Doty v. West Gate Bank

Nebraska Supreme Court Online Library
www.nebraska.gov/courts/epub/
02/19/2016 09:22 AM CST
- 787 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787Owen L. Doty et al., appellees, v.
West Gate Bank, Inc., a Nebraska
banking corporation, appellant.
___ N.W.2d ___
Filed February 19, 2016. No. S-14-1060.
1. Summary Judgment. Summary judgment is proper when the pleadings
and evidence admitted at the hearing disclose that there is no genuine
issue as to any material fact or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to judgment
as a matter of law.
2. 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.
3. Statutes: Appeal and Error. Statutory interpretation is a question of
law, which an appellate court resolves independently of the trial court.
4. Declaratory Judgments: Appeal and Error. When a declaratory judg-
ment action presents a question of law, an appellate court has an obliga-
tion to reach its conclusion independently of the conclusion reached by
the trial court with regard to that question.
5. Statutes: Legislature: Intent. In discerning the meaning of a statute,
a court must determine and give effect to the purpose and intent of the
Legislature as ascertained from the entire language of the statute con-
sidered in its plain, ordinary, and popular sense, as it is the court’s duty
to discover, if possible, the Legislature’s intent from the language of the
statute itself.
6. Trusts: Deeds: Statutes. Because trust deeds did not exist at common
law, the trust deed statutes are to be strictly construed.
7. Statutes: Appeal and Error. An appellate court does not consider
a statute’s clauses and phrases as detached and isolated expressions.
Instead, the whole and every part of the statute must be considered in
fixing the meaning of any of its parts.
- 788 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 7878. Statutes: Intent. A word or phrase repeated in a statute will bear
the same meaning throughout the statute, unless a different inten-
tion appears.
9. Trusts: Deeds: Liens: Security Interests. Under Neb. Rev. Stat.
§ 76-1013 (Reissue 2009), an action to recover the balance due upon
the obligation for which the trust deed was given as security does not
include enforcement of liens upon or security interests in other collateral
given to secure the same obligation.
10. Trusts: Deeds: Limitations of Actions. The running of the statute of
limitations for an action under Neb. Rev. Stat. § 76-1013 (Reissue 2009)
does not extinguish the balance due upon the underlying obligation.
11. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
Appeal from the District Court for Lancaster County:
A ndrew R. Jacobsen, Judge. Reversed and remanded with
directions.
Gregory S. Frayser, of Cline, Williams, Wright, Johnson &
Oldfather, L.L.P., for appellant.
Joel G. Lonowski and Andrew K. Joyce, of Morrow, Poppe,
Watermeier & Lonowski, P.C., L.L.O., for appellees.
Heavican, C.J., Connolly, Miller-Lerman, and Cassel, JJ.,
and Bishop, Judge.
Cassel, J.
INTRODUCTION
In this appeal, we are asked to determine whether the
3-month statute of limitations1 set forth in the Nebraska Trust
Deeds Act2 (Act) bars a bank from foreclosing on the bank’s
remaining collateral. We conclude that it does not. Our con-
clusion is consistent with the plain language of the Act, our
1
See Neb. Rev. Stat. § 76-1013 (Reissue 2009).
2
Neb. Rev. Stat. §§ 76-1001 to 76-1018 (Reissue 2009 & Cum. Supp.
2014).
- 789 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787p­ revious interpretations of the same language, and the deci-
sions in other states under similar provisions. We therefore
reverse, and remand with directions.
BACKGROUND
R elevant Deeds and Notes
In 2002 and 2003, various members of the Doty family gave
three deeds of trust to West Gate Bank, Inc. (Bank), as security
for certain loans. Each deed of trust (DOT) conveyed a specific
tract of real estate. The parties identify each DOT by the street
name where the real estate is located. We follow the same con-
vention. Owen L. Doty and Joy A. Doty executed and delivered
the “Starr Street DOT.” Owen, Joy, Clifford Doty, and Allison
Doty executed and delivered the “Harwood Court DOT.” And
Ronald L. Doty and Angela J. Doty executed and delivered the
“148th Street DOT.”
