Strunk v. Chromy-Strunk

Decision Date20 January 2006
Docket NumberNo. S-04-879.,S-04-879.
Citation270 Neb. 917,708 N.W.2d 821
PartiesGrant J. STRUNK, appellee and cross-appellant, v. Kim CHROMY-STRUNK, appellant and cross-appellee.
CourtNebraska Supreme Court

Richard T. Seckman, Schuyler, of Karel & Seckman, for appellant.

Sally A. Rasmussen, of Knudsen, Berkheimer, Richardson & Endacott, L.L.P., Lincoln, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

McCORMACK, J.

I. NATURE OF CASE

Kim Chromy-Strunk, now known as Kim Svatora, and her former husband, Grant J. Strunk, were divorced in 2001. The decree contained a settlement agreement providing Grant with an additional $75,000 judgment if, during Grant's lifetime, Kim voluntarily or involuntarily sold, transferred, gifted, conveyed, or foreclosed upon the marital property granted to her. It is under this provision that Grant sought to determine the $75,000 due and to garnish Kim's checking account, after Kim had "conveyed" the property by issuing a warranty deed to herself and her second husband, Roger A. Svatora, in joint tenancy.

The district court held that the provision was a valid condition precedent in a contract, and not a void conditional judgment, and that the condition had been satisfied by the warranty deed. It therefore overruled Kim's motion to quash the garnishment, determined that $75,000 plus accrued interest from the time of the conveyance was due and owing in full, and directed the garnishee to pay into the court. The primary issue presented in this case is whether the provision is a void conditional judgment, and, if not, whether the condition for the provision was satisfied.

II. BACKGROUND

Kim and Grant were divorced by the district court on April 18, 2001. Pursuant to the property settlement agreement (the Settlement) attached to the decree, Kim, in addition to a vehicle and other personal property, was awarded all right, title, and interest in the marital residence subject to any encumbrances on the property, including a mortgage balance of approximately $90,000. Grant, in addition to a vehicle and other personal property, was awarded $50,000 to be paid by Kim on or before April 1, 2004, said sum accruing interest at 6 percent per annum until paid in full. Furthermore, the Settlement provided:

[I]f at any time said real property is sold, transferred, gifted, conveyed, foreclosed upon, or for any other reason or in any other manner conveyed, whether voluntarily or involuntarily by the Respondent [(Kim)] to any third party, Petitioner [(Grant)] shall receive the additional sum of $75,000 which shall accrue no interest until due. This additional sum of $75,000 shall only be due to the Petitioner by the Respondent if said property is sold or conveyed as described above, during the Petitioner's lifetime. If said real property is sold or transferred as described above, after the Petitioner's death, Petitioner shall not be entitled to the additional sum of $75,000, but the initial sum of $50,000, together with interest, shall be due to the Petitioner or his estate.

Both the $50,000 judgment and the $75,000 judgment shall be liens against said property and shall remain liens against said property until said sums are paid or otherwise extinguished.

The Settlement set forth that Kim and Grant acknowledged that its terms and provisions were "fair, reasonable, equitable and not unconscionable"; that it had been "carefully examined and entered into freely and voluntarily by each of them"; and that they had both received legal advice in connection with the negotiation and execution of the Settlement from attorneys of their choosing. The district court, in the dissolution decree, found the Settlement to be reasonable and equitable and not unconscionable, and ordered compliance therewith.

On February 18, 2004, Kim filed an application for subordination of judgment lien and notice of hearing with the district court. The application described the $50,000 judgment and the $75,000 contingent amount. Kim explained that she desired to pay Grant the $50,000 sum plus interest on or before the April 1, 2004, due date set forth in the Settlement, but that she did not have sufficient liquid assets to do so. As a result, she was trying to refinance the first lien mortgage on the marital residence in order to procure sufficient funds. However, the finance company refused to loan the required funds unless its loan was in first position ahead of Grant's lien attached to the $75,000 contingent payment. Because Grant had refused Kim's request to voluntarily subordinate his contingent payment lien, Kim asked the district court to order such subordination. Grant objected to the subordination on the grounds that it would effectuate an improper modification of the Settlement, it was requested for the purpose of avoiding payment, and it would unduly reduce the security for his $75,000 lien.

