                          IN THE NEBRASKA COURT OF APPEALS

               MEMORANDUM OPINION AND JUDGMENT ON APPEAL
                        (Memorandum Web Opinion)

                                 ADAMS BANK & TRUST V. BROWN


  NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
 AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).


                                ADAMS BANK & TRUST, APPELLEE,
                                                 V.

                        CHARLES BROWN AND JUNE BROWN, APPELLANTS.


                            Filed October 17, 2017.     No. A-16-1065.


       Appeal from the District Court for Lincoln County: DONALD E. ROWLANDS, Judge.
Affirmed.
       Robert B. Reynolds and Michael D. Samuelson, of Reynolds, Korth & Samuelson, P.C.,
L.L.O., for appellee.
       Steve Windrum, of Malcom, Nelsen & Windrum, L.L.C, for appellants.



       INBODY, PIRTLE, and RIEDMANN, Judges.
       INBODY, Judge.
                                        I. INTRODUCTION
         Charles Brown and June Brown (Appellants) appeal the district court’s dismissal of nine
of the theories of recovery listed in Appellants’ counterclaim and the district court’s final judgment
entered in favor of Adams Bank & Trust (Adams Bank). For the reasons set forth herein, we affirm.
                                   II. STATEMENT OF FACTS
       Adams Bank is a Nebraska banking corporation with its principal place of business located
in Ogallala, Keith County, Nebraska. Appellants are husband and wife and have at all relevant
times herein been residents of Nebraska.




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       In June 2005, Appellants executed a promissory note (Appellants’ Note) with Adams Bank
for $61,620.98 with a maturity date in June 2020. Under a section titled “collateral,” Appellants’
Note referenced a previous deed of trust stating: “I acknowledge this Note is secured by DEED
OF TRUST DATED 5-6-98 AND FILED 5-15-98 IN BOOK 578 AT PAGE 722-727 IN
LINCOLN COUNTY, NEBRASKA.” In April 2006, Appellants’ son and daughter-in-law, Travis
and Tina Brown, executed a promissory note (Travis/Tina Note) with Adams Bank for $58,533.37
with a maturity date in January 2026. Under a section titled “collateral,” the Travis/Tina Note
referenced that it would be secured by an April 15, 2006, deed of trust.
       The April 15, 2006, deed of trust (Travis/Tina Deed of Trust) was subsequently executed
and recorded by Travis and Tina Brown and covered the following real estate:
       Township 12 North, Range 27 West of the 6th P.M., Lincoln County, Nebraska
       Section 4: That part of Lot 4 lying North of U.S. Highway #30, EXCEPT that portion
       thereof conveyed to the State of Nebraska by Deed recorded in Book 115, Page 451 and
       Except the Union Pacific Railroad Right of Way

(Hereinafter “32-acre tract.”)
        To further secure the Travis/Tina Note, Appellants executed and recorded a new deed of
trust (Appellants’ Deed of Trust) in favor of Adams Bank. Appellants’ deed of trust covered both
promissory notes and encompassed the following described real estate:
        Lot 1, Rayburn Replat, Brady, Lincoln County, Nebraska. The real property or its address
        is commonly known as 316 N. Locust Street, Brady, NE 69123.

(Hereinafter “Brady property.”)
       Both deeds of trust contained identical language in the section titled “TAXES AND
LIENS” obligating the trustor to pay any taxes on the property. Specifically, the “Payment”
subsection stated, in relevant part:
       Trustor shall pay when due (and in all events prior to delinquency) all taxes . . . levied
       against or on account of the Property[.] Trustor shall maintain the Property free of all liens
       having priority over or equal to the interest of Lender under this Deed of Trust, except for
       the lien of taxes and assessments not due and except as otherwise provided in this Deed of
       Trust.

Both deeds also provide Adams Bank the ability to protect its interests if the trustors failed to make
their payments. The “LENDER’S EXPENDITURES” sections stated, in relevant part:
        If Trustor fails (A) to keep the Property free of all taxes, liens, security interests,
        encumbrances, and other claims . . . then Lender may do so. If any action or proceeding is
        commenced that would materially affect Lender’s interests in the Property, then Lender on
        Trustor’s behalf may, but is not required to, take any action that Lender believes to be
        appropriate to protect Lender’s interests.

       Prior to 2010, Travis and Tina accumulated unpaid property tax on the 32-acre tract.
Lincoln County thereafter brought the 32-acre tract to tax sale and a tax sale certificate was issued.



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Vandelay Investments, LLC was subsequently issued a tax deed on the 32-acre tract. In August
2012, Travis and Tina filed for a Chapter 13 bankruptcy which was converted to Chapter 7 during
the proceedings. They were granted a discharge in January 2015. During the course of the
bankruptcy action, an accompanying adversarial action under a second bankruptcy case number
was brought concerning the 32-acre tract raising the validity of Vandelay’s tax deed which had
been issued in November 2013. Among the named defendants to the adversarial action were Travis
and Tina Brown and Adams Bank. The United States Bankruptcy Court for the District of
Nebraska ultimately found for Vandelay and quieted title in the 32-acre tract “as against all named
Defendants” on January 28, 2015.
        On September 12, 2014, Adams Bank sent Appellants a letter to inform them that, on
March 10, 2010, the 32-acre tract went to public tax sale and a tax certificate was issued. The letter
went on to inform Appellants that the Travis/Tina Note had a past due balance and set forth the
total required for a complete payoff of the loan. Specifically, the letter warned:
        Per the granted deed of trust, you have considerable interest and liability in this loan.
        Adams Bank & Trust is in process of attempting to resolve the issue [of the tax sale with
        the purchaser,] however, it is very important that we discuss this matter with you and make
        arrangements for payoff to be made by you on the past due loan.

