Summary
The Supreme Court of Nebraska held that the common-law rule against perpetuities does not apply to a commercial contractual option to repurchase land. The court reversed the Nebraska Court of Appeals, which had deemed the option void, and remanded for consideration of the remaining assignments of error.
Topics
Practice areas
Questions Presented
- Whether the common-law rule against perpetuities invalidates a contractual option allowing sellers, their successors, or heirs to repurchase commercial real property after termination of landfill operations and required monitoring.
Holdings
- The common-law rule against perpetuities does not apply to the commercial contractual option to repurchase the property because the option arose from a nondonative commercial transaction and is governed by the parties' contractual arrangement.
Key quotations
“In concluding that the rule against perpetuities does not apply to this option, we merely hold the parties to the terms of their contractual arrangement.” (600)
“It would not be prudent to now deny appellees the benefit of their bargain while allowing Waste Management to avoid the terms of the agreement.” (600)
Factual background
In 1989, the Bauermeisters and Deavers sold approximately 280 acres to Waste Management for development and operation of a landfill. The purchase agreement granted the sellers, their successors, or heirs an option to repurchase all or part of the property for one dollar after termination of the landfill and through two years after termination of required monitoring; the option could also be transferred. After landfill operations ceased in 2003, the sellers attempted to exercise the option, but Waste Management refused to convey the property. The district court enforced the option, while the Court of Appeals held it void under the rule against perpetuities.
Procedural history
The Douglas County District Court found the sellers' option to repurchase enforceable, quieted title in their favor, and ordered Waste Management to convey the property by warranty deed. The Nebraska Court of Appeals reversed, holding that the option violated the common-law rule against perpetuities. The Nebraska Supreme Court granted further review, reversed the Court of Appeals, and remanded for consideration of the remaining assignments of error.
Remand instructions
Remand to the Nebraska Court of Appeals to consider the remaining assignments of error that it had not previously reached.