Kardell v. Ellis ( 2020 )

IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
(Memorandum Web Opinion)
KARDELL V. ELLIS
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
JACKSON KARDELL, APPELLEE,
V.
LAURA ELLIS, APPELLANT.
Filed February 25, 2020. No. A-18-946.
Appeal from the District Court for Douglas County: SHELLY R. STRATMAN, Judge.
Affirmed.
Steven G. Ranum, of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, L.L.C., for
appellant.
Michael D. Sands, of Baird Holm, L.L.P., for appellee.
RIEDMANN, BISHOP, and ARTERBURN, Judges.
BISHOP, Judge.
I. INTRODUCTION
Laura Ellis (Laura) appeals the Douglas County District Court’s order granting summary
judgment in favor of Jackson Kardell in this quiet title action. We affirm.
II. BACKGROUND
On September 30, 2009, Laura and Jackson (who were in a relationship at the time) entered
into a “Security Land Contract” (Land Contract) with Laura’s father, Jeffrey Ellis (Jeffrey).
Pursuant to the Land Contract, Jeffrey agreed to sell a residential property located in Omaha,
Nebraska, to Laura and Jackson, as tenants in common, for $79,200. Laura and Jackson were to
pay the purchase price in equal monthly installments of $660 commencing October 1, 2009, with
the last installment being due on September 30, 2019. The Land Contract further provided that
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“[t]he [Warranty] Deed [conveying to the Purchaser fee simple title to the Property] shall be
executed concurrently with the execution of this Agreement and placed in the possession and safe
keeping of the Seller pending payment in full of this contract.” And, “Possession of the Property
shall be delivered to the Purchaser on . . . the date of this contract. The Seller’s interest in the
Property is security for the payment of the balance of the Purchase Price owed by the Purchaser.”
The Land Contract was recorded with the Douglas County Register of Deeds on October 28, 2009.
We note that although the Land Contract stated that a Warranty Deed would be executed
concurrently with the Land Contract, it was not.
Subsequent to the execution of the Land Contract, Laura and Jackson ended their romantic
relationship. In 2011, prior to full performance of the Land Contract, they decided to take up
separate residences. On October 12, Laura and Jackson signed an “Acknowledgment of Separation
and Quitclaim” which stated in relevant part:
Laura and Jackson agree that Jackson will continue to reside at [the residential
property], and that Laura, in consideration of ONE DOLLAR ($1.00) and other valuable
consideration, receipt of which is hereby confirmed, is executing a quitclaim deed
conveying and transferring whatever rights and interest she possesses in the [residential]
property to Jackson.
Laura and Jackson both acknowledge that Jackson had paid Laura $10,000 as of October 12 to buy
out her interest in the residential property; Laura gave deposition testimony that she had put
$18,000 to $20,000 into the property and that Jackson agreed to pay her $10,000 prior to or at the
time the deed was executed, and then another $5,000 in “the next couple years” to buy her out. We
note that as of October 1, 2011, 25 installments of $660--a total of $16,500--would have been paid
to Jeffrey on the Land Contract. Also on October 12, Laura executed a “Quitclaim Deed”
conveying and transferring the residential property to Jackson; this Quitclaim Deed was recorded
with the Douglas County Register of Deeds on October 17.
Jackson subsequently continued to make monthly payments to Jeffrey pursuant to the Land
Contract. On May 31, 2017, Jackson paid the remaining balance of the purchase price under the
Land Contract ($18,480). On June 22, Jeffrey signed the Warranty Deed conveying the residential
property to Jackson and Laura, as tenants in common; the Warranty Deed was recorded with the
Douglas County Register of Deeds on July 6.
On July 10, 2017, Jackson filed a complaint against Laura and Jeffrey. The complaint
contained a quiet title action against Laura wherein Jackson alleged that upon the execution and
delivery of the Quitclaim Deed, Laura transferred all of her title and interest in the residential
property to him, and that he is therefore the fee simple owner of the residential property despite
the inclusion of Laura on the Warranty Deed conveyed by Jeffrey. In the event that the district
court determined the Quitclaim Deed failed to transfer all title and interest to the residential
property, Jackson pled an alternative claim of unjust enrichment against Laura. The complaint also
contained a breach of contract action against Jeffrey wherein Jackson essentially alleged that
Jeffrey should not have included Laura as a grantee on the Warranty Deed when he knew that
Laura had executed a Quitclaim Deed to Jackson.
