Pan v. IOC Realty Specialist

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/16/2018 12:11 AM CST
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
PAN v. IOC REALTY SPECIALIST
Cite as 301 Neb. 256
Samuel Pan, doing business as US World
Daycare Center, appellee, v. IOC R ealty
Specialist Inc. and Bernard M.
Tompkins, appellants.
___ N.W.2d ___
Filed October 12, 2018. No. S-17-815.
1. Statutes: Judgments: Appeal and Error. Issues of statutory interpreta-
tion present a question of law, and when reviewing questions of law, an
appellate court has an obligation to resolve the questions independently
of the conclusion reached by the trial court.
2. Judgments: Appeal and Error. In reviewing a judgment awarded
in a bench trial of a law action, an appellate court does not reweigh
evidence, but considers the evidence in the light most favorable to the
successful party and resolves evidentiary conflicts in favor of the suc-
cessful party, who is entitled to every reasonable inference deducible
from the evidence.
3. Intent: Words and Phrases. The word “include” preceding a list does
not indicate an exclusive list absent other language showing a con-
trary intent.
4. Landlord and Tenant: Leases: Property: Statutes. The scope of the
Disposition of Personal Property Landlord and Tenant Act is not so nar-
rowly confined as to exclude commercial leases. As such, the act applies
in commercial lease cases.
5. Landlord and Tenant: Property: Proof: Liability. All that is required
under the Disposition of Personal Property Landlord and Tenant Act
is evidence that would lead a prudent person to believe the property
belonged to the requesting party. The landlord need not know for certain
that the party requesting the personal property owns it in order to be
relieved from liability.
6. Actions: Parties. In order for a party to be indispensable or necessary,
the threshold determination that must be made is whether the party has
an interest in the subject matter of the controversy.
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7. Landlord and Tenant: Property: Conversion. The remedial provisions
within the Disposition of Personal Property Landlord and Tenant Act are
rooted in the theories of conversion by seeking to restore the status quo
when a landlord improperly disposes of or withholds the property of a
former tenant.
8. Landlord and Tenant: Property: Damages: Words and Phrases. The
phrase “value of the personal property” in its relation to “actual dam-
ages” is the fair market value of the property at the time the tenant’s
property is improperly detained by the landlord.
9. Judgments: Appeal and Error. In reviewing a judgment awarded
in a bench trial of a law action, an appellate court does not reweigh
evidence, but considers the evidence in the light most favorable to the
successful party and resolves evidentiary conflicts in favor of the suc-
cessful party, who is entitled to every reasonable inference deducible
from the evidence.
10. Attorney Fees: Appeal and Error. When an attorney fee is authorized,
the amount of the fee is addressed to the trial court’s discretion, and its
ruling will not be disturbed on appeal absent an abuse of discretion.
11. Attorney Fees: Records. An award of attorney fees involves consider-
ation of such factors as the nature of the case, the services performed
and results obtained, the length of time required for preparation and
presentation of the case, the customary charges of the bar, and general
equities of the case. If the contents of the record show the allowed fee
not to be unreasonable, then that fee would not be untenable or an abuse
of discretion.
Appeal from the District Court for Douglas County: Gregory
M. Schatz, Judge. Affirmed.
John C. Chatelain, of Chatelain & Maynard, for appellants.
Willow T. Head, of Law Offices of Willow T. Head, P.C.,
L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Freudenberg, J.
I. SUMMARY OF CASE
This case involves a dispute between a landlord and a ten-
ant over the disposition of personal property. A former tenant,
Samuel Pan, sued his landlord, IOC Realty Specialist Inc., and
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PAN v. IOC REALTY SPECIALIST
Cite as 301 Neb. 256
its sole shareholder, Bernard M. Tompkins, when the landlord
refused to return the tenant’s personal property that remained
on the leased premises. After a bench trial, a judgment was
entered against IOC Realty Specialist and Tompkins for the
wrongful retention of property pursuant to the Disposition of
Personal Property Landlord and Tenant Act (the Act).1 The
district court held that IOC Realty Specialist and Tompkins
violated the Act by knowingly retaining personal property that
belonged to Pan and awarded Pan damages and attorney fees.
We affirm.
II. FACTS
IOC Realty Specialist is a corporation that deals in real
estate and property management. IOC Realty Specialist is
owned by its sole shareholder and licensed real estate broker,
Tompkins (collectively IOC). For approximately 20 years,
Tompkins, by and through IOC Realty Specialist, has man-
aged the leased premises at issue in Omaha, Nebraska, for
its owners, Leon and Mary Kleinschmit. The Kleinschmits or
their corporation, Millard Electronics, Inc., were consistently
listed as the “lessor” on each lease signed concerning the sub-
ject property.
