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The NE Law Express is available to members of the Nebraska State Bar at no additional charge.

Nebraska State Bar Association NE Law Express for May 16, 2008

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Cases affecting the following practice areas are summarized in today's NE Law Express:

Administrative Law, Civil Service, Termination, Appeal and Error
Civil Service, Breach of Contract, Appeal and Error
Contracts, Interpretation
Contracts, Subrogation Clause, Public Policy
Judgment, Final Order, Form

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Case Summaries

Administrative Law, Civil Service, Termination, Appeal and Error

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This appeal deals with a district court’s review of the termination of a county employee by the Civil Service Commission in a petition of error.

Pierce v. Douglas Cty. Civil Serv. Comm., 275 Neb. 722 (2008)

Supreme Court Headnotes

Administrative Law:

1. Administrative action must not be arbitrary or capricious. ••• The reviewing court in an error proceeding is restricted to the record before the administrative agency and does not reweigh evidence or make independent findings of fact.

2. Appeal and Error. In reviewing an administrative agency decision on a petition in error, both the district court and the appellate court review the decision to determine whether the agency acted within its jurisdiction and whether sufficient, relevant evidence supports the decision of the agency.

3. Evidence. The evidence is sufficient, as a matter of law, if an administrative tribunal could reasonably find the facts as it did based on the testimony and exhibits contained in the record before it.

Judgments:

1. Jurisdiction: Appeal and Error. An appellate court determines juris-dictional issues that do not involve factual disputes as a matter of law. ••• On a question of law, an appellate court reaches a conclusion independent of the court below.

Civil Service:

1. Administrative Law:

a. Final Orders: Breach of Contract: Appeal and Error. Under Neb. Rev. Stat. § 23-2515 (Reissue 1997), an appeal from a final order of the Civil Service Commission is a petition in error, not an original breach of contract action against the county.

b. Statutes. The Civil Service Commission is a statutorily created tribunal that is required to act in a judicial manner when deciding employee appeals.

c. Appeal and Error. When the Civil Service Commission acts in a judicial manner, a party adversely affected by its decision is entitled to appeal to the district court through the petition in error statutes.

Date Filed and Case No.: May 16, 2008. No. S-07-252.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may16/s07-252.pdf

Court Appealed From: District Court for Douglas County: W. Russell Bowie III, Judge.

Attorneys for the Appeal: Timothy S. Dowd for Nathan Pierce, appellant. Donald W. Kleine and Bernard J. Monbouquette for The Douglas County Civil Service Commission and the County of Douglas, Nebraska, appellees.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Connolly, J.

Summary: In June 2001, Nathan Pierce, a Douglas County Public Properties Department (Department) employee, was suspended by the Department for verbally abusing Kimberly Fisher Nahriri, a licensed practical nurse in the Douglas County Health Center’s assisted living unit. After Nahriri refused to take Pierce’s blood pressure, Pierce became belligerent and frightened Nahriri by putting his arm on the back of her chair and his other arm on her desk, so that he hemmed her into her workstation. The Department suspended Pierce for two offenses under the Commission’s personnel manual: (1) fighting or causing a disturbance and (2) “[i]mmoral, indecent, disgraceful, or inappropriate conduct” that may reasonably be expected to affect the public’s confidence in county government.

After his suspension for this incident, the County's assistant personnel director imposed work restrictions on Pierce, ordering him to have no contact with Nahriri and that to be accompanied by a coworker if he worked in Nahriri's unit at the Health Center. Later, in November 2001, the Douglas County Civil Service Commission (Commission) affirmed the Department's suspension of Pierce, recommending management neither allow Pierce in or near any area in which Nahriri worked nor allow him to approach her, speak to her, or observe her. The Commission's order, unlike the personnel directive, did not address whether Pierce could be in Nahriri's unit if accompanied by a coworker. (The Commission's recommendations effectively barred Pierce from being in an area where Nahriri worked, while the personnel directive allowed Pierce to be in Nahriri's work unit if accompanied by a coworker.)

