IN THE SUPREME COURT OF NEBRASKA

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1 /(~r;-_qj IN THE SUPREME COURT OF NEBRASKA WILLIAM MARK OLSEN, ) ) CASE Appellants, ) ) v. ) PETITION FOR FURTHER ) REVIEW HAROLD CLARE OLSEN and ) CHERIE L. OLSEN, PERSONAL ) ) Appellees. ) 1. In this Petition for Further Review, appellant CHERIE L. OLSEN is called CHERIE. Her husband Harold Clair Olsen (called "Harold") died on 19 December 1995 ( T12) and the action was revived on 26 February 1996 in CHERIE as his Personal Representative (T12-3). Appellee WILLIAM MARK OLSEN is called MARK. 2. On 30 April 1996, the trial court found in favor CHERIE and entered judgment for her against MARK in the amount of $20,271.81, with costs assessed against MARK. (T18). After CHERIE's Motion for New Trial was overruled (T21), she appealed to the Court of Appeals. On 10 October 1997, the Court of Appeals vacated the judgment of the district court and remanded the cause with directions to dismiss CHERIE's cross-petition, holding that the Banner County District Court did not have subject matter jurisdiction over the accounting action brought by CHERIE in the cross-petition. 1.

2 3. Pursuant to Rule 2F, Rules of the Supreme Court/Court of Appeals of the State of Nebraska, CHERIE petitions this court for further review of the Court of Appeals' decision. 4. CHERIE assigns that the Court of Appeals erred as follows: 1. Holding that the trial court did not have subject matter jurisdiction because an earlier action was pending in Kimball County, Nebraska. 2. Failing to reverse the trial court's judgment and remand the case and directing the entry of a judgment of $59, against MARK. MEMORANDUM BRIEF IN SUPPORT OF PETITION FOR FURTHER REVIEW STATEMENT OF THE FACTS MARK is the son of Harold (112:17-18). Harold owned the life estate in Banner County, Nebraska, outlined in Ex. 1 (E1:4,4, Env.). Harold assigned this life estate to MARK, conditioned on MARK's paying certain described debts of Harold's. When that was done, the assignment terminated and the life estate reverted to Harold (see E2, 2: 5,6, Env.) Harold and CHERIE brought Case No in the District Court for Kimball County, Nebraska, against MARK to recover on a promissory note (E2: 5,6, Env.) (The pleadings in Case 6014 are not before the court; perforce, they must be reconstructed from the court's findings ( E2 : 5, 6, Env. ). 2.

3 Clearly Harold and CHERIE brought an action on a promissory note, claiming prejudgment interest. MARK filed a counterclaim apparently seeking pasture rent, government storage payments for wheat, and return of a grinder. MARK pleaded the assignment made by 15 August 1983 contract as~ defense (E2: 5,6, Env.). The court, in Case 6014, found for Harold and CHERIE on the note but denied prejudgment interest, found against MARK on his counterclaim except for the grinder, and found that the assignment of the life estate terminated not later than 1 January 1987 and the income reverted to Harold. No pleadings then existed to raise any issue of income from the life estate after 1 January While Case 6014 was pending in Kimball County, MARK brought an action in Banner County (Case 1285) to recover possession of part of the life estate and enjoin Harold from using it. Necessarily, he pleaded the assignment of 15 August 1983 claiming it to be still in force. Harold and CHERIE filed an Amended Answers and Cross Petition (Tl-5) alleging Harold was owner of the life estate (T3), entitled to possession of all of it, and praying to recover rents, profits, and other proceeds (T4-5). MARK dismissed his petition and filed an Amended Answer of Plaintiff to Cross-Petition on 20 January 1994 (T7). Harold and CHERIE filed a Reply on 22 September The trial court granted CHERIE's petition for accounting ( T15) and entered judgment for her in the amount of $20, MARK's defenses were denied (T15). 3.

4 Because the judgment in CHERIE's favor was inadequate, the appeal resulted. ARGUMENT In its opinion, the Court of Appeals cites 21 c. J. S., Courts, 188, pp The text writer says (p. 223): In order that the rule may be applicable which prevents interference by another court with the jurisdiction of the court first assuming it, the second action should relate to the same question. So, too, the second action should be between the same parties, seeking on the one hand, and opposing on the other, the same remedy. No pleadings from Case 6014 (Kimball County) are available to the court. As reconstructed from the judgment, however, Case 6014 was a suit on a promissory note with a cross-petition wherein MARK asserted a right to recover pasture rent for part of the life estate, government storage payments for wheat, and the return of a grinder. As a basis for his claim, MARK pleaded the assignment of the life estate. In Case 6014, the court determined that the assignment had terminated by 1 January 1987 and that MARK's claims should be denied (E2: 5, 6, Env.). Case 1285 in Banner County was brought by MARK to (1) recover possession of part of the life estate, and (2) to enjoin Harold from using any part of the life estate. Harold and CHERIE answered and cross-petitioned for rents, profits, and other proceeds received from the life estate (T5). MARK dismissed his 4.

