Mark Steven Pestal and Kimberly Ann Pestal v. John J. Malone, Sr., et al.

This equity action involves a dispute among neighbors over
four parcels of property. The disputed parcels are either part of
or adjacent to a common driveway serving three lots, 6, 7, and
8, in the Hilltop of Oak Hills Highlands subdivision in Douglas
County, Nebraska. The owners of lot 8, Mark Steven Pestal and
Kimberly Ann Pestal, appellees, brought this action in the district
court for Douglas County against the owners of lot 7, John
J. Malone, Sr., and Karen Malone, appellants. The owners of lot
6, Steven and Elizabeth Gleason, also affected by this action,
were not made parties.

Following trial, the district court granted relief in favor of
the Pestals. The court determined that the Pestals were owners
in fee simple of two of the disputed parcels and that the Pestals
were entitled to prescriptive easements with specified terms over
the two other parcels. The district court enjoined the Malones
from interfering with the Pestals' interests in the disputed parcels
and dismissed with prejudice the Malones' counterclaim in
which they had sought to quiet title to the disputed parcels in
their name. The Malones appeal.

We conclude that because the record reflects the absence of
parties who have an interest in the property that is the subject of
this action and whose rights to such property may be affected by
this action, the district court was without jurisdiction to resolve
this controversy. Accordingly, we vacate the district court's
order and dismiss the appeal.

FACTS

Lots 6, 7, and 8 border on Washington Circle in the Hilltop of
Oak Hills Highlands subdivision. The owners of lots 6, 7, and 8
share a common driveway. The Pestals own lot 8. The Malones
own lot 7. The Gleasons own lot 6. Lot 7 is situated between
lots 6 and 8. The record shows the existence of a driveway easement,
which is a recorded, perpetual, nonexclusive easement,
over a portion of lot 7 "to the present and future owners, occupants
and invitees of Lots 6 and 8." According to its terms, the
purpose of the driveway easement is to provide "vehicular and
pedestrian access from Washington Circle to Lot[s] 6 and 8"
as well as to lot 7. The easement is recorded with the Douglas
County register of deeds.

The Pestals brought the instant action against the Malones,
and, according to the caption of their amended complaint, all
persons claiming an interest in lot 7, "Real Names Unknown."

The Gleasons were not named as parties. The amended complaint
was filed March 10, 2004. Based upon a representation
to the court that the real names of persons having an interest
in the disputed parcels could not be determined after diligent
investigation, the Pestals were granted permission to serve the
unnamed parties by publication.

The Pestals claimed title to four parcels of property, two in
fee by adverse possession and two by prescriptive easement. The
district court in its order filed after trial described these four
disputed parcels as follows:

Parcel A, the driveway property, is an irregular shaped
section of a brick and concrete drive and adjacent bricked
area that exclusively serves [the Pestals'] lot but lies
entirely within the legal boundaries of [appellants'] lot. . . .

Parcel B, the roadway easement, is an asphalted area that
abuts [the Pestals'] driveway and is located entirely within
[appellants'] lot. . . . Parcel C, the landscaping property, is
a long and narrow area consisting mainly of landscaping
and a small section of the brick and concrete driveway .


. . . Parcel D, the parking easement, is a rectangular section
of the asphalted roadway that is entirely within the
perpetual nonexclusive easement granted to the owners of
Lot[s] 8 and 6.

The record reflects that parcels C and D lie within the driveway
easement. The Pestals sought a fee simple interest in parcel C
and a prescriptive easement in parcel D.

In their answer, the Malones denied the Pestals' allegations
that the Pestals were entitled to title by adverse possession
and to prescriptive easements over the disputed parcels. The
Malones attached a copy of a recorded driveway easement to
their answer. The Malones filed a counterclaim that sought to
have title to the disputed parcels quieted in their names.

On November 13 and 14, 2006, the district court conducted
a bench trial. A total of eight witnesses, including Steven
Gleason, testified. During his testimony, Steven Gleason stated
that he and his wife were the owners of lot 6. He also generally
described his use of the driveway easement and the property
that made up the disputed parcels. Over 50 exhibits were admitted
into evidence during trial, including a copy of the driveway
easement.

On January 29, 2007, the district court entered its order. The
court determined that the Pestals had met their burden of proof
as to all four parcels. By virtue of the Pestals' establishing
their claims of adverse possession to parcels A and C, the court
awarded A and C in fee simple to the Pestals. The court also
awarded prescriptive easements to the Pestals as to parcels B and
D. The prescriptive easement as to parcel C was for the purposes
of ingress and egress and as to parcel D was for the purpose
of occasional parking. The district court entered a permanent
injunction prohibiting the Malones from interfering with the
Pestals' property rights. Finally, the district court dismissed the
Malones' counterclaim with prejudice. The Malones appeal.

