Arnold v. Walz ( 2020 )


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    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    ARNOLD v. WALZ
    Cite as 
    306 Neb. 179
    Joy Arnold, Personal Representative of the
    Estate of Beverly Freiden, deceased, appellee, v.
    Michael J. Walz, an individual, appellant,
    and John Doe et al., appellees.
    ___ N.W.2d ___
    Filed June 19, 2020.    No. S-19-619.
    1. Jurisdiction. A question of jurisdiction is a question of law.
    2. Summary Judgment. Summary judgment is proper when the plead-
    ings and the evidence admitted at the hearing disclose that there is no
    genuine issue as to any material fact or as to 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. An appellate court will affirm
    a lower court’s grant of summary judgment if the pleadings and admit-
    ted evidence show that there is no genuine issue as to any material facts
    or as to the ultimate inferences that may be drawn from those facts and
    that the moving party is entitled to judgment as a matter of law.
    4. Equity: Quiet Title. A quiet title action sounds in equity.
    5. Equity: Appeal and Error. On appeal from an equity action, an appel-
    late court tries factual questions de novo on the record and, as to ques-
    tions of both fact and law, is obligated to reach a conclusion indepen-
    dent of the conclusion reached by the trial court, provided that where
    credible evidence is in conflict on a material issue of fact, the appellate
    court considers and may give weight to the fact that the trial judge heard
    and observed the witnesses and accepted one version of the facts rather
    than another.
    6. Jurisdiction: Time: Notice: Appeal and Error. Under Neb. Rev. Stat.
    § 25-1912 (Cum. Supp. 2018), to vest an appellate court with jurisdic-
    tion, a party must timely file a notice of appeal.
    7. Judgments: Time: Notice: Appeal and Error. Under Neb. Rev. Stat.
    § 25-1912(3) (Cum. Supp. 2018), filing a timely motion for a new trial
    or a timely motion to alter or amend a judgment terminates the time in
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    ARNOLD v. WALZ
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    which a notice of appeal must be filed; instead, the 30-day period to
    appeal starts anew upon the entry of the order ruling upon the motion
    for a new trial or the motion to alter or amend a judgment.
    8.    Pleadings: Judgments. In some circumstances, an appellate court may
    treat a postjudgment motion under a different title as a motion to alter
    or amend a judgment, based on the actual relief it seeks, rather than the
    way it was titled by the movant.
    9.    Pleadings: Judgments: Time. A motion to reconsider may be treated
    as a motion to alter or amend under Neb. Rev. Stat. § 25-1329 (Reissue
    2016) if it was filed no later than 10 days after the entry of judgment,
    and must seek substantive alteration of the judgment.
    10.    Options to Buy or Sell: Real Estate: Words and Phrases. An option
    to purchase real estate is a unilateral contract by which the owner of
    the property agrees with the holder of the option that he or she has
    the right to buy the property according to the terms and conditions of
    the option.
    11.    Options to Buy or Sell: Real Estate. Under an option to purchase
    real estate, the owner does not sell the land; nor does the owner at the
    time contract to sell. The owner does, however, agree that the person to
    whom the option is given shall have the right, at his or her election or
    option, to demand the conveyance in the manner specified.
    12.    Options to Buy or Sell: Real Estate: Time. An option to purchase real
    estate compels performance within the time limit specified or, if none is
    mentioned, then within a reasonable time.
    13.    Options to Buy or Sell: Real Estate. Options to buy or sell real estate
    should be strictly construed and not extended beyond their express
    provisions.
    14.    ____: ____. The exercise of an option to buy or sell real estate must be
    absolute, unambiguous, without condition or reservation, and in accord­
    ance with the offer made.
    15.    ____: ____. Where a real estate option contract specifies the required
    manner of acceptance, the holder must conform.
    Appeal from the District Court for Douglas County: Marlon
    A. Polk, Judge. Affirmed.
    James R. Place, of Place Law Office, for appellant.
    Edward F. Pohren, of Smith, Slusky, Pohren & Rogers,
    L.L.P., for appellee Joy Arnold.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
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    ARNOLD v. WALZ
    Cite as 
    306 Neb. 179
    Miller-Lerman, J.
