Schmid v. Simmons

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/20/2022 01:07 AM CDT
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
SCHMID v. SIMMONS
Cite as 311 Neb. 48Lanny Schmid, an individual, appellee and
cross-appellee, v. Lee Simmons, an individual, and
Niobrara River Ranch, L.L.C., a Nebraska limited
liability company, appellants, MAR14, LLC,
a Nebraska limited liability company,
appellee and cross-appellant,
and Thomas Masters, an
individual, appellee.
___ N.W.2d ___
Filed March 4, 2022. No. S-20-524.
1. Trial: Equity: Appeal and Error. On appeal from the bench trial
of an equity action, the standard of review is de novo on the record
and the court must resolve questions of law and fact independently
of the trial court’s determinations. When the evidence is in conflict,
the appellate court considers and may give weight to the fact that the
trial court observed the witnesses and accepted one version of the facts
over another.
2. Constitutional Law: Appeal and Error. The review of constitutional
standards is a question of law and is reviewed independently of the trial
court’s determination.
3. Motions for New Trial: Judges: Words and Phrases: Appeal and
Error. An appellate court reviews the denial of a motion for new trial
or, in the alternative, to alter or amend the judgment, for an abuse of
discretion. A judicial abuse of discretion exists if the reasons or rul-
ings of a trial judge are clearly untenable, unfairly depriving a litigant
of a substantial right and denying just results in matters submitted
for disposition.
4. Constitutional Law: Jury Trials: Equity. Article I, § 6, of the Nebraska
Constitution preserves the right to a jury trial as it existed under the
common law when the Nebraska Constitution was adopted in 1875. At
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
SCHMID v. SIMMONS
Cite as 311 Neb. 48common law, legal claims were tried by a jury and equitable claims
were tried by a court.
5. Claims: Jury Trials: Equity. In Nebraska, it is well established that
litigants are typically entitled to a jury trial on legal claims, but not
equitable claims.
6. Constitutional Law: Statutes: Actions: Jury Trials: Equity. Pursuant
to the Nebraska Constitution and statutes, the courts have traditionally
denied jury trials in equitable actions and provided them as a matter of
right in legal actions.
7. Actions: Pleadings: Equity. The essential character of a cause of action
and the remedy or relief it seeks as shown by the allegations of the peti-
tion determine whether a particular action is one at law to be tried to a
jury or in equity to be tried to a court.
8. ____: ____: ____. The nature of an action, whether legal or equitable,
is determinable from its main object, as disclosed by the averments of
the pleadings and the relief sought. This determination is unaffected by
the conclusions of the pleader or whether or not the pleader denominates
the case as one at law or in equity.
9. Jurisdiction: Equity. If a court of equity has properly acquired jurisdic-
tion of a suit for equitable relief, it may make complete adjudication
of all matters properly presented and involved in the case and grant
relief, legal or equitable, as may be required and thus avoid unnecessary
litigation.
10. Actions: Jury Trials: Equity. Under the equitable cleanup doctrine,
when a cause of action for equitable relief is stated, and when the plain-
tiff prays for equitable relief, a jury trial cannot be demanded as a matter
of right by the defendant. This is true even if the defendant pleads legal
defenses or files a counterclaim for damages in response to the plain-
tiff’s equitable cause of action.
11. Constitutional Law: Jury Trials: Equity. Neb. Const. art. I, § 6, pre-
serves the right to a jury trial as it existed under the common law when
the Nebraska Constitution was adopted. It does not create or extend such
right. At common law, litigants did not have a right to a jury trial in
equitable actions.
12. ____: ____: ____. It does not offend the Nebraska Constitution to deny
a jury trial when the main object of a civil action is equitable, even
when a defendant raises legal counterclaims in response to the plaintiff’s
equitable action.
13. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 4814. Actions: Pleadings: Notice. Nebraska is a notice pleading jurisdiction,
and civil actions are controlled by a liberal pleading regime. A party is
required to set forth only a short and plain statement of the claim show-
ing the pleader’s entitlement 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. The rationale for this liberal notice plead-
ing standard 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.
15. Rules of the Supreme Court: Trial: Pleadings: Implied Consent. To
determine whether an issue was tried by the express or implied consent
of the parties under Neb. Ct. R. Pldg. § 6-1115(b), the key inquiry is
whether the parties recognized that an issue not presented by the plead-
ings entered the case at trial.
16. ____: ____: ____: ____. Implied consent for purposes of Neb. Ct. R.
Pldg. § 6-1115(b) may arise in two situations: First, the claim may be
introduced outside of the complaint—in another pleading or document—
and then treated by the opposing party as if pleaded. Second, consent
may be implied if during the trial the party acquiesces or fails to object
to the introduction of evidence that relates only to that issue.
