Articles Posted in Nebraska Supreme Court

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The Supreme Court affirmed the district court’s summary judgment orders that determined Mutual of Omaha Bank held a valid and enforceable deed of trust against Robert Watson’s homestead property. The court concluded that the primary deed of trust had first priority as an encumbrance on the property, ordered an execution sale, and foreclosed Watson from asserting any interest in the property. On appeal, Defendant argued that the district court erred in concluding that Watson and his then-spouse intended to encumber their homestead through the primary deed of trust. The Supreme Court held that, although its reasoning differed from the district court, the court did not err in finding that the primary deed of trust was valid and enforceable. View "Mutual of Omaha Bank v. Watson" on Justia Law

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Linda Clarke filed suit against First National Bank of Omaha (FNB) alleging that she, rather than Gregg Graham, was the owner of a certificate of deposit. FNB filed a third-party action seeking recovery against Graham to the extent FNB was liable to Clarke. The parties filed competing motions for summary judgment. The district court granted summary judgment for Clark against FNB and in favor of FNB against Graham. Graham filed a motion for new trial. Before the court had ruled on the motion, Graham filed his notice of appeal. FNB filed a motion for summary dismissal, arguing that the court of appeals lacked jurisdiction because the notice of appeal was prematurely filed. The court of appeals overruled the motion for summary dismissal. The Supreme Court dismissed the appeal for lack of jurisdiction, holding that Graham’s notice of appeal was prematurely filed and, therefore, was without effect. View "Clarke v. First National Bank of Omaha" on Justia Law

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Jerry Morgan purchased property by obtaining a loan secured by a deed of trust. Morgan conveyed the property to his company, Midland Properties, LLC, and managed the property as a rental. Wells Fargo, N.A., which had been assigned the lender’s interest in the promissory note and deed of trust, initiated a nonjudicial foreclosure on the deed of trust, citing Morgan’s failure to make payments as they became due. HBI, LLC purchased the property at a trustee’s sale and conveyed the property to H&S Partnership, LLP. Morgan and Midland Properties (collectively, Appellants) filed an amended complaint against Wells Fargo, HBI, and H&S alleging wrongful foreclosure of a deed of trust, quiet title, tortious interference with business relationships, and declaratory relief. The district court granted summary judgment for Wells Fargo. The Supreme Court affirmed, holding (1) the district court properly excluded evidence for lack of foundation and hearsay; (2) the evidence did not support Appellants’ claims or establish a genuine issue of material fact; and (3) the district court did not abuse its discretion in denying Appellants’ motion for leave to amend their complaint. View "Midland Properties, LLC v. Wells Fargo, N.A." on Justia Law

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Homeowners obtained loans from Bank for the construction of a new home and entered into an agreement with Contractor to complete the new home construction. When Homeowners defaulted on payments owed to Contractor and on both loans, the house was sold at foreclosure, and Homeowners filed for bankruptcy. Contractor filed a fourth amended complaint against Homeowners, who were later dismissed as parties, and Bank. Following a trial the court granted summary judgment for Bank on Contractor’s claims of fraud and civil conspiracy. The Supreme Court reversed. After remand, Contractor filed a fifth amended complaint, which differed from the fourth amended complaint in several respects. The district court determined that the election of remedies doctrine and judicial estoppel required a dismissal of Contractor’s claims. The Supreme Court reversed, holding (1) Contractor’s claims were consistently premised on the existence of a contract, and therefore, no election was required; and (2) Contractor’s claims were based on different facts and obligations, and therefore, both could be pursued. View "deNourie & Yost Homes, LLC v. Frost" on Justia Law

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A Bank filed an action against four Guarantors on their personal guaranties of an LLC’s debts. That action resulted in three appeals by the Guarantors. The first appeal was generated after the district court granted the Bank’s motions for summary judgment but failed to adjudicate a cross-claim. The second appeal was taken from execution and garnishment proceedings that occurred while the first appeal was pending. The third appeal was taken after one Guarantor moved to vacate the summary judgment order and the district court denied the motion and dismissed the pending cross-claim. The Supreme Court vacated the final orders in the second appeal and affirmed the judgment in the third appeal, holding (1) the execution and garnishment proceedings were void because they were commenced prior to judgment; and (2) the district court correctly overruled the Guarantor’s motion to vacate the summary judgment order. View "Cattle Nat’l Bank & Trust Co. v. Watson" on Justia Law

