Schlatz v. Bahensky

Joni R. Schlatz and StuaRt J. S chlatz , cotRuSteeS
of the ameRican family tRuSt, appellantS,
v. Ron BahenSky, an individual ,
et al ., appelleeS.
785 N.W.2d 825
Filed July 9, 2010. 	No. S-09-866.
1. Summary Judgment. Summary judgment is proper when the pleadings and
evidence admitted at the hearing 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.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
appellate court views the evidence in the light most favorable to the party against
whom the judgment is granted and gives such party the benefit of all favorable
inferences deducible from the evidence.
Appeal 	from 	the 	District 	Court 	for 	Merrick 	County:
michael J. owenS, Judge. Reversed and remanded for further
proceedings.
Mark A. Beck, of Beck Law Office, P.C., L.L.O., for
appellants.
Blake J. Schulz and Cathleen H. Allen, of Leininger, Smith,
Johnson, Baack, Placzek & Allen, for appellee Ron Bahensky.
heavican, 	c.J., 	wRight, 	connolly, 	geRRaRd, 	Stephan,
mccoRmack, and milleR-leRman, JJ.
milleR-leRman, J.
NATURE OF CASE
This case arises out of a dispute to real property between
beneficiaries of a trust and heirs to an estate. This appeal is
taken from an order of the district court for Merrick County
granting the motion for summary judgment filed by an heir,
defendant Ron Bahensky (appellee), and quieting title to the
disputed property in the name of the decedent, Irene Bahensky
(Irene). The plaintiffs-appellants, Joni R. Schlatz and Stuart
J. Schlatz in their capacity as successor cotrustees of the
American Family Trust, appeal. Because we determine that
there are genuine issues of material fact, we reverse, and
remand for further proceedings.
180 	280 NEBRASkA REPORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:46 AM CST

STATEMENT OF FACTS
At issue in this case is the ownership of two parcels of real
estate located in Merrick County, Nebraska, described by the
court as
The West Half of the Northeast Quarter of Section Ten
(10), Township Twelve (12) North, Range Eight (8) West
of the Sixth P.M., Merrick County, Nebraska; and The
West Half of the Southeast Quarter of Section Three (3),
Township Twelve (12) North, Range Eight (8) West of the
Sixth P.M., Merrick County, Nebraska.
Appellants 	are 	the 	successor 	cotrustees 	of 	the American
Family Trust, the trust that currently holds the last recorded
deed to the property at issue. They filed this action to quiet
title in the name of the American Family Trust or in the name
of the purported beneficiaries of this trust. On the record
before us, appellee, one of several defendants, is an heir of
Irene. The case may be generally characterized as one involv-
ing a dispute among the beneficiaries of a trust and the heirs
to an estate.
Prior to June 17, 1967, the real property at issue was owned
by Melvin Bahensky (Melvin) and Irene as joint tenants. On
June 17, the real estate was conveyed by Melvin and Irene as
joint tenants to Melvin and Irene as tenants in common. On
July 11, 1978, by quitclaim deed, Melvin deeded his undi-
vided one-half interest in the real estate to Irene. The deed was
recorded on July 12. This transaction resulted in Irene’s being
the sole owner of the real estate at issue. Appellee argues that
this was the last valid conveyance of the property. After this
transaction, on July 12, Melvin and Irene began a series of
conveyances, many of which appear to be based on forms cir-
culated by individuals or organizations apparently designed to
avoid taxes, reduce future probate expenses, plan their respec-
tive estates, and avoid attorney fees.
The first of these conveyances began with a quitclaim deed
executed by Irene on July 12, 1978, conveying the property to
Melvin and Janis A. Gustafson, trustees of the “I. Dammann
Trust.” The district court found that the parties failed to pro-
duce any evidence of the existence of the I. Dammann Trust.
However, there was evidence produced that on approximately
SCHLATz v. BAHENSky 	181
Cite as 280 Neb. 180