In September 2002, after a predisciplinary hearing, the Department terminated Pierce's employment for violating the Commission's 2001 order. Although the Department alleged two separate violations, it terminated Pierce's employment for a violation that occurred on August 6, 2002. At the Commission's hearing regarding the termination, the evidence of the August 6 violation showed that Pierce had walked through the assisted living unit in front of the nurses' station where Nahriri worked, while Nahriri was on duty. The Department also accused Pierce of committing a second offense of "[i]mmoral, indecent, disgraceful, or inappropriate conduct" the punishment for what would be a second offense, was termination.

In its notice of disciplinary charges, the Department did not accuse Pierce of being in Nahriri’s unit unescorted or of violating the personnel directive. Instead, the notice stated that Pierce was near Nahriri’s work area on August 6, 2002, violating the Commission’s 2001 order. The notice stated that the 2001 order prohibited him from being in or near any area where Nahriri worked but the evidence before the Commission showed that the Department disciplined Pierce for being in Nahriri’s work unit unaccompanied. The Department terminated Pierce’s employment for violating the Commission’s 2001 order by being in the vicinity of Nahriri unescorted on August 6.

At the public hearing before the Commission, the evidence also showed that the Department and Health Center administrators disagreed on the type of work restrictions imposed by the Commission’s 2001 order. Further, the Commission found “conflicting testimony as to whether or not . . . Pierce was accompanied into the area in which he was required to have an escort.” but it concluded that Pierce had failed to meet his burden of proving he was accompanied on August 6, 2002, because he did not present corroborating testimony. It therefore found that “Pierce violated the [2001] recommendation of the Commission and the work conditions of . . . Pierce as set forth by the County.”

Pierce presented evidence at the Commission hearing to show that the Department and personnel director had violated the grievance procedures under the collective bargaining agreement (CBA) between Douglas County and the International Union of Operating engineers, Local 571. But other than to note that Pierce had raised these violations, the Commission did not address them.

Pierce filed a petition in error in the district court. In its order, the court rejected Pierce’s claims that the County failed to produce sufficient evidence to support his termination. In addressing the burden of proof, the district court relied on the decision in Caniglia v. City of Omaha, 210 Neb. 404, 315 N.W.2d 241 (1982) and concluded that Pierce had the "burden to show that good cause did not exist for his discharge from employment." It also rejected his claim that the Commission had impermissibly shifted the burden of proof to him. The district court further concluded the County had shown Pierce committed the offense of “[i]mmoral, indecent, disgraceful, or inappropriate conduct.”

Further, as the August 6, 2002, violation occurred within 1 year of November 1, 2001, when the Commission affirmed Pierce’s suspension for the first violation the district court concluded the Department had not violated the CBA by charging Pierce with a second offense past the 1-year limit for using an offense for further disciplinary action. However, the court determined that it did not have jurisdiction to decide Pierce’s remaining claims that the County had breached the CBA. Pierce appealed and the Nebraska Supreme Court decided the case.

Did the district court correctly determine that it lacked jurisdiction to decide the CBA issue? The County argued the above, relying on Jackson v. County of Douglas, 223 Neb. 65, 388 N.W.2d 64 (1986) it contends that a claim for breach of a collective bargaining agreement against a county is subject to Neb. Rev. Stat. § 23-135 (Section 23-135 is the county claims statute.) In Jackson, the Court concluded that the employees claim was an action at law for the payment of services arising out of a contractual relationship. Because the employees did not comply with the county claims statute, they held that the district court properly dismissed their petition for lack of jurisdiction.

The Court said that Jackson, is not controlling here. Here, under § 23-2515, an appeal from a final order of the Commission is a petition in error, not—as in Jackson—an original breach of contract action against the county.