    NATURE OF CASE
    Michael J. Walz, the appellant, leased real property from
    Beverly Freiden, and the lease included an option to purchase
    the property at any time before the end date of the lease. During
    Walz’ tenancy, Beverly Freiden died. Joy Arnold (Arnold), an
    appellee, and Jon Freiden were appointed copersonal represent­
    atives of her estate. Beverly Freiden’s will provided that the
    property would remain in the estate, or if sold, the proceeds
    would be divided variously as indicated later in this opinion.
    After the term of Walz’ initial option ended, Jon Freiden and
    Walz executed several lease modifications which purportedly
    extended Walz’ option to buy the real property. Walz eventu-
    ally claimed he owned the property. Arnold was reappointed
    personal representative of the estate and petitioned the district
    court for Douglas County seeking a declaratory judgment and
    to quiet title to the property in the estate. Arnold claimed that
    the property had not been distributed and remained in the
    estate, and she alleged that the purported lease modification
    contracts between Jon Freiden and Walz were improper and
    unenforceable. The district court granted Arnold’s motion for
    summary judgment and quieted titled in favor of the estate.
    Walz appealed. We affirm.
    STATEMENT OF FACTS
    Beverly Freiden died on December 8, 2012. In the sub-
    sequent related probate proceedings in the county court for
    Douglas County, Arnold and Jon Freiden were appointed coper­
    sonal representatives of the estate. Beverly Freiden’s last will
    and testament stated, inter alia, that her real property, an unim-
    proved lot located at the southwest corner of 18th and Jackson
    Streets in Omaha, Nebraska,
    may either be sold or retained by my personal represent­
    atives as they shall determine, and upon sale, whenever
    it occurs, my son, Jon Freiden, shall receive the first
    $25,000 from the sale and the remainder of the net sale
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    ARNOLD v. WALZ
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    proceeds shall be paid over to my grandson, Bart Arnold
    for his care; provided however, if I am not the owner of
    said real estate at the time of my death, then I give, devise
    and bequeath from my estate to my son, Jon Freiden,
    the sum of $25,000.00 and I give, devise and bequeath
    the reminder of the net sale proceeds received when
    the property was sold to my grandson, Bart Arnold for
    his care.
    Arnold and Jon Freiden, as copersonal representatives, did not
    sell the property. They filed an informal closing by verified
    statement on December 31, 2013, which stated, consistent with
    Neb. Rev. Stat. § 30-24,117(b) (Reissue 2016), that Arnold
    and Jon Freiden’s appointments as copersonal representatives
    “shall terminate one year after the filing hereof.” The schedule
    of distribution regarding Beverly Freiden’s assets provided that
    “[c]ash and real estate” would be distributed to Jon Freiden.
    The parties agree that this reference to “real estate” was
    undoubtedly describing the real property at issue in this case. It
    is undisputed that there is no evidence of recording (such as a
    deed), and the will did not designate the real estate as an asset
    to be given wholly to Jon Freiden.
    The appellant, Walz, had leased the real property from
    Beverly Freiden since at least 2012 and was interested in
    eventually buying the real property. The dispute before this
    court arises from an option-to-purchase provision originally
    included in a February 1, 2012, lease between Beverly Freiden
    and Walz. The lease/purchase agreement was for a period of
    tenancy to terminate on July 31, 2014. The 2012 option to pur-
    chase (2012 Option) provided as follows:
    6. OPTION TO PURCHASE: The Tenant shall,
    simultaneously with the execution hereof, have an option
    to purchase the leased premises under the following
    terms and conditions:
    a. The option price at the end of the lease term to
    be $20,000.00, which option price shall be available to
    the Tenant only if all of the lease payments as set forth
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    ARNOLD v. WALZ
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    herein have been paid. The Tenant may exercise his
    option at any time before July 31, 2014, however, the
    option price shall then be $20,000.00, and in addition, an
    amount equal to the number of unpaid rental installments
    (as set forth above) multiplied by $250.00.
    b. Tenant must exercise this option in writing at the
    address of the Landlord or her agent or representative at
    any time during the term of the lease as set forth herein.
    c. Upon exercise of this option, the Tenant shall close
    on the purchase not later than August 15, 2014.