17. ____: ____: ____: ____. For purposes of Neb. Ct. R. Pldg. § 6-1115(b),
implied consent may not be found if the opposing party did not recog-
nize that new matters were at issue during the trial. A court will not
imply consent to try a claim merely because evidence relevant to a prop-
erly pleaded issue incidentally tends to establish an unpleaded claim.
18. Corporations: Courts: Judgments. Neb. Rev. Stat. § 21-147(b) (Cum.
Supp. 2020) affords a court discretion to order a remedy other than dis-
solution, but it does not require the court to exercise that discretion.
Appeal from the District Court for Cherry County: Mark D.
Kozisek, Judge. Affirmed.
Bartholomew L. McLeay and Dwyer Arce, of Kutak Rock,
L.L.P., for appellants.
Michael C. Cox, John V. Matson, Quinn R. Eaton, and
Cassandra M. Langstaff, of Koley Jessen, P.C., L.L.O., for
appellee Lanny Schmid.
Eric A. Scott for appellee MAR14, LLC.
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 48Heavican, C.J., Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ., and Weimer, District Judge.
Stacy, J.
This appeal arises from a dispute involving a limited liabil-
ity company (LLC) and its members. After a bench trial, the
district court entered a judgment which ordered an accounting,
declared the membership rights of the parties, quieted title to
certain real estate, and established a resulting trust; all other
requested relief was denied. One member of the LLC appealed,
assigning error to the district court’s denial of a request for a
jury trial on its legal counterclaims. The LLC cross-appealed,
assigning error to the court’s denial of a request to dissociate
one of the members. Finding no merit to the assigned errors,
we affirm.
I. BACKGROUND
In 2014, Lanny Schmid and Lee Simmons pooled their
money with others to bid on certain tracts of land being sold at
public auction, including 560 acres near Valentine, Nebraska,
which the parties refer to as the “Canyon Rim” land. The col-
lective bid was successful. Only the Canyon Rim tract is rele­
vant to this appeal.
Schmid did not attend the closing for the Canyon Rim
land, but on the day of closing, he transferred $600,000 to an
account operated by Niobrara River Ranch, L.L.C. (NRR).
NRR is a trade name that Simmons uses for some of his busi-
ness ventures, and the account into which Schmid transferred
the funds is owned and controlled by Simmons. The reason for
Schmid’s transfer is disputed, but it appears Simmons used the
$600,000, along with other funds, to close on the land acquired
by the parties. The deed to the Canyon Rim land was titled in
the name “MAR14, LLC” (MAR14).
MAR14 is a member-managed limited liability company,
and its only members are Simmons, Schmid, and Thomas
Masters. Its operating agreement states that “this Company
is formed to purchase land, transfer it and manage it.” The
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
SCHMID v. SIMMONS
Cite as 311 Neb. 48operating agreement requires unanimous consent of all mem-
bers for certain matters, including property transfers. The
record shows that Simmons initially created MAR14 to take
title to another tract of land and to serve as a tax-planning
vehicle for other properties.
After closing on the Canyon Rim land, Simmons and Schmid
considered building cabins on the property, subdividing the
property, and selling the property. But roughly 2 years after
acquiring the land, the parties’ communications regarding the
Canyon Rim land stalled.
In May 2016, Schmid sent Simmons an email proposing that
they divide ownership of the Canyon Rim land. Schmid sug-
gested that 320 acres of the Canyon Rim land be titled in his
name and that the remaining 240 acres be titled in Simmons’
name. Simmons did not accept the proposal. About 2 months
later, in July 2016, Schmid sent Simmons a demand letter
requesting, among other things, a full accounting of MAR14’s
activities, an accounting of his $600,000 transfer, and an expla-
nation for why title to certain property was transferred from
MAR14 to another entity without unanimous approval from all
MAR14 members. Simmons’ attorney responded to this letter,
but no resolution was reached.
1. Lawsuit
Shortly thereafter, Schmid filed a lawsuit against Simmons,
MAR14, and NRR in the district court for Cherry County,
Nebraska. In an amended complaint, Schmid added the third
member of MAR14, Masters, as a defendant. Schmid’s opera-
tive amended complaint sought (1) to quiet title to a specific
parcel of land acquired in the auction and to eject Simmons
from the parcel, (2) a declaratory judgment determining the
MAR14 members’ percentage of ownership, (3) an accounting
from MAR14, (4) judicial dissolution of MAR14, and (5) any
other relief the court deemed just and equitable.
Simmons and NRR filed a joint answer, generally denying
that Schmid was entitled to the relief sought and disputing
the nature of Schmid’s $600,000 transfer. Their answer also
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SCHMID v. SIMMONS
Cite as 311 Neb. 48alleged several counterclaims, including claims for (1) a result-
ing trust, (2) a decree quieting title, and (3) an ­accounting/action
for assumpsit.
