Katherine R. Napleton Trust v. Vatterott Ed. Ctrs.

182 	275 NEbRASkA REPORTS
katHerine r. napleton revoCable S elf -D eClaration of truSt ,
appellant , v . vatterott eDuCational C enterS, inC.,
a miSSouri Corporation , appellee .
745 N.W.2d 325
Filed February 29, 2008. 	No. S-06-1032.
1. 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 such party the benefit of all reasonable
inferences deducible from the evidence.
2. Summary Judgment. Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue regarding any material
fact 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.
typical negligent entrustment case involves at least three par-
ties, including the person who entrusts the vehicle to another,
the entrustee whose negligent operation causes an injury, and
the injured party who seeks compensation. We have held in
such cases that negligent entrustment standing alone does
not establish liability; it must also be shown that the driver
to whom the vehicle was entrusted negligently caused the
plaintiff’s injury.1
As a matter of general principle, I agree with the court’s
holding today that one who controls access to a motor vehicle
may be held liable for negligent entrustment, even if he or she
is not the owner. but I reserve judgment on the question of
whether a negligent entrustment claim can ever be asserted by
or on behalf of the entrustee whose own negligence is a proxi-
mate cause of an accident and resulting injury. This issue was
not briefed or argued in this appeal, and as the majority notes,
it would require an evaluation of the parties’ respective claims
under Nebraska’s comparative negligence statute, which cannot
be undertaken on this record. There may be other considerations
as well. Thus, I concur in the judgment of the court, leaving
to another day the question of whether negligent entrustment,
standing alone, can establish liability to an entrustee.
1 See, e.g., Gertsch v. Gerber, 193 Neb. 181, 226 N.W.2d 132 (1975).
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
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3. 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 suf-
ficient evidence to demonstrate that it is entitled to judgment as a matter of law.
4. Contracts: Judgments: Appeal and Error. The meaning of a contract is a ques-
tion 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.
5. Contracts. In interpreting a contract, a court must first determine, as a matter of
law, whether the contract is ambiguous.
6. ____. When the terms of a contract are clear, they are to be accorded their plain
and ordinary meaning.
Appeal 	from 	the 	District 	Court 	for 	Douglas 	County:
w. ruSSell bowie iii, Judge. Affirmed.
Andrew J. Hilger, of Greul & Hilger, L.L.C., for appellant.
James D. Garriott, of Cassem, Tierney, Adams, Gotch &
Douglas, for appellee.
H eaviCan, 	C.J., 	wriGHt, 	C onnollY, 	G errarD, 	S tepHan,
mCC ormaCk, and miller -lerman, JJ.
mCC ormaCk, J.
NATURE OF CASE
The katherine R. Napleton Revocable Self-Declaration of
Trust (Napleton), the lessor of property located in Omaha,
Nebraska, brought suit against Vatterott Educational Centers,
Inc. (Vatterott), the assignee of the lease, for breach of contract.
Napleton alleged that Vatterott was liable for the failure of the
assignor-lessee of the property, the Omaha College of Health
Careers, Inc. (Omaha College), to pay property taxes in years
preceding the assignment of the lease to Vatterott. We affirm
the district court’s granting of summary judgment in favor
of Vatterott.
bACkGROUND
Napleton is the owner of property located at 225 North 80th
Street in Omaha. In 1999, Napleton and Omaha College entered
into a lease agreement wherein Omaha College leased the property
from Napleton. On October 5, 2001, Napleton, Omaha College,
and Vatterott entered into an agreement entitled “Assignment &
Amendment of Lease Agreement” (Assignment Agreement).
kATHERINE R. NAPLETON TRUST v. VATTEROTT ED. CTRS. 	183
Cite as 275 Neb. 182

184 	275 NEbRASkA REPORTS
Under the terms of the Assignment Agreement, Napleton
agreed to terminate Omaha College’s rights and obligations
under the 1999 lease and to assign Omaha College’s rights and
obligations to Vatterott. The Assignment Agreement further
provided that Vatterott would pay rent during the term of the
lease as well as “additional rent.” The additional rent clause
provides: “Lessee agrees to pay to Lessor as additional rent
those amounts and at such time as payment of such additional
rent would be required to be paid by Tenant under [the] terms
of Section 4, Additional Rent, of the 1999 Lease.” Section 4 of
the 1999 lease provided:
Tenant agrees to pay to Landlord as additional rent those
amounts and at such time as payment of such addi-
tional rent would be required to be paid by General
Motors Corporation under the terms of the Original 1955
Lease if said Original 1955 Lease were still in full force
and effect.
The 1955 lease referenced in the 1999 lease was between New
England Mutual Life Insurance Company and General Motors
Corporation. Article 2, § 2.02, of the 1955 lease provided:
As additional rent, Lessee shall pay, from the operative
date of this lease, all:
(a) 	Taxes, 	assessments 	and 	other 	governmental
charges except as hereinafter stated in paragraph (e) of
this section;
. . . .
(e) Other expenses and charges;
which during any term of this lease shall be levied,
assessed or imposed by any governmental authority upon
or with respect to, or incurred in connection with the
ownership, possession, occupation, operation, alteration,
maintenance, repair and use of the premises . . . .
Property taxes on the property for the year 2000 were due
in the amount of $29,168.38. The property taxes on the prop-
erty for the year 2001 were due in the amount of $31,261.62.
However, neither the 2000 nor the 2001 property taxes were
paid by Omaha College or Napleton. Napleton claims that it
first became aware that Omaha College was delinquent on prop-
erty taxes for the tax years 2000 and 2001 in February 2003. On

