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05/24/2019 09:07 AM CDT




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                                  Nebraska Supreme Court A dvance Sheets
                                          303 Nebraska R eports
                                        WINTROUB v. NATIONSTAR MORTGAGE
                                                Cite as 303 Neb. 15




                                      Edward Wintroub, appellant, v.
                                    Nationstar Mortgage LLC, appellee.
                                                    ___ N.W.2d ___

                                           Filed May 3, 2019.     No. S-18-142.

                 1. Summary Judgment. Summary judgment is to be granted when there
                    is no genuine issue of material fact and the moving party is entitled to
                    judgment as a matter of law.
                 2. ____. Summary judgment is proper only when the pleadings, deposi-
                    tions, admissions, stipulations, and affidavits in the record disclose that
                    there is no genuine issue as to any material fact or as to the ultimate
                    inferences that may be drawn from those facts and that the moving party
                    is entitled to judgment as a matter of law.
                 3. Summary Judgment: Appeal and Error. In reviewing a summary judg-
                    ment, an appellate court views the evidence in a light most favorable to
                    the party against whom the judgment is granted and gives such party the
                    benefit of all reasonable inferences deducible from the evidence.
                 4. Contracts. The interpretation of a contract and whether the contract is
                    ambiguous are questions of law subject to independent review.
                 5. Mortgages. The priority of a mortgage may be changed by agreement
                    of the parties, rendering subordination agreements enforceable in mort-
                    gages under Nebraska law.
                 6. Contracts: Mortgages: Intent. If an instrument executed by parties is
                    intended by them as security for a debt, whatever may be its form or
                    name, it is in equity a mortgage.
                 7. Contracts: Mortgages: Words and Phrases. As with the terms used
                    in describing a mortgage, the Nebraska Supreme Court has repeatedly
                    termed a purchaser’s interest under an executory land contract as both a
                    “security” and a “lien” upon the land.
                 8. Contracts: Mortgages: Title: Liens. Because a seller in a land contract
                    retains the title as security for the unpaid purchase money and has an
                    equitable lien on the land to the extent of the debt, a seller has, for all
                    intents and purposes, a purchase-money mortgage.
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             Nebraska Supreme Court A dvance Sheets
                     303 Nebraska R eports
                  WINTROUB v. NATIONSTAR MORTGAGE
                          Cite as 303 Neb. 15

 9. Contracts: Mortgages. Subordination agreements are enforceable in
    land contracts.
10. ____: ____. Nebraska courts apply basic contract principles to determine
    the enforceability, validity, and meaning of a subordination agreement.
11. Contracts. In interpreting contracts, the court as a matter of law must
    first determine whether the contract is ambiguous.
12. Contracts: Words and Phrases. An instrument is ambiguous if a word,
    phrase, or provision in the instrument has, or is susceptible of, at least
    two reasonable but conflicting interpretations or meanings.
13. Contracts: Intent. If a contract is unambiguous, the intent of the parties
    must be determined from the contents of the contract.

   Appeal from the District Court for Douglas County: Peter
C. Bataillon, Judge. Affirmed.
   Melvin C. Hansen and Edward L. Wintroub for appellant.
   Brian D. Nolan and Elizabeth Gasaway, of Nolan, Olson &
Stryker, P.C., L.L.O., for appellee.
  Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
   Freudenberg, J.,
                       NATURE OF CASE
   Purchasers of property entered into a land contract with a
seller-trust for the purchase of a residence. Both parties agreed
to a provision in the contract that stated: “Until all amounts
due hereunder are paid in full, this Land Contract shall be sub-
ordinated to any rights held by Seller’s Lender.” Subsequently,
after the purchasers took possession, the seller-trust signed a
promissory note and a deed of trust to a bank for a sum of
money in order to pay a previously existing mortgage on the
purchased property. The note and deed of trust were subse-
quently assigned to various entities, eventually being assigned
to its current holder, a mortgage company who appears as the
appellee in this case. At issue is whether the quoted provision
in the land contract effectively subordinated the rights of the
purchasers to the rights held by later assignees of the note and
deed of trust.
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          Nebraska Supreme Court A dvance Sheets
                  303 Nebraska R eports
              WINTROUB v. NATIONSTAR MORTGAGE
                      Cite as 303 Neb. 15