MAR14 filed its own answer to Schmid’s operative com-
plaint and generally denied that Schmid was entitled to have
MAR14 judicially dissolved. MAR14 also counterclaimed,
seeking a “judicial determination and declaration concerning”
Schmid’s membership status in MAR14, costs of its action,
and other equitable relief. Masters filed an answer in which
he denied making any capital contribution to MAR14 and dis-
claimed any interest in the real estate held by MAR14.
2. Telephonic Progression Conference
In February 2017, the presiding judge held a telephonic
conference with the parties’ counsel. The bill of exceptions
does not include that conference, but our transcript includes a
signed and file-stamped progression order which memorialized
the conference. The progression order states the conference
occurred in “Judge’s chambers at Ainsworth, Nebraska, by
telephone conference call” and also states, “The parties agreed
the matter was equitable and would be tried to the court with-
out a jury.”
3. Simmons and NRR Amend Answer to Add
Counterclaim and Make Jury Demand
In December 2017, Simmons and NRR amended their answer
to include a counterclaim for “Breach of Contract/Estoppel.”
The counterclaim sought to recover lost profits and demanded
a jury trial on “any and all issues or claims triable by right
under the Nebraska Constitution or Nebraska statutes.”
Schmid moved to strike the jury demand from the amended
answer, and the court granted that motion. In addition to
noting that the parties agreed, during the progression con-
ference, that the matter was equitable in nature and would
be tried to the court, the court’s order stated that Simmons,
Masters, MAR14, and NRR were not entitled to a jury trial.
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SCHMID v. SIMMONS
Cite as 311 Neb. 48It relied on Kuhlman v. Cargile 1 for the proposition that
“when a court of equity acquires jurisdiction over a cause
for any purpose it may retain the cause for all purposes and
proceed to a final determination on all matters put in issue in
the case.” This rule is sometimes referred to as the “equitable
clean-up” doctrine. 2
The court subsequently issued a final pretrial order which
stated that “the pleadings adequately state the issues to be
tried,” and it confirmed that “[t]he matter shall be tried to the
court without a jury.” Simmons and NRR objected to that por-
tion of the pretrial order which required a trial to the bench on
their legal counterclaims, but the court overruled the objection
and declined to reconsider its prior ruling. Simmons and NRR
renewed their jury demand at the start of the bench trial, and
the court again overruled their objection.
During the 4-day bench trial, the parties adduced evidence
on all disputed issues. We summarize only that evidence which
is pertinent to the assignments of error on appeal.
Schmid testified that he was a financial member of MAR14
and that his $600,000 transfer was a capital contribution to the
LLC. Schmid believed MAR14’s purpose was to acquire and
manage agricultural land. Schmid testified that MAR14 refused
to provide him an accounting of revenues and expenses and
denied his right to authorize transfers, receive revenue, and
participate in its operation and management. Schmid wanted
MAR14 to be judicially dissolved because he and Simmons
were unable to agree on the membership status of the MAR14
members, the percentage of ownership of any member, the
distributions to be made, or how to conduct the business and
operations of MAR14. According to Schmid, MAR14 was
“hopelessly deadlocked” and it was “not reasonably practical to
carry on MAR14’s activities in conformity with the certificate
of organization of MAR14 and the operating agreement.”
1
Kuhlman v. Cargile, 200 Neb. 150, 156, 262 N.W.2d 454, 458 (1978).
2
See John P. Lenich, Nebraska Civil Procedure §§ 29:9 and 29:10 (2021).
See, also, 27A Am. Jur. 2d Equity § 103 (2019).
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 48Simmons testified that he was MAR14’s only “financial”
member. He described Schmid’s $600,000 transfer to MAR14
as an investment in Canyon Rim and the parties’ collective
plans for that land, rather than a capital contribution to MAR14.
He also testified that after making initial capital contributions,
neither Schmid nor Masters contributed additional capital to
MAR14. Simmons testified that he formed MAR14 to facili-
tate certain property exchanges, and he believed Schmid was
hindering that purpose.
During closing argument, Schmid’s attorney urged the court
to judicially dissolve MAR14. The attorney also suggested to
the court that it had discretion to pursue other equitable alter-
natives if it deemed dissolution inappropriate, but Schmid did
not ask the court to dissociate any member from MAR14.
When presenting closing arguments on behalf of Simmons
and NRR, counsel expressly asked the court, for the first time,
to consider using its equitable powers and authority under Neb.
Rev. Stat. § 21-147(b) (Cum. Supp. 2020) to dissociate Schmid
from MAR14. Later, MAR14 submitted a posttrial brief in
which it asked, for the first time, to have Schmid dissociated.
This brief is not in our appellate record.
4. Judgment
On May 27, 2020, the district court entered judgment deny-
ing Schmid’s claims for quiet title and ejectment, but granting
Schmid’s claims for an accounting and declaratory judgment.
