Eadie v. Leise Properties ( 2018 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/10/2018 01:09 AM CDT
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
R achel Eadie and Jeffrey Blount, individually
and as parents and natural guardians of their
minor children, Jaden and Zarah, appellants,
v.
Leise Properties, LLC, and Certified
Properties M anagement, Inc., appellees.
___ N.W.2d ___
Filed June 1, 2018. No. S-17-646.
1. Motions to Dismiss: Appeal and Error. An appellate court reviews a
district court’s order granting a motion to dismiss de novo, accepting
the allegations in the complaint as true and drawing all reasonable infer-
ences in favor of the nonmoving party.
2. Negligence. The question whether a legal duty exists for actionable
negligence is a question of law dependent on the facts in a particular
situation.
3. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court has an obligation to resolve the questions independently
of the conclusion reached by the trial court.
4. Pleadings: Appeal and Error. An appellate court reviews a district
court’s denial of a motion for leave to amend a complaint for an abuse
of discretion. However, an appellate court reviews de novo an underly-
ing legal conclusion that the proposed amendments would be futile.
5. Actions: Pleadings: Notice. Civil actions are controlled by a liberal
pleading regime; a party is only required to set forth a short and plain
statement of the claim showing that the pleader is entitled to relief and
is not required to plead legal theories or cite appropriate statutes so long
as the pleading gives fair notice of the claims asserted.
6. Motions to Dismiss: Pleadings. To prevail against a motion to dis-
miss for failure to state a claim, a plaintiff must allege sufficient facts,
accepted as true, to state a claim to relief that is plausible on its face.
In cases in which a plaintiff does not or cannot allege specific facts
showing a necessary element, the factual allegations, taken as true, are
nonetheless plausible if they suggest the existence of the element and
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EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
raise a reasonable expectation that discovery will reveal evidence of the
element or claim.
7. Negligence: Damages: Proximate Cause. In order to prevail in a neg-
ligence action, a plaintiff must establish the defendant’s duty to protect
the plaintiff from injury, a failure to discharge that duty, and damages
proximately caused by the failure to discharge that duty.
8. Negligence. The threshold issue in any negligence action is whether the
defendant owes a legal duty to the plaintiff.
9. Pleadings. A district court’s denial of leave to amend pleadings is
appropriate only in those limited circumstances in which undue delay,
bad faith on the part of the moving party, futility of the amendment, or
unfair prejudice to the nonmoving party can be demonstrated.
10. Motions to Dismiss: Limitations of Actions. A dismissal without
prejudice means that another petition may be filed against the same par-
ties upon the same facts as long as it is filed within the applicable statute
of limitations.
11. Motions to Dismiss: Claim Preclusion. A dismissal with prejudice
operates as a rejection of the plaintiff’s claims on the merits and claim
preclusion bars further litigation.
12. Motions to Dismiss: Pleadings. As a general rule, when a court grants
a motion to dismiss for failure to state a claim, a party should be
given leave to amend absent undue delay, bad faith, unfair prejudice,
or futility.
13. Appeal and Error. An appellate court is not obligated to engage in an
analysis which is not needed to adjudicate the controversy before it.
Appeal from the District Court for Douglas County: Thomas
A. Otepka, Judge. Reversed and remanded with direction.
James Martin Davis, of Davis Law Office, for appellants.
Stephen G. Olson II, Robert S. Keith, and Kristina J. Kamler,
of Engles, Ketcham, Olson & Keith, P.C., for appellee Leise
Properties, LLC.
Patrick S. Cooper, David J. Stubstad, and Brandon J. Crainer,
of Fraser Stryker, P.C., L.L.O., for appellee Certified Property
Management, Inc.
Heavican, C.J., Miller-Lerman, Cassel, and Stacy, JJ., and
Luther and O’Gorman, District Judges.
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
Per Curiam.
INTRODUCTION
A natural gas explosion at a rental house injured the next-
door neighbors and destroyed the neighbors’ house, and they
sued based upon a negligence theory. Less than 5 months
after the action commenced, without providing a postresponse
opportunity to amend and based upon a no-duty-owed con-
clusion, the district court dismissed the neighbors’ amended
complaint with prejudice. Because amendment to state a claim
was plausible, the district court abused its discretion in dis-
missing the complaint with prejudice. We reverse, and remand
with direction.
