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Jordan v. LSF8 Master Participation Trust
Citation: 300 Neb. 523Docket: S-17-995
Court: Nebraska Supreme Court; July 13, 2018; Nebraska; State Supreme Court
Original Court Document: View Document
The Nebraska Supreme Court case Jordan v. LSF8 Master Participation Trust addresses several legal principles relevant to issue preclusion and summary judgment. 1. **Issue Preclusion**: This legal doctrine allows certain issues directly decided in a prior final judgment to not be relitigated in future cases involving the same parties. The requirements for its application include: an identical issue decided in the prior action, a final judgment on the merits, a party being involved in both cases, and a full and fair opportunity to litigate the issue previously. 2. **Summary Judgment**: Summary judgment is appropriate when there are no genuine issues of material fact, allowing the moving party to obtain judgment as a matter of law. Appellate courts review summary judgment by favoring the non-moving party regarding evidence and reasonable inferences. 3. **Motions for New Trial**: Such motions filed after summary judgment do not extend the 30-day period for filing a notice of appeal. However, a timely motion to alter or amend a judgment does terminate this period. 4. **Consolidation of Trials**: The right to consolidate cases for trial depends on the defendant's application. Courts inherently possess the authority to consolidate cases to streamline evidence presentation and reduce the number of hearings. 5. **Judicial Admissions and Evidence**: A judicial admission is an acknowledgment made in court proceedings that serves as a substitute for evidence. Statements in trial briefs are regarded similarly to unsworn statements, and prior briefs can be admitted without a per se prohibition. 6. **Hearsay and Nonhearsay Statements**: A court's decision to admit statements as nonhearsay is reviewed for abuse of discretion, which occurs when a trial court's decision is unreasonable or contrary to justice and evidence. Overall, the case illustrates the application of these legal doctrines and procedural rules in the context of Nebraska law. Issue preclusion requires a determination of whether the same issue was involved and resolved in both prior and current proceedings. The burden lies with the party asserting issue preclusion to demonstrate that a specific issue was necessarily determined in the previous case. Previous judgments are conclusive only regarding facts directly at issue, not collateral facts. For issue preclusion to bar a subsequent action, the same evidence must support both cases; differing proof means the prior judgment does not apply. An issue is considered identical unless there is a significant factual change. A party cannot invoke issue preclusion if they had a higher burden of proof in the previous action. Due process necessitates that issue preclusion applies only to parties who participated in the prior suit or had their interests adequately represented. Furthermore, a party cannot selectively choose which facts to raise in earlier proceedings to avoid issue preclusion. In a quiet title action, the plaintiff sought to invalidate a mortgage lien, claiming his signatures were forged. However, a prior dissolution ruling had allocated the marital home and related debt to him, and he had previously argued the lien's propriety wouldn't be challenged even if signatures were forged. The court ruled that the plaintiff was barred from contesting the mortgage's validity due to issue preclusion and judicial estoppel. The plaintiff contended the doctrines shouldn't apply to invalid encumbrances under Nebraska law and claimed the court erred in admitting trial briefs from the dissolution case. The appeal was affirmed. Background information notes the marriage between Richard K. Jordan and Kelly R. Jordan, the purchase of their homestead, and its status under Nebraska law. Richard and Kelly acquired a manufactured home for about $100,000 through an installment contract, allowing the lender to maintain a security interest until full payment. They made payments until Kelly refinanced with Ameriquest Mortgage Company for $68,250, using $50,875.55 to pay off their installment contract and the remainder for other debts. The refinancing was secured by a deed of trust recorded on April 26, 2004, listing only Kelly as the borrower, who signed the documents, but Richard’s apparent signatures appeared on an attached page, including a note indicating an "original signature" by the registrar. Additionally, a notarized acknowledgment by Richard was made on February 29, 2004, in a separate county. In 2013, Richard and Kelly's marriage was dissolved, and a court determined their property and debt division. The court noted their debts exceeded assets, partly due to unfiled tax returns and a lawsuit judgment. It recognized only Kelly's name on the mortgage instruments, linked to a quitclaim deed