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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

In re Estate of Steven G. Clark, deceased.

Clark Grain Company, a Nebraska corporation, 

and Brian D. Clark, appellants and 

cross-appellees, v. Jelayne Clark, 

appellee and cross-appellant.

___ N.W.2d ___

Filed August 9, 2022. No. A-21-803.

1. Contracts. The interpretation of a contract and whether the contract is 

ambiguous are questions of law subject to independent review.

2. Jurisdiction: Appeal and Error. It is the power and duty of an appellate court to determine whether it has jurisdiction over the matter before 

it, irrespective of whether the issue is raised by the parties.

3. Jurisdiction: Final Orders: Appeal and Error. For an appellate court 

to acquire jurisdiction of an appeal, there must be a final order entered 

by the court from which the appeal is taken.

4. Final Orders: Appeal and Error. Under Neb. Rev. Stat. § 25-1902 

(Cum. Supp. 2020), the three types of final orders that an appellate 

court may review are (1) an order that affects a substantial right and that 

determines the action and prevents a judgment, (2) an order that affects 

a substantial right made during a special proceeding, and (3) an order 

that affects a substantial right made on summary application in an action 

after a judgment is rendered.

5. Decedents’ Estates. A proceeding under the Nebraska Probate Code is a 

special proceeding.

6. Final Orders: Appeal and Error. A substantial right is affected if an 

order affects the subject matter of the litigation, such as diminishing a 

claim or defense that was available to an appellant before the order from 

which an appeal is taken.

7. ____: ____. A substantial right is not affected when that right can be 

effectively vindicated in an appeal from the final judgment.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

08/09/2022 08:08 AM CDT
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8. Contracts. A contract written in clear and unambiguous language is not 

subject to interpretation or construction and must be enforced according 

to its terms.

9. ____. The fact that the parties have suggested opposite meanings of a 

disputed instrument does not necessarily compel the conclusion that the 

instrument is ambiguous.

10. ____. A court is not free to rewrite a contract or to speculate as to terms 

of the contract which the parties have not seen fit to include.

11. ____. Extrinsic evidence is not permitted to explain the terms of a contract that is unambiguous.

12. ____. A latent ambiguity exists when collateral facts make the meaning 

of the contract uncertain.

13. ____. A contract must receive a reasonable construction, and a court 

must construe it as a whole and, if possible, give effect to every part of 

the contract.

14. ____. A contract is viewed as a whole in order to construe it.

15. ____. Whatever the construction of a particular clause of a contract, 

standing alone, may be, it must be read in connection with other clauses.

Appeal from the County Court for Nemaha County: Curtis 

L. Maschman, Judge. Reversed and remanded with directions.

Louie M. Ligouri, of Ligouri Law Office, for appellants.

Charles M. Bressman, Jr., of Bressman, Hoffman & Jacobs, 

for appellee.

Moore, Riedmann, and Arterburn, Judges.

Riedmann, Judge.

INTRODUCTION

Brian D. Clark and Clark Grain Company (the Company) 

appeal, and Jelayne Clark cross-appeals, the order of the county 

court for Nemaha County which determined that a term defined 

in a contract was ambiguous and, therefore, utilized extrinsic 

evidence to ascertain the intent of the parties. We conclude that 

the court erred in finding ambiguity in the contract and reverse 

the court’s order and remand the cause with directions.
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

BACKGROUND

The Company is a closely held Nebraska corporation. Its 

four shareholders were Steven G. Clark; his brother, Brian; 

and their parents, William Clark and Marilyn Clark. In January 

2005, the shareholders entered into a Restricted Stock Purchase 

Agreement (RSPA). The RSPA provided that in the event of the 

death of Steven or Brian, the Company had “the right to purchase the deceased’s shares of stock from his estate at fair market value.” Paragraph 3 of the RSPA further provided, “‘Fair 

market value’ for the stock shall be determined by the amount 

of the previous year-end corporate balance sheet, wherein 

assets, less liabilities, divided by the number of outstanding 

shares of stock shall be the value.”

Steven died in July 2017. In August, his widow, Jelayne, 

filed an application for informal appointment of personal representative in intestacy. Within the action, the Company and 

its shareholders filed a petition to adjudicate and settle stock 

shares. They asked that pursuant to the RSPA, the county 

court value Steven’s shares of stock according to the formula 

set forth in the RSPA and facilitate the right granted to the 

Company to purchase his shares.

Jelayne filed an answer, alleging that the formula provided 

in the RSPA for calculating the value of Steven’s shares was 

ambiguous and asking the court to hold a hearing at which 

the parties could provide evidence of the fair market value 

of the stock, including the opinions of her expert witness. 