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In her answer and counterclaim filed on August 9, 2017, Laura denied that Jackson was
the fee simple owner of the residential property, and raised several affirmative defenses (e.g.,
failure of consideration, undue influence, fraud, unclean hands, laches, and statute of limitations).
In her counterclaim, Laura alleged that under the Warranty Deed, she and Jackson owned fee
simple title in the residential property as tenants in common and she asked that title to the
residential property “be quieted and confirmed” accordingly.
In his answer filed on August 9, 2017, Jeffrey denied that he was in breach of contract. On
November 1, Jeffrey filed a motion for partial summary judgment, asking the district court to
dismiss all causes of action against him. After a hearing, the district court filed an order on May
21, 2018, finding that Jeffrey had complied with the terms of the Land Contract. The court granted
partial summary judgment in Jeffrey’s favor as to all causes of action against him; causes of action
against Jeffrey were dismissed with prejudice. That ruling is not challenged on appeal.
On May 22, 2018, Jackson filed a motion for summary judgment asking the district court
to find in his favor with regard to his quiet title action against Laura. On May 23, Laura filed her
own motion for summary judgment asking the court to dismiss all causes of action against her and
to quiet title to the residential property in her and Jackson, as tenants in common, as requested in
her counterclaim.
After a hearing at which evidence was received, the district court filed its order on
September 7, 2018. The district court found that Jackson was entitled to fee simple ownership of
the property. Accordingly, the court denied Laura’s motion for summary judgment, and granted
summary judgment in favor of Jackson.
Laura appeals.
III. ASSIGNMENTS OF ERROR
Laura assigns that the district court erred in (1) granting summary judgment in favor of
Jackson and quieting title to the property in his name only and (2) denying her motion for summary
judgment and not adhering to the terms of the Warranty Deed and Security Land Contract and not
quieting title to the property in Laura and Jackson as tenants in common.
IV. STANDARD OF REVIEW
Summary judgment is to be granted when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. Wintroub v. Nationstar Mortgage, 303
Neb. 15, 927 N.W.2d 19 (2019). Under an appellate court’s standard of review, summary judgment
is proper only when the pleadings, depositions, admissions, stipulations, and affidavits in the
record 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. See id. In reviewing a summary judgment, an appellate court views the evidence in a 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. Id.
The interpretation of a contract and whether the contract is ambiguous are questions of law
subject to independent review. Id.
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V. ANALYSIS
This quiet title action is brought pursuant to Neb. Rev. Stat. § 25-21,112 et seq. (Reissue
2016). Section 25-21,112 provides:
An action may be brought and prosecuted to final decree, judgment or order, by
any person or persons, whether in actual possession or not, claiming title to, or an estate in
real estate against any person or persons who claim, or apparently have an adverse estate
or interest therein, for the purpose of determining such estate, or interest, canceling
unenforceable liens, or claims against, or which appear to be against said real estate, and
quieting the title to real estate.
A party seeking to declare his title must rely on the strength of his own title and not the weakness
of the title of others. Dugan v. Jensen, 244 Neb. 937, 510 N.W.2d 313 (1994).
Jackson claims, and the district court found, that he had and was entitled to “fee simple”
ownership of the residential property. See, Black’s Law Dictionary 648 (8th ed. 2004) (fee simple
is also termed exclusive ownership); Sterner v. Nelson, 210 Neb. 358, 314 N.W.2d 263 (1982)
(absolute title estate or property is fee simple estate; it is estate without end or limitations and
largest estate person can possibly have).
In order to establish who has ownership of the residential property, we must establish the
respective interests of Jackson, Laura, and Jeffrey as a result of various contracts and deeds
relevant to these proceedings.
