Heritage Bank v. Gabel

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
03/02/2018 09:14 AM CST
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Nebraska Supreme Court A dvance Sheets
298 Nebraska R eports
HERITAGE BANK v. GABEL
Cite as 298 Neb. 961Heritage Bank, Trustee of the Charles L.
Gabel R evocable Trust, appellee,
v. James L. Gabel et al.,
appellants.
___ N.W.2d ___
Filed February 9, 2018. No. S-17-363.
1. Summary Judgment: Appeal and Error. 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.
2. Judgments: Words and Phrases. According to Neb. Rev. Stat.
§ 25-1301(1) (Reissue 2016), a judgment is the final determination of
the rights of the parties in an action.
3. Judgments. A judgment must be sufficiently certain in its terms to be
able to be enforced.
Appeal from the District Court for Polk County: R achel
A. Daugherty, Judge. Reversed and remanded for further
proceedings.
John C. Hahn, of Wolfe, Snowden, Hurd, Luers & Ahl,
L.L.P., for appellants.
Kent E. Rauert and Samuel R. O’Neill, of Svehla Law
Offices, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
Funke, JJ.
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961K elch, J.
INTRODUCTION
Heritage Bank, as trustee of the Charles L. Gabel Revocable
Trust (Trust), brought an action for forcible entry and detainer
against James L. Gabel (James), C.J. Land & Cattle, L.P., and
MCGFF, LLC (collectively Appellants), after James failed to
pay rent on farmland in accordance with a lease agreement.
The district court for Polk County granted summary judg-
ment in favor of Heritage Bank, and Appellants now appeal.
Upon our review of the record, we discern genuine issues
of material fact. Therefore, we reverse, and remand for fur-
ther proceedings.
FACTS
Charles L. Gabel (Charles) owned various parcels of farm-
land in Polk County. He and his son, James, farmed the land
together for at least 30 years.
On February 8, 2008, Charles established the Trust and
transferred the farmland to the Trust. The Trust named Charles
as the initial trustee and James as the successor trustee. Charles,
as trustee, leased the farmland to C.J. Land & Cattle, of which
James was the general partner, for a term of 20 years. Payment
due under the lease was 30 percent of the crops produced on
the land each year, to be delivered no later than March 1 of the
following year.
On May 5, 2010, C.J. Land & Cattle, through James as its
general partner, assigned all of its rights under the lease to
MCGFF. On March 1, 2011, the Trust leased the land directly
to MCGFF, under the same terms as the prior lease, including
the 30-percent crop-share provision.
On September 11, 2012, Charles resigned as trustee.
Although not specifically appointed, James assumed the duties
as successor trustee. On May 1, 2013, James, as a member of
MCGFF, assigned all of MCGFF’s rights under the March 1,
2011, lease to himself. As a result, James is the current tenant
of the land.
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961Charles amended the Trust various times before his death.
As his health began to decline, proceedings were initiated in
the county court for Cass County for a guardianship and con-
servatorship for Charles. In addition, a separate proceeding
was brought in Cass County by James for administration of
the Trust. On August 26, 2014, Heritage Bank, by stipulation
of James, was appointed as trustee through the proceedings for
administration of the Trust.
Charles died on November 18, 2015. James later filed a peti-
tion to determine the validity of a subsequent Trust of Charles
in the county court for Cass County. The county court found
that it lacked jurisdiction to hear the petition, because the
subsequent Trust was associated with a will contest pending
before the district court for Cass County. At the time of this
appeal, that proceeding was apparently still ongoing.
Meanwhile, James failed to deliver the 2015 crop payment
to Heritage Bank by March 1, 2016. Rather than providing
written notice of default, Heritage Bank served James with
a written notice to vacate the property within 3 days. When
James failed to do so, Heritage Bank filed an amended com-
plaint against James, C.J. Land & Cattle, and MCGFF. The
first cause of action alleged that the leases and assignments
were invalid for various reasons, while the second cause of
action was for forcible entry and detainer. It alleged that even
if the leases and assignments were valid, James had not paid
rent to the Trust as required by the terms of the lease and
was in unlawful possession of the land following receipt of
the notice to vacate. It sought restitution of the land to the
Trust, as well as damages and costs. Appellants answered that
James was the rightful trustee and that thus, Heritage Bank
lacked standing to bring this action, particularly following
Charles’ death.
On January 20, 2017, Heritage Bank filed a motion for
summary judgment as to its second cause of action for forc-
ible entry and detainer. The evidence presented at the hearing
showed that James had failed to deliver the Trust’s share of
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961the 2015 crops by March 1, 2016. The president of Heritage
Bank provided an affidavit stating that he made numerous
demands to James and his attorneys, both in person and
via email, including several communications instructing them
where the crops were to be delivered.