The Company and its shareholders responded, objecting to 

Jelayne’s requests to present evidence and asking for an order 

in limine excluding her expert’s opinions. After holding a 

hearing on the objections and motion in limine, the county 

court entered an order in April 2018, in which it observed 

that the RSPA included a definition of fair market value, but 

found that

there is a problem with this definition. Although the parties designated this as a definition of [fair market value], 
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

it is essentially the definition of book value. If fixed 

assets make up a significant portion of the balance sheet 

and they are not periodically revalued to reflect current 

value they are then “carried at book”. A significant appreciation or depreciation would greatly impact the [fair market value] of the assets and thus the share value.

The court therefore concluded that there was a latent ambiguity in the RSPA as to the meaning of the term “fair market 

value.” Accordingly, it held that extrinsic evidence was necessary to resolve the ambiguity as to whether the formula was 

one for fair market value or book value.

A trial was held in July 2021, and on September 9, the 

county court entered a written order. After reviewing the evidence presented at trial, the court reaffirmed its previous finding that the RSPA’s definition of fair market value was ambiguous because no evidence was presented that would make the 

RSPA’s formula anything other than book value. The court 

therefore looked to extrinsic evidence of the intent of the parties to resolve the ambiguity.

In reviewing the language of the RSPA and the evidence 

submitted at trial, the court determined that the primary intent 

of the RSPA was to provide a fair and straightforward way 

for the continuation of the Company in the event of the death 

of Steven or Brian. Of the competing goals of fairness and 

straightforwardness, the court held that fairness “must be the 

lodestar.” Accordingly, the court utilized the formula set forth 

in the RSPA, but substituted expert opinion of the fair market 

value of real estate for the value of certain real estate listed 

on the balance sheet to reach a total value for Steven’s shares 

of $1,016,853.75. The court required that the Company elect 

to purchase Steven’s shares within 45 days of the date of the 

order. This appeal followed.

ASSIGNMENTS OF ERROR

The appellants assign that the county court erred in (1) 

determining that the RSPA contained a latent ambiguity; 
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

(2) rewriting the RSPA to reflect its view of a fairer bargain; (3) admitting extrinsic evidence to vary, change, add to, 

and render meaningless terms of the RSPA, including admitting inadmissible opinion evidence; (4) rejecting what the 

parties to the RSPA intended by their agreement, including 

the meaning given to the agreement by the parties themselves 

while engaged in their performance of the agreement before 

any controversy arose; and (5) failing to consider or account 

for the discounts for the minority interest and lack of marketability of the shares of stock valued by the court and in totally 

disregarding the testimony and expert opinions of a certain 

expert witness. They further assign that the county court’s 

decision is contrary to the evidence and the law and constitutes 

an abuse of discretion.

On cross-appeal, Jelayne assigns that the county court erred 

when it did not resolve the ambiguity in the RSPA by utilizing 

the fair market value established by her experts.

STANDARD OF REVIEW

[1] The interpretation of a contract and whether the contract is ambiguous are questions of law subject to independent 

review. Bierman v. Benjamin, 305 Neb. 860, 943 N.W.2d 

269 (2020).

ANALYSIS

Before we reach the merits of the appeal, we pause to 

address whether the order from which the appeal was taken is 

a final, appealable order. We asked the parties to address this 

issue when briefing the case. After our review, we conclude 

that the September 9, 2021, order is final and appealable, and 

thus, we have jurisdiction over the appeal.

[2,3] It is the power and duty of an appellate court to 

determine whether it has jurisdiction over the matter before 

it, irrespective of whether the issue is raised by the parties. In 

re Estate of McKillip, 284 Neb. 367, 820 N.W.2d 868 (2012). 

Generally, for an appellate court to acquire jurisdiction of an 
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

appeal, there must be a final order entered by the court from 

which the appeal is taken. Id.

[4,5] Under Neb. Rev. Stat. § 25-1902 (Cum. Supp. 2020), 

the three types of final orders that an appellate court may 

review are (1) an order that affects a substantial right and that 

determines the action and prevents a judgment, (2) an order 

that affects a substantial right made during a special proceeding, and (3) an order that affects a substantial right made on 

summary application in an action after a judgment is rendered. 

In re Estate of McKillip, supra. A probate proceeding is a special proceeding. See id. Therefore, the question is whether the 

September 9, 2021, order affected a substantial right.

[6,7] A substantial right under § 25-1902 is an essential legal right. Western Ethanol Co. v. Midwest Renewable 

Energy, 305 Neb. 1, 938 N.W.2d 329 (2020). A substantial 

right is affected if an order affects the subject matter of 

the litigation, such as diminishing a claim or defense that 

was available to an appellant before the order from which 

an appeal is taken. Id. Substantial rights under § 25-1902 

include those legal rights that a party is entitled to enforce or 

defend. Western Ethanol Co. v. Midwest Renewable Energy, 

supra. A substantial right is not affected when that right can 

be effectively vindicated in an appeal from the final judgment. In re Estate of Potthoff, 273 Neb. 828, 733 N.W.2d 860 

(2007). As one commentator has observed, in the context of 

multifaceted special proceedings that are designed to administer the affairs of a person, an order that ends a discrete 

phase of the proceedings affects a substantial right because 

it finally resolves the issues raised in that phase. See John 

P. Lenich, What’s So Special About Special Proceedings? 

Making Sense of Nebraska’s Final Order Statute, 80 Neb. L. 

