Jordan v. LSF8 Master Participation Trust , 300 Neb. 523 ( 2018 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/26/2018 01:08 AM CDT
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
R ichard K. Jordan, appellant, v. LSF8 M aster
Participation Trust and K elly R. Jordan, now
known as K elly R. Fairchild, appellees.
___ N.W.2d ___
Filed July 13, 2018. No. S-17-995.
1. Issue Preclusion: Appeal and Error. The applicability of issue preclu-
sion is a question of law on which an appellate court reaches a conclu-
sion independent of the court below.
2. Summary Judgment. Summary judgment is proper when the pleadings
and evidence admitted at the hearing disclose no genuine issue regard-
ing 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 law.
3. 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.
4. Motions for New Trial: Time: Appeal and Error. A motion for new
trial following the entry of summary judgment is not a proper motion
and does not terminate the 30-day period to file a notice of appeal under
Neb. Rev. Stat. § 25-1912 (Reissue 2016).
5. Pleadings: Judgments: Time: Appeal and Error. A timely motion to
alter or amend a judgment under Neb. Rev. Stat. § 25-1329 (Reissue
2016) terminates the 30-day period to file a notice of appeal under Neb.
Rev. Stat. § 25-1912 (Reissue 2016).
6. Pleadings: Judgments. A postjudgment motion must be reviewed based
on the relief sought by the motion, not on its title.
7. Trial: Parties. The right to consolidate is dependent upon application by
the defendant.
8. Trial: Courts. The trial court has the inherent power to consolidate
for purposes of trial in order to expedite the reception of evidence and
eliminate the multiplicity of hearings and trials.
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
9. Statutes. A statute should not be construed to restrict or remove a
common-law right unless the plain words of the statute compel it.
10. Homesteads: Issue Preclusion: Estoppel. Issue preclusion and judicial
estoppel may supply the statutory requirements set forth in Neb. Rev.
Stat. § 40-104 (Reissue 2016) for encumbrances of a homestead.
11. Evidence: Words and Phrases. A judicial admission is a formal act
done in the course of judicial proceedings which is a substitute for evi-
dence, thereby waiving or dispensing with the production of evidence
by conceding for the purpose of litigation that the proposition of fact
alleged by the opponent is true.
12. Rules of Evidence. Statements in trial briefs should be treated under the
evidence rules the same as unsworn statements made anywhere else.
13. ____. There is no per se bar against the admission of briefs from prior
proceedings.
14. Rules of Evidence: Hearsay: Appeal and Error. A court’s decision
to admit a statement as a nonhearsay statement against interest under
Neb. Rev. Stat. § 27-801(4)(b) (Reissue 2016) is reviewed for an abuse
of discretion.
15. Judgments: Words and Phrases. An abuse of discretion occurs when a
trial court’s decision is based upon reasons that are untenable or unrea-
sonable or if its action is clearly against justice or conscience, reason,
and evidence.
16. Issue Preclusion: Summary Judgment. Issue preclusion is a question
of law that may properly be raised on a motion for summary judgment.
17. Issue Preclusion: Judgments: Final Orders: Parties. Under issue pre-
clusion, when an issue of ultimate fact has been determined by a final
judgment, that issue cannot again be litigated between the same parties
in a future lawsuit.
18. Issue Preclusion. Issue preclusion applies where (1) an identical issue
was decided in a prior action, (2) the prior action resulted in a final
judgment on the merits, (3) the party against whom the doctrine is to be
applied was a party or was in privity with a party to the prior action, and
(4) there was an opportunity to fully and fairly litigate the issue in the
prior action.
19. Issue Preclusion: Judgments. The first step in determining whether
issue preclusion applies is to decide whether there is an identity of
issues in the successive proceedings.
20. Issue Preclusion: Proof. The party relying on issue preclusion in a
present proceeding has the burden to show that a particular issue was
involved and necessarily determined in a prior proceeding.
21. Actions: Judgments: Verdicts. In determining whether issues in a prior
and subsequent action are identical, the former verdict and judgment
are conclusive only as to the facts directly in issue and do not extend to
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
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facts which may be in controversy but which rest on evidence and are
merely collateral.
22. Issue Preclusion: Judgments: Evidence: Proof. The issue preclusion
test as to whether the former judgment is a bar generally is whether the
same evidence will sustain both the present and the former action; where
different proof is required, a judgment in the former action is no bar to
the subsequent action.
23. Issue Preclusion: Words and Phrases. For purposes of applying the
doctrine of issue preclusion, an issue is considered to be the identical
issue in the absence of a significant factual change.
24. Issue Preclusion: Parties: Proof. Issue preclusion does not apply to
a party who had a higher standard of proof in the first action than the
standard of proof in a later proceeding.
25. Issue Preclusion: Due Process. Due process requires that the rule of
issue preclusion operate only against persons who have had their day in
court either as a party to a prior suit or as a privy; and, where not so,
that at least the presently asserted interest was adequately represented in
the prior trial.
26. Issue Preclusion. A party cannot circumvent the doctrine of issue pre-
clusion simply by cherrypicking which facts and theories to raise at the
prior proceeding and which to reserve for later.
Appeal from the District Court for Buffalo County: William
T. Wright, Judge. Affirmed as modified.
Kent A. Schroeder, of Ross, Schroeder & George, L.L.C.,
for appellant.
John D. Stalnaker and Robert J. Becker, of Stalnaker,
Becker & Buresh, P.C., for appellee LSF8 Master Participation
Trust.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and
Papik, JJ., and Schreiner, District Judge.
Heavican, C.J.