Even after receiving this notice, neither Appellants nor any other party made payments on the
Travis/Tina Note. On February 24, 2015, a notice of default was recorded with the Lincoln County
Register of Deeds covering the Appellants’ Brady property. Additionally, Appellants stopped
making payments on their Note and Adams Bank accelerated the Appellants’ loan. In June 2015,
Adams Bank caused a foreclosure sale on the Brady property. Adams Bank was the highest bidder
at the sale buying the Brady property for $95,000.
        The following month, Adams Bank brought the instant action against Appellants seeking
a monetary judgment for the difference between the amount owed on the loans and the $95,000
received from the foreclosure sale. Appellants contested Adams Bank’s claim and counterclaimed
alleging 11 separate theories of recovery.
        Appellants’ first theory of recovery asserted they had a right under the Travis/Tina Note to
protect their offered security by paying any delinquent taxes or redeeming any tax sale certificates
on the 32-acre tract. As such, Appellants alleged Adams Bank had a duty to take the ordinary,
reasonable, and necessary action with respect to the property including paying the real estate taxes
on the 32-acre tract or notifying the Appellants of the tax status of the 32-acre tract so that
Appellants could protect their own interests by redeeming the tax sale certificate.
        Appellants’ second theory of recovery asserted Travis and/or Tina were told by Adams
Bank representatives that as long as their payment was current for approximately one year after
the date of initial indebtedness that Appellants would no longer be at risk of potential loss of the
Brady property under their loan. Additionally, Appellants asserted Adams Bank representatives
told Travis and/or Tina that the security interest of the 32-acre tract was sufficient to protect the
Brady property. Appellants argued Adams Bank knew, or should have known, that Appellants’
intention in securing of the Travis/Tina Note was limited to the principal of the promissory note
and any interest thereon. Appellants alleged Adams Bank, even with such knowledge and



                                                -3-
representations, included language in their deed of trust to extend the security to any and all of
Travis and Tina’s indebtedness. Therefore, Appellants claim Adams Bank’s actions and omissions
constituted fraud, constructive fraud, and inequitable conduct.
         Among Appellants’ additional theories of recovery, the third claimed unjust enrichment;
the fourth claimed a fiduciary duty to protect Appellants’ security property and breach thereof; the
fifth claimed laches; the sixth claimed unconscionable conduct; the seventh claimed waiver; the
eighth claimed failure to mitigate and avoidable consequences, and the ninth claimed failure to
satisfy conditions precedent.
         Appellants’ tenth theory of recovery asserted Adams Bank breached the implied covenant
of good faith and fair dealing in respect to the notes’ contractual provisions.
         Lastly, Appellants’ eleventh theory of recovery asserted Adams Bank owed a duty of care
to Appellants, that it breached such duty in the actions described in the first two claims, and that
such breach was negligent and was a proximate and factual cause to the damages suffered by
Appellants in their loss of the Brady property and remaining amount Adams Bank claimed was
owed by them.
         Adams Bank filed a motion to dismiss Appellants’ counterclaim under Neb. Ct. R.
§ 6-1112(b)(6) alleging failure to state claims upon which relief could be granted. The district
court determined “[Adams Bank] had the right under the Deed of Trust but not the duty, to pay the
real estate taxes to redeem the tax sale certificate on the Thirty-Two (32) acre tract.” Accordingly,
the court partially granted Adams Bank’s motion to dismiss by dismissing “[a]ny defense or
counterclaim raised by [Appellants] which is premised upon that non-existent duty,” namely
theories of recovery one, three through nine, and eleven. Thereafter, the case proceeded to bench
trial on Adams Bank’s claim and Appellants’ counterclaims under theories of recovery two and
ten.
         After the trial, the district court found “[g]enerally in favor of [Adams Bank] and against
the [Appellants].” The district court found Neb. Rev. Stat. § 76-1013 (Reissue 2009) applicable
and that it provides:
         [A]t any time within three months after any sale of property under a trust deed, an action
         may be commenced to recover the balance due upon the obligation for which the trust deed
         was given as security. Before rendering judgment, the court shall find the fair market value
         at the date of the sale of the property sold. The court shall not render judgment for more
         than the amount by which the amount of indebtedness with interest and the costs and
         expense of sale, including trustee’s fees, exceeds that fair market value of the property.

