Selma Development v. Great Western Bank

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	37
Cite as 285 Neb. 37
Selma D evelopment, l.l.C., a nebraSka limiteD
liability Company, et al., appellantS, v. G reat
WeStern bank, a bank ChartereD unDer
the State of South Dakota, appellee.
G reat WeStern bank, a bank ChartereD unDer
the State of South Dakota, appellee, v.
miChael p. earl et al., appellantS.
825 N.W.2d 215
Filed January 18, 2013. 	Nos. S-11-1021, S-11-1022.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower
court’s grant of summary judgment if the pleadings and admitted evidence show
that there is no genuine issue as to any material facts or as to the ultimate infer-
ences that may be drawn from those facts and that the moving party is entitled to
judgment as a matter of law.
2. ____: ____. 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.
3. Jurisdiction: Final Orders: Appeal and Error. For an appellate court to acquire
jurisdiction of an appeal, there must be a final order entered by the court from
which the appeal is taken.
4. Final Orders: Appeal and Error. Under Neb. Rev. Stat. § 25-1902 (Reissue
2008), the three types of final orders that an appellate court may review are (1) an
order that affects a substantial right and that determines the action and prevents
a judgment, (2) an order that affects a substantial right made during a special
proceeding, and (3) an order that affects a substantial right made on summary
application in an action after a judgment is rendered.
5. Summary Judgment: Proof. The party moving for summary judgment has the
burden to show that no genuine issue of material fact exists and must produce
sufficient evidence to demonstrate that the moving party is entitled to judgment
as a matter of law.
6. Appeal and Error. An appellate court is not obligated to engage in an analysis
that is not necessary to adjudicate the case and controversy before it.
Appeals from the District Court for Douglas County: peter
C. bataillon, Judge. Judgments vacated, and causes remanded
for further proceedings.
James D. Sherrets, Diana J. Vogt, and Thomas D. Prickett,
of Sherrets, Bruno & Vogt, L.L.C., for appellants.
Thomas M. White, C. Thomas White, and Amy S. Jorgensen,
of White & Jorgensen, for appellee.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:39 AM CST

38 	285 NEBRASKA REPORTS
Mark A. Hunzeker and Jarrod P. Crouse, of Baylor, Evnen,
Curtiss, Grimit & Witt, L.L.P., for amicus curiae Home Builders
Association of Lincoln.
heaviCan, C.J., WriGht, C onnolly, Stephan, mCC ormaCk,
and miller-lerman, JJ.
WriGht, J.
NATURE OF CASE
In order to purchase and renovate an apartment building,
Selma Development, L.L.C. (Selma), obtained a loan from
TierOne Bank (TierOne) as evidenced by a note and secured
by a trust deed. Upon a renewal of the loan, it was guaranteed
with six individual guaranty agreements. Selma defaulted on
the note, and the property was sold at a trustee’s sale.
The sale price was insufficient to cover the amount of the
debt, and TierOne brought an action seeking payment from the
guarantors. Selma brought a separate action against TierOne to
set aside the sale and quiet title. In response, TierOne filed a
counterclaim against Selma seeking payment of the debt. The
trial court consolidated the two actions. Selma dismissed its
claims against TierOne, but specifically retained its affirma-
tive defenses.
Following a hearing, the trial court determined the fair
market value of the property to be $630,000, which greatly
exceeded the $350,001 received from the trustee’s sale. TierOne
moved for summary judgment against Selma and the guaran-
tors (collectively the defendants) on its deficiency actions. The
court concluded that Nebraska’s antideficiency statute, Neb.
Rev. Stat. § 76-1013 (Reissue 2009), applied to Selma but not
the guarantors. The court entered judgment against Selma for
$306,229.99, the difference between the amount owed on the
debt and the fair market value of the property. It entered judg-
ment against the guarantors for $586,228.99, the difference
between the amount owed on the debt and the amount received
from the trustee’s sale. The defendants appeal.
SCOPE OF REVIEW
[1,2] An appellate court will affirm a lower court’s grant
of summary judgment if the pleadings and admitted evidence