In 2007, Pan purchased a daycare business which included
an assignment of a lease at a commercial property owned
by the Kleinschmits. IOC facilitated this assignment as the
Kleinschmits’ real estate broker. The leasehold was assigned
in October 2007, designating Pan and his business partner,
Mary Chol, as the new tenants on the assignment agreement
and lease documentation. In 2007, Chol left the business
arrangement with Pan. However, Pan’s daycare business con-
tinued to lease the property on a month-to-month basis until
June 2014.
In June 2014, Pan negotiated with Ci Nuer Ben America
(CNBA), a Nebraska corporation, for the purchase of Pan’s
1
Neb. Rev. Stat. §§ 69-2301 to 69-2314 (Reissue 2009 & Cum. Supp.
2016).
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daycare business and all of Pan’s personal property on the
leased premises. The personal property included various chil-
dren’s toys, sleeping mats, appliances, a wooden fence, a stor-
age shed, and outside playsets embedded in concrete at the
back of the building. Pan advised IOC of his agreement with
CNBA for the purchase of Pan’s daycare business, including all
of his personal property on the leased premises. IOC met with
the owner of CNBA, James Panoam, in July and signed a new
lease to begin CNBA’s tenancy of the property on August 1.
Soon thereafter, CNBA paid rent for the month of August,
but failed to make any further rent payments. Additionally, Pan
never received any payment from CNBA under the terms of
their agreement and, as a consequence, Pan never delivered the
keys to the lease premises to CNBA.
Pan advised IOC in August 2014 that CNBA never paid the
contract price for the personal property on the leased prem-
ises. Pan repeatedly attempted to recover his property through
December. Pan called IOC and visited the leased property in
an effort to retrieve the personal property at issue, but found
that the locks had been changed.
Pan and IOC spoke both over the telephone and in person
regarding the disposition of the property. At one point, IOC
allowed Pan to access the leased property to recover some of
his belongings. However, IOC did not allow Pan to retrieve
the remainder of his property after further requests from Pan
to do so.
After 3 consecutive months (September through November
2014) of nonpayment of rent, IOC evicted CNBA and sought
a new lessee. In an effort to mitigate damages and relet the
building, IOC had several personal property items subject to
the agreement between Pan and CNBA moved to a warehouse
that IOC managed for Millard Electronics.
Pan retained an attorney who sent a letter to IOC request-
ing that Pan’s property be returned. IOC stated it was con-
cerned about future property disputes between Pan and CNBA.
Therefore, IOC requested that Pan provide a statement from
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CNBA waiving its claim to the property. On December 26,
2014, Pan provided IOC an affidavit from Panoam, identifying
himself as president of CNBA, and indicating that Pan owned
the property. IOC refused to return the property and requested
a notarized corporate resolution, reasoning that the initial affi-
davit was insufficient to bind CNBA. On January 12, 2015,
Pan provided a second statement from Panoam as “President
and Sole Shareholder d/b/a [CNBA]” containing a list of per-
sonal property and stating that CNBA did not have any owner-
ship in the personal property on the leased premises. However,
IOC again refused to return the personal property, because it
did not receive a corporate resolution as requested.
In January 2015, IOC entered into a new lease with another
company to operate a daycare. Some of the disputed property
was considered by IOC too large to remove and remained on
the leased premises. IOC permitted the new daycare to utilize
the property.
IOC did not request storage fees from Pan during any of
their business discussions regarding the property. IOC first
requested storage fees when it filed a counterclaim for such
payment in its answer to Pan’s complaint.
In June 2015, IOC mailed correspondence to Pan stating a
willingness to release the subject personal property if Pan would
provide a “‘Transfer or Assignment and Indemnification,’”
requesting that Pan indemnify IOC from claims by CNBA.
Pan refused to agree to indemnify IOC and subsequently filed
suit for recovery of the property, damages for IOC’s retention
of the property, and attorney fees. IOC denied that Pan was
entitled to the property and filed a counterclaim for storage
fees incurred.
1. Exhibits 17 and 32 and R easonable
Belief of Ownership
During trial, two affidavits were admitted into evidence
over hearsay objections. The first, exhibit 17, was a let-
ter authored by Pan’s attorney which included one of the
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PAN v. IOC REALTY SPECIALIST
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above-mentioned affidavits from Panoam doing business as
CNBA. The affidavit asserted that the property did not belong
to CNBA, but, rather, it belonged to Pan. The court admitted
the exhibit, reasoning that the exhibit was being offered as a
showing by Pan that he complied with IOC’s demand for a
statement from CNBA disavowing its ownership in the subject
personal property.
In a similar fashion, Pan offered exhibit 32, the second
affidavit by Panoam stating that the personal property located
at the subject leased premises did not belong to CNBA. The
court again overruled the hearsay objection, finding Pan was
not offering the exhibit for the truth of its contents. Further,
the district court detailed that exhibit 32 would be utilized
only to show that Pan complied with the requests made by
IOC as opposed to proving that the property was owned
by Pan.