        The district court then determined Appellants’ Brady property sold for $95,000, but that
the entire amount of indebtedness which was secured by the Appellants’ deed of trust on the date
of sale was $114,862.04 with the costs and expenses of exercising the power of sale amounting to
$628.15 plus attorney fees. The district court determined that the $95,000 was the fair market value
and that the costs incurred in the exercising of the power of sale and attorney fees were “fair,
reasonable, and necessary.” Therefore, the district court entered judgment in favor of Adams Bank
against Appellants, jointly and severally, for $23,175.07 as of July 24, 2015, plus interest at the




                                                -4-
rate of $13.51 per day thereafter. The court dismissed Appellants’ remaining theories of recovery.
Appellants have now appealed.
                                 III. ASSIGNMENTS OF ERROR
         Appellants’ first grouping of assignments of error, restated, relate to the claims that the
district court erred by partially granting Adams Bank’s motion to dismiss. Specifically, Appellants
contend the district court erred in (1) finding that there was no duty to protect Appellants’ Brady
property and partially dismissing the counterclaim; (2) dismissing “any defense . . . premised upon
that non-existent duty” because no predicate motion or other pleading was brought concerning
Appellants’ defenses; and (3) not providing Appellants the opportunity to amend their pleadings.
         Next, Appellants assign, restated, that the district court erred by overruling various
objections to evidence received at the trial. Specifically, Appellants challenge the receipt of
Exhibits 35 and 28 and certain questioning in the testimony of Cynthia McVay.
         Finally, Appellants’ assignments of error, restated, contend that, following the bench trial,
the district court erred by finding generally in favor of Adams Bank and against the Appellants.
Specifically, Appellants contend the district court erred in finding (1) that there was sufficient
evidence to find in favor of Adams Bank on its claim; (2) that Appellants failed to meet their
burden of proof on their remaining theories of recovery; and (3) that Adams Bank was entitled to
attorney fees for which Appellants would be liable and that the attorney fees incurred were fair,
reasonable, and necessary.
                                  IV. STANDARD OF REVIEW
         Appellants challenge the district court’s ruling on Adams Bank’s motion to dismiss, the
district court’s ruling on evidentiary objections and receipt of evidence during the trial, and the
district court’s disposition after the bench trial.
         On the appeal from the district court’s ruling on Adams Bank’s motion to dismiss, an
appellate court reviews de novo a lower court’s dismissal of a complaint for failure to state a claim.
Doe v. Omaha Pub. Sch. Dist., 273 Neb. 79, 727 N.W.2d 447 (2007). Because a motion pursuant
to Neb. Ct. R. of Pldg. in Civ. Actions 12(b)(6) (rev. 2003) tests the legal sufficiency of the
complaint, not the claim’s substantive merits, a court may typically look only at the face of the
complaint to decide a motion to dismiss. Id. Dismissal under rule 12(b)(6) should be granted only
in the unusual case in which a plaintiff includes allegations that show on the face of the complaint
that there is some insuperable bar to relief. Id. When analyzing a lower court’s dismissal of a
complaint for failure to state a claim, an appellate court accepts the complaint’s factual allegations
as true and construes them in the light most favorable to the plaintiff. Id. Complaints should be
liberally construed in the pleading party’s favor, and a complaint should not be dismissed merely
because it does not state with precision all elements that give rise to a legal basis for recovery.
Ferer v. Erickson, Sederstrom, 272 Neb. 113, 718 N.W.2d 501 (2006).
         On Appellants’ appeal concerning the district court’s evidentiary rulings, the admissibility
of evidence is controlled by the Nebraska Evidence Rules. Green Tree Fin. Servicing v. Sutton,
264 Neb. 533, 650 N.W.2d 228 (2002). Judicial discretion is involved only when the rules make
such discretion a factor in determining admissibility. Id. A trial court has the discretion to




                                                -5-
determine the relevancy and admissibility of evidence, and such determinations will not be
disturbed on appeal unless they constitute an abuse of that discretion. Id. A judicial abuse of
discretion requires that the reasons or rulings of the trial court be clearly untenable insofar as they
unfairly deprive a litigant of a substantial right and a just result. Tremain v. Tremain, 264 Neb.
328, 646 N.W.2d 661 (2002).
        On the appeal challenging the district court’s disposition to the claims considered at the
bench trial, we find the nature of the action is one in law. See White v. Medico Life Ins. Co., 212
Neb. 901, 902, 327 N.W.2d 606, 608 (1982) (explaining that “whether the nature of an action is
legal or equitable is to be determined from its main object, as disclosed by the averments of the
pleadings and relief sought”). In a bench trial of a law action, the trial court’s factual findings have
the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong. Donut
Holdings v. Risberg, 294 Neb. 861, 885 N.W.2d 670 (2016). An appellate court independently
reviews questions of law decided by a lower court. Id. The meaning of a contract and whether a
contract is ambiguous are questions of law. Facilities Cost v. Otoe County School, 291 Neb. 642,
868 N.W.2d 67 (2015). The existence of a fiduciary duty and the scope of that duty are questions
of law for a court to decide. Gonzalez v. Union Pac. R.R. Co., 282 Neb. 47, 803 N.W.2d 424
(2011).
                                           V. ANALYSIS
        As noted above, Appellants contend the district court erred at three stages of the underlying
proceedings. First, Appellants claim the district court erred in granting Adams Bank’s motion and
dismissing Appellants’ theories of recovery one, three through nine, and eleven. Second,
Appellants contend the district court erred in overruling Appellants’ objections to the receipt of
Exhibits 35 and 28 and certain questioning in the testimony of Cynthia McVay. Finally, following
the bench trial, Appellants claim the district court erred in granting judgment for Adams Bank and
against Appellants under Adams Banks’ claim and Appellants’ theories of recovery two and ten.
                                 1. RULING ON MOTION TO DISMISS
       Appellants contend the district court erred in finding Adams Bank had no duty to protect
Appellants’ Brady property and dismissing the majority of their counterclaims. Additionally,
Appellants assert the district court incorrectly dismissed “any defense . . . premised upon that
non-existent duty” because no predicate motion or other pleading was brought concerning
Appellants’ defenses. Finally, Appellants claim the district court erred in not providing them the
opportunity to amend their pleadings.
                                     (a) Duty to Protect Security
        Appellants make and repeat several arguments attacking the district court’s dismissal of
their theories of recovery based upon its finding that Adams Bank “had the right under the Deed
of Trust but not the duty, to pay the real estate taxes to redeem the tax sale certificate” on the
32-acre tract. First, Appellants argue that, as the only listed justification for dismissal of nine of
their counterclaims, such reasoning does not address the full breadth of what Appellants claimed
to be Adams Bank’s duty under the promissory note and deeds of trust--namely, that Adams Bank