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	39
Cite as 285 Neb. 37
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter of
law. Professional Mgmt. Midwest v. Lund Co., 284 Neb. 777,
826 N.W.2d 225 (2012). 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
Selma executed a $550,000 promissory note to TierOne
on May 23, 2005, secured by a deed of trust on an apart-
ment building located in Omaha, Nebraska. The building
was a three-story 28-unit brick structure from the early 20th
century. The promissory note was refinanced to $700,000 on
December 5, 2005. Michael P. Earl, Louis A. Wright, Gerald
W. Lee, Scott K. Schneiderman, Randall P. Roth, and Edward
T. Kileen III executed separate contracts personally guaranty-
ing the note.
Selma made its last payment on the loan on November 2,
2006. It thereafter defaulted on the note, and TierOne elected
to sell the property. A trustee’s sale was set for November
28, 2007.
The defendants alleged that prior to the trustee’s sale,
Omaha Social Capital, LLC, had agreed to buy the property
for $705,000. The trustee’s sale was postponed to allow time
for negotiations toward a possible sale. The trustee’s sale
was subsequently postponed several times. The last postpone-
ment extended the date of the sale to December 17, 2007, so
TierOne could review financial information related to Omaha
Social Capital’s purchase of the property. At the December 17
trustee’s sale, TierOne entered the first bid of $350,000. It sold
the property to H & S Partnership, LLP, for $350,001.
On February 13, 2008, TierOne filed an action against the
guarantors for payment of the remaining debt on the note, pur-
suant to the guaranty contracts. That case is docketed on appeal
to this court as case No. S-11-1022.
TierOne alleged the real estate was sold at a trustee’s sale
for $350,001. The balance due on the note at the time of

40 	285 NEBRASKA REPORTS
the sale was $697,941.29, and after applying the sale pro-
ceeds ($350,001), there was a deficiency in the amount of
$347,940.29 plus interest, late fees, and escrow balance for a
total amount due of $424,896.09. Interest continued to accrue
at $85.79 per day from December 17, 2007. TierOne also
alleged that the guarantors were jointly and severally liable.
The guarantors denied the relevant allegations and asserted
affirmative defenses, including failure to state the fair market
value of the property as of the date of the trustee’s sale, waiver
and estoppel, and improper charging of fees and crediting of
payments against the debt.
On February 20, 2008, the defendants filed a separate
action against TierOne to set aside the trustee’s sale and
quiet title. That case is docketed on appeal to this court as
case No. S-11-1021. TierOne denied the allegations made by
the defendants. It counterclaimed, alleging the amount of the
indebtedness owed by the defendants and asserting that the fair
market value of the real estate sold by the trustee’s sale was
$350,001. It requested judgment against Selma in the amount
of $347,940.29 in unpaid principal plus interest, late charges,
and escrow balance.
The defendants filed a reply to the counterclaim, raising
the same affirmative defenses of failure to state the fair mar-
ket value of the real estate as of the date of the trustee’s sale,
waiver and estoppel, and improper charging of fees and credit-
ing of payments.
The cases were consolidated by the trial court on November
13, 2008. On April 6, 2010, the defendants moved to dismiss
all claims against TierOne in case No. S-11-1021, specifically
reserving their affirmative defenses against TierOne, includ-
ing the affirmative defenses raised by Selma in its reply to
TierOne’s counterclaim. At this point, TierOne believed that
the remaining issue was the fair market value of the real estate
and what, if any, deficiency remained under § 76-1013.
Meanwhile, TierOne was closed by the then federal Office
of Thrift Supervision on June 4, 2010, and the Federal
Deposit Insurance Corporation was appointed as receiver.
Under a purchase agreement with the receiver, Great Western
Bank assumed all of TierOne’s interest in both cases. Great

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	41
Cite as 285 Neb. 37
Western Bank was substituted for TierOne in both actions.
For consistency, we will continue to refer to the appellee
as “TierOne.”
Following a hearing, the trial court determined the property
had a fair market value of $630,000 at the time of foreclosure.
On March 10, 2011, TierOne moved for summary judgment,
claiming the “pleadings, affidavits and depositions indicate that
there are no genuine issue[s] of material fact and that TierOne
. . . is entitled to judgment as a matter of law.”
At the summary judgment hearing on May 5, 2011, TierOne
claimed there were two issues that followed the trial court’s
determination that the fair market value of the real estate
was $630,000: (1) whether the guarantors were entitled to
the benefit of the Nebraska Trust Deeds Act, Neb. Rev. Stat.
§ 76-1001 et seq. (Reissue 2009), and (2) as to the guaran-
tors, the amount of their liability regarding the amount of the
indebtedness.
The defendants objected to TierOne’s characterization of
the issues, claiming the order determining the fair market
value was the final order in the proceedings. The trial court
disagreed. A colloquy followed between the court and counsel
to the effect that the affirmative defenses had not been decided
by the court at the hearing on the fair market value. The court
stated that the only issue that had been decided was the fair
market value and that there were “a whole bunch of issues I
[the court] haven’t decided yet.”
At the summary judgment hearing, TierOne offered numer-
ous exhibits. The defendants also offered exhibits, and the
hearing was continued to June 2011. At a June 20 hearing,
TierOne requested that the trial court take judicial notice of
all evidence that had been introduced by both parties up to the
date of the hearing.
The trial court also took judicial notice of the court file that
was offered. Additional exhibits were offered and received, and
all objections were overruled. Argument was then presented
on the application of the Nebraska Trust Deeds Act. No argu-
ment was made regarding the affirmative defenses set forth in
the pleadings.

