Wintroub v. Nationstar Mortgage
927 N.W.2d 19
Neb.2019Background
- In Feb 2006 Edward Wintroub and his wife entered a land contract to buy a house from the Faller Trust; 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 took a loan from Lehman Brothers in Feb–Mar 2006 and executed a recorded deed of trust securing that loan; the deed subsequently passed by assignment to Nationstar Mortgage LLC.
- The Wintroubs defaulted on the land contract; the Faller Trust later defaulted on the Lehman loan and a trustee’s sale was scheduled in 2015.
- Wintroub sued to enjoin the trustee’s sale, claiming his equitable title and possession gave him priority and that Nationstar had notice or duty to inquire into his possession.
- Nationstar moved for summary judgment; the district court granted it, holding the unambiguous subordination clause subordinated Wintroub’s contract interest to the earlier-recorded deed of trust and its assignees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wintroub’s land-contract interest has priority over Nationstar’s mortgage | Wintroub: his equitable title/actual possession gives superior or constructive notice defenses to defeat Nationstar’s priority | Nationstar: the 2006 recorded deed of trust (and its assignments) has priority; the unambiguous subordination clause in the land contract subordinated Wintroub’s interest to seller’s lenders | Held: Nationstar’s mortgage has priority; the subordination clause unambiguously subordinated Wintroub’s rights to seller’s lenders and their assignees |
| Whether the subordination clause in the land contract is enforceable against Wintroub | Wintroub: equitably entitled; possession may impose inquiry notice (relying on Grand Island Hotel) to negate lender’s good-faith status | Nationstar: subordination clauses in land contracts are enforceable; clause here is clear and applies to lender assignees | Held: Subordination clauses in land contracts are generally enforceable; the clause here is unambiguous and controls |
| Whether actual possession imposed a duty on Nationstar to inspect and therefore defeat lender priority | Wintroub: actual possession required lender to inspect; constructive notice could affect race-notice priority | Nationstar: inspection/doctrine cited applies to landlord-tenant contexts and does not override the clear subordination or recorded deed priority | Held: Court declined to rely on notice/inquiry theories because the subordination clause plainly resolved priority in Nationstar’s favor |
| Whether genuine issues of material fact exist to preclude summary judgment | Wintroub: factual disputes over possession and equitable title create triable issues | Nationstar: record shows no disputed material facts regarding the unambiguous contract language and lack of payment by Wintroub | Held: No genuine issue of material fact; summary judgment for Nationstar affirmed |
Key Cases Cited
- Grand Island Hotel Corp. v. Second Island Development Co., 191 Neb. 98, 214 N.W.2d 253 (1974) (possession can give notice in landlord/tenant contexts)
- Vilcinskas v. Johnson, 252 Neb. 292, 562 N.W.2d 57 (1997) (mortgage priority may be altered by agreement)
- Meek v. Gratzfeld, 223 Neb. 306, 389 N.W.2d 300 (1986) (contract interpretation principles apply to mortgage subordination)
- Mackiewicz v. J.J. & Associates, 245 Neb. 568, 514 N.W.2d 613 (1994) (characterizing land-contract vendor interest as security akin to a mortgage)
- Timberlake v. Douglas County, 291 Neb. 387, 865 N.W.2d 788 (2015) (principles of contract interpretation and priority issues)