The Court reminded that it has held that the Commission is a statutorily created tribunal that is required to act in a judicial manner when deciding employee appeals. When the Commission acts in a judicial manner, a party adversely affected by its decision is entitled to appeal to the district court through the petition in error statutes. Thus, the court here erred in concluding that it lacked jurisdiction over Pierce’s claims that the Department violated the CBA as far as those claims were related to his termination. However, the Court did not reach the merits of these claims.

Was the Commission’s decision to terminate Pierce’s employment, arbitrary and capricious, because it was unsupported by competent evidence. The County argued that in an appeal from a disciplinary action, under Caniglia, the Commission correctly found that Pierce had failed to prove someone accompanied him and that his presence in Nahriri’s unit was excused. The Court wrote that Caniglia is an anomaly in their case law as in no other case have they placed the burden on the employee to prove good cause did not exist in a disciplinary action. Assuming arguendo that the County proved Pierce was in Nahriri’s unit unaccompanied, the Court nonetheless reversed, concluding that the County had failed to show Pierce’s mere violation of a work restriction, without any other showing of misconduct, warranted termination as a second offense of “[i]mmoral, indecent, disgraceful, or inappropriate conduct.”

Does the record support the department’s alleged second offense of immoral, indecent, disgraceful, or inappropriate conduct? In addition to contending that the County failed to prove he was unaccompanied, Pierce contended the evidence fails to show that he engaged in “[i]mmoral, indecent, disgraceful, or inappropriate conduct.” The Court said that, Pierce’s conduct did not rise to the level of immoral, indecent, or disgraceful. So the question is whether it constituted “inappropriate conduct.” They agreed that the term “inappropriate conduct,” standing alone, could be broad enough to encompass any improper conduct by an employee. In this case, however, they declined to interpret it that broadly. “We cannot judge an offense of ‘inappropriate conduct’ in a vacuum, detached from the consequences for the offense” they wrote.

Conclusion: The Court concluded that the district court erred in refusing to review Pierce’s claims that the Department violated grievance procedures under the CBA in terminating his employment. In a petition in error appeal from the Commission, the district court has jurisdiction to determine contract issues related to disciplinary actions; the petitioner is not required to file a claim with the county under § 23-135.

Regarding Pierce’s claims of insufficient evidence, they concluded that the evidence fails to show that the Department considered Pierce’s alleged conduct on August 6, 2002, to be a serious violation of the personnel manual, warranting termination. The Department’s decision to charge Pierce with a second offense of “[i]mmoral, indecent, disgraceful, or inappropriate conduct” was apparently motivated by a second allegation of misconduct that played no role in the Commission’s decision to uphold Pierce’s termination. The district court therefore erred in affirming Pierce’s termination based on his alleged conduct on August 6. Accordingly, they reversed the district court’s judgment, which affirmed the decision of the Commission to uphold Pierce’s termination and remanded the cause with directions to the district court to remand the case to the Commission to vacate its order. REVERSED AND REMANDED WITH DIRECTIONS.

Civil Service, Breach of Contract, Appeal and Error

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This appeal deals with a district court’s review of the termination of a county employee by the Civil Service Commission in a petition of error.

Pierce v. Douglas Cty. Civil Serv. Comm., 275 Neb. 722 (2008)

Supreme Court Headnotes

Administrative Law:

Judgments:

Civil Service:

1. Administrative Law:

b. Statutes. The Civil Service Commission is a statutorily created tribunal that is required to act in a judicial manner when deciding employee appeals.

Date Filed and Case No.: May 16, 2008. No. S-07-252.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may16/s07-252.pdf

Court Appealed From: District Court for Douglas County: W. Russell Bowie III, Judge.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Connolly, J.

Contracts, Interpretation

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This appeal presents two issues regarding a subrogation clause in a contract. The first is whether enforcing a waiver of subrogation provision to bar a gross negligence claim violates public policy. The second is whether the waiver of subrogation is limited to damages to “the work” as defined in the agreement, or whether it also applies to damages to “non-work” property. The Nebraska Supreme Court concludes that the waiver of subrogation is effective against claims for gross negligence. They further concluded that the waiver applies to damages to both the work and the non-work property.