BACKGROUND
The rental house next door to the house where Rachel Eadie
and Jeffrey Blount and their children (collectively the neigh-
bors) resided blew up on July 25, 2016. The neighbors sued
the rental house’s landowner, Leise Properties, LLC, and its
property manager, Certified Property Management, Inc. The
suit was filed on December 15, 2016. On January 27, 2017,
before any response was filed, the neighbors filed an amended
complaint, which we summarize.
A mended Complaint
The amended complaint was not a model of clarity, particu-
larly regarding the allegations of negligence. But some of the
basic allegations were clear. The rental house that blew up was
located at 3858 North 68th Street in Omaha, Nebraska. The
neighbors’ address was 3862 North 65th Street, contiguous to
the rental house property. The neighbors’ house was destroyed,
and they suffered personal injuries in the explosion.
Sometime prior to the date of the explosion, the landowner
and its property manager had evicted tenants from the rental
house. The evicted tenants removed items from the rental
house, including a gas clothes dryer that did not belong to the
tenants. The tenants allegedly removed the dryer without prop-
erly terminating and blocking the gas connection, and natural
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EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
gas was allowed to seep into and fill the rental house. On July
25, 2016, when an agent of the property manager entered the
rental house, the gas ignited and the rental house exploded.
The force of the explosion destroyed the neighbors’ house and
caused personal injuries to the neighbors.
Regarding duty, the amended complaint alleged that the
landowner delegated to the property manager “duties . . .
of reasonable care.” The amended complaint stated that the
evicted tenants were “permitted to remove property and to
disconnect the gas dryer without permission to do so without
proper supervision and due diligence and care by failing to
monitor, observe, and to prevent the gas leakage.” Later, the
complaint stated that the landowner and its property manager
“acted in reckless disregard for the safety of neighbors . . .
by failing to properly monitor the actions of the tenants who
were permitted to re-enter the . . . rental home after eviction
and to cause gas to escape.” It also stated that the “seepage
of gas is one duty that the [landowner and property manager]
evaded and permitted to occur.” The complaint next alleged
a duty to “properly maintain and pursue safe habitation of
the home that exploded.” Finally, it alleged negligence in
“permitt[ing] the ingredients of a dangerous and explosive gas
to accumulate within the property.”
Motions to Dismiss
The property manager filed a motion to dismiss the amended
complaint for failure to state a claim.1 Three days later, on
February 13, 2017, the landowner filed a similar motion. The
motions were heard on May 5.
District Court’s Order
On May 11, 2017, the district court dismissed the amended
complaint with prejudice. The court first disposed of the com-
plaint’s allusion to res ipsa loqitur, which is not contested
on appeal.
1
See Neb. Ct. R. Pldg. § 6-1112(b)(6).
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Nebraska Supreme Court A dvance Sheets
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EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
The district court then examined the “proper standard of
care regarding negligent supervision and monitoring” and sum-
marized the duty as “whether the defendant acted as a reason-
ably prudent person would in a similar circumstance.” The
court concluded that the amended complaint failed to allege
a “recognized legal duty.” The court opined that there was
“no recognized legal duty of a landlord to supervise a tenant’s
move-out in order to ensure that a third party is not harmed
by the actions of the tenant.” The court also found no duty to
control the conduct of a third person as to prevent him or her
from causing physical harm to another in the absence of a spe-
cial relationship.
The court analyzed two cases cited by the neighbors, one
involving the use of dynamite by a construction company to
remove a tree a few feet away from the plaintiff’s property2
and one against a gas distribution company regarding an
employee who filled an underground tank to supply a restau-
rant without first inspecting the condition of the equipment
receiving the gas.3 Contrasting the defendants’ respective
activities in those cases with the landowner’s and property
manager’s engagement in the “real estate and property man-
agement business,” the court found no duty to “supervise
a tenant’s move-out to ensure the safety of third parties.”
Without discussing whether amendment to state a plausible
claim was possible or likely, the court dismissed the amended
complaint with prejudice.
Postorder Attempt to A mend
The neighbors filed a motion to vacate the order of dismissal
with prejudice. They also filed a motion for leave to amend,
together with the proposed second amended complaint. On
May 30, 2017, both motions were overruled.
2
See Wendt v. Yant Construction Co., 125 Neb. 277, 249 N.W. 599 (1933).
3
See Clay v. Butane Gas Corporation, 151 Neb. 876, 39 N.W.2d 813
(1949).
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
Represented by new counsel, the neighbors brought this
timely appeal.
ASSIGNMENTS OF ERROR
The neighbors make two assignments of error, which we
have restated into three components. They assign error to (1)
the district court’s ruling that the amended complaint failed to
identify a legal duty, (2) the dismissal with prejudice, and (3)
the failure to grant the postdismissal motion to file a second
amended complaint.
