Dreesen Enters. v. Dreesen

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
04/09/2021 08:08 AM CDT
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Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433Dreesen Enterprises, Inc., a Nebraska corporation,
appellee, v. Rose Dreesen, also known as
Rozella A. Dreesen, defendant and
third-party plaintiff, appellant, and
Daniel L. Dreesen, third-party
defendant, appellee.
___ N.W.2d ___
Filed February 12, 2021. No. S-20-353.
1. Partition: Quiet Title: Trusts: Equity. Partition, quiet title, and con-
structive trust actions are actions in equity.
2. Equity: Appeal and Error. A case in equity is reviewed de novo on
the record, subject to the rule that where credible evidence is in con-
flict on material issues of fact, the appellate court considers and may
give weight to the fact that the trial court observed the witnesses and
accepted one version of the facts over another.
3. Landlord and Tenant: Restitution. An action for restitution of prem-
ises brought under Nebraska’s Uniform Residential Landlord and Tenant
Act is an action at law.
4. Judgments: Appeal and Error. In a bench trial of a law action, the trial
court’s factual findings have the effect of a jury verdict and will not be
disturbed on appeal unless clearly wrong.
5. Quiet Title: Proof. In an action to quiet title, when the plaintiff’s title
is put in issue by the answer, he or she is required to establish upon the
trial that he or she is the owner of the legal or equitable title to the prop-
erty, or has some interest therein superior to the rights of the defendant,
in order to entitle him or her to the relief demanded.
6. Trusts: Property: Title: Equity: Proof. Generally, a court, sitting in
equity, will not impose a constructive trust and constitute an individual
as a trustee of the legal title for property unless it be shown, by clear
and convincing evidence, that the individual, as a potential constructive
trustee, had obtained title to property by fraud, misrepresentation, or
an abuse of an influential or confidential relationship and that, under
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Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433the circumstances, such individual should not, according to the rules of
equity and good conscience, hold and enjoy the property so obtained.
7. Trusts: Proof. A party seeking the remedy of a constructive trust has the
burden to establish the factual foundation, by evidence which is clear
and convincing, required for a constructive trust.
8. Leases. The terms of an oral lease agreement are to be found in the par-
ties’ respective versions of the agreement, and their acts and conduct in
light of the subject matter.
Appeal from the District Court for Lancaster County: Darla
S. Ideus, Judge. Affirmed.
David V. Chipman, of Monzón, Guerra & Associates, for
appellant.
Christopher S. Bartling, of Bartling & Hinkle, P.C., for
appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Cassel, J.
INTRODUCTION
A former wife appeals a district court’s judgment evicting
her from a property and quieting title to it in her former hus-
band’s corporation, but awarding her a judgment for the money
she provided for its downpayment. She claimed co-ownership
in the property and sought a constructive trust and partition.
He argued she loaned him the downpayment and was not an
owner. The court found his version of events more credible and
granted relief accordingly. We give weight to the court’s factual
findings and affirm its judgment.
BACKGROUND
Since the dissolution of a marriage in 2004, Daniel L.
Dreesen and Rose Dreesen have occasionally continued to
live together in Beatrice, Nebraska. In 2013, Daniel evicted
Rose from the Beatrice property for failure to pay rent, and
Rose moved to Wymore, Nebraska. However, Rose visited
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Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433Daniel often—each time staying on the Beatrice property a few
days before Daniel would ask her to leave.
In 2017, Daniel and Rose once again cohabitated—this
time in Lincoln, Nebraska. However, the sole titleholder of
the ­property that Daniel and Rose lived on was Dreesen
Enterprises, Inc. Daniel wholly owned Dreesen Enterprises and
is its president. Rose does not have any ownership stake in
Dreesen Enterprises.
This case arose after Rose failed to pay rent to Dreesen
Enterprises for 2 years and it initiated eviction proceedings
against her in county court. Rose denied being a tenant and
claimed to co-own the property—a title dispute that deprived
the county court of subject matter jurisdiction of the evic-
tion proceeding. 1
Dreesen Enterprises then filed a complaint in district court,
seeking that the court quiet title to the property in Dreesen
Enterprises and restore the premises to it. Rose filed a counter-
complaint, requesting partition or, alternatively, a constructive
trust and restitution.