In his affidavit, James stated that he was willing and able
to deliver the crops as required under the lease at all times,
but was awaiting instruction on where to deliver them. James
further stated that under terms of the lease, the tenant must
be given a written notice of default for unpaid rents and a
reasonable amount of time to correct any such default, nei-
ther of which was given to him. The evidence showed that
James eventually deposited two checks with the clerk of the
Polk County Court containing 30 percent of the 2015 crop
proceeds. However, those checks were not delivered to that
court until October 27, 2016. James stated that any default
was cured by delivery of the checks and that any harm
suffered by the Trust was due to Heritage Bank’s failure
as trustee.
On March 13, 2017, the district court issued a written order
granting summary judgment in favor of Heritage Bank. It
concluded that Heritage Bank was the trustee, because it was
the only entity that had been issued letters of trustee. It noted
that although James believed he should have been appointed
trustee pursuant to the Trust documents, he had not been so
appointed and the proceeding to determine the validity of the
various Trust documents was still ongoing. It found the undis-
puted evidence established that Appellants did not deliver
the 2015 crop payment to the trustee by March 1, 2016.
Regarding the required notice of default, the district court
found that Appellants had notice they were not in compli-
ance with the terms of the lease after James was served with
a notice to vacate, a complaint, and an amended complaint.
The district court found that the defect was not cured within a
reasonable amount of time, because Appellants did not submit
checks for the crop proceeds to the clerk of the district court
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961until October 27, 2016, which was approximately 6 months
after he was served in this matter.
The granting of the judgment on the second cause of action
implicitly dismissed the first cause of action, the dismissal of
which was later formalized by the parties. Appellants have now
filed this appeal.
ASSIGNMENTS OF ERROR
Appellants assign that the district court erred in finding that
there was no genuine issue of material fact as to (1) whether
or not Heritage Bank is the proper trustee and the real party in
interest, (2) whether or not James breached the lease agreement
by failing to deliver the trust crops on time, (3) whether or
not Heritage Bank complied with the lease agreement, and (4)
whether or not James cured any breach of the lease agreement
within a reasonable time.
STANDARD OF REVIEW
[1] We will affirm a lower court’s grant of summary judg-
ment if the pleadings and admitted evidence show that there
is no genuine issue as to any material facts or as to the ulti-
mate inferences that may be drawn from those facts and that
the moving party is entitled to judgment as a matter of law.
O’Brien v. Cessna Aircraft Co., ante p. 109, 903 N.W.2d
432 (2017).
ANALYSIS
Before proceeding with the assigned errors, we note that the
order of the district court stated in conclusion that the motion
for summary judgment was sustained, but it did not set forth
any further recitation as to what the order granted as a judg-
ment. One would need to view both the motion for summary
judgment and the amended complaint in conjunction with the
court’s order to determine the relief granted.
[2,3] Our concern with this type of order is twofold. First,
Neb. Rev. Stat. § 25-1301(1) (Reissue 2016) states, “A judg-
ment is the final determination of the rights of the parties in an
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961action.” Second, the general rule of law is that a judgment must
be sufficiently certain in its terms to be able to be enforced.
Friedman v. Friedman, 290 Neb. 973, 863 N.W.2d 153 (2015).
The judgment must be in such a form that a clerk is able to
issue an execution upon it which an officer will be able to
execute without requiring external proof and another hearing.
Id. Here, the order simply stated, “The [m]otion for [s]ummary
[j]udgment is [s]ustained.” It is difficult to find that this order
fully determined the rights of the parties without further defin-
ing the judgment granted and that a clerk could issue an execu-
tion without having to make his or her own determination of
what the order entailed. We urge trial courts to fully set forth
the exact judgment being granted so that litigants, clerks, and
sheriffs are able to proceed without any additional inquiry.
Nonetheless, since the remaining issues in the instant case may
arise on remand, we shall proceed with the analysis, assuming
without deciding that the order actually granted the forcible
entry and detainer judgment sought.
Appellants initially claim that the district court erred in
finding that there is no issue of material fact as to whether
or not Heritage Bank is the proper trustee of the Trust and
the real party in interest. Appellants explain this position in
their brief:
Since Charles’ death Heritage [Bank] has continued
to act as though it is the Trustee based on the August
26, 2014 Appointment. The Appellants argue that this
has been improper and that the appointment of Heritage
[Bank] as Conservator and Trustee only applied prior
to Charles’ death. Upon the death of Charles, the Trust
became irrevocable and the Successor Trustee named
therein, James, became trustee. . . . The death of Charles
created a vacancy in trusteeship. See Neb. Rev. Stat.
§30-3860(a)(5). That vacancy should have been filled by
James, the person designated to serve as successor trustee
according to the Trust. See Neb. Rev. Stat. §30-3860(c).
Brief for appellant at 13.
