Panhandle Collections, Inc. v. Kuldip Singh

Gering, NE - Collections Attorney, collect a debt



The City of Scottsbluff provided sewer services to a property located on Highland Road. The “Service Start Up” request

for the property was introduced at trial as an exhibit and purports to bear the signature of Singh as the “Authorized Person”

requesting the service. Singh testified he did not sign the service request application card, and he introduced his driver’s

license as evidence of his signature. The signature on the service request card and the signature on the driver’s license do

not appear to be similar. Nevertheless, the county court found

Singh requested service at the property address. The property

is owned by Cheema Investments, LLC (Cheema). Singh is a

principal in Cheema. Also introduced at trial as an exhibit was

Scottsbluff Mun. Code § 18-4-16 (1990), which states in part:

“All charges for sanitary sewer service under this Article shall

be a lien upon the property served, and may be collected either

from the owner or the person, firm, or corporation requesting

the service.” (Emphasis supplied.) The county court also orally

referred to a second municipal ordinance, “[§] 18-3-9,” but it

was not offered or received into evidence and is not part of the

record before us.

In an effort to collect the fees due, the City of Scotttsbluff

assigned its interest in the debt to Panhandle. After Singh

refused to pay the debt, Panhandle sued Singh.

The complaint was filed October 11, 2018, and alleged that

Singh owed the sewer fees. Singh answered the complaint on

November 5, denying responsibility for the fees because the

property was owned by Cheema. Singh denied owning any real

estate in his name and denied ever personally requesting any

city services at the property address. Singh filed his answer

without benefit of counsel.

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Nebraska Court of Appeals Advance Sheets

28 Nebraska Appellate Reports

PANHANDLE COLLECTIONS v. SINGH

Cite as 28 Neb. App. 924

On March 7, 2019, Panhandle filed an amended complaint,

alleging Cheema is the legal owner of the property. The

substantive allegations in the amended complaint were again

directed only toward Singh individually. Panhandle made no

effort to serve Cheema, and the county court did not order

service to be made. Instead, the county court set a trial date of

March 15, a week later. Singh did not file a motion for continuance, nor did he make any effort to file a cross-claim against

Cheema prior to trial.

The county court found Singh owed the sewer fees and

entered judgment in favor of Panhandle in the amount of

$408.40. On March 22, 2019, Singh filed a motion for new

trial, which was denied. An appeal to the district court was perfected on May 7. The district court affirmed the county court’s

judgment on August 28, citing the municipal code and stating

that there was “ample evidence . . . for the County Court to

find that . . . Singh requested [the] services.” This appeal followed, and Singh is now represented by counsel. Panhandle

has not submitted a brief in response to Singh’s appeal.

ASSIGNMENTS OF ERROR

Singh assigns numerous errors relating to the evidence

adduced at trial, but the errors assigned related to “irregularities in the trial court proceedings” are dispositive. Singh specifically assigns as error the court’s failure to add Cheema as

an indispensable party, that Cheema was not served with process, and that Cheema was not made a party to the suit.

STANDARD OF REVIEW

[1-3] The district court and higher appellate courts generally

review appeals from the county court for error appearing on

the record. Griffith v. Drew’s LLC, 290 Neb. 508, 860 N.W.2d

749 (2015). When reviewing a judgment for errors appearing

on the record, the inquiry is whether the decision conforms

to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. Id. In instances

when an appellate court is required to review cases for error

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Nebraska Court of Appeals Advance Sheets

28 Nebraska Appellate Reports

PANHANDLE COLLECTIONS v. SINGH

Cite as 28 Neb. App. 924

appearing on the record, questions of law are nonetheless

reviewed de novo on the record. Id.

[4] The absence of an indispensable party to a controversy

deprives the court of subject matter jurisdiction to determine

the controversy and cannot be waived. In re Trust Created by

Augustin, 27 Neb. App. 593, 935 N.W.2d 493 (2019).

ANALYSIS

Neb. Rev. Stat. § 25-323 (Reissue 2016) is entitled “Necessary

parties; brought into suit; procedure.” Section 25-323 provides

in 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.

[5-11] The language of § 25-323 tracks the traditional

distinction between the necessary and indispensable parties.

Midwest Renewable Energy v. American Engr. Testing, 296

Neb. 73, 894 N.W.2d 221 (2017). This court in In re Trust

Created by Augustin reviewed the distinction, explaining:

“‘“‘Necessary parties[]’ [are parties] who have an interest

in the controversy, and should ordinarily be joined unless

their interests are separable so that the court can, without injustice, proceed in their absence[.] ‘Indispensable

parties[]’ [are parties] whose interest is such that a final

decree cannot be entered without affecting them, or that

termination of controversy in their absence would be

inconsistent with equity.”

“‘. . . The inclusion of a necessary party is within the

trial court’s discretion. . . . However, there is no discretion as to the inclusion of an indispensable party.’”

[Midwest Renewable Energy v. American Engr. Testing,

296 Neb.] at 90, 894 N.W.2d at 236. Therefore, the first

clause of § 25-323 makes the inclusion of necessary parties discretionary when a controversy of interest to them

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Nebraska Court of Appeals Advance Sheets

28 Nebraska Appellate Reports

PANHANDLE COLLECTIONS v. SINGH

Cite as 28 Neb. App. 924

is severable from their rights. See Midwest Renewable

Energy v. American Engr. Testing, supra. “The second

clause, however, mandates the district court order indispensable parties be brought into the controversy.” Id.

at 90, 894 N.W.2d at 236. All persons interested in the

contract or property involved in an action are necessary

parties, whereas all persons whose interests therein may

be affected by a decree in equity are indispensable parties. See Midwest Renewable Energy v. American Engr.

Testing, supra.

27 Neb. App. at 620-21, 935 N.W.2d at 515.

[12,13] The absence of an indispensable party to a controversy deprives the court of subject matter jurisdiction to

determine the controversy and cannot be waived. In re Trust

Created by Augustin, supra. When a lower court lacks the

power, that is, the subject matter jurisdiction, to adjudicate the

merits of a claim, issue, or question, an appellate court also

lacks the power to determine the merits of the claim, issue, or

question presented to the lower court. Id. When it appears that

all indispensable parties to a proper and complete determination of an equity cause were not before the court, an appellate

court will remand the cause for the purpose of having such

parties brought in. Id. Necessary parties are parties who have

an interest in the controversy, and should ordinarily be joined

unless their interests are separable so that the court can, without injustice, proceed in their absence. Id.

Singh argues that the failure to join Cheema as an indispensable party created a jurisdictional defect and that therefore, this

court is deprived of subject matter jurisdiction. Singh argues

Cheema is an indispensable party, since it owns the real estate

where sewer services were delivered and Panhandle acknowledged Cheema’s interest by making allegations against it in

its amended complaint. We agree that Cheema was an indispensable party, especially given that § 18-4-16 provides that

“charges for sanitary sewer service [are] a lien upon the property.” In the present case, the record owner of the property

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Nebraska Court of Appeals Advance Sheets

28 Nebraska Appellate Reports

PANHANDLE COLLECTIONS v. SINGH

Cite as 28 Neb. App. 924

where services were delivered was not included in the suit and

did not have an opportunity to defend its interest in the property. We remand the cause for the purpose of adding Cheema to

the suit as an indispensable party

The county court lacked jurisdiction over this case upon its

failure to add an indispensable party. As a result, the district

court’s order is reversed and the cause is remanded to the district court with directions to reverse and vacate the order of

the county court and remand the matter to the county court for

further proceedings