Connolly, J.
Michael E. Kelliher appeals from the district court's order canceling a notice of lis pendens he filed against property in which he claimed title. His business partner, Travis Soundy, sold the property to Schijohn, L.L.C. Kelliher then filed suit, alleging that Soundy did not have authority to sell the property without Kelliher's consent and that the owners of Schijohn knew that he claimed an interest in it.
The first issue is jurisdictional. Kelliher concedes the district court's June 2013 order canceling the notice of lis pendens is not a final order. But he contends that review is proper under the collateral order doctrine. The second issue is whether the court erred in canceling the notice of lis pendens before Kelliher has had an opportunity to appeal the summary judgment order denying him relief. We conclude that we have jurisdiction under the collateral order doctrine and that the district court erred by canceling the notice of lis pendens.
In 2006, Kelliher and Soundy filed articles of organization for Clover Investments, L.L.C. (Clover), in which they made equal contributions and had equal membership rights. About 3 months later, Clover purchased a bar in Kearney, which was its sole asset. In March 2007, Soundy purchased Kelliher's interest in Clover.
In July 2008, Soundy and Kelliher negotiated an oral agreement for Kelliher to earn back his 50-percent interest in Clover. According to Kelliher, he agreed to manage the bar and inject his own funds into the operations, which duties he fulfilled. According to Soundy, the oral agreement required Kelliher to successfully manage the bar, including "restoring and maintaining the amortization of loans" to Clover and keeping current all of Clover's obligations. In November 2009, Soundy terminated the management agreement. He contends that he was the sole owner of Clover. In March 2010, Clover sold the bar to Schijohn.
Kelliher sued Soundy, Clover, and Schijohn. He alleged that in July 2008, after Soundy had unsuccessfully tried to sell Clover's property, Soundy contacted Kelliher to see if he would be interested in repurchasing an interest. Kelliher alleged that he agreed to do this by making capital improvements and had fulfilled that duty.
Schijohn moved for summary judgment on Kelliher's quiet title claim. The court granted the motion, concluding, as a matter of law, that Schijohn was entitled to rely on the apparent authority of Soundy to convey the property.
Kelliher moved to vacate or modify the judgment and, alternatively, to certify the order as appealable under Neb.Rev.Stat. § 25-1315(1) (Reissue 2008). The court denied the motion to vacate its order but granted the certification request. In case No. A-11-612, the Nebraska Court of Appeals dismissed the appeal without opinion on September 9, 2011.
Kelliher did not seek further review. On remand, Schijohn moved to cancel Kelliher's notice of lis pendens against the property. Its attorney stated that Schijohn was trying to sell the building and needed clear title. Kelliher argued that he had not yet had an opportunity to appeal and that the majority of courts in other jurisdictions have held it is improper to release a notice of lis pendens until after an appeal or after the time to seek review has passed.
In a June 2013 order, the court ruled on various motions and noted that a trial was scheduled for August. Nonetheless, the court canceled the notice of lis pendens, based on its earlier dismissal of the claim against Schijohn.
Kelliher assigns, restated, that the district court erred by granting Schijohn's motion to cancel the notice of lis pendens.
When a jurisdictional question does not involve a factual dispute, the issue is a matter of law.
Statutory interpretation is a question of law that an appellate court resolves independently of the trial court.
Before reaching the legal issues presented for review, an appellate court must determine whether it has jurisdiction over the matter before it.
Kelliher concedes that the June 2013 order canceling the notice of lis pendens was not a final order. But Kelliher argues that this court has jurisdiction under
The June 2013 order satisfied the first and third elements of the collateral order doctrine. The order conclusively determined the validity of the notice.
The jurisdictional dispute centers on the second element of the collateral order doctrine: Whether the release of the notice was completely separate from the merits of the underlying action. The requirement that a court order must resolve an important issue completely separate from the merits of the action prevents piecemeal review.
Federal courts hold that whether the cancellation of a notice of lis pendens is completely separate from the merits depends on the language of the relevant statute. When the lis pendens statute is silent as to the grounds for release or includes grounds other than the merits of the underlying suit, an order canceling a notice of lis pendens is independent of the merits of the underlying suit.
Neb.Rev.Stat. § 25-531 (Cum.Supp. 2012), the lis pendens statute, allows a court to cancel a notice of lis pendens any time after the complaint is filed "on good cause shown." Section 25-531, in relevant part, provides:
Although § 25-531 does not expressly make the merits of the underlying action relevant to a motion to cancel a notice of lis pendens, the phrase "good cause" is potentially broad enough to include this consideration. So, we consider whether the "good cause" requirement includes the perceived merits (or lack thereof) of the pending litigation.
Under the common-law doctrine of lis pendens (literally "[a] pending lawsuit"
The development of Nebraska's lis pendens statute is instructive. As one court has noted, statutes did not create the lis pendens doctrine, but instead limit its application by requiring the plaintiff to record a notice that complies with statutory requirements.
We decided a similar issue concerning the lis pendens statute in Merrill v. Wright.
Because "the scope of the lis pendens rule must be confined to the interests and estates sought to be subjected," we held that it did not extend to "independent and adverse titles."
Interpreting "good cause" to include a perceived weakness in the merits of the pending action would also be contrary to the purpose of the lis pendens statute. We have recognized that "[t]he scope of the [lis pendens] rule is determined by its end and purpose."
We conclude that we have jurisdiction over the appeal under the collateral order doctrine. The court's order canceling the notice of lis pendens conclusively determined the validity of the notice and would be effectively unreviewable on appeal from a final judgment. We also determine that the cancellation of the notice is completely separate from the merits of the underlying action. "Good cause" to cancel a notice of lis pendens under § 25-531 does not include a consideration of the merits of the underlying action.
The substantive issue raised by this appeal is whether good cause existed
As an initial matter, we reject Kelliher's argument that a court may never cancel a notice of lis pendens unless the time for appeal has expired. We reach this decision for two reasons. First, the plain language of § 25-531 permits an aggrieved person to move to cancel a notice "any time" after the commencement of the action. The lis pendens statute, as amended by the 1887 act, permitted a person to petition for cancellation only after the action was "settled, discontinued or abated."
Second, a bright-line rule that a court could never cancel a notice of lis pendens if time for appeal remains would extend the lis pendens statute beyond its legislative purpose. Although it is true that the right to appeal usually extends the time for which property is subject to the lis pendens doctrine,
Here, Kelliher's quiet title claim clearly sought to affect title to real property and we hold that good cause to cancel the notice of lis pendens did not exist. In its June 2013 order, the court stated that the notice should be canceled because it had dismissed Kelliher's quiet title action against Schijohn. As we explained above, however, the perceived merits of the underlying action are not good cause to cancel a notice while time for appeal remains. In its motion to cancel the notice, Schijohn also stated that it had a buyer who wanted to purchase the property. But neither is the existence of a prospective purchaser who wants to buy the property free of the pending litigation good cause to cancel a notice. The very purpose of the lis pendens statute is to prevent third parties from acquiring interest in the property that would preclude a court from granting the relief sought.
We conclude that we have jurisdiction over the appeal under the collateral order
REVERSED.
Cassel, J., not participating.