                                                 -6-
had the duty to “either make payment of the real estate taxes . . . or to notify the [Appellants] of
relevant information with respect to the status of such taxes, and their delinquency.” However, the
district court was not required to explicitly outline all of its analysis in dismissing Appellants’
counterclaims. It was sufficient the district court dismissed the counterclaims after Appellants’
pleadings asserted such a duty existed. Reading the ruling in context to the parties’ pleadings and
the motion to dismiss, the finding that Adams Bank had the right but not the duty to pay the
delinquent taxes was properly extended to notifying other parties to pay it.
         Second, Appellants argue that the promissory note, deeds of trust, and legal principles
provide that Adams Bank had a duty to protect Appellants’ offered security. Appellants first cite
related authority on mortgages, sureties, and marshalling securities to support their theory that any
duty to protect a secondary security property by extracting the maximum value of a primary
security property is enhanced when the secondary security property is offered by a party who is
not a co-obligor, surety, or guarantor. However, even though Appellants assert otherwise in their
reply brief, Appellants offer no specific Nebraska authority that would require a creditor to expend
funds to maximize value from a security when a secondary security exists.
         Additionally, the terms of the deeds of trust and Travis/Tina Note do not impose a duty on
Adams Bank to pay delinquent taxes on the 32-acre tract to protect Appellants’ Brady property.
Specifically, the Travis/Tina Deed of Trust provides:
                 Trustor shall pay when due (and in all events prior to delinquency) all taxes . . .
         levied against or on account of the Property[.] Trustor shall maintain the Property free of
         all liens having priority over or equal to the interest of Lender under this Deed of Trust,
         except for the lien of taxes and assessments not due and except as otherwise provided in
         this Deed of Trust. . . .
                 If Trustor fails (A) to keep the Property free of all taxes, liens, security interests,
         encumbrances, and other claims . . . then Lender may do so. If any action or proceeding is
         commenced that would materially affect Lender’s interests in the Property, then Lender on
         Trustor’s behalf may, but is not required to, take any action that Lender believes to be
         appropriate to protect Lender’s interests.

(Emphasis supplied.) In this quoted section, the Travis/Tina Deed of Trust--which provides the
rights and obligations of Adams Bank and Travis and Tina Brown dealing with the 32-acre
tract--only states that Adams Bank “may” exercise a right to pay any delinquent taxes on the
32-acre tract. It does not state Adams Bank is required to do so. Moreover, if such delinquent taxes
resulted in an action that would negatively affect Adams Bank’s interest in the 32-acre tract,
Adams Bank was again permitted, but not required to, intervene to protect its interests. In fact,
Adams Bank attempted to protect its interests by participating in the adversarial action challenging
Vandelay’s rights as the tax deed holder to the 32-acre tract. Under the Travis/Tina Deed of Trust,
Adams Bank was not required to pay delinquent taxes nor was it required to intervene in court
actions that might negatively affect its interests, but it did have the right to do so. Just because
Adams Bank chose to exercise one of these rights, it was not then required to exercise both. The
Travis/Tina Deed of Trust does not reference a duty for Adams Bank to notify Appellants of any
delinquent taxes, and the Travis/Tina Note and the Appellants’ Deed of Trust do not state any



                                                 -7-
additional rights or duties of Adams Bank regarding the payment of delinquent taxes. Therefore,
the district court did not err in finding Adams Bank “had the right under the [Travis/Tina] Deed of
Trust but not the duty, to pay the real estate taxes to redeem the tax sale certificate.”
                               (b) Dismissal of Affirmative Defenses
       Appellants next contend the district court incorrectly dismissed “any defense . . . premised
upon that non-existent duty” because no predicate motion or other pleading was brought
concerning Appellants’ defenses. Specifically, Appellants claim the district court’s ruling
dismissed its affirmative defenses listed in paragraphs 16 through 41 of their answer.
       When read in context, the dismissal of “any defense” is limited. Specifically, the court’s
order provides:
                1. Plaintiff had the right under the Deed of Trust but not the duty, to pay the real
       estate taxes to redeem the tax sale certificate on the Thirty-Two (32) acre tract. Any defense
       or counterclaim raised by Defendants which is premised upon that non-existent duty should
       be stricken from the pleadings;
                2. Accordingly, the 1st, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, and 11th Theories of Recovery
       set forth in the Defendants’ Counterclaim are dismissed.

