Mut. of Omaha Bank v. Murante

• Decision Date: 25 April 2013
• Docket Number: No. S–11–1101.,S–11–1101.
• Citation: 285 Neb. 747,829 N.W.2d 676
• Parties: MUTUAL OF OMAHA BANK, as Successor by Merger to Nebraska State Bank of Omaha, appellee, v. Sam MURANTE, an Individual, appellant.
• Court: Nebraska Supreme Court

285 Neb. 747

829 N.W.2d 676

MUTUAL OF OMAHA BANK, as Successor by Merger to Nebraska State Bank of Omaha, appellee,

v.Sam MURANTE, an Individual, appellant.

No. S–11–1101.

Supreme Court of Nebraska.

April 25, 2013.

Syllabus by the Court

[285 Neb. 747]1. Statutes: Appeal and Error. Statutory interpretation is a question of law that an appellate court resolves independently of the trial court.

2. Contracts: Judgments: Appeal and Error. The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.

3. Summary Judgment: Appeal and Error. An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admissible evidence offered at the hearing show that there is no genuine issue as to any material facts or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

4. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence.

5. Statutes: Appeal and Error. Absent a statutory indication to the contrary, an appellate court gives words in a statute their ordinary meaning.

6. Statutes: Legislature: Intent: Appeal and Error. An appellate court will not look beyond a statute to determine the legislative intent when the words are plain, direct, or unambiguous.

7. Contracts: Guaranty: Debtors and Creditors: Words and Phrases. A guaranty is a contract by which the guarantor promises to make payment if the principal debtor defaults.

8. Contracts: Guaranty. A guaranty is an independent contract that imposes responsibilities different from those imposed in an agreement to which it is collateral.

9. Contracts: Guaranty. A guaranty is interpreted using the same general rules as are used for other contracts.

10. Contracts: Guaranty. A guaranty must be interpreted by reference to the entire document, with meaning and effect given to every part of the guaranty whenever possible.

11. Pleadings: Appeal and Error. Permission to amend pleadings is addressed to the discretion of the trial court; absent an abuse of discretion, the trial court's decision will be affirmed.

Steven J. Olson, of Brown & Brown, P.C., L.L.O., Omaha, and Michael J. O'Bradovich, Omaha, for appellant.

Patrick B. Griffin and Alison M. Gutierrez, of Kutak Rock, L.L.P., Omaha, for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, and McCORMACK, JJ., and INBODY, Chief Judge.

WRIGHT, J.

NATURE OF CASE

This case presents the question of whether a guaranty of a promissory note secured by a deed of trust is subject to the Nebraska Trust Deeds Act (Act), see Neb.Rev.Stat. § 76–1001 to § 76–1018 (Reissue 2009 & Cum.Supp.2012). The lender made loans to the borrower which were secured by deeds of trust describing real estate owned by the borrower. As additional security for the loans to the borrower, the guarantor promised payment of the indebtedness on the notes. When the borrower defaulted, the lender sought payment of the indebtedness from the guarantor. The district court granted summary judgment in favor of the lender. The guarantor claims his obligation on the guaranty is subject to § 76–1013 of the Act. We affirm.

SCOPE OF REVIEW

Statutory interpretation is a question of law that an appellate court resolves independently of the trial court. Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012).

The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below. McKinnis Roofing v. Hicks, 282 Neb. 34, 803 N.W.2d 414 (2011).

An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admissible evidence offered at the hearing show that there is no genuine issue as to any material facts or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Zawaideh v. Nebraska Dept. of Health & Human Servs., 285 Neb. 48, 825 N.W.2d 204 (2013). In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence. Id.

FACTS

Background Facts

In 2005, Sam Murante, who is a real estate broker, and a real estate agent formed Sutherlands Plaza, L.L.C. (Sutherlands), and began the development of the Sutherlands property at 29th and L Streets in Omaha. Mutual of Omaha Bank (Mutual) and its predecessor, Nebraska State Bank of Omaha, made four loans to Sutherlands. Each loan was evidenced by a promissory note, and Sutherlands executed four deeds of trust.