A trial was held to determine the property’s ownership. The
record features diametrically opposed testimony by Daniel and
Rose. No other witnesses testified. Daniel’s and Rose’s ver-
sions of events are explained in turn.
Daniel’s Version of Events
Daniel testified he purchased the property for $283,000
through Dreesen Enterprises. Dreesen Enterprises entered into
a purchase agreement to buy the property, and Daniel signed
the agreement as its president. Daniel denied that he agreed to
co-own the property with Rose, citing that she did not sign the
purchase agreement.
The seller conditioned the purchase of the property upon
closing within 1 week of signing the agreement. Daniel had
1
See Federal Nat. Mortgage Assn. v. Marcuzzo, 289 Neb. 301, 854 N.W.2d
774 (2014).
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DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433sufficient equity in other real estate to cover the down­payment,
but given the quick deadline, he was not able to liquidate
it. Daniel discussed with Rose how he planned to raise the
“money,” and she proposed loaning him $50,000 for the down-
payment. Daniel accepted Rose’s offer, and Daniel obtained
the remaining purchase price amount through a bridge loan.
Dreesen Enterprises signed a promissory note, which Daniel
personally guaranteed. Rose did not sign the note or guarantee
the loan.
After obtaining financing, Daniel closed on the property in
July 2016. The property was titled solely in Dreesen Enterprises
for liability purposes. Rose did not sign the closing documents.
Immediately after closing, Daniel moved onto the property.
Daniel presented evidence at trial that Dreesen Enterprises
paid all the mortgage payments, real estate taxes, and insurance
costs for the property.
Daniel and Rose agreed to have her reside on the property
as a tenant—a living arrangement similar to the Beatrice prop-
erty circa 2013. However, after Daniel decided that he was not
going to “get along” with Rose, he attempted to repay Rose the
loan and stop her from moving onto the property. When Daniel
presented her with a check for $50,000, she tore it up. Rose
moved onto the property in January 2017. But, despite Daniel’s
repeated demands, Rose never paid rent.
Rose’s Version of Events
Rose claims to co-own the property with Daniel. Rose dis-
covered the property, initially made contact with the sellers,
and toured the property with Daniel. Rose served as the prop­
erty’s caretaker. She cooked meals, did laundry, and bought
groceries for both Daniel and herself. Additionally, she con-
tributed toward improving the home’s condition by helping
purchase a fence and buying items like a new front door.
Rose argues that her $50,000 was not a loan to Daniel,
but instead her capital contribution to their joint purchase
of the property. Rose testified that she originally discussed
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Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433loaning Daniel the downpayment, but they later agreed on buy-
ing the property together. She supported her argument by alleg-
ing that she paid $4,000 toward the loan’s interest payments.
Finally, although Rose admitted that before closing, Daniel told
her the property would be titled in Dreesen Enterprises, she
explained that she did not protest Daniel’s plan because he did
not tell her of his plan until 10 minutes before the closing and
he already had her $50,000.
To prove Rose’s claims, she presented a document that
Daniel allegedly signed, stating they bought the home together.
However, Rose admitted that Daniel never read the document.
Furthermore, Rose presented a cashier’s check for $4,000,
but the check was made out to herself, not the bank servicing
Dreesen Enterprises’ loan.
Daniel’s Rebuttal
Daniel refuted Rose’s version of events, repeatedly show-
ing Rose’s testimony conflicted with her previous statements.
Daniel presented transcripts from the county court’s proceed-
ings in which Rose had testified that “I was originally going to
. . . loan him the money, but that all changed. This [was] what
we had agreed on before anything was done” and also that she
agreed to pay Daniel $600 per month, but they lowered the rent
to $500 per month based on her income. Daniel corroborated
these statements with a 2019 letter written by Rose to Daniel’s
attorney in which she stated that the “agreement was he pay me
back the money all of it [b]ut he gave me a [check] which was
not all he owed me” and that “we [first] decided on the $600.00
[per month,] then we went to $500.00.”
