Wintroub v. Nationstar Mortg. LLC
303 Neb. 15
| Neb. | 2019Background
- Edward Wintroub and his wife entered an unrecorded land contract with the Faller Trust to buy a completed residence on Feb 23, 2006; the contract included: “Until all amounts due hereunder are paid in full, this Land Contract shall be subordinated to any rights held by Seller’s Lender(s).”
- The Faller Trust executed a promissory note (Feb 23, 2006) and a deed of trust to Lehman Brothers Bank (recorded Mar 8, 2006) to pay off an earlier mortgage and liens.
- The note and deed of trust were later assigned through successors to Nationstar Mortgage, which recorded its assignment in 2012.
- Wintroub defaulted on the land contract payment schedule; a second land contract (Aug 30, 2010) containing the same subordination clause replaced the 2006 contract but likewise was not recorded.
- Faller Trust defaulted on its loan, prompting a trustee sale; Wintroub sued to enjoin the sale claiming his equitable title/possession gave him priority over Nationstar.
- The district court granted Nationstar summary judgment, holding the unambiguous subordination clause subordinated Wintroub’s interest to the lender’s deed of trust; Wintroub appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a subordination clause in an executory land contract is enforceable against a purchaser | Wintroub argued his equitable title/possession should prevent subordination or at least create fact issues | Nationstar argued subordination clauses are enforceable and Lehman’s recorded deed of trust (and assignees) has priority | Court: Subordination clauses in land contracts are generally enforceable; the clause was unambiguous and subordinated purchaser’s interest to lender/assignees |
| Whether Wintroub’s actual possession gave notice defeating the lender’s status as a good-faith purchaser under the race-notice statute | Wintroub relied on Grand Island Hotel to say actual possession gives notice and creates fact issues | Nationstar argued the possession/inspection rule applies to landlord-tenant contexts, not purchase-money mortgage priority disputes | Court: Did not need to decide applicability; because the subordination clause was clear and purchaser did not pay in full, lender’s recorded deed of trust prevails |
| Whether Wintroub paid amounts due under the land contract (affecting subordination) | Wintroub did not contend he paid in full; asserted equitable title instead | Nationstar pointed to absence of payment and recorded senior deed of trust | Court: No evidence Wintroub paid; thus subordination remained in force and lender’s lien had priority |
| Whether summary judgment was appropriate given the record | Wintroub claimed genuine issues of material fact remained | Nationstar maintained the undisputed contracts and recordings entitled it to judgment as a matter of law | Court: Summary judgment proper; viewed facts most favorably to Wintroub but found no genuine material fact precluding judgment for Nationstar |
Key Cases Cited
- Grand Island Hotel Corp. v. Second Island Development Co., 191 Neb. 98 (1974) (actual possession may give notice to a purchaser in certain contexts)
- Vilcinskas v. Johnson, 252 Neb. 292 (1997) (mortgage priority may be altered by agreement)
- Meek v. Gratzfeld, 223 Neb. 306 (1986) (contract principles govern subordination agreements)
- Mackiewicz v. J.J. & Associates, 245 Neb. 568 (1994) (treating purchaser’s interest under land contract as security/lien)
- Timberlake v. Douglas County, 291 Neb. 387 (2015) (contract interpretation and ambiguity are questions of law)