Ryan v. Kolterman
| Decision Date | 30 September 1983 |
| Docket Number | No. 44547,44547 |
| Parties | Kelly P. RYAN et al., Appellees, v. Brian KOLTERMAN et al., Appellants, Sam Wright, Jr., et al., Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
Contracts: Foreclosure. An application for the strict foreclosure of a land contract, being in the nature of a forfeiture, is addressed to the sound discretion of the court, and before this relief may be granted it must be clear that the property involved is of less value than the amount due on the contract for its sale or that it would not bring a surplus over the amount due if a sale was ordered.
Brian Kolterman, pro se.
Michael J. Mooney of McCormack, Cooney, Mooney & Hillman, P.C., Omaha, for appellees.
On November 19, 1979, the appellees Ryan, as sellers, and the appellants Kolterman, as buyers, entered into a contract for a sale of 17 acres of land, more or less, legal title to which was held by the Ryans, and which was improved by 4 acres of boat basin and creek, a 29-pad mobile home park, and a restaurant.
The buyers agreed to pay $280,650 for the real property and $6,350 for personal property, on terms of $50,000 down, $25,000 no later than September 1, 1980, monthly payments of $2,334.30 for 59 months, and the balance of $196,832.09 in one payment 60 months after the first installment became due.
The contract provided that the buyers could make improvements up to the amount of $100,000 without the prior consent of the sellers, it set forth the buyers' right to cure any default at the sellers' expense, and contained an acceleration clause. The deed from the buyers to the sellers was placed in escrow, to be delivered upon the final payment.
The buyers paid $47,500 at the time of closing, since then have paid a total of $9,000 in monthly installments, and were credited the net sum of $4,789 by the sellers, who operated the mobile home park and paid its expenses. No payments were made by the buyers under the contract after October 1, 1980.
The businesses on the property were operating at the time of sale, and it was the buyers' intention to continue their operation and to fulfill their contractual obligations from the income produced.
The evidence showed that the restaurant was closed on October 1, 1980. The marina was not operated during the year 1980, and at the time of trial the boat basin had silted to the degree that dredging will be required to make it functional. The buyers have unsuccessfully attempted to secure loans and other financing arrangements to meet their obligations to the sellers.
Shortly after their occupancy, the buyers expended sums on reopening expenses totaling $24,038, which included $13,000 in remodeling the restaurant and $11,038 for the digging of a sewer. The sewer contractor was not paid in full by the buyers and has perfected a mechanic's lien on the property in the amount of $7,538. Other valid mechanics' liens total $1,325. The trial court properly found that these liens first attached to the equitable interest of the buyers, but if unpaid were decreed a statutory lien against the property, which was subject to sale in satisfaction.
The sellers brought an equitable action for strict enforcement of the contract of sale, the trial court granted this relief, and the buyers-appellants seek reversal on the grounds that a strict foreclosure was not justified by the evidence.
Mr. Kolterman admitted that the buyers have defaulted on the contract, and testified that at the time of trial they owed, by his reckoning, $255,000 on the contract of sale.
Mr. Kolterman testified, as an owner, that he valued the property at $330,000, without giving his reasons therefor.
An appraiser called on behalf of the buyers testified that while he customarily uses three approaches to valuing property, i.e., cost, market, and income, in this case the buyers offered him no income figures, and he did not use the market approach because in his opinion there had been no sales of comparable property. He testified that under the replacement cost less depreciation method of valuation, he arrived at a...
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