Humphrey v. Smith

311 Neb. 632

974 N.W.2d 293

Barbara J. HUMPHREY, appellee,

v.Edward J. SMITH and Dora Prosolow, appellants.

No. S-21-131.

Supreme Court of Nebraska.

Filed May 27, 2022

Judith A. Wells, of Law Office of Judith A. Wells, Omaha, and Darnetta L. Hunter, for appellants.

Matthew P. Saathoff, Omaha, and Katherine A. Rehan, of Saathoff Law Group, P.C., L.L.O., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Funke, J.

INTRODUCTION

Donald Humphrey and Edward J. Smith purchased a house together. Donald paid a portion of the purchase price of the home, which the parties agreed was to be a loan. Donald and Smith had a written loan agreement, wherein they agreed that Donald would remove his name from the property's ownership once the loan was repaid. After Donald died, his wife, Barbara J. Humphrey, filed a complaint for partition of the property, contending she and Smith were tenants in common. Smith countered that before Donald died, he orally forgave the remainder of the loan, leaving Smith as the sole owner of the property.

The district court for Douglas County, Nebraska, granted Barbara's motion for summary judgment as to partition, but denied her motion for summary judgment as to unjust enrichment. The court also denied Smith's motion for summary judgment as to his counterclaim for unjust enrichment claim. For reasons set forth herein, we affirm in part, and in part reverse and remand with directions consistent with this opinion.

BACKGROUND

LOAN

The real estate at issue is a single family dwelling located on North Ridge Drive in Omaha, Nebraska (the Home). In 2015, Donald and Smith purchased the Home for $35,000. Both Donald and Smith were listed as purchasers on the purchase agreement and as grantees on a special warranty deed to the Home. Donald paid approximately $25,000 toward the purchase of the Home, which, all parties agree, was a loan (the Loan). In order to arrange for the repayment of the Loan, Donald and Smith entered into a loan agreement, which provided, in part:

Smith found [the Home] to serve as a personal residence for him.

....

[Donald's] name is added to the property's ownership as a way to secure repayment of the $25,192.92 loan made to ... Smith, while [he] lives on the property as his permanent residence.

After ... Smith repays Donald ... the loan, [Donald's] name will be removed from the property's ownership leaving ... Smith as the sole owner of [the Home]. This agreement also states that if the inevitable or unavoidable should happen to Donald ... then his interest in the above-mentioned property shall fall to Barbara ... but only until the lack [sic] portions of the $25,219.92 loan is repaid. Once the loan is paid in full, then Smith takes full ownership of the [Home].

From approximately December 2015 until 2018, Smith made monthly payments toward the Loan pursuant to their agreement. Eventually, Smith stopped making payments, because he claimed that Donald forgave the Loan in June or July 2018. Smith's partner, Dora Prosolow, also testified to hearing Donald orally forgive the Loan in June or July 2018. Accordingly, Smith did not make any payments toward the Loan in June or July of that year. However, the last recorded payment was dated August 3, 2018, and was for "Loan Repayment on House." Donald died on August 24, 2018. Although Smith and Prosolow (collectively Appellants) are still residing in the Home, they have not paid rent or made any payments toward the Loan since the last recorded payment. Barbara refutes the allegation that Donald forgave the Loan and claims a balance remains on the Loan in the amount of $16,126.11.

COURT PROCEEDINGS

After Donald's death, Barbara filed an affidavit for transfer of real property without probate with the Douglas County register of deeds. The affidavit purported to transfer Donald's interest in the Home to Barbara. The affidavit stated, "The deceased is the sole owner of the real property described as An undivided 1/2 interest in Lot 16, Dillons 11th Addition ...." A title and escrow report further listed Barbara and Smith as the vested titleholders of the Home.