Lexington Ins. Co. V. Entrex Comm. Servs., 275 Neb. 702 (2008)

Supreme Court Headnotes

Summary Judgment.

1. Summary judgment is proper when the pleadings and evidence admitted at the hearing disclose no genuine issue regarding any material fact or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

2. Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence.

Contracts.

1. The meaning of a contract is a question of law. ••• A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms. ••• A contract must receive a reasonable construction, and a court must construe it as a whole and, if possible, give effect to every part of the contract. ••• When there is a question about the meaning of the contract’s language, the contract will be construed against the party preparing it.

2. Public Policy. The determination of whether a contract violates public policy is a question of law.

3. Subrogation: Waiver: Negligence. A contractual waiver of subrogation is enforceable against gross negligence claims.

4. Words and Phrases. A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

Judgments:

1. Appeal and Error. When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusions reached by the trial court.

Date Filed and Case No.: May 16, 2008. No. S-06-1452.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may16/s 06-

452.pdf

Court Appealed From: District Court for Douglas County: Thomas A. Otepka, Judge.

Attorneys for the Appeal: J. Joseph McQuillan, Jeffrey R. Learned, Charles R. Tuffley, and Alyssa J. Endelman for Lexington Insurance Company et al., appellants. William R. Johnson, Craig F. Martin and Raymond E. Walden for Entrex Communication Services, Inc., appellee. Thomas A. Grennan and Francie C. Riedmann for Communication Structures & Services, Inc., appellee. Dean Suing for Dudutis Erection & Maintenance, Inc., appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Connolly, J.

Summary: Hearst-Argyle Properties, Inc., and the Hearst Corporation (collectively Hearst) owned a television broadcast tower in Omaha, Nebraska. In February 2003, Hearst contracted with Entrex Communication Services, Inc. (Entrex), to upgrade the antenna on the tower. Entrex subcontracted with Communication Structures & Services, Inc., which hired Dudutis Erection & Maintenance, Inc., to assist (hereinafter collectively Entrex). The parties’ contract required Hearst to obtain property insurance to cover “the Project” (as defined in the agreement). Instead of obtaining a specific property insurance policy to cover the Project, Hearst relied upon five existing “all-risk” property insurance policies (collectively Lexington). These all-risk policies collectively provided Hearst with $25 million in coverage. The tower collapsed in July 2003, allegedly causing over $6 million in damages and Lexington compensated Hearst for its losses, less a $250,000 deductible.

Hearst sued Entrex, alleging that the tower collapse occurred because of Entrex’s gross negligence. After the tower collapsed in July 2003, Hearst sued Entrex alleging that Entrex’s gross negligence caused the collapse. Entrex moved for summary judgment claiming that a waiver of subrogation in the parties’ agreement barred Hearst’s claims to the extent insurance proceeds covered the damages. The district court granted the motion and dismissed Hearst’s claims for damages that had been compensated by insurance. Hearst’s insurer appealed.

Did the district court err in holding that the contractual waiver of subrogation barred gross negligence claims? According to Lexington, public policy precludes parties from contractually disclaiming or limiting their liability for gross negligence. On this issue, other jurisdictions are split on whether to enforce contractual waivers of subrogation against such claims. Some courts have held that even though traditional exculpatory provisions may not be effective against claims for gross negligence, waivers of subrogation are effective to bar gross negligence claims. But other courts have decided that because a traditional exculpatory clause is generally ineffective against a gross negligence claim, a waiver of subrogation will similarly be ineffective.

Reviewing the parties arguments in the opinion, the Nebraska Supreme Court found that , “we like other jurisdictions, recognize the important policy goal that waivers of subrogation serve in avoiding disruption of construction projects and reducing litigation among parties to complicated construction contracts. Concluding that waivers of subrogation cannot be enforced against gross negligence claims would undermine this underlying policy by encouraging costly litigation to contest whether a party’s conduct was grossly negligent.” Therefore, the Court concluded that public policy favors enforcement of waivers of subrogation even in the face of gross negligence claims.

