Winberg v. Cimfel
| Decision Date | 26 May 1995 |
| Docket Number | No. S-93-810,S-93-810 |
| Citation | 532 N.W.2d 35,248 Neb. 71 |
| Parties | Larry L. WINBERG and June E. Winberg, Husband and Wife, Appellants, v. Rynold A. CIMFEL and Patricia H. Cimfel, Husband and Wife, and Marvin Sterner and Esther Sterner, Husband and Wife, Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Specific Performance: Equity. An action for specific performance sounds in equity.
2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court
tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.
3. Contracts: Real Estate: Options to Buy or Sell: Words and Phrases. An "option to purchase real estate" is a unilateral contract by which the owner of the property agrees with the holder of the option that he has the right to buy the property according to the terms and conditions of the option.
4. Contracts: Conveyances: Real Estate: Options to Buy or Sell. By an agreement for an option to purchase real estate, the owner does not sell the land, nor does the owner at the time contract to sell. The owner does, however, agree that the person to whom the option is given shall have the right at his election or option to demand the conveyance in the manner specified.
5. Contracts: Conveyances: Real Estate: Options to Buy or Sell. A right of first refusal, rather than an option to purchase real estate, is created by an agreement which (1) contains no terms or conditions of sale; (2) fails to indicate that the party interested in purchasing real estate has an absolute right to demand conveyance of the property at any time prior to the owner's decision to sell it; and (3) implements the word "first" to indicate that if the owner decides to sell the real estate, he or she is compelled to offer it first to the other party to the agreement.
6. Contracts: Merger: Intent. For a merger of agreements to take place, the same parties and the same subject matter must be involved and there must be some showing of intent to merge the two agreements.
7. Real Estate: Vendor and Vendee: Consideration: Notice: Words and Phrases. A "bona fide purchaser" of land is one who purchases for valuable consideration without notice of any suspicious circumstances which would put a prudent person on inquiry.
8. Real Estate: Vendor and Vendee: Claims: Notice. To qualify as a bona fide purchaser of land, one must actually have paid the purchase money before he or she received notice of a claim against the land.
John O. Sennett, of Sennett and Associates, Broken Bow, for appellants.
Larry W. Beucke, of Parker, Grossart, Bahensky & Beucke, Kearney, and Carlos E. Schaper, of Schaper & Steffens, Broken Bow, for appellees.
Larry L. and June E. Winberg filed this equity action against Rynold A. and Patricia H. Cimfel and Marvin and Esther Sterner, requesting specific performance of a right of first refusal to purchase a certain 276-acre tract of land in Custer County. The district court for Custer County granted the Cimfels' and Sterners' motions for summary judgment. We reverse the judgment and remand the cause for further proceedings because the district court erred in finding that the Winbergs' right of first refusal merged into a subsequent warranty deed conveying a contiguous 4-acre tract of land from the Cimfels to the Winbergs and because the Sterners did not qualify as bona fide purchasers of land.
Rynold and Patricia Cimfel purchased a 280-acre farm in Custer County on or about February 21, 1959. On December 4, 1970, the Cimfels entered into a real estate sales agreement with the Winbergs, wherein the Cimfels agreed to convey a 4-acre tract of the 280-acre farm to the Winbergs in exchange for $1,600. The payment schedule in the sales agreement reflects that the Winbergs were to pay the final installment on January 1, 1976. The section of the sales agreement entitled "Special Agreements between the Seller and the Buyer" contained the following language Parties of the first part [the Cimfels] will have first rights to purchase above four acres or any part thereof if parties of the second part [the Winbergs] desire to sell. Parties of the second part will be given first opportunity to purchase remaining 276 acre [sic], more or less, attached and now owned by the parties of the first part if parties of the first part desire to sell.
The Winbergs filed the sales agreement with the register of deeds in Custer County on March 3, 1971. The record reflects that the Winbergs paid off the money owed on the 4-acre tract in a timely fashion. On December 30, 1975, the Cimfels executed and delivered a warranty deed conveying the 4-acre tract to the Winbergs, which the Winbergs filed with the Custer County register of deeds on January 15, 1980. The warranty deed made no mention of the "first rights to purchase" detailed above.