2. Evidence of Damages and
Fair M arket Value
At trial, Pan opined on the value of the disputed personal
property. Pan, although lacking several itemized and specific
receipts of his expenditures on the subject personal prop-
erty, asserted that the property was worth $27,611, accord-
ing to an itemization in exhibit 14. In addition, Pan testi-
fied as to the accuracy of bank statements and copies of
checks stemming from two accounts used in the operation
of his daycare business. Pan also testified that these state-
ments and checks corresponded to the property at issue.
Generally, these bank statements and checks identify to whom
funds were paid, but do not enumerate the specific purchases
being made.
Contesting Pan’s asserted valuation of the personal prop-
erty, IOC presented testimony that the property was bug
infested, dirty, and in poor condition following CNBA’s evic-
tion in November 2014. IOC did not present evidence as to a
specific monetary value of the personal property. No expert
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evidence was presented by either party regarding the fair
­market value of the property at issue.
3. District Court’s Final Order
After the trial, the district court found that the Act applied.
The court reasoned that by utilizing the phrase “whether such
premises are used as a dwelling unit or self-storage unit or
facility or not” in the definition of “tenant,” the Act did not
preclude commercial tenants from citing the Act in attempting
to retrieve their personal property from landlords.
The district court found each defendant to be jointly and
severally liable, because neither IOC Realty Specialist nor
Tompkins made any distinction between themselves in the
pleadings. Further, the court found IOC held itself out to be
the owner, landlord, and lessor of the property in question and
never took the position that it was simply an agent for the true
owners of the property in any pleadings filed in the case. The
court also noted that IOC’s counterclaim for storage fees cor-
roborated this finding.
Based on the evidence received at trial, the district court
found that IOC retained Pan’s property in violation of the
Act. By finding that IOC withheld Pan’s property from him
while knowing that Pan’s sale of the property had not been
completed in August 2014, the court implicitly found IOC’s
asserted belief that the property belonged to CNBA was
unreasonable.
The court relied on exhibit 14, as well as the testimony
regarding the condition of the property, in order to determine
damages in the case. Pan was awarded $10,000, or approxi-
mately 50 percent of Pan’s personal valuation, in damages.
The court notably excluded the storage shed and fence, finding
that these items were permanently affixed to the real property
and no longer personal property.
Also pursuant to the Act, the district court awarded Pan
attorney fees. IOC’s counterclaim for storage fees was dis-
missed. From this order, IOC appeals.
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PAN v. IOC REALTY SPECIALIST
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III. ASSIGNMENTS OF ERROR
IOC assigns that the district court erred in (1) failing to
join necessary and indispensable parties, (2) admitting hear-
say into evidence, (3) finding that Pan had ownership and a
right to possession of the subject party, (4) entering a money
judgment in a replevin action without determining that the
property could not be returned, (5) determining the fair mar-
ket value of the property at issue without sufficient evidence,
(6) finding the Act applicable to a commercial lease, (7) find-
ing that IOC violated the Act, and (8) denying IOC’s claim
for storage fees.
IV. STANDARD OF REVIEW
[1] Issues of statutory interpretation present a question of
law, and when reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusion reached by the trial court.2
The amount of damages to be awarded is a determination
solely for the fact finder, and its action in this respect will
not be disturbed on appeal if it is supported by evidence and
bears a reasonable relationship to the elements of the damages
proved.3 With respect to damages, an appellate court reviews
the trial court’s factual findings under a clearly erroneous stan-
dard of review.4
[2] In a bench trial of a law action, the trial court’s factual
findings have the effect of a jury verdict, and the Supreme
Court will not disturb those findings unless they are clearly
erroneous.5 In reviewing a judgment awarded in a bench trial
of a law action, an appellate court does not reweigh evidence,
2
See Whipps Land & Cattle Co. v. Level 3 Communications, 265 Neb. 472,
658 N.W.2d 258 (2003).
3
Funk v. Lincoln-Lancaster Cty. Crime Stoppers, 294 Neb. 715, 885
N.W.2d 1 (2016).
4
Id.
5
Mays v. Midnite Dreams, 300 Neb. 485, 915 N.W.2d 71 (2018).
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but considers the evidence in the light most favorable to the
successful party and resolves evidentiary conflicts in favor of
the successful party, who is entitled to every reasonable infer-
ence deducible from the evidence.6
When an attorney fee is authorized, the amount of the fee is
addressed to the trial court’s discretion, and its ruling will not
be disturbed on appeal absent an abuse of discretion.7
V. ANALYSIS
1. The Act or R eplevin
Before addressing the parties’ assignments of error, it is
necessary to clarify the nature of the action tried to the court.