from Richard to Kelly, which Richard claimed did not contain his real signature. The court did not definitively address the validity of Richard's signatures on the mortgage documents but concluded Richard was likely aware of the debt incurred in February 2004. The court found all equity in the real estate was consumed by existing liens, including a mortgage, judgment, and IRS lien, yet awarded the property to Richard for practical reasons connected to his trucking business. The property was awarded subject to all existing debts, and the court quieted title in Richard, terminating any interest Kelly had in the property. The debt allocation resulted in a minimal difference of $1,477.84 between the parties, with the court deeming an equalizing judgment unnecessary. Richard initiated a quiet title action against LSF8 and Kelly after the appeal period for a prior dissolution decree expired. He aimed to eliminate encumbrances on the property from LSF8, asserting that Kelly was the previous owner and claiming that his signature on a quitclaim deed dated April 26, 2004, transferring title to Kelly was forged. He also alleged forgery regarding his signature on a deed of trust, allegedly notarized on February 29, 2004, but did not explicitly state that he had not acknowledged this deed before the notary. Richard's complaint did not reference Nebraska homestead statutes. LSF8 denied the forgery claims, asserting several affirmative defenses, including waiver and estoppel, alongside a counterclaim for a declaratory judgment to establish its deed of trust as a valid, prioritized lien on the property. LSF8 also sought equitable subrogation or an equitable lien for priority over other encumbrances. Separate from this action, Richard had another pending quiet title action against Kelly, challenging Kelly's claimed title based on the alleged forged signature on a quiet title deed. The court considered whether to consolidate both actions but noted potential differing standards of proof and did not receive a formal motion to join them. On May 9, 2017, LSF8 filed for summary judgment in its favor regarding Richard's quiet title action and its counterclaim. Richard contended that his forged signature and improper acknowledgments made the deed of trust void under homestead statutes. LSF8 argued that Richard was estopped from claiming invalidity based on undisputed facts. During the summary judgment hearing, LSF8 introduced Richard's trial briefs from the dissolution proceedings as evidence, which were contested by Richard's attorney on grounds of foundation and hearsay. The court admitted the briefs but stated it would disregard any extraneous markings present on the exhibits. The court deemed the statements in the briefs as nonhearsay under Neb. Rev. Stat. 27-801(4)(b, Reissue 2016) and relevant to LSF8’s claims of issue preclusion, collateral estoppel, and ratification. Richard's counsel proposed that Richard be allocated the real estate associated with a $65,300 mortgage in the equitable division of marital debt. A detailed property division analysis supported Richard’s claim for an equalization payment from Kelly. Richard’s counsel expressed confusion about the mortgage’s validity unless there were doubts regarding Richard's signature on the Quit Claim Deed, asserting that even a forgery would not invalidate the lien. In support of its summary judgment motion, LSF8 introduced Richard's deposition, where he did not confirm whether he had signed the trust deed but mentioned he was not in Buffalo County when he allegedly acknowledged it. LSF8 also submitted Kelly’s affidavit detailing the original financing for a manufactured home, which included a fixed-rate note from February 11, 2004, bearing only Kelly's signature. Richard's request for a continuance to depose Kelly again was denied, as the court noted that the validity of Kelly’s acknowledgment of the trust deed was not addressed in the pleadings. On July 7, 2017, the court granted summary judgment for LSF8, affirming its deed of trust as a valid lien against Richard’s claims and finding barring factors like issue preclusion and judicial estoppel. Subsequently, Richard filed a 'Motion for New Trial' on July 14, 2017, citing surprise, newly discovered evidence, legal errors, and insufficient evidence. He argued that the deed of trust was void and unenforceable because neither he nor Kelly executed or acknowledged it. An affidavit from Richard’s counsel was submitted, indicating that Kelly admitted her signature and initials were on the deed, but stated it was signed in Kearney, Nebraska, not in Council Bluffs, Iowa, as purported. Counsel intended to submit a deposition as additional evidence for LSF8’s summary judgment motion, but learned that the court had already ruled on it. Kelly’s deposition, included in the motion for a new trial, revealed that in 2004, she and Richard agreed to refinance their debts with Ameriquest Mortgage Company. Kelly signed some documents in Kearney, but did