Brick Development v. CNBT II
918 N.W.2d 824
Neb.2018Background
- In 1978 the Smiths leased a parking lot to TTE for 50 years. The lease allowed assignment and contained a right of first refusal and periodic rent escalations.
- TTE assigned the parking lease to Raasch in 2006 when Raasch purchased the adjacent office building; Raasch executed a deed of trust to the Bank that referenced leases for the office property only.
- After Raasch defaulted, the Bank’s trustee’s sale conveyed the office building to CNBT in 2012; the trustee’s deed recited the office property was sold “subject to” certain leases but stated the grantee would not assume liabilities.
- Brick (successor to the Smiths) continued to receive rent from CNBT and sought to treat CNBT as assignee/assumptor of the long-term parking lease, asserting breach when CNBT later terminated the lease in 2015.
- Brick sued CNBT and the Bank for breach and claimed CNBT was equitably estopped from invoking the statute of frauds; defendants moved for summary judgment arguing no written assumption and that the statute of frauds bars enforcement.
- The district court granted summary judgment for CNBT and the Bank, finding no written assumption, no equitable estoppel (Brick was a sophisticated business), and that any tenant liability ended when CNBT ceased possession.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CNBT is bound to the 50‑year parking lease | Brick: CNBT’s possession, rent payments, compliance with lease terms amount to assumption | CNBT: No written assumption signed by CNBT; trustee’s deed and deed of trust don’t create privity of contract | Held: No. Statute of frauds bars enforcement absent a written, signed assumption by CNBT |
| Whether CNBT’s payment/use creates an assignment sufficient under statute of frauds | Brick: Possession + rent creates presumption of assignment/assumption | CNBT: Privity of estate may exist for occupancy, but privity of contract (assumption) requires written affirmation; paying rent is not enough | Held: Paying rent/possession does not satisfy statute of frauds; only covenants that run with the land bind CNBT during occupancy |
| Whether equitable estoppel prevents defendants from invoking statute of frauds | Brick: CNBT accepted benefits and should be estopped from denying assumption | CNBT: No inducement to waive written requirement; Brick is a sophisticated business charged with knowledge of statute of frauds | Held: No estoppel — Brick did not reasonably rely to its detriment; as a sophisticated entity it cannot rely on oral assurances |
| Whether any genuine issue of material fact precluded summary judgment | Brick: CNBT’s conduct raises factual dispute about intent to assume | Defendants: No signed documentation; statute of frauds dispositive regardless of conduct | Held: No genuine issue — absence of a signed assumption is dispositive; summary judgment affirmed |
Key Cases Cited
- Walters v. Sporer, 298 Neb. 536 (2017) (deed acceptance can satisfy statute of frauds when instrument shows clear intent)
- Mayer v. Dwiggins, 114 Neb. 184 (1925) (assignment transfers privity of estate but privity of contract remains with original lessee)
- Hogg v. Reynolds, 61 Neb. 758 (1901) (covenant to pay rent runs with the land; liability exists while privity of estate exists)
- Regency Homes Assn. v. Egermayer, 243 Neb. 286 (1993) (three requirements for covenants to run with the land)
- Becher v. Becher, 299 Neb. 206 (2018) (equitable estoppel principles and application to sophisticated parties)