Silverleaf Investments v. Devastator Real Estate , 28 Neb. Ct. App. 278 ( 2020 )

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04/28/2020 09:08 AM CDT
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Nebraska Court of Appeals Advance Sheets
28 Nebraska Appellate Reports
SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
Silverleaf Investments, LLC, a Nebraska limited
liability company, appellee, v. Devastator
Real Estate, LLLP, a South Dakota
limited liability partnership,
appellant.
___ N.W.2d ___
Filed April 28, 2020. No. A-19-509.
1. Summary Judgment. 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.
2. ____. Summary judgment is proper only when the pleadings, deposi-
tions, 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.
3. Summary Judgment: Appeal and Error. In reviewing a summary
judgment, an appellate court views the evidence in a light most favor-
able to the party against whom the judgment is granted and gives
such party the benefit of all reasonable inferences deducible from
the evidence.
4. Contracts. A court interpreting a contract must first determine as a mat-
ter of law whether the contract is ambiguous.
5. ____. A contract written in clear and unambiguous language is not sub-
ject to interpretation or construction and must be enforced according to
its terms.
6. Contracts: Real Estate: Time. In an ordinary contract for the sale of
real estate, time is not of the essence unless provided in the agreement
itself or is clearly manifested by the agreement construed in the light of
surrounding circumstances.
7. Contracts: Time. In a contract where time is not of the essence,
perform­ance must be within a reasonable time.
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Nebraska Court of Appeals Advance Sheets
28 Nebraska Appellate Reports
SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
8. ____: ____. When a contract expressly provides for a specific closing
date, performance is normally due within a reasonable time after the
date mentioned.
Appeal from the District Court for Douglas County: J
Russell Derr, Judge. Affirmed.
Douglas W. Ruge for appellant.
Robert F. Peterson and Kathleen M. Foster, of Peterson &
Foster Law, for appellee.
Moore, Chief Judge, and Arterburn and Welch, Judges.
Arterburn, Judge.
INTRODUCTION
Silverleaf Investments, LLC (Silverleaf), brought an action
against Devastator Real Estate, LLLP (Devastator), after
Devastator terminated an agreement for the purchase of real
property. The district court for Douglas County entered sum-
mary judgment in favor of Silverleaf, and Devastator now
appeals from the entry of that order. For the reasons that
follow, we affirm the district court’s order entering sum-
mary judgment.
BACKGROUND
On June 4, 2018, the parties executed a “Uniform Commercial
Purchase Agreement” for Devastator’s purchase of real prop-
erty located in Omaha, Nebraska, from Silverleaf. Paragraph
6 of the agreement specified that Devastator would pay an
initial deposit of $50,000 that would be applied to the overall
purchase price of $1,585,000. It also detailed the consequences
should Devastator terminate the agreement:
In the event that [Devastator] cancels this agreement, in
writing, before the end of the time period specified in
paragraph 7 the Deposit will be returned to [Devastator].
In the event of refusal or failure of [Devastator] to
consummate the purchase, after all applicable condi-
tions specified in paragraph 7 have been met or waived,
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
[Silverleaf] will retain the Deposit as its liquidated dam-
ages for failure to carry out the agreement of sale.
Paragraph 7 of the agreement gave Devastator the right to
make a complete inspection of the property within 30 days
after the agreement’s effective date and the sole discretion
to terminate the agreement and recoup its deposit if it deter-
mined the property’s condition was unacceptable. Paragraph 7
further delineated eight specific conditions that were to occur
within the first 10 days after the agreement’s effective date.
The eight conditions in this due diligence provision called
for Silverleaf to provide various disclosures and documen-
tation regarding title insurance, surveys and plats, environ-
mental reports, leases, zoning information, permits, sanitary
improvement districts, and profit and loss reports or income
and expense reports. If each of those eight conditions was not
satisfied during that time period, then the agreement “shall
be null and void, and any Deposit returned to [Devastator].”
The agreement set July 26, 2018, as the “[a]pproximate clos-
ing date.”
Silverleaf’s selling agent, Seth Campbell, stated in an affida-
vit that he had provided to Devastator the required disclosures
pursuant to paragraph 7 of the agreement. He specifically
stated that all information available to Silverleaf as referenced
by paragraph 7 was provided to Devastator’s real estate agent.
Campbell stated that Silverleaf was ready to close the sale
of the property on July 26, 2018, and noted that there were
no defects in the title as of that date. However, according to
Campbell, Devastator ceased communications and refused to
close the purchase. Campbell stated, “I am aware that the
Purchase Agreement did not have a contingency for financing
and that, in the event of [Devastator’s] refusal to close, the ear-
nest deposit was to be forfeited to [Silverleaf].”