42 	285 NEBRASKA REPORTS
On November 10, 2011, the trial court sustained TierOne’s
motion for summary judgment, concluding that § 76-1013
of the Nebraska Trust Deeds Act did not apply to TierOne’s
action against the guarantors. The court found § 76-1013 cov-
ered only “an action that is ‘commenced to recover the balance
due upon the obligation for which the trust deed was given
as security.’”
The trial court stated that TierOne’s action against the guar-
antors was not an action to collect on an obligation for which
a trust deed had been given as security, but an action to collect
on the guaranties, which were separate contracts. After looking
to persuasive authority in other states, the court concluded that
§ 76-1013 did not apply to TierOne’s action against the guaran-
tors. The guarantors were not entitled to the protection afforded
to a debtor who has given a trust deed to secure an existing
note of indebtedness.
The 	trial 	court 	entered 	judgment 	against 	Selma 	for
$306,229.99, the amount of the debt ($936,229.99) minus the
fair market value of the property ($630,000). It assessed the
guarantors a liability of $586,228.99, the amount of the debt
minus the sale price of $350,001. The court entered judgment
for court costs and interest as of April 14, 2011, against both
Selma and the guarantors.
The trial court’s judgments were appealed on November 23,
2011, and the cases were consolidated on appeal. We moved
the cases to our docket pursuant to our authority to regulate the
dockets of the appellate courts of this state. See Neb. Rev. Stat.
§ 24-1106(3) (Reissue 2008).
ASSIGNMENTS OF ERROR
The defendants claim, summarized and restated, that the trial
court erred (1) in finding that the terms of § 76-1013 do not
apply to the obligation of the guarantors; (2) in not releasing
the guarantors from their obligation, because TierOne’s actions
precluded the guarantors from appearing at the trustee’s sale
and protecting the value of the property; (3) in failing to find
TierOne was estopped from seeking more than the fair market
value of the property, because it started the bidding at a much
lower amount than the fair market value, it accepted a bid of

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	43
Cite as 285 Neb. 37
$1 more than the opening bid, and it failed to mitigate its dam-
ages; and (4) in allowing TierOne to seek relief not pled prior
to the court’s order that determined the fair market value of the
property in question.
We will group the errors into three categories: (1) errors
relating to the trial court’s order of February 4, 2011, which
determined the fair market value of the real property in ques-
tion; (2) errors relating to the affirmative defenses pled by
the defendants; and (3) errors regarding the interpretation and
application of § 76-1013.
ANALYSIS
february 4, 2011, orDer D etermininG
fair market value
We first address the defendants’ claim that the trial court’s
February 4, 2011, order, which determined the fair market
value of the property, was a final order from which TierOne did
not timely appeal. We conclude that the order was interlocutory
and therefore not a final, appealable order.
[3,4] For an appellate court to acquire jurisdiction of an
appeal, there must be a final order entered by the court from
which the appeal is taken. In re Estate of McKillip, 284 Neb.
367, 820 N.W.2d 868 (2012). Under Neb. Rev. Stat. § 25-1902
(Reissue 2008), the three types of final orders that an appel-
late court may review are (1) an order that affects a substantial
right and that determines the action and prevents a judgment,
(2) an order that affects a substantial right made during a spe-
cial proceeding, and (3) an order that affects a substantial right
made on summary application in an action after a judgment is
rendered. In re Estate of McKillip, supra.
Only the first type of final order is at issue here. To be
a “final order” under the first type of reviewable order, an
order must dispose of the whole merits of the case and must
leave nothing for further consideration of the court. Thus, the
order is final when no further action of the court is required
to dispose of the pending cause; however, if the cause is
retained for further action, the order is interlocutory. Rohde
v. Farmers Alliance Mut. Ins. Co., 244 Neb. 863, 509 N.W.2d
618 (1994).