the same date, a trust was recorded with the Howard County,
Nebraska, register of deeds, and that trust was titled the “M & I
Bahensky Trust.” The district court therefore determined that
the I. Dammann Trust and the M & I Bahensky Trust were
one and the same. This finding is not challenged on appeal. As
discussed further below, the district court concluded that the
M & I Bahensky Trust was not valid, because it did not ade-
quately identify the beneficiaries, and the legal consequences
of this invalidity are the subject of this appeal.
On January 1, 1982, in a trustee’s deed executed by Melvin,
Irene, and Gustafson, “as all of the Trustees under Agreement
dated July 10, 1978,” the land was conveyed out of the
M & I Bahensky Trust and to “Melvin D. Bahensky or Irene
D. Bahensky or Jeffrey J. Reiss W.R.O.S.”
On September 13, 1988, Melvin and Irene executed a quit-
claim deed conveying the real estate to the “Green Acres Trust
Co.” (Green Acres Trust). The deed was not executed by Jeffrey
J. Reiss as a grantor. On June 22, 1991, by warranty deed, the
Green Acres Trust conveyed the real estate to the “Evergreen
LTD [Trust].” On November 15, 1996, Irene, as trustee of the
Evergreen LTD Trust, executed a quitclaim deed conveying
the real estate to the American Family Trust, with Melvin as
trustee. Appellants entered evidence purporting to show that
beneficiaries of the American Family Trust were identified
by amendments.
Melvin and Irene are now deceased, and appellants brought
this action to quiet title to the real estate at issue in favor of
the American Family Trust. Appellee filed a counterclaim.
Appellee also filed a cross-claim against the other defendants
in this matter—Reiss, Gustafson, and all persons claiming an
interest in the property in question—in which appellee sought
to quiet title in the name of Irene.
On April 23, 2009, appellee filed a motion for summary
judgment on his counterclaim and cross-claim. A hearing was
held on the motion on May 11. Defendants Reiss and Gustafson
did not attend the hearing.
On August 3, 2009, the district court filed an order grant-
ing appellee’s motion and quieting title in the name of Irene.
As an initial matter, the court determined that the I. Dammann
182 	280 NEBRASkA REPORTS

Trust was in fact the M & I Bahensky Trust and, therefore,
examined the latter trust document to determine the validity of
the M & I Bahensky Trust and the impact of such validity on
subsequent transfers.
In examining the M & I Bahensky trust, the district court
noted that regarding beneficiaries, the M & I Bahensky Trust
contained the following language:
The Beneficial Interests, as a convenience, for distribu-
tion are divided into One Hundred (100) Units. They are
non-assessable, non-taxable, non-negotiable, but transfer-
able; and the lawful possessor thereof shall be construed
the true and lawful owner thereof. The lawful owner may,
if he so desires, cause his Beneficial Certificate to be reg-
istered with the Secretary of the Trust.
The district court observed that this language was found in
the trust at issue in First Nat. Bank v. Schroeder, 222 Neb. 330,
383 N.W.2d 755 (1986). This court concluded that the trust at
issue in Schroeder was invalid because it failed to adequately
identify the beneficiaries. Based on the reasoning in Schroeder,
the district court concluded that the transfer by Irene to the
trustees of the M & I Bahensky Trust was “invalid and void.”
In its order, the district court continued that, “[t]herefore, all
subsequent purported conveyances of such real estate are also
void.” The district court concluded that because the transfer
to the M & I Bahensky Trust was void, ownership of the real
estate devolved into a resulting trust in favor of Irene. The
court concluded that there were no genuine issues of material
fact and quieted title to the property in the name of Irene. This
appeal followed.
ASSIGNMENTS OF ERROR
Appellants claim that the district court erred in (1) imposing
a resulting trust in favor of the estate of Irene and (2) quieting
title in the name of Irene.
STANDARDS OF REVIEW
[1,2] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is no genu-
ine issue as to any material fact or as to the ultimate inferences
that may be drawn from those facts and that the moving party
SCHLATz v. BAHENSky 	183
Cite as 280 Neb. 180

is entitled to judgment as a matter of law. In re Estate of Fries,
279 Neb. 887, 782 N.W.2d 596 (2010). In reviewing a sum-
mary judgment, an appellate court views the evidence in the
light most favorable to the party against whom the judgment is
granted and gives such party the benefit of all favorable infer-
ences deducible from the evidence. Id.
ANALySIS
On appeal, appellants claim that because the American
Family Trust, as amended, indicates its intended beneficiaries
with reasonable specificity, and because it is the last pur-
ported trust created by Irene, it demonstrated Irene’s intentions.
Appellants claim that the district court erred when it did not
quiet title in the beneficiaries of that trust, rather than Irene.
Appellants’ argument presumes that the American Family Trust
and conveyances into the trust are valid, presumptions which
are not supported by the record. We reject appellants’ argument
on the summary judgment record before us, because there is a
genuine issue of material fact (except as to the trustee’s deed
of January 1, 1982, which is invalid) as to the validity of the
trusts formed and transfers made subsequent to the formation
of the M & I Bahensky Trust, including the American Family
Trust. However, because we do find error in the decision of
the district court on grounds different from those asserted by
appellants, we reverse and remand. Specifically, we conclude
that the district court erred when it concluded that because the
M & I Bahensky Trust was void, “all subsequent purported
conveyances of such real estate are also void,” thus necessarily
quieting title in Irene.
The district court concluded that the M & I Bahensky Trust
was not valid because it failed to adequately identify the bene-
ficiaries. This conclusion was correct based on the reasoning in
First Nat. Bank v. Schroeder, 222 Neb. 330, 332, 383 N.W.2d
755, 757 (1986), wherein we disapproved of a provision com-
parable to the instant case of “units of beneficial interest” with-
out providing who was to receive the certificates of beneficial
interest. The district court also correctly concluded that the
failure of the M & I Bahensky Trust created a resulting trust in
Irene as settlor. See First Nat. Bank v. Daggett, 242 Neb. 734,
184 	280 NEBRASkA REPORTS