not recall seeing her acknowledgment page or appearing before a notary in Iowa. A quitclaim deed transferring the homestead from Richard to Kelly was attached, allegedly signed by Richard and notarized on February 29, 2004. On August 21, 2017, the court denied Richard’s motion for a new trial, stating that the new evidence did not alter the ruling that Richard’s effort to invalidate the deed of trust was barred by issue preclusion and judicial estoppel. Richard appealed on September 20, 2017, claiming the court erred in (1) not combining this case with his quiet title action against Kelly, (2) considering his dissolution action trial briefs, (3) granting summary judgment for LSF8, and (4) denying his new trial motion. The standard of review indicates that issue preclusion is a legal question for appellate courts, and summary judgment is appropriate when no significant facts are disputed. Richard contended that the court should have joined his cases, erred in admitting dissolution action briefs, and that there was a genuine material fact dispute regarding the execution of the deed of trust by both spouses. Regarding jurisdiction, Richard's motion for a new trial did not terminate the 30-day appeal period following summary judgment, as such a motion is improper. However, his motion contained claims for newly discovered evidence and errors of law, qualifying it as a motion to alter or amend the judgment, which does terminate the appeal period. Richard filed a timely notice of appeal after the district court overruled a terminating motion, establishing jurisdiction for the appeal. The court did not abuse its discretion in declining to sua sponte consolidate Richard's action with a related quiet title case against Kelly, as consolidation requires a motion from the defendant, which neither Kelly nor LSF8 made. While Richard argued that consolidation would have allowed the court to consider relevant deposition evidence from Kelly, the court found that this evidence was irrelevant to the equitable defenses underlying the summary judgment. The court ruled that Richard was estopped from challenging the validity of LSF8’s lien, irrespective of the deed's acknowledgment status. Richard also contended that issue preclusion and judicial estoppel did not apply to homestead claims that do not meet statutory requirements. However, the court rejected this argument, clarifying that equitable estoppel does not apply when statutory procedures for homestead conveyances, as outlined in Neb. Rev. Stat. § 40-104, are not followed. Claims of invalidity regarding homestead property deeds must be raised within specific statutory timeframes. The court noted that while Richard referenced cases about estoppel, they pertained specifically to equitable estoppel, which is not applicable when agreements contravene public policy or fail to meet statutory mandates. Judicial estoppel and issue preclusion can bar claims of invalidity, and these doctrines differ from equitable estoppel. Judicial estoppel safeguards the judicial process by preventing a party from taking contradictory positions in different proceedings, while issue preclusion enhances judicial efficiency by avoiding redundant litigation. Claims of invalidity under statute 40-104 should be treated similarly to other claims regarding judicial estoppel and issue preclusion, as these doctrines are rooted in common law and the homestead statutes do not limit their application. Despite the significance of homestead protections, they do not override the principles of judicial estoppel and issue preclusion. The district court's admission of trial briefs into evidence at the summary judgment hearing was upheld. Richard's hearsay objection was dismissed by the court under section 27-801(4)(b), which states that certain statements are not considered hearsay if they are against a party and meet specific criteria. Richard did not contest the admissibility of his attorney's statements as hearsay or argue their relevance on appeal. Instead, he claimed that trial briefs cannot be deemed judicial admissions, which are formal acknowledgments made during litigation that waive the need for evidence. The court clarified that it did not treat Richard's trial briefs as judicial admissions but referenced a prior case to support their admissibility as nonhearsay statements. Richard’s argument regarding the classification of statements in trial briefs as judicial admissions is deemed irrelevant. The court holds that such statements should be evaluated under the same evidentiary rules as unsworn statements made elsewhere, noting that other jurisdictions have allowed trial briefs from previous actions as admissible evidence or subject to judicial notice. There is no absolute prohibition against admitting these briefs. The court’s decision to admit Richard’s trial briefs as non-hearsay statements against interest is subject to an abuse of discretion standard, defined as decisions based on untenable or unreasonable reasons. The