Walker v. Probandt

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
Dennis Walker et al., appellees, v. John
Probandt, appellee, and John
Raynor, appellant.
___ N.W.2d ___
Filed March 30, 2021. 	No. A-20-299.
1. Judgments: Jurisdiction: Appeal and Error. When a jurisdictional
question does not involve a factual dispute, determination of the issue is
a matter of law which requires an appellate court to reach a conclusion
independent from that of the inferior court.
2. Jurisdiction: Parties: Waiver. The absence of an indispensable party to
a controversy deprives the court of subject matter jurisdiction to deter-
mine the controversy and cannot be waived.
3. Actions: Jurisdiction. Lack of subject matter jurisdiction may be raised
at any time by any party or by the court sua sponte.
4. Jurisdiction. Parties cannot confer subject matter jurisdiction upon a
judicial tribunal by either acquiescence or consent.
5. Courts: Appeal and Error. When a lower court is given specific
instructions on remand, it must comply with the specific instructions and
has no discretion to deviate from the mandate.
6. Jurisdiction: Final Orders: Appeal and Error. An appellate court has
the duty to determine whether the trial court had subject matter juris-
diction to enter the final order sought to be reviewed, and to vacate an
order of the trial court entered without jurisdiction.
7. Actions: Promissory Notes: Parties. Where promissory notes which
are the subject of an action are transferred during its pendency, the
action can continue in the name of the original holder of the notes.
8. Appeal and Error. A trial court cannot err in failing to decide an issue
not raised, and an appellate court will not consider an issue for the
first time on appeal that was not presented to or passed upon by the
trial court.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/14/2026 08:24 AM CDT

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
Appeal from the District Court for Dawson County: James
E. Doyle IV, Judge. Affirmed.
Patrick M. Heng, of Patrick M. Heng Law Office, P.C.,
L.L.O., for appellant.
Diana J. Vogt and James D. Sherrets, of Sherrets, Bruno &
Vogt, L.L.C., for appellees.
Riedmann, Bishop, and Welch, Judges.
Riedmann, Judge.
INTRODUCTION
Upon remand, a debtor sought to have a judgment against
him vacated on the basis that the district court lacked subject
matter jurisdiction to adjudicate the case. The district court
denied the motion to vacate on the basis that the relief sought
fell outside the directions of the mandate. We determine that
the district court erred in determining that it lacked authority
to address the issue, but affirm its decision denying the motion
to vacate.
BACKGROUND
The relevant facts of this matter originated upon remand
from this court to the district court for Dawson County. In
Walker v. Probandt, 25 Neb. App. 30, 902 N.W.2d 468 (2017),
John Raynor was found liable on a promissory note originally
issued by First State Bank (FSB) and subsequently assigned to
Skyline Acquisition, LLC (Skyline). An appeal was brought,
and Raynor filed a cross-appeal. This court affirmed in part,
and in part reversed and remanded to the district court with
directions. Various other parties and issues were involved in
the underlying action, but this present appeal is limited to the
proceedings on mandate as they relate to Raynor’s liability on
the promissory note.
In our previous opinion, we provided specific directions on
remand, stating:

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
We conclude that the district court abused its discre-
tion in declining to enter default judgment against [John]
Probandt on the fraud/misappropriation cause of action,
and we remand the cause to the district court with direc-
tions to enter a default judgment against Probandt in the
amount of $2,184,530.
We find no error in the decision to enter judgment in
favor of Skyline against Raynor. However, the district
court erred in failing to award a credit against the judg-
ment for the amounts received in settlement, and we
remand the cause for recalculation of this amount.
Id. at 52, 902 N.W.2d at 484.
Upon remand, the district court entered an order on August
8, 2018, spreading the mandate, entering judgment against
Probandt in the amount of $2,184,530, and setting an evi-
dentiary hearing to determine the credit to be applied to the
judgment against Raynor. Thereafter, on November 21, Raynor
sought an order vacating the judgment for want of subject mat-
ter jurisdiction. He claimed that the district court lacked subject
matter jurisdiction to decide liability on the FSB promissory
note because FSB assigned the note to Skyline in June 2011,
but Skyline was not made a party to the litigation until trial
(and after the statute of limitations had run); therefore, Raynor
claimed that all pleadings filed by FSB during the interim that
sought recovery on the note were a nullity. The evidentiary
hearing to determine the credit to be applied to the judgment
was held on July 30, 2019.
In a subsequent written order, the court ruled that on man-
date, it did not have jurisdiction to vacate the judgment as
requested by Raynor; rather, it was confined to do only what
the appellate court mandated be done. It therefore denied the
motion to vacate. It then determined that a $450,000 credit
was to be applied to the judgment against Raynor and entered
an order accordingly. Raynor filed a motion for new trial, and
after a hearing, the court determined that it incorrectly calcu-
lated the amount of credit. It entered a new order—awarding