District Court’s Findings
Faced with two witnesses with diametrically opposed testi-
mony, the district court made a credibility determination and
several factual findings. The court found “Daniel’s version of
events that the $50,000 was a loan is more credible,” although
it noted that Daniel had not repaid the loan. The court also
found that Rose was aware before closing that the property
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DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433was going to be titled in Dreesen Enterprises and did not pro-
test Daniel’s actions. Finally, the court found that Daniel and
Rose had entered into an oral agreement in which Rose would
pay $500 per month to reside at the property and she had not
paid the agreed-upon rent.
Based on these findings, the court granted three forms of
relief to Daniel and restitution to Rose. The court ­quieted
title to the property in Dreesen Enterprises, enjoining Rose
from asserting any claim of interest in the property and con-
sequently declining to partition the property. Additionally,
because Rose knew prior to closing that the property would
be titled in Dreesen Enterprises’ name and she did not object,
the court denied Rose’s request for a constructive trust. The
court restored the premises to Daniel, finding Daniel and Rose
had agreed to an oral lease in which Rose would pay $500
per month to reside on the property. Finally, the court ordered
Daniel to pay restitution of $50,000, because he was unjustly
enriched by the unpaid loan.
Rose filed a timely appeal, which we moved to our docket. 2
ASSIGNMENTS OF ERROR
Rose assigns the district court erred in (1) quieting title to
the property in Dreesen Enterprises, (2) failing to partition the
property, (3) finding that Rose failed to meet her burden for
the imposition of a constructive trust in her favor regarding the
property, and (4) finding that Dreesen Enterprises had estab-
lished there was a valid oral lease and was entitled to restora-
tion of the premises.
STANDARD OF REVIEW
[1,2] Partition, quiet title, and constructive trust actions are
actions in equity. 3 A case in equity is reviewed de novo on
2
See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2018).
3
See, FTR Farms v. Rist Farm, 305 Neb. 708, 942 N.W.2d 204 (2020);
Adair Holdings v. Johnson, 304 Neb. 720, 936 N.W.2d 517 (2020); Junker
v. Carlson, 300 Neb. 423, 915 N.W.2d 542 (2018).
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308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433the record, subject to the rule that where credible evidence
is in conflict on material issues of fact, the appellate court
considers and may give weight to the fact that the trial court
observed the witnesses and accepted one version of the facts
over another. 4
[3,4] An action for restitution of premises brought under
Nebraska’s Uniform Residential Landlord and Tenant Act is an
action at law. 5 In a bench trial of a law action, the trial court’s
factual findings have the effect of a jury verdict and will not be
disturbed on appeal unless clearly wrong. 6
ANALYSIS
Quiet Title
[5] The cornerstone of Rose’s appeal is that she co-owns the
property with Daniel, assigning that the court erred in quieting
title to the property in Dreesen Enterprises. In an action to quiet
title, when the plaintiff’s title is put in issue by the answer, he
or she is required to establish upon the trial that he or she is the
owner of the legal or equitable title to the property, or has some
interest therein superior to the rights of the defendant, in order
to entitle him or her to the relief demanded. 7
The court found that Dreesen Enterprises was the sole
owner of the property because (1) the property was conveyed
solely to Dreesen Enterprises; (2) it paid all the real estate
taxes, insurance, and mortgage payments on the property; and
(3) Daniel, the sole owner of Dreesen Enterprises, resided
at the property since purchase. The court also cited Rose’s
statements regarding her refusal to accept Daniel’s repayment
because it “was not all he owed [her]” in its judgment finding
that the $50,000 was a loan. While Rose heavily disputes the
4
Skyline Woods Homeowners Assn. v. Broekemeier, 276 Neb. 792, 758
N.W.2d 376 (2008).
5
See Blankenau v. Landess, 261 Neb. 906, 626 N.W.2d 588 (2001).
6
Hastings State Bank v. Misle, 282 Neb. 1, 804 N.W.2d 805 (2011).
