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Stauffer v. Benson

Supreme Court of Nebraska

July 25, 2014

MARK STAUFFER AND CINDI STAUFFER, HUSBAND AND WIFE, APPELLEES,
v.
BETTY JEAN BENSON, APPELLANT

Page 760

[Copyrighted Material Omitted]

Page 761

Appeal from the District Court for Phelps County: STEPHEN R. ILLINGWORTH, Judge.

Stephen G. Lowe for appellant.

Bradley D. Holbrook and Nicholas R. Norton, of Jacobsen, Orr, Lindstrom & Holbrook, P.C., L.L.O., for appellees.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.

OPINION

Page 762

[288 Neb. 684] Miller-Lerman, J.

NATURE OF CASE

In this breach of contract action, Mark Stauffer and Cindi Stauffer, husband and wife, the appellees, entered into an agreement (Purchase Agreement) with Betty Jean Benson under which the appellees were to purchase Benson's undivided one-third interest in certain real estate for $150,000. The contract was not performed, and the appellees filed an action against Benson in the district court for Phelps County. At the time of the bench trial, Benson no longer had title to the property. In an order filed August 2, 2013, the court determined that Benson had breached the Purchase Agreement by refusing to sell her interest in the property to the appellees. The district court found in favor of the appellees and [288 Neb. 685] against Benson and awarded damages to the appellees. Benson appeals. We affirm.

STATEMENT OF FACTS

This case involves a parcel of real estate, a farm, located in Phelps County, Nebraska. Initially, Vern Johnson and Josie Johnson, husband and wife, owned the 160-acre parcel of real estate. Vern passed away in 1970, and after Vern's death, the property passed equally to the couple's three children, Gary Johnson, Nancy Ashcraft, and Benson, subject to a life estate in favor of Josie. Josie passed away in September 2010.

Cindi is the daughter of Gary. In 1987, the appellees moved onto the property and began a farming operation. At trial, the parties testified that there were numerous discussions regarding the execution of the " family plan" to sell the farm to the appellees in order to keep it in the family. These discussions occurred between the appellees and Benson prior to and after the execution of the Purchase Agreement which is at the center of this case.

Due to issues within the family, the farm became the subject of a partition sale, and ultimately, the property was sold at a partition sale. The appellees were named as parties in the partition action. Before the partition sale occurred, the appellees had entered into negotiations with Benson, Ashcraft, and Gary to purchase their interests in the property. The Purchase Agreement between the appellees and Benson was signed after the partition action had been filed but before sale.

With respect to the negotiations between the appellees and Benson, on January 18, 2011, an attorney, acting on behalf of and at the direction of Cindi, sent a draft purchase agreement to the appellees and to Benson. Under the Purchase Agreement, the appellees were to pay a deposit of $200 and to purchase Benson's undivided one-third interest in the farm for a total of $150,000. With respect to the $200, the Purchase Agreement stated: " $200 deposited herewith as evidenced by [Benson's] receipt attached below. Balance to be paid as shown in Paragraph(s) 1 following, which paragraph(s) numbered 1& 2 inclusive as being applicable to this agreement." The [288 Neb. 686] balance of $149,800 was specifically discussed in Paragraph 1. Paragraph 1 of the Purchase Agreement provided:

1. Conditional Upon Loan:
Balance of $149,800 to be paid in cash or by certified check at time of delivery of deed, conditional however, upon [the appellees'] ability to obtain a loan to be

Page 763

secured by deed of trust or mortgage on above described property [the farm], in the amount of $148,000. Said loan to be FSA (Farm Service Agency) with terms providing for interest not exceeding 5% per annum, and annual payments of approximately $N/A plus taxes and insurance. [The appellees] agree to make application for said loan within 30 days from the date of acceptance or this offer shall be null and void and the earnest money shall be forfeited.

The Purchase Agreement originally set the closing date for May 1, 2011.

On January 24, 2011, Benson appeared at the office of the appellees' attorney and signed the Purchase Agreement. The attorney did not discuss the terms and conditions of the draft purchase agreement with Benson. On January 25, the appellees' attorney sent a letter to them informing them that Benson had signed the Purchase Agreement. The appellees signed the Purchase Agreement approximately 1 week later.

After signing the Purchase Agreement, the appellees sought funding through the Farm Service Agency (FSA), which they ultimately did not obtain. However, the appellees' friends, Karen Kirby and Scott Kirby, agreed to loan $150,000 to the appellees, and they executed a promissory note on February 8, 2011. Per the promissory note, the appellees were to repay the note in full by February 8, 2012.

During this time, the appellees were also attempting to negotiate a price for Ashcraft's undivided one-third interest in the property. The appellees already had assurances from Gary, Cindi's father, to purchase his undivided one-third interest. Benson was aware of the appellees' negotiations with Ashcraft, and on April 28, 2011, Benson agreed to extend the closing date of the Purchase Agreement for her undivided one-third interest from May 1, 2011, to March 1, 2012.

[288 Neb. 687] The negotiations with Ashcraft were complicated due to matters involving Josie's estate in which questions had been raised regarding Ashcraft's handling of the estate. On June 14, 2011, Ashcraft's attorney sent a letter to the appellees' counsel and Benson's counsel offering to sell Ashcraft's one-third interest to the appellees for $185,000, conditioned on Ashcraft's being released from any liability on issues regarding Josie's estate.

On July 7, 2011, the appellees' attorney sent a letter to Ashcraft's attorney indicating that the appellees would purchase Ashcraft's interest for $185,000. The letter also stated that " [e]veryone is having a difficult time getting . . . Benson to sign the estate settlement agreement."

On July 18, 2011, Ashcraft's attorney sent a letter to the appellees' attorney recognizing that Benson was not going to be agreeable to signing the estate settlement agreement. He stated that he had spoken with Ashcraft and that it was their " plan to move forward with the partition action pending in Phelps County District Court unless all parties are willing to settle all matters in a manner consistent with the ...


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