The district court granted the request for subordination of Grant's $75,000 lien and issued a corresponding order requiring Kim to use the proceeds of the refinancing to pay Grant's $50,000 lien. On March 15, 2004, Grant appealed to the Nebraska Court of Appeals. See Strunk v. Chromy-Strunk, No. A-04-351, 2004 WL 2216508 (Oct. 5, 2004) (not designated for permanent publication) (Strunk I). Relying on Hall v. Hall, 176 Neb. 555, 126 N.W.2d 839 (1964), the district court denied Grant's motion for a supersedeas bond, reasoning that the bond was not expressly provided for under Neb.Rev. Stat. § 25-1916 (Cum.Supp. 2002), and was therefore discretionary with the court. The record reflects that no cash in lieu of cost bond or supersedeas bond was filed in Strunk I. Because of the disallowance of the supersedeas bond, the district court's order approving subordination of the $75,000 contingent lien remained in full force and effect and was not stayed pending any appeal.

On October 5, 2004, the Court of Appeals released an unpublished opinion reversing the district court's decision granting subordination of the $75,000 lien to the new lien of the refinancing institution. The Court of Appeals reasoned that there were insufficient facts to support Kim's burden of showing that the subordination would not unduly reduce the security for the payment of the lien. Kim did not request further review of that decision.

While Strunk I was pending, Kim refinanced the residence, and on April 1, 2004, a joint tenancy warranty deed was filed wherein the residence was "convey[ed]" to Kim and her second husband, Roger, as follows:

KIM P. SVATORA, formerly known as KIM P. CHROMY, and ROGER A. SVATORA, Wife and Husband, Grantor, whether one or more, in consideration of $1.00 and other valuable consideration, receipt of which is hereby acknowledged, conveys to KIM P. SVATORA and ROGER A. SVATORA, Wife and Husband, Grantees, as joint tenants and not as tenants in common....

That same date, Kim tendered a check to Grant in the amount of $58,860.27 by depositing it with the clerk of the district court. Grant returned the check to Kim explaining that he could not accept such funds without jeopardizing his appeal.

On May 26, 2004, Grant's attorney filed with the Colfax County District Court an affidavit and praecipe for summons in garnishment. The attorney stated that Grant had recovered a judgment against Kim on April 18, 2001, which judgment became due and payable on April 1, 2004, and that there was due on the judgment the sum of $75,000 plus $614.90 interest as of May 25, and $13.10 costs, for a total of $75,628. Pursuant to the aforementioned "judgment," interrogatories were sent to financial institutions where Kim was thought to hold funds.

Attached to at least one of these interrogatories was a "Request for Hearing" form, which Kim signed and filed with the district court, contesting the propriety of the garnishment. Kim also filed a motion to quash the garnishment and supporting affidavit and praecipe for summons. In her motion to quash, she alleged that the district court lacked jurisdiction, that the pleadings and records of the district court did not reflect a $75,000 judgment in Grant's favor because the conditions or contingencies had not been satisfied, and that the judgment upon which Grant wished to garnish was a void conditional judgment.

Grant responded with a "Motion to Determine Amounts Due and Notice of Hearing," wherein Grant alleged that the condition for his $75,000 lien had been satisfied by way of the April 1, 2004, joint tenancy warranty deed, and asked the court to determine the amounts due to him by virtue of the dissolution settlement and decree. Grant also filed the garnishee bank's response to the garnishment interrogatories wherein it admitted being in possession of $4,315.97 in a demand account belonging to Kim. Grant requested that the court order this amount be paid into the court. Kim objected.

A hearing was held on Kim's request for a hearing on the garnishment and motion to quash and on Grant's motion to determine amounts due. During the hearing, Kim asked the court to mark the court file in its entirety and enter it as an exhibit. Grant objected to the court's taking judicial notice of the entire file. After some discussion about whether the file could be judicially noticed and whether it needed to be marked with an exhibit sticker, the court granted Kim's request and entered the file as exhibit 4. That exhibit contains 83 unnumbered pages, some double-sided, and includes the praecipe for bill of exceptions, notice of appeal, and other documents related to Strunk I that are found in the transcript for that case.

The district court held that the transfer of Kim's interest in the property to herself and Roger in joint tenancy created in a third party an undivided share of the whole property, thus fulfilling the condition under the Settlement and...

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