After determining that Schmid intended his $600,000 to be used
to purchase the Canyon Rim land, the court declared Schmid
to be the owner of an undivided 53.57 percent interest in the
Canyon Rim land. It ordered MAR14 to convey that undivided
interest to Schmid. The court effectively denied Schmid’s dis-
solution claim, reasoning that its resolution of the other issues
“removes the necessity of dissolving [MAR14].”
The court granted Simmons and NRR’s request for a result-
ing trust and to quiet title to certain land, but it denied their
counterclaims for an accounting, assumpsit, reimbursement,
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 48and breach of contract/estoppel. On MAR14’s counterclaim for
declaratory judgment regarding Schmid’s membership ­status,
the court found that “Schmid is not a financial/economic mem-
ber” of MAR14. The court’s judgment did not expressly rule
on the requests made during closing argument to dissociate
Schmid from MAR14, but it did state that “[a]ny other claims
for relief by any party, expressed or implied, are denied and
dismissed with prejudice.”
5. Motion to Alter or Amend
MAR14 filed a timely motion to alter or amend the judg-
ment, asking the district court to expressly rule on, and grant,
its request to dissociate Schmid from MAR14. The court over-
ruled MAR14’s motion, reasoning the request to dissociate was
not properly before the court, because it was not presented in
the pleadings, and instead was raised for the first time in clos-
ing argument.
Simmons and NRR filed this timely appeal, and MAR14
cross-appealed. Simmons and NRR challenge the denial of a
jury trial on their legal counterclaims. Among other things,
they argue that the equitable cleanup doctrine, relied upon by
the trial court to deny their jury demand, has been abrogated
in Nebraska. Alternatively, they argue the doctrine should
be abandoned. We granted bypass to consider the continued
viability of the equitable cleanup doctrine in Nebraska.
II. ASSIGNMENTS OF ERROR
Simmons and NRR assign that the district court erred in deny-
ing their demand for a jury trial on their legal counterclaims.
On cross-appeal, MAR14 assigns that the district court erred
in failing to “rule on Schmid’s [membership] status . . . and
order Schmid’s dissociation” from MAR14. For the sake of
completeness, we note that MAR14 also assigned error to the
court’s refusal to cancel a lis pendens filed on MAR14’s prop-
erty, but it has since abandoned that assignment, so this opinion
will not further address it.
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 48III. STANDARD OF REVIEW
[1] On appeal from the bench trial of an equity action, the
standard of review is de novo on the record and the court must
resolve questions of law and fact independently of the trial
court’s determinations. 3 When the evidence is in conflict, the
appellate court considers and may give weight to the fact that
the trial court observed the witnesses and accepted one version
of the facts over another. 4
[2] The review of constitutional standards is a question
of law and is reviewed independently of the trial court’s
determination. 5
[3] An appellate court reviews the denial of a motion for
new trial or, in the alternative, to alter or amend the judgment,
for an abuse of discretion. 6 A judicial abuse of discretion exists
if 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 disposition. 7
IV. ANALYSIS
On appeal, Simmons and NRR contend they were entitled to
a jury trial on their legal counterclaims and the district court
erred in denying them that right. They argue the court erro-
neously relied on the equitable cleanup doctrine, which they
contend was effectively abrogated by our analysis in Jacobson
v. Shresta. 8 Alternatively, they urge this court to abandon the
doctrine now. We begin our analysis of these arguments by
reviewing Nebraska law pertaining to the right to a jury trial
in civil cases.
3
Benjamin v. Bierman, 305 Neb. 879, 943 N.W.2d 283 (2020).
4
Id.5
In re Interest of Zoie H., 304 Neb. 868, 937 N.W.2d 801 (2020).
6
AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212(2020).
7
Dycus v. Dycus, 307 Neb. 426, 949 N.W.2d 357 (2020).
8
Jacobson v. Shresta, 288 Neb. 615, 849 N.W.2d 515 (2014).
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Nebraska Supreme Court Advance Sheets
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SCHMID v. SIMMONS
Cite as 311 Neb. 481. Civil Right to Jury Trial and
Equitable Cleanup Doctrine
In their appellate briefing, Simmons and NRR focus on
the right to a civil jury trial as guaranteed by the Nebraska
Constitution. We limit our analysis accordingly.
[4] Article I, § 6, of the Nebraska Constitution provides:
The right of trial by jury shall remain inviolate, but the
Legislature may authorize trial by a jury of a less number
than twelve in courts inferior to the District Court, and
may by general law authorize a verdict in civil cases in
any court by not less than five-sixths of the jury.