                             FACTS
   Appellant, Edward Wintroub, filed an appeal from an order
dated January 23, 2018, by the Douglas County District Court,
which granted a motion for summary judgment in favor of
appellee, Nationstar Mortgage LLC (Nationstar).
   Wintroub and his wife entered into a purchase agreement
with Landmark Enterprises on January 6, 2006, to purchase
a residence being built by Landmark Enterprises on Harney
Street in Omaha, Douglas County, Nebraska, for $610,000. At
that time, the house had been under construction for about 1
year and the Wintroubs were involved in the design and con-
struction decisions of this house.
   On February 23, 2006, the house was completed and the
Wintroubs entered into a land contract with the Steve Faller
Revocable Trust (Faller Trust) to purchase the residence.
On the same day and just prior to the transfer, Landmark
Enterprises transferred its interest in this property to the
Faller Trust.
   Also on February 23, 2006, Steve Faller, as trustee of the
Faller Trust, signed a promissory note to Lehman Brothers
Bank for $488,000, which was used to pay the existing mort-
gage on the property with Great Western Bank and a con-
struction lien. The Great Western Bank mortgage had been
previously recorded with the Douglas County register of deeds
in 2004.
   On February 24, 2006, Faller, individually and as trustee
of the Faller Trust, signed a deed of trust to Lehman Brothers
Bank to secure the above-noted promissory note. The deed of
trust was dated February 23, 2006. The deed of trust was filed
and recorded with the Douglas County register of deeds on
March 8.
   The note and deed of trust were assigned to various enti-
ties, and the current holder of the note and deed of trust is
Nationstar, the appellee in this case. Nationstar filed and
recorded its assignment on September 25, 2012, with the
Douglas County register of deeds.
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              Nebraska Supreme Court A dvance Sheets
                      303 Nebraska R eports
                  WINTROUB v. NATIONSTAR MORTGAGE
                          Cite as 303 Neb. 15

   According to the February 2006 land contract, the Faller
Trust was the grantor of the property and the Wintroubs
were the grantees. Pursuant to the terms of the contract, the
Wintroubs were required to pay the contract price in full by
March 1, 2008. The contract provided: “Until all amounts due
hereunder are paid in full, this Land Contract shall be subordi-
nated to any rights held by Seller’s Lender.” Timely payment
was not made by the Wintroubs. Consequently, the parties
entered into a new land contract with the same above-quoted
provision on August 30, 2010. The new contract explicitly
canceled the prior contract and required the Wintroubs to pay
the full contract price by July 1, 2012. Timely payment was
again not made by the Wintroubs. Neither of the land contracts
was recorded.
   The Faller Trust eventually defaulted on its loan, and based
on this default, a sale of the property was scheduled for June
8, 2015. Wintroub filed suit to enjoin a trustee sale of the
property, asserting that his claim to the property was supe-
rior to that of Nationstar. Nationstar moved for summary
judgment.
   Nationstar asserted four different legal theories in support
of its motion for summary judgment. The lower court agreed
that based on the evidence submitted at the hearing, there was
no issue of fact that Nationstar had superior title as a result
of the March 2006 deed of trust in favor of its predecessor,
Lehman Brothers Bank. The court did not address Nationstar’s
other theories.
   Wintroub argued that because he was in actual possession of
the property, Nationstar had a duty to inspect the property to
determine if someone was in actual possession of it. He relied
on Grand Island Hotel Corp. v. Second Island Development
Co.,1 where we held that a purchaser is charged with notice of
a tenant’s right when the latter is in actual possession of the

1
    Grand Island Hotel Corp. v. Second Island Development Co., 191 Neb. 98,
    214 N.W.2d 253 (1974).
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           Nebraska Supreme Court A dvance Sheets
                   303 Nebraska R eports
               WINTROUB v. NATIONSTAR MORTGAGE
                       Cite as 303 Neb. 15

