In re Estate of Karmazin , 299 Neb. 315 ( 2018 )


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    04/26/2018 09:12 AM CDT
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    Nebraska Supreme Court A dvance Sheets
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    IN RE ESTATE OF KARMAZIN
    Cite as 
    299 Neb. 315
    In re Estate of Bernadine M. K armazin, deceased.
    Denise Baumgart and K enneth K armazin, appellees
    and cross-appellants, v. Judy O’Sullivan,
    Personal R epresentative of the Estate
    of Bernadine M. K armazin, deceased,
    appellant and cross-appellee.
    ___ N.W.2d ___
    Filed March 16, 2018.    No. S-17-228.
    1.	 Decedents’ Estates: Appeal and Error. An appeal from the county
    court’s allowance or disallowance of a claim in probate will be heard as
    an appeal from an action at law. In reviewing a judgment of the probate
    court in a law action, an appellate court does not reweigh evidence, but
    considers the evidence in the light most favorable to the successful party
    and resolves evidentiary conflicts in favor of the successful party, who is
    entitled to every reasonable inference deducible from the evidence. The
    probate court’s factual findings have the effect of a verdict and will not
    be set aside unless clearly erroneous.
    2.	 Judgments: Appeal and Error. On a question of law, an appellate court
    is obligated to reach a conclusion independent of the determination
    reached by the court below.
    3.	 Contracts. The meaning of a contract and whether a contract is ambig­
    uous are questions of law.
    4.	 Standing: Jurisdiction. Standing requires that a litigant have such a
    personal stake in the outcome of a controversy as to warrant invocation
    of a court’s jurisdiction and justify the exercise of the court’s remedial
    powers on the litigant’s behalf.
    5.	 Pleadings. The pleadings in a cause are not mere ordinary admissions
    for the purposes of use in that suit, but are judicial admissions.
    6.	 Pleadings: Evidence: Waiver. In effect, pleadings are not a means
    of evidence, but a waiver of all controversy, so far as the opponent
    may desire to take advantage of them, and therefore, a limitation of
    the issues.
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    7.	 Appeal and Error. A party cannot complain of error which the party
    has invited the court to commit.
    8.	 Actions: Pleadings: Parties: Joinder. Joinder or substitution of the real
    party in interest shall have the same effect as if the action had been com-
    menced by the real party in interest.
    9.	 Property: Taxes. Real property tax liability rests with the owner or
    owners of the real property at the time real property taxes are charged,
    accrued, or assessed, i.e., due and payable.
    10.	 Contracts: Words and Phrases. A contract is ambiguous when a word,
    phrase, or provision in the contract has, or is susceptible of, at least two
    reasonable but conflicting interpretations or meanings.
    Appeal from the County Court for Hall County: A rthur
    S. Wetzel, Judge. Affirmed in part, and in part reversed and
    remanded with direction.
    Brenda K. Smith and Gretchen L. McGill, of Dvorak Law
    Group, L.L.C., for appellant.
    Mark A. Beck, of Beck Law Office, P.C., L.L.O., for
    appellees.
    Heavican,        C.J.,    Miller-Lerman,          Cassel,      Stacy,     and
    Funke, JJ.
    Cassel, J.
    I. INTRODUCTION
    A life tenant leased real estate to a remainderman for 1 year
    ending on October 31, 2015. The life tenant died in August.
    The principal issue is whether the lease clause requiring the
    lessor to pay unspecified real estate taxes made her liable for
    2015 taxes that became due and payable on December 31.
    The county court allowed the remaindermen’s claims for these
    taxes. Although two interpretations are possible, the one requir-
    ing the estate to pay taxes becoming due after the lease expired
    was not reasonable. We reverse that portion of the order and
    otherwise affirm.
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    IN RE ESTATE OF KARMAZIN
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    II. BACKGROUND
    Bernadine M. Karmazin (decedent) conveyed a remainder
    interest in certain property to Kenneth Karmazin (Karmazin)
    and in other property to Denise Baumgart. Decedent retained a
    life estate interest in the property.