ASSIGNMENTS OF ERR OR

On appeal, the Malones raise seven assignments of error.
Because we conclude that the district court erred in failing
to require the presence of all necessary parties, we discuss
only the assignment of error that claims that the district court
lacked jurisdiction.

STANDARDS OF REVIEW

[1,2] The presence of necessary parties to a suit is a jurisdictional
matter that cannot be waived by the parties; it is the duty
of the plaintiff to join all persons who have or claim any interest
that would be affected by the judgment. Ruzicka v. Ruzicka,
262 Neb. 824, 635 N.W.2d 528 (2001). When a jurisdictional
question does not involve a factual dispute, its determination
is a matter of law, which requires an appellate court to reach a
conclusion independent of the decision made by the lower court.
See id.

ANALYSIS

On appeal, the Malones assert that the district court lacked
jurisdiction because the Pestals failed to join necessary parties
as required by Neb. Rev. Stat. § 25-323 (Cum. Supp. 2006),
which grants the district court authority to determine disputes
when the proper parties are before it. Section 25-323 is entitled
"Necessary parties; brought into suit; procedure." Section
25-323 provides, inter alia, as follows:

The court may determine any controversy between parties
before it when it can be done without prejudice to
the rights of others or by saving their rights; but when a
determination of the controversy cannot be had without the
presence of other parties, the court must order them to be
brought in.

The Malones note that by virtue of the driveway easement,
the Gleasons held perpetual easements over parcels C and D,
and, in addition, the evidence shows that the Gleasons used parcels
A and B. As a result, the Malones argue that the Gleasons
were necessary parties in the action filed by the Pestals. Because
the Gleasons were not parties to this action, the Malones claim
the district court erred when it failed to order the Gleasons to
be brought in. The Malones further argue that because of the
absence of necessary parties, the district court lacked jurisdiction
to enter the relief it granted in this case.

[3,4] The Malones admit that they did not raise the necessary
party argument before the district court. As a general rule,
an appellate court will not consider an issue on appeal that was
not presented to or passed upon by the trial court. See Clark v.
Clark, ante p. 276, 746 N.W.2d 132 (2008). However, the presence
of necessary parties is jurisdictional and cannot be waived
by the parties. Ruzicka v. Ruzicka, supra. If necessary parties
to a proceeding are absent, the district court has no jurisdiction
to determine the controversy. See Langemeier v. Urwiler Oil &
Fertilizer, 259 Neb. 876, 613 N.W.2d 435 (2000). We therefore
address the merits of this argument.

[5] We have stated that an indispensable or necessary party
is one whose interest in the subject matter of the controversy is
such that the controversy cannot be finally adjudicated without
affecting the necessary party's interest or which is such that
not to address the interest of the necessary party would leave
the controversy in such a condition that its final determination
may be wholly inconsistent with equity and good conscience.

See In re Adoption of Kenton H., 272 Neb. 846, 725 N.W.2d
548 (2007). We have also stated that the presence of necessary
parties is jurisdictional and that the absence of necessary parties
deprives the district court of jurisdiction. Ruzicka v. Ruzicka,
supra; Langemeier v. Urwiler Oil & Fertilizer, supra.

We have long recognized in adverse possession and easement
actions the importance of naming as parties all persons or
entities who have or may have an interest in the property that
is the subject of the action. In Whitaker v. Gering Irr. Dist., 183
Neb. 290, 160 N.W.2d 186 (1968), we set aside the judgment
and remanded the cause for a new trial when we determined
on appeal that persons who had an interest in the real property
that was the subject of the action had not been brought in as
parties. In Whitaker, we stated that "[t]he defendant's claim of
adverse possession . . . whether it be limited to an easement or
not, certainly could not be established as against [persons who]
are not parties to the action" and that "[w]hen it appears that all
indispensable parties to a proper and complete determination of
an equity cause were not before the district court, [an appellate
court] will remand the cause for the purpose of having such parties
brought in." Id. at 294-95, 160 N.W.2d at 188-89.

A determination of the present controversy will necessarily
prejudice the rights of all persons who have or claim to have
an interest in the disputed parcels. The evidence showed that
the Gleasons used parcels A and B. More significantly, the
Gleasons have a recorded interest in the driveway easement,
parcels C and D, and the district court awarded the Pestals title
in fee simple to parcel C and a prescriptive easement to parcel
D, thereby affecting the Gleasons' interests.