    Walz did not exercise the 2012 Option during the origi-
    nal tenancy.
    In July 2014, Walz presented Jon Freiden with a docu-
    ment titled “MODIFICATION TO LEASE/PURCHASE
    AGREEMENT” (2014 Agreement). Jon Freiden signed the
    document as a “[r]epresentative for Beverly Freiden” on
    August 4; Walz and Arnold did not sign the document. The
    2014 Agreement stated that “both parties had entered into a
    prior agreement regarding the parking lot” and provided:
    Both parties wish to make the following modifications
    to the original agreement.
    1. . . . Walz is to be responsible for the payment of the
    real estate taxes for this property.
    2. The balance owed as of August 1, 2014 for the pur-
    chase of this property is $15,000.
    3. . . . Walz will continue to make montly payments
    in the amount of $250 each month due on the first of
    the month and late after the 15th of each month. If the
    payment is received late, a $25 late fee will be due
    and payable.
    4. This agreement is for one year, ending on July 31,
    2015. At the end of this agreement the balance of $12,000
    will be paid off or this agreement will be renegotiated at
    that time.
    5. Jon Freiden will provide to . . . Walz, legal documents
    showing that as son for Beverly Freiden, he has author-
    ity to sell this property on behalf of Beverly Freiden.
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    ARNOLD v. WALZ
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    306 Neb. 179
    Walz did not exercise the option to purchase the real property
    by July 31, 2015. After the terms of the 2014 Agreement ended,
    Jon Freiden and Walz executed another “MODIFICATION TO
    LEASE/PURCHASE AGREEMENT” (2015 Agreement) on
    August 28, 2015. It stated, inter alia:
    2. The balance owed as of August 1, 2015 for the pur-
    chase of this property is $11,750.
    3. . . . Walz will continue to make monthly payments
    in the amount of $250 each month due on the first of
    the month and late after the 15th of each month. If the
    payment is received late, a $25 late fee will be due
    and payable.
    4. This agreement is for one year, ending on July 31,
    2016. At the end of this agreement the balance will be
    paid off or this agreement will automatically renew at the
    same terms and conditions as the previous year.
    Based on the 2015 Agreement, Walz began to exercise control
    of the property and claims that he had purchased the property
    from Jon Freiden.
    In January 2017, Arnold petitioned the county court for
    Douglas County to reopen the estate of Beverly Freiden,
    alleging that assets of the estate were not fully distributed
    and needed to be distributed. On January 24, that court reap-
    pointed Arnold as personal representative of the estate. Jon
    Freiden, whose appointment as personal representative had
    expired, was not involved in the second appointment. See
    § 30-24,117(b).
    Arnold, as sole personal representative of the estate, filed
    a complaint in the district court for Douglas County seek-
    ing declaratory judgment and quiet title to the property. The
    complaint alleged that Walz had not timely exercised the 2012
    Option, and it indicated that there was no enforceable modifi-
    cation. Walz filed an answer denying the allegations.
    Arnold moved for summary judgment. Arnold claimed that
    the real property had never been distributed and remained
    in the estate, and Walz claimed that either he had purchased
    the property from Beverly Freiden according to a modified
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    ARNOLD v. WALZ
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    option agreement or the property was distributed to Jon
    Freiden, who sold it to Walz.
    The district court held a hearing on the motion for summary
    judgment and received evidence but agreed not to hear oral
    arguments until after the parties could review the evidence
    and submit briefs. The parties submitted briefs but did not
    provide notice of a hearing. The court took the matter under
    advisement. In its written order, filed December 6, 2018, the
    district court granted Arnold’s motion for summary judgment
    and ­quieted title in favor of the estate. The court found that
    Walz had not exercised the 2012 Option, because he had not
    attempted to exercise it before July 31, 2014, and had not
    “‘close[d] on the purchase not later than August 15, 2014,’” as
    required by the contract. The district court also found that the
    subsequent 2014 Agreement and 2015 Agreement were unen-
    forceable with respect to the option to purchase, because the
    option had ended on its own terms and there was no longer a
    valid option to exercise by Walz as a holdover tenant.