Pan’s complaint styled his action as one for replevin, but both
parties address issues of the Act on appeal and tried the action
largely as one seeking damages under the Act. Generally, the
measure of damages under the Act are (1) money damages
not exceeding fair market value of the personal property and
(2) attorney fees,8 while the object of a replevin action is to
recover specific personal property.9
The parties tried the case as one seeking primarily monetary
damages. On appeal, IOC does not assign error to the district
court’s order for an unpled remedy. Thus, while it would have
been preferable for Pan to move to conform the pleadings to
the evidence, Pan’s failure to formally seek amendment is not
dispositive.10
Neb. Ct. R. Pldg. § 6-1115(b) provides in pertinent part:
When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
6
Id.
7
ACI Worldwide Corp. v. Baldwin Hackett & Meeks, 296 Neb. 818, 896
N.W.2d 156 (2017).
8
§ 69-2312.
9
Zelenka v. Pratte, 300 Neb. 100, 912 N.W.2d 723 (2018).
10
See id.
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pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to
raise these issues may be made upon motion of any party
at any time, even after judgment; but failure so to amend
does not affect the result of the trial of these issues.11
Here, despite styling the complaint as one for replevin, the
parties tried the action as one for damages under the Act and
treated the case in all respects as if the Act had been raised in
the pleadings. We conclude the parties impliedly consented to
try this action as one for remedy under the Act and, pursuant
to § 6-1115(b), treat this action as one in which the Act was
raised in the pleadings.
2. The Act A pplies to
Commercial Leases
This is the court’s first opportunity to address the Act, which
provides procedures that landlords are to follow when a former
tenant abandons personal property.12 It also provides remedies
to tenants in the event they seek the return of property and the
landlord improperly refuses.13
The fundamental objective of statutory interpretation is to
ascertain and carry out the Legislature’s intent.14 When statu-
tory interpretation is one of first impression, the statutory
language is to be given its plain and ordinary meaning, and
an appellate court will not resort to interpretation to ascer-
tain the meaning of statutory words which are plain, direct,
and unambiguous.15 The court, in discerning the meaning of
a statute, should determine and give effect to the purpose
and intent of the Legislature as ascertained from the entire
11
See Zelenka v. Pratte, supra note 9 (citing Blinn v. Beatrice Community
Hosp. & Health Ctr., 270 Neb. 809, 708 N.W.2d 235 (2006)).
12
See §§ 69-2303 through § 69-2307.
13
See § 69-2312.
14
State v. Thompson, 294 Neb. 197, 881 N.W.2d 609 (2016).
15
Dean v. State, 288 Neb. 530, 849 N.W.2d 138 (2014).
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language of the statute considered in its plain, ordinary, and
popular sense.16
In construing statutes, legislative intention is to be deter-
mined from a general consideration of a whole act with refer-
ence to the subject matter to which it applies and the particular
topic under which the language in question is found, and
intent so deduced from the whole will prevail over that of a
particular part considered separately.17 When words of a par-
ticular clause, taken literally, would plainly contradict other
clauses of the same statute, or lead to some manifest absurdity
or to some consequences which a court sees plainly could not
have been intended, or to result manifestly against the general
term, scope, and purpose of the law, then the court may apply
the rules of construction to ascertain the meaning and intent
of the lawgiver, and bring the whole statute into harmony
if possible.18
IOC argues on appeal that the Act does not apply to com-
mercial leases. Rather, IOC contends that by specifically iden-
tifying the terms “‘dwelling unit’” and “‘self-storage unit’”
in certain sections of the Act, the Legislature intended for the
statute to be read narrowly.19 Further, IOC argues that the dis-
trict court erred in construing § 69-2302(6) by reading a mean-
ing into it that was not plainly there. We disagree.
IOC relies on the language of § 69-2302(1) and (6), defin-
ing landlord and tenant respectively, in making its argument.
Section 69-2302(1), defining landlord, states, “Landlord [is
defined as] the owner, lessor, or sublessor of . . . premises,
including self-service storage units or facilities, for rent or his
or her agent or successor in interest.” (Emphasis ­ supplied.)
Section 69-2302(6) defines “[t]enant” to mean “a person enti-
tled under a rental agreement to occupy any premises for rent
16
Farmers Co-op v. State, 296 Neb. 347, 893 N.W.2d 728 (2017).
17
Lang v. Sanitary District, 160 Neb. 754, 71 N.W.2d 608 (1955).
18
Dean v. State, supra note 15.
19
Brief for appellants at 37.
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or storage uses to the exclusion of others whether such prem-
ises are used as a dwelling unit or self-service storage unit or
facility or not.” (Emphasis supplied.)
[3] This court has held that the word “include” preceding a
list does not indicate an exclusive list absent other language
showing a contrary intent.20 Thus, the identification of “stor-
age units or facilities” within definition of “landlord” under
§ 69-2302(1) does not itself indicate a limitation of the Act
to self-storage units and dwellings. Rather, the inclusion of
these two types of facilities would indicate a nonexclusive list
of example applications. Therefore, the Legislature’s specific
identification of storage units and facilities in this section
would not create such a limiting effect as to indicate that the
Act applies only to leases of that nature.