         Among the theories of recovery dismissed in the order, the fifth claimed laches, the seventh
claimed waiver, the eighth claimed failure to mitigate and avoidable consequences, and the ninth
claimed failure to satisfy conditions precedent. Although these were included in Appellants’
counterclaims, these are defenses. See Vanice v. Oehm, 255 Neb. 166, 582 N.W.2d 615 (1998)
(stating that a claim of laches is a defense which asserts “circumstances have changed such that
the assertion of rights by the plaintiff would prejudice the adverse party”); Omaha Police Union
Local 101, IUPA, AFL-CIO v. City of Omaha, 292 Neb. 381, 872 N.W.2d 765 (2015) (explaining
that waiver is a defense to a plaintiff’s claim when there has been “a voluntary and intentional
relinquishment or abandonment of a known existing legal right or such conduct as warrants an
inference of the relinquishment of such right”); Borley Storage & Transfer Co. v. Whitted, 271
Neb. 84, 95, 710 N.W.2d 71, 80 (2006) (explaining that the doctrine of avoidable consequences is
another name for the failure to mitigate damages and is a defense wherein “a wronged party will
be denied recovery for such losses as could reasonably have been avoided”); Weeder v. Cent. Cmty.
Coll., 269 Neb. 114, 121, 691 N.W.2d 508, 514 (2005) (detailing that noncompliance with a
condition precedent is an affirmative defense). When the language of the first paragraph is read
with the explanatory second paragraph, the language of the court’s order is a dismissal of all the
listed theories of recovery resting on the offered duty including those that were separate causes of
action and those that were responsive defenses.
         As stated above, the district court appropriately found that Adams Bank did not have a duty
to pay the 32-acre tract property tax. Pursuant to such a finding, any defense premised on that duty
would have inevitably failed. Therefore, the district court did not err in its dismissal of “any
defense . . . premised upon that non-existent duty.”




                                                  -8-
                        (c) Failure to Direct Appellants to Amend Their Pleadings
        Finally, Appellants argue the district court, after submitting its ruling on Adams Bank’s
motion to dismiss, should have allowed it to amend its pleadings to comply with the court’s ruling.
However, the district court was not required to suggest Appellants amend their pleadings let alone
unilaterally direct Appellants to amend their theories of recovery. In fact, to do so would have
crossed the line into advocacy. See Sherman v. Sherman, 18 Neb. App. 342, 781 N.W.2d 615
(2010) (explaining that a “judge must be impartial, his or her official conduct must be free from
even the appearance of impropriety, and a judge’s undue interference in a trial may tend to prevent
the proper presentation of the cause of action. A judge must be careful not to appear to act in the
dual capacity of judge and advocate.”)
        Appellants made no written or oral motion to amend. If Appellants believed they could
amend their pleadings to comply with the district court’s ruling, they should have submitted such
a motion to the court. Therefore, the district court did not err in failing to unilaterally direct
Appellants to amend their pleadings.
                     2. OVERRULING OF APPELLANTS’ EVIDENTIARY MOTIONS
        Appellants also claim the district court erred in receiving certain evidence over their
objections. Specifically, Appellants challenge the receipt of Exhibits 28 and 35 and certain
questioning during Cynthia McVay’s testimony.
        Exhibit 28 was offered as a loan history for Travis and Tina which reflects all debits and
credits associated with the Travis/Tina Note. Appellants objected to Exhibit 28 because of certain
information contained within concerning attorney fees. Specifically, Appellants’ trial counsel
stated:
        I’m going to object to Exhibit 28, Your Honor, on the basis that Exhibit 28, as the Court
        will note when it reviews it, has a number of entries in it which purport to have charges to
        a law firm of--the Reynolds Law Firm that relate to this transaction.
                And I can advise the Court somewhat preemptively that there is no other
        documentation that I am aware of and that has been provided in respect to an ominous
        discovery request for any and all documents that directly or indirectly relate to the claims
        in the Plaintiff’s Complaint that would have to do with any attorneys fee that may be related
        to any of these transactions at all. All we’ve got is a single line entry of seven or eight
        charges that show up on Exhibit 28.
                And that’s the extent of any documentation that relate to these. And by reason of
        the insufficiency of any of the documentation or supporting documents that relate to these
        it’s my position that the exhibit is incompetent and irrelevant and immaterial.

The district court overruled this objection stating “Overruled. I’ll receive Exhibit 28, but whether
I’ll back out the attorneys fees from the eventual determination in the case, I’ll make that
determination after I take the matter under advisement.”
         Similarly, Exhibit 35 was offered as a loan history for Appellants which reflects all debits
and credits associated with the Appellants’ Note. Appellants also objected to this exhibit and the
district court overruled it by the following exchange:



                                                -9-
               [APPELLANTS’ TRIAL COUNSEL]: Same objection as was made to Exhibit 28
       by reason of Exhibit 35 also having some entries in it which show a charge and apparently
       a payment to the Reynolds Law Firm that, as I explained previously in the previous
       objections, to adopt those reasons and that it is incompetent, irrelevant, and immaterial.
               THE COURT: I’ll overrule the objection. But, again, what costs, if any, relate to
       the foreclosures that might be included in any eventual judgments against the Defendants
       would have to be determined after I take the matter under advisement.