1. EFFECT OF 2009 LAND CONTRACT
As stated previously, on September 30, 2009, Laura and Jackson (who were in a
relationship at the time) entered into a Land Contract with Laura’s father, Jeffrey. Pursuant to the
Land Contract, Jeffrey agreed to “sell and convey” to Laura and Jackson, as tenants in common, a
residential property in Omaha. The pertinent terms of the Land Contract were as follows.
....
Section 3. PURCHASE PRICE.
3.1 The Purchaser agrees to pay to Seller . . . the sum of $79,200.00, to be paid in
119 equal monthly installments of $660.00 each commencing October 1, 2009, without
interest prior to maturity, and a final installment of $660.00 on September 30, 2019. The
entire unpaid balance of said principal sum, with interest thereon, shall be due and payable
on September 30, 2019. . . .
3.2 It is the mutual intention that the Purchaser shall take the Property free and clear
of all liens and encumbrances existing as of the date hereof, except as expressly provided
in Section 5 hereof, upon payment of the entire Purchase Price.
3.3 Purchaser shall have the right to prepay all or any part of the principal balance
of this contract at any time without premium or penalty.
....
Section 5. DELIVERY OF TITLE.
Contemporaneously with the execution and delivery of this contract, the Seller has
executed a general warranty deed (the “Deed”) conveying to the Purchaser fee simple title
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to the Property free and clear of all liens and encumbrances, subject only to the following
permitted title exceptions [which are not relevant to this appeal]:
....
The Deed shall be executed concurrently with the execution of this Agreement and
placed in the possession and safe keeping of the Seller pending payment in full of this
contract.
Section 6. POSSESSION.
Possession of the Property shall be delivered to the Purchaser on . . . the date of this
contract. The Seller’s interest in the Property is security for the payment of the balance of
the Purchase Price owed by the Purchaser . . . .
....
Section 13. ASSIGNMENT BY PURCHASER.
13.1 The Purchaser may not assign this contract nor any of its rights and obligations
hereunder without the prior written consent of the Seller.
....
13.3 In the event that Laura . . . and Jackson . . . should decide to part company and
take up separate residences, Laura . . . may buy out the interest of Jackson . . . by payment
to him of one half of the total amount of payments made by the Purchasers pursuant to
paragraph 3.1 above. Upon payment to him of said sum, Jackson . . . agrees to execute and
deliver a quit claim deed to the Property in favor of Laura . . . .
....
Section 15. GENERAL PROVISIONS.
....
15.3 This contract is the entire agreement between the parties covering everything
agreed upon or understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations, or terms of any kind as conditions or
inducements to the execution hereof or in effect between the Purchaser and the Seller,
except as expressed in this contract. No change or addition shall be made to this contract
except by written supplemental agreement signed by the parties.
The Land Contract was recorded with the Douglas County Register of Deeds on October 28, 2009.
The effects of a contract like the Land Contract described above are clearly established in
Nebraska law.
As in a mortgage, one selling under an installment land contract agrees to accept
payments from the buyer, generally by a series of installments over time, until the purchase
price as established by the contract has been paid. When the contract price has been paid,
the seller must deliver a deed of title to the buyer. . . . Under such an arrangement, the seller
retains the legal title as security for the deferred installments of the purchase price, and the
buyer acquires equitable ownership of the property. . . . The net result is that the seller
holds the legal title in trust for the buyer. . . . The buyer in possession, on the other hand,
is, for all practical purposes, the owner of the property, with all the rights of an owner,
subject only to the terms of the contract.
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Mackiewicz v. J.J. & Associates, 245 Neb. 568, 573-74, 514 N.W.2d 613, 618-19 (1994) (internal
citations omitted). See, also, Wintroub v. Nationstar Mortgage, 303 Neb. 15, 927 N.W.2d 19
(2019).
Further, the Nebraska Supreme Court has stated:
It has been frequently and consistently decided by this court, as it is quite unanimously
agreed by courts generally, that if the owner of real estate enters into a contract of sale
whereby the purchaser agrees to buy and the owner agrees to sell it and the vendor retains
the legal title until the purchase money or some part of it is paid, the ownership of the real
estate as such passes to and vests in the purchaser, and that from the date of the contract
the vendor holds the legal title as security for a debt as trustee for the purchaser.