[6] As for parcel C, from the record available to us, it
appears that the Gleasons' easement in the driveway, which is
recorded and continues in favor of future owners of lot 6, is
not a mere personal right and therefore is appurtenant to the
land. See Spilker v. First Nat. Bank & Trust Co., 211 Neb. 540,
319 N.W.2d 429 (1982). Although parcel C was awarded to
the Pestals in fee simple, the Gleasons' easement interest, as
appurtenant thereto, passed with the award of title without having
been expressly mentioned by the district court. See Hillary
Corp. v. United States Cold Storage, 250 Neb. 397, 550 N.W.2d
889 (1996). Because the Gleasons' interest in parcel C ran with
the land, see id. (quoting Broadhead v. Terpening, 611 So. 2d
949, 954 (Miss. 1992), stating "‘[e]asements by necessity and
by implication are appurtenant to the dominant estate and run
with land'"), the impact on the Gleasons' interest in parcel C
by virtue of the district court's award to the Pestals of parcel C
was de minimis. However, as to parcel D, in which the Gleasons
had a recorded prescriptive easement for the purpose of access
to their lot 6, the district court's award of a prescriptive easement
to parcel D to the Pestals for their parking purposes had
an adverse effect on the Gleasons' ability to exercise their easement
right of access. Thus, the Gleasons' interests are affected
by the controversy and the Gleasons were necessary parties to
this action. The district court erred in not sua sponte requiring
that the Gleasons be made parties. See Ruzicka v. Ruzicka, 262
Neb. 824, 635 N.W.2d 528 (2001).

The Pestals as the successful parties do not dispute the
Gleasons' status as necessary parties, at least with regard to
the driveway easement, parcels C and D. The Pestals claim,
however, that because they named "All Persons . . . Real Names
Unknown" as defendants in the caption of their amended complaint
and constructively served such defendants, the Gleasons
had constructive notice of the litigation and were thus converted
into parties. We do not agree with the Pestals' assessment of the
record or the applicable law.

Contrary to the Pestals' assertion, the Gleasons were not
unknown persons. Compare Neb. Rev. Stat. § 25-321 (Cum.
Supp. 2006) (providing that when names of persons having
interest in real estate do not appear of record, plaintiff may in
complaint designate such persons as "‘all persons having or
claiming any interest in'" such real estate, followed by words,
"‘real names unknown'"). The driveway easement as a public
record was readily available, and, in any event, a copy of the
easement was attached to the Malones' answer. Under these
circumstances, the Gleasons' interest in the disputed parcels
was readily apparent. The Gleasons should have been joined as
named parties.

The Pestals also argue that because Steven Gleason appeared
as a witness at trial, the Gleasons had actual notice of the
proceedings
and need not be named as parties. We reject this
argument. Even ignoring the fact that Elizabeth Gleason was not
a witness, it is axiomatic that being a witness does not make one
a party to an action. Compare Bank of Vernal v. Uintah County
et al. (Two Cases), 122 Utah 410, 250 P.2d 581 (1952) (stating
generally that individual who took no part in proceedings other
than as witness and who did not agree to become party to lawsuit
was not party and that such individual's interest in property
that was subject of lawsuit was unaffected by litigation). The
Gleasons' rights cannot be properly resolved or ruled upon
unless they are added as necessary parties.

For completeness, we note that the Malones claim on appeal
that there exist other entities with interests in the disputed
parcels whose presence is required for a final determination
of the subject matter of the action. We cannot determine from
the record on appeal the validity of the Malones' contention,
although we note there is an indication that the subdivision
homeowners' association may have easement rights over all or
some of the disputed parcels.

We conclude that this controversy involving potential interests
in real property cannot be properly resolved without the proper
participation of all necessary parties in the suit. See Ruzicka v.
Ruzicka, supra. Because the presence of necessary parties is
jurisdictional, we conclude the district court lacked jurisdiction
in this matter. See Langemeier v. Urwiler Oil & Fertilizer, 259
Neb. 876, 613 N.W.2d 435 (2000).

* * *

http://court.nol.org/opinions/2008/june/jun13/s07-216.pdf

In an action involving real estate for adverse possession
and prescriptive easements, it is fundamental that all persons
or entities having an interest in the property that is the subject
of the action be made parties to the lawsuit. In the absence of
a necessary party, the district court is without jurisdiction to
determine the controversy. Because a determination of the controversy
would prejudice the rights of the Gleasons, who were
not named as parties, we vacate the district court’s order and
dismiss the appeal.
Vacated and dismissed.

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