    In 2014, decedent entered into two lease agreements with
    Karmazin. The lease terms required Karmazin to pay cash rent
    to decedent for land intended for crops, pasture, or hay. The
    leases were for a 1-year term, commencing November 1, 2014,
    and ending on October 31, 2015. They provided that “Real
    Estate Taxes will be paid by [decedent].” Karmazin’s rent pay-
    ments were due April 1, August 1, and November 1, 2015.
    On August 23, 2015, decedent died. After the commence-
    ment of informal probate proceedings, a notice to creditors
    published in a local newspaper stated that creditors of the estate
    must file their claims with the court on or before December 15,
    2015, or be forever barred. The estate did not mail to either
    Baumgart or Karmazin (collectively the claimants) a copy of
    the notice to creditors.
    On December 15, 2015, an attorney for the estate wrote a
    letter to the personal representative regarding liability for real
    estate taxes. The attorney stated that because decedent died in
    2015, the estate’s obligation to pay real estate taxes ended with
    the real estate taxes that became delinquent in 2015, in other
    words, the 2014 taxes.
    On April 11, 2016, Baumgart filed an “Application to
    Determine Tax Liability.” She alleged that in “late 2015,
    demand was placed upon the Personal Representative to pay
    the 2015 real estate taxes,” which resulted in the December
    15, 2015, letter. She asked that the court determine the estate’s
    liability for the 2015 real property taxes and require the estate
    to reimburse 2015 taxes paid. The estate disallowed the claim.
    On July 28, the claimants filed an amended application to
    determine tax liability and liability for rent paid by Karmazin.
    The estate also disallowed this claim.
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    The claimants filed a petition for allowance of the claim.
    They identified the amount of the claim as “unknown.” The
    estate objected. It alleged that the claims were barred under
    Neb. Rev. Stat. § 30-2485(b) (Reissue 2016). It also alleged
    that the claimants failed to properly file a claim because they
    did not identify an amount.
    During a hearing, the parties stipulated that the estate did not
    pay any of the 2015 real estate taxes on the property. Baumgart
    testified that she was a remainderman of certain property in
    Nuckolls County, Nebraska, that the property “became [hers]”
    when decedent died, and that she paid the 2015 real estate
    taxes. Karmazin similarly testified that he was a remainder-
    man in real estate in Nuckolls County pursuant to a deed, that
    he became the sole owner upon decedent’s death, and that he
    paid taxes and interest. Over objection, the court allowed the
    claimants to submit deeds at a later time showing life estate
    and remainder interests. The claimants subsequently filed an
    affidavit to which they attached copies of deeds evidencing the
    ownership of the relevant parcels of real estate.
    The county court determined that Karmazin did not timely
    submit his claim for rent. With regard to real estate taxes, the
    court stated that under operation of law, the liability for real
    estate taxes would lie with the owner of the property at the
    time the taxes became due and payable. However, the court
    determined that because the lease agreements controlled the
    lessor’s and lessee’s respective obligations to pay taxes, the
    law’s default rule did not apply. The court found the leases
    to be ambiguous, noting that they did not specify the tax
    year. Ultimately, the court ordered the estate to reimburse
    Baumgart for payment of real estate taxes in the amount of
    $2,097.74 and to reimburse Karmazin $8,929.46, plus interest
    of $68.40.
    The estate filed a timely appeal, and the claimants asserted a
    cross-appeal. We moved the case to our docket.1
    1
    See Neb. Rev. Stat. § 24-1106(3) (Supp. 2017).
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    IN RE ESTATE OF KARMAZIN
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    III. ASSIGNMENTS OF ERROR
    The estate assigns, consolidated, that the court erred in (1)
    determining the claimants had standing, (2) allowing testimony
    from the claimants regarding their status as remaindermen of
    the estate, (3) admitting deeds without proper foundation, (4)
    determining the claimants made a proper claim under the pro-
    bate code, (5) determining the lease agreements were ambigu-
    ous, and (6) determining the estate must reimburse the claim-
    ants for payment of real estate taxes and interest.
    On cross-appeal, the claimants allege that the court erred
    in determining that Karmazin failed to properly file his claim
    for rent.
