Nebraska Court Abused Its Discretion Hearing a Matter Already Commenced in Kansas

The Supreme Court of Nebraska finds that a Nebraska district court abused its discretion by entertaining an estate administration issue already pending in Kansas. In Mueller v. Margo Loop (Neb., No. S-21-1030, January 6, 2023).

Cheryl M. Mueller was the widow of Lorine H. Mueller’s son. In 2016, a Nebraska court entered a money judgment for the mother-in-law against Ms. Cheryl Mueller, the daughter-in-law, for $340,846.52.

Mrs. Lorine Mueller died in Kansas in 2017. In November 2017, her daughter, Ms. Margo Loop, asked the Kansas court to subtract the 2016 Nebraska judgment from the money the daughter-in-law would receive from the estate of the late Mrs. Mueller.

In the Kansas case, Ms. Cheryl Mueller objected, arguing that a forum selection clause for Nebraska in a separate settlement agreement she had reached with Ms. Loop blocked the setoff. She then sought a declaratory judgment in Nebraska preventing Ms. Loop; her brother, Mr. Gary Mueller; and Ms. Lorine Mueller’s estate from setting off the 2016 judgment against the daughter-in-law’s share of her mother-in-law’s estate.

The district court found that Ms. Loop and Mr. Mueller could pursue setoff despite the terms of the settlement. Ms. Cheryl Mueller appealed.

The highest court of Nebraska first considers whether the district court should have entertained the lawsuit. The court must decline to consider the merits of an action in certain situations. In particular, when a prior action is pending with the same parties and the same issues, entertaining the action constitutes an abuse of the court’s discretion, even if the other lawsuit is in a different jurisdiction.

Here, the district court should have declined to extend jurisdiction. When Ms. Cheryl Mueller filed the Nebraska action, the parties were already litigating the matter in Kansas. She had a remedy available. The Kansas probate court could rule in her favor and decide that the settlement precluded the setoff. Despite the forum selection clause, the court in Kansas has subject matter jurisdiction because people cannot deny a court of subject matter jurisdiction by their own consensus.

Since it should not have entertained the matter, the district court abused its discretion. Yet the district court was correct in dismissing the action. Because another court was already considering the issue Ms. Cheryl Mueller raised, the district court should not have heard the case.

Read the opinion here.