STANDARD OF REVIEW
[1] An appellate court reviews a district court’s order grant-
ing a motion to dismiss de novo, accepting the allegations in
the complaint as true and drawing all reasonable inferences in
favor of the nonmoving party.4
[2,3] The question whether a legal duty exists for action-
able negligence is a question of law dependent on the facts
in a particular situation.5 When reviewing questions of law,
an appellate court has an obligation to resolve the ques-
tions independently of the conclusion reached by the trial
court.6
[4] An appellate court reviews a district court’s denial of a
motion for leave to amend a complaint for an abuse of discre-
tion. However, an appellate court reviews de novo an under-
lying legal conclusion that the proposed amendments would
be futile.7
4
See Nimmer v. Giga Entertainment Media, 298 Neb. 630, 905 N.W.2d 523
(2018).
5
Bell v. Grow With Me Childcare & Preschool, 299 Neb. 136, 907 N.W.2d
705 (2018).
6
Id.
7
Estermann v. Bose, 296 Neb. 228, 892 N.W.2d 857 (2017).
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
ANALYSIS
Basic Civil Pleading Principles
[5] Nebraska is a notice pleading jurisdiction. Civil actions
are controlled by a liberal pleading regime; a party is only
required to set forth a short and plain statement of the claim
showing that the pleader is entitled to relief and is not required
to plead legal theories or cite appropriate statutes so long as
the pleading gives fair notice of the claims asserted.8 The
ration­
ale for this liberal notice pleading standard in civil
actions is that when a party has a valid claim, he or she should
recover on it regardless of a failure to perceive the true basis
of the claim at the pleading stage.9
[6] To prevail against a motion to dismiss for failure to
state a claim, a plaintiff must allege sufficient facts, accepted
as true, to state a claim to relief that is plausible on its face.10
Here, we accept the allegations of the amended complaint
as true and draw all reasonable inferences in favor of the
neighbors. In cases in which a plaintiff does not or cannot
allege specific facts showing a necessary element, the factual
allegations, taken as true, are nonetheless plausible if they
suggest the existence of the element and raise a reasonable
expectation that discovery will reveal evidence of the element
or claim.11
[7,8] In order to prevail in a negligence action, a plaintiff
must establish the defendant’s duty to protect the plaintiff
from injury, a failure to discharge that duty, and damages
proximately caused by the failure to discharge that duty.12
8
Rodriguez v. Catholic Health Initiatives, 297 Neb. 1, 899 N.W.2d 227
(2017).
9
Id.
10
Id.
11
Id.
12
Bell v. Grow With Me Childcare & Preschool, supra note 5.
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
The threshold issue in any negligence action is whether the
defend­ant owes a legal duty to the plaintiff.13
Landowner’s Duty to Persons
Outside the Land
Unaided by the parties, the district court overlooked our
jurisprudence regarding liability imposed upon possessors of
land for physical harm to others outside the land under certain
circumstances. Prior to our adoption of the duty analysis in § 7
of the Restatement (Third) of Torts in 2010,14 we had recog-
nized such liability of landowners.
For example, in Brown v. Nebraska P.P. Dist.,15 we adopted
§ 371 of the Restatement (Second) of Torts.16 In Brown, smoke
obstruction from burning weeds was alleged to have caused
driving hazards on a nearby public highway. We assumed duty
and concluded that issues of fact remained as to whether the
defendant failed to exercise reasonable care to prevent injury
to travelers on the highway and whether the negligence was a
proximate cause of the injury.17
We have not yet adopted § 54(a) of the Restatement (Third)
of Torts,18 which would impose upon a possessor of land a duty
of reasonable care for artificial conditions or conduct on the
land that poses a risk of physical harm to persons or property
not on the land.
It is not necessary to do so here. We are not presented with a
developed record. The pleadings here were not well articulated.
13
Id.
14
See, A.W. v. Lancaster Cty. Sch. Dist. 0001, 280 Neb. 205, 784 N.W.2d
907 (2010); 1 Restatement (Third) of Torts: Liability for Physical and
Emotional Harm § 7 (2010).
15
Brown v. Nebraska P.P. Dist., 209 Neb. 61, 306 N.W.2d 167 (1981).
16
Restatement (Second) of Torts § 371 (1965).
17
Id.
18
2 Restatement (Third) of Torts: Liability for Physical and Emotional Harm
§ 54(a) (2012).