The DOT’s also secured future advances given by the Bank
to those named in the DOT’s. Later, the Bank advanced funds
to Owen, Joy, Ronald, and Angela. This advance was docu-
mented by promissory note No. 3311257 (Note 257). (From
this point forward, we refer to Owen, Joy, Ronald, and Angela
collectively as “the Dotys.”) The Dotys defaulted on Note 257,
and so the Bank exercised its power of sale under the 148th
Street DOT and applied the funds generated by the sale to Note
257. An unpaid balance remained on the note. Later, the Dotys
brought a declaratory judgment action asking the district court
to declare that the Bank was barred by § 76-1013 from recov-
ering any amount still owed under Note 257.
While that action was pending before the district court, two
other notes went into default and Owen and Joy sought to
refinance the corresponding debts. At first, the Bank refused
to release the Starr Street DOT and the Harwood Court DOT,
asserting that those DOT’s secured the balance remaining
under Note 257.
Thereafter, the Dotys and the Bank executed a pledge and
security agreement, a substitution of collateral agreement, and
- 790 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787an account control agreement whereby they granted the Bank
a security interest in a deposit account. But one provision of
the pledge and security agreement provided that “the Debtor
disputes that any amount is owed under the Note.” After the
refinancing was completed, the other two notes were paid
in full and the Bank released the Starr Street DOT and the
Harwood Court DOT.
At oral argument, the Dotys conceded that if § 76-1013
did not extinguish Note 257, the debt would survive and be
enforceable against the substituted collateral. Thus, they agreed
that this court needed to focus only on the interpretation of
§ 76-1013 by the district court.
District Court’s Decision
The Dotys and the Bank filed cross-motions for summary
judgment in the declaratory judgment action. In November
2014, the district court granted the Dotys’ motion and denied
the Bank’s. It concluded that the Bank was barred by the
3-month statute of limitations in § 76-1013 “from taking any
action whatsoever to collect any amounts it believes it is due
on Note 257.” Section 76-1013 states:
At any time within three months after any sale of
property under a trust deed, as hereinabove provided, an
action may be commenced to recover the balance due
upon the obligation for which the trust deed was given as
security, and in such action the complaint shall set forth
the entire amount of the indebtedness which was secured
by such trust deed and the amount for which such prop-
erty was sold and the fair market value thereof at the
date of sale, together with interest on such indebtedness
from the date of sale, the costs and expenses of exercis-
ing the power of sale and of the sale. Before rendering
judgment, the court shall find the fair market value at
the date of sale of the property sold. The court shall not
render judgment for more than the amount by which the
amount of the indebtedness with interest and the costs
- 791 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787and expenses of sale, including trustee’s fees, exceeds
the fair market value of the property or interest therein
sold as of the date of the sale, and in no event shall the
amount of said judgment, exclusive of interest from the
date of sale, exceed the difference between the amount
for which the property was sold and the entire amount
of the indebtedness secured thereby, including said costs
and expenses of sale.
The Bank argued that § 76-1013 applies only to deficiency
actions, not nonjudicial foreclosures on separate collateral.
The district court declined to find a distinction between defi-
ciency actions and nonjudicial foreclosures, concluding that
the Bank’s argument is “not supported by any meaningful
distinction between the two types of actions or the text of
Section 76-1013.”
The district court also examined the policy behind the
Act, which we discussed in Pantano v. Maryland Plaza
Partnership.3 It noted that in Pantano, we said, “‘In the world
of deficiency judgments, [§ 76-1013] represents a departure
from tradition’” because “‘[t]raditionally, the amount of a
deficiency judgment was the total indebtedness minus the
price paid at public sale.’” This traditional formula benefited
creditors, who “‘could radically underbid a valuable property,
take title, and then sue the debtor for deficiency.’” Section
76-1013 prevents this outcome, because it requires the dis-
trict court to calculate the deficiency owed based upon the
fair market value (hereinafter FMV) of the foreclosed prop-
erty. Therefore, “‘[a] creditor gains no advantage by under­
bidding . . . .’”