Brian Wragge, who represented Devastator in the transac-
tion, stated in an affidavit that the due diligence period pro-
vided by paragraph 7 existed in order for Devastator to obtain
financing for the purchase. He said that the reason Devastator
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
requested financial information and other disclosures from
Silverleaf was so that it could be provided to Devastator’s pro-
spective lenders. Wragge stated that Devastator attempted to
secure financing throughout June and July 2018 and, at lend-
ers’ prompting, requested further information from Silverleaf
regarding the property’s income. According to Wragge,
Campbell and he were in communication on behalf of their
clients through the latter part of July. Wragge stated that
Silverleaf expressed frustration with the delay in closing on
July 26 and, for the first time, demanded an immediate clos-
ing. From that time and through August 2, the parties were
negotiating an extension agreement according to Wragge.
Wragge stated that Devastator “then terminated the purchase
agreement and sent a form requesting the deposit be returned”
after a bank denied a loan on July 30. The bank’s denial letter
regarding Devastator’s loan application listed the reasons for
denial as “[d]elinquent past or present credit obligations with
others” and “[u]nable to verify income.”
On August 10, 2018, Silverleaf filed a complaint against
Devastator, alleging that Devastator’s failure to close the
purchase was a breach of their purchase agreement, which
entitled it to retain Devastator’s $50,000 deposit. Devastator
then filed an answer and counterclaim on October 9, which
sought dismissal of Silverleaf’s claim. Additionally Devastator
sought to recoup the $50,000 deposit it paid, contending that
Silverleaf breached their purchase agreement and did not act
in good faith.
On March 7, 2019, Silverleaf filed a motion for summary
judgment. The court heard arguments on the motion on April
22, during which nine exhibits were admitted, including the
affidavits from Campbell and Wragge. The court entered an
order granting summary judgment in favor of Silverleaf on
April 25. The court determined that the agreement included
no provision making closing contingent on Devastator’s first
securing financing. It further determined that Devastator ter-
minated the agreement after its option under paragraph 7 to
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
retain the security deposit expired, that deadline being July
4, 2018. Thus, the court concluded that Devastator’s termina-
tion of the purchase agreement entitled Silverleaf to retain the
$50,000 security deposit, and the court accordingly entered
summary judgment in Silverleaf’s favor.
Devastator now appeals.
ASSIGNMENTS OF ERROR
Devastator assigns, restated and consolidated, that the dis-
trict court erred in granting summary judgment without first
deciding whether time was of the essence with respect to
the purchase agreement’s due diligence date and whether, by
its conduct, Silverleaf waived its right to, or was equitably
estopped from, strict enforcement of the agreement’s 30-day
provision.
STANDARD OF REVIEW
[1-3] 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 this
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 judg-
ment as a matter of law. 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.
ANALYSIS
[4,5] A court interpreting a contract must first determine as
a matter of law whether the contract is ambiguous. Davenport
Ltd. Partnership v. 75th & Dodge I, L.P., 279 Neb. 615, 780
N.W.2d 416 (2010). A contract written in clear and unambiguous
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
language is not subject to interpretation or construction and
must be enforced according to its terms. Id.
[6-8] Case law states that in an ordinary contract for the
sale of real estate, time is not of the essence unless provided in
the agreement itself or is clearly manifested by the agreement
construed in the light of surrounding circumstances. Pettit v.
Paxton, 255 Neb. 279, 583 N.W.2d 604 (1998). Where time is
not of the essence, performance must be within a reasonable
time. Id. When a contract expressly provides for a specific
closing date, performance is normally due within a reasonable
time after the date mentioned. Id.
Time of Essence.
Devastator argues that the parties’ agreement did not provide
that time was of the essence and that their conduct showed
that “they did not intend for strict adherence to a 30 day time
period” as provided by paragraph 7 of the agreement. Brief for
appellant at 11. Devastator argues that “in the absence of time
being of the essence, the 30 day time specified in the contract
was to be performed within a reasonable time.” Id. In essence,
Devastator is arguing that the agreement’s paragraph 7, which
provided 30 days during which Devastator could terminate the
agreement and retain its security deposit, was ambiguous—and
that, somehow, we ought to understand that the agreement’s
meaning of “30 days” was actually “a reasonable time” rather
than the commonly understood quantity of 24-hour periods.
We disagree.