Regarding the definition of “tenant,” the phrase “whether or
not,” as found in the definition of “tenant” under § 69-2302(6),
is plainly defined to indicate that it is not important which of
the possibilities are true.21 In addition, a reading of subsec-
tion (6) of § 69-2302, when considering the rest of the statute,
specifically in conjunction with the definition of “landlord” at
subsection (1), would not produce such a narrowed scope as
IOC suggests. Rather, a plain reading of this definitional sec-
tion would indicate that the use of the premises or nature of the
lease would not have an effect on its applicability.22 Moreover,
the definition of “tenant” also broadly includes the language
“any premises for rent or storage.”23
[4] We find that the scope of the Act is not so narrowly con-
fined as to exclude commercial leases. As such, the Act applies
in commercial lease cases.
20
Timberlake v. Douglas County, 291 Neb. 387, 865 N.W.2d 788 (2015).
21
See “Whether or not,” Cambridge Dictionary, https://dictionary.cambridge.
org/dictionary/english (last visited Sept. 24, 2018).
22
See § 69-2302(1) and (6).
23
§ 69-2302(6).
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3. Violation of the Act
The district court found that, in violation of the Act, IOC,
as the landlord of the leased premises, wrongfully retained
Pan’s personal property by failing to return it to Pan upon his
request. IOC argues on appeal that (1) IOC was not the “land-
lord” under § 69-2302(1), (2) Pan was not the “former tenant”
under § 69-2307(1), and (3) § 69-2302(4) of the Act requires a
“[r]easonable belief” that the personal property belonged to the
requesting party before the landlord is required to return the
property to that party. Lastly, IOC argues that the Act requires
the payment of storage fees to IOC.
Under § 69-2307(1):
A landlord shall release personal property left on the
vacated premises to the former tenant or to any person
reasonably believed by the landlord to be the owner if
such tenant or other person pays the reasonable costs
of storage and advertising and takes possession of the
property not later than the date specified in the notice for
taking possession.
The purpose of § 69-2307(1) is to protect landlords from liabil-
ity to owners of personal property when the landlord errone-
ously surrenders property to a party other than the true owner
but who the landlord reasonably believed was the owner.
Conversely, if the requesting party is not a former tenant or a
person that the landlord reasonably believes owns the personal
property, the landlord would not be protected from liability
under § 69-2307(1).
Under § 69-2312, the Act plainly envisions a cause of action
by a tenant for landlord violations of its provisions. Reading
§§ 69-2307 and 69-2312 in conjunction, a landlord would not
be required to relinquish property to any party that is either
(1) not a former tenant or (2) not a person who is reason-
ably believed by the landlord to be the owner of the personal
property at issue. But a landlord would be required to release
the property to a former tenant or a person claiming owner-
ship of the personal property, so long as the landlord, under an
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objective, prudent person standard, should reasonably believe
the requesting party is the owner of the personal property in his
possession and that person pays reasonable storage fees to the
extent required to be paid by the Act.
(a) Landlord
Addressing IOC’s first contention that it is not the landlord
under the Act, the definition of a landlord under § 69-2302(1)
explicitly provides that the landlord is the “owner, lessor, or
sublessor . . . or his or her agent or successor in interest.” This
definition clearly includes agents under its scope. Tompkins
admitted in his testimony at trial that he, as well as his com-
pany, IOC Realty Specialist, served as the Kleinschmits’ agent
for the lease of the property for years. Consequently, IOC is
considered the landlord of the property for the purposes of
applying this section of the Act.
(b) Former Tenant
IOC contends that CNBA, and not Pan, was the “former ten-
ant” for the purposes of applying § 69-2307(1) of the Act. The
definition of tenant under the Act, in pertinent part, broadly
defines tenant to include “person[s] entitled under a rental
agreement to occupy any premises for rent or storage uses
to the exclusion of others.”24 Pan falls under this definition,
because he rented the leased premises and operated his daycare
business on the property for several years.
But § 69-2307(1) specifies that the landlord shall release
personal property to the former tenant. Giving the word “for-
mer” its plain and ordinary meaning, as Nebraska law requires,
“former” is defined as having been previously or “coming
before in time.”25 There is no reason to narrowly construe the
term “former tenant” in § 69-2307(1), as IOC suggests. Rather,
“former tenant” includes any past tenant to whom the property
24
§ 69-2302(6).
25
Merriam Webster’s Collegiate Dictionary 459 (10th ed. 2001).
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may have belonged. Under such an analysis, the district court
did not err in finding that Pan was a former tenant under the
Act and that IOC was required to release the personal property
to Pan.