Based upon these statements in Pantano, the district court
concluded that the Pantano court and the Legislature “were
clearly concerned with debtors obtaining a credit against their
debts for the FMV of property sold under the Act, not just
3
Pantano v. Maryland Plaza Partnership, 244 Neb. 499, 507 N.W.2d 484(1993).
- 792 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787the sale price.” It declared that if the Bank seeks to recover
a deficiency, “regardless of whether that amount is sought
against the debtor[s] personally or their property, it must
comply with the Act and bring an action so that the process is
overseen by the courts and the [Dotys are] given credit for”
the FMV of their property.
The district court concluded that because the Bank did not
bring an action within the limitations period, “receipt of the
proceeds of the trustee’s auction constitutes payment in full of
Note 257.” It reasoned that because 3 months had passed since
the sale in this case, “it cannot be judicially determined how
much should have been subtracted from Note 257 as a result of
the sale.” And because “[a] creditor cannot collect an amount
of money which cannot be known,” the Bank cannot recover
any amount owed under Note 257.
The Bank filed a timely appeal, which we moved to our
docket.4
ASSIGNMENTS OF ERROR
Although the Bank makes numerous assignments of error,
we distill and combine them for analysis. Essentially, the
Bank assigns that the district court erred in (1) concluding
that the Bank was required to seek a deficiency judgment
under § 76-1013 before resorting to its remaining collateral
and (2) concluding that the debt owed on Note 257 is con-
sidered paid in full because the statute of limitations for an
action pursuant to § 76-1013 has expired. Although the Bank
also assigns that the district court erred in “concluding that
each [DOT] is not a separate and distinct contract,” we do not
reach this issue.
STANDARD OF REVIEW
[1,2] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is no
4
See Neb. Rev. Stat. § 24-1106(3) (Reissue 2008).
- 793 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787genuine issue as to any material fact or as to the ultimate infer-
ences that may be drawn from those facts and that the moving
party is entitled to judgment as a matter of law.5 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.6
[3] Statutory interpretation is a question of law, which an
appellate court resolves independently of the trial court.7
[4] When a declaratory judgment action presents a question
of law, an appellate court has an obligation to reach its conclu-
sion independently of the conclusion reached by the trial court
with regard to that question.8
ANALYSIS
§ 76-1013 Inapplicable
The Bank admits that it is barred from filing an action for
a deficiency judgment by the 3-month statute of limitations
in § 76-1013. But it argues that the running of the statute of
limitations for a deficiency judgment does not prevent it from
resorting to the other collateral securing Note 257. It points
to the statute’s use of the phrase “an action” and argues that
phrase refers only to deficiency actions filed in court. It also
cites several cases where we have characterized § 76-1013 as
applicable to deficiency actions.
[5,6] We begin by examining the text of § 76-1013. In
discerning the meaning of a statute, a court must determine
and give effect to the purpose and intent of the Legislature as
ascertained from the entire language of the statute considered
5
Board of Trustees v. City of Omaha, 289 Neb. 993, 858 N.W.2d 186(2015).
6
Id.
7
State v. Mendoza-Bautista, 291 Neb. 876, 869 N.W.2d 339 (2015).
8
Board of Trustees v. City of Omaha, supra note 5.
- 794 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787in its plain, ordinary, and popular sense, as it is the court’s duty
to discover, if possible, the Legislature’s intent from the lan-
guage of the statute itself.9 But because the Act made a change
in common law, we strictly construe the statutes composing
the Act, as have previous courts interpreting the Act.10 Thus,
because trust deeds did not exist at common law, the trust deed
statutes are to be strictly construed.11
Although we set forth the entire statute above, we reiterate
the most relevant portions:
At any time within three months after any sale of
property under a trust deed, . . . an action may be com-
menced to recover the balance due upon the obligation for
which the trust deed was given as security, and in such
action the complaint shall set forth the entire amount of
the indebtedness which was secured by such trust deed
and the amount for which such property was sold and the
[FMV] thereof at the date of sale . . . . Before rendering
judgment, the court shall find the [FMV] at the date of
sale of the property sold.