I. NATURE OF CASE
The plaintiff appeals from an order of summary judgment in
a quiet title action seeking to invalidate a mortgage lien on the
ground that it was an improper encumbrance of the homestead
under Neb. Rev. Stat. § 40-104 (Reissue 2016), because his
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
signatures on the deed of trust were forged. In a prior order
of dissolution and property division, the court allocated to
the plaintiff the marital home and its accompanying refinanc-
ing mortgage debt, after concluding that it was “unlikely [the
plaintiff] was unfamiliar” with the debt. The plaintiff’s attorney
asserted in trial briefs to the dissolution court that even if the
signatures on pertinent documents were forgeries, the “propri-
ety” of the mortgage lien would not be in question.
The court in the quiet title action determined as a matter of
law that the plaintiff was barred from challenging the valid-
ity of the mortgage lien by the doctrines of issue preclusion
and judicial estoppel. The plaintiff argues on appeal that such
equitable doctrines do not apply to encumbrances that are
invalid under § 40-104 and that in any event, the court erred in
concluding there was no genuine issue that all the elements of
those doctrines were satisfied. The plaintiff also asserts that the
trial court erred in admitting into evidence the trial briefs from
the dissolution proceedings and in failing to join the action
with another quiet title action he had filed against his ex-wife
regarding the same property. We affirm.
II. BACKGROUND
Richard K. Jordan and Kelly R. Jordan, now Kelly R.
Fairchild, were married in 1985. They purchased real prop-
erty in 1995, which included land and a new manufactured
home where they lived during their marriage (the real estate).
The parties do not dispute that this was their homestead as
defined by Nebraska statutes, at least up to the $60,000 value
and land limitations described in Neb. Rev. Stat. § 40-101
(Reissue 2016).
Richard and Kelly purchased the manufactured home for
approximately $100,000 by way of an installment contract and
security agreement, giving the lender a security interest in the
home until all payments had been made. Richard and Kelly
made payments on the installment contract until Kelly entered
into a fixed-rate refinancing loan with Ameriquest Mortgage
Company in the amount of $68,250.
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
The proceeds of that loan were used to satisfy the outstand-
ing debt of Richard and Kelly on the installment contract in the
amount of $50,875.55. The remainder of the loan was used to
pay off other debts owed by Richard and Kelly.
The refinancing mortgage was secured with a deed of trust
dated February 11, 2004, in favor of Ameriquest Mortgage
Company. The deed was recorded in the office of the register
of deeds on April 26.
Kelly was designated in the deed as the only borrower, and
she was the only party to initial the various pages and sign
the original signature page. Attached to the deed of trust was
an acknowledgment signed by Kelly before a notary public
in Council Bluffs, Pottawatomie County, Iowa, on February
11, 2004.
But both Richard’s and Kelly’s apparent signatures appear
on another signature page attached to Kelly’s acknowledgment.
In fact, Richard’s apparent signature appears twice. Next to
one of Richard’s apparent signatures is the notation, “original
signature,” which notation appears to be made by the registrar
of deeds.
The following page of the trust deed contains a notarized
statement by Rhonda Nichols, a notary in Buffalo County, that
Richard had acknowledged the trust deed instrument before her
in Buffalo County on February 29, 2004. Nichols signed and
stamped the acknowledgment again on March 19.
On the first page of the deed of trust is a registrar’s note
stating, “Borrower does not show Richard Jordan but a sig-
nature [illegible] notarized/requested to record as presented.”
The deed of trust was assigned in 2014 to LSF8 Master
Participation Trust (LSF8).
1. Dissolution
The marriage of Richard and Kelly was dissolved in 2013.
A trial had been held to determine the division of property and
debts. In its dissolution decree, the court found that Richard
and Kelly had more debts than assets, in part due to income
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
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tax liability for unfiled tax returns and a judgment against
them in a lawsuit.
The decree set forth that the real estate was encumbered by
a mortgage deed of trust in the amount of $65,300. The court
recognized that only Kelly’s name was on the debt and mort-
gage instruments and that a quitclaim deed, dated February 29,
2004, “purportedly from Richard to Kelly . . . allowed Kelly
to obtain this apparent refinancing.” The court acknowledged
that Richard denied that this quitclaim deed contained his
real signature.
The court did not specifically discuss in the decree whether
Richard denied that his purported signatures on the debt and
mortgage instruments were his. Instead, the court concluded:
“The debt however was incurred in February 2004, was
recorded in 2004, and it’s highly unlikely that Richard was
unfamiliar with it.”
The court found that the mortgage lien, a judgment lien, and
an Internal Revenue Service lien consumed all the equity in
the real estate. But the court awarded the real estate to Richard
because vehicles and equipment previously used in Richard’s
trucking business were stored on the land; therefore, Richard
would have more use for the property. The court stated that
awarding the real estate to Richard “is more realistic as long as
it’s accompanied by all associated debt.”
The court thus awarded the real estate to Richard, explicitly
subject to the mortgage lien, the judgment lien, and any tax
lien present or future. The court also quieted title of the real
estate in Richard and terminated any right, title, or interest
Kelly might have in the real estate. Ultimately, the court’s allo-
cation of debt resulted in a mere $1,477.84 difference between
the parties, and the court found that an equalizing judgment
would not be appropriate.
2. Quiet Title Action
After the time for appealing the dissolution decree had
passed without an appeal by either party, Richard brought, in
the same court, a quiet title action against LSF8 and Kelly.
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
Richard described the action as one in which he sought “to
quiet title to real estate . . . by setting aside a deed of trust.”