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The Lindsays were minority shareholders of the 304 Corporation; its principal asset was Mid City Bank. In 2010, the Nebraska Department of Banking and Finance and the FDIC began an examination of the bank. In 2011, the Department appointed the FDIC as the bank's receiver, stating that “‘large commercial real estate loan and poor management practices . . . led to a deterioration of the bank’s capital’” so that there was “‘no option but to declare the insolvent institution receivership.’” The bank reopened and regained good standing. In 2014, the FDIC filed suit, alleging that Fitl “was grossly negligent and breached his fiduciary duties,” 12 U.S.C. 1821(d)(2)(A)(i). The Lindsays also filed suit, alleging breach of fiduciary duties. The court dismissed. The Nebraska Supreme Court affirmed. The Lindsays’ claims are similar to all other shareholders’ claims and did not arise from a special duty, since the injury was not “separate and distinct.” The district court correctly concluded that the Lindsays’ claims were derivative in nature and that as a result of the FDIC lawsuit, the Lindsays had no standing to bring a derivative action on behalf of the corporation. View "Lindsay v. Fitl" on Justia Law

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U.S. Bank was a senior lien holder on certain property, and First Nebraska Educators Credit Union’s interest was junior to U.S. Bank’s. After a foreclosure sale, First Nebraska filed suit, alleging that because it did not receive notice of the sale, it was not able to bid on the property, and its second lien interest was extinguished with the sale of the property. The district court granted U.S. Bank’s motion to dismiss for failure to state a claim, concluding that First Nebraska was not entitled to notice. At issue on appeal was whether U.S. Bank was required to mail a notice of sale to First Nebraska under Neb. Rev. Stat. 76-1008. The Supreme Court affirmed, holding that U.S. Bank was not required to serve notice of foreclosure sale upon First Nebraska. View "First Neb. Educators Credit Union v. U.S. Bancorp" on Justia Law

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Various members of the Doty family gave three deeds of trust (DOT) conveying specific tracts of real estate to West Gate Bank, Inc. as security for certain loans. The DOTs also secured future advances given by the Bank. One advance was documented by Promissory Note 257. The Dotys defaulted on Note 257, and therefore, the Bank exercised its power of sale under one DOT and applied the funds generated by the sale to Note 257. The Dotys later brought a declaratory judgment action asking the district court to declare that the Bank was barred by Neb. Rev. Stat. 76-1013 from recovering any amount still owed under Note 257. The district court granted summary judgment in favor of the Dotys, concluding that the Bank was barred by the three-month statute of limitations in section 76-1013 from taking action to collect amounts due on Note 257. The Supreme Court reversed, holding that the district court (1) correctly determined that section 76-1013 precludes the Bank from bringing a personal deficiency action against the Dotys for the balance owed under Note 275; but (2) erred in determining that the three-month statute of limitations set forth in section 76-1013 applies to successive foreclosures on remaining collateral. Remanded. View "Doty v. West Gate Bank, Inc." on Justia Law

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Defendants gave a promissory note to Bank and secured a loan with a trust deed on real property. Defendants defaulted on the note, and Bank initiated foreclosure proceedings. The property was sold after a sheriff's sale. Bank subsequently filed a complaint to recover the deficiency. The district court granted Defendants' motion for summary judgment, holding that because Bank filed its complaint ninety-nine days after the sheriff's sale, the action was barred by the three-month statute of limitations in Neb. Rev. Stat. 76-1013. The Supreme Court reversed, holding (1) the special three-month statute of limitations on actions for deficiency set forth in the Nebraska Trust Deeds Act applies where a lender elects to judicially foreclose upon the real estate, but the special limitation applies only where the property has been sold by exercising the power of sale set forth in the trust deed; and (2) because the judicial foreclosure of the trust deed in this case did not result in the sale of property under a trust deed, it did not fall under the statutory language in section 76-1013, and the deficiency action was governed by the general statute of limitations for actions on written contracts. Remanded. View "First Nat'l Bank of Omaha v. Davey" on Justia Law

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Lender made loans to Borrower that were secured by deeds of trust describing real estate owned by Borrower. As additional security for the loans to Borrower, Guarantor promised payment of the indebtedness on the promissory notes. Borrower subsequently defaulted, and Lender sought payment of the indebtedness from Guarantor. Guarantor moved to amend his answer to assert he was not liable to Lender because Lender was barred by section 76-1013 of the Nebraska Trust Deeds Act (Act) from pursuing a deficiency action against Borrower. The district court granted summary judgment in favor of Lender. At issue on appeal was whether a guaranty of a promissory note secured by a deed of trust is subject to the Act. The Supreme Court affirmed, holding that Guarantor's guaranty was not subject to the Act, and under the terms of the guaranty, Guarantor was liable for the total amount of Borrower's debt, less the trustee's sale price. View "Mut. of Omaha Bank v. Murante" on Justia Law