Summary
The Nebraska Supreme Court affirmed summary judgment for CNBT II LLC and The Cattle National Bank & Trust Co. in a dispute over whether CNBT II assumed obligations under a long-term parking lot lease. The court held that CNBT II did not expressly assume the lease, was liable only for covenants running with the land during its possession, and could invoke the statute of frauds because no writing signed by CNBT II established an assumption of the lease. The court also rejected equitable estoppel and found no genuine issue of material fact.
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Practice areas
Questions Presented
- Whether CNBT became bound by the 50-year parking lot lease when it acquired the office building at a trustee's sale, used the parking lot, paid rent, and complied with certain lease provisions, despite never signing an express assumption.
- Whether the Nebraska statute of frauds barred enforcement of the long-term lease obligations against CNBT.
- Whether equitable estoppel prevented CNBT from asserting the statute of frauds as a defense.
- Whether a genuine issue of material fact existed concerning CNBT's intent to assume the lease obligations.
- Whether the district court properly granted summary judgment to CNBT and the Bank.
Holdings
- CNBT was not bound by the lease's contractual obligations because privity of contract does not pass to a purchaser of a leasehold through an assignment alone, and CNBT never expressly assumed the lease. CNBT could be liable only for covenants running with the land during the period it possessed the premises.
- The statute of frauds barred Brick's claim because CNBT did not sign a writing expressly assuming obligations under a lease for more than one year.
- CNBT's possession, rent payments, and compliance with lease provisions did not create an exception to the requirement that an assumption of a lease exceeding one year be in writing.
- Equitable estoppel did not prevent CNBT from asserting the statute of frauds because there was no evidence that CNBT induced Brick to believe it had assumed the lease's long-term obligations or that Brick changed its position to its disadvantage in reliance on that belief.
- No genuine issue of material fact existed because CNBT never signed anything expressly assuming the parking lot lease obligations; CNBT's conduct and intent were therefore irrelevant to the statute-of-frauds issue.
Key quotations
“Because there is no privity of contract and the purchaser did not expressly assume the lease, the statute of frauds bars the owner’s claim for breach of contract.” (281)
“We conclude that paying rent while in possession is not an exception to the requirement under the statute of frauds that an assumption of a lease for a period greater than 1 year must be in writing.” (291)
“Because there is no privity of contract and CNBT did not expressly assume the lease, Brick’s breach of contract claim is barred by the statute of frauds.” (292)
Factual background
The original lessors leased a parking lot to Two Twenty Enterprises for 50 years, and the lease authorized assignment but stated that an encumbrance, foreclosure, or conveyance would not relieve the lessee of its obligations. After TTE assigned the lease to Raasch Enterprises, Raasch conveyed an office building to the Bank as security; the deed of trust referred to leases concerning the office building but did not identify the parking lot or parking lot lease. Following foreclosure, CNBT purchased the office building, used the parking lot, paid rent, and complied with certain lease provisions, but never signed an express assumption of the parking lot lease. Brick later acquired the parking lot from the original lessors and sued after CNBT terminated its use.
Procedural history
Brick sued CNBT and the Bank, alleging that CNBT had assumed a long-term parking lot lease and was liable for breach of its obligations. The parties filed competing motions for summary judgment. The district court concluded that CNBT had not assumed the lease, that the statute of frauds barred Brick's claim, and that equitable estoppel did not apply; it granted summary judgment to CNBT and the Bank. The Nebraska Supreme Court affirmed.