         When reviewing the admission of evidence, we begin by noting “[a] trial court has the
discretion to determine the relevancy and admissibility of evidence, and such determinations will
not be disturbed on appeal unless they constitute an abuse of discretion.” Green Tree Fin. Servicing
v. Sutton, 264 Neb. 533, 538, 650 N.W.2d 228, 233 (2002). A party bringing an objection must
state the specific ground of the objection or ensure that such specific ground was apparent from
the context. Should such specific objection not be stated or otherwise apparent, the overruling of
the objection is not reviewable on appeal. Neb. Rev. Stat. § 27-103(1)(a) (Reissue 2008). A party
may not assert a different ground for an objection to the admission of evidence than was offered
to the trial court. State v. Davlin, 263 Neb. 283, 639 N.W.2d 631 (2002).
         Here, Appellants objected to the information contained within exhibits 28 and 35
concerning attorney fees claiming this offered evidence was incompetent, irrelevant, and
immaterial. Adams Bank, through testimony by Cynthia McVay, provided sufficient foundation
and explanation of what the documents were, where they came from, and their relevancy to this
case. Moreover, in overruling the objections, the district court noted it reserved the right to later
determine whether or not to “back out the attorneys fees from the eventual determination in the
case” after considering the sufficiency of the evidence in relation to the claims asserted. Taking
into account the considerable deference the district court has on the determination of the relevancy
and materiality of evidence and the court’s ability to weigh the evidence and its sufficiency, the
district court did not err in overruling Appellants’ objections to exhibits 28 and 35.
         During the bench trial, Appellants also objected to a question by Adams Bank during
Cynthia McVay’s testimony. Specifically, Adams Bank asked: “There’s likewise a statement in
the Complaint that the entire amount of indebtedness secured by Charles and June Brown’s deed
of trust on date of sale is $114,862.04. Is that a fair statement?” Appellants objected to this question
stating “lack of foundation.” However, the district court overruled the objection stating
“Overruled, I’ll permit it. But then you can go into how that number was calculated, Mr. Windrum,
on cross-examination. You may answer.”
         Again, considering the district court’s discretion and the testimony proceeding and
following the objected to question, the district court did not err in overruling Appellants’ objection
to the questioning of Cynthia McVay.
                                           3. BENCH TRIAL
       Appellants contend the district court erred by finding generally in favor of Adams Bank
and against the Appellants. Specifically, Appellants contend the district court erred in finding (1)
there was sufficient evidence to find in favor of Adams Bank on its claim; (2) Appellants failed to



                                                 - 10 -
meet their burden of proof on their remaining theories of recovery; and (3) Adams Bank was
entitled to attorney fees and that the attorney fees incurred were fair, reasonable, and necessary.
                             (a) Adams Bank’s Deficiency Judgment
         Appellants challenge the district court’s determination that Adams Bank provided
sufficient evidence that Adams Bank was entitled to a judgment on its deficiency claim.
         The district court received the promissory notes, the deeds of trust, past due notices, loan
histories, notices of default, a loan payoff statement, testimony from Adams Bank representatives
Cynthia McVay and Chad Adams, and testimony from June and Tina. The evidence presented
clearly outlined that Appellants stopped paying on the Appellants’ Note and never paid on the
Travis/Tina Note. It is also clear that Adams Bank foreclosed on the Appellants’ Brady property
seeking payment of the Notes. Further, the district court’s order found that, regarding Adams
Bank’s complaint against the Appellants, § 76-1013 provides, “in pertinent part, that ‘at any time
within three months after any sale of property under a trust deed, an action may be commenced to
recover the balance due upon the obligation for which the trust deed was given as security.’”
         The Appellants’ Deed of Trust outlines the debt which it provided security for, specifically
stating:
                 CROSS-COLLATERALIZATION. In addition to the Note, this Deed of Trust
         secures all obligations, debts and liabilities, plus interest thereon, of either Trustor or
         Borrower to Lender, or any one or more of them, as well as all claims by Lender against
         Borrower and Trustor or any one or more of them, whether now existing or hereafter
         arising, whether related or unrelated to the purpose of the Note, whether voluntary or
         otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute
         or contingent, liquidated or unliquidated, whether Borrower or Trustor may be liable
         individually or jointly with others.

The term “Note” is further explained as:
               The [Travis/Tina Note] dated April 14, 2006, in the original principal amount of
       $58,533.57 from Borrower to Lender, together with all renewals of, extensions of,
       modifications of, refinancings of, consolidations of, and substitutions for the promissory
       note or agreement[.]”