We have long held that this constitutional provision preserves
the right to a jury trial as it existed under the common law
when the Nebraska Constitution was adopted in 1875. 9 At com-
mon law, legal claims were tried by a jury and equitable claims
were tried by a court. 10
[5-8] Under Nebraska statute, “[i]ssues of fact arising in
actions for the recovery of money or of specific real or per-
sonal property, shall be tried by a jury unless a jury trial is
waived . . . .” 11 Thus, in Nebraska, it is well established that
litigants are typically entitled to a jury trial on legal claims, but
not equitable claims. 12 As we have explained:
Pursuant to the Nebraska Constitution and statutes, this
court has traditionally denied jury trials in equitable
actions and provided them as a matter of right in legal
actions. . . .
The essential character of a cause of action and the
remedy or relief it seeks as shown by the allegations
9
Id.
10
Id.
11
Neb. Rev. Stat. § 25-1104 (Reissue 2016).
12
See State ex rel. Cherry v. Burns, 258 Neb. 216, 602 N.W.2d 477 (1999).
See, also, Smeal Fire Apparatus Co. v. Kreikemeier, 279 Neb. 661, 782
N.W.2d 848 (2010), disapproved on other grounds, Hossaini v. Vaelizadeh,
283 Neb. 369, 808 N.W.2d 867 (2012).
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SCHMID v. SIMMONS
Cite as 311 Neb. 48of the petition determine whether a particular action is
one at law to be tried to a jury or in equity to be tried to a
court. . . . The nature of an action, whether legal or equi-
table, is determinable from its main object, as disclosed
by the averments of the pleadings and the relief sought.
This determination is unaffected by the conclusions of
the pleader or whether or not the pleader denominates the
case as one at law or in equity. 13
[9] Moreover, we have consistently held that if a court of
equity has properly acquired jurisdiction of a suit for equitable
relief, it may make complete adjudication of all matters prop-
erly presented and involved in the case and grant relief, legal
or equitable, as may be required and thus avoid unnecessary
litigation. 14 The historical roots and purpose of the doctrine has
been described by one commentator as follows:
The doctrine traces its roots to the days when there were
separate equity and law courts. If an equity court acquired
jurisdiction of a case because of a presence of an equita-
ble claim, the court could adjudicate the entire case even
though that might involve awarding legal relief. In other
words, the equity court could grant any equitable relief
that was warranted and could then clean-up the rest of the
case by awarding any incidental legal relief that was war-
ranted. The purpose of the doctrine was to avoid multiple
litigation and to protect plaintiffs from being left without
a remedy if they initially chose the wrong court. 15
[10] Even after separate equity courts and law courts
merged, Nebraska has consistently applied the equitable
cleanup doctrine. 16 Relying on the doctrine, we have long
13
State ex rel. Cherry, supra note 12, 258 Neb. at 223-24, 602 N.W.2d at
482-83 (citations omitted).
14
State ex rel. Cherry, supra note 12.
15
See Lenich, supra note 2, § 29:9 at 1232.
16
Lenich, supra note 2.
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SCHMID v. SIMMONS
Cite as 311 Neb. 48said that when a cause of action for equitable relief is stated,
and when the plaintiff prays for equitable relief, a jury trial
cannot be demanded as a matter of right by the defendant. 17
This is true even if the defendant pleads legal defenses or
files a counterclaim for damages in response to the plaintiff’s
equitable cause of action. 18
Here, the district court relied on the above principles to find
that Simmons and NRR were not entitled to a jury trial on their
“Breach of Contract/Estoppel” claim. On this record, we find
no error with this determination.
The pleadings and relief sought by the parties reveal that
this action was primarily equitable in nature. The parties do
not dispute that Schmid’s claims sounded in equity, 19 as did
most of Simmons and NRR’s counterclaims. 20 Simmons and
NRR argue they raised legal counterclaims in their operative
amended answer, 21 but we do not understand them to dispute
that the “main object” 22 of this action was equitable. Thus,
17
Kuhlman, supra note 1.
18
Id.
19
See, Burnett v. Maddocks, 294 Neb. 152, 881 N.W.2d 185 (2016)
(recognizing action to quiet title sounds in equity); Robertson v. Jacobs
Cattle Co., 285 Neb. 859, 830 N.W.2d 191 (2013) (action for partnership
dissolution and accounting sounds in equity); Detter v. Miracle Hills
Animal Hosp., 269 Neb. 164, 691 N.W.2d 107 (2005) (action for corporate
dissolution sounds in equity); Lone Cedar Ranches v. Jandebeur, 246 Neb.
769, 772, 523 N.W.2d 364, 368 (1994) (explaining that whether to treat
declaratory judgment action as one in law or equity depends on nature
of dispute and that accounting can be an equitable remedy when action
involves “a complicated series of accounts”).
20
See, Burnett, supra note 19 (quiet title action sounds in equity); Brtek v.
Cihal, 245 Neb. 756, 515 N.W.2d 628 (1994) (actions to impose resulting
trust sound in equity).