During the week prior to August 17, 1992, Rynold Cimfel received an inquiry from one Arthur Sterner regarding Sterner's interest in purchasing the 276-acre tract. Cimfel arranged to meet with Sterner in Broken Bow on August 17. At the August 17 meeting, Cimfel quoted a price of $90,000 for the land to Sterner, but the parties did not reach an agreement regarding the sale of the land.
Prior to meeting with Sterner, Cimfel stopped at the Winberg residence and informed June Winberg that the 276-acre tract was for sale. Cimfel testified in his deposition that he believed that he had a "gentleman's agreement" with the Winbergs whereby the Winbergs were to have the first opportunity to buy the 276-acre tract when it became available for purchase. Cimfel did not remember having entered into the written "first rights to purchase" agreement. Cimfel testified that the Winbergs knew that time was of the essence because he told June Winberg that the time for planting winter wheat was nearing. However, Cimfel conceded that he never expressly told the Winbergs that time was of the essence.
On August 20, 1992, the Cimfels received a postcard from the Winbergs stating that the Winbergs were interested in purchasing the 276-acre tract. In the postcard, the Winbergs inquired about the Cimfels' asking price per acre and asked how many acres of the land were pasture. Rynold Cimfel testified that he wrote a letter in response to the Winbergs' postcard the day he received it. The Winbergs received Cimfel's letter on August 22, 1992. In the letter, Cimfel provided a legal description of the land and estimated that it consisted of approximately 280 acres. Cimfel described the soil and instructed the Winbergs to obtain an aerial map of the tract at the Agricultural Stabilization and Conservation Service office in Broken Bow. Finally, Cimfel stated an asking price of $90,000. Cimfel testified, but did not state in the letter, that he expected a response from the Winbergs in 3 to 5 days.
The same day that the Winbergs received the letter from Cimfel, Cimfel received a phone call from Sterner, who informed Cimfel that he had looked at the property again and was interested in purchasing it. Cimfel arranged to meet Sterner at Sterner's residence in Broken Bow on August 25, 1992.
Without prior notice, Cimfel stopped by the Winbergs' residence on the way to his August 25 meeting with Sterner and found no one home. Cimfel then met with Sterner, and the two parties reached an agreement for the sale of the 276-acre tract to Sterner.
After reaching the agreement with Sterner, Cimfel stopped at Larry Winberg's barbershop. Cimfel informed Winberg that he had just sold the 276-acre tract to Sterner because he assumed that the Winbergs were not interested in purchasing the land, based on the lack of a response to his letter. That same day, the Winbergs sent a letter via certified mail to the Cimfels expressing their interest in purchasing the 276 acres. The Winbergs also applied and received approval for a $90,000 loan, which the Winbergs assert was to be used to purchase the 276 acres.
The Cimfels refused to convey the 276-acre tract to the Winbergs. Subsequently, the Winbergs filed the instant action, naming the Cimfels and the Sterners as defendants, seeking specific performance of the "first rights to purchase" agreement for the 276-acre tract, and asking the court to declare the conveyance between the Cimfels and the Sterners void. The Cimfels answered, and the Sterners answered and counterclaimed, asking the court to quiet title in the Cimfels, subject to the sales agreement with the Sterners.
Each party filed a motion for summary judgment. The district court held that the "first rights to purchase" agreement in the 1970 contract merged into the 1975 warranty deed that conveyed the 4-acre tract to the Winbergs, and that because the "first rights to purchase" agreement was not specifically continued in the deed, it ceased to exist on or about January 1, 1976.
The Winbergs contend that the district court erred in sustaining the Cimfels' and the Sterners' motions for summary judgment and in finding that the "first rights to purchase" in the 1970 sales agreement merged into the 1975 warranty deed and therefore did not survive past January 1, 1976.
An action for specific performance sounds in equity. Fritsch v. Hilton Land & Cattle Co., 245 Neb. 469, 513 N.W.2d 534 (1994). In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court...
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