Background
In December 2023, William Martens, the owner of a commercial property, filed a forcible entry and detainer (FED) action in Douglas County Court against his tenants, BB’s Childcare, LLC, and its registered agent Tasha McNeil, alleging failure to pay rent. The underlying lease, entered in September 2020, was a five-year agreement that included provisions giving the tenants an option to purchase the property during the second and third lease terms, a credit toward the purchase price for rent payments already made, and a restriction on the owner’s right to sell without first affording the tenants an opportunity to exercise their purchase option. The tenants argued throughout the county court proceedings that these provisions conferred an equitable interest in the property, creating a title dispute that stripped the county court of subject matter jurisdiction over the FED action. The county court rejected that argument and entered judgment for the owner granting restitution of the premises.
On appeal to the district court, the tenants failed to include the county court’s judgment in the transcript. The district court, applying the rule that an appellant must present a record supporting assigned errors or the lower court’s decision will be affirmed, declined to reach the merits and affirmed. After the tenants moved to alter or amend the judgment and sought to file a supplemental transcript containing the county court’s judgment, the district court refused, reasoning it was more willing to correct the record before submission. The tenants appealed, and the Nebraska Supreme Court moved the case to its own docket.
The Court’s Holding
The Nebraska Supreme Court vacated the district court’s judgment and remanded with directions to vacate the county court’s judgment and dismiss the FED complaint for lack of subject matter jurisdiction. The court held that the lease provisions — granting the tenants a purchase option, crediting their rental payments toward the purchase price, and restricting the owner’s alienation rights — were sufficient to arguably confer an equitable interest in the property. Under long-established Nebraska law, when a defendant’s asserted rights in the property create a genuine title dispute, a court hearing a FED action is divested of subject matter jurisdiction and must dismiss the case; only a tribunal with general jurisdiction, such as the district court sitting as a court of original jurisdiction rather than as an appellate court, may resolve such questions.
The court further held that because the supplemental transcript was necessary to determine whether the county court had lacked jurisdiction — a question that can never be waived — the district court abused its discretion by refusing to allow it to be filed late. The absence of the judgment from the transcript did not excuse the obligation to conduct a jurisdictional review. The court clarified, however, that its ruling expressed no view on the merits of the tenants’ title claims, and that those questions remain open for resolution in a court of competent jurisdiction. The court also disapproved any reading of its prior decision in Woodsonia Hwy 281 v. American Multi-Cinema that would treat a title dispute as inhering in every FED action brought under a written lease.
Key Takeaways
- A county court hearing a forcible entry and detainer action loses subject matter jurisdiction — and must dismiss — once the evidence discloses a genuine title dispute; a defendant’s mere assertion of a title claim is insufficient, but lease terms that arguably confer an equitable interest (purchase options with rent credits and alienation restrictions) cross that threshold.
- Subject matter jurisdiction cannot be waived, created by consent, or forfeited by procedural default: even an appellant’s failure to include the lower court’s judgment in the appellate transcript does not relieve a reviewing court of the duty to examine jurisdiction.
- A district court abuses its discretion by denying leave to file a supplemental transcript out of time when that transcript is necessary to determine whether the court below lacked subject matter jurisdiction over a FED action.
- Not every written lease with purchase-related provisions generates a title dispute sufficient to strip FED jurisdiction; courts must examine the specific lease terms to determine whether possession can be adjudicated without resolving the defendant’s property rights.
Why It Matters
This decision reinforces the firm limits on Nebraska county courts’ jurisdiction in eviction proceedings and signals that commercial leases containing purchase options, rent-credit arrangements, or alienation restrictions may routinely raise equitable title questions that FED courts cannot resolve. Landlords who seek to evict commercial tenants holding such leases must be prepared to have their FED actions dismissed — potentially after trial — and to re-litigate possession in district court through a different form of action.
The case also establishes a new appellate rule: when a mandatory item is missing from a county-court transcript and that omission implicates the lower court’s subject matter jurisdiction, the failure to raise the omission before submission does not preclude a post-judgment motion for a supplemental transcript, and denial of that motion constitutes an abuse of discretion. Practitioners handling FED appeals must audit transcripts for mandatory items early, but this decision confirms that jurisdictional defects remain reviewable regardless of procedural missteps.