21
See, Goes v. Vogler, 304 Neb. 848, 937 N.W.2d 190 (2020) (action for
breach of contract is action at law); Kissinger v. Genetic Eval. Ctr., 260
Neb. 431, 618 N.W.2d 429 (2000) (assumpsit is action at law).
22
State ex rel. Cherry, supra note 12, 258 Neb. at 223, 602 N.W.2d at 482.
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SCHMID v. SIMMONS
Cite as 311 Neb. 48because the district court properly acquired equitable jurisdic-
tion over the suit, Simmons and NRR were not entitled to
demand a jury trial on their legal counterclaims as a matter of
right. Under the equitable cleanup doctrine, the district court
was permitted to make complete adjudication of all matters
properly presented to it and to grant either legal or equi-
table relief. 23
2. Has Equitable Cleanup
Doctrine Been Abrogated?
Simmons and NRR’s primary argument on appeal is that
the equitable cleanup doctrine was abrogated by this court in
Jacobson v. Shresta 24 and that thus, the district court should
not have relied on it. Jacobson involved a medical malprac-
tice suit, and the issue was whether the plaintiff waived the
right to jury trial “by failing to object to a defendant’s motion
for a bench trial before the court sustain[ed] the motion.” 25
The appeal was originally docketed with the Nebraska Court
of Appeals, which held that under such circumstances, there
was a valid jury waiver. But we disagreed on further review,
explaining that jury waivers are “statutorily governed by
§ 25-1126.” 26 Neb. Rev. Stat. § 25-1126 (Cum. Supp. 2020)
provides:
The trial by jury may be waived by the parties in
actions arising on contract and with assent of the court in
other actions (1) by the consent of the party appearing,
when the other party fails to appear at the trial by himself
or herself or by attorney, (2) by written consent, in person
or by attorney, filed with the clerk, and (3) by oral con-
sent in open court entered upon the record.
23
State ex rel. Cherry, supra note 12.
24
Jacobson, supra note 8.
25
Id. at 620, 849 N.W.2d at 519.
26
Id. at 623, 849 N.W.2d at 521.
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SCHMID v. SIMMONS
Cite as 311 Neb. 48Jacobson explained that “unless a party’s conduct falls into one
of § 25-1126’s three categories, we will not find a waiver of a
constitutional right.” 27
Thus, Jacobson clarified the circumstances under which a
court can find that a party has validly waived the right to a
jury trial. But Jacobson has no bearing on the applicability
of the equitable cleanup doctrine. It is axiomatic that a party
must be entitled to a jury trial before they can validly waive
that right. And as we have already explained, it is well estab-
lished in Nebraska that when a cause of action for equitable
relief is stated, and when the plaintiff prays for equitable relief,
a jury trial cannot be demanded as a matter of right by the
defendant, even when the defendant raises legal counterclaims
or defenses in response to the plaintiff’s equitable cause of
action. 28 Nothing in Jacobson purports to alter the applica-
bility of the equitable cleanup doctrine, and we expressly
reject Simmons and NRR’s suggestion that Jacobson abrogated
the doctrine.
3. Should Doctrine Be Abandoned?
Alternatively, Simmons and NRR argue that even if Jacobson
did not abrogate the equitable cleanup doctrine, this court
should nevertheless abandon the doctrine. They suggest that
the doctrine is either unconstitutional or “serves no purpose in
Nebraska today.” 29
[11,12] As an initial matter, we reject Simmons and NRR’s
suggestion that the doctrine is unconstitutional. As already
explained, Neb. Const. art. I, § 6, preserves the right to a jury
trial as it existed under the common law when the Nebraska
Constitution was adopted. 30 It does not create or extend
27
Id.
28
Kuhlman, supra note 1.
29
Brief for appellants at 29.
30
Jacobson, supra note 8.
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Cite as 311 Neb. 48such right. 31 At common law, litigants did not have a right to
a jury trial in equitable actions. 32 And as already explained,
it is a basic and long-established principle of Nebraska’s
equity jurisprudence that where a court of equity has properly
acquired jurisdiction in a suit for equitable relief, it will make
a complete adjudication of all matters properly presented and
involved in the case and ordinarily will grant such relief, legal
or equitable, as may be required and thus avoid unnecessary
litigation. 33 Thus, it does not offend the Nebraska Constitution
to deny a jury trial when the main object of a civil action is
equitable, even when a defendant raises legal counterclaims in
response to the plaintiff’s equitable action. 34
We also disagree with Simmons and NRR’s suggestion that
the equitable cleanup doctrine serves no purpose in Nebraska
today. The primary purpose of the doctrine is to promote
judicial efficiency in adjudicating cases, by allowing courts
tasked with adjudicating actions which are primarily equitable
in nature to hear and resolve all claims presented in those
actions. 35 Simmons and NRR have not suggested the doctrine
can no longer achieve this purpose, and they have offered no
principled reason to abrogate a doctrine which we have fol-
lowed for more than a century.