7
See Weesner v. Weesner, 168 Neb. 346, 95 N.W.2d 682 (1959).
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DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433court’s findings, we give them weight and find no reason to
reverse the court’s ruling.
Partition
Next, Rose argues that the court erred in failing to partition
the property. Any joint owner of any real estate or of any inter-
est therein may compel partition of the property. 8 However,
because Rose was not an owner of the property, the court did
not err in declining to grant partition.
Constructive Trust
Alternatively, Rose claims that the court erred in not impos-
ing a constructive trust in her favor regarding the property. A
constructive trust is imposed when one has acquired legal title
to property under such circumstances that he or she may not in
good conscience retain the beneficial interest in the property. 9
A constructive trust is a relationship, with respect to property,
subjecting the person who holds title to the property to an
equitable duty to convey it to another on the grounds that his
or her acquisition or retention of the property would constitute
unjust enrichment. 10
[6,7] Generally, a court, sitting in equity, will not impose a
constructive trust and constitute an individual as a trustee of
the legal title for property unless it be shown, by clear and con-
vincing evidence, that the individual, as a potential constructive
trustee, had obtained title to property by fraud, misrepresenta-
tion, or an abuse of an influential or confidential relationship
and that, under the circumstances, such individual should not,
according to the rules of equity and good conscience, hold and
enjoy the property so obtained. 11 A party seeking the remedy of
a constructive trust has the burden to establish the factual
8
See Neb. Rev. Stat. § 25-2170.01 (Reissue 2016).
9
Brtek v. Cihal, 245 Neb. 756, 515 N.W.2d 628 (1994).
10
Id.11
Id.- 441 -
Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433foundation, by evidence which is clear and convincing, required
for a constructive trust. 12
Here, Rose needed to prove by clear and convincing evi-
dence that Daniel obtained the property through fraud, mis-
representation, or an abuse of an influential or confidential
relationship. However, Daniel fully disclosed that the property
would be titled solely in Dreesen Enterprises and Rose voiced
no objection to Daniel’s actions or took any steps to stop the
closing and take back her $50,000. The court found that Rose
did not present sufficient evidence to overcome these unfavor-
able facts, failing to meet her burden of proof. We agree and
find no error.
Restitution of Premises
[8] Finally, Rose argues the court erred in finding that
Dreesen Enterprises had established there was a valid oral
lease and that it was entitled to restoration of the premises
under Nebraska’s Uniform Residential Landlord and Tenant
Act. 13 The terms of an oral lease agreement are to be found in
the parties’ respective versions of the agreement, and their acts
and conduct in light of the subject matter. 14 The party seeking
to enforce the contract carries the burden of proof. 15
The court found that there was an oral agreement between
Daniel and Rose in which Rose would pay $500 per month
to reside at the property and that she had not paid the agreed-
upon rent. Daniel presented evidence at trial supporting such a
finding. Because there is evidence in the record supporting the
court’s factual finding, it was not clearly wrong and we will
12
Id.13
See Neb. Rev. Stat. § 76-1401 et seq. (Reissue 2018).
14
See, Kinkenon v. Hue, 207 Neb. 698, 301 N.W.2d 77 (1981) (citing 1
Arthur Linton Corbin, Corbin on Contracts § 18 (1963)). See, also,
§ 76-1403.
15
See Griggs v. Oak, 164 Neb. 296, 82 N.W.2d 410 (1957).
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DREESEN ENTERS. v. DREESEN
Cite as 308 Neb. 433not disturb it. 16 Therefore, the court did not err in restoring
the premises to Dreesen Enterprises.
CONCLUSION
While Dreesen Enterprises was the sole owner of the prop-
erty, Rose was not only a tenant, but also Daniel’s lender. The
court did not err in quieting title to Dreesen Enterprises, declin-
ing to partition the property or impose a constructive trust upon
it, restoring the premises to Dreesen Enterprises, and awarding
Rose a monetary judgment for the unpaid loan. We affirm the
district court’s judgment.
Affirmed.
16
See Hastings State Bank, supra note 6.