John D. Walters, appellant,
Melanie Griffith Sporer and Jay A. Sporer, Trustees of the Revocable Inter Vivos Trust of Melanie Griffith dated December 5, 2000, and Douglas M. Lau and Debra L. Lau, HUSBAND AND WIFE, APPELLEES.
Specific Performance: Equity: Appeal and
Error. An action for specific performance sounds in
equity, and on appeal, an appellate court tries factual
questions de novo on the record and, as to questions of both
fact and law, is obligated to reach a conclusion independent
from the conclusion reached by the trial court.
Deeds. The construction of language in a
deed is a question of law.
Statutes. Statutory interpretation presents
a question of law.
Appeal and Error. On a question of law, an
appellate court reaches a conclusion independently of the
Summary Judgment. Summary judgment is proper
when the pleadings and evidence admitted at the hearing
disclose no genuine issue regarding any material fact or the
ultimate inferences that may be drawn from those facts and
that the moving party is entitled to judgment as a matter of
Summary Judgment: Appeal and Error. In
reviewing a summary judgment, an appellate court views the
evidence in the light most favorable to the party against
whom the judgment is granted and gives such party the benefit
of all reasonable inferences deducible from the evidence.
Property: Options to Buy or Sell: Words and
Phrases. Generally, a right of first refusal, or a
preemptive right, is a right to elect to take specified
property at the same price and on the same terms and
conditions as those contained in a good faith offer by a
third person if the owner manifests a willingness to accept
the offer; essentially a dormant option, a right of first
refusal is merely contingent until the condition [298 Neb.
537]precedent is met, at which point the preemptive right
ripens into a full option.
Property: Options to Buy or Sell. While a
right of first refusal has no binding effect before it has
ripened, upon doing so, it legally constrains an owner's
right to sell his property by compelling him to offer it
first to the party who holds the right of first refusal.
Options to Buy or Sell: Specific Performance:
Proof. A right of first refusal may be enforced by
specific performance where it can be proved that the
condition triggering the right has occurred and the option
holder was ready, able, and willing to buy during the period.
Property: Options to Buy or Sell. A right of
first refusal is a nonvested property interest.
Property: Conveyances: Words and Phrases.
The purpose of a reservation is to reserve to the grantor
something new out of that which is conveyed and which did not
exist before as an independent right.
___: ___: ___. A reservation is always something taken back
out of that which is demised; accordingly, a reservation is a
regranting of an interest in the property from the grantee to
___: ___: ___. Whether a provision is a reservation or an
exception does not depend upon the use of a particular word,
but upon the character and effect of the provision itself.
Deeds. The grantor of a deed may reserve any
nonpossessory interest in the land that he could not have
held separate from his ownership interest.
Property: Conveyances: Fraud. A reservation
is subject to the statute of frauds.
Deeds: Parties. The general rule is that the
grantee of a deed accepted by him is a party to the deed,
even though he does not sign it, and that he is concluded by
recitals in the deed and by reservations contained therein in
favor of the grantor.
Fraud: Equity. The statute of frauds is
based on principles of equity, in particular, recognition
that the purpose of the statute of frauds is to prevent
frauds, not to enable a party to perpetrate a fraud by using
the statute as a sword rather than a shield.
Deeds. The acceptance of a deed operates to
satisfy the requirement, under Neb. Rev. Stat. § 36-103
(Reissue 2016), that a contract creating an interest in land
be signed by the party to be charged therewith.
Deeds: Fraud. In the absence of fraud, one
who fails to read a deed cannot avoid the effect of accepting
Appeal and Error. An appellate court will
not consider an issue on appeal that was not presented to or
passed upon by the trial court.
___. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and
controversy before it.
Neb. 538] Appeal from the District Court for Hitchcock
County: David Urbom, Judge. Reversed and remanded for further
G. Vinton for appellant.
D. Stalnaker, of Stalnaker, Becker & Buresh, P.C., for
appellees Melanie Griffith Sporer and Jay A. Sporer.
C. Fair, of Dudden & Fair, P.C., L.L.O., for appellees
Douglas M. Lau and Debra L. Lau.
Wright, Miller-Lerman, Cassel, Kelch, and Funke, JJ.
an action by appellant John D. Walters (John) to enforce a
right of first refusal set forth in a 1998 warranty deed, by
which he and his then-spouse (the Walterses) conveyed real
property to appellees Douglas M. Lau and Debra L. Lau. The
Laus later sold the property to appellees Jay A. Sporer and
Melanie Griffith Sporer by a warranty deed, in 2013, without
giving John notice of the Sporers' offer.
court granted summary judgment for the Laus and the Sporers
against John because it ruled that the language in the deed
did not satisfy the statute of frauds, Neb. Rev. Stat. §
36-105 (Reissue 2016), and there was no other written
agreement signed by the Laus. We hold that a right of first
refusal in a deed is an enforceable agreement under the
statute of frauds upon the acceptance of the deed. Therefore,
we reverse the judgment and remand the cause for further
proceedings consistent with this opinion.
