Debra J. Junker et al., appellants,
Elwyn Carlson and Joel Carlson, defendants and third-party plaintiffs, appellees, SLS Partners, appellee, and Michael Carlson, also known as Mike Carlson, third-party defendant, appellee.
Actions: Trusts: Equity. An action to impose
a constructive trust is an equitable action.
Equity: Appeal and Error. On appeal from an
equity action, an appellate court decides factual questions
de novo on the record and, as to questions of both fact and
law, is obligated to reach a conclusion independent of the
trial court's determination.
___. On appeal from an equity action, when credible evidence
is in conflict on material issues of fact, the court
considers and may give weight to the fact that the trial
court observed the witnesses and accepted one version of the
facts over another.
Trusts: Property: Title: Unjust Enrichment:
Equity. A constructive trust is a relationship, with
respect to property, subjecting the person who holds title to
the property to an equitable duty to convey it to another on
the ground that his or her acquisition or retention of the
property would constitute unjust enrichment.
Trusts: Property: Title: Equity: Proof.
Regardless of the nature of the property upon which a
constructive trust is imposed, a party seeking to establish
the trust must prove by clear and convincing evidence that
the individual holding the property obtained title to it by
fraud, misrepresentation, or an abuse of an influential or
confidential relationship and that under the circumstances,
such individual should not, according to the rules of equity
and good conscience, hold and enjoy the property so obtained.
Appeal and Error. Appellate courts do not
consider arguments and theories raised for the first time on
Neb. 424] Appeal from the District Court for Kearney County:
Terri S. Harder, Judge.
G. Vinton for appellants.
Windrum, of Malcom, Nelsen & Windrum, L.L.C., for
appellees Elwyn Carlson and Joel Carlson.
J. Pepperl, PC, L.L.O., for appellee SLS Partners.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke, JJ.
trust's grantors and beneficiaries asserted claims for
constructive trusts against other parties who had dealt with
the trustee. After a bench trial, the district court
dismissed the claims. Because we agree that the claims failed
either for lack of proof or because of Neb. Rev. Stat. §
30-38, 101 (Reissue 2016), which protects third parties
dealing in good faith with a trustee, we affirm.
1997, Dale E. Carlson and Carol A. Carlson (collectively
Grantors), husband and wife, conveyed certain real estate to
a trust known as Mill Creek Trust Company. Although the trust
instrument is not a part of our record, evidence and
testimony established that the intended beneficiaries of this
trust were Grantors' three children: Debra J. Junker,
Lynn P. Carlson, and Mike Carlson. The conveyed real estate
included farmland, several buildings, and one residential
home. Grantors lived in this residential home until 2006.
property was conveyed between trusts in order to avoid
taxation and Grantors' creditors until it was held by the
Aebeskiver Company Trust (the Trust), of which Roger Wells
(Trustee) was trustee. In his deposition, Trustee
acknowledged [300 Neb. 425] that the property was conveyed to
the Trust for the benefit of Grantors' children.
and two of the three beneficiaries brought suit against (1)
Trustee, (2) a buyer of the property, and (3) tenants who had
leased a portion of the property. There were two other
defendants whom we do not address, because they were
dismissed from the suit prior to judgment and are not
relevant for the purposes of this appeal. The suit asserted
that the defendants had knowingly participated in certain
transactions which constituted a breach of Trustee's
fiduciary duties. The third beneficiary was later added as a
third-party defendant, but his interests aligned with the
other trust beneficiaries and he was represented by their
counsel at trial. For convenience, we will refer to the
Grantors and the three beneficiaries collectively as
"Claimants." And we will disregard technical
distinctions in pleadings between the trust beneficiaries.
judgment was entered against Trustee in his separate
bankruptcy action, he was dismissed from the suit. After the
dismissal of Trustee, the contested issues were limited to
(1) whether the transactions constituted a breach of trust
and, if so, whether the buyer and tenants knowingly
participated in those breaches and (2) whether the buyer and
tenants were unjustly enriched.
Overview of Transactions
December 2001, Trustee leased the farmland portion of the
trust property to Joel Carlson and Elwyn Carlson
(collectively Tenants), with the lease to expire in 2007.
While the lease was still in place, Trustee sold the property
to SLS Partners (Buyer), a company that provides capital to
property owners by buying their property and leasing it back
with an option to repurchase. The terms of the sale were such
that, in exchange for the property, Buyer paid $200, 000, as
well as executed a lease and an option agreement. Buyer
agreed to lease the property back to the seller for $26, 405
per year, and the agreement provided the seller with the
option to purchase [300 Neb. 426] the property back in the
first 4 years of the lease at a price which increased each
year the option was not exercised.
2004, even though the property had been sold to Buyer,
Trustee entered into an agreement to amend the original lease
with Tenants, extending it from February 2007 to February
January 2007, the Trust exercised its option to repurchase
the trust property from Buyer for $294, 000 and
simultaneously sold it to a third party for $515, 000. In
order to clear the title prior to closing, the Trust
negotiated with and paid ...