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
$1,600,000 in credit and adjusting the interest—and issued
judgment in the amount of $735,932.34. Raynor appeals.
ASSIGNMENTS OF ERROR
Raynor assigns, restated and renumbered, that the district
court erred in failing to (1) grant his motion to dismiss for
lack of subject matter jurisdiction, (2) find that Raynor was an
accommodation party under Neb. U.C.C. § 3-419(a) (Reissue
2020), and (3) find that a judgment against Raynor is unsup-
ported and inconsistent with § 3-419.
STANDARD OF REVIEW
[1] When a jurisdictional question does not involve a factual
dispute, determination of the issue is a matter of law which
requires an appellate court to reach a conclusion independent
from that of the inferior court. K N Energy, Inc. v. Cities of
Broken Bow et al., 248 Neb. 112, 532 N.W.2d 32 (1995).
ANALYSIS
On remand, Raynor sought to have the judgment entered
against him vacated on the basis that the district court lacked
subject matter jurisdiction over the case. The district court
denied the motion, stating that it lacked jurisdiction to con-
sider it, given the limited nature of the mandate. Raynor argues
the court erred in denying his motion, because subject matter
jurisdiction may be raised at any stage of the proceedings.
We agree that the district court had jurisdiction to consider
the motion.
Raynor asserts that the district court lacked subject matter
jurisdiction for 31⁄2 years because the action was originally
commenced with FSB as a party but when FSB assigned the
note to Skyline in June 2011, Skyline became an indispensa-
ble party. Because Skyline was not added as a party until
January 7, 2015, Raynor reasons that the amended complaints
filed during that time period which sought recovery from
him on the promissory note were a nullity. He asserts, “It is
indisputable that, as the assignee of [FSB], P-Skyline was an

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
indispensable party under Neb. Rev. Stat. § 25-323. There is
no subject matter jurisdiction without the assignee, P-Skyline,
prosecuting the claim as is mandated by Neb. Rev. Stat.
§ 25-301.” Brief for appellant at 16.
[2,3] The absence of an indispensable party to a controversy
deprives the court of subject matter jurisdiction to determine
the controversy and cannot be waived. Panhandle Collections
v. Singh, 28 Neb. App. 924, 949 N.W.2d 554 (2020). Lack of
subject matter jurisdiction may be raised at any time by any
party or by the court sua sponte. J.S. v. Grand Island Public
Schools, 297 Neb. 347, 899 N.W.2d 893 (2017).
Through his motion to dismiss, Raynor raised the issue
of the court’s subject matter jurisdiction. The district court
concluded that because the matter was before it on remand,
it was limited to the specific directions of the mandate. Its
understanding of the constraints of a remand is supported in
Nebraska case law. See, e.g., TransCanada Keystone Pipeline
v. Tanderup, 305 Neb. 493, 941 N.W.2d 145 (2020) (stating we
have consistently held that when lower court is given specific
instructions on remand, it must comply with specific instruc-
tions and has no discretion to deviate from mandate). However,
as stated above, lack of subject matter jurisdiction may be
raised at any stage of a proceeding.
[4] In Bolan v. Boyle, 222 Neb. 826, 387 N.W.2d 690
(1986), defendants raised the issue of the court’s subject matter
jurisdiction for the first time on remand through a motion for
summary judgment. The district court granted the motion and
dismissed the case. On appeal, the plaintiff argued that it was
error for the district court to entertain a jurisdictional challenge
on remand. The Nebraska Supreme Court rejected the argu-
ment. Although it recognized that the first appeal “turned out
to be an exercise in futility,” it concluded:
[T]his court cannot act to impose or grant subject matter
jurisdiction on a court which otherwise does not have it.
As we have reaffirmed recently, “parties cannot confer
subject matter jurisdiction upon a judicial tribunal by