DeBoer v. Oakbrook Home Assn., 218 Neb. 813, 816, 359 N.W.2d 768, 771 (1984)
(quoting Buford v. Dahlke, 158 Neb. 39, 62 N.W.2d 252 (1954)). As such, an “‘“executory
contract for the sale of land vests equitable ownership of the property in the purchaser, and . . . the
seller retains the legal title as security for the deferred installments of the purchase price.”’”
DeBoer v. Oakbrook Home Assn., 218 Neb. at 816, 359 N.W.2d at 771 (quoting Buford v. Dahlke,
supra). “‘Under a land contract, the vendee is the equitable owner of the real estate.’” DeBoer v.
Oakbrook Home Assn., supra. When a deed is held in escrow until payment of the purchase price,
“‘the grantor of an instrument held in escrow loses control over it so long as the grantee does not
default, even though he retains bare legal title in the land as security for the payment of the
purchase price.’” Id. at 817, 359 N.W.2d at 771 (quoting Beren Corp. v. Spader, 198 Neb. 677,
255 N.W.2d 247 (1977)).
In this case, once the Land Contract was signed on September 30, 2009, and recorded with
the Douglas County Register of Deeds on October 28, Jackson and Laura (as tenants in common)
were vested with equitable ownership of the property, with all the rights associated with being an
owner, except that Jeffrey retained legal title as security for the deferred installment payments of
the purchase price. Jeffrey had no control over the land so long as Jackson and Laura were not in
default. See DeBoer v. Oakbrook, supra (vendor has no control over land while deed in escrow
and vendee not in default; vendor precluded from imposing new and additional restrictions upon
land). Once the contract terms were paid, Jeffrey was required to deliver the deed of title to the
buyers as tenants in common, which he did on June 22, 2017; the Warranty Deed was recorded
with the Douglas County Register of Deeds on July 6.
2. EFFECT OF 2011 QUITCLAIM DEED
On October 12, 2011, Laura and Jackson signed an “Acknowledgment of Separation and
Quitclaim” which stated in relevant part:
Laura and Jackson agree that Jackson will continue to reside at [the residential
property], and that Laura, in consideration of ONE DOLLAR ($1.00) and other valuable
consideration, receipt of which is hereby confirmed, is executing a quitclaim deed
conveying and transferring whatever rights and interest she possesses in the [residential]
property to Jackson.
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Also on October 12, Laura executed a “Quitclaim Deed” which stated:
Laura . . . GRANTOR, in consideration of One Dollar ($1.00) and other valuable
consideration received from GRANTEE, JACKSON . . . remise, convey, release and quit
claim to GRANTEE the following described real estate[.]
[Legal description of property.]
The Grantor hereby conveys and transfers whatever right and interest she acquired by
reason of a Security Land Contract dated September 30, 2009[.]
This Quitclaim Deed was recorded with the Douglas County Register of Deeds on October 17,
2011.
“A quitclaim deed by its nature is an instrument of transfer whereby the grantor transfers
only the interest the grantor has in the property at the time of the conveyance.” Gustafson v.
Gustafson, 239 Neb. 448, 451, 476 N.W.2d 819, 821 (1991). Additionally, “the distinguishing
characteristic of a quitclaim deed is that it is a conveyance of any interest or title of the grantor in
and to the land described rather than of the land itself.” Smith v. Berberich, 168 Neb. 142, 146, 95
N.W.2d 325, 327 (1959). Accordingly, at the time Laura executed the quitclaim deed, she had the
right to fee simple title upon payment of the purchase price and the right to a warranty deed being
filed representing that. Thus, by executing the quitclaim deed, Laura transferred that existing right
to Jackson, and she retained no further rights or interest in the property.
3. EFFECT OF 2017 WARRANTY DEED
There is no dispute that after the execution of the Quitclaim Deed, Jackson subsequently
continued to make monthly payments to Jeffrey pursuant to the Land Contract. On May 31, 2017,
Jackson paid the remaining balance of the purchase price under the Land Contract ($18,480). Once
the Land Contract purchase price was paid in full, Jeffrey was required to deliver the deed of title.