By these plain terms, § 76-1013 applies only to “an action”
commenced after any sale of property under a trust deed. The
statute says nothing about any step that does not constitute
“an action.”
[7] Thus, we must determine what “an action” means. We
make that determination by examining the language of the stat-
ute itself. We do not consider a statute’s clauses and phrases
as detached and isolated expressions.12 Instead, the whole and
every part of the statute must be considered in fixing the mean-
ing of any of its parts.13
9
Fisher v. PayFlex Systems USA, 285 Neb. 808, 829 N.W.2d 703 (2013).
10
First Nat. Bank of Omaha v. Davey, 285 Neb. 835, 830 N.W.2d 63 (2013).
11
Id.
12
Fisher v. PayFlex Systems USA, supra note 9.
13
Id.
- 795 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787Here, § 76-1013 authorizes “an action” and provides that
“in such action the complaint shall” be filed with the district
court. It then requires the district court to render a judgment.
Taken together, these references to a complaint and a judgment
clearly convey that “an action” encompasses only suits rest-
ing upon a complaint and filed in court. This is particularly
true in light of our civil code, which abolished all forms of
actions and suits and substituted “but one form of action.”14
The Legislature presumably understood the specific meaning
conveyed by its choice of words.15 And the Legislature’s use of
this terminology suggests that it did not intend for this provi-
sion to govern nonjudicial foreclosures, which require neither
a complaint nor a judgment to go forward.
[8] This reading is reinforced by the Act’s use of the term
“an action” in another provision, which states:
The trustee’s sale of property under a trust deed shall
be made within the period prescribed in section 25-205
for the commencement of an action on the obligation
secured by the trust deed unless the beneficiary elects
to foreclose a trust deed in the manner provided for by
law for the foreclosure of mortgages on real estate . . . in
which case the statute of limitations for the commence-
ment of such action shall be the same as the statute of
limitations for mortgages . . . .16
This language supports our reading of § 76-1013 in two ways.
First, it distinguishes a “trustee’s sale” and “an action on the
obligation secured by the trust deed.” It does not call the
trustee’s sale “an action on the deed.” It calls it a sale. This
suggests that the Legislature recognized that a trustee’s sale,
which is a nonjudicial foreclosure, and “an action” are two
different creatures of law. Second, it uses “action” to refer
14
Neb. Rev. Stat. § 25-101 (Reissue 2008).
15
See Shipler v. General Motors Corp., 271 Neb. 194, 710 N.W.2d 807(2006).
16
§ 76-1015 (emphasis supplied).
- 796 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787to mortgage foreclosure proceedings, which do require court
action.17 Thus, § 76-1015 uses “action” in the same way as
§ 76-1013—to refer to a civil action in a court of competent
jurisdiction.18 A word or phrase repeated in a statute will bear
the same meaning throughout the statute, unless a different
intention appears.19
This reading of § 76-1013 is consistent with our decisions in
prior cases. Although we have never addressed whether a non-
judicial foreclosure constitutes “an action” under § 76-1013,
we have consistently characterized § 76-1013 as applicable to
deficiency actions filed in court. In Mutual of Omaha Bank v.
Murante,20 we said that the Act “applies to actions for deficien-
cies on the obligation for which a [DOT] was given as secu-
rity.” And in First Nat. Bank of Omaha v. Davey,21 we stated
that “the language of § 76-1013 demonstrates that the statute’s
applicability is limited to deficiency actions brought after non-
judicial foreclosure by a trustee.”
Finally, decisions from other jurisdictions support our analy-
sis. We discuss two cases in detail, one from Utah and another
from California, before summarizing similar decisions from
other states.
The Utah decision is particularly applicable, because Utah
has a statute very similar to § 76-1013.22 In Phillips v. Utah
State Credit Union,23 a debtor obtained a loan from a lender
to purchase certain real property. As security, the debtor gave
17
See Neb. Rev. Stat. § 25-2141 (Reissue 2008).