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
either acquiescence or consent.” Riedy v. Riedy[, 222
Neb.] 310, 312, 383 N.W.2d 742, 744 (1986). Subject
matter jurisdiction may not be waived.
Bolan v. Boyle, 222 Neb. at 827, 387 N.W.2d at 691.
[5] Bolan v. Boyle, supra, involved a general remand as
opposed to a specific mandate. See TransCanada Keystone
Pipeline v. Tanderup, supra (explaining general remand is
reversal of judgment and remand of cause for further proceed-
ings without specific direction as to what trial court should do,
whereas specific mandate directs court as to what it must do
on mandate). In cases of specific remand, Nebraska case law
is clear that when a lower court is given specific instructions
on remand, it must comply with the specific instructions and
has no discretion to deviate from the mandate. Id. Insofar as
tension arises between the court’s inability to act beyond the
scope of a specific mandate and its inability to address a matter
over which it is claimed it has no jurisdiction, we determine it
must address the issue of jurisdiction.
Addressing the same conflict, an Illinois appellate court
explained:
The mandate of this court directing the trial court to
proceed to review the assessment was, of course, based
on the assumption that the circuit court had jurisdiction
of the subject matter. Accordingly, we hold that it was
proper for the trial court to entertain the Department’s
objection to jurisdiction.
Fredman Bros. Furniture v. Ill. Dept. of Rev., 129 Ill. App. 3d
38, 40, 471 N.E.2d 1037, 1038, 84 Ill. Dec. 271, 272 (1984).
Our opinion in Walker v. Probandt, 25 Neb. App. 30, 902
N.W.2d 468 (2017), was also premised on the assumption
that the district court had subject matter jurisdiction of the
case. Raynor raised the issue on remand through a motion to
vacate, and the court denied the motion not on the merits, but,
rather, under the belief it was without jurisdiction to address
the issue. Because lack of subject matter jurisdiction may be
raised at any time, we determine the court erred in not address-
ing the issue.

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
[6] While an appellate court will not ordinarily decide an
issue not passed upon by the trial court, see Capitol City
Telephone v. Nebraska Dept. of Rev., 264 Neb. 515, 650
N.W.2d 467 (2002), an appellate court has the duty to deter-
mine whether the trial court had subject matter jurisdiction
to enter the final order sought to be reviewed, and to vacate
an order of the trial court entered without jurisdiction, see
Anderson v. A & R Ag Spraying & Trucking, 306 Neb. 484, 946
N.W.2d 435 (2020). We therefore proceed to address whether
the district court had subject matter jurisdiction over the under-
lying case during the time period after which FSB assigned
the note to Skyline but before Skyline was added as a party.
We conclude that it did. Neb. Rev. Stat. § 25-301 (Reissue
2016) states:
Every action shall be prosecuted in the name of the real
party in interest except as otherwise provided in section
25-304. An action shall not be dismissed on the ground
that it is not prosecuted in the name of the real party in
interest until a reasonable time has been allowed after
objection for joinder or substitution of the real party in
interest. Joinder or substitution of the real party in inter-
est shall have the same effect as if the action had been
commenced by the real party in interest.
(Emphasis supplied.)
The last sentence of § 25-301 explicitly gives the court con-
tinuing jurisdiction when the real party in interest is substituted
for another party. Therefore, when Skyline was substituted as
plaintiff, the effect was as if it had commenced the action.
Likewise, the failure to include Skyline as a party earlier in
the case did not strip the district court of jurisdiction. See Eli’s,
Inc. v. Lemen, 256 Neb. 515, 591 N.W.2d 543 (1999).
In Eli’s, Inc. v. Lemen, supra, Eli’s, Inc., was an assignee
of a printing company’s creditors. After it filed suit against
the debtor, Eli’s assigned its rights to DCB, Inc. DCB was
not substituted as a party plaintiff. Following a judgment in
favor of Eli’s, the debtor appealed. He argued that the district
court lost jurisdiction when Eli’s interests were assigned to