The first loan to Sutherlands was for $2,233,950 and was secured by two deeds of trust. The loan was later refinanced to a $2,337,078 note and remained secured by the two deeds of trust. The second loan was for $619,250 and was secured by the first deed of trust.

In November 2007, Mutual became the holder of the notes and the beneficiary of the deeds of trust. Mutual made a third loan for $122,500 and a fourth loan for $75,000 to Sutherlands, which were secured by a third and fourth deed of trust, respectively.

Murante's Guaranty Contract

As additional security for the first loan, Murante executed a commercial guaranty dated October 31, 2005. Murante unconditionally guaranteed full payment and satisfaction of Sutherlands' debt and obligations evidenced by the notes. He agreed to pay the principal amount outstanding on all debts, liabilities, and obligations Sutherlands owed to Mutual. The guaranty permitted Mutual to proceed against Murante on his obligation under the guaranty even when Mutual had not exhausted its remedies against Sutherlands. Murante waived all defenses based on suretyship or impairment of collateral except payment in full, including any defense from an antideficiency or other law which might prevent Mutual from bringing an action, including a deficiency action, against him.

Trustee's Sale

In 2010, Sutherlands defaulted and Mutual served written notice of default to Sutherlands. Sutherlands failed to cure the defaults and filed for bankruptcy on September 2, 2010. Mutual exercised its right to accelerate the debt. Murante was served with written notice of default, acceleration, and demand for payment, but did not pay the debt. As of January 1, 2011, Murante owed Mutual $3,292,839.33. On January 18, Mutual commenced an action against Murante for breach of the guaranty agreement.

After it had commenced its action on the guaranty, Mutual sold the real estate which secured the loans at a trustee's sale. On March 17, 2011, notice of the trustee's sale was published, which stated the real estate described in the deeds of trust would be sold to the highest bidder on April 26. At the trustee's sale, three parties identified themselves as having an interest in bidding. Mutual submitted the only bid of $1,658,000, and the property was conveyed to Mutual by trustee's deed.

District Court Decision

In this action to enforce the guaranty contract, the district court concluded that under the terms of the guaranty, Sutherlands' debt was not extinguished and Murante remained liable for Sutherlands' indebtedness. Murante had moved to amend his answer to assert that he was no longer liable to Mutual, because Mutual was barred by § 76–1013 from pursuing a deficiency action against Sutherlands. The district court overruled Murante's motion to amend and sustained Mutual's motion for summary judgment. It entered judgment against Murante for the full amount of Sutherlands' indebtedness, less Mutual's bid of $1,658,000.

Murante appealed, and we granted his petition to bypass the Nebraska Court of Appeals.

ASSIGNMENTS OF ERROR

Murante assigns, summarized and restated, that the district court erred in (1) holding that § 76–1013 did not apply to the action and that the debt was not extinguished by Mutual's failure to bring a deficiency action against Sutherlands, (2) sustaining Mutual's motion for summary judgment and overruling his motion to amend, and (3) failing to exercise its equity authority to perform an accounting and prevent a windfall.

ANALYSIS

Effect of § 76–1013

Murante claims that the guaranty agreement is subject to the Act. Because the fair market value of the real estate sold at the trustee's sale is higher than the trustee sale price of $1,658,000, he claims he is entitled to have the fair market value of the property credited against the debt.

Our interpretation of the Act is a question of law which we determine independently of the court below. For the reasons set forth, we conclude that the Act does not apply to Mutual's action on the guaranty. We therefore affirm the judgment of the district court. Section § 76–1013 states in relevant part:

At any time within three months after any sale of property under a trust deed, ... an action may be commenced to recover the balance due upon the obligation for which the trust deed was given as security.... Before rendering judgment, the court shall find the fair market value at the date of sale of the property sold. The court shall not render judgment for more than the amount by which the amount of the indebtedness with interest and the costs and expenses of sale, including trustee's fees, exceeds the fair market value of the property or interest therein sold as of the date of the sale....

Absent a statutory indication to the contrary, we give words in a statute their ordinary meaning. In re Interest of Erick M., 284 Neb. 340, 820 N.W.2d 639 (2012). We will not look beyond the statute to determine the legislative intent when the words are plain,...