    On December 13, 2018, Walz filed a “Motion for New
    Hearing and/or Motion to Reconsider and Set Aside Order
    Granting Summary Judgment on December 6, 2018.” Walz
    sought reconsideration of the summary judgment order,
    because the court had not held oral arguments on the motion
    and had made “[e]rrors in [l]aw . . . contrary to the [e]vidence.”
    At the hearing on Walz’ motion, in addition to identifying
    the aforementioned claimed procedural irregularities with the
    motion for summary judgment, Walz claimed that the court
    had failed to consider several of his arguments related to
    the validity of the 2014 Agreement and 2015 Agreement and
    attacked the judgment on the basis of errors of substantive
    law. The district court denied Walz’ motion to reconsider, and
    Walz appeals.
    ASSIGNMENTS OF ERROR
    Walz assigns, summarized and restated, that the district
    court erred when it found there were no disputed material facts,
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    concluded that the property remained in the estate, granted
    summary judgment in favor of Arnold, and quieted title in
    the estate.
    STANDARDS OF REVIEW
    [1] A question of jurisdiction is a question of law. Clarke
    v. First Nat. Bank of Omaha, 
    296 Neb. 632
    , 
    895 N.W.2d 284
    (2017).
    [2,3] Summary judgment is proper when the pleadings and
    the evidence admitted at the hearing disclose that there is no
    genuine issue as to any material fact or as to the ultimate
    inferences that may be drawn from those facts and that the
    moving party is entitled to judgment as a matter of law. Meyer
    Natural Foods v. Greater Omaha Packing Co., 
    302 Neb. 509
    , 
    925 N.W.2d 39
    (2019). An appellate court will affirm a
    lower court’s grant of summary judgment if the pleadings and
    admitted evidence show that there is no genuine issue as to
    any material facts or as to the ultimate inferences that may be
    drawn from those facts and that the moving party is entitled to
    judgment as a matter of law.
    Id. [4,5]
    A quiet title action sounds in equity. Adair Holdings
    v. Johnson, 
    304 Neb. 720
    , 
    936 N.W.2d 517
    (2020). On appeal
    from an equity action, 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 of the conclu-
    sion reached by the trial court, provided that where credible
    evidence is in conflict on a material issue of fact, the appellate
    court considers and may give weight to the fact that the trial
    judge heard and observed the witnesses and accepted one ver-
    sion of the facts rather than another.
    Id. ANALYSIS Walz’ Notice
    of Appeal Was Timely.
    Arnold claims that Walz’ postjudgment motion did not ter-
    minate the 30-day period during which a party may file a
    notice of appeal. See Neb. Rev. Stat. § 25-1912 (Cum. Supp.
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    2018). Therefore, we initially address Arnold’s contention that
    Walz failed to timely appeal the district court’s May 30, 2019,
    dispositive order.
    [6,7] Under § 25-1912, to vest an appellate court with juris-
    diction, a party must timely file a notice of appeal. Clarke v.
    First Nat. Bank of 
    Omaha, supra
    . A party must file a notice of
    appeal within 30 days of the judgment, decree, or final order
    from which the party is appealing.
    Id. However, filing a
    timely
    motion for a new trial or a timely motion to alter or amend a
    judgment terminates the time in which a notice of appeal must
    be filed.
    Id. Instead, the 30-day
    period to appeal starts anew
    upon the entry of the order ruling upon the motion for a new
    trial or the motion to alter or amend a judgment.
    Id. [8,9]
    In some circumstances, an appellate court may treat
    a postjudgment motion under a different title as a motion to
    alter or amend a judgment, based on the actual relief it seeks,
    rather than the way it was titled by the movant. See, id.; State
    v. Bellamy, 
    264 Neb. 784
    , 
    652 N.W.2d 86
    (2002). A motion to
    reconsider may be treated as a motion to alter or amend under
    Neb. Rev. Stat. § 25-1329 (Reissue 2016) if it was filed no
    later than 10 days after the entry of judgment, and must seek
    substantive alteration of the judgment. See, Clarke v. First Nat.
    Bank of 
    Omaha, supra
    ; State v. 
    Bellamy, supra
    .