Appellants’ Note was also protected in the Appellants’ Deed of Trust in the language incorporating
all “obligations, debts and liabilities.”
        The order under which funds from a foreclosure apply to the secured debts is explained
under the Appellants’ Deed of Trust under the section titled “Foreclosure by Power of Sale” which
states:
                (b) As may be permitted by law, after deducting all costs, fees and expenses of
        Trustee and of this Trust, including costs of evidence of title in connection with sale,
        Trustee shall apply the proceeds of sale to payment of (i) all sums expended under the
        terms of this Deed of Trust or under the terms of the Note not then repaid, including but




                                               - 11 -
       not limited to accrued interest and late charges, (ii) all other sums then secured hereby, and
       (iii) the remainder, if any, to the person or persons legally entitled thereto.

Here, the term “Note” again may be read as the Travis/Tina Note and “all other sums then secured
hereby” includes Appellants’ Note.
         Appellants’ claim that they should not be held personally liable for the Travis/Tina Note is
without merit. According to the language from Appellants’ Deed of Trust quoted above, after
Appellants’ Brady property was sold at the foreclosure sale, the Travis/Tina Note was to be paid
first, any other obligations were to be paid second, and the remainder was to go to any other persons
legally entitled thereto. Thus, the Travis/Tina Note was paid off through the $95,000 gained
through the foreclosure sale and then the rest of the proceeds went to the Appellants’ Note leaving
a remaining balance on that note. Because Appellants were parties of the Appellants’ Note, they
remained personally liable for any remaining balance on their Note.
         Appellants also claim the district court erred in finding the fair market value of the Brady
property was $95,000. On June 16, 2015, Adams Bank caused a foreclosure sale on the Appellants’
Brady property; Adams Bank bought the property at the sale for $95,000 as the highest bidder.
Four months later, after some renovation to the property and the payment of unpaid property taxes,
Adams Bank resold the Brady property for $110,000. Appellants claim the property should have,
therefore, been valued at the $110,000 price.
         During trial, the district court received testimony from Adams Bank representatives of the
process involved in foreclosing on the Appellants’ Brady property, valuing of the property, and
the ultimate purchase of the property as the highest bidder. There was also testimony about work
performed on the property prior to its eventual resale and the payment of unpaid property taxes.
Although Adams Bank did not use an independent appraiser, it was not required to do so. Adams
Bank bought the property in a foreclosure sale that was open to other bids. The fact that it was
subsequently sold months later for a higher price after work was put into it is not conclusive of an
incorrect initial valuation. Based upon all of the foregoing, the district court had sufficient evidence
to find $95,000 was the fair market value of the property at the time of foreclosure sale.
         The district court additionally received testimony from Adams Bank representatives, the
deeds of trust and promissory notes, credit statements, and other evidence describing the amount
owed on the promissory notes after the foreclosure sale. Specifically, that the total indebtedness
secured by Appellants’ Deed of Trust on the date of sale of $114,862.04. Its determination that
Adams Bank is owed a deficiency judgment in the amount of $23,175.07 plus interest at the rate
of $13.51 per day was not clearly wrong and is therefore not in error.
                        (b) Appellants’ Theories of Recovery Two and Ten
        Appellants’ second theory of recovery claimed fraud, constructive fraud, and inequitable
conduct. To support this claim, Appellants assert Travis and/or Tina were told by representatives
of Adams Bank that as long as they were current in their payments for approximately one year
after the date of initial indebtedness that Appellants would no longer be at risk of potential loss of
the Appellants’ Brady property under their loan. Additionally, Appellants asserted Adams Bank




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representatives told Travis and/or Tina that the security interest of the 32-acre tract was sufficient
to protect Appellants’ Brady property.
         During trial, Tina and June Brown testified to these alleged representations by Adams
Bank. However, this testimony was lacking in specifics on the details of the alleged conversations.
Adams Bank additionally denies such conversations took place. Therefore, the disposition of
Appellants’ second theory of recovery rests on a credibility determination by the district court. The
district court’s decision was not clearly wrong and its factual determination on credibility should
not be disturbed.
         Appellants also challenge the district court’s alternative reason for finding Appellants
failed to meet their burden to show such amendments were made to the Appellants’ Deed of Trust.
Specifically, the appellants argue that Neb. Rev. Stat. § 45-1,113 (Reissue 2010) requires that any
such agreements would have to have been in writing to be enforceable. Section 45-1,113(1)
provides:
         A debtor or a creditor may not maintain an action or assert a defense in an action based on
         a credit agreement unless the credit agreement is in writing, expresses consideration, sets
         forth the relevant terms and conditions of the credit agreement, and is signed by the creditor
         and the debtor.

Neb. Rev. Stat. § 45-1,112 (Reissue 2010) defines a credit agreement to be:
               (1)(a) Credit agreement means:
               (i) A contract, promise, undertaking, offer, or commitment to loan money or to
      grant or extend credit; or
               (ii) A contract, promise, undertaking, or offer to forebear repayment of money or
      to make any other financial accommodation in connection with a loan of money or grant
      or extension of credit, or any amendment of, cancellation of, waiver of, or substitution for
      any or all of the terms or provisions of any instrument or document executed in connection
      with a loan of money or grant or extension of credit, except for loans of money or grants
      or extensions of credit which are:
               (A) Not in excess of twenty-five thousand dollars and used primarily for personal,
      family, or household purposes of the debtor or debtors; or
               (B) Used for the purchase of and secured solely by the principal residence of the
      debtor or debtors.
               (b) Credit agreement does not include (i) letters of credit or (ii) promissory notes,
      real estate mortgages, trust deeds, security agreements, financing statements, guarantee
      agreements, pledge agreements, or other similar documents or instruments evidencing an
      obligation to repay indebtedness or securing the repayment of indebtedness