(c) Reasonable Belief That Pan
Was Owner of Property
IOC also asserts that it lacked a reasonable belief that Pan
was the owner of the property. IOC could be relieved of liabil-
ity if it did not have a reasonable belief that Pan was the true
owner of the personal property.26
The Act defines reasonable belief at § 69-2302(4):
Reasonable belief shall mean the knowledge or belief a
prudent person should have without making an inves-
tigation, including any investigation of public records,
except that when the landlord has specific information
indicating that such an investigation would more prob-
ably than not reveal pertinent information and the cost
of such an investigation would be reasonable in relation
to the probable value of the personal property involved,
reasonable belief shall include the actual knowledge or
belief a prudent person would have if such investigation
were made.
Under this definition, IOC’s imputed reasonable belief would
include the actual knowledge or belief that “a prudent person”
would have if an investigation were made. It is an objective
rather than a subjective standard.
Although Pan did initially inform Tompkins that Pan
entered into an agreement with CNBA to sell his personal
property, Tompkins was subsequently told on a number of
occasions that Pan was the owner of this property. Pan sent
numerous letters to Tompkins, including various affidavits
and statements from CNBA stating that CNBA had no owner-
ship right to the property. Tompkins admitted in his testimony
26
See § 69-2307(1).
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at trial and in response letters to Pan’s attorney submitted
as evidence at trial that he had received Pan’s letters and
CNBA’s statements.
[5] All that is required under the Act is evidence that would
lead a prudent person to believe the property belonged to
the requesting party. The landlord need not know for cer-
tain that the party requesting the personal property owns
it in order to be relieved from liability. IOC demanded
more than what is required under the Act. IOC specifically
requested a notarized affidavit and corporate resolution before
it would agree to return Pan’s personal property. Although
Pan sent multiple affidavits stating that CNBA disclaimed
ownership in the property, IOC continued to refuse to return
the property.
The district court implicitly found IOC’s belief the prop-
erty belonged to CNBA to be unreasonable by determining
that IOC withheld Pan’s personal property while knowing
that Pan’s purchase agreement had not been completed in
August 2014. In making this determination, the district court
relied on correspondence between Pan and Tompkins in the
aggregate. In the parties’ correspondence, Tompkins specifi-
cally conditioned the return of the property upon his receipt
of written statements from CNBA disclaiming its ownership
interest in the personal property at issue. The district court
additionally stated that it relied on testimony disclosing the
fact that Tompkins spoke to Pan regarding the failed sale of
his business to CNBA in making its determination of prop-
erty ownership.
IOC argues on appeal that the district court improperly
relied upon inadmissible hearsay when it received into evi-
dence certain attachments to the correspondence between Pan
and Tompkins, specifically, exhibits 17 and 32, which were
identified as affidavits from CNBA stating that it disclaimed
any ownership in the personal property. We find no merit to
IOC’s argument that the court improperly relied on hearsay in
reaching its conclusion.
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Hearsay is a statement offered in evidence to prove the
truth of the matter asserted.27 If an out-of-court statement is
not offered for proving the truth of the facts asserted, it is not
hearsay.28 The district court admitted exhibits 17 and 32 for the
purpose of proving that Pan complied with IOC’s requests for
proof that CNBA did not claim an ownership interest in the
property. Regardless of the truth of the matter asserted in those
exhibits, they form part of the surrounding circumstances that
would lead a prudent person to believe that Pan was the owner
of the personal property at issue.
The court also relied on testimony disclosing the fact that
Tompkins spoke to Pan regarding the failed sale of his busi-
ness to CNBA. Consequently, the district court found that IOC
was aware that the property belonged to Pan as a result of
the failed sale. Other relevant and properly admitted evidence
included testimony from both Pan and Tompkins indicating
that IOC at one point allowed Pan onto the premises to take
some of the personal property, as well as an admission within
IOC’s counterclaim stating Pan owns or claims ownership in
the property.
The district court did not clearly err in finding that Pan was
the owner of the personal property and, further, in its implicit
finding that IOC’s belief the property belonged to CNBA was
unreasonable. As such, the court did not clearly err when it
held that IOC violated the Act by refusing to return Pan’s prop-
erty upon his request.
(d) Storage Fees
IOC argues that it did not violate the Act, because § 69-2312
requires the payment of reasonable storage fees when a land-
lord retains the personal property of a tenant. While this may
be true, pursuant to § 69-2311(3), a demand for storage fees
by a landlord must be in writing and mailed to the tenant
27
Neb. Rev. Stat. § 27-801(3) (Reissue 2016).
28
State v. McCave, 282 Neb. 500, 805 N.W.2d 290 (2011).
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within 5 days of the landlord’s receipt of the tenant’s request
for the return of personal property.
In this case, there is no evidence that IOC requested storage
fees before the claim was filed against it. Rather, the first time
storage fees were requested was in the counterclaim asserted
in IOC’s answer. IOC did not request storage fees within the
timeframe required by the Act. Accordingly, this court affirms
the district court’s judgment rejecting IOC’s claim for stor-
age fees.