real estate at the time it is sold. This notice, Wintroub argued,
would negate the original bank’s status as a “good faith pur-
chaser” under Nebraska’s race-notice statute, see Neb. Rev.
Stat. § 76-238 (Reissue 2018). In support of this argument,
Wintroub submitted an affidavit that affirmed that he and his
wife took possession of the property at issue on February
23, 2006.
   Nationstar disagreed and argued that this inspection
requirement applies only to a landlord-tenant situation, not
a ­purchase-money mortgage transaction such as this one.
Nationstar noted that Nebraska has never applied this require-
ment to the purchase and sale of private residential buildings.
   Ultimately, the district court found that it need not deter-
mine whether the rule in Grand Island Hotel Corp. might
apply in this case, because the two land contracts in question
have a similar provision: “Until all amounts due hereunder
are paid in full, this Land Contract shall be subordinated to
any rights held by Seller’s Lender(s).” The court held that this
clearly meant that if there were any lenders of the Faller Trust,
then those lenders take precedence over and rights or interest
of Wintroub. In addition, the court found:
      Because the second Land contract cancelled the first
      Land Contract, the new interest of [Wintroub] began on
      August 30, 2010. Thus, the filing with the Register of
      Deeds of the Lehman Brothers mortgage in March of
      2006 takes precedent over any priority the 2010 Land
      Contract provided to [Wintroub]. This precedence also
      extends to all of the assignees, which [Nationstar] is such
      an assignee.
   As a result, the court sustained Nationstar’s motion for
summary judgment and dismissed the case accordingly.
Wintroub appeals.

                ASSIGNMENT OF ERROR
  Wintroub assigns that the district court erred in granting
Nationstar’s motion for summary judgment where genuine
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             Nebraska Supreme Court A dvance Sheets
                     303 Nebraska R eports
                  WINTROUB v. NATIONSTAR MORTGAGE
                          Cite as 303 Neb. 15

issues of material fact, and the ultimate inferences that may
be drawn from those facts, exist.
                   STANDARD OF REVIEW
   [1-3] Summary judgment is to be granted when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.2 Under this court’s standard
of review, summary judgment is proper only when the plead-
ings, depositions, admissions, stipulations, and affidavits in the
record disclose that there is no genuine issue as to any material
fact or as to the ultimate inferences that may be drawn from
those facts and that the moving party is entitled to judgment as
a matter of law.3 In reviewing a summary judgment, an appel-
late court views the evidence in a light most favorable to the
party against whom the judgment is granted and gives such
party the benefit of all reasonable inferences deducible from
the evidence.4
   [4] The interpretation of a contract and whether the con-
tract is ambiguous are questions of law subject to indepen-
dent review.5
                          ANALYSIS
   On appeal, Wintroub contends that the district court erred
in sustaining Nationstar’s motion for summary judgment.
Wintroub primarily argues that genuine issues of material
fact remain as to (1) whether Wintroub’s interest in the land,
pursuant to the land contract, had priority over Nationstar’s
interest and (2) whether the subordination clause is enforceable
against him.
   [5-9] We have never specifically addressed the enforceabil-
ity of subordination agreements in land contracts. However,

2
    Vilcinskas v. Johnson, 252 Neb. 292, 562 N.W.2d 57 (1997).
3
    Id.
4
    Id.
5
    Timberlake v. Douglas County, 291 Neb. 387, 865 N.W.2d 788 (2015).
                                    - 21 -
               Nebraska Supreme Court A dvance Sheets
                       303 Nebraska R eports
                   WINTROUB v. NATIONSTAR MORTGAGE
                           Cite as 303 Neb. 15

we have held that the priority of a mortgage may be changed
by agreement of the parties, rendering subordination agree-
ments enforceable in mortgages under Nebraska law.6 We have
also noted that it is generally accepted that if an instrument
executed by parties is intended by them as security for a debt,
whatever may be its form or name, it is in equity a mortgage.7
As with the terms used in describing a mortgage, this court has
repeatedly termed a purchaser’s interest under an executory
land contract as both a “security” and a “lien” upon the land.8
Further, as in a mortgage, the vendor under an installment land
contract agrees to accept payments from the purchaser, gener-
ally by a series of installments over time, until the purchase
price as established by the contract has been paid. When the
contract price has been paid, the vendor must deliver a deed of
title to the purchaser.9 Based on these principles and observa-
tions, this court has uniformly recognized that because a seller
in a land contract retains the title as security for the unpaid
purchase money and has an equitable lien on the land to the
extent of the debt, a seller has, for all intents and purposes, a
purchase-money mortgage.10 Therefore, it would follow that
subordination agreements are enforceable in land contracts, as
such agreements are enforceable in mortgages. We hold that
generally, a subordination agreement set forth within a contract
for the sale and purchase of land is enforceable.
    [10-13] We turn next to the terms of the subordination
agreement at issue in this case. In construing subordination
agreements, many courts have frequently indicated that the
principles and rules governing the construction, application,
and enforceability of contracts apply to mortgage subordination