Specifically, Richard asked the court to quiet title in his name
without any encumbrances by LSF8.
Richard alleged that Kelly was the former owner of the
property. At the same time, he alleged that his apparent signa-
ture on a quitclaim deed filed April 26, 2004, and purporting to
transfer title from Richard to Kelly was forged.
Regarding LSF8, Richard alleged that his apparent signature
on a deed of trust filed April 26, 2004, was a forgery. Richard
recognized that this signature was “allegedly notarized by
[the notary] on February 29, 2004.” He did not specifically
allege in his complaint that he had not, in fact, acknowl-
edged the trust deed in front of the notary on February 29.
Richard did not make any reference in his complaint to the
Nebraska homestead statutes, Neb. Rev. Stat. §§ 40-101 to
40-116 (Reissue 2016).
LSF8 denied Richard’s allegation that his signature was a
forgery. LSF8 alleged affirmative defenses of waiver, estoppel,
unclean hands, laches, unjust enrichment, acquiescence and
acceptance, and ratification.
LSF8 brought a counterclaim for declaratory judgment that
the LSF8 deed of trust constitutes a valid, first, and prior lien
against the property. In the alternative, LSF8 counterclaimed
for equitable subrogation or an equitable lien, giving it priority
over any other encumbrance on the property.
(a) No Joinder
The record indicates that there was a separate, pending quiet
title action by Richard against Kelly. In that action, Richard
asserted that Kelly was claiming title to the property, adversely
to Richard, by virtue of an alleged quiet title deed containing
Richard’s forged signature. However, the record does not con-
tain the complaint in the other action.
At a status hearing for both actions, the court stated that
it was considering whether to try the two actions together,
but noted concern as to whether the two actions involved
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
different standards of proof. In its order on status hearing,
the court acknowledged that the parties advised that both
actions involved the same real estate and common parties
and could be tried together. But the record does not contain a
motion by either party to join the actions, or an order joining
the actions.
(b) Motion for
Summary Judgment
On May 9, 2017, LSF8 moved for summary judgment
against Richard in his quiet title action and in favor of LSF8
in its counterclaim that its deed of trust is a first and prior-
ity encumbrance upon the real estate or, in the alternative,
that LSF8 was entitled to a similar equitable lien on the
real estate.
At the time of the summary judgment hearing, it was clear
that Richard was claiming his forged signature and lack of
proper acknowledgments rendered the deed of trust void under
the homestead statutes. LSF8 responded that the court need
not determine the disputed factual questions of whether the
deed of trust contained valid signatures and acknowledgments
because the undisputed facts demonstrated that under sev-
eral equitable doctrines, Richard was estopped from asserting
such invalidity.
(i) Trial Briefs From
Dissolution Proceedings
At the summary judgment hearing, LSF8 offered into evi-
dence certified copies of Richard’s trial brief and rebuttal brief
filed in the dissolution proceedings. The attorney who wrote
the briefs was the same attorney representing Richard in the
quiet title action.
Richard’s attorney objected on the grounds of foundation,
relevancy, and hearsay. The foundation objection went to the
fact that there were handwritten, extraneous markings on the
exhibits. The court allowed the exhibits into evidence, with the
caveat that the court would ignore any extraneous markings.
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
Cite as 300 Neb. 523
The court found the statements in the briefs to be nonhearsay
under Neb. Rev. Stat. § 27-801(4)(b) (Reissue 2016) and rel-
evant to LSF8’s arguments of issue preclusion, collateral estop-
pel, and ratification.
The trial brief reflects that in the proposed equitable divi-
sion of marital debt, Richard’s counsel suggested allocating
to Richard the real estate, including the mortgage thereon
in the amount of $65,300. The mortgage lien that corre-
sponded to the trust deed was also listed in a detailed prop-
erty division analysis attached to the brief, and it supported
Richard’s argument that Kelly would owe him an equalization
payment.
Under the heading “Status of the Mortgage,” Richard’s
counsel wrote:
This author is somewhat confused as to why the valid-
ity of the current mortgage is an issue unless the evidence
as to the validity of [Richard’s] signature on the Quit
Claim Deed is in doubt. Even if [Richard’s] signature is a
forgery it would not affect the propriety of the lien.
In the rebuttal trial brief, Richard’s counsel argued that award-
ing the real estate to Kelly was “unrealistic” because liens
against the real estate, including the mortgage, consumed its
entire equity.
(ii) Richard’s Deposition
In support of its motion for summary judgment, LSF8 also
entered into evidence Richard’s deposition. During the deposi-
tion, Richard was not specifically asked whether he had signed
the trust deed or acknowledged it before a notary. Richard
indicated, however, that he was not in Buffalo County on
February 29, 2004, when he purportedly acknowledged the
trust deed before Nichols.
(iii) Kelly’s Affidavit
Lastly, LSF8 entered into evidence Kelly’s affidavit outlin-
ing the undisputed factual background regarding the original
financing for the manufactured home. Attached to the affidavit
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was the fixed rate note memorializing the refinancing loan on
February 11, 2004. That note contained only Kelly’s signature
and initials.
(c) Motion for Continuance
Denied
Richard asked for a continuance of the summary judg-
ment hearing in order to take a second deposition of Kelly.
Richard’s counsel explained that Kelly had testified in her
deposition for the companion quiet title action that she
had never appeared before a notary public in Pottawatomie
County, Iowa. LSF8 was not present during that deposition
because it was not a party, and it refused to waive its right to
be present. Therefore, Richard asked to depose Kelly again,
with LSF8 present, in an effort to obtain the same testimony.