44 	285 NEBRASKA REPORTS
The February 4, 2011, order did not dispose of the whole
merits of the case. Until the trial court determined that the fair
market value of the real estate was greater than the trustee’s
sale price, Selma was obligated to pay the difference between
the amount of the debt and the sale price. The guarantors were
obligated to pay the same amount. When the fair market value
was determined to be greater than the sale price, Selma was
entitled to the benefit of the fair market value, and its obliga-
tion was reduced accordingly. See § 76-1013. The remaining
issue was whether the guarantors were entitled to the benefit
of the fair market value that was afforded to the debtor under
§ 76-1013.
The trial court determined the fair market value of the
property was $630,000, which was $279,999 more than the
$350,001 received from the trustee’s sale. Once the court deter-
mined the fair market value was greater than the sale price, the
amount of the guarantors’ liability became an issue. Pursuant
to § 76-1013, Selma was liable for only the difference between
the debt and the fair market value. As to the guarantors, the
issue became whether they were liable for the difference
between the debt and the amount received at the trustee’s sale
or the difference between the debt and the fair market value of
the property.
Thus, the February 4, 2011, order which determined the fair
market value of the property was interlocutory and not a final,
appealable order. The trial court still had to resolve the affirma-
tive defenses raised by the defendants and whether § 76-1013
applied to the guarantors.
affirmative D efenSeS
On November 10, 2011, the trial court entered summary
judgment in favor of TierOne. The court determined that
§ 76-1013 did not apply to the guarantors, and it entered defi-
ciency judgments against Selma in the amount of $306,229.99
and against the guarantors in the amount of $586,228.99.
Because there remain material issues of fact in dispute con-
cerning the affirmative defenses raised by the defendants, we
vacate the trial court’s order in which it summarily entered a
judgment of deficiency against the defendants.

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	45
Cite as 285 Neb. 37
In our recent opinion of Professional Mgmt. Midwest v.
Lund Co., 284 Neb. 777, 826 N.W.2d 225 (2012), we discussed
the requirements for summary judgment. An appellate court
will affirm a lower court’s grant of summary judgment if the
pleadings and admitted evidence show that there is no genuine
issue as to any material facts or as to the ultimate inferences
that may be drawn from the facts and that the moving party is
entitled to judgment as a matter of law. Id. In reviewing a sum-
mary 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.
[5] The party moving for summary judgment has the bur-
den to show that no genuine issue of material fact exists and
must produce sufficient evidence to demonstrate that the
moving party is entitled to judgment as a matter of law. Id.
This standard explicitly invokes the idea of sufficiency of
the evidence.
Furthermore, “[a]fter the movant for summary judgment
makes a prima facie case by producing enough evidence
to demonstrate that the movant is entitled to judgment
if the evidence was uncontroverted at trial, the burden
to produce evidence showing the existence of a material
issue of fact that prevents judgment as a matter of law
shifts to the party opposing the motion.”
Id. at 788, 826 N.W.2d at 234, quoting In re Estate of Cushing,
283 Neb. 571, 810 N.W.2d 741 (2012).
TierOne argues that the defendants abandoned their claims
related to how the trustee’s sale was conducted because they
dismissed all claims against TierOne in case No. S-11-1021.
TierOne asserts the dismissal eliminated claims to set aside
the trustee’s sale and quiet title, as well as claims for equitable
estoppel and declaratory judgment. We disagree.
In 	response 	to 	TierOne’s 	counterclaim 	in 	case 	No.
S-11-1021 and TierOne’s claim in case No. S-11-1022, the
defendants raised affirmative defenses. When Selma’s claims
against TierOne were dismissed in case No. S-11-1021, the
affirmative defenses against TierOne’s counterclaim were spe-
cifically reserved.