31
Sharmer v. Johnson, 43 Neb. 509, 61 N.W. 727 (1895).
32
See, Jacobson, supra note 8; Sharmer, supra note 31. See, also, Krumm
v. Pillard, 104 Neb. 335, 338-39, 177 N.W. 171, 172 (1920) (“[w]hen
the action is one purely legal in its nature, the rule is that either party
ordinarily, as a matter of right, is entitled to demand a jury trial. . . . When
the cause is for equitable relief, a jury cannot be demanded as a matter of
right by either party to try any issue arising in the case”); State v. Moores,
56 Neb. 1, 8, 76 N.W. 530, 532 (1898) (“[t]he right of trial by jury, at
common law, never existed in equitable proceedings”).
33
Sechovec v. Harms, 187 Neb. 70, 187 N.W.2d 296 (1971).
34
See Kuhlman, supra note 1.
35
See State ex rel. Cherry, supra note 12.
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Cite as 311 Neb. 48We are aware that some states have chosen to limit or aban-
don similar doctrines. 36 Here, however, Simons and NRR have
not presented any compelling reason to abandon or modify the
doctrine’s application in Nebraska.
The equitable cleanup doctrine is still good law in Nebraska,
and the district court did not err in relying on it to deny
Simmons and NRR’s jury demand on their legal counterclaims.
Simmons and NRR’s lone assignment of error is meritless.
4. Waiver of Jury
[13] For the sake of completeness, we note that the par-
ties devote substantial briefing to whether Simmons and NRR
validly waived the right to a jury trial under § 25-1126 at the
February 2017 telephonic conference. Because we have con-
cluded that Simmons and NRR were not entitled to a jury trial
on their legal counterclaims in the first instance, we need not
reach the issue of whether they validly waived a jury under one
of the enumerated methods in § 25-1126. An appellate court is
not obligated to engage in an analysis that is not necessary to
adjudicate the case and controversy before it. 37
5. Cross-Appeal
On cross-appeal, MAR14 assigns error to the district court’s
“fail[ure] to rule on Schmid’s [membership] status . . . and
order Schmid’s dissociation” from MAR14. As explained
below, we find this assignment of error to be without merit.
We begin by noting that as part of its assignment of
error, MAR14 contends the court erred in failing to “rule on
Schmid’s [membership] status.” But the record belies this
36
See, e.g., State ex rel. Leonardi v. Sherry, 137 S.W.3d 462, 474 (Mo. 2004)
(narrowing application of equitable cleanup doctrine, explaining that
“[i]n some situations, the practical and efficient trial of a case may require
limited incidental claims at law to be tried to the court in connection with
equitable matters” but stating that “[t]rying incidental claims at law to the
court . . . should be the exception and not the rule”).
37
Gonzales v. Nebraska Pediatric Practice, 308 Neb. 571, 955 N.W.2d 696(2021).
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Cite as 311 Neb. 48contention. In its written judgment, the court ruled that Schmid
is not a financial/economic member of MAR14. Thus, the
court did issue a ruling on Schmid’s membership status, and to
the extent MAR14 suggests otherwise, it is mistaken.
The primary thrust of MAR14’s cross-appeal is not that the
court failed to rule on Schmid’s membership status, but, rather,
that it failed to order Schmid’s dissociation from MAR14.
MAR14 makes three arguments in support of this contention:
(1) The court should have ruled on Schmid’s dissociation,
because MAR14 raised this issue in its pleadings; (2) even if
it was not raised in the pleadings, the court should have ruled
on Schmid’s dissociation, because the parties tried the issue
by consent; and (3) the court had authority under § 21-147(b)
to order Schmid’s dissociation and should have exercised that
authority. We address each argument in turn.
(a) Was Dissociation Sufficiently Pled?
MAR14 contends the district court should have ruled on its
request to dissociate Schmid, because this issue was raised in
the pleadings. The record does not support this contention.
[14] Nebraska is a notice pleading jurisdiction, and civil
actions are controlled by a liberal pleading regime. 38 A party
is required to set forth only a short and plain statement of the
claim showing the pleader’s entitlement 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. 39
The rationale for this liberal notice pleading standard 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. 40
38
Tryon v. City of North Platte, 295 Neb. 706, 890 N.W.2d 784 (2017).
39
AVG Partners I, supra note 6. See, also, Haffke v. Signal 88, 306 Neb.
625, 643, 947 N.W.2d 103, 117 (2020) (“the touchstone is whether fair
notice was provided”); Neb. Ct. R. Pldg. § 6-1108.
40
Tryon, supra note 38.
