Walters v. Sporer
298 Neb. 536
Neb.2017Background
- In 1998 John D. Walters and his then-spouse conveyed ~8 acres to Douglas and Debra Lau by warranty deed that contained a reservation granting Grantor (John) a 30‑day written notice and a right to buy on the same terms (a right of first refusal).
- The transaction included financing (note and trust deed), ancillary documents, and the parties used an attorney selected by John; the Laus later paid off the note and received reconveyance.
- The Laus sold the combined ~13‑acre parcel in 2013 to Jay and Melanie Sporer (trustees) without giving John written notice; John later recorded an assignment of the right to himself and sued for specific performance/quiet title.
- The district court granted summary judgment to the Laus and Sporers, finding the deed provision void under Neb. Rev. Stat. § 36‑105 (statute of frauds for land sale contracts) because the Laus did not sign a separate writing; John appealed.
- The Nebraska Supreme Court reviewed whether a right of first refusal reserved in a deed is a nonvested property interest, whether it is a reservation subject to the statute of frauds, and whether a grantee’s acceptance of a deed binds the grantee to reservations therein.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a right of first refusal reserved in a deed creates an enforceable property interest | Right is a nonvested property interest / reservable in the deed and enforceable by specific performance when triggered | Right is a contract, not a reservation; therefore §36‑105 (writing signed by seller) applies and was not satisfied | Right of first refusal is a nonvested property interest and may be reserved in a deed; enforceable when condition occurs |
| Whether the deed reservation is subject to the statute of frauds and which statute applies (§36‑103 vs §36‑105) | Reservation is a regranting by grantee and thus falls under §36‑103 (requires signature of party to be charged) and is satisfied by grantee’s acceptance of the deed | Reservation is not a reservation (not a present possessory right) and instead is an agreement for sale subject to §36‑105 | Reservation is within §36‑103 (interest in land) and both statutes require signature by party to be charged; acceptance of deed satisfies that requirement |
| Whether the Laus (grantees) are bound by the reservation despite not signing the deed or reading it | Deed accepted by grantees binds them to recitals and reservations; acceptance is equivalent to signing and satisfies statute of frauds absent fraud | Laus did not agree to an indefinite right and did not sign or receive separate consideration; therefore should not be bound | Acceptance of deed by grantees binds them to reservations contained in deed absent fraud; Laus are bound |
| Whether summary judgment for defendants was appropriate | John sought specific performance but factual issues remain; he moved for summary judgment too | Defendants argued statute of frauds bars enforcement as a sale contract and moved for summary judgment | Court erred in granting summary judgment for Laus and Sporers; genuine factual issues remain so John not entitled to summary judgment now; case reversed and remanded |
Key Cases Cited
- Winberg v. Cimfel, 248 Neb. 71 (Neb. 1995) (distinguishes option and right of first refusal and explains enforceability by specific performance)
- Bauermeister v. Waste Mgmt. Co., 280 Neb. 1 (Neb. 2010) (classifies option contracts as nonvested property interests for perpetuities analysis)
- Schaffert v. Hartman, 203 Neb. 271 (Neb. 1978) (discusses reservations that create rights to use or enjoyment of land)
- Elrod v. Heirs, Devisees, etc., 156 Neb. 269 (Neb. 1952) (definition and effect of reservations and exceptions in deeds)
- Jones v. Stahr, 16 Neb. App. 596 (Neb. Ct. App. 2008) (right of first refusal ripening into an option and assignability analysis)