    Arnold asserts that we should not treat Walz’ “Motion to
    Reconsider and Set Aside Order Granting Summary Judgment”
    as a motion to alter or amend, because it sought relief based
    on procedural irregularities in the summary judgment hearing
    and did not request a substantive alteration of the judgment.
    We disagree.
    The motion on its face as well as the transcripts of the
    hearing on Walz’ postjudgment motion show that Walz sought
    relief based on both procedural and substantive reasons. Walz
    asserted several errors of law, including a claim that the
    district court had failed to consider when a personal rep-
    resentative was barred from seeking a “clawback” of real
    property. We consider Walz’ motion to be a motion to alter
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    or amend, and accordingly, Walz’ notice of appeal was timely
    filed following consideration of his postjudgment motion. See
    §§ 25-1329 and 25-1912. See, also, Clarke v. First Nat. Bank
    of Omaha, 
    296 Neb. 632
    , 
    895 N.W.2d 284
    (2017).
    Walz Did Not Exercise the Option in Lease.
    We begin by examining Walz’ claim to the property based
    on the 2012 Option. The trial court found that Arnold’s evi-
    dence showed that the option was not executed. Walz did not
    refute this finding, and we therefore agree with the ruling by
    the trial court.
    [10-12] An option to purchase real estate is a unilateral
    contract by which the owner of the property agrees with the
    holder of the option that he or she has the right to buy the
    property according to the terms and conditions of the option.
    Walters v. Sporer, 
    298 Neb. 536
    , 
    905 N.W.2d 70
    (2017). By
    such an agreement, the owner does not sell the land; nor does
    the owner at the time contract to sell.
    Id. The owner does,
    however, agree that the person to whom the option is given
    shall have the right, at his or her election or option, to demand
    the conveyance in the manner specified.
    Id. An option compels
    performance within the time limit specified or, if none is men-
    tioned, then within a reasonable time.
    Id. [13-15]
    Options should be strictly construed and not
    extended beyond their express provisions. State Securities Co.
    v. Daringer, 
    206 Neb. 427
    , 
    293 N.W.2d 102
    (1980); Wright v.
    Barclay, 
    151 Neb. 94
    , 
    36 N.W.2d 645
    (1949). The exercise of
    an option to buy or sell real estate must be absolute, unam-
    biguous, without condition or reservation, and in accordance
    with the offer made. State Securities Co. v. 
    Daringer, supra
    ;
    Master Laboratories, Inc. v. Chesnut, 
    154 Neb. 749
    , 
    49 N.W.2d 693
    (1951). Where the contract specifies the required manner
    of acceptance, the holder must conform. Gleeson v. Frahm, 
    211 Neb. 677
    , 
    320 N.W.2d 95
    (1982).
    Among its other requirements to exercise the right to pur-
    chase the property, the 2012 Option was timebound and pro-
    vided, “The Tenant may exercise his option at any time before
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    July 31, 2014 . . . .” Here, the district court found that Walz’
    actions were insufficient to exercise the option prior to the
    expiration of this term. Walz’ evidence did not refute this
    finding. Therefore, the option expired under the terms of the
    original lease/purchase agreement, strictly construed. It appears
    from the record that Walz continued his tenancy and proceeded
    as though the option had not been extinguished. However, after
    July 31, 2014, Walz became a holdover tenant and his tenancy
    rights no longer included the right to elect or opt to buy the
    leased real property according to the terms of the 2012 Option.
    See Wright v. 
    Barclay, supra
    . Because the option contained in
    the lease is not one of the terms of the tenancy itself, Nebraska
    law does not recognize that an option would be incorporated
    into a subsequent lease of a holdover tenant. See
    id. In this case,
    the original lease/purchase agreement and 2012 Option
    did not contain any provision for renewal of the lease or of the
    option, which might alter these general rules.
    With respect to the effect of the 2014 Agreement and
    2015 Agreement, which purportedly modified the 2012
    lease/purchase agreement to empower Walz to treat his rent
    payments as installment payments to buy the real property,
    these contracts, if analyzed on their face, do not provide
    continuity with the original lease/purchase agreement and
    did not revive the original but extinguished option to buy the
    property. Although they are framed as a contract modifica-
    tion, they cannot modify a terminated contract. The district
    court did not err when it found that the effect of the 2014
    Agreement and 2015 Agreement was “moot” with regard to
    the 2012 Option, because there was no longer a valid option
    to exercise or modify.