February 19, 2003, Napleton requested payment from Vatterott
for the property tax delinquency in the amount of $71,513.15.
That amount included the amount of taxes delinquent for the
2000 and 2001 property tax years, as well as $11,083.15 in
interest. Vatterott forwarded a check in the amount of $7,537.20
to Napleton, which Vatterott determined was its prorated share
of the property taxes for 2001.
Napleton brought the present action against Vatterott, alleg-
ing breach of contract. Vatterott filed a motion for summary
judgment, which was granted by the district court. In its
order, the district court stated that although Vatterott agreed
to pay additional rent under the Assignment Agreement, the
Assignment Agreement did not obligate Vatterott to pay accrued
but unpaid obligations of Omaha College. The district court
then found as a matter of law that
an assignee is not liable for covenants or agreements
of the assignor broken before the assignee acquired the
leasehold unless agreed to by the parties at the time the
lease was entered into. . . . The prior obligations of Omaha
College . . . became causes of action in favor of [Napleton]
against Omaha College . . . at the time those covenants
were broken.
Napleton now appeals.
ASSIGNMENTS OF ERROR
Napleton asserts that the district court erred in (1) its inter-
pretation of the Assignment Agreement and (2) finding as a
matter of law that an assignee is not liable for lease covenants
or agreements broken by the assignor prior to the assignment.
STANDARD OF REVIEW
[1] 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 	such
party the benefit of all reasonable inferences deducible from
the evidence.1
1 Sayah v. Metropolitan Prop. & Cas. Ins. Co., 273 Neb. 744, 733 N.W.2d
192 (2007).
kATHERINE R. NAPLETON TRUST v. VATTEROTT ED. CTRS. 	185
Cite as 275 Neb. 182

186 	275 NEbRASkA REPORTS
ANALYSIS
privitY of eState
Napleton argues that the property tax delinquency was an
obligation under the 1999 lease. Napleton claims that obliga-
tions under the 1999 lease were amended prospectively from
the date of the Assignment Agreement, but were not terminated.
Napleton further argues that under the Assignment Agreement,
Omaha College’s obligations under the 1999 lease were termi-
nated, but that to the extent Omaha College failed to perform
its obligations under the 1999 lease, those obligations were
assumed by Vatterott. The broad question presented by these
arguments is whether an assignee of a lease for real property
must perform obligations not fulfilled by the assignor of the
lease prior to the lease assignment.
[2,3] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue
regarding any material fact 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 The party moving for sum-
mary judgment has the burden to show that no genuine issue
of material fact exists and must produce sufficient evidence to
demonstrate that it is entitled to judgment as a matter of law.3
It has generally been stated that an assignee or transferee of
an interest in leased property is liable for a breach of a promise
that runs with the land and which is broken while the assignee
or transferee holds the leasehold estate, but is not liable for a
promise that runs with the land if the promise is broken before
the assignment or transfer.4
In Regency Adv. Ltd. v. Bingo Idea-Watauga,5 the assignee
of a landlord brought an action against a commercial tenant,
claiming in part that the tenant breached the lease by fail-
ing to pay rent. The tenant counterclaimed, alleging that the
2 Erickson v. U-Haul Internat., 274 Neb. 236, 738 N.W.2d 453 (2007).
3 Hauptman, O’Brien v. Turco, 273 Neb. 924, 735 N.W.2d 368 (2007).
4 See, e.g., Restatement (Second) of Property § 16.1 (1977); 49 Am. Jur. 2d
Landlord and Tenant § 960 (2006).
5 Regency Adv. Ltd. v. Bingo Idea-Watauga, 936 S.W.2d 275 (Tex. 1996).