district court did not abuse its discretion in this case. The discussion then shifts to issue preclusion, which can be raised in summary judgment motions and does not require a showing of bad faith, unlike judicial estoppel. Issue preclusion prevents the relitigation of an issue of ultimate fact that has been resolved by a final judgment between the same parties. For issue preclusion to apply, four conditions must be met: (1) an identical issue was decided in a prior action; (2) that action resulted in a final judgment on the merits; (3) the party against whom it is applied was involved in the prior action; and (4) there was a fair opportunity to litigate the issue previously. The parties agree that the dissolution decree was a final judgment and that Richard was a party to those proceedings. The key question is whether the issue in Richard's quiet title action against LSF8 is identical to an issue decided in the dissolution proceedings and whether he had a full and fair opportunity to litigate it. The burden lies with the party invoking issue preclusion to demonstrate the identity of the issues. Issue preclusion applies when a particular issue was determined in a prior proceeding, limiting the applicability of that determination to the specific facts directly in issue. The conclusive nature of a former judgment does not extend to collateral facts that may be in controversy but are not directly addressed. The critical test for bar application is whether the same evidence would support both actions; differing proof requirements negate the bar effect. For issue preclusion to apply, an issue must be identical unless there is a significant factual change, and it is not applicable if a party faced a higher standard of proof in the first action than in the subsequent one. In the case of Woodward v. Andersen, the Nebraska Supreme Court held that issue preclusion barred certain claims due to determinations made during a prior dissolution proceeding regarding the value of marital property, including claims related to alleged improper withdrawals by one party. The court noted that a settlement agreement made part of the dissolution decree stated that the wife was not indebted to the corporation and that the corporation had no claims against her. Consequently, the husband was precluded from raising claims of excessive withdrawals prior to dissolution. In the present case, Richard contends that the validity of the lien held by LSF8 was not addressed in the prior dissolution proceedings, arguing that issue preclusion does not apply. However, this argument is rejected because the validity and enforceability of the lien were directly at issue during the dissolution when the court allocated the lien. The trial briefs indicated that determining the lien's validity was essential for the court's equitable division of marital debt, and the same proof required to establish a lien's invalidity under Nebraska law applies in both dissolution proceedings and quiet title actions. The court maintained the preponderance of the evidence standard in both contexts. Richard's challenge to the lien's validity was based on unchanged facts since the dissolution proceedings, leading to the conclusion that the issue was already adjudicated. The district court also assessed whether Richard had a fair opportunity to litigate the lien's validity during the dissolution. Due process requires that issue preclusion only applies to those who have had their opportunity to litigate, either as parties or privies. A party cannot selectively raise issues in previous proceedings. The court referenced a prior case where the husband had the chance to litigate despite not fully utilizing discovery options. Although Richard did not argue the specific theory of invalidity under the homestead statutes during the dissolution, he had the opportunity to do so. His claim that the lienholder's absence in the dissolution proceedings deprived him of a fair opportunity was rejected, as issue preclusion applies only to parties involved in the prior action. The district court concluded that Richard had a full opportunity to litigate the lien's validity, ruling that his attempt to invalidate LSF8's lien was barred by issue preclusion. The court affirms the summary judgment in favor of LSF8, primarily based on issue preclusion, rendering the alternative basis of judicial estoppel unnecessary for consideration. The district court's denial of Richard’s motion to alter or amend was upheld, as Kelly's deposition was deemed irrelevant to the issue of preclusion. Regarding plain error, the court recognized a misstatement in the district court’s summary judgment order, which inaccurately declared the deed of trust as a “valid first and prior lien” against non-parties. The language of the order has been modified to clarify that the deed of trust is valid as against Richard and Kelly, the defendants in Richard’s quiet title action. The judgment of the district court is affirmed as modified.