       Appellants argue that § 45-1,112(b) specifically exempting “promissory notes” and “trust
deeds” from the credit agreement means § 45-1,113 is not applicable to the instant case. However,
because we have determined that the district court did not err in finding the testimony offered
concerning the alleged conversations to modify the agreement was not credible, we do not need to
address whether § 45-1,113 applies. See Kelly v. Kelly, 246 Neb. 55, 516 N.W.2d 612 (1994)



                                                - 13 -
(explaining that an appellate court is not obligated to engage in analysis which is not necessary to
adjudicate the case and controversy before it).
        Appellants also claim the district court erred in finding that they failed to meet their burden
on their tenth theory of recovery which claimed Adams Bank breached the implied covenant of
good faith and fair dealing regarding the notes’ contractual provisions. Because the district court
did not err in finding that Appellants’ offered testimony was not credible and that Appellants did
not meet their burden to show there was a modification of Appellants’ Deed of Trust or the
Travis/Tina Note as analyzed above, the district court did not err in finding there was no modified
contract for Adams Bank to breach the implied covenant of good faith and fair dealing. Therefore,
the district court did not err in finding Appellants failed to meet their burden on their tenth theory
of recovery.
                                    (c) Award of Attorney Fees
        Appellants challenge the district court’s award of attorney fees to Adams Bank. They
primarily argue Adams Bank did not provide a sufficient evidentiary basis for the determination
of those fees.
        Under sections titled “ATTORNEYS’ FEES; EXPENSES,” the Travis/Tina Note and
Appellants’ Note provide:
               Lender may hire or pay someone else to help collect this Note if I do not pay. I will
        pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s
        attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit, including
        attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate
        any automatic stay or injunction), and appeals if not prohibited by applicable law, I also
        will pay any court costs, in addition to all other sums provided by law.

The Travis/Tina Deed of Trust further provides:
                LENDERS EXPENDITURES. If Trustor fails (A) to keep the Property free of all
       taxes, liens, security interests, encumbrances, and other claims, (B) to provide any required
       insurance on the Property, or (C) to make repairs to the Property then Lender may do so.
       If any action or proceeding is commenced that would materially affect Lender’s interests
       in the Property, then Lender on Trustor’s behalf may, but is not required to, take any action
       that Lender believes to be appropriate to protect Lender’s interests. All expenses incurred
       or paid by Lender for such purposes will then bear interest at the rate charged under the
       Note from the date incurred or paid by Lender to the date of repayment by Trustor. All
       such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be
       payable on demand; (B) be added to the balance of the Note and be apportioned among
       and be payable with any installment payments to become due during either (1) the term of
       any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as
       a balloon payment which will be due and payable at the Note’s maturity. The Deed of Trust
       also will secure payment of these amounts. The rights provided for in this paragraph shall
       be in addition to any other rights or any remedies to which Lender may be entitled on




                                                - 14 -
       account of any default. Any such action by Lender shall not be construed as curing the
       default so as to bar Lender from any remedy that it otherwise would have had.

See, also, Appellants’ Deed of Trust (containing an almost identical provision with only the
addition to subsection (C) stating “. . . (C) to make repairs to the Property or to comply with any
obligation to maintain existing indebtedness in good standing as required below then Lender may
do so . . .”) (emphasis added).
        During trial, the district court received Exhibits 28 and 35, which are loan histories under
the Travis/Tina Note and the Appellants’ Note, respectively. These exhibits list several payments
made to “Reynolds Korth and Samuelson PC.” From testimony during the testimony of Cynthia
McVay and Chad Adams, it was revealed that these listings indicate payments made by Adams
Bank to the Reynolds law firm for efforts related to collections on the amount owed including
“several bankruptcies, litigation over taxes, and many, many legal matters involving these [notes]
over the years.” However, because it is Adams Bank’s policy to discard invoices after they are
paid, Adams Bank presented no specific evidence on what these payments were for.
        The district court found “that the attorneys’ fees incurred by [Adams Bank] were fair,
reasonable, and necessary, based upon the testimony of Mr. Adams who is also a licensed attorney,
in addition to his position as president of [Adams Bank].” The court received evidence regarding
the amount of the fees, testimony from representatives of Adams Bank on how those fees were
determined generally, and explanation on the events which would have required expending such
attorney fees. Therefore, the district court did not err in determining Adams Bank was entitled to
attorney fees for the collection efforts under the two notes.
                                       VI. CONCLUSION
        We conclude the district court did not err (1) in dismissing Appellants’ counterclaim
theories of recovery one, three through nine, and eleven; (2) finding Adams Bank is entitled to a
deficiency judgment of $23,175.07 plus interest at the rate of $13.51 per day; (3) finding
Appellants did not meet their burdens under counterclaim theories of recovery two and ten; (4)
finding Adams Bank is entitled to attorney fees for collection under the notes; and (5) overruling
Appellants’ objections to exhibits 28 and 35 and certain questioning during Cynthia McVay’s
testimony.
                                                                                       AFFIRMED.




                                               - 15 -