assignee breached the lease by failing to build leased space for
the tenant. The Texas Supreme Court held that the assignee
was not liable for breach of the lease because the obligation
to build leased space accrued before the lease was assigned to
the assignee. Quoting the Restatement of Property (Second),
the court stated, “‘A transferee is liable on a promise that runs
with the transferred interest only to the extent of a breach of the
promise that occurs while the transferee is in privity of estate
with the person entitled to enforce the promise.’”6
In Lone Star Gas v. Mexia Oil & Gas,7 the buyer under a gas
purchase contract sued in part the assignee to whom the seller
had assigned its lease interests in a gas well. The buyer alleged
that the assignee was obligated to reimburse the buyer for taxes
paid on gas well production. The Texas Court of Appeals held
that the assignment which stated that it was “subject to” the gas
purchase contract between the buyer and the seller/assignor did
not obligate the assignee to pay the prior debt of the assignor.
The court explained that privity of estate is the foundation of
the assignee’s liability on covenants that run with the land.
because there was not privity of estate between the buyer and
the assignee when the breaches took place, the assignee was not
liable for breaches that took place before the assignment.8
Finally, in First Nat. Bank v. Hazelwood Co.,9 the Oregon
Supreme Court stated the following proposition:
The rule is . . . “The assignee is only liable for covenants
running with the land which are broken while he is the
legal assignee.”
. . . .
6 Id. at 277 (quoting Restatement, supra note 4, comment h.).
7 Lone Star Gas v. Mexia Oil & Gas, 833 S.W.2d 199 (Tex. App. 1992).
8 Id. (citing Washington N. Gas Co. v. Johnson, 123 Pa. 576, 16 A. 799 (1889)
(assignee liable for covenants maturing while held by him, but not liable for
those previously broken)).
9 First Nat. Bank v. Hazelwood Co., 85 Or. 403, 407-08, 166 P. 955, 956
(1917) (quoting 1 David McAdam, The Rights, Duties, Remedies and
Incidents belonging to and Growing Out of the Relation of Landlord and
Tenant 863, 875 (Thomas F. keogh ed., 4th ed. 1910)).
kATHERINE R. NAPLETON TRUST v. VATTEROTT ED. CTRS. 	187
Cite as 275 Neb. 182

188 	275 NEbRASkA REPORTS
“An assignee is only liable for his own breaches of
express or implied covenants in the lease which run with
the land, so long as he retains possession by himself or
his tenants.”
The court further noted the following rule: “‘An assignee of the
leasehold is in privity of estate with the lessor and is liable to
him personally for the breach of the lessee’s covenants which
are annexed to and run with the leasehold and which are broken
while he holds the leasehold estate.’”10
In the present case, Napleton and Vatterott were not in priv-
ity of estate when the 2000 tax liability accrued. Nor were they
in privity of estate between January and October 4 of the 2001
tax year, or for 9 months of the period in which the 2001 tax
liability accrued. The lack of privity of estate between Napleton
and Vatterott means that Vatterott is not liable for any breaches
of the lease terms prior to the October 5, 2001, assignment
unless the parties contracted otherwise.
aSSiGnment aGreement
[4-6] 	The 	Assignment 	Agreement 	provides 	in 	part:
“[Napleton] and [Omaha College] agree to terminate [Omaha
College’s] rights and obligations under the 1999 Lease and
to assign [Omaha College’s] rights and obligations therein to
[Vatterott].” 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.11 In interpreting a contract, a court
must first determine, as a matter of law, whether the contract is
ambiguous.12 When the terms of a contract are clear, they are to
be accorded their plain and ordinary meaning.13
10 Id. at 409, 166 P. at 956 (quoting 16 R.C.L. Landlord and Tenant § 349
(1917)).
11 Hogelin v. City of Columbus, 274 Neb. 453, 741 N.W.2d 617 (2007).
12 Tighe v. Combined Ins. Co. of America, 261 Neb. 993, 628 N.W.2d 670
(2001).
13 Sayah v. Metropolitan Prop. & Cas. Ins. Co., supra note 1.

The language of the Assignment Agreement is clear and
unambiguous. Omaha College’s rights and obligations under
the 1999 lease were terminated as of October 5, 2001, the
date the Assignment Agreement was executed. The Assignment
Agreement does not provide that Vatterott is liable for any
obligations arising prior to the date of assignment. Absent a
provision obligating Vatterott for liabilities arising prior to the
time Vatterott obtained its leasehold interest in the property,
the lack of privity of estate in this case compels our conclusion
that Vatterott is not liable for Omaha College’s failure to fulfill
Omaha College’s obligations under the 1999 lease.
CONCLUSION
For the reasons discussed above, we affirm.
affirmeD.
in re intereSt of mattHew p., a CHilD unDer 18 YearS of aGe .
S tate of nebraSka , appellee , v .
mattHew p., appellant .
745 N.W.2d 574
Filed February 29, 2008. 	No. S-07-649.
1. Statutes: Appeal and Error. Statutory interpretation is a question of law, which
an appellate court resolves independently of the trial court.
2. ____: ____. Statutory language is to be given its plain and ordinary meaning,
and an appellate court will not resort to interpretation to ascertain the meaning of
statutory words which are plain, direct, and unambiguous.
Appeal from the Separate Juvenile Court of Lancaster County:
linDa S. porter, Judge. Affirmed.
Dennis R. keefe, Lancaster County Public Defender, and
Sarah P. Newell for appellant.
Gary Lacey, Lancaster County Attorney, Alicia b. Henderson,
and, on brief, Michelle A. Paxton for appellee.
H eaviCan, 	C.J., 	wriGHt, 	C onnollY, 	G errarD, 	S tepHan,
mCC ormaCk, and miller -lerman, JJ.
IN RE INTEREST OF MATTHEW P. 	189
Cite as 275 Neb. 189