1998, the Laus began looking for a wooded acreage to
establish a home. Eventually, the Laus entered into
negotiations with John to purchase approximately 8 acres of
land and for the Walterses to finance the purchase.
Subsequently, John and the Laus met with an attorney, chosen
by John, to draft the sale documents.
Neb. 539] John testified that the attorney represented both
him and the Laus because he never spoke with the attorney
alone, only with the Laus. The Laus stated that they agreed
to use John's attorney because Debra Lau knew him but
that the attorney did not represent them. The attorney
testified that John had been a client of his prior to the
transaction, and he stated that he had no documents
indicating that the Laus were his clients or that he jointly
represented those parties.
stated that he and the Laus met with the attorney three
times: The first time, the attorney gave them general
instructions; the second time, they discussed the terms; and
the third time was the closing.
addition, John stated that he and the Laus had discussed and
orally agreed to the right of first refusal before meeting
with the attorney and that it was brought up at the second
meeting with the attorney. John testified that he remembered
asking at the meeting if they needed the right of first
refusal in a separate document but that the attorney said it
could just be included in the deed.
stated that he wanted the right of first refusal for several
reasons, including the following: He was not trying to sell
the property at that time, but was willing to sell it to the
Laus because they were friends; he could have extended a
pivot on his abutting property to the east to irrigate a
portion of the land; he had an oil well abutting the
property; and there was a road on the land that he used to
access his adjacent land. He testified that he would not have
sold the property without the right of first refusal.
Lau also believed the parties met three times. She stated she
recalled that during the first two meetings, the discussion
included the price per acre, the interest rate for the deed
of trust, how payments would be made, an option for the Laus
to purchase an additional 5.7 acres, and the paperwork needed
for the sale. She admitted that it would be difficult to
remember everything from the meetings, however. She stated
that during closing, she read only the documents that she
Neb. 540] Douglas Lau remembered the Laus' having met
with the attorney only once before closing. He stated that
they told the attorney everything they wanted at the first
meeting. He said that the Laus had few requests and accepted
John's first offer for price because they needed the land
and were not in a position to barter. He testified that he
did not remember discussing a right of first refusal with
John. However, he testified that he would have had no
objection to granting John a right of first refusal.
Laus both testified that they believed paragraph 11 of the
deed of trust was a right of first refusal and that it was
the exclusive statement on the issue. Paragraph 11 of the
deed of trust effectively contains a "due on sale"
clause: "Should Trustors desire to sell or encumber the
subject premises or any part thereof, they shall forthwith
obtain the consent of Beneficiary to such sale or encumbrance
while any sums remain due on the Note secured by this Trust
Deed." If the Laus violated this provision, the
Walterses had the right to demand immediate payment of the
balance owed and pursue any remedies provided under the deed.
Laus both stated that they believed their right of first
refusal obligation ended once the deed of trust was paid.
Debra Lau also stated that this was discussed at the second
meeting with the attorney and that she remembered saying that
as long as they owed John money on the property, it was not
an unreasonable request.
attorney stated that he did meet with the parties and had
discussions with them but that he had no recollection of the
specific contents of any conversations he had with the Laus,
including whether or not he discussed the right of first
refusal with them. He believed that he purposefully included
the right of first refusal in the deed, because it was the
only time he could recall including such a right in a deed.
The attorney also testified that it would have been routine
for him to discuss all of the documents in a real estate
transaction with the parties, as well as any nonstandard
provisions. He believed the absence of a separate document
for the right [298 Neb. 541] of first refusal was probably a
result of the parties' desire to save expenses.
September 15, 1998, the Walterses conveyed the 8-acre tract
of land to the Laus by a joint tenancy warranty deed. At
closing, the parties also executed a promissory note and
trust deed for the Walterses to finance the Laus purchase of
the property; a grant of a right of use, providing the Laus
an easement over other property owned by the Walterses for
ingress and egress; an option contract for a 5.7-acre section
of land, which was surrounded on three sides by the 8-acre
section the Laus had purchased; and other documents related
to the transaction. John testified that the Laus also granted
him an oral easement to use their driveway to access his
adjacent land to the east.
warranty deed included a reservation of mineral rights, as
well as, the right of first refusal. In regard to the right
of first refusal, the deed contained the following provision:
"No sale of the above-described premises shall be
consummated without giving at least 30 days written notice of
the terms to Grantor. Grantor shall have the right to buy the
lot on the same terms.''
after closing, Debra Lau, at the attorney's direction,
went to the courthouse to sign the "Form 521"
"Real Estate Transfer Statement." A Form 521
transfer statement sets forth information regarding the
parties to the transaction, the type of property transferred,
and the consideration paid.Nebraska law requires that a deed
will not be recorded unless the transfer statement is signed
by the grantee and filed with the deed.
