Norwest Bank Nebraska, N.A. v. Bellevue Bridge Commission

607 N.W.2d 207, 8 Neb. Ct. App. 1033, 2000 Neb. App. LEXIS 24
CourtNebraska Court of Appeals
DecidedFebruary 15, 2000
DocketNo. A-99-006
StatusPublished

This text of 607 N.W.2d 207 (Norwest Bank Nebraska, N.A. v. Bellevue Bridge Commission) 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
Norwest Bank Nebraska, N.A. v. Bellevue Bridge Commission, 607 N.W.2d 207, 8 Neb. Ct. App. 1033, 2000 Neb. App. LEXIS 24 (Neb. Ct. App. 2000).

Opinion

Hannon, Judge.

INTRODUCTION

A bank sued a bridge commission on revenue bonds which were in default and requested that the district court appoint a receiver to manage the commission’s affairs. The district court appointed a former employee of the commission as receiver, and [1034]*1034the commission appeals, alleging that the district court erred in (1) denying its motion to continue because it received only 5 days’ notice of the hearing and was unable to procure all of the commission’s records from the former employee and (2) appointing the former employee as receiver, because he was an interested person in the lawsuit. We hold that the district court abused its discretion in appointing the employee as receiver due to his conflicts of interest stemming from tension between himself and the administration, his wife’s residual interest in a trust which was a creditor of the commission, and his financial interest in several of the commission’s depositories. Accordingly, we reverse, and remand.

SUMMARY OF EVIDENCE

This is the second time we review this case on appeal. We refer to the statement of facts given in our prior decision, Norwest Bank Neb. v. Bellevue Bridge Comm., 7 Neb. App. 750, 585 N.W.2d 505 (1998), and describe here only general background and the additional facts relevant to deciding the issues now appealed.

The Bellevue Bridge Commission (Commission) is a public body corporate and politic created in 1950 in Bellevue, Nebraska, pursuant to Neb. Rev. Stat. § 39-868 (1943). The Commission issued revenue bonds, due in 1980, to finance the construction of a toll bridge over the Missouri River, connecting Bellevue and the State of Iowa. The Commission is governed by commissioners who are appointed by the mayor and who are assisted by a secretary and a treasurer employed by the Commission.

The Commission employed Jeffrey Renner as secretary from approximately 1985 through 1996. In 1996, the then current mayor of Bellevue made new appointments to the Commission. Until that time, Renner had been active in running the day-today operations of the Commission through practices and procedures established for some time by the former administration. Upon taking their positions, the new commissioners reviewed the Commission’s structure and operation and made several changes.

[1035]*1035Shortly after the new commissioners were appointed, Norwest Bank Nebraska, N.A. (Norwest), the registered holder on many of the revenue bonds and trustee for other bonds, initiated a suit in district court to appoint a receiver for the Commission based on the fact that the Commission was in default on the bonds and had been in default for some time. Norwest sued to have Renner appointed as receiver. The district court appointed Renner as the receiver, and the first appeal to this court ensued. We reversed for jurisdictional reasons, and remanded. The present suit followed, in which Norwest applied to have Renner appointed as receiver in a suit to collect on the bonds. The Commission objected to Renner because of the tension between Renner and the new administration and because Renner had a financial interest in the position. After a hearing on the merits, the district court once again appointed Renner as receiver for the Commission, and the Commission now appeals.

ASSIGNMENTS OF ERROR

The Commission alleges that the district court erred in (1) denying its motion for a continuance of the hearing on the application for receiver and (2) appointing Renner, an interested person, as receiver. Due to our ruling on Norwest’s second assignment, the first assignment becomes moot and we therefore do not address it.

STANDARD OF REVIEW

An appellate court reviews the appointment of a receiver de novo on the record for an abuse of discretion. See Federal Land Bank of Omaha v. Victor, 232 Neb. 351, 440 N.W.2d 667 (1989). A judicial abuse of discretion exists when reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition. Holste v. Burlington Northern RR. Co., 256 Neb. 713, 592 N.W.2d 894 (1999).

ANALYSIS

We begin by noting that the Commission’s assignment of error complains only of Renner’s appointment as receiver and not whether a receiver should have been appointed in the first place. Accordingly, we limit our review to the former issue only.

[1036]*1036With respect to whether a specific individual is or is not qualified to act as a receiver, Neb. Rev. Stat. § 25-1086 (Reissue 1995) states in pertinent part that “[n]o person shall be appointed receiver who is party, solicitor, counsel, or in any manner interested in the suit.” The question in this case then becomes whether Renner is interested in the suit in any manner. If he is, then his appointment constitutes an abuse of discretion and we must reverse.

Only two cases in this jurisdiction have decided issues under § 25-1086. In Kellner v. Kellner, 8 Neb. App. 316, 593 N.W.2d 1 (1999), this court held that the district court erred in a divorce action by, inter alia, ordering the wife to manage the sale of all the marital assets and deposit a check with the court for one-half of the amount received. Likening the situation to the appointment of a receiver, we reasoned:

Interestingly, the receiver statutes provide that no person shall be appointed a receiver who is a party, solicitor, or in any manner interested in the suit. See Neb. Rev. Stat. § 25-1086 (Reissue 1995). That provision would seem to be a sound rule, whatever the name of the person appointed by a court to perform a function for the court. After all, when the law clearly provides that an attorney, an officer of the court, cannot have even the appearance of a conflict of interest, courts should not appoint a layperson with an obvious conflict to perform a function for the court.

Kellner, 8 Neb. App. at 335-36,593 N.W.2d at 14. Accordingly, the wife was an inappropriate person to conduct a judicial sale of marital property in the divorce suit.

In Vieth v. Ress, 60 Neb. 52, 82 N.W. 116 (1900), the trial court appointed an attorney for one of the parties of the suit as counsel for the receiver. The Nebraska Supreme Court reversed, holding that the duties and demands on an attorney in such a position would “ ‘be likely to impose upon him conflicting and inconsistent duties, such as can not be properly performed by one person.’ ” Id. at 56, 82 N.W. at 118. “The interests of the debtor and creditor are conflicting, and the same attorney can not with propriety act for the receiver who represents both.” Id. at 55, 82 N.W. at 117.

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Related

Norwest Bank Nebraska, N.A. v. Bellevue Bridge Commission
585 N.W.2d 505 (Nebraska Court of Appeals, 1998)
In Re Interest of Powers
493 N.W.2d 166 (Nebraska Supreme Court, 1992)
Holste v. Burlington Northern Railroad
592 N.W.2d 894 (Nebraska Supreme Court, 1999)
Federal Land Bank of Omaha v. Victor
440 N.W.2d 667 (Nebraska Supreme Court, 1989)
Kellner v. Kellner
593 N.W.2d 1 (Nebraska Court of Appeals, 1999)
Veith v. Ress
82 N.W. 116 (Nebraska Supreme Court, 1900)

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Bluebook (online)
607 N.W.2d 207, 8 Neb. Ct. App. 1033, 2000 Neb. App. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norwest-bank-nebraska-na-v-bellevue-bridge-commission-nebctapp-2000.