Did the waiver of subrogation apply to insured damages, which here include both the work and the non-work property? Lexington next contended that the district court erred in holding that the waiver of subrogation barred Lexington’s claims for damage to non-work property. The parties’ agreement essentially defines “work” as the construction and services provided by the contractor to fulfill the contractor’s obligations under the contract. The record reflects that of the over $6.2 million in claimed damages, about only $470,000 represented damages to the work, while the remainder represented damages to non-work property.

Here, Hearst did not purchase a separate builder’s risk policy covering the work, but instead relied upon existing “all-risk” property insurance policies issued by Lexington and other companies. These all-risk policies collectively provided Hearst with $25 million in coverage for both the work and the non-work property. Lexington claims that even though Hearst’s existing property insurance policies covered both the work and the non-work property, the parties waived subrogation only for damages to the work property. Therefore, Lexington believes it can recover for claims it paid for damages to non-work property. Entrex, of course, contends that the waiver applies to all insured damages, including those to non-work property. Lexington counters that even if Entrex’s interpretation is reasonable, the waiver is at most ambiguous.

The Court determined that the waiver of subrogation is subject to only one reasonable interpretation—that urged by Entrex. Looking towards other jurisdictions regarding the work and non-work property damage waivers, the Court adopted the majority approach and concluded that the waiver applies to damages to both the work and the non-work property. “We find the majority courts’ rationale persuasive. We also believe this approach is more consistent with other provisions in the parties’ agreement and furthers the purpose of the waiver clause. Furthermore, construing the contract as a whole, we are unable to conclude that the minority approach is reasonable.” Therefore, as explained more fully in the opinion, the Court found that the contract is not ambiguous and that here, the waiver applies to damages to both the work and the non-work property.

Conclusion: The Court concluded that the district court correctly determined that contractual waivers of subrogation are effective to bar gross negligence claims. Therefore, the waiver of subrogation in the parties’ agreement was enforceable even though Lexington alleged Entrex was grossly negligent. Also, they interpreted the waiver of subrogation provision as applying to all damages covered by a property insurance policy obtained pursuant to the agreement or other property insurance policy that covers the work. When that policy is broad enough to cover both the work and the non-work property, as Hearst’s policies were here, the waiver applies to both the work and the non-work damages. Thus, Lexington is unable to recover the proceeds it paid for damages to the work and non-work property. The district court did not err in granting Entrex’s motion for summary judgment or in dismissing Lexington’s claims for the insurance proceeds it paid. AFFIRMED.

Contracts, Subrogation Clause, Public Policy

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Lexington Ins. Co. V. Entrex Comm. Servs., 275 Neb. 702 (2008)

Supreme Court Headnotes

Summary Judgment.

Contracts.

2. Public Policy. The determination of whether a contract violates public policy is a question of law.

3. Subrogation: Waiver: Negligence. A contractual waiver of subrogation is enforceable against gross negligence claims.

4. Words and Phrases. A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

Judgments:

1. Appeal and Error. When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusions reached by the trial court.

Date Filed and Case No.: May 16, 2008. No. S-06-1452.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may16/s 06-

452.pdf

Court Appealed From: District Court for Douglas County: Thomas A. Otepka, Judge.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Connolly, J.

Judgment, Final Order, Form

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The question presented in this appeal is whether the trial court’s file-stamped letter memorandum to the parties, directing the plaintiff to prepare a final decree, was itself a final judgment. The Nebraska Court of Appeals determined that it was, and dismissed an appeal taken after the entry of the final decree, reasoning that the notice of appeal was untimely. The Nebraska Supreme Court determined that a filing that does not finally dispose of a case does not become a final, appealable order just because it is file stamped, and the trial court’s order in this case was clearly not meant to be a final determination of the rights and liabilities of the parties.