See Mackiewicz v. J.J. & Associates, supra. On June 22, Jeffrey signed the Warranty Deed
conveying the residential property to Laura and Jackson, as tenants in common; the Warranty Deed
was recorded with the Douglas County Register of Deeds on July 6.
Although Jeffrey did not sign the Warranty Deed until June 22, 2017, the Land Contract
provided that, “Contemporaneously with the execution and delivery of this contract [dated
September 30, 2009,] the Seller has executed a general warranty deed . . . conveying to the
Purchaser fee simple title to the Property”; “the Deed shall be executed concurrently with the
execution of this Agreement and placed in the possession and safe keeping of the Seller pending
payment in full of this contract.” The Land Contract was recorded with the Douglas County
Register of Deeds on October 28, 2009. Under the terms of the Land Contract itself, Jeffrey was
to execute a general warranty deed in 2009, and only keep it in “safe keeping” pending payment
in full of the contract price.
Laura claims that the Warranty Deed executed in 2017 provided her with an interest in the
residential property, “which could not have been previously transferred to Jackson by the Quit
Claim Deed as a quitclaim deed does not convey after-acquired title.” Brief for appellant at 9. We
disagree with Laura’s contention that the Warranty Deed provided her with “new rights that she
did not have when she executed the quitclaim deed.” Id. at 13. As stated previously, once the Land
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Contract was signed and recorded in 2009, Laura and Jackson (as tenants in common) were vested
with equitable ownership of the residential property. Although Jeffrey retained legal title as
security for the payment of the purchase price, it was to be held in trust for Laura and Jackson,
who were for all practical purposes, the owners of the property, with all the rights of an owner,
subject only to the terms of the contract. See Mackiewicz v. J.J. & Associates, 245 Neb. 568, 514
N.W.2d 613 (1994). Thus, when Laura executed and delivered the Quitclaim Deed in 2011, she
transferred all of her ownership interest in the residential property to Jackson, making him the sole
owner of the property. This is not a case involving an after-acquired interest by Laura, and the fact
that the Warranty Deed was not actually executed until 2017 is of no consequence for the reasons
stated above.
At the time Jackson filed his quiet title action in July 2017, he was the sole owner of the
residence. Thus, he was entitled to have title quieted to him, unless Laura raised a successful
affirmative defense.
4. LAURA’S AFFIRMATIVE DEFENSES
At the district court level, Laura raised numerous affirmative defenses to Jackson’s quiet
title action. Although the district court did not specifically address Laura’s affirmative defenses in
its order, it would have necessarily determined the affirmative defenses lacked merit in order for
the court to enter summary judgment in Jackson’s favor. Further, on appeal, Laura only addresses
three affirmative defenses: failure of consideration, fraud, and unclean hands. Thus, our discussion
will be limited accordingly.
With regard to Laura’s affirmative defenses, we initially note that Jackson claims Laura
seeks to nullify the quitclaim documents via time-barred claims. He cites to Becker v. Hobbs, 256
Neb. 432, 438, 590 N.W.2d 360, 364 (1999), for the proposition that “‘[a] counterclaim, setoff, or
cross-petition, to be available as a matter of affirmative defense or affirmative relief, must be a
claim upon which the defendant could, at the date of the commencement of the plaintiff’s suit,
have maintained an action on the defendant’s part against the plaintiff.’” However, as Laura points
out in her reply brief, the case cited by Jackson “deals with the timeliness of a counterclaim
asserted by a defendant, not an affirmative defense.” Reply brief for appellant at 7. Laura’s
counterclaim was only to have title to the residential property quieted to her and Jackson as tenants
in common. Failure of consideration, fraud, and unclean hands were raised only as affirmative
defenses to Jackson’s complaint to have title quieted in him alone.
(a) Failure of Consideration
Laura claims the “actual terms of the agreement between Laura and Jackson would need
to be established in order for the court to determine the rights and obligations of the parties.” Brief
for appellant at 14. She cites to Lindsay Internat. Sales & Serv. v. Wegener, 301 Neb. 1, 917
N.W.2d 133 (2018), for the proposition that a failure of consideration means the contract is valid
when formed but becomes unenforceable because the performance bargained for has not been
given. She contends that if Jackson failed to make the payments as agreed upon between the
parties, then the agreement “could be unenforceable because there was not proper payment of
consideration.” Brief for appellant at 15.