    IV. STANDARD OF REVIEW
    [1] An appeal from the county court’s allowance or disal-
    lowance of a claim in probate will be heard as an appeal from
    an action at law.2 In reviewing a judgment of the probate court
    in a law action, an appellate court does not reweigh evidence,
    but considers the evidence in the light most favorable to the
    successful party and resolves evidentiary conflicts in favor of
    the successful party, who is entitled to every reasonable infer-
    ence deducible from the evidence.3 The probate court’s factual
    findings have the effect of a verdict and will not be set aside
    unless clearly erroneous.4
    [2,3] On a question of law, an appellate court is obligated to
    reach a conclusion independent of the determination reached
    by the court below.5 The meaning of a contract and whether a
    contract is ambiguous are questions of law.6
    2
    In re Estate of Alberts, 
    293 Neb. 1
    , 
    875 N.W.2d 427
    (2016).
    3
    Id.
    4
    Id.
    5
    Id.
    6
    Frohberg Elec. Co. v. Grossenburg Implement, 
    297 Neb. 356
    , 
    900 N.W.2d 32
    (2017).
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    V. ANALYSIS
    1. Standing
    The estate contends that the claimants failed to establish
    standing. The claimants based their claim on their remainder
    interests in the property. But the estate argues that they failed
    to offer valid evidence of ownership.
    [4] The estate conflates standing with proof of the valid-
    ity of a claim. Standing requires that a litigant have such a
    personal stake in the outcome of a controversy as to warrant
    invocation of a court’s jurisdiction and justify the exercise of
    the court’s remedial powers on the litigant’s behalf.7 The pro-
    bate code gives standing to purported creditors of an estate.8
    Because the claimants purported to be creditors of the estate,
    they had standing to assert their claims.
    2. Interest in Property
    The estate argues that the claimants’ failure to offer deeds
    into evidence defeats their claim of an ownership interest. It
    relies upon In re Estate of Olsen.9 In that case, we stated that
    in cases involving questions of title, ownership, and right to
    possession in the proof of deeds, leases, and mortgages and
    other instruments of title, the best evidence rule requires that
    the instrument itself be produced, unless a sufficient foundation
    is laid for the production of secondary evidence of the contents
    of such instrument, such as by showing its loss or destruction
    or that it is in the possession or control of an adverse party who
    has neglected to produce it after notice to do so.10
    [5,6] But here, the estate admitted in its pleadings the
    claimants’ ownership interests. The pleadings in a cause are
    not mere ordinary admissions for the purposes of use in that
    
    7 Stew. v
    . Heineman, 
    296 Neb. 262
    , 
    892 N.W.2d 542
    (2017).
    8
    See, generally, § 30-2485 and Neb. Rev. Stat. §§ 30-2486 and 30-2488
    (Reissue 2016).
    9
    In re Estate of Olsen, 
    254 Neb. 809
    , 
    579 N.W.2d 529
    (1998).
    10
    
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    suit, but are judicial admissions.11 In effect, pleadings are not
    a means of evidence, but a waiver of all controversy, so far
    as the opponent may desire to take advantage of them, and
    therefore, a limitation of the issues.12 In the estate’s objec-
    tion to the claim, it stated that “[p]ursuant to Claimant’s
    Amended Application, [decedent] died in 2015, and Claimants
    owned a remainder interest in the Property subject to the life
    estate interest of [decedent].” The objection next stated that
    “Claimants were the owners of the Property as of December
    31, 2015.” Because of the estate’s judicial admissions of the
    claimants’ remainder interests, the claimants were not bound
    to produce the actual deeds at the hearing.
    3. A mount of Each Claim
    The estate next contends that the claimants failed to make
    a proper claim under the probate code. It submits that the
    failure to identify the amount of the claims was a fatal defect.
    We disagree.
    The estate relies on J.R. Simplot Co. v. Jelinek.13 In that
    case, a creditor filed a “‘Demand for Notice’” (demand) which
    stated that the creditor had “‘a financial interest in the estate
    of the deceased and holds an outstanding claim’” but did not
    include a basis for the potential claim nor an amount due.14
    We concluded that the demand was “at most ‘notice to a rep-
    resentative of an estate regarding a possible demand or claim
    against the estate.’”15 We observed that the demand did not
    refer to the statute governing presentation of claims,16 but,
    rather, referenced a statute providing that interested parties
    11
    Prime Home Care v. Pathways to Compassion, 
    283 Neb. 77
    , 
    809 N.W.2d 751
    (2012).