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
DCB. The Supreme Court rejected the argument, holding that
the issue was governed by Neb. Rev. Stat. § 25-322 (Reissue
1995). That statute then stated and continues to state in almost
identical language:
An action does not abate by the death or other dis-
ability of a party, or by the transfer of any interest therein
during its pendency, if the cause of action survives or
continues. In the case of the death or other disability of
a party, the court may allow the action to continue by or
against his or her representative or successor in interest.
In case of any other transfer of interest, the action may be
continued in the name of the original party or the court
may allow the person to whom the transfer is made to be
substituted in the action.
§ 25-322 (Reissue 2016).
[7] The Eli’s, Inc. court stated that it had previously inter-
preted this section to mean that
“the transfer of interest after the action is commenced
does not prevent the action from being continued to
final termination in the name of the original plaintiff.”
Exchange Elevator Company v. Marshall, 147 Neb. 48,
54, 22 N.W.2d 403, 407 (1946), citing Vogt v. Binder, 76
Neb. 361, 107 N.W. 383 (1906). Further, this court has
held that where promissory notes which were the subject
of an action were transferred during its pendency, the
action could continue in the name of the original holder
of the notes. Commercial Nat. Bank v. Faser, 99 Neb.
105, 155 N.W. 601 (1915).
256 Neb. at 529-30, 591 N.W.2d at 553-54.
In the present case, FSB was the original plaintiff and
remained the named plaintiff until Skyline was substituted
in July 2015. Eli’s, Inc. instructs that substitution was not
required, but pursuant to § 25-322, it was permissible. And
§ 25-301 confirms that when the real party in interest is sub-
stituted, it has the same effect as if it had commenced the
action. Therefore, the district court did not lose subject matter

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
jurisdiction of the case and Raynor’s motion to vacate on that
basis was properly denied.
Raynor argues that Midwest Renewable Energy v. American
Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017), stands
for the proposition that an assignee is an indispensable party
and if not named as a party to a lawsuit, the court is without
subject matter jurisdiction. We find this case distinguishable
from the matter at issue. Significantly, the plaintiff in Midwest
Renewable Energy sought to quiet title to property upon which
a judgment lien had been filed. It named as a defendant the
original party who obtained the judgment and filed the lien;
however, at the time the action was commenced, the judgment
had been assigned to a third party who was not named in the
lawsuit. The court held that the assignee of the judgment and
judgment lien was an indispensable party.
In the present case, however, at the time the action was
filed, FSB was the holder of the promissory note. It was
not until during the litigation that the note was assigned to
Skyline. We find that § 25-322 is applicable in this situation
and that the principles of Eli’s, Inc. v. Lemen, 256 Neb. 515,
591 N.W.2d 543 (1999), govern. See, also, New Light Co. v.
Wells Fargo Alarm Servs., 252 Neb. 958, 567 N.W.2d 777
(1997) (allowing substitution of plaintiff, real party in inter-
est, after statute of limitations had run where no new cause
of action is introduced and party substituted possesses interest
in controversy sufficient to enable it to maintain proceeding).
Therefore, we determine that the district court did not lose
subject matter jurisdiction of the case during the time period
between FSB’s assignment of the note and Skyline’s being
named a party.
Raynor also assigns that the district court erred in failing
to find that he was an accommodation party under § 3-419(a)
of the Uniform Commercial Code and that a judgment against
Raynor was unsupported and inconsistent with § 3-419. He
argues on appeal that he raised both of these issues with
the district court on remand; however, our record does not

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Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
WALKER v. PROBANDT
Cite as 29 Neb. App. 704
contain any such motion nor does the bill of exceptions from
the hearing on remand contain reference to these issues.
[8] A trial court cannot err in failing to decide an issue not
raised, and an appellate court will not consider an issue for the
first time on appeal that was not presented to or passed upon
by the trial court. Vande Guchte v. Kort, 13 Neb. App. 875,
703 N.W.2d 611 (2005). We have stated that “to gain appellate
review of an issue or theory, it must be presented to the trial
court. In this way, litigants have some assurance that appel-
late review will be essentially limited to the case which was
tried and presented in the lower court.” Id. at 883, 703 N.W.2d
at 620.
The transcript and the bill of exceptions do not support
Raynor’s assertion that he presented these issues to the dis-
trict court. Furthermore, even if he had presented them to the
district court, they clearly lie outside the specific directions of
the mandate, and the district court had no authority to address
them. See TransCanada Keystone Pipeline v. Tanderup, 305
Neb. 493, 941 N.W.2d 145 (2020). This assigned error fails.
CONCLUSION
We conclude that the district court erred in determining
that it was without jurisdiction to address Raynor’s assertion
that the court lacked subject matter jurisdiction over the case.
However, we find no merit in Raynor’s claim that subject mat-
ter jurisdiction was lacking. Because our record contains no
indication that the accommodation party issue was raised in the
district court on remand, and because those issues clearly fall
outside the confines of the mandate, we find no error as to this
issue. We therefore affirm the order denying Raynor’s motion
to vacate.
Affirmed.