18
See § 25-101.
19
PPG Industries Canada Ltd. v. Kreuscher, 204 Neb. 220, 281 N.W.2d 762(1979).
20
Mutual of Omaha Bank v. Murante, 285 Neb. 747, 751, 829 N.W.2d 676,
681 (2013).
21
First Nat. Bank of Omaha v. Davey, supra note 10, 285 Neb. at 843, 830
N.W.2d at 69.
22
See Utah Code Ann. § 57-1-32 (LexisNexis 2010).
23
Phillips v. Utah State Credit Union, 811 P.2d 174 (Utah 1991).
- 797 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787the lender a note and trust deed to the property. As additional
security, the debtor assigned to the lender a note and mortgage
which he owned as mortgagee. The debtor defaulted, and the
lender sold the real property under the trust deed. After the
sale, a balance of $22,566.30 remained.
The debtor later sued the lender under Utah’s 3-month
statute of limitations provision, seeking a declaration that
the lender was prohibited from recovering any portion of the
remaining balance. Utah’s statute of limitations provision was
nearly identical to § 76-1013. It provided, in relevant part:
“At any time within three months after any sale of
property under a trust deed . . . an action may be com-
menced to recover the balance due upon the obligation
for which the trust deed was given as security, and in
such action the complaint shall set forth the entire amount
of the indebtedness which was secured by such trust
deed . . . .”24
The trial court concluded that because the lender did not bring
a deficiency action against the debtor within 3 months, the
lender was prohibited from proceeding against the additional
security assigned by the debtor.
The Utah Supreme Court reversed. It observed that the
lender did not seek a deficiency judgment against the debtor,
but, rather, “merely sought to retain its additional security.”25
And it stated that the lender’s retention and use of its addi-
tional security was not “the type of ‘action’ against [the
debtor] which is prohibited by” the 3-month statute of limita-
tions provision.26 It concluded:
[W]here a creditor takes more than one item of security
upon an obligation secured by a trust deed, the creditor is
not precluded from making use of that additional security
24
Id. at 176 n.2.
25
Id. at 178.
26
Id.
- 798 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787merely because the creditor has not sought a deficiency
judgment within three months of a nonjudicial sale of
one of the items covered by the trust deed property, nor
is the creditor required to seek a deficiency judgment . . .
in order to maintain its right to the additional security, so
long as the security is applied toward the debt owed on
the original loan.27
The Supreme Court of California also reached the same
result under similar facts and a similar statute. In Dreyfuss v.
Union Bank of California,28 the debtors defaulted on a loan
secured by three separate DOT’s covering three parcels of real
property. The creditor conducted successive nonjudicial fore-
closures on the properties without seeking a judicial determina-
tion of the FMV of the properties sold.
The debtors sued, claiming that FMV determinations were
required under California’s antideficiency provision, which
provides in part:
Whenever a money judgment is sought for the balance
due upon an obligation for the payment of which a [DOT]
was given as security, following the exercise of the power
of sale in such [DOT] the plaintiff shall set forth in his
or her complaint the entire amount of the indebtedness
which was secured . . . . Before rendering any judgment
the court shall find the [FMV] of the real property . . . at
the time of sale.29
The California Supreme Court concluded that the provi-
sion is not implicated “when a creditor merely exercises the
right to exhaust all of the real property pledged to secure an
obligation.”30 It noted that in the past, it has held that “‘[t]he
27
Id.
28
Dreyfuss v. Union Bank of California, 24 Cal. 4th 400, 11 P.3d 383, 101
Cal. Rptr. 2d 29 (2000).
29
Cal. Civ. Proc. Code § 580a (West 2011).