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However, Jackson argues that the plain language of the “Acknowledgment of Separation
and Quitclaim” shows that Laura expressly acknowledged receipt of full consideration owed by
Jackson for conveyance of the Quitclaim Deed. The “Acknowledgment of Separation and
Quitclaim” stated in relevant part:
Laura and Jackson agree that Jackson will continue to reside at [the residential
property], and that Laura, in consideration of ONE DOLLAR ($1.00) and other valuable
consideration, receipt of which is hereby confirmed, is executing a quitclaim deed
conveying and transferring whatever rights and interest she possesses in the [residential]
property to Jackson.
Jackson asserts that Laura is attempting to introduce extrinsic evidence to invalidate the quitclaim
documents, specifically, that Jackson did not pay her the additional sums she claims are owed. He
cites to Summer Haven Lake Assn. v. Vlach, 25 Neb. Ct. App. 384, 905 N.W.2d 714 (2017), for the
proposition that extrinsic evidence is not permitted to explain the terms of a contract that is not
ambiguous. He claims that Laura’s assertion that “the consideration paid was not the full amount
owed pursuant to a prior, oral agreement, is in direct opposition with the plain language of the
quitclaim documents and the rules for interpreting such contracts under Nebraska law.” Brief for
appellee at 11.
In her reply brief, Laura cites to Irwin v. West Gate Bank, 288 Neb. 353, 848 N.W.2d 605
(2014), to support her claim that extrinsic evidence is allowed to explain the consideration for the
contract in the instant case. In Irwin v. West Gate Bank, the document at issue provided, “‘For
good and valuable consideration, the receipt of which is hereby acknowledged. . . .’” Id. at 354,
848 N.W.2d at 607. There was later a claim of lack of consideration and that the contract was
unenforceable. The Supreme Court said:
Lack of consideration is relevant to whether the parties have formed an enforceable
contract. . . . We have approved the proposition that “consideration is an essential element
to the validity of a contract.” . . . Actual consideration is therefore relevant to whether an
enforceable contract was formed.
We have long observed: “‘That the contract was lacking in consideration from its
inception may be shown by extrinsic evidence, providing the proof thereof does not
contradict or vary the contractual consideration named in the written contract . . . .’” . . . A
statement that consideration for a promise was received is a statement of fact, not a term
of the contract. As a statement of fact, it may be explained or contradicted by extrinsic
evidence. . . . “[A] mere pretense of bargain does not suffice, as where there is a false recital
of consideration or where the purported consideration is merely nominal. In such cases
there is no consideration . . . .”
Id. at 360, 848 N.W.2d at 610 (emphasis supplied).
However, Irwin v. West Gate Bank, supra, dealt with a lack of consideration and whether
or not an enforceable contract was even formed. That is not the circumstance present here. Laura
never claimed there was a lack of consideration. See Schuelke v. Wilson, 255 Neb. 726, 735, 587
N.W.2d 369, 376 (1998) (“[g]enerally, sufficient consideration for an agreement will be found if
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there is some benefit to one of the parties or a detriment to the other”). The evidence clearly showed
that consideration ($10,000) was actually received in exchange for the quitclaim documents.
Jackson argues that “$10,000, as a matter of law, is not considered nominal consideration and
clearly provided a benefit to Laura.” Brief for appellee at 14. We agree. The principles related to
lack of consideration are inapplicable to the circumstances present here.
However, as previously noted, in her argument related to her affirmative defense for failure
of consideration, Laura cited to Lindsay Internat. Sales & Serv. v. Wegener, supra, which
distinguishes a “lack of consideration” from a “failure of consideration” and provides clarity
between the two concepts. “‘A lack of consideration means no contract is ever formed because no
consideration exists or none was intended to pass.’ . . . A failure of consideration, on the other
hand, ‘means the contract is valid when formed but becomes unenforceable because the
performance bargained for has not been given.’” 301 Neb. at 10, 917 N.W.2d at 141 (internal
quotations omitted). Laura’s affirmative defense was based on a failure of consideration, meaning
the quitclaim documents were valid when formed, but allegedly became unenforceable because
the performance bargained for had not been given.
