Last Pass Aviation v. Western Co-op Co. ( 2017 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
06/16/2017 09:13 AM CDT
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
Last Pass Aviation, Inc., et al., appellees, v.
Western Cooperative Company, appellant.
___ N.W.2d ___
Filed March 24, 2017. No. S-16-207.
1. Jurisdiction: Appeal and Error. A jurisdictional question which does
not involve a factual dispute is determined by an appellate court as a
matter of law.
2. ____: ____. Before reaching the legal issues presented for review, it is
the duty of an appellate court to determine whether it has jurisdiction
over the matter before it, irrespective of whether the issue is raised by
the parties.
3. Final Orders: Appeal and Error. A party cannot move to voluntarily
dismiss a case without prejudice, consent to entry of such an order, and
then seek interlocutory appellate review of an adverse pretrial order.
4. Jurisdiction: Final Orders: Appeal and Error. When an order adju-
dicates fewer than all the claims of all the parties, appellate jurisdiction
cannot be created by voluntarily dismissing, without prejudice, the
claims on which the court has not yet ruled.
Appeal from the District Court for Box Butte County: Travis
P. O’Gorman, Judge. Appeal dismissed.
Steven W. Olsen and Adam A. Hoesing, of Simmons Olsen
Law Firm, P.C., for appellant.
Gary J. Nedved, of Keating, O’Gara, Nedved & Peter,
P.C., L.L.O., and Jon Worthman, of Worthman Law Office,
for appellees.
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
Stacy, J.
This action involves the enforceability of a covenant not to
compete in a contract for the sale of an aerial spraying com-
pany. The district court granted declaratory judgment in favor
of the seller, finding the covenant was overly broad and unen-
forceable. The parties then stipulated to dismiss the remaining
claims without prejudice, and the buyer appealed the declara-
tory judgment ruling. Because we hold the procedure used
here did not create a final order and did not confer appellate
jurisdiction, we dismiss the appeal.
FACTS
In February 2011, Tony D. Peterson agreed to sell Last
Pass Aviation, Inc., an aerial spraying company headquar-
tered in Alliance, Nebraska, to Western Cooperative Company
(Westco). The purchase agreement contained a covenant not to
compete, which prohibited Last Pass Aviation and its princi-
pals from engaging in aerial spraying and chemical sales in the
states of Nebraska, South Dakota, Wyoming, and Colorado for
a period of 10 years.
In February 2014, Last Pass Aviation, Peterson, and his
son Lucas J.H. Peterson (collectively Last Pass) filed this
action seeking a declaratory judgment that the covenant not
to compete between Last Pass and Westco was overbroad and
unenforceable. Westco filed an answer and a counterclaim
asking the court to enjoin Last Pass from “selling, dispersing,
delivering or consigning any aerial spraying services or agri-
cultural chemicals within the states of Nebraska, South Dakota,
Wyoming or Colorado.” The court issued a temporary injunc-
tion on April 28, 2014.
Subsequently, Westco filed an amended answer. The
amended answer included two additional counterclaims alleg-
ing that Last Pass had breached the parties’ purchase agreement
and sought damages for lost profits and loss of goodwill based
on the breaches.
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
Trial commenced on July 15, 2015, and it appears from the
parties’ pretrial filings that trial was held on all issues raised
by the pleadings. After posttrial briefing, the court entered an
order on September 28 finding the noncompete agreement was
void and unenforceable because it was greater than reasonably
necessary to protect the business interests of Westco both in
geographical scope and duration. The September 28 order did
not address Westco’s counterclaims.
After the court issued the September 28, 2015, order, Last
Pass filed a motion seeking damages and attorney fees related
to the issuance of the temporary injunction. Last Pass relied
on Neb. Rev. Stat. § 25-1079 (Reissue 2016) and Koch v.
Aupperle1 as authority for the motion. Before the court was
able to rule on the motion, Westco filed a notice of appeal.
That appeal was docketed in the Nebraska Court of Appeals as
case No. A-15-972.
In November 2015, the Court of Appeals dismissed the
appeal for lack of jurisdiction. That court’s minute order cited
Neb. Ct. R. App. P. § 2-107(A)(2) (rev. 2012) and Malolepszy
v. State.2 Section 2-107(A)(2) authorizes a Nebraska appel-
late court to summarily dismiss a case when it determines it
lacks jurisdiction. Malolepszy held that under Neb. Rev. Stat.
§ 25-1315(1) (Reissue 2016), an order is final in a case involv-
ing multiple claims or parties only when there has been an
explicit adjudication as to all claims and parties or the trial
court has made an express determination that there is no just
reason for delay of an appeal of an order disposing of less than
all claims or parties.
After the cause was remanded, the parties filed a “Stipulated
Motion to Dismiss Without Prejudice” in the district court. In
this motion, the parties jointly requested dismissal, without
1
Koch v. Aupperle, 277 Neb. 560, 763 N.W.2d 415 (2009).
2
Malolepszy v. State, 270 Neb. 100, 699 N.W.2d 387 (2005).
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
prejudice, of Westco’s breach-of-contract counterclaims and
Last Pass’ motion for damages and attorney fees. The stipu-
lated motion recited:
[T]he Second and Third Amended Counterclaims were
not addressed by the Order of this court entered on
September 28, 2015. Under Neb. Rev. Stat. § 25-1315,
such Order is not final and appealable because all claims
were not addressed at the district court level. The Order
of this court only addressed [Last Pass’] First and Second
Causes of Action for declaratory relief . . . and [Westco’s]
First Amended Counterclaim for injunctive relief . . . .
[Westco’s] counterclaims will be available for refiling
if desired.