30
Dreyfuss v. Union Bank of California, supra note 28, 24 Cal. 4th at 406,
11 P.3d at 386, 101 Cal. Rptr. 2d at 33.
- 799 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787giving of additional security for [a] note gives the right to
exhaust such security . . . .’”31
Other courts have reached similar results. In Hull v. Alaska
Federal Sav. & Loan Ass’n,32 the plaintiff-debtors argued that
their lender’s retention of pledged savings accounts consti-
tuted a “‘further action or proceeding,’” which was prohibited
under Alaska’s antideficiency provision. The Supreme Court
of Alaska disagreed, concluding that the “further action or
proceeding” language covered only in-court proceedings. It
did not bar the retention of additional security pledged on the
underlying obligation. Similarly, in Gardner v. First Heritage
Bank,33 the Washington Court of Appeals concluded that a
lender may foreclose on additional collateral to satisfy a bal-
ance owed under a note, despite that state’s antideficiency
statute. It stated that the lender was “merely exercis[ing] the
right to exhaust all of the real property pledged to secure
an obligation.”34
In the case before us, the district court construed “an action”
very broadly. It seemed to conclude that a nonjudicial foreclo-
sure constitutes “an action,” stating that there is no “meaning-
ful distinction” between deficiency actions and nonjudicial
foreclosures in the text of § 76-1013. We disagree.
The plain language used—“an action”—is the language of
a legal suit, not nonjudicial foreclosure. In a broad colloquial
sense, a nonjudicial foreclosure might be characterized as
an “action.”35 But this meaning would clearly conflict with
31
Id. at 409, 11 P.3d at 388, 101 Cal. Rptr. 2d at 35 (quoting Freedland v.
Greco, 45 Cal. 2d 462, 289 P.2d 463 (1955)).
32
Hull v. Alaska Federal Sav. & Loan Ass’n, 658 P.2d 122, 124 (Alaska
1983).
33
Gardner v. First Heritage Bank, 175 Wash. App. 650, 303 P.3d 1065(2013).
34
Id. at 668, 303 P.3d at 1074.
35
See, e.g., Black’s Law Dictionary 35 (10th ed. 2014) (defining “action” as
“[t]he process of doing something”).
- 800 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787the statute’s plain terms. An appellate court attempts to give
effect to each word or phrase in a statute and ordinarily will
not read language out of a statute.36
[9] Thus, we hold that under § 76-1013, an action to recover
the balance due upon the obligation for which the trust deed
was given as security does not include enforcement of liens
upon or security interests in other collateral given to secure
the same obligation. Accordingly, § 76-1013 does not govern
the Bank’s right to exercise its powers of sale under the other
DOT’s or the other collateral which was substituted by agree-
ment. It necessarily follows that § 76-1013’s requirement of
an FMV determination is inapplicable. The Bank may col-
lect from the Bank’s additional collateral without bringing an
action for a deficiency under § 76-1013.
We agree with the district court that the Act’s terms reflect
the Legislature’s concern that debtors receive credit for the
FMV of their property. But the Legislature did not include a
provision that requires an FMV determination in a situation
such as this, where a lender pursues successive nonjudicial
foreclosures of trust deeds given to secure the same debt. We
must give effect to the statute’s plain terms, and we will not
read into the Act requirements that are not there.37
Enforceable Debt
The district court held that the Dotys’ obligation on Note
257 was paid in full. It reasoned that the Bank was required to
get an FMV determination under § 76-1013 before executing
on its additional collateral. And because the Bank did not do
so, according to the district court, the amount owed on the debt
cannot be determined.
As we explained above, the Bank was not required to obtain
an FMV determination, because § 76-1013 does not apply to
subsequent nonjudicial foreclosures against other collateral
36
Werner v. County of Platte, 284 Neb. 899, 824 N.W.2d 38 (2012).
37
See State v. Frederick, 291 Neb. 243, 864 N.W.2d 681 (2015).
- 801 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787given to secure the same obligation. Therefore, the FMV deter-
mination requirement is irrelevant here, and the district court’s
reasoning is erroneous.
With the correct understanding in mind, we must decide
whether the running of the statute of limitations on a personal
deficiency action renders the underlying debt paid in full or
otherwise unenforceable. We conclude that it does not.