The problem with Laura’s failure of consideration argument is that she signed and
delivered the quitclaim documents, both of which acknowledged or confirmed her receipt of the
consideration given to sign such documents. And where a grantor executed a deed and made a
valid delivery, he or she cannot subsequently, by withdrawing or destroying the deed, or by other
acts indicating a subsequent change of intention, affect the transaction thus completed. See Kramer
v. Dorsch, 173 Neb. 869, 115 N.W.2d 457 (1962). Laura executed the Quitclaim Deed and
delivered it to Jackson; if she had not received all sums due to her, then similar to other mortgagees
as discussed earlier, she could have retained possession of or placed into escrow the Quitclaim
Deed until the contract terms had been fully paid, at which point she would then deliver the deed
of title to the buyer (Jackson). See Mackiewicz v. J.J. & Associates, 245 Neb. 568, 514 N.W.2d
613 (1994). Instead, Laura executed and made a valid delivery of the Quitclaim Deed to Jackson,
thus completing the real estate transaction. See Kramer v. Dorsch, supra.
Further, to the extent Laura had not been paid in full based upon her understanding of an
oral agreement she had with Jackson, there is nothing in writing to support her claim. The quitclaim
documents were the only written documents related to the sale of her interest in the real estate and
those documents acknowledged her receipt of consideration from Jackson. The statute of frauds
provides that “[e]very contract . . . for the sale of any lands, shall be void unless the contract or
some note or memorandum thereof be in writing and signed by the party by whom the . . . sale is
to be made. Neb. Rev. Stat. § 36-105 (Reissue 2016). An oral contract to buy land falls under the
statute of frauds, although an oral contract may be enforced in cases of part performance. American
Central City v. Joint Antelope Valley Auth., 281 Neb. 742, 807 N.W.2d 170 (2011). Part
performance was not an issue in the present case, thus, any oral agreement related to Laura’s sale
of her interest in the real estate to Jackson would fall within the statute of frauds and would be
void. Further, a “mere breach or violation of an oral agreement which is specifically covered by
the statute of frauds by one of the parties thereto or the mere denial of an agreement or refusal to
perform it is not of itself a fraud either in equity or in law for which the court should give relief.”
Farmland Service Coop, Inc. v. Klein, 196 Neb. 538, 543, 244 N.W.2d 86, 90 (1976). There are
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no material issues of fact as to Laura’s affirmative defense based on failure of consideration which
would preclude entry of summary judgment in Jackson’s favor.
(b) Fraud
Laura pled that the Quitclaim deed was void due to fraud. Generally, in the absence of
fraud, one who signs an instrument without reading it, when one can read and has had the
opportunity to do so, cannot avoid the effect of one’s signature merely because one was not
informed of the contents of the instrument. Cullinane v. Beverly Enters. - Neb., 300 Neb. 210, 912
N.W.2d 774 (2018). However, this rule applies only in the absence of fraud or an inability to read.
See id. Laura did not plead a specific type of fraud, but her argument on appeal identifies the
elements for fraudulent misrepresentation.
A fraudulent misrepresentation claim requires a plaintiff to establish the following
elements: (1) A representation was made; (2) the representation was false; (3) when made, the
representation was known to be false or made recklessly without knowledge of its truth and as a
positive assertion; (4) the representation was made with the intention that the plaintiff should rely
on it; (5) the plaintiff did so rely on it; and (6) the plaintiff suffered damage as a result. Cullinane
v. Beverly Enters. - Neb., supra. A plaintiff must show that the defendant intended the plaintiff to
rely on a false representation; whether a party’s reliance upon a misrepresentation was reasonable
is a question of fact. Id. In a fraud case, direct evidence is not essential, but proof of fraud drawn
from circumstantial evidence must not be guesswork or conjecture; such proof must be rational
and logical deductions from the facts and circumstances from which they are inferred. Id.
In support of this affirmative defense, Laura contends only that “Jackson told her that he
would pay her $15,000 but did not state so in the Quitclaim Agreement for tax purposes,” that she
“relied upon that representation when executing the Quitclaim Deed and Quitclaim Agreement,
and suffered the potential loss of her interest in the Property and payment of an additional $5,000.”
