Jordan v. LSF8 Master Participation Trust, S-17-995.
| Court | Supreme Court of Nebraska |
| Citation | 300 Neb. 523,915 N.W.2d 399 |
| Docket Number | No. S-17-995.,S-17-995. |
| Parties | Richard K. JORDAN, appellant, v. LSF8 MASTER PARTICIPATION TRUST and Kelly R. Jordan, now known as Kelly R. Fairchild, appellees. |
| Decision Date | 13 July 2018 |
300 Neb. 523
915 N.W.2d 399
Richard K. JORDAN, appellant,
v.
LSF8 MASTER PARTICIPATION TRUST and Kelly R. Jordan, now known as Kelly R. Fairchild, appellees.
No. S-17-995.
Supreme Court of Nebraska.
Filed July 13, 2018.
Kent A. Schroeder, of Ross, Schroeder & George, L.L.C., Kearney, for appellant.
John D. Stalnaker and Robert J. Becker, of Stalnaker, Becker & Buresh, P.C., Omaha, for appellee LSF8 Master Participation Trust.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and Papik, JJ., and Schreiner, District Judge.
Heavican, C.J.
I. NATURE OF CASE
The plaintiff appeals from an order of summary judgment in a quiet title action seeking to invalidate a mortgage lien on the ground that it was an improper encumbrance of the homestead under Neb. Rev. Stat. § 40-104 (Reissue 2016), because his
signatures on the deed of trust were forged. In a prior order of dissolution and property division, the court allocated to the plaintiff the marital home and its accompanying refinancing mortgage debt, after concluding that it was "unlikely [the plaintiff] was unfamiliar" with the debt. The plaintiff’s attorney asserted in trial briefs to the dissolution court that even if the signatures on pertinent documents were forgeries, the "propriety" of the mortgage lien would not be in question.
The court in the quiet title action determined as a matter of law that the plaintiff was barred from challenging the validity of the mortgage lien by the doctrines of issue preclusion and judicial estoppel. The plaintiff argues on appeal that such equitable doctrines do not apply to encumbrances that are invalid under § 40-104 and that in any event, the court erred in concluding there was no genuine issue that all the elements of those doctrines were satisfied. The plaintiff also asserts that the trial court erred in admitting into evidence the trial briefs from the dissolution proceedings and in failing to join the action with another quiet title action he had filed against his ex-wife regarding the same property. We affirm.
II. BACKGROUND
Richard K. Jordan and Kelly R. Jordan, now Kelly R. Fairchild, were married in 1985. They purchased real property in 1995, which included land and a new manufactured home where they lived during
their marriage (the real estate). The parties do not dispute that this was their homestead as defined by Nebraska statutes, at least up to the $60,000 value and land limitations described in Neb. Rev. Stat. § 40-101 (Reissue 2016).
Richard and Kelly purchased the manufactured home for approximately $100,000 by way of an installment contract and security agreement, giving the lender a security interest in the home until all payments had been made. Richard and Kelly made payments on the installment contract until Kelly entered into a fixed-rate refinancing loan with Ameriquest Mortgage Company in the amount of $68,250.
The proceeds of that loan were used to satisfy the outstanding debt of Richard and Kelly on the installment contract in the amount of $50,875.55. The remainder of the loan was used to pay off other debts owed by Richard and Kelly.
The refinancing mortgage was secured with a deed of trust dated February 11, 2004, in favor of Ameriquest Mortgage Company. The deed was recorded in the office of the register of deeds on April 26.
Kelly was designated in the deed as the only borrower, and she was the only party to initial the various pages and sign the original signature page. Attached to the deed of trust was an acknowledgment signed by Kelly before a notary public in Council Bluffs, Pottawatomie County, Iowa, on February 11, 2004.
But both Richard’s and Kelly’s apparent signatures appear on another signature page attached to Kelly’s acknowledgment. In fact, Richard’s apparent signature appears twice. Next to one of Richard’s apparent signatures is the notation, "original signature," which notation appears to be made by the registrar of deeds.