    12
    
    Id. 13 J.R.
    Simplot Co. v. Jelinek, 
    275 Neb. 548
    , 
    748 N.W.2d 17
    (2008).
    14
    
    Id. at 556,
    748 N.W.2d at 25.
    15
    
    Id. at 557,
    748 N.W.2d at 25.
    16
    See § 30-2486.
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    can request notice from the court of filings pertaining to an
    estate.17 We further noted that the claimant had earlier filed a
    “‘Statement of Claim’” which “provided a description of the
    claim, a due date, and the name and address of the claimant or
    authorized party.”18
    We do not read J.R. Simplot Co. as mandating that an
    amount due be specified. We noted in the facts section of the
    opinion and again in the analysis that the demand did not list
    a basis for the claim or an amount due. But those omissions
    merely buttressed our ultimate conclusion that the demand did
    not qualify as a statement of a claim under § 30-2486(1).
    Significantly, the statute governing presentation of claims
    does not require that the amount of the claim be specified.
    Instead, § 30-2486(1) provides that a claimant “may file a
    written statement of the claim.” The statute identifies matters
    that shall be stated: “If a claim is not yet due, the date when it
    will become due shall be stated. If the claim is contingent or
    unliquidated, the nature of the uncertainty shall be stated. If the
    claim is secured, the security shall be described.”19 The statute
    provides that the failure to correctly describe such matters
    “does not invalidate the presentation made.”20
    Here, the amount of the claims was easily ascertainable and
    not subject to dispute. The claimants sought reimbursement for
    2015 real estate taxes paid. The amount of such taxes was a
    matter of public record. Karmazin additionally requested reim-
    bursement for rent, and he attached a copy of the leases which
    showed the payment dates and amounts due. The application
    notified the estate of the basis for the claims, and the amounts
    of the claims could be determined with certainty. We find no
    merit to the estate’s assignment of error.
    17
    See Neb. Rev. Stat. § 30-2413 (Reissue 2016).
    18
    J.R. Simplot Co. v. Jelinek, supra note 
    13, 275 Neb. at 558
    , 748 N.W.2d
    at 26.
    19
    § 30-2486(1).
    20
    
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    Although not statutorily required, the better practice is to
    identify an amount of a claim. Doing so advances the purpose
    of § 30-2485—“‘facilitation and expedition of proceedings for
    distribution of a decedent’s estate, including an early appraisal
    of the respective rights of interested persons and prompt settle-
    ment of demands against the estate.’”21
    4. R ent
    On cross-appeal, the claimants assert that the county court
    erred in finding Karmazin’s claim for rent to be barred. At
    issue is a payment made after decedent’s death. The claimants
    now contend that Karmazin’s claim is not yet due or, alterna-
    tively, that it arose before decedent’s death. But they advanced
    a different view at the trial level.
    [7] Any error by the county court in finding that the claim
    arose after death was invited. In a brief filed with the court,
    the claimants took the position that the claim arose after dece-
    dent’s death and that they had 4 months after the claim arose
    to file a claim.22 Similarly, the estate asserted in its responsive
    brief that the claim arose after decedent’s death. The court
    ruled accordingly. A party cannot complain of error which the
    party has invited the court to commit.23 Because the claimants
    contended before the county court that the claim arose after
    decedent’s death, they cannot now argue that it arose before
    her death.
    The statute does not authorize a court to extend the time
    for filing a claim that arose after death. Section 30-2485(a)(1)
    allows the court to grant a creditor additional time upon “good
    cause shown” for a claim that arose prior to a decedent’s death.
    But there is no similar “good cause” provision for a claim that
    arose after the decedent’s death.24
    21
    J.R. Simplot Co. v. Jelinek, supra note 
    13, 275 Neb. at 554
    , 748 N.W.2d
    at 23.
    22
    See § 30-2485(b)(2).
    23
    Linda N. v. William N., 
    289 Neb. 607
    , 
    856 N.W.2d 436
    (2014).
    24
    See § 30-2485(b).