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Cite as 311 Neb. 48Even under Nebraska’s liberal pleading regime, we cannot
find the issue of Schmid’s dissociation was raised in any of the
pleadings in this case or in the court’s pretrial order. No party
requested that Schmid be dissociated from MAR14, nor did
any party allege that Schmid engaged in any activities which
would merit his dissociation from the LLC. And we reject as
meritless MAR14’s suggestion that by seeking a judicial decla-
ration regarding Schmid’s “membership status,” it also placed
Schmid’s dissociation from MAR14 at issue.
(b) Was Dissociation Tried by Consent?
MAR14 next argues that even if the issue of Schmid’s dis-
sociation was not raised in the pleadings, the parties tried the
issue by consent. Again, we disagree.
[15,16] Neb. Ct. R. Pldg. § 6-1115(b) provides that when
issues not raised by the pleadings have been tried by the
express or implied consent of the parties, they shall be treated
in all respects as if they had been raised in the pleadings. 41 To
determine whether an issue was tried by the express or implied
consent of the parties under § 6-1115(b), the key inquiry is
whether the parties recognized that an issue not presented
by the pleadings entered the case at trial. 42 We have said that
implied consent for purposes of § 6-1115(b) may arise in two
situations:
First, the claim may be introduced outside of the com-
plaint—in another pleading or document—and then
treated by the opposing party as if pleaded. Second,
consent may be implied if during the trial the party acqui-
esces or fails to object to the introduction of evidence that
relates only to that issue. 43
41
See United Gen. Title Ins. Co. v. Malone, 289 Neb. 1006, 858 N.W.2d 196(2015).
42
Id.43
Id. at 1028, 858 N.W.2d at 216, quoting Blinn v. Beatrice Community
Hosp. & Health Ctr., 270 Neb. 809, 708 N.W.2d 235 (2006) (internal
quotation marks omitted).
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Cite as 311 Neb. 48[17] Implied consent may not be found if the opposing party
did not recognize that new matters were at issue during the
trial. 44 A court will not imply consent to try a claim merely
because evidence relevant to a properly pleaded issue inciden-
tally tends to establish an unpleaded claim. 45
The record in this case does not support MAR14’s argu-
ment that the issue of dissociation was tried by consent of the
parties. Notably, the issue of Schmid’s dissociation was raised
for the first time during closing argument, after all parties had
rested. We see nothing in the record suggesting that “during the
trial,” Schmid “acquiesce[d] or fail[ed] to object to the intro-
duction of evidence that relates only to [the issue of Schmid’s
dissociation].” 46 While there was some testimony that the mem-
bers of MAR14 were “hopelessly deadlocked” and that Schmid
and Simmons did not see eye-to-eye on MAR14’s operations,
this evidence was relevant to Schmid’s judicial dissolution
claim. Thus, on this record, we cannot find that Schmid should
have recognized that his dissociation from MAR14 was being
placed at issue during trial. We reject MAR14’s claim that the
parties tried the issue of Schmid’s dissociation by consent.
(c) Dissociation Under § 21-147(b)
[18] Finally, MAR14 contends the court had authority under
§ 21-147(b) to dissociate Schmid from MAR14 and erred in
refusing to exercise that authority. Section 21-147(b) provides,
“In a proceeding brought under subdivision (a)(5) of this sec-
tion, the court may order a remedy other than dissolution.” This
statutory language affords a court discretion to order a remedy
other than dissolution, but it does not require the court to
exercise that discretion. Nor was the court, under § 21-147(b),
required to order dissociation of a member in the event it found
dissolution to be inappropriate.
44
United Gen. Title Ins. Co., supra note 41.
45
Id.
46
See id. at 1028, 858 N.W.2d at 216, quoting Blinn, supra note 43 (internal
quotation marks omitted).
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Cite as 311 Neb. 48Thus, the question here is whether the district court abused
its discretion in failing to order Schmid’s dissociation from
MAR14 as an alternative remedy to dissolution. A judicial
abuse of discretion exists if 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 disposition. 47
On this record, we cannot find the court abused its discre-
tion in failing to dissociate Schmid from MAR14. The issue
of dissociation was not mentioned by any party until closing
arguments in the case, and MAR14’s request for dissociation,
raised only in a posttrial brief, does not even appear in our
record. Even assuming that facts exist to support Schmid’s
dissociation—an issue on which we express no opinion—we
cannot find the district court abused its discretion in failing to
order dissociation as an alternative remedy to dissolution when
this issue was not expressly litigated at trial. For the same rea-
son, we cannot find the district court abused its discretion in
failing to alter or amend the judgment to order Schmid’s dis-
sociation. MAR14’s assignment of error is without merit.
V. CONCLUSION
For all of the reasons stated, we affirm.
Affirmed.
Miller-Lerman, J., not participating.
47
Dycus, supra note 7.