After observing that the issue of the validity of Kelly’s
acknowledgment of the trust deed had not been raised by
the pleadings, the court denied the motion but noted that it
would postpone pretrial in the event summary judgment were
not granted.
(d) Order Granting
Summary Judgment
On July 7, 2017, the court granted summary judgment
against Richard and in favor of LSF8 on its counterclaim, find-
ing that LSF8’s deed of trust was a valid first and prior lien
on the real estate as “against . . . all other claims.” The court
found that Richard’s quiet title action was barred by issue
preclusion and judicial estoppel. The court also discussed equi-
table estoppel and ratification, but ultimately appeared not to
base its decision on those doctrines.
(e) Motion for New Trial
On July 14, 2017, Richard filed a “Motion for New Trial,”
challenging the court’s order of summary judgment. In the
motion, Richard asked for a new trial on the grounds of sur-
prise, newly discovered evidence, errors of law, and insufficient
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evidence. Richard requested in the alternative that the court
amend or alter its order of summary judgment because the deed
of trust was neither executed nor acknowledged by Richard
or Kelly and was therefore void and unenforceable under
§ 40-104.
(i) Attorney Affidavit
In a supporting affidavit attached to the motion for new
trial and entered into evidence at the hearing on the motion,
Richard’s counsel averred Kelly testified in a deposition that
the signature and initials of the deed of trust were hers, but
that the deed was “executed and signed in Kearney, Nebraska,
on February 11, 2004,” and that she was not “physically in
Council Bluffs, Iowa on February 11, 2004.” Counsel averred
that he intended to ask the court to submit the deposition as
additional evidence for purposes of LSF8’s summary judgment
motion, but when staff requested a hearing date for the motion,
they were informed that the court had already signed the order
ruling on summary judgment.
(ii) Kelly’s Deposition
Kelly’s deposition was entered into evidence for purposes of
the motion for new trial. Kelly testified in her deposition that
in 2004, she and Richard had agreed to obtain a refinancing
loan to pay off their installment contract and other debts. They
settled on Ameriquest Mortgage Company, which sent the
paperwork through the mail. Kelly signed some of the paper-
work in Kearney.
At a later date, Richard and Kelly went to “Rhonda’s
house,” where Richard signed a quitclaim deed and Richard
and Kelly signed signature pages. Kelly had no recollection of
seeing her acknowledgment page, which was attached to the
deed of trust. Further, Kelly had no recollection of appearing
before a notary in Iowa. Attached to the deposition is a quit-
claim deed conveying the homestead from Richard to Kelly,
purportedly signed by Richard and notarized by Nichols on
February 29, 2004.
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JORDAN v. LSF8 MASTER PARTICIPATION TRUST
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(iii) Order Denying Motion for New Trial
The court denied Richard’s motion for new trial on August
21, 2017. The court explained that the alleged newly discov-
ered evidence did not affect its determination that Richard’s
action attempting to invalidate the deed of trust was barred by
issue preclusion and judicial estoppel.
Richard filed his notice of appeal on September 20, 2017.
III. ASSIGNMENTS OF ERROR
Richard assigns, summarized and restated, that the district
court erred in (1) failing to try the current quiet title action
together with his quiet title action against Kelly, (2) entering
into evidence his trial briefs from the dissolution action, (3)
granting summary judgment in favor of LSF8, and (4) denying
his motion for new trial regarding the same.
IV. STANDARD OF REVIEW
[1] The applicability of issue preclusion is a question of
law on which an appellate court reaches a conclusion indepen-
dent of the court below.1
[2,3] 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 law.2 In reviewing a summary judg-
ment, 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.3
V. ANALYSIS
Richard argues that the district court should have joined
this action with a companion case against Kelly, that the court
1
See Strode v. City of Ashland, 295 Neb. 44, 886 N.W.2d 293 (2016).
2
Id.
3
Id.
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erred in considering trial briefs from the dissolution action,
and that summary judgment was improper because there was
a genuine issue of material fact regarding whether the deed of
trust was “executed and acknowledged by both spouses,” as
required by § 40-104.
1. Motion for New Trial
[4] We first dispose of a preliminary jurisdictional matter.
Although neither party has alleged a jurisdictional defect, it
is the duty of an appellate court to determine whether it has
jurisdiction over the matter before it.4 The question of our
appellate jurisdiction arises in this case because Richard pur-
ported to file, following entry of summary judgment, a motion
for new trial as a terminating motion for the time for taking an
appeal. A motion for new trial following the entry of summary
judgment is not a proper motion and does not terminate the
30-day period to file a notice of appeal under Neb. Rev. Stat.
§ 25-1912 (Reissue 2016).5
[5,6] A timely motion to alter or amend a judgment under
Neb. Rev. Stat. § 25-1329 (Reissue 2016), however, also
terminates the 30-day period to file a notice of appeal under
§ 25-1912.6 And a postjudgment motion must be reviewed
based on the relief sought by the motion, not on its title.7
Because Richard’s motion presented newly discovered evi-
dence8 and sought a substantive alteration of the judgment
based on claimed errors of law,9 his motion is properly consid-
ered a motion to alter or amend the judgment. Richard timely
4
First Tennessee Bank Nat. Assn. v. Newham, 290 Neb. 273, 859 N.W.2d
569 (2015).
5
Cl. Ch. v. First Nat. Bank of Omaha, 296 Neb. 632, 895 N.W.2d 284 (2017).
6
See § 25-1912(3)(b).
7
See, Clarke v. First Nat. Bank of Omaha, supra note 5; Woodhouse Ford
v. Laflan, 268 Neb. 722, 687 N.W.2d 672 (2004).