Wagner v. Wagner, 275 Neb. 693 (2008)

Supreme Court Headnotes

Jurisdiction:

1. 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. Records. Trial courts, and the clerks of those courts, should not file stamp any court-issued document that is not meant to take legal effect.

Courts:

1. Appeal and Error. Regarding a question of law, the Nebraska Supreme Court reaches a conclusion independent of the determination reached by the Nebraska Court of Appeals. ••• Upon reversing a decision of the Nebraska Court of Appeals, the Nebraska Supreme Court may consider, as it deems appropriate, some or all of the assignments of error the Court of Appeals did not reach.

Final Orders:

1. Appeal and Error. When multiple issues are presented to a trial court for simultaneous disposition in the same proceeding and the court decides some of the issues, while reserving other issues for later determination, the court’s determination of less than all the issues is an interlocutory order and is not a final order for the purpose of an appeal.

Judgments:

1. Final Orders: Records. Court-issued findings that direct a party to prepare a final order memorializing those findings, and to submit that order to an opposing party for approval before submitting it to the court, are not a final determination of the rights of the parties and do not become a final order or judgment if file stamped. ••• There must first be a final determination of the rights of the parties before there is a judgment to be either rendered or entered.

Date Filed and Case No.: May 16, 2008. No. S-06-427.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may16/s06-427.pdf

Court Appealed From: Petition for further review from the Court of Appeals, Irwin, Sievers, and Moore, Judges, on appeal thereto from the District Court for Hall County, James D. Livingston, Judge.

Attorneys for the Appeal: Riko E. Bishop for James Brian Wagner, appellant. Kevin A. Brostrom and Stacie A. Goding for Mary Elizabeth Wagner, appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack, and Miller-Lerman, JJ.

Authored By: Gerrard, J.

Summary: This case began with Mary Wagner’s petition to dissolve her marriage to James Wagner. The parties reached an agreement on child custody and support, and other miscellaneous issues, but the case proceeded to trial on the valuation and division of the marital estate, alimony, and attorney fees. Trial was held and afterwards, a letter from the trial judge dated January 10, 2006, was sent to the parties, and file stamped on January 11. The letter stated that “[b]y this letter I am rendering decision on the trial of this matter” and directed Mary’s counsel to draft a decree incorporating the judge’s findings, submit it to James’ counsel for approval, and then submit it to the court. While the letter incorporated the previous stipulation of the parties, made several specific findings with respect to the valuation and division of the marital estate, awarded alimony and attorney fees but the letter did not make any jurisdictional findings with respect to the dissolution of the marriage, nor did it make the required finding that the marriage was irretrievably broken. And the letter did not, in point of fact, order the marriage dissolved.

Instead, as directed by the court, a decree of dissolution was prepared and approved by counsel. That decree, which included the necessary jurisdictional findings and actually dissolved the marriage, was rendered by the trial court on February 7, 2006. James moved for new trial and to alter or amend the judgment which on March 14, the court overruled the motion for new trial, but amended the judgment to expressly provide that the alimony award would terminate on the death of either party.

On April 12, James filed his notice of appeal but the Court of Appeals dismissed it finding that the trial court’s letter was “a written, signed document which set forth the court’s determination of all issues presented for resolution. The Court of Appeals determined that the letter operated to render judgment, “because it was a written, signed notation of the relief granted or denied,” and had been entered when it was file stamped by the clerk of the court. Thus, the Court of Appeals determined that the letter was a final judgment, that neither a timely notice of appeal, nor a timely tolling motion, had been filed with respect to the letter, and concluded that James’ appeal was untimely, and dismissed it. The Nebraska Supreme Court granted James motion for further review.

Was the trial court’s file-stamped letter memorandum a final judgment? The Supreme Court wrote that the problem in this case is that the trial court’s letter memorandum was signed and file stamped, which is all that § 25-1301 requires for the court to render a judgment. They have recently decided two cases addressing similar issues, and said a review of those cases was essential to the analysis of the instant case.