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961However, the record presented to this court reflects that
James initiated an action to administer the Trust in the county
court for Cass County. During the pendency of the trust admin-
istration proceeding, James stipulated to the appointment of
Heritage Bank as trustee. The order following the stipulation
is not in the record before us, but the record does contain
the letters of trustee issued to Heritage Bank on October 7,
2014, naming it as trustee prior to Charles’ death. Further, the
record does not contain any entry whereby Heritage Bank was
removed as trustee.
In this instance, Charles’ death does not control whether
Heritage Bank is the trustee. The conservatorship and trust
administration were docketed separately and are two separate
proceedings. One is to determine whether a conservator is
needed over the business affairs of an alleged incapacitated
person, and the other action is a request for the county court to
administer a trust. Even if the conservatorship terminated upon
the death of Charles, Heritage Bank was the court-appointed
trustee prior to his death and, as a separate legal banking entity,
it continued as such after his death, absent removal by order of
the court. Consequently, the record before this court supports
the district court’s finding that Heritage Bank was the trustee
and had standing to bring this action. Appellants’ assignment of
error on this issue has no merit.
Appellants’ remaining assignments of error are intertwined
and shall be addressed together. Appellants contend that the
district court erred in finding that there is no issue of mate-
rial fact as to whether James breached the lease agreement by
failing to deliver the Trust crops on time, whether Heritage
Bank complied with the lease agreement, and whether James
cured any breach of the lease agreement within a reason-
able time.
First, Appellants claim that the evidence is in dispute as to
whether James was properly directed concerning a location
for crop delivery and, therefore, could not timely deliver the
crops. They point to the first paragraph of the lease, which
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298 Nebraska R eports
HERITAGE BANK v. GABEL
Cite as 298 Neb. 961states in part that the agreed payment was “30% of the crops
produced on said real estate on an annual basis delivered at
Tenant’s expense to an elevator within 15 miles of the farms
as Owner shall direct.” James, by affidavit, stated that he
requested a delivery location from Heritage Bank but that
Heritage Bank failed to provide a delivery site. In countering
this, Heritage Bank points to an exhibit which it claims sets
forth that numerous demands were made for delivery of the
crops to a location within 15 miles from the leased property.
However, that exhibit, an affidavit of the president of Heritage
Bank, sets forth only that “numerous demands” for deliv-
ery of the crops were made on James but does not disclose
where Heritage directed the delivery location to occur. Thus,
the record contains conflicting evidence concerning whether
Heritage complied with the lease.
Next, Appellants claim that Heritage Bank never provided
James with a notice of default, as required by the lease. They
argue that such notice would have allowed James 30 days
to cure the alleged breach. Heritage Bank contends that its
requests for delivery of the crops and the notice to vacate,
along with service of the amended complaint, acted as suffi-
cient notice of default. The district court agreed.
The lease agreement states, in relevant part:
In the event Lessee fails to make the payment of rent or
if default is made in the performance of any other term
or condition thereof by Lessee, the lease, at the option of
Lessor, shall terminate and be forfeited and Lessor may
re-enter the premises and remove all persons in posses-
sion therefrom. Lessee shall be given written notice of
any such default or breach and forfeiture of said lease
shall not result if, within 30 days of such written notice,
Lessee has corrected the default or has taken action rea-
sonably likely to correct this default within a reasonable
time thereafter.
The plain language of the lease required Heritage Bank to
provide written notice of the default or breach to James which,
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HERITAGE BANK v. GABEL
Cite as 298 Neb. 961in turn, would allow him 30 days to cure. The title of a partic-
ular document forwarded to James does not control whether he
was given the proper notice. Rather, we must review the con-
tent of each document sent to James to determine whether he
received proper notice. Here, the terms of the lease that James
allegedly breached were not specifically set forth within the
notice to vacate. Further, the record does not contain any evi-
dence that Heritage Bank set forth the alleged breaches in any
other written communications. That is, there is no evidence
that James had any way to cure those breaches within 30 days
as allowed by the lease. Further, any notice of the alleged
breaches given to James by way of service of the complaint
would not allow James adequate time to cure, since litigation
of the matter had already commenced. Nor would the district
court’s order to pay the crop proceeds into that court consti-
tute a notice of default and right to cure. Either the parties
complied with the terms of the lease prior to the court action
or they did not. Even if James had paid the crop proceeds into
the district court within 30 days of the court order, that would
not have barred Heritage Bank from proceeding with the forc-
ible entry and detainer action.
Accordingly, upon our review of the record, we conclude
that genuine issues of material fact precluded summary judg-
ment in this instance. See O’Brien v. Cessna Aircraft Co., ante
p. 109, 903 N.W.2d 432 (2017).
CONCLUSION
The judgment of the district court is reversed, and the mat-
ter is remanded for further proceedings.
R eversed and remanded for
further proceedings.
Wright, J., not participating.