Wilkinson Development v. Ford & Ford Investments
311 Neb. 476
| Neb. | 2022Background
- Wilkinson (buyer) and Ford (seller) contracted Aug 30, 2019 to sell commercial property; Wilkinson advanced earnest money and delivered the full purchase price to the closing agent on Nov 21, 2019.
- Ford negotiated with PSK and signed a purchase agreement with PSK on Nov 22, 2019; PSK and Ford later closed Dec 16 and recorded a deed Dec 19, 2019.
- Wilkinson filed a complaint for specific performance on Nov 25, 2019 and recorded a lis pendens on Nov 26, 2019; the lis pendens prompted the PSK closing agent to refuse title insurance.
- The district court granted Wilkinson specific performance on Mar 4, 2021; Ford did not appeal.
- PSK moved to vacate the decree and sought joinder on Mar 26, 2021; the district court denied the motion and PSK appealed.
Issues
| Issue | Wilkinson's Argument | PSK's Argument | Held |
|---|---|---|---|
| Was PSK a necessary/indispensable party under § 25-323? | Joinder unnecessary because lis pendens binds subsequent purchasers. | PSK’s rights would be affected and thus it must be joined. | Court upheld denial of vacatur; lis pendens statute controls and joinder was not required. |
| Did the lis pendens notice eliminate the obligation to join PSK? | Yes; filing gave constructive notice and treated later-recording purchasers as bound as if joined. | Lis pendens was insufficient notice to bind PSK. | Lis pendens constituted constructive notice; PSK, having recorded after the notice, was bound. |
| Did PSK obtain equitable title before the lis pendens and thus escape its effect? | N/A (Wilkinson argued exceptions to equitable conversion apply). | PSK claimed equitable title from Nov 22, 2019 predating lis pendens. | Court rejected PSK’s equitable-title defense because exceptions apply (PSK had knowledge of Wilkinson’s prior claim and did not pay full price before lis pendens). |
| Did Wilkinson have a continuing duty to join PSK after learning of PSK’s contract? | No; what matters is plaintiff’s knowledge when lis pendens was filed. | Yes; once Wilkinson learned of PSK it should have joined PSK. | Court held no continuing duty to join after filing lis pendens; plaintiff’s knowledge at filing controls. |
| Could PSK have preserved its rights by intervening rather than demanding joinder? | PSK could and should have sought intervention to participate. | Failure to intervene does not excuse failure to join. | Court noted PSK could have intervened; its failure to do so undermines its complaint but does not change lis pendens effect. |
Key Cases Cited
- Kibler v. Kibler, 287 Neb. 1027, 845 N.W.2d 585 (2014) (discusses lis pendens and related statutory interpretation)
- Brown v. Jacobsen Land & Cattle Co., 297 Neb. 541, 900 N.W.2d 765 (2017) (explains purpose and effect of lis pendens)
- Hadley v. Corey, 137 Neb. 204, 288 N.W. 826 (1939) (describes doctrine that purchasers during pendency take subject to judgment)
- DeBoer v. Oakbrook Home Assn., 218 Neb. 813, 359 N.W.2d 768 (1984) (outlines equitable conversion and its exceptions)
- Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017) (addresses necessary and indispensable party analysis)