Devastator urges us to rely on Pettit v. Paxton, supra, and
to analogize the 30-day provision to a closing date in an agree-
ment where time was not of the essence. Notably, however,
Devastator does not cite to a case where our courts have previ-
ously extended the rationale in such a way, and we have found
no authority in Nebraska for Devastator’s proposition. In this
case, the language of the contract is clear and unambiguous
as to the timeframe to which Devastator needed to adhere in
order to avoid the possible forfeiture of the deposit. There
is nothing in the language of the agreement that implies that
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
the due diligence date set is uncertain. In contrast, the parties
clearly intended the closing date to be a “soft” date. Paragraph
11 describes July 26, 2018, as the “[a]pproximate closing
date.” Therefore, where the parties wished to list a “soft” date,
they did so specifically. However, we see no similar intent in
the language of paragraphs 6 and 7.
Paragraph 6 provides that if Devastator cancels the agree-
ment, in writing, before the end of the period specified in
paragraph 7, it is entitled to a refund of its deposit. Paragraph
7 provided Devastator “Thirty (30) days after the Effective
Date of this Agreement” to make its inspection of the premises
and review the materials required to be provided by Silverleaf.
During that time period, Devastator, in its “sole discretion,”
could terminate the agreement and obtain the return of the
deposit if it found the property unacceptable.
Unlike the “[a]pproximate closing date” found in paragraph
11, the language of paragraphs 6 and 7 is firm. The parties
could have utilized “soft” language in paragraphs 6 and 7 but
chose not to do so. As a result, construing the four corners of
the contract, we find that the language of the due diligence
clause clearly and unambiguously required Devastator to com-
plete its due diligence within 30 days if it wished to obtain
a refund of its deposit. Based on the unambiguous language
contained in this agreement, we cannot find that a “time is of
the essence” clause was necessary to enforce the 30-day due
diligence deadline.
By Wragge’s own admission, Devastator terminated the
agreement after it was unable to secure financing from a bank
on July 30, 2018. The parties’ agreement was executed on June
4. While Wragge’s affidavit indicates that additional informa-
tion was requested from Silverleaf, there is no allegation that
Silverleaf failed to satisfy the eight conditions set forth by
paragraph 7. Moreover, Campbell stated in his affidavit that he
provided the required disclosures to Devastator in accordance
with paragraph 7. At most, Devastator argues that it requested
“more clarity on the income[] and expressed additional issues”
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
beyond paragraph 7’s eight specific conditions. Reply brief for
appellant at 4. The uncontroverted evidence before us shows
that Devastator terminated the agreement more than 30 days
after it was signed and that Silverleaf had fulfilled the condi-
tions under paragraph 7 as required. Therefore, pursuant to the
plain language of the contract, Silverleaf was entitled to retain
the security deposit.
Waiver and Estoppel.
Devastator also argues that Silverleaf waived its right to
insist on strict performance of the 30-day provision by con-
tinuing to cooperate with Devastator’s attempts to secure
financing after 30 days. In addition, or perhaps alternatively,
Devastator argues that Silverleaf’s conduct equitably estops it
from enforcing the 30-day provision. These arguments are both
predicated on Devastator’s effort to link its efforts to secure
financing to the inspection period. Devastator’s right to inspect
the property and then terminate the agreement and retain its
deposit within 30 days existed separate of any financing mat-
ters. The plain terms of paragraph 7 of the agreement required
Silverleaf to turn over certain documents within 10 days of
the agreement’s effective date. Campbell’s unrebutted state-
ment in his affidavit was that he provided all of the required
documentation to Devastator. Beyond that, Silverleaf’s coop-
eration with Devastator’s efforts to obtain financing through
the agreement’s approximate closing date of July 26, 2018,
appears to have been done in good faith and cannot be under-
stood to waive or otherwise equitably estop enforcement of the
terms of their agreement.
As the district court’s order granting summary judgment
notes, “[Devastator’s] arguments might be well taken if it was
[Silverleaf] that terminated the Agreement when [Devastator]
was not able to close by July 26, 2018.” But it was Devastator
that terminated the agreement. The agreement unambiguously
addressed the consequences of Devastator’s termination more
than 30 days after the contract was entered. Silverleaf provided
the requisite disclosures under paragraph 7. While Silverleaf
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SILVERLEAF INVESTMENTS v. DEVASTATOR REAL ESTATE
Cite as 28 Neb. Ct. App. 278
did not immediately seek forfeiture of the deposit upon the
expiration of the 30 days, the record in no way indicates that it
waived its ability to do so or engaged in behavior that would
give rise to a defense of equitable estoppel. Silverleaf did not
seek the deposit until Devastator terminated the agreement.
Based on our record, particularly the affidavits of Campbell
and Wragge, there exists no material issue of fact regarding
the proper recipient of the $50,000 deposit. The district court
correctly found that Silverleaf is entitled to judgment as a mat-
ter of law.
CONCLUSION
Based on the foregoing, we conclude that the district court
correctly entered summary judgment in favor of Silverleaf and
awarded it the $50,000 deposit. We therefore affirm the order
of the district court.
Affirmed.