The following page of the trust deed contains a notarized statement by Rhonda Nichols, a notary in Buffalo County, that Richard had acknowledged the trust deed instrument before her in Buffalo County on February 29, 2004. Nichols signed and stamped the acknowledgment again on March 19.
On the first page of the deed of trust is a registrar’s note stating, "Borrower does not show Richard Jordan but a signature [illegible] notarized/requested to record as presented." The deed of trust was assigned in 2014 to LSF8 Master Participation Trust (LSF8).
1. DISSOLUTION
The marriage of Richard and Kelly was dissolved in 2013. A trial had been held to determine the division of property and debts. In its dissolution decree, the court found that Richard and Kelly had more debts than assets, in part due to income
tax liability for unfiled tax returns and a judgment against them in a lawsuit.
The decree set forth that the real estate was encumbered by a mortgage deed of trust in the amount of $65,300. The court recognized that only Kelly’s name was on the debt and mortgage instruments and that a quitclaim deed, dated February 29, 2004, "purportedly from Richard to Kelly ... allowed Kelly to obtain this apparent refinancing." The court acknowledged that Richard denied that this quitclaim deed contained his real signature.
The court did not specifically discuss in the decree whether Richard denied that his purported signatures on the debt and mortgage instruments were his. Instead, the court concluded: "The debt however was incurred in February 2004, was recorded in 2004, and it’s highly unlikely that Richard was unfamiliar with it."
The court found that the mortgage lien, a judgment lien, and an Internal Revenue Service lien consumed all the equity in the real estate. But the court awarded the real
estate to Richard because vehicles and equipment previously used in Richard’s trucking business were stored on the land; therefore, Richard would have more use for the property. The court stated that awarding the real estate to Richard "is more realistic as long as it’s accompanied by all associated debt."
The court thus awarded the real estate to Richard, explicitly subject to the mortgage lien, the judgment lien, and any tax lien present or future. The court also quieted title of the real estate in Richard and terminated any right, title, or interest Kelly might have in the real estate. Ultimately, the court’s allocation of debt resulted in a mere $1,477.84 difference between the parties, and the court found that an equalizing judgment would not be appropriate.
2. QUIET TITLE ACTION
After the time for appealing the dissolution decree had passed without an appeal by either party, Richard brought, in the same court, a quiet title action against LSF8 and Kelly.
Richard described the action as one in which he sought "to quiet title to real estate ... by setting aside a deed of trust." Specifically, Richard asked the court to quiet title in his name without any encumbrances by LSF8.
Richard alleged that Kelly was the former owner of the property. At the same time, he alleged that his apparent signature on a quitclaim deed filed April 26, 2004, and purporting to transfer title from Richard to Kelly was forged.
Regarding LSF8, Richard alleged that his apparent signature on a deed of trust filed April 26, 2004, was a forgery. Richard recognized that this signature was "allegedly notarized by [the notary] on February 29, 2004." He did not specifically allege in his complaint that he had not, in fact, acknowledged the trust deed in front of the notary on February 29. Richard did not make any reference in his complaint to the Nebraska homestead statutes, Neb. Rev. Stat. §§ 40-101 to 40-116 (Reissue 2016).
LSF8 denied Richard’s allegation that his signature was a forgery. LSF8 alleged affirmative defenses of waiver, estoppel, unclean hands, laches, unjust enrichment, acquiescence and acceptance, and ratification.
LSF8 brought a counterclaim for declaratory judgment that the LSF8 deed of trust constitutes a valid, first, and prior lien against the property. In the alternative, LSF8 counterclaimed for equitable subrogation or an equitable lien, giving it priority over any other encumbrance on the property.
(a) No Joinder
The record indicates that there was a separate, pending quiet title action by Richard against Kelly. In that action, Richard asserted that Kelly was claiming title to the property, adversely to Richard, by virtue of an alleged quiet title deed containing Richard’s forged signature. However, the record does not contain the complaint in the other action.
At a status hearing for both actions, the court stated that it was considering whether to try the two actions together, but noted concern as to whether the two actions involved
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