Walters v. Sporer
298 Neb. 536
| Neb. | 2017Background
- In 1998 John Walters and his then-spouse conveyed ~8 acres to Douglas and Debra Lau; the warranty deed included a clause granting Walters a right of first refusal: the grantee must give Walters 30 days written notice of terms and Walters "shall have the right to buy the lot on the same terms."
- The sale was accompanied by a promissory note, trust deed, and other documents; the Laus accepted and recorded the deed and later paid off the note and received reconveyance in 2007.
- In 2013 the Laus sold the property (~13 acres including the 8 acres) to the Sporers without giving Walters notice or an opportunity to exercise the asserted right of first refusal.
- Walters sued in 2014 seeking specific performance (to purchase under the reserved right) and quiet title; Sporers and Laus countered that the right was unenforceable under the statute of frauds or had expired.
- The district court granted summary judgment to Laus and Sporers, holding the deed provision was not an enforceable reservation (invoking §36-105); Walters appealed and the Nebraska Supreme Court reviewed de novo.
Issues
| Issue | Plaintiff's Argument (Walters) | Defendant's Argument (Laus/Sporers) | Held |
|---|---|---|---|
| Whether a right of first refusal reserved in a deed is an enforceable interest in land | The deed reservation created a nonvested property interest enforceable against grantees once the deed was accepted | The clause is not a reservation of an interest in land and is void under the statute of frauds because grantees did not sign a separate written contract | Yes — a right of first refusal may be reserved in a deed and is enforceable when the deed is accepted |
| Which statute governs ( §36-103 v. §36-105 ) | The reservation is an interest in land governed by the statute requiring signatures on instruments creating interests (§36-103), not by the contract-for-sale statute (§36-105) | The right is a contract for sale and thus void under §36-105 for lack of the grantees’ signatures | The court treated the right as a nonvested property interest falling within §36-103 (not §36-105) |
| Whether grantees’ acceptance binds them to reservations in the deed despite not signing it | Acceptance and recording of the deed makes the grantees parties to its reservations; accepting the deed satisfies the signature requirement to charge the grantee | Grantees argue they never agreed and did not sign the deed provision; some asserted the reservation was unintended or expired | Acceptance of the deed binds the grantees absent fraud; recording/acceptance satisfies the statute-of-frauds signature requirement |
| Whether summary judgment for defendants was proper | Plaintiff argued genuine issues of fact remained (e.g., scope/duration, whether condition ripened, readiness to purchase) and that reservation was enforceable | Defendants argued the right was invalid and summary judgment should be granted | Court reversed summary judgment for defendants and remanded for further proceedings on remaining factual issues |
Key Cases Cited
- Winberg v. Cimfel, 248 Neb. 71 (Neb. 1995) (distinguishes options and rights of first refusal; explains enforceability and ripening into an option)
- Bauermeister v. Waste Mgmt. Co., 280 Neb. 1 (Neb. 2010) (classifies certain options as nonvested property interests for perpetuities analysis)
- Elrod v. Heirs, Devisees, etc., 156 Neb. 269 (Neb. 1952) (explains reservations vs. exceptions and that reservations may create nonpossessory interests beyond easements)
- Schaffert v. Hartman, 203 Neb. 271 (Neb. 1978) (discussed in relation to characterizing reservations that affect use/enjoyment)
- Schupack v. McDonald’s System, Inc., 200 Neb. 485 (Neb. 1978) (addressed personal-nature/right assignability issues for rights of first refusal in a non-real-property context)
- Jones v. Stahr, 16 Neb. App. 596 (Neb. Ct. App. 2008) (analyzed acceptance under a right of first refusal and whether it ripened into an assignable option)