8
Woodhouse Ford v. Laflan, supra note 7.
9
Cl. Ch. v. First Nat. Bank of Omaha, supra note 5.
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filed his notice of appeal after the terminating motion was
overruled. Thus, we have jurisdiction over this appeal.
2. Failure to Join Actions
Turning to the merits, we begin by concluding that the dis-
trict court did not abuse its discretion in failing to join, sua
sponte, this action with a companion quiet title action that
Richard brought against Kelly. An order allowing or denying
consolidation will be affirmed absent an abuse of discretion.10
Richard argues that the court failed to “follow its own order”
to consolidate the quiet title action against LSF8 with the
other action against Kelly.11 Richard further argues that he was
prejudiced because had the court consolidated the actions, the
court would have had the evidence in Kelly’s deposition that
the trust deed was not acknowledged by either party before a
notary public.
[7] The right of consolidation of two or more actions pend-
ing in the same court is described in Neb. Rev. Stat. § 25-703
(Reissue 2016) as a motion that may be brought by the defend­
ant. We have said that the right to consolidate is thus depen-
dent upon application by the defendant.12 Here, neither Kelly
nor LSF8 asked for consolidation.
[8] The trial court also has the inherent power to consoli-
date for purposes of trial in order to expedite the reception
of evidence and eliminate the multiplicity of hearings and
trials.13 But while there was some discussion of the possibil-
ity of future joinder, the court never issued an order to join
the cases.
Furthermore, Richard was not prejudiced by the failure to
join the actions. Kelly’s deposition testimony was irrelevant
10
See, Eicher v. Mid America Fin. Invest. Corp., 270 Neb. 370, 702 N.W.2d
792 (2005); Butler v. Secrist, 84 Neb. 85, 120 N.W. 1109 (1909).
11
Brief for appellant at 12.
12
See Bruno v. Kramer, 176 Neb. 597, 126 N.W.2d 885 (1964).
13
See id.
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to the equitable defenses upon which the court’s order of
summary judgment was based. The court’s order depended
not upon whether the deed of trust was properly signed and
acknowledged, but upon the court’s conclusion that Richard
was estopped from relying on any improper signature or
acknowledgment in his attempt to invalidate LSF8’s lien.
Finding no error in the failure to join this action with the
companion quiet title action filed only against Kelly, we now
examine the court’s conclusion that issue preclusion and judi-
cial estoppel barred Richard’s claim.
3. A pplicability of Estoppel
to Homestead Claims
Richard argues as a threshold matter that issue preclusion
and judicial estoppel are inapplicable to encumbrances that fail
to satisfy the requirements of the homestead statutes. We find
no merit to this argument.
Richard relies on case law wherein we have held that “estop-
pel” will not supply the statutory requirements set forth in
§ 40-104 for encumbrances of a homestead.14 Section 40-104
provides:
Except as otherwise provided in this section, the home-
stead of a married person cannot be conveyed or encum-
bered unless the instrument by which it is conveyed
or encumbered is executed and acknowledged by both
spouses. . . . Any claim of invalidity of a deed of convey-
ance of homestead property because of failure to comply
with the provisions of this section must be asserted within
the time provided in sections 76-288 to 76-298.
A purchase agreement or contract for sale of home-
stead property signed by both spouses does not require
acknowledgment to be enforceable.
14
See, Christensen v. Arant, 218 Neb. 625, 358 N.W.2d 200 (1984); O’Neill
Production Credit Assn. v. Mitchell, 209 Neb. 206, 307 N.W.2d 115
(1981); McIntosh v. Borchers, 201 Neb. 35, 266 N.W.2d 200 (1978);
Bacon v. Western Securities Co., 125 Neb. 812, 252 N.W. 317 (1934).
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We generically refer to “estoppel” in the cases Richard
relies on. However, an examination of the facts of those cases
makes clear that we were referring to equitable estoppel.15
Equitable estoppel or “‘“estoppel by misrepresentation”’”16
is a bar frequently applied to transactions in which it is found
that it would be unconscionable to permit a person to maintain
a position inconsistent with one in which he or she has acqui-
esced or of which he or she has accepted any benefit.17 The
cases under the homestead statutes that Richard presents are
consistent with other cases where we have refused under the
circumstances to apply equitable estoppel to agreements that
are contrary to public policy, fail to satisfy statutory require-
ments, or are otherwise invalid for reasons not implicating a
tribunal’s jurisdiction.18
In contrast, we have held with little inconsistency that
judicial estoppel and issue preclusion can apply to bar simi-
lar claims of invalidity.19 Equitable estoppel is meaningfully
15
See id.
16
Wenzel v. Wenzel, 174 Neb. 61, 65, 115 N.W.2d 788, 792 (1962).
17
See, In re Estate of Fuchs, 297 Neb. 667, 900 N.W.2d 896 (2017);
Securities Acceptance Corp. v. Brown, 171 Neb. 406, 106 N.W.2d 456
(1960), clarified on denial of rehearing 171 Neb. 701, 107 N.W.2d 540.
18
See, State on behalf of Kayla T. v. Risinger, 273 Neb. 694, 731 N.W.2d
892 (2007); Stewart v. Bennett, 273 Neb. 17, 727 N.W.2d 424 (2007); Coe
v. Covert, 214 Neb. 140, 332 N.W.2d 699 (1983); Turner v. City of North
Platte, 203 Neb. 706, 279 N.W.2d 868 (1979); Vap v. City of McCook,
178 Neb. 844, 136 N.W.2d 220 (1965). But see, e.g., James v. Rainchief
Constr. Co., 197 Neb. 818, 251 N.W.2d 367 (1977); Zweygardt v. Farmers
Mut. Ins. Co., 195 Neb. 811, 241 N.W.2d 323 (1976); Murphy Finance
Co. v. Fredericks, 177 Neb. 1, 127 N.W.2d 924 (1964); Koch v. Koch, 175
Neb. 737, 123 N.W.2d 642 (1963); Securities Acceptance Corp. v. Brown,
supra note 17.
