Nebraska Supreme Court: Decedent’s Real Property Remained In Estate And Was Not Validly Purchased Under Option Contract

In the June 2020 case of Arnold v. Walz, the Nebraska Supreme Court determined that decedent’s real property remained in the estate, and had not been validly purchased because the purported seller did not own the property. 

Beverly Freiden died on December 8, 2012. The Nebraska probate court appointed Arnold and Jon Frieden as co-personal representatives of decedent’s estate.

Decedent’s will stated that her real property located in Omaha, Nebraska “may either be sold or retained by my personal representatives as they shall determine, and upon sale… my son shall receive the first $25,000 from the sale and the remainder.. to my grandson Bart Arnold for his care.” 

The co-personal representatives did not sell the property. Instead, they filed an informal closing by verified statement which stated that Arnold and Jon Freiden’s appointments as co-personal representatives “shall terminate one year after the firing hereof.”

Walz had leased the property from decedent and was interested in buying the real property — an option to purchase provision was included in the lease between decedent and Walz. Walz did not exercise the option during the original tenancy. 

In August 2014 (after the expiration of the option), Walz and Freiden purported to modify the lease/purchase agreement to extend the option to purchase to July 31, 2015. 

In August 2015, Walz and Jon Freiden entered into another agreement in which set forth the “balance owed for the purchase of the property.” As a result of that agreement, Walz claimed he purchased the property from Jon Freiden. 

In January 2017, the decedent’s estate was reopened and Arnold Freiden was reappointed as personal representative. Arnold filed a complain to quiet title to the property, alleging that Walz had not timely exercised his option to purchase, and that there was no enforceable modification to the lease/purchase agreement. 

Under Nebraska law, options to purchase are strictly construed and not extended beyond their express provisions. The Nebraska Supreme Court ultimately held that Walz did not exercise the option before it expired in 2014. 

See, Nebraska Supreme Court: Decedent’s Real Property Remained In Estate And Was Not Validly Purchased Under Option Contract, Probate Stars, June 25, 2020.