5 petition (T14) and filed an amended answer to the cross-petition (T7). Trial was had on the cross-petition and answer. The court found that Harold was entitled to rents, profits, and other income from the life estate from "January 1, 1987 to April 6, 1992" (T15) and entered judgment for CHERIE (T18). Neb Rev Stat (Reissue of 1989) provides, in part: The defendant may set forth in his answer as many grounds of defense, counterclaim, and setoff as he may have. [Emphasis supplied] governs the filing of a counterclaim. It provides, in part: The counterclaim mentioned in section must be one in favor of a defendant and against a plaintiff between whom a several judgment might be had in the action, and arising out of the contract or transaction set forth in the petition as the foundation of the plaintiff's claim, or connected with the subject of the action provides a penalty for failure to file a counterclaim: If the defendant omits to set up the counterclaim or setoff, he cannot recover costs against the plaintiff in any subsequent action thereon; but this section shall not apply to causes of action which are stricken out of or withdrawn from the answer, as provided in sections and

6 In case 6014, Harold and CHERIE were plaintiffs; they could not file a counterclaim against MARK. And even if they could, the substance of their claim against MARK was not lost; they might lose the right to recover costs (see ). In Currie v. Chief School Bus Serv., 250 Neb 872, 553 NW 2d 469 (1996), this court said (p. 877): In Nebraska, all counterclaims are permissive. In other words, the defendant is not required to plead the counterclaim. The penalty for failure to so plead is that, in subsequent action thereon, the defendant cannot recover costs. See Neb Rev Stat (Reissue 1995). See, also, Rogers v. Buettgenback, 114 Neb 835, 212 NW 168 (1926). Although counterclaims are not compulsory in this state, Neb Rev Stat (Reissue 1995) requires that counterclaims must arise out of the contract or transaction set forth in the petition or be connected with the subject matter of the action. See, also, Kli tzing v. Didier, 215 Neb 122, 337 NW 2d 418 (1983). The connection of a counterclaim with the subject matter of the action must be more than casual or incidental; it is required to be immediate and direct. McGerr v. Marsh, 148 Neb 50, 26 NW 2d 374 (1947). In 21 c. J. s., Courts, 188, p. 223, the text states: So, too, the second action should be between the same parties, seeking on the one hand, and opposing on the other, the same remedy. 6.

7 The action in Banner County is between the same parties but it does not seek the same remedy. In the Kimball County case, Harold and CHERIE sought to recover on a promissory note; MARK defended by seeking to recover of a "set-off and counterclaim" for pasture rent, government storage payments for wheat, and a feed grinder. MARK's rights were dependant, in part, on the assignment of 15 August 1983, but the assignment had nothing to do with Harold and CHERIE's rights to recover on the promissory note. The remedy in the Banner County action was, for MARK, possession of land and an injunction respecting it, and, for Harold and CHERIE, recovery of rents, profits, and other income following termination of the assignment {E2: 5, 6, Env.). These were not a necessary part of the action in Kimball County, Nebraska. The Court of Appeals appears to have overlooked Sports Courts of Omaha v. Meginnis, 242 Neb. 768, 497 NW 2d 38 (1993). In that case Sports Court sued Meginnis and Schuessler in Douglas County as co-obligors on a promissory note. The suit was twice dismissed for want of prosecution and Sports Court appealed from the second order of dismissal. After the second dismissal, Sports Courts sued Meginnis alone on the note apparently in Douglas County. Later it dismissed this second action without prejudice. Sports Court brought an action in Lancaster County against Meginnis alone on the note. At the time this suit was filed, its appeal against Meginnis and Schuessler was pending. 7.

8 The Lancaster County district court dismissed the action on motion for summary judgment on three grounds: (1) lack of subject matter jurisdiction because the appeal from Douglas County was pending, ( 2) dismissal by Douglas County district court was res judicata, and (3) the action was barred by a 3- month statute of limitations. This court, citing two criminal cases where an appeal from district court divested the trial court of jurisdiction, distinguished both cases and went on to say (p. 773): However, the present case may be distinguished from Battershaw and Allen. In those cases, the issue was whether an appeal from a district court judgment divested the district court of jurisdiction over the particular case involved in the appeal. case, Sports Courts appealed from a In the present judgment of the Douglas County District Court and then filed another action in Lancaster County during pendency of the appeal. Because Sports Courts' appeal now before this court involves an action maintained in a court distinct from the site of the previous action, the rule expressed in Battershaw and Allen is inapplicable to preclude the district court's jurisdiction over Sports Courts' Lancaster County action. Therefore, the trial court had subject matter jurisdiction to dispose of Sports Courts' suit against Meginnis and erroneously concluded that it lacked jurisdiction to dispose of the case. 8.

9 CHERIE submits the Court of Appeals was clearly in error in holding the Banner County Court to be without subject matter jurisdiction. Under Sports Courts, the filing of identical cases in both Kimball and Banner Counties would not divest the Banner County court of subject matter jurisdiction. ~ fortiori, two suits between the same persons but seeking different relief or remedies would not cause the second court to be without subject matter jurisdiction. The holding of the Court of Appeals is clearly wrong and should be reversed. By ~~~~~~~~~~~~~--- HA-=;RI Robert M. Harris - NSBA # Randall L. Lippstreu - NSBA # West 27th Street scottsbluff, Nebraska Telephone: (308) Her Attorneys 9.