Lau testified that she was not sure if the attorney told her
why she needed to sign the transfer statement but that he
might have said it was to get the deed recorded. She also
testified that she did not recall discussing the form at
Neb. 542] The attorney sent the Laus and the Walterses
letters, dated 3 days after the closing, in which he enclosed
all of the documents involved in the transaction-including
copies of the joint tenancy warranty deed. He could not
recall ever hearing from the Laus again after sending the
Lau stated that he read the deed when he received it in the
mail a couple of weeks after closing. He stated that he
believed the right of first refusal in the warranty deed was
between the Walterses and had nothing to do with the Laus. He
explained that he believed it was an attempt by John to
protect himself in future divorce proceedings. He testified
that this was his own belief and not based on any
representations made by John.
Lau testified that she remembered receiving the documents in
the mail after closing but did not feel the need to read any
of them because she had just signed them. She stated that she
did not read the deed until she received notice of this
2003, the Laus exercised their option to purchase the
5.7-acre tract, which John conveyed to them by a joint
tenancy warranty deed. In 2007, the Laus finished paying John
on the promissory note, and, upon their request, the
Walterses executed a deed of reconveyance to them.
2013, the Laus decided to sell the approximately 13-acre
tract of land with their trailer home. In order to do so,
Debra Lau contacted a real estate agent and showed him the
Laus' transaction documents for the property, including
the warranty deed.
the Laus listed their property, they did not inform the
Walterses, but their agent told them that he would mention
the listing to John. John testified that the agent told him
that the Laus had listed the property and their trailer home
for $75, 000. John told the agent that he was interested in
the land, but not the trailer home. Later, the agent told
John that the Laus might be interested in selling just the
property. On both occasions, John told the agent to keep him
informed but [298 Neb. 543] did not mention his right of
first refusal. John said he did not call the Laus about the
property listing because they were not speaking.
Sporers owned an adjacent acreage west of the
Laus:property, and Douglas Lau called Jay Sporer
to see if he was interested in purchasing the Laus'
property. Douglas Lau did not mention the Walterses'
right of first refusal. The Laus entered a purchase agreement
with Jay Sporer but neither the purchase agreement nor the
Laus' affidavit regarding debts, liens, and adverse
claims to the property mentioned the Walterses' right of
first refusal. In 2013, the Laus conveyed the property to the
Sporers, as trustees of Melanie Griffith's revocable
inter vivos trust, by warranty deed, which was recorded that
2014, John's then-spouse assigned her entire interest in
the right of first refusal to John, which he recorded.
filed suit in February 2014, alleging that he had reserved a
right of first refusal in the warranty deed. He claimed that
each acre of land conveyed from the Laus to the Sporers is of
equal value; accordingly, because the total price of the
approximately 13 acres was about $27, 000, he valued the 8
acres of land from the 1998 transaction at $16, 615.36. He
prayed for an order that (1) required the Sporers to convey
the property to him after he paid them that amount and (2)
quieted title to the property in him.
their amended answer, the Sporers denied that (1) the
warranty deed reflected the Laus' agreement with John,
(2) the Laus had agreed to grant the Walterses an indefinite
and unlimited right of first refusal, (3) John had any right
of first refusal, (4) the Laus were required to give John
notice of the 2013 sale to the Sporers, and (5) the 8 acres
all had equal value. They alleged that the right of first
refusal, to the extent it existed, had expired under the
terms of the trust deed. Alternatively, they alleged that
there was no meeting of the minds between the Laus and the
Walterses regarding the alleged right or that a mistake had
been made in drafting the [298 Neb. 544] warranty deed to
include this right when the parties had not agreed to it.
affirmative defense, the Sporers alleged that John's
"[c]omplaint should be barred, in full or in part, due
to its failure to comply with Neb. Rev. Stat. §76-301,
et seq., providing for the reimbursement of an
occupant for improvements made and taxes paid." Finally,
they alleged that John's complaint was barred, in whole
or in part, by the doctrines of unclean hands, unjust
enrichment, estoppel, waiver, or laches.
April 2015, the Sporers filed a cross-claim against the Laus.
They sought an order that the Laus had breached the 2013
warranty deed that conveyed the property to the ...