19
See, TFF, Inc. v. SID No. 59, 280 Neb. 767, 790 N.W.2d 427 (2010);
Stewart v. Bennett, supra note 18; Lammers Land & Cattle Co. v. Hans,
213 Neb. 243, 328 N.W.2d 759 (1983); State v. Solomon, 16 Neb. Ct. App.
368, 744 N.W.2d 475 (2008). But see City of Omaha v. Morello, 257 Neb.
869, 602 N.W.2d 1 (1999).
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d­ifferent from the doctrines of judicial estoppel and issue
preclusion. Issue preclusion and judicial estoppel concern not
just the equities between individuals which warrant equitable
estoppel,20 but also the integrity of the judicial process.21
Judicial estoppel protects the integrity of the judicial process
by preventing a party from taking a position inconsistent with
one successfully and unequivocally asserted by the same party
in a prior proceeding.22 Issue preclusion promotes judicial
economy by preventing needless litigation.23
[9,10] For purposes of the application of judicial estop-
pel or issue preclusion, there is no reason to treat claims of
invalidity under § 40-104 differently from other claims of
invalidity that we have found subject to judicial estoppel
or issue preclusion. The homestead statutes do not address
judicial estoppel or issue preclusion, which have long been
part of our common law.24 A statute should not be construed
to restrict or remove a common-law right unless the plain
words of the statute compel it.25 Despite the importance of the
homestead protections, they do not require greater emphasis
than the sound judicial policy underlying judicial estoppel and
issue preclusion.26 We hold that issue preclusion and judicial
20
See Bryan M. v. Anne B., 292 Neb. 725, 874 N.W.2d 824 (2016).
21
See, e.g., Cleaver-Brooks, Inc. v. Twin City Fire Ins. Co., 291 Neb. 278,
865 N.W.2d 105 (2015); Jardine v. McVey, 276 Neb. 1023, 759 N.W.2d
690 (2009); State v. Bruckner, 287 Neb. 280, 842 N.W.2d 597 (2014); 50
C.J.S. Judgments § 1031 (2009).
22
Hike v. State, 297 Neb. 212, 899 N.W.2d 614 (2017).
23
McGill v. Lion Place Condo. Assn., 291 Neb. 70, 864 N.W.2d 642 (2015).
24
See, e.g., State v. Marrs, 295 Neb. 399, 888 N.W.2d 721 (2016); Finnern
v. Bruner, 167 Neb. 281, 92 N.W.2d 785 (1958); Chamberlain v. Woolsey,
66 Neb. 141, 92 N.W. 181 (1902); 31 C.J.S. Estoppel and Waiver § 186
(2008).
25
See In re Trust of Shire, 299 Neb. 25, 907 N.W.2d 263 (2018).
26
Compare, e.g., In re Interest of Noah B. et al., 295 Neb. 764, 891 N.W.2d
109 (2017).
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estoppel may supply the statutory requirements set forth in
§ 40-104 for encumbrances of a homestead.
4. A dmission of Trial Briefs
Before deciding whether the district court was correct in
finding no genuine dispute that the elements of the estoppel
doctrines at issue were satisfied, we address whether the dis-
trict court erred in admitting the trial briefs into evidence at the
summary judgment hearing. We conclude that it did not.
Richard objected below on the ground of hearsay. The
district court found the statements to be nonhearsay under
§ 27-801(4)(b). Section 27-801(4)(b) provides in relevant part
that a statement is not hearsay if it
is offered against a party and is (i) his own statement, in
either his individual or a representative capacity, or (ii)
a statement of which he has manifested his adoption or
belief in its truth, or (iii) a statement by a person autho-
rized by him to make a statement concerning the subject,
or (iv) a statement by his agent or servant within the
scope of his agency or employment . . . .
Richard does not argue on appeal that the attorney’s state-
ments in the trial briefs of the prior action are hearsay.
In other words, Richard does not argue that LSF8 offered
the briefs into evidence to prove the truth of the matters
asserted therein.27 Richard does not explain how his attorney’s
statements in the trial briefs fail to satisfy the elements of
§ 27-801(4)(b). Richard also does not argue on appeal that the
statements were irrelevant.
[11] Instead, Richard argues that statements in trial briefs
cannot be considered judicial admissions. A judicial admis-
sion is a formal act done in the course of judicial proceed-
ings which is a substitute for evidence, thereby waiving or
dispensing with the production of evidence by conceding for
the purpose of litigation that the proposition of fact alleged
27
See § 27-801(3).
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by the opponent is true.28 Although the district court cited to a
case in which the court allowed statements by an attorney into
evidence as judicial admissions, the district court explained
that it was not allowing Richard’s trial briefs into evidence as
judicial admissions. Rather, the case was cited merely as sup-
port for the district court’s conclusion that briefs from a prior
action may be admissible against a party as nonhearsay state-
ments. Thus, Richard’s argument regarding whether statements
in briefs can be considered judicial admissions is not relevant
to the question before us.