4. Failure to Join
Indispensable Parties
IOC assigns as error on appeal that the district court erred
in failing to add Chol; CNBA; and the Kleinschmits, doing
business as Millard Electronics, as necessary and indispensable
parties. This argument has no merit.
The code of civil procedure provides that if a determina-
tion of the controversy cannot be had without the presence of
the parties, the court must order them to be brought into the
litigation.29 Neb. Rev. Stat. § 25-323 (Reissue 2016) codifies
the concept of compulsory joinder in Nebraska, stating in rel-
evant part:
The court may determine any controversy between
parties before it when it can be done without prejudice
to the rights of others or by saving their rights; but when
a determination of the controversy cannot be had without
the presence of other parties, the court must order them to
be brought in.
The first clause of this statute makes the inclusion of necessary
parties discretionary when a controversy of interest to them
is severable from their rights.30 However, the second clause
29
Koch v. Koch, 226 Neb. 305, 411 N.W.2d 319 (1987).
30
Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894
N.W.2d 221 (2017).
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­ andates the district court to order indispensable parties be
m
brought into the controversy.31
[6] In Nebraska, it has long been held that an indispensable
party is one whose interest in the subject matter of the contro-
versy is such that the controversy cannot be finally adjudicated
without affecting the indispensable party’s interest, or which
is such that not to address the interest of the indispensable
party would leave the controversy in such a condition that its
final determination may be wholly inconsistent with equity and
good conscience.32 Further, based on the distinction of parties
in § 25-323, we have found that all persons interested in a
contract or property involved in a suit to be necessary parties,
and all persons whose interests therein may be affected by
the decree in equity to be indispensable parties.33 As such, in
order for a party to be indispensable or necessary, the threshold
determination that must be made is whether the party has an
interest in the subject matter of the controversy.
Here, none of the listed parties can be considered neces-
sary or indispensable, because none of them claim or have
a property interest in the subject matter of this controversy.
Chol; CNBA; and the Kleinschmits, doing business as Millard
Electronics, never asserted any ownership interest over the
property at issue. In fact, CNBA made statements disclaiming
ownership. Further, IOC acknowledged in its appellate brief
that it received multiple statements from Panoam indicating
that Pan was the sole owner of the property. Accordingly, we
find that Chol; CNBA; and the Kleinschmits, doing business as
Millard Electronics, are not necessary or indispensable parties
to this action, because they do not assert any interest in the
personal property involved in this dispute.
31
Id.
32
Id. See, also, American Nat. Bank v. Medved, 281 Neb. 799, 801 N.W.2d
230 (2011); Koch v. Koch, supra note 29; Johnson v. Mays, 216 Neb. 890,
346 N.W.2d 401 (1984).
33
Midwest Renewable Energy v. American Engr. Testing, supra note 30.
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5. A ppropriate R emedy
and Damages
IOC asserts that there was insufficient evidence to support
the court’s award of damages and attorney fees under the Act.
The Act, at § 69-2312, provides in pertinent part:
Any landlord who retains personal property in viola-
tion of the . . . Act shall be liable to the tenant in a civil
action for:
(1) Actual damages not to exceed the value of the
personal property if such property is not surrendered: (a)
Within a reasonable time after the tenant requests surren-
der of the personal property . . . and
(2) Reasonable attorney’s fees and costs.
Because we have held that the Act applies in this case and that
IOC violated the Act by unreasonably withholding Pan’s per-
sonal property, Pan is entitled to actual damages for the value
of his property, as well as reasonable attorney fees.
[7,8] IOC asserts, specifically, that Pan failed to prove with
a sufficient degree of certainty what the fair market value of
his property was. We observe that in conversion actions, the
fair market value of the property for the purposes of actual
damages is calculated on the date of the unlawful taking,
with interest accruing thereon.34 Further, “fair market value”
is defined as the price that a seller is willing to accept and a
buyer is willing to pay on the open market and in an arm’s-
length transaction.35 While this is not a conversion action, the
remedial provisions within the Act are rooted in the theories
of conversion by seeking to restore the status quo when a
landlord improperly disposes of or withholds the property of a
former tenant. In accordance with these holdings and the plain
language of § 69-2312(1), we find that the phrase “value of the
34
See NJI2d Civ. 4.27. See, also, Zelenka v. Pratte, supra note 9; Hickman-
Williams Agency v. Haney, 152 Neb. 219, 40 N.W.2d 813 (1950); Oak
Creek Valley Bank v. Hudkins, 115 Neb. 628, 214 N.W. 68 (1927).
35
Black’s Law Dictionary 1785 (10th ed. 2014).
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personal property” in its relation to “[a]ctual damages” is the
fair market value of the property at the time the tenant’s prop-
erty is improperly detained by the landlord.