In Hosack v. Hosack, 267 Neb. 934, 678 N.W.2d 746 (2004) the district court entered a file-stamped journal entry in which the court dissolved the parties’ marriage, divided the marital estate, and awarded alimony. The journal entry provided that a decree was to be prepared by counsel, provided to opposing counsel for review, and “presented to the Court for signature no later than November 15, 2002.” The decree was prepared and entered, and an appeal was taken. The Court of Appeals summarily dismissed the appeal, finding it was untimely because it was not taken within 30 days of the file-stamped journal entry, which the Court of Appeals determined to be a final, appealable order. On further review, the Supreme Court reversed, finding that the journal entry “left certain matters unresolved” and concluded that “the journal entry was not the final determination of the rights of the parties in this action.” The Supreme Court also took the opportunity to expressly disapprove of the practice of a trial court’s filing of a journal entry which describes an order that is to be entered at a subsequent date, explaining that confusion “‘can be avoided if trial courts will, as they should, limit themselves to entering but one final determination of the rights of the parties in a case.

Then, in City of Ashland v. Ashland Salvage, 271 Neb. 362, 711 N.W.2d 861 (2006) the Supreme Court again faced a file-stamped journal entry followed by a subsequent order. But the situation was distinguishable from Hosack, in that the plaintiff in City of Ashland sought both declaratory and injunctive relief. The journal entry disposed of the entire merits of the case, but directed the plaintiff to prepare an “‘Order of Permanent Injunction’” that the court entered later. Unlike Hosack, the journal entry in City of Ashland disposed of all claims, it was a final, appealable order. And because the notice of appeal in City of Ashland had been taken from the journal entry and not the subsequent permanent injunction, the Court concluded they had jurisdiction over the appeal.

Here, the Supreme Court found that the Court of Appeals erred in two respects. First, the letter from the trial judge to counsel had not disposed of all the issues presented by the pleadings. “Most pertinently, the letter had not found that the marriage was irretrievably broken, or dissolved the marriage.” But just as important, the Court wrote that, as in Hosack, the trial court’s letter was written only in contemplation of a decree to be entered later. Here, the court’s direction to counsel to prepare a final decree, and submit that decree for approval to opposing counsel and then the court, clearly indicated that the letter was not intended to be the court’s final adjudication of the rights and liabilities of the parties. As in Hosack, the Supreme Court said that the court’s preliminary findings contemplated that the decree was to be prepared for opposing counsel’s review and were not the final determination of the rights of the parties. And City of Ashland is distinguishable, because in that case, the trial court’s journal entry was a complete adjudication of all the issues presented, and the subsequent injunction was merely an order to enforce the terms of the previously entered final judgment. “Such orders, entered in an action after judgment, are not uncommon in Nebraska law, and do not affect the status of the final judgment they are intended to enforce.”

The Court ruled that court-issued findings that direct a party to prepare a final order memorializing those findings, and to submit that order to an opposing party for approval before submitting it to the court, are not a final determination of the rights of the parties and do not become a final order or judgment if file stamped. To the extent that the Court of Appeals’ majority opinion in Peterson v. Peterson, 14 Neb. App. 778, 714 N.W.2d 793 (2006) provides otherwise, The Court said it is disapproved. Instead, they agreed with the dissenting opinion in Peterson, that “there [must] first be a final determination of the rights of the parties before there is a judgment to be either rendered or entered” and that in circumstances such as these, the court’s preliminary findings “are not the final determination of the rights of the parties and the final determination will be made only after counsel prepares a decree in conformance with the findings, submits the same to opposing counsel for approval, and then to the court for rendition and entry.”

Conclusion: Therefore, the Court concluded that James’ assignment of error had merit, and the Court of Appeals erred in dismissing his appeal. Due to its jurisdictional conclusion, the Court of Appeals did not reach any of James’ assignments of error, and the Supreme Court concluded that under these circumstances, it is appropriate for the Court of Appeals to consider James’ arguments in the first instance. REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.