[12,13] We hold that statements in trial briefs from prior
proceedings should be treated under the evidence rules the
same as unsworn statements made anywhere else. As the dis-
trict court noted, other courts have found trial briefs from other
actions to be admissible as evidence or capable of being judi-
cially noticed.29 There is no per se bar against the admission of
briefs from prior proceedings.30
[14,15] A court’s decision to admit statements as a nonhear-
say statement against interest under § 27-801(4)(b) is reviewed
for abuse of discretion.31 An abuse of discretion occurs when
a trial court’s decision is based upon reasons that are unten-
able or unreasonable or if its action is clearly against justice or
conscience, reason, and evidence.32 The district court did not
abuse its discretion in admitting Richard’s trial briefs.
We turn now to the court’s decision that issue preclusion
barred Richard’s claim that the deed of trust and LSF8’s lien
were invalid.
28
Reicheneker v. Reicheneker, 264 Neb. 682, 651 N.W.2d 224 (2002).
29
See, Williams v. Union Carbide Corp., 790 F.2d 552 (6th Cir. 1986);
Thyssen Elevator Co. v. Drayton-Bryan Co., 106 F. Supp. 2d 1355 (2000).
See, also, F.D.I.C. v. Houde, 90 F.3d 600 (1st Cir. 1996).
30
Thyssen Elevator Co. v. Drayton-Bryan Co., supra note 29.
31
See, Bump v. Firemens Ins. Co., 221 Neb. 678, 380 N.W.2d 268 (1986);
Gerken v. Hy-Vee, Inc., 11 Neb. Ct. App. 778, 660 N.W.2d 893 (2003).
32
Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d 630 (2018).
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5. Issue Preclusion
[16,17] Issue preclusion is a question of law that may prop-
erly be raised on a motion for summary judgment.33 Unlike
in judicial estoppel where bad faith must be demonstrated,34
a party’s state of mind is irrelevant to issue preclusion. Under
issue preclusion, when an issue of ultimate fact has been deter-
mined by a final judgment, that issue cannot again be litigated
between the same parties in a future lawsuit.35
[18] Issue preclusion applies where (1) an identical issue
was decided in a prior action, (2) the prior action resulted
in a final judgment on the merits, (3) the party against whom
the doctrine is to be applied was a party or was in priv-
ity with a party to the prior action, and (4) there was an
opportunity to fully and fairly litigate the issue in the prior
action.36
The parties do not dispute that the dissolution decree was
a prior final judgment on the merits, that Richard was a
party to the dissolution proceedings, and that Richard is the
party against whom the doctrine was applied. The question is
whether the issue presented by Richard in his quiet title action
against LSF8 was identical to an issue decided in the dissolu-
tion proceedings and, if so, whether there was an opportunity
to fully and fairly litigate it.
[19,20] The first step in determining whether issue preclu-
sion applies is to decide whether there is an identity of issues
in the successive proceedings.37 The party relying on issue
preclusion in a present proceeding has the burden to show that
33
See Cunningham v. Prime Mover, Inc., 252 Neb. 899, 567 N.W.2d 178
(1997).
34
See, Hike v. State, supra note 22; Cleaver-Brooks, Inc. v. Twin City Fire
Ins. Co., supra note 21.
35
In re Estate of Wagner, 246 Neb. 625, 522 N.W.2d 159 (1994).
36
In re Interest of Noah B. et al., supra note 26.
37
Stew. v. Hechtman, 254 Neb. 992, 581 N.W.2d 416 (1998).
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a particular issue was involved and necessarily determined in a
prior proceeding.38
[21,22] In determining whether issues in a prior and sub-
sequent action are identical, the former verdict and judgment
are conclusive only as to the facts directly in issue and do not
extend to facts which may be in controversy but which rest
on evidence and are merely collateral.39 The test as to whether
the former judgment is a bar is generally whether the same
evidence will sustain both the present and the former action;
where different proof is required, a judgment in the former
action is no bar to the subsequent action.40
[23,24] Thus, for purposes of applying the doctrine of issue
preclusion, an issue is considered to be the identical issue in
the absence of a significant factual change.41 And issue pre-
clusion does not apply to a party who had a higher standard
of proof in the first action than the standard of proof in a
later proceeding.42
Apposite to the case at bar is Woodward v. Andersen.43
Woodward was an action for an accounting and breach of
fiduciary duties in which we held that issue preclusion barred
certain claims based on issues determined in a prior dissolu-
tion proceeding. We explained that as a necessary determi-
nation in the dissolution court’s equitable distribution of the
property, the court decided the value of a corporation that
was marital property subject to distribution.44 This determina-
tion, in turn, necessarily included any claim of the husband or
the corporation at the time of the dissolution against the wife
38
See Stevenson v. Wright, 273 Neb. 789, 733 N.W.2d 559 (2007).
39
Eicher v. Mid America Fin. Invest. Corp., supra note 10.
40
Id.
41
See Kopecky v. National Farms, Inc., 244 Neb. 846, 510 N.W.2d 41 (1994).
42
deNourie & Yost Homes v. Frost, 289 Neb. 136, 854 N.W.2d 298 (2014).
43
Woodward v. Andersen, 261 Neb. 980, 627 N.W.2d 742 (2001).
44
See id.
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with respect to the wife’s alleged improper withdrawals from
the corporation.45
As part of the factual background, we observed that the hus-
band made claims in the dissolution proceeding that the wife
was wrongfully withdrawing money.46 Moreover, the parties
entered into a settlement agreement that was made a part of
the dissolution decree in which the parties agreed that the wife
was not indebted to the corporation and that the corporation
did not have any claims against the wife.47
We held in Woodward that the husband was foreclosed by
issue preclusion from raising, either individually or on behalf
of the corporation, a claim of excessive withdrawals during
the time period before the dissolution.48
Richard argues that the validity of the lien now held by
LSF8 was not at issue in the prior dissolution proceeding and
that the dissolution decree did not expressly state that the
lien was valid and enforceable against Richard. Therefore,
he argues, issue preclusion does not apply. This argument
lacks merit.