46 	285 NEBRASKA REPORTS
At the hearing on the motion to dismiss on April 27, 2010,
the trial court noted that the affirmative defenses were not
dismissed. At the first hearing on the motion for summary
judgment on May 5, 2011, the court recognized that “there’s a
whole bunch of issues I haven’t decided yet.” The court then
inquired as to what the issues were, noting the issues of fair
market value, impairment of collateral, and amount of the defi-
ciency. The defendants responded, “And all other affirmative
defenses that we asserted in the matter.”
At the hearing on summary judgment, evidence was offered
and received, and the hearing was continued to June 20, 2011.
At this hearing, TierOne asked the trial court to take judicial
notice of the evidence already introduced. The defendants had
presented evidence that TierOne promised it would contact
the guarantors if the sale were to proceed on December 17,
2007, and that TierOne would bid the amount of the debt at the
trustee’s sale. The evidence showed that at the time of the sale,
the amount of the debt was $774,897.09 and the fair market
value was $630,000.
The defendants offered evidence to show that TierOne did
not notify the guarantors that the sale would proceed on
December 17, 2007, and that TierOne had promised to bid the
amount of the debt at the sale. They also presented evidence
that at least one other bidder would have attended and bid at
the sale. TierOne offered evidence which disputed that it made
these representations.
If the amount bid at the sale had been greater than the fair
market value, Selma’s liability would have been reduced. The
guarantors would also benefit from an increase of the sale
price. If TierOne had promised to bid the amount of the debt
at the sale and had actually done so, the defendants’ liability
would have been extinguished. Therefore, there were material
issues of fact in dispute regarding the defendants’ affirmative
defenses which prevented summary judgment on the amount
of the indebtedness owed by the defendants. The amount
of the deficiency was a material issue of fact in dispute.

SELMA DEVELOPMENT v. GREAT WESTERN BANK 	47
Cite as 285 Neb. 37
Therefore, the trial court erred in granting summary judgment
on this issue.
nebraSka truSt D eeDS aCt
The defendants claim that § 76-1013 of the Nebraska Trust
Deeds Act applies to the liability of the guarantors. TierOne
argues that § 76-1013 does not.
We do not reach this issue. A finding by the district court
that any of the defendants’ affirmative defenses are meritori-
ous could reduce the liability of the defendants. If the district
court were to find that the defendants have a valid affirma-
tive defense because TierOne promised to bid the amount of
the debt at the trustee’s sale and failed to do so, the liability
of all defendants would be extinguished. It would then be
unnecessary to determine the application of the Nebraska Trust
Deeds Act.
[6] An appellate court is not obligated to engage in an analy-
sis that is not necessary to adjudicate the case and controversy
before it. Professional Mgmt. Midwest v. Lund Co., 284 Neb.
777, 826 N.W.2d 225 (2012). Because of our determination
that summary judgment was inappropriate, we do not reach
or address the issue of the application of the Nebraska Trust
Deeds Act. The parties may argue this issue on remand and in
any subsequent appeal.
CONCLUSION
Once the trial court determined that the fair market value
of the property was greater than the amount received at the
trustee’s sale, it had to determine whether the Nebraska Trust
Deeds Act applied to the guarantors. Accordingly, its order
determining fair market value was not a final order.
In order to enter judgment for a specific amount against
either Selma or the guarantors, the court was required to con-
sider the affirmative defenses raised by the defendants. The
defendants offered evidence which created a genuine issue
of material fact regarding their affirmative defenses, which
precluded summary judgment. Because of this determination,

48 	285 NEBRASKA REPORTS
we do not reach the issue regarding the application of the
Nebraska Trust Deeds Act.
We 	vacate 	the 	judgments 	against 	the 	defendants 	and
remand the causes for further proceedings consistent with
this opinion.
JuDGmentS vaCateD, anD CauSeS remanDeD
for further proCeeDinGS.
CaSSel, J., not participating.
Z iaD l. Z aWaiDeh, m.D., appellant, v. nebraSka
D epartment of health anD human ServiCeS
reGulation anD liCenSure anD State
of nebraSka ex rel. Jon bruninG,
attorney G eneral, appelleeS.
825 N.W.2d 204
Filed January 18, 2013. 	No. S-12-069.
1. 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.
2. ____: ____. 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.
3. ____: ____. The grant of a motion for summary judgment may be affirmed on
any ground available to the trial court, even if it is not the same reasoning the
trial court relied upon.
4. Judgments: Appeal and Error. When reviewing questions of law, an appellate
court resolves the questions independently of the lower court’s conclusions.
5. Courts: Jurisdiction: Immunity. It is well-settled law in Nebraska that sover-
eign immunity deprives a trial court of subject matter jurisdiction.
6. Constitutional Law: Legislature: Immunity: Waiver. Neb. Const. art. V, § 22,
permits the State to lay its sovereignty aside and consent to be sued on such terms
and conditions as the Legislature may prescribe.
7. ____: ____: ____: ____. Neb. Const. art. V, § 22, is not self-executing, but
instead requires legislative action for waiver of the State’s sovereign immunity.