Barbara then filed a complaint for partition in the district court, requesting that a referee be appointed to conduct a sale and to divide the proceeds between herself and Smith according to their respective ownership interests. Barbara also requested that the court permanently enjoin Appellants from possessing the home. Barbara further alleged that Appellants had been unjustly enriched, because they have enjoyed the benefits of living in the Home without paying rent, and that therefore, Barbara was entitled to those lost rents.

Appellants filed an answer, denying most of the allegations in the complaint. Smith also filed a counterclaim alleging that the Humphreys were unjustly enriched because he performed work for them for which he was not adequately compensated. Although Smith concedes that the Humphreys paid him for the work at the agreed-upon wage, he nevertheless argues that the amount paid was less than what he should have received and that he lost $136,000 in unpaid services.

Barbara filed her motion for summary judgment on her complaint and on Smith's counterclaim. In support of her motion, Barbara filed a statement of undisputed facts, along with an evidence index. Appellants did not file an opposition to summary judgment or a statement of disputed facts. However, Appellants did file a motion to dismiss with prejudice, with several accompanying pleadings in support of said motion, including "Defendant's Evidence of Forgery," "Defendant's Evidence of Adverse Possession," and "Defendant's Evidence of Bias and Prejudice." In response, Barbara filed a motion to strike the pleadings for failure to comply with Neb. Ct. R. § 6-1526(B)(1) and (2), which requires a party to file an evidence index and an annotated statement of disputed facts when opposing a motion for summary judgment.

At the hearing on the motion for summary judgment, Appellants offered several exhibits into evidence which were received over Barbara's objections. After the hearing, the district court granted the motion for summary judgment in part and denied it in part. Specifically, the court determined that the evidence indisputably showed that Barbara and Smith owned the Home as tenants in common and that as a result, Barbara was entitled to a partition as a matter of law. The court also granted summary judgment on Smith's unjust enrichment counterclaim, finding that the evidence indisputably showed that Smith and the Humphreys agreed to an hourly wage and that the Humphreys paid Smith all amounts due under the agreement. However, the court determined that Barbara was not entitled to summary judgment on her claim for unjust enrichment for lost rent, because there was a factual dispute as to whether the loan had been forgiven. Additionally, the court declined to rule on Barbara's request for attorney fees pursuant to Neb. Rev. Stat. § 25-2179 (Reissue 2016).

The court ultimately found that a referee should be appointed to conduct a partition of the Home and that if the Home was to be sold at a referee's sale, Barbara and Smith would each be entitled to 50 percent of the proceeds. The court stated, "Smith's share will be offset by either (1) the unpaid balance of the Loan or (2) half the rental value of the Home for the period that [Appellants] have occupied it since they last made a monthly payment." Appellants filed a timely appeal.

ASSIGNMENTS OF ERROR

Appellants assign three errors, but they can be summed up as asserting the district court erred in finding that there was no issue of disputed fact as to whether Barbara and Smith owned the property as tenants in common and that based on those undisputed facts, Barbara was entitled to partition as a matter of law.

STANDARD OF REVIEW

A jurisdictional issue that does not involve a factual dispute presents a question of law.¹

In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence.² An appellate court affirms 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 and that the moving party is entitled to judgment as a matter of law.³

Appellate review of a district court's use of inherent power is for an abuse of discretion.⁴

Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process.⁵

ANALYSIS

JURISDICTION

Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.⁶ For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken.⁷ Although partial summary judgments are usually considered interlocutory and must ordinarily dispose of the whole merits of the case to be considered final, partition actions are unique in that the action has two distinct stages: first, the title determination and, second, the division of the real estate, i.e., the "partition."⁸

The seminal case on the issue of the appealability of orders in a partition action is Peterson v. Damoude .⁹ In that case, we explained that the appealability of orders in partition actions depends on the nature of the controversy resolved and that such orders can be arranged into three classes:

(1) Where there is no controversy as to the ownership of the property in common and the right of partition, but the controversy is as to something relating to the partition, as whether the property can be equitably divided or must be sold, one party contending that it can be equitably divided and asking for a distinct portion of

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