The validity and enforceability of the lien against Richard
were directly and necessarily at issue in the dissolution pro-
ceeding when the court was deciding to whom the lien should
be allocated. Not only was this fact reflected in the trial briefs,
but the lien’s validity was a necessary determination in the
court’s ultimate allocation of the lien to Richard as part of the
equitable division of the marital debt.
The same proof is required to establish that a lien is invalid
under § 40-104 in a dissolution proceeding as in a quiet
title action. We apply the same preponderance of the evi-
dence standard in both dissolution proceedings and quiet title
45
See id.
46
See id.
47
See id.
48
See id.
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actions.49 The facts upon which Richard challenges the validity
of the lien have not changed since the dissolution proceedings.
Therefore, we agree with the district court that the identi-
cal issue upon which Richard based his quiet title action was
decided in the dissolution proceeding.
[25] We must last determine whether the district court was
correct in finding that Richard had an opportunity to fully and
fairly litigate the validity of the lien in the dissolution proceed-
ings. This is essentially a due process analysis.50 Due process
requires that the rule of issue preclusion operate only against
persons who have had their day in court either as a party to
a prior suit or as a privy; and, where not so, that at least the
presently asserted interest was adequately represented in the
prior trial.51
[26] For this element to be satisfied, there is no requirement
that the party actually took advantage of that opportunity to
fully and fairly litigate the issue.52 A party cannot circumvent
the doctrine of issue preclusion by cherrypicking which facts
and theories to raise at the prior proceeding and which to
reserve for later.53 Thus, in Woodward, we held that there was
an opportunity to fully and fairly litigate the issue of improper
withdrawals, despite the husband’s failure to obtain full dis-
covery in the prior dissolution proceedings.54 We explained
that it was the husband’s choice to enter into a settlement
49
See, Caruso v. Parkos, 262 Neb. 961, 637 N.W.2d 351 (2002); Rush Creek
Land & Live Stock Co. v. Chain, 255 Neb. 347, 586 N.W.2d 284 (1998);
Goodman v. Goodman, 180 Neb. 83, 141 N.W.2d 445 (1966). See, also,
Wetovick v. County of Nance, 279 Neb. 773, 782 N.W.2d 298 (2010).
50
4 Christine P. Costanakos, Nebraska Practice, Juvenile Court Law and
Practice § 12:8 (2017).
51
Gottsch v. Bank of Stapleton, 235 Neb. 816, 458 N.W.2d 443 (1990).
52
See Simmons v. O’Brien, 77 F.3d 1093 (8th Cir. 1996).
53
See Basurto v. Imperial Irr. Dist., 211 Cal. App. 4th 866, 150 Cal. Rptr. 3d
145 (2012).
54
See Woodward v. Andersen, supra note 43.
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agreement rather than move to compel or attempt to pursue
additional discovery.55
While there is no evidence that Richard presented to the
dissolution court the precise theory of invalidity under the
homestead statutes that he has argued in this quiet title action,
he had the opportunity to do so. Richard seems to suggest that
he did not have the opportunity to fully and fairly litigate the
validity of the lien because the lienholder at the time of the
dissolution proceeding was not a party thereto. Specifically,
Richard argues that if the lien had been found in the disso-
lution proceedings to be invalid, “[o]ne can be assured that
LSF8 would claim that they were not a party in the dissolu-
tion case and therefore neither claim or issue preclusion would
apply to them.”56 This conclusion is axiomatic since issue
preclusion only applies against a party or person in privity
with a party to the prior action. But this does not lead us to
the conclusion that Richard lacked an opportunity in the dis-
solution proceeding to fully and fairly litigate the validity of
the lien as against him.
We agree with the district court that Richard had the
opportunity to fully and fairly litigate in the dissolution pro-
ceeding the question of the lien’s validity under the home-
stead statutes.
In conclusion, the district court did not err in finding as a
matter of law that Richard’s attempt to invalidate LSF8’s lien
was barred by issue preclusion. We affirm the court’s order of
summary judgment in favor of LSF8 for this reason.
6. R atification and Judicial Estoppel
Because we affirm the order of summary judgment on the
grounds of issue preclusion, we need not reach the issue of
whether the court was correct in ordering summary judgment
for the alternative reason of judicial estoppel.
55
See id.
56
Brief for appellant at 18.
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7. Motion to A lter or A mend
The district court did not err in denying Richard’s motion
to alter or amend, as Kelly’s deposition testimony was irrel-
evant to issue preclusion.
8. Plain Error
As acknowledged by LSF8 at oral arguments, we note a
point of plain error57 in the wording of the district court’s order.
In granting summary judgment, the district court declared the
deed of trust to be a “valid first and prior lien on the real
estate as against . . . all other claims.” The district court lacked
the authority to declare the lien as first and prior against
claims by persons or entities not parties to the present action.58
We therefore modify the language of the order to state that the
deed of trust is a valid first and prior lien on the real estate as
against Richard and Kelly, the defendants in Richard’s quiet
title action.
VI. CONCLUSION
For the reasons set forth above, we affirm the judgment of
the district court as modified.
A ffirmed as modified.
57
See State v. Lane, 299 Neb. 170, 907 N.W.2d 737 (2018).
58
See Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73,
894 N.W.2d 221 (2017).