    Walz suggests that the effect of the 2014 Agreement and
    2015 Agreement was to retroactively apply Walz’ rent pay-
    ments to a “balance owed” on the property. Contrary to Walz’
    suggestion, the terms of the modifications regarding a balance
    owed are more in the nature of a land contract or install-
    ment contract and not consistent with the original lease/pur-
    chase agreement, which had provided for a purchase price of
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    $20,000. The 2012 Option did not suggest an intent that the
    original option should continue after July 31, 2014, in such
    a manner, and the 2014 Agreement and 2015 Agreement did
    not expressly create a new option to buy the property. It is
    well settled that “[t]he terms of an option should be precisely
    regarded and enforced without addition or alteration.” Master
    Laboratories, Inc. v. Chesnut, 154 Neb. at 
    752, 49 N.W.2d at 696
    . The 2012 Option was limited in express terms and dura-
    tion and could not be exercised or modified beyond its expira-
    tion. The district court did not err when it concluded that by
    application of the law to the unrefuted evidence, Walz had not
    exercised a valid option.
    The District Court Did Not Err When
    It Quieted Title in the Estate.
    Walz next claims that the district court erred when it quieted
    title to the real property in the estate. Walz contends that the
    property was distributed to Jon Freiden at the conclusion of the
    original informal probate and that Jon Freiden later sold the
    property to him. We reject this claim of error.
    A deed of real estate, signed by the grantor, lawfully
    acknowledged, and recorded as directed by statute, is gener-
    ally required to transfer title to real estate. Neb. Rev. Stat.
    § 76-211 (Reissue 2018). But real property may be distrib-
    uted in kind in accordance with the will; the absence of a
    recorded deed does not invalidate the instruments in the
    probate proceedings between the parties. See Neb. Rev. Stat.
    §§ 30-24,104 (Reissue 2016) and 76-238(1) (Reissue 2018).
    Section 30-24,104(a) provides, in relevant part, that “[u]nless
    a contrary intention is indicated by the will, the distributable
    assets of a decedent’s estate shall be distributed in kind to the
    extent possible . . . .”
    Had the will of Beverly Freiden designated the real prop-
    erty to Jon Freiden without caveat, the property would have
    devolved upon her death without a deed. However, the will
    demonstrates a contrary intention. Beverly Freiden directed
    that the property
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    may either be sold or retained by my personal represen-
    tatives as they shall determine, and upon sale, whenever
    it occurs, my son, Jon Freiden, shall receive the first
    $25,000.00 from the sale and the remainder of the net
    sale proceeds shall be paid over to my grandson, Bart
    Arnold for his care.
    The real property remained in the estate, and Jon Freiden
    was entitled to only the first $25,000 of the proceeds upon a
    sale of the real property. Pursuant to the will, the real prop-
    erty was not required to be distributed in kind to Jon Freiden
    because it was also meant to support Bart Arnold to the extent
    there would be additional sale proceeds.
    Although the distribution sheet mentions that Jon Freiden
    was to receive real property from the estate, there is no evi-
    dence, such as the personal representative’s deed, demonstrat-
    ing that a conveyance from the estate to Jon Freiden took
    place. To the contrary, the evidence included a continuity of
    registered ownership with no reference to Jon Freiden. In light
    of the intent of the will, the distribution sheet was not a con-
    veyance of the property to Jon Freiden. Because Jon Freiden
    did not own the real property, he did not possess the authority
    to unilaterally convey the property to Walz. There is no genu-
    ine issue of material fact with respect to the fact that the real
    property remained in the estate. The district court did not err
    when it quieted title in the estate.
    CONCLUSION
    Walz, a tenant of the real property of the decedent, Beverly
    Freiden, did not exercise the option associated with the lease,
    and subsequent purported options were not valid or enforceable.
    The real property remained in the estate. Accordingly, we
    affirm the order of the district court that granted Arnold’s
    motion for summary judgment and quieted title in the estate.
    Affirmed.