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    Karmazin did not timely present his claim for rent. The
    claim concerned rent due on November 1, 2015. Karmazin
    asserted the claim on July 28, 2016. Because he did not assert
    it within 4 months after it arose, we conclude the county
    court did not err in finding Karmazin’s claim for rent to
    be barred.
    5. R eal Estate Taxes
    (a) Timeliness of Claim
    The estate argues that Karmazin did not timely present
    a claim for the 2015 real estate property taxes. Those taxes
    became due and payable on December 31, 2015.25 Thus, the
    estate contends that any claim for such taxes must have been
    made by May 1, 2016, and that Karmazin did not present his
    claim until July 28.
    [8] Whether Karmazin’s claim was timely turns on whether
    the claim for taxes in the July 2016 amended application
    related back to the claim for taxes in the April 11 applica-
    tion. It did. In the April 11 application, Baumgart stated that
    she and “her siblings owned a remainder interest in certain
    real property, subject to the life estate interest of [decedent].”
    We digress to note that the filing of this claim on behalf
    of Baumgart’s “siblings” did not constitute an unauthorized
    practice of law.26 The application requested a determination
    of “the Estate’s liability for 2015 taxes on real property that
    the Decedent held a life estate interest and received all 2015
    income therefrom.” The July application added Karmazin’s
    name as an “[a]pplicant.” In effect, it joined a real party in
    interest. “Joinder or substitution of the real party in interest
    shall have the same effect as if the action had been com-
    menced by the real party in interest.”27 Thus, the amended
    25
    See Neb. Rev. Stat. § 77-203 (Reissue 2009).
    26
    See In re Estate of Cooper, 
    275 Neb. 297
    , 
    746 N.W.2d 653
    (2008).
    27
    Neb. Rev. Stat. § 25-301 (Reissue 2016).
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    application related back to the original.28 And because the
    April application was filed within 4 months of when the
    claim arose, Karmazin’s claim for real estate taxes was
    not barred.
    (b) Liability for Taxes
    The estate argues that the county court erred in determining
    that the estate must reimburse the claimants for 2015 property
    taxes. We agree.
    (i) Default Rule
    [9] The default rule is that the owner of real property on
    December 31 is liable for the taxes assessed and levied for that
    calendar year. Real property tax liability rests with the owner
    or owners of the real property at the time real property taxes
    are charged, accrued, or assessed, i.e., due and payable.29 As
    mentioned above, the 2015 real estate taxes became due and
    payable on December 31, 2015. On that date, the remainder-
    men were the sole owners of the real property. Thus, under the
    default rule, the claimants would be responsible for payment of
    the 2015 taxes.
    (ii) Lease Agreements
    The default rule can be modified by contract. Here, lease
    agreements between decedent and Karmazin provided that
    “Real Estate Taxes will be paid by [decedent].” Due to the
    leases, the county court determined that the default rule did not
    apply. The court reasoned:
    It is clear the decedent/life tenant received cash rent
    for crops planted and harvested in 2015. Logic and equity
    further dictate the estate should be responsible for the pay-
    ment of real estate taxes for 2015. The Court determines
    28
    See Fisher v. Heirs & Devisees of T.D. Lovercheck, 
    291 Neb. 9
    , 
    864 N.W.2d 212
    (2015).
    29
    See In re Estate of Olsen, supra note 9.
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    the intent of the parties was for the tenant to pay rent and
    the landlord to pay real estate taxes associated with the
    crop year 2015.
    But the county court erred in resorting to consideration of
    equity. We are presented with an action at law, not in equity.30
    Thus, equitable principles do not apply.
    The county court also determined that logic compelled the
    conclusion that the estate was liable for the taxes. It found the
    leases to be ambiguous. And in attempting to determine the
    intent of the contracting parties, it reasoned that it was logical
    for the estate to pay taxes associated with the 2015 crop year.
    We disagree on both of these points of law.
    [10] A contract is ambiguous when a word, phrase, or
    provision in the contract has, or is susceptible of, at least
    two reasonable but conflicting interpretations or meanings.31
    Here, the leases did not specify whether decedent would be
    responsible for the 2014 taxes or the 2015 taxes. But the leases
    are ambiguous only if both of the conflicting interpretations
    are reasonable.