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
The critical question is whether the district court should have
dismissed the complaint with prejudice, thereby effectively
denying leave to amend. Because the answer to that question
is sufficient to resolve the appeal, we need not delineate with
precision the duties owed by possessors of land.
Dismissal With Prejudice
[9] The neighbors argue that because they should have been
permitted to amend their complaint, the district court erred in
dismissing the action with prejudice. We agree. The district
court did not explain why it was dismissing the complaint
with prejudice. A district court’s denial of leave to amend
pleadings is appropriate only in those limited circumstances in
which undue delay, bad faith on the part of the moving party,
futility of the amendment, or unfair prejudice to the nonmov-
ing party can be demonstrated.19 The record would not support
a finding of undue delay, bad faith, or unfair prejudice. As
we read the judge’s order, it appears that the court thought
amendment would be futile.
[10,11] In this case, the district court dismissed the neigh-
bors’ amended complaint with prejudice. A dismissal without
prejudice means that another petition may be filed against
the same parties upon the same facts as long as it is filed
within the applicable statute of limitations.20 In comparison,
“‘a dismissal with prejudice operates as a rejection of the
plaintiff’s claims on the merits and [claim preclusion bars]
further litigation.’”21 Here, the dismissal with prejudice would
preclude the neighbors from filing a second suit with the same
claims in a Nebraska court.
[12] If a plaintiff has moved for leave to amend before the
court rules on a motion to dismiss, the court must first consider
19
Estermann v. Bose, supra note 7.
20
See Dworak v. Farmers Ins. Exch., 269 Neb. 386, 693 N.W.2d 522 (2005).
21
RFD-TV v. WildOpenWest Finance, 288 Neb. 318, 329, 849 N.W.2d 107,
116 (2014) (quoting Jaramillo v. Burkhart, 59 F.3d 78 (8th Cir. 1995)).
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EADIE v. LEISE PROPERTIES
Cite as 300 Neb. 141
and rule upon the pending motion to amend.22 We have hinted
that the same rule should apply where the plaintiff did not
move for leave.23 As a general rule, when a court grants a
motion to dismiss for failure to state a claim, a party should
be given leave to amend absent undue delay, bad faith, unfair
prejudice, or futility. Granting leave to amend is consistent
with the rationale for the liberal pleading standard in civil
cases discussed above.24 And it is consistent with the practice
in Nebraska prior to the adoption of the Nebraska Court Rules
of Pleading in Civil Cases.25 But leave should not be granted
when it is clear that the defect cannot be cured by amend-
ment.26 Here, that would only be the case if amendment would
be futile.
As we have already explained, the district court (and the
parties, apparently) did not consider whether a duty to the
neighbors could be found in the pertinent law governing the
liability imposed upon possessors of land for physical harm to
others outside the land under certain circumstances. Upon our
de novo review of that question, we cannot say that amend-
ment would be futile. Thus, we conclude that the district court
abused its discretion in dismissing the amended complaint
with prejudice.
Other Assignments
[13] We do not reach the neighbors’ other assignments
of error. An appellate court is not obligated to engage in an
22
See Gonzalez v. Union Pacific RR. Co., 282 Neb. 47, 803 N.W.2d 424
(2011).
23
See Spear T Ranch v. Knaub, 269 Neb. 177, 691 N.W.2d 116 (2005).
24
See, John P. Lenich, Nebraska Civil Procedure § 15:5 (2018); 5B Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357
(3d ed. 2004 & Supp. 2017).
25
See Lenich, supra note 24.
26
See Kocontes v. McQuaid, 279 Neb. 335, 778 N.W.2d 410 (2010).
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EADIE v. LEISE PROPERTIES
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analysis which is not needed to adjudicate the controversy
before it.27
CONCLUSION
The district court did not consider the pertinent law govern-
ing liability imposed upon possessors of land for physical harm
to others outside the land under certain circumstances. Thus,
when the court apparently determined that amendment of the
complaint would be futile, it overlooked a potential source of
duty to the neighbors. Upon de novo review, we cannot say
that amendment would have been futile. Thus, we conclude the
district court abused its discretion in dismissing the neighbors’
complaint with prejudice. We reverse the dismissal with preju-
dice, and remand the cause with direction to grant the neigh-
bors leave to amend their complaint.
R eversed and remanded with direction.
Funke, J., participating on briefs.
Wright, J., not participating.
27
Thompson v. Johnson, 299 Neb. 819, 910 N.W.2d 800 (2018).