Johnson Lakes Development, Incorporated v. Central Nebraska Public Power & Irrigation District

568 N.W.2d 573, 5 Neb. Ct. App. 957, 1997 Neb. App. LEXIS 130
CourtNebraska Court of Appeals
DecidedAugust 26, 1997
DocketA-95-1380, A-95-1388
StatusPublished
Cited by5 cases

This text of 568 N.W.2d 573 (Johnson Lakes Development, Incorporated v. Central Nebraska Public Power & Irrigation District) is published on Counsel Stack Legal Research, covering Nebraska Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson Lakes Development, Incorporated v. Central Nebraska Public Power & Irrigation District, 568 N.W.2d 573, 5 Neb. Ct. App. 957, 1997 Neb. App. LEXIS 130 (Neb. Ct. App. 1997).

Opinion

Hannon, Judge.

The two appeals covered by this opinion concern a lease of the land surrounding Johnson Lake in Gosper and Dawson Counties. Central Nebraska Public Power & Irrigation District (Central) owns the land and is the defendant and the appellant in both cases. Johnson Lakes Development, Incorporated (JLDI), the lessee, is the plaintiff in case No. A-95-1380, and R. Daniel Niemoth, Lois M. Niemoth, and all persons similarly situated are the plaintiffs in case No. A-95-1388. The Niemoths and the persons they claim to be representing (collectively “the Niemoths”) separately subleased various parcels of the land from JLDI. The plaintiffs in both actions sought the same relief *959 against Central, and Central, JLDI, and the Niemoths separately moved for summary judgment. The trial court granted JLDI’s motion, denied Central’s motion, and dismissed the Niemoths’ action on the ground that it was moot.

The controlling issues in these appeals are (1) whether a provision calling for termination of the lease upon the nonrenewal of Central’s Federal Energy Regulatory Commission (FERC) license was effective because the license was renewed for only 1 year at a time rather than an additional 50 years and (2) whether Central can unilaterally terminate the lease under a provision in the lease giving Central “complete power and authority to cancel or terminate” the lease “at any time it so desires by giving JLDI written notice of such intentions at least six (6) months in advance.” We conclude that (1) the issuance of the FERC license for 1 year constituted a renewal and did not effect the termination of the lease and further that Central waived the possible termination by failing to rely upon it for more than 7 years and (2) Central can terminate the lease if it strictly complies with the terms of the lease. We therefore reverse the district court’s granting of summary judgment to JLDI in case No. A-95-1380 and partially grant Central’s motion for summary judgment. We also reverse the district court’s dismissal as moot of case No. A-95-1388.

I. SUMMARY OF EVIDENCE

For many years, JLDI has leased the real estate surrounding Johnson Lake from Central. The Niemoths and others have subleased parcels of said real estate and developed the same. On May 1, 1978, Central and JLDI entered into a lease for real estate surrounding Johnson Lake, and it is the construction of that lease that is determinative of the instant action. The lease is five single-spaced pages in length and has many detailed provisions. Those pertinent to the issues of this case are as follows:

WHEREAS, the DISTRICT [Central] desires to provide a new Agreement for a thirty-one (31) year term with automatic renewal extension at the end of the first year and each successive year, resulting in a thirty-one (31) year maximum and a thirty (30) year minimum Agreement...[.]
*960 NOW THEREFORE, in consideration of the mutual covenants, promises and agreements herein contained, the parties do hereby covenant, promise and agree as follows:
(1) The DISTRICT does hereby lease to JLDI for a period of thirty-one (31) years from this date ....
(2) Said thirty-one (31) year period shall take effect on the date of this Agreement and shall include an automatic renewal period of one (1) year. This renewal period shall take effect at the end of the first year and at the end of each successive year in which the Agreement is in existence, resulting in a thirty-one (31) year maximum term and a thirty (30) year minimum term. Any and all leasing or subleasing done by JLDI under this Agreement shall not extend beyond the terms or period of this Agreement.
(3) Within one (1) year from the effective date of this Agreement, JLDI and all sub-lessees shall enter into new agreements based on the thirty/thirty-one (30/31) year period....
(31) It is understood and agreed by the parties to this Agreement that the powers of the DISTRICT are under limitation and restriction by reason of the Federal Energy Regulatory Commission (formerly Federal Power Commission) license dated July 30, 1937, and expiring fifty (50) years thereafter with the rights as thereon granted and agreed to, and in the event said FERC license is not renewed, that upon the expiration of such license this Agreement shall deliver full and complete possession of all leased areas to the DISTRICT by JLDI.
(33) The DISTRICT shall have complete power and authority to cancel or terminate this Agreement at any time it so desires by giving JLDI written notice of such intentions at least six (6) months in advance addressed to JLDI at its last known corporate address. Upon such cancellation or termination of this Agreement between DISTRICT and JLDI, all permanent improvements ... and other property of a permanent nature which has been placed on DISTRICT property and lands by JLDI, sublessees or by any *961 one holding by, through or under JLDI, except buildings, shall immediately become the property of the DISTRICT and all buildings thereon not removed within thirty (30) days following the termination of this Agreement shall become the property of the DISTRICT. . . .
(35) . . . This Agreement cannot be changed, modified, abrogated or annulled, except that the same be in writing and signed by the parties hereto, after the officers of the DISTRICT are authorized to do so by the Board of Directors of the DISTRICT.

(Emphasis supplied.) While the lease did not provide for rent, there was consideration consisting of mutual promises and covenants.

On March 4, 1994, Central’s board of directors passed resolution No. 94-2, authorizing and instructing Central’s president and secretary to enter into a modification agreement with JLDI (as well as with other lake associations) “to provide, among other things, for the payment of fair and reasonable rent for the personal benefit received from the use of’ Central’s property. The resolution gave JLDI until June 1 to enter into a modification agreement with Central. If JLDI failed to do so, Central’s officers were authorized to begin the process of canceling or terminating any agreement with JLDI. Central subsequently passed resolution No. 94-5, extending the negotiating period until July 15. JLDI has refused to sign any modification agreement.

On July 22, 1994, JLDI filed this action against Central. The Niemoths filed a similar petition. In summary, both JLDI and the Niemoths allege that Central is attempting to unilaterally modify the terms and conditions of the lease in a manner favorable to Central and unfavorable to JLDI and the Niemoths and that such attempt constitutes an unlawful taking of property.

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Bluebook (online)
568 N.W.2d 573, 5 Neb. Ct. App. 957, 1997 Neb. App. LEXIS 130, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-lakes-development-incorporated-v-central-nebraska-public-power-nebctapp-1997.