    We are mindful of the nature of these specific leases. In
    the absence of a different agreement, a yearly lease of farm-
    land begins on March 1 and ends on February 28 of the suc-
    ceeding year.32 But the leases here supplied a different term:
    November 1, 2014, to October 31, 2015.
    In terms of real property taxation, several dates are impor-
    tant. Property is assessed for taxation purposes on January
    1.33 On or before October 15, the county board of equaliza-
    tion levies taxes for that calendar year.34 The taxes levied for
    that calendar year become due and payable on December 31,
    30
    See Cattle Nat. Bank & Trust Co. v. Watson, 
    293 Neb. 943
    , 
    880 N.W.2d 906
    (2016).
    31
    Frohberg Elec. Co. v. Grossenburg Implement, supra note 6.
    32
    See Wilson v. Fieldgrove, 
    280 Neb. 548
    , 
    787 N.W.2d 707
    (2010).
    33
    Neb. Rev. Stat. § 77-1301(1) (Cum. Supp. 2016).
    34
    Neb. Rev. Stat. § 77-1601(1) (Reissue 2009).
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    in other words, on the last day of the year.35 In counties
    with a population of less than 100,000—such as Nuckolls
    County—the first half of the prior year’s taxes becomes delin-
    quent on May 1, and the second half becomes delinquent on
    September 1.36
    One interpretation of the leases is that decedent would pay
    the taxes due or delinquent during the term of the leases. Those
    would be the 2014 real estate taxes. The 2014 taxes became
    due on December 31, 2014, and would be delinquent in May
    and September of 2015—all within the term of the lease.
    The claimants proposed, and the county court adopted, a
    different interpretation. This interpretation, premised upon rent
    received for crops planted and harvested in 2015, would be
    that decedent would be responsible for the taxes assessed and
    levied during the lease term, that is, the 2015 taxes. But those
    taxes did not become due until December 31, 2015. Typically,
    they would not be paid until sometime in 2016. Moreover,
    under this interpretation, either decedent would not have been
    liable at all for the 2014 taxes (which became due and, if not
    paid by the delinquency dates, delinquent during the lease
    term) or decedent would have been liable for both the 2014
    and 2015 real estate taxes in the 1-year term of the lease. This
    interpretation is not reasonable.
    We conclude that the leases are not ambiguous. Although
    there are two conflicting interpretations of the contract lan-
    guage, only one of them is reasonable. That interpretation
    made decedent responsible for the 2014 taxes.
    The answer becomes clearer if decedent’s death is removed
    from the equation. Under the default rule, decedent—as the
    owner of the property on December 31, 2015—would have
    been responsible for the 2015 taxes. And if the leases had been
    renewed for another 1-year term—from November 1, 2015, to
    October 31, 2016—decedent would have been liable for the
    35
    § 77-203.
    36
    See Neb. Rev. Stat. § 77-204 (Reissue 2009).
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    2015 taxes, because they became due and payable during the
    term of the lease. With or without a lease, the owner of the
    land would be responsible for the 2015 taxes.
    The confusion stems from Karmazin’s status as both a ten-
    ant under the lease and an owner of the remainder. As the
    tenant, the lease agreements did not make him responsible for
    the taxes. But upon decedent’s death, the claimants became
    the sole owners of the land Karmazin leased. As the owners of
    the land on December 31, 2015, the claimants were liable for
    the taxes that became due and payable on that date.
    Because the estate did not own the property on December
    31, 2015, and the leases did not obligate decedent to pay taxes
    that had not yet become due, we conclude the county court
    erred in ordering the estate to reimburse the claimants for the
    real estate taxes they paid. We reverse that part of the court’s
    order and remand the cause with direction to deny this claim.
    VI. CONCLUSION
    We conclude that the county court did not err in finding
    Karmazin’s claim for rent to be barred. Because the claimants
    were the owners of the property on December 31, 2015, and
    the leases did not obligate decedent to pay the taxes due on
    that date, we reverse that portion of the court’s judgment and
    remand the cause with direction.
    A ffirmed in part, and in part reversed
    and remanded with direction.
    Wright and K elch, JJ., not participating.