Brief for appellant at 18. Laura does not assert that any representation made by Jackson was false
or that the representation was known to be false or made recklessly without knowledge of its truth
and as a positive assertion. In her deposition testimony, Laura stated that she had an opportunity
to read both documents before signing, and when she asked Jackson why the documents said “this
dollar thing” and not $15,000 like they agreed upon, Jackson told her it was “‘not a big deal, it’s
just so that we don’t have to pay taxes on it.’” The evidence indicates that Jackson merely provided
an explanation for why the quitclaim documents refer to one dollar “and other valuable
consideration,” rather than any amount the parties may have agreed upon. Such an assertion does
not meet the elements of fraudulent misrepresentation.
Laura stated, “I remember Jackson and I discussing that he pay me a lump sum. He had me
add up everything that I could think of up to that point which I know came out to anywhere between
18,000 and 20,000.” “[He] said that was too much money, that he didn’t have that, and so I rounded
down for him. I rounded down to [$15,000],” “and he agreed upon that.” The agreement was
“[m]aybe about a month, month and a half before [the quitclaim deed] was signed.” She said that
Jackson gave her $1,000 around the time of their discussion, and then $9,000 later. Laura said
Jackson told her it would take him a couple years to give her the other $5,000. Laura acknowledged
that she did not have any documents or written records showing the $15,000 amount allegedly
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agreed upon. Even viewing the evidence most favorably to Laura, the facts do not support a claim
of fraudulent misrepresentation.
(c) Unclean Hands
Under the doctrine of unclean hands, “a person who comes into a court of equity to obtain
relief cannot do so if he or she has acted inequitably, unfairly, or dishonestly as to the controversy
at issue.” Farmington Woods Homeowners Assn. v. Wolf, 284 Neb. 280, 289, 817 N.W.2d 758,
767 (2012). “Generally, conduct which forms a basis for a finding of unclean hands must be willful
in nature and be considered fraudulent, illegal, or unconscionable.” Id.
Laura’s arguments for unclean hands relate to the purpose of the Land Contract (e.g., that
Jeffrey transferred the property to Laura and Jackson under favorable financial terms, that Jeffrey
wanted Laura to have the property if she and Jackson broke up, and that Jackson took advantage
of an opportunity that was not meant for him). Laura was well aware of the purpose of the Land
Contract at the time she quitclaimed her interest in the residential property to Jackson. Following
the quitclaim deed, any potential breach of the provisions in the Land Contract allowing for Laura
to buy out Jackson’s interest in the property, and prohibiting the purchaser from assigning the
contract or any of its rights without Jeffrey’s consent, would have to have been brought by Jeffrey.
However, as noted earlier, Jeffrey did not raise a breach of contract claim at any time prior to
receiving full payment on the Land Contract (and signing of the Warranty Deed), even though the
evidence showed he was aware of the Quitclaim Deed between Laura and Jackson. Thus, Laura’s
claim of unclean hands, as it relates to arguments about the purpose of the Land Contract, fails.
Laura also alleges that Jackson has unclean hands because of the additional $5,000 that
Jackson allegedly still owes her, and her allegation that the only reason the $15,000 amount was
not stated on the documents was because Jackson said it was so they did not have to pay taxes on
it. As we stated in our discussion related to Laura’s fraud claim, this evidence indicates that
Jackson merely provided an explanation for why the quitclaim documents refer to one dollar “and
other valuable consideration,” rather than any amount the parties may have agreed upon. Conduct
which forms a basis for a finding of unclean hands must be willful in nature and be fraudulent,
illegal, or unconscionable. See Farmington Woods Homeowners Assn. v. Wolf, supra. Jackson’s
explanation did not constitute fraudulent, illegal, or unconscionable conduct. Again, construing
the evidence most favorably to Laura, this affirmative defense fails.
VI. CONCLUSION
For the reasons stated above, we affirm the decision of the district court granting summary
judgment in favor of Jackson and denying Laura’s motion for summary judgment.
AFFIRMED.
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