We first turn to our interpretation of § 76-1013 in Mutual of
Omaha Bank v. Murante.38 There, a lender sought to recover
from a guarantor, even though § 76-1013 prohibited it from
recovering against the debtors. We stated that where the stat-
ute of limitations in § 76-1013 has expired, “[t]he debt as
evidenced by the notes has not been extinguished.”39 We also
quoted our opinion in Department of Banking v. Keeley,40
where we said: “‘If the principal obligation is not void . . . but
is merely unenforceable against the debtor because of some
matter of defense which is personal to the debtor,’” the guaran-
tor will not be able to defeat the action.41 We concluded that the
lender could recover the debt from the guarantor.
We note also that we have reached the same conclusion in
the area of mortgages. We stated in 1901 that “[t]he right to
foreclose [a] mortgage exists after the note it was given to
secure is barred by the statute of limitations.”42 More recently,
in 1971, we affirmed that a lender may foreclose on a mort-
gage, even though the statute of limitations on the promissory
note has expired.43
38
Mutual of Omaha Bank v. Murante, supra note 20.
39
Id. at 753, 829 N.W.2d at 682.
40
Department of Banking v. Keeley, 183 Neb. 370, 160 N.W.2d 206 (1968).
41
Mutual of Omaha Bank v. Murante, supra note 20, 285 Neb. at 753, 829
N.W.2d at 682 (quoting Department of Banking v. Keeley, supra note 40).
42
Omaha Savings Bank v. Simeral, 61 Neb. 741, 743, 86 N.W. 470, 471
(1901).
43
Johns. I. Case Credit Corp. v. Thompson, 187 Neb. 626, 193 N.W.2d 283(1971).
- 802 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787Our approach appears to be the majority one. According to
Williston on Contracts, “most courts have held that the statute
of limitations merely bars the remedy of the creditor or other
plaintiff but does not totally discharge the right.”44 Under this
majority approach, “the creditor remains entitled after the
statute has run to use any other means of collecting its debt
than a direct right of action. Therefore, any security by way
of lien or mortgage may be utilized to collect or recover on
the claim.”45
[10] Consistent with Mutual of Omaha Bank v. Murante,46
we conclude that the running of the statute of limitations for
an action under § 76-1013 does not extinguish the balance due
upon the underlying obligation. Accordingly, we conclude that
the balance due on Note 257 was not void, extinguished, or
considered paid in full. Instead, the running of the statute of
limitations under § 76-1013 merely rendered the debt unen-
forceable in a personal deficiency action. The debt still exists,
and the Bank may enforce it by collecting from the Bank’s
remaining collateral.
Separate and Distinct Contracts
[11] The Bank assigns that the district court erred in “con-
cluding that each deed of trust is not a separate and distinct
contract.” We need not reach this issue, because it is not nec-
essary to our resolution of this appeal. An appellate court is
not obligated to engage in an analysis that is not necessary to
adjudicate the case and controversy before it.47
CONCLUSION
For the reasons discussed above, we conclude that although
the district court correctly determined that § 76-1013 precludes
44
31 Samuel Williston, A Treatise on the Law of Contracts § 79:3 at 259
(Richard A. Lord ed., 4th ed. 2004).
45
Id. at 260-61.
46
Mutual of Omaha Bank v. Murante, supra note 20.
47
Gray v. Kenney, 290 Neb. 888, 863 N.W.2d 127 (2015).
- 803 -
Nebraska A dvance Sheets
292 Nebraska R eports
DOTY v. WEST GATE BANK
Cite as 292 Neb. 787the Bank from bringing a personal deficiency action against
the Dotys for the balance owed under Note 257, it incorrectly
determined that § 76-1013 applies to successive foreclosures
on remaining collateral. Therefore, the district court erred
in granting the Dotys’ motion for summary judgment and in
denying the Bank’s. Accordingly, we reverse, and remand with
directions to the district court to grant the Bank’s motion for
summary judgment.
R eversed and remanded with directions.
Wright, McCormack, and Stacy, JJ., not participating.