[9] In reviewing a judgment awarded in a bench trial of a
law action, an appellate court does not reweigh evidence, but
considers the evidence in the light most favorable to the suc-
cessful party and resolves evidentiary conflicts in favor of the
successful party, who is entitled to every reasonable inference
deducible from the evidence.36 Further, the amount of damages
to be awarded is a determination solely for the fact finder, and
its action in this respect will not be disturbed on appeal if it
is supported by evidence and bears a reasonable relationship
to the elements of the damages proved.37 With respect to dam-
ages, an appellate court reviews the trial court’s factual find-
ings under a clearly erroneous standard of review.38
This court has long held that damages, like any other ele-
ment of the plaintiff’s case, must be pled and proved and that
the burden is on the plaintiff to offer evidence sufficient to
prove the plaintiff’s alleged damages.39 Evidence of damages
must be sufficient to enable the trier of fact to estimate actual
damages with a reasonable degree of certainty and exactness.40
Proof of damages to a mathematical certainty is not required;
however, a plaintiff’s burden of offering evidence sufficient
to prove damages cannot be sustained by evidence which is
speculative and conjectural.41
36
Mays v. Midnite Dreams, supra note 5.
37
Funk v. Lincoln-Lancaster Cty. Crime Stoppers, supra note 3.
38
Id.
39
See, Bedore v. Ranch Oil Co., 282 Neb. 553, 805 N.W.2d 68 (2011); Bass
v. Boetel & Co., 191 Neb. 733, 217 N.W.2d 804 (1974).
40
ACI Worldwide Corp. v. Baldwin Hackett & Meeks, supra note 7; Lesiak v.
Central Valley Ag Co-op, 283 Neb. 103, 808 N.W.2d 67 (2012); Bedore v.
Ranch Oil Co., supra note 39; O’Connor v. Kaufman, 260 Neb. 219, 616
N.W.2d 301 (2000).
41
ACI Worldwide Corp. v. Baldwin Hackett & Meeks, supra note 7.
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IOC argues that there was insufficient evidence pre-
sented on the issue of fair market value to justify the district
court’s judgment awarding Pan $10,000 in actual damages, or
approximately 50 percent of Pan’s evaluation of the property.
We disagree.
At trial, several documents were received into evidence
related to actual damages. These documents included bank
statements and receipts for the personal property at issue, as
well as an exhibit that contained an itemization of the prop-
erty and Pan’s opinion as to its value. The itemization, along
with the bank statements and receipts, including any oral
testimony relevant to these documents, were not objected to
by IOC.
It is well established in Nebraska that the opinion of a per-
sonal property owner is competent evidence of its value, solely
because of his or her status as owner.42 Further, additional
evidence was presented at trial to bolster the district court’s
judgment on damages. This evidence included testimony from
Pan discussing the purchase price of $30,000 pursuant to
his purchase agreement with CNBA and testimony from wit-
nesses from both sides opining as to the condition of the per-
sonal property.
In reviewing the district court’s award of $10,000 in dam-
ages, and considering the evidence in the light most favorable
to the successful party while resolving evidentiary conflicts in
favor of that party, we find that the district court’s award is
not clearly erroneous. As a result, we affirm the district court’s
valuation of damages.
[10,11] Concerning attorney fees, the Act explicitly awards
a tenant reasonable attorney fees upon improper rejection
of a request for the return of personal property by a land-
lord.43 In Nebraska, we have held that when an attorney fee
42
See Peck v. Masonic Manor Apartment Hotel, 203 Neb. 308, 278 N.W.2d
589 (1979).
43
§ 69-2312(2).
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is authorized, the amount of the fee is addressed to the trial
court’s discretion, and its ruling will not be disturbed on
appeal absent an abuse of discretion.44 Judicial abuse of dis-
cretion exists when the 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 dispo-
sition.45 An award of attorney fees involves consideration of
such factors as the nature of the case, the services performed
and results obtained, the length of time required for prepara-
tion and presentation of the case, the customary charges of the
bar, and general equities of the case.46 If the contents of the
record show the allowed fee not to be unreasonable, then that
fee would not be untenable or an abuse of discretion.47
In this case, Pan produced evidence of his attorney fees by
way of an affidavit by his attorney. This evidence was neither
objected to nor argued against at the trial court level. The affi-
davit unambiguously details $14,151.49 in fees pursuant to the
litigation of the case between Pan and IOC. Therefore, we find
that the district court was within its discretion in awarding Pan
$10,000 in attorney fees.
VI. CONCLUSION
For the reasons stated above, the lower court’s decision in
this case is affirmed.
A ffirmed.
44
ACI Worldwide Corp. v. Baldwin Hackett & Meeks, supra note 7.
45
Id.
46
Id.
47
See Garza v. Garza, 288 Neb. 213, 846 N.W.2d 626 (2014) (citing
Boamah-Wiafe v. Rashleigh, 9 Neb. Ct. App. 503, 614 N.W.2d 778 (2000)).