Similarly . . . the parties state that [Last Pass’] Motion
for damages and fees need only be addressed by the Court
if the Court’s Order of September 28, 2015 is affirmed on
appeal. [Last Pass’] motion will be available for refiling
if desired after the appeal is concluded.
The district court subsequently entered an order of dismissal
without prejudice that largely mirrored the language of the
parties’ stipulated motion. The order of dismissal was prepared
by Westco’s counsel and approved as to form and content by
Last Pass’ counsel. The order identified those claims resolved
by the court’s earlier order of September 28, 2015 (spe-
cifically, Last Pass’ action for declaratory relief and Westco’s
counterclaim for injunctive relief) and identified those claims
which remained unresolved (specifically, Last Pass’ motion
for damages and fees and Westco’s second and third amended
counterclaims for breach of contract). The order purported to
dismiss the unresolved claims and motion “without prejudice”
and specifically provided for the refiling of the motion and the
counterclaims after the appeal.
Westco timely appealed from the order of dismissal with-
out prejudice. We moved the appeal to our docket on our
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
own motion pursuant to our statutory authority to regulate the
caseloads of the appellate courts of this state.3
ASSIGNMENTS OF ERROR
Westco assigns that the district court erred in (1) finding
the geographic scope and duration of the covenant not to
compete unreasonable, (2) finding no evidence supported the
reasonableness of the 10-year duration, (3) placing upon it the
burden of proving the reasonableness of the 10-year duration,
(4) issuing an advisory opinion which did not resolve all of
the issues between the parties, (5) failing to equitably reform
or “blue pencil” the covenant not to compete, and (6) failing
to receive into evidence a purchase agreement between Westco
and another Nebraska aerial spraying company.
STANDARD OF REVIEW
[1] A jurisdictional question which does not involve a factual
dispute is determined by an appellate court as a matter of law.4
ANALYSIS
[2] Before reaching the legal issues presented for review, it
is the duty of an appellate court to determine whether it has
jurisdiction over the matter before it, irrespective of whether
the issue is raised by the parties.5 After reviewing the record,
we conclude we lack appellate jurisdiction because Westco has
not appealed from a final order.
[3] We considered a similar situation in Smith v. Lincoln
Meadows Homeowners Assn.6 In Smith, the plaintiff brought
3
See Neb. Rev. Stat. § 24-1106(3) (Reissue 2016).
4
Holdsworth v. Greenwood Farmers Co-op, 286 Neb. 49, 835 N.W.2d 30
(2013); In re Adoption of Amea R., 282 Neb. 751, 807 N.W.2d 736 (2011).
5
Sutton v. Killham, 285 Neb. 1, 825 N.W.2d 188 (2013); Carlos H. v.
Lindsay M., 283 Neb. 1004, 815 N.W.2d 168 (2012).
6
Smith v. Lincoln Meadows Homeowners Assn., 267 Neb. 849, 678 N.W.2d
726 (2004).
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
a premises liability action and alleged the defendant’s negli-
gence caused her to suffer various damages, including broken
bones and the onset of multiple sclerosis. The district court
granted partial summary judgment in favor of the defendant
on the allegation that damages included the onset of multiple
sclerosis. The plaintiff then moved to dismiss her cause of
action, without prejudice, so that she could appeal the grant of
summary judgment. We found her appeal was not from a final
order, as her voluntary dismissal was “quite clearly, an attempt
to obtain interlocutory review of an order that would otherwise
not be appealable.”7 We held it was clear that a party “cannot
move to voluntarily dismiss a case without prejudice, consent
to entry of such an order, and then seek interlocutory appellate
review of an adverse pretrial order.”8
We recently relied on Smith in Addy v. Lopez.9 There, the
plaintiff filed a wrongful death action against three defendants.
After the trial court granted summary judgment in favor of
one defendant, the parties entered into a joint stipulation to
dismiss the claims against the remaining two defendants “with-
out prejudice” in order to pursue an appeal of the summary
judgment.10 We held that such a procedure did not create appel-
late jurisdiction when there would otherwise be none because
to do so would “‘effectively abrogate our long-established
rules governing the finality and appealability of orders, as
“the policy against piecemeal litigation and review would be
severely weakened.”’”11
The same reasoning applies to the procedure used by the
parties here. Westco’s initial appeal was dismissed for lack
of a final order. Once the matter was back before the district
7
Id. at 851, 678 N.W.2d at 729.
8
Id. at 856, 678 N.W.2d at 732.
9
Addy v. Lopez, 295 Neb. 635, ___ N.W.2d ___ (2017).
10
Id. at 636, ___ N.W.2d at ___.
11
Id. at 638, ___ N.W.2d at ___, quoting Smith, supra note 6.
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
LAST PASS AVIATION v. WESTERN CO-OP CO.
Cite as 296 Neb. 165
court, the parties did not seek rulings on the remaining coun-
terclaims or motion for damages and fees, nor did they request
an order directing final judgment under § 25-1315 on fewer
than all of the claims or move to dismiss the remaining claims
with prejudice. Instead, the parties stipulated to a voluntary
dismissal, without prejudice, of the pending counterclaims and
motion for damages and fees, with the stated intent to bring
those matters back before the court for ruling, depending on
the outcome of the appeal. Such a procedure does not create
finality and confer appellate jurisdiction.
[4] When an order adjudicates fewer than all the claims
of all the parties, appellate jurisdiction cannot be created by
voluntarily dismissing, without prejudice, the claims on which
the court has not yet ruled.12 We conclude the order appealed
from is not a final order, and we lack jurisdiction to consider
the appeal.
A ppeal dismissed.
12
See, Addy, supra note 9; Malolepszy, supra note 2; Smith, supra note 6.