 6
     See Meek v. Gratzfeld, 223 Neb. 306, 389 N.W.2d 300 (1986).
 7
     Mackiewicz v. J.J. & Associates, 245 Neb. 568, 514 N.W.2d 613 (1994).
 8
     Id.
 9
     See id.
10
     Id.
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               Nebraska Supreme Court A dvance Sheets
                       303 Nebraska R eports
                    WINTROUB v. NATIONSTAR MORTGAGE
                            Cite as 303 Neb. 15

agreements.11 Nebraska courts take the same approach, apply-
ing basic contract principles to determine the enforceabil-
ity, validity, and meaning of a subordination agreement.12 In
interpreting contracts, the court as a matter of law must first
determine whether the contract is ambiguous.13 An instrument
is ambiguous if a word, phrase, or provision in the instrument
has, or is susceptible of, at least two reasonable but conflicting
interpretations or meanings.14 If a contract is unambiguous, the
intent of the parties must be determined from the contents of
the contract.15 The interpretation of a contract and whether the
contract is ambiguous are questions of law subject to indepen-
dent review.16
   Both the 2006 and the governing 2010 land contracts between
the Wintroubs and the Faller Trust similarly provide: “Until all
amounts due hereunder are paid in full, this Land Contract shall
be subordinated to any rights held by the Seller’s Lender(s).”
Applying the foregoing rules of construction or interpretation
of a document, we conclude that this subordination clause is
unambiguous. Indeed, Wintroub does not assert otherwise.
With regard to the relevant contract property, the above-quoted
subordination clause plainly means that the rights of any exist-
ing lenders of the Faller Trust would take precedence over the
Wintroubs’ rights or interest in the property until the Wintroubs
have paid the contract price “in full.”
   The Faller Trust’s first lender after the 2006 land contract
was Lehman Brothers Bank. Any interest or rights that the

11
     See, e.g., In re Stambaugh, 532 B.R. 572 (2015); Wells Fargo Bank, NA v.
     SBC IV REO, LLC, 318 Mich. App. 72, 896 N.W.2d 821 (2016); KeyBank
     Natl. v. Southwest Greens of Ohio, 2013 Ohio 1243, 988 N.E.2d 32 (2013).
12
     See, Meek v. Gratzfeld, supra note 6; Reitz v. Petersen, 131 Neb. 706, 269
     N.W. 811 (1936).
13
     Porter v. Smith, 240 Neb. 928, 486 N.W.2d 846 (1992).
14
     Id.
15
     Id.
16
     Timberlake v. Douglas County, supra note 5.
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          Nebraska Supreme Court A dvance Sheets
                  303 Nebraska R eports
              WINTROUB v. NATIONSTAR MORTGAGE
                      Cite as 303 Neb. 15

Wintroubs may have had pursuant to the 2006 land con-
tract were subordinated to the lien of Lehman Brothers Bank,
which would pass to its successors and assignees, which now
includes Nationstar.
   Wintroub does not argue that he paid the amounts due and
owing as required by the land contract. There is no evidence
in the record suggesting a material issue of whether Wintroub
has paid the amounts due and owing as required by the land
contract. Wintroub simply argues on appeal that he has “equi-
table title” pursuant to the land contract and Nebraska law.
Wintroub fails to explain how having an “equitable title”
affects the enforcement of the plain language of the subordina-
tion clause.
   Even viewing the evidence in the light most favorable to
Wintroub and giving him the benefit of all reasonable infer-
ences deducible from the evidence, we find no genuine issues
of material fact remaining in this case. As such, the district
court did not err in granting Nationstar’s motion for sum-
mary judgment.
   We note, as the court below correctly ascertained, that the
merits of any additional issues or arguments raised by the par-
ties on appeal need not be addressed or determined; the unam-
biguous terms of the subordination clause expressly apply and
govern in this case. There is no genuine issue that under the
subordination clause, Nationstar’s mortgage has priority over
Wintroub’s interest.
                         CONCLUSION
   Based on the analysis above, we find that the district court
did not err in sustaining Nationstar’s motion for summary judg-
ment. We therefore affirm the decision of the district court.
                                                     A ffirmed.
