellAnt, v. plAnet
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CompAny, And melAnge C ompUter ServiCeS,
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828 N.W.2d 168
Filed March 29, 2013. 	No. S-12-340.
1. Judgments: Jurisdiction. When a jurisdictional question does not involve a
factual dispute, the issue is a matter of law.
2. Judgments: Appeal and Error. An appellate court reviews questions of law
independently of the lower court’s conclusion.
3. Jurisdiction: Rules of the Supreme Court: Pleadings: Appeal and Error.
When reviewing an order dismissing a party from a case for lack of personal
jurisdiction under Neb. Ct. R. Pldg. § 6-1112(b)(2), an appellate court examines
the question of whether the nonmoving party has established a prima facie case
of personal jurisdiction de novo.
4. Judgments: Jurisdiction: Appeal and Error. An appellate court reviews a lower
court’s determination regarding personal jurisdiction based on written submis-
sions in the light most favorable to the nonmoving party.
5. Pleadings: Affidavits: Appeal and Error. If the lower court does not hold a
hearing and instead relies on the pleadings and affidavits, then an appellate court
must look at the facts in the light most favorable to the nonmoving party and
resolve all factual conflicts in favor of that party.
6. Jurisdiction: Words and Phrases. Personal jurisdiction is the power of a tribu-
nal to subject and bind a particular entity to its decisions.
7. Due Process: Jurisdiction: States. Before a court can exercise personal juris-
diction over a nonresident defendant, the court must determine, first, whether