497 N.W.2d 358 (1993). However, because a later transfer by
Irene could potentially be valid, the district court erred when
it reasoned that all subsequent purported conveyances were
necessarily void and that therefore, it was required to quiet title
in Irene.
The consequence of the failure of the M & I Bahensky Trust
was that the interest sought to be transferred into the M & I
Bahensky Trust was not effectively transferred and a result-
ing trust in favor of Irene was created. See First Nat. Bank v.
Daggett, supra. See, also Restatement (Third) of Trusts § 7
(2003). Therefore, Irene retained her beneficial interest in the
real property and the corresponding power to dispose of it. See,
e.g., Collins v. Collins, 46 Ariz. 485, 52 P.2d 1169 (1935).
On the record before us, and given the deficiencies of the
M & I Bahensky Trust, it is clear that the purported trans-
fer by “Trustee’s Deed” from the M & I Bahensky Trust to
“Melvin D. Bahensky or Irene D. Bahensky or Jeffrey J. Reiss
W.R.O.S.” on January 1, 1982, was not valid, because it was
made by trustees of an invalid trust. However, contrary to the
district court’s determination, given the resulting trust in favor
of Irene, Irene individually retained the power to transfer the
real property and there remains the possibility that she did so
effectively at a later date.
We have examined the record made on summary judgment
to determine whether transfers made by Irene subsequent to
the invalid trustee’s deed of January 1, 1982, were effective.
Chronologically, the next event in the record is a quitclaim
deed by Melvin and Irene on September 13, 1988, to the Green
Acres Trust. The trust document creating the Green Acres
Trust and other facts surrounding the Green Acres Trust and
its purported transfer to the Evergreen LTD Trust are not in
the record. A valid transfer to the Green Acres Trust would be
a prerequisite to the determination of the validity of the sub-
sequent transfers by the Green Acres Trust to the Evergreen
LTD Trust and thereafter by the Evergreen LTD Trust to the
American Family Trust.
There are genuine issues of material fact on the record
before us, including whether the Green Acres Trust is a valid
trust and whether the purported conveyance into it was proper.
SCHLATz v. BAHENSky 	185
Cite as 280 Neb. 180

Viewing the evidence favorably to the nonmoving party as we
must, appellants may be entitled to prevail, and we cannot say
on this record that appellee, solely on the basis of the invalidity
of the M & I Bahensky Trust, as the moving party, was entitled
to judgment.
CONCLUSION
Because we determine there are genuine issues of material
fact, the order of the district court granting appellee’s motion
for summary judgment and quieting title in the name of Irene is
reversed and the cause remanded for further proceedings.
R eveRSed and Remanded foR
fuRtheR pRoceedingS.
vitalix , inc., appellant, v. Box Butte county
BoaRd of equalization, appellee .
786 N.W.2d 326
Filed July 9, 2010. 	No. S-09-1074.
1. Taxation: Judgments: Appeal and Error. Appellate courts review decisions
rendered by the Tax Equalization and Review Commission for errors appearing
on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing
on the record, an appellate court’s inquiry is whether the decision conforms to
the law, is supported by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.
3. Taxation: Appeal and Error. Questions of law arising during appellate review
of Tax Equalization and Review Commission decisions are reviewed de novo on
the record.
4. Stipulations. Parties cannot stipulate to legal conclusions.
Appeal from the Tax Equalization and Review Commission.
Affirmed.
Gerard T. Forgét III, of Forgét Firm, P.C., L.L.O., for
appellant.
No appearance for appellee.
heavican, 	c.J., 	wRight, 	connolly, 	geRRaRd, 	Stephan,
mccoRmack , and milleR-leRman, JJ.
186 	280 NEBRASkA REPORTS