Rev. 239 (2001).

The Nebraska Supreme Court has recognized that “we have 

decided several cases involving finality in probate orders. 

In doing so, we have generally noted that a consideration 
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Cite as 31 Neb. App. 250

regarding finality is whether the order ended a discrete—that 

is, separate and distinct—phase of the proceedings.” In re 

Estate of Beltran, 310 Neb. 174, 180, 964 N.W.2d 714, 719 

(2021).

In In re Estate of Rose, 273 Neb. 490, 730 N.W.2d 391 

(2007), a surviving spouse elected to take her elective share 

of 50 percent of the augmented estate and requested a family 

allowance. The probate court included certain property in the 

augmented estate and ordered the personal representative to pay 

a monthly family allowance, but the court did not make a final 

determination of the augmented estate. The Supreme Court 

determined that the probate court’s treatment of items relevant 

to the calculation of the augmented estate could be effectively 

considered on an appeal from the final establishment of the 

augmented estate, and it noted that the determinations made by 

the court were “preliminary to a complete determination of the 

size of the augmented estate which was the fundamental issue 

before the county court.” Id. at 495, 730 N.W.2d at 395. As 

such, the order appealed from was not final.

Conversely, in In re Estate of Potthoff, supra, the Supreme 

Court found that the probate court’s order determining that a 

decedent’s notice of severance of joint tenancy was ineffective 

and that awarding the wife all of the property as the sole surviving joint property owner was a final order. In reaching its 

decision, it stated that the order

resolved the separate issue of whether [the decedent’s] 

interest in the property was part of the probate estate, and 

following the county court’s order, there was nothing left 

to be determined on that issue. Moreover, unlike In re 

Estate of Rose, the rights involved in this case cannot be 

effectively considered in an appeal from the final judgment in which the probate estate is finally established. It 

is not uncommon for the probate of an estate to remain 

open for years. If that were to be the case here, by the 

time the probate estate is finally settled, the property in 
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question may have been disposed of or the value of the 

property may be substantially reduced.

In re Estate of Potthoff, 273 Neb. at 832, 733 N.W.2d at 865.

In the present case, the valuation of the stock does not necessarily create the same risk as did the property in In re Estate of 

Potthoff, because its value is purportedly set by contract based 

on a prior balance sheet. Regardless, because the Company is 

not a beneficiary of the estate and its right to purchase Steven’s 

shares is purely contractual, valuing the shares and granting the 

Company its right to purchase them is a separate issue from the 

probate of the estate. And the September 9, 2021, order finally 

resolved the issues raised in that phase and likely resolved any 

issues involving the Company, leaving solely the distribution 

of Steven’s estate among his wife and children. In that sense, 

we find it to be a discrete phase of the proceeding. Therefore, 

the order is a final, appealable order.

We now turn to the errors assigned on appeal. The appellants 

assign that the county court erred in finding that the RSPA contained a latent ambiguity and in considering extrinsic evidence 

to ascertain the parties’ intent rather than enforcing the RSPA 

solely according to its terms. Jelayne argues that the appellants 

are estopped from appealing the issue of ambiguity because 

they failed to appeal from the April 2018 order in which the 

county court first determined that an ambiguity existed. We 

disagree that the April order was an appealable order.

As set forth in our analysis above, the proceeding was a special proceeding, so the question is whether the April 2018 order 

finding an ambiguity affected a substantial right of the parties. 

In its determination that an ambiguity existed, the county court 

did not resolve that ambiguity; rather, it indicated that extrinsic 

evidence was necessary to resolve the ambiguity as to whether 

the formula was one for fair market value or book value. Had 

the appellants appealed following the April order, we would 

have dismissed the appeal for lack of jurisdiction because no 

substantial right of the parties had yet been affected.
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

Turning to the appellants’ assignment of error that the 

county court erred in finding a latent ambiguity and in considering extrinsic evidence rather than enforcing the RSPA solely 

according to its terms, we agree.

[8-11] A contract written in clear and unambiguous language is not subject to interpretation or construction and must 

be enforced according to its terms. Benjamin v. Bierman, 305 

Neb. 879, 943 N.W.2d 283 (2020). The fact that the parties 

have suggested opposite meanings of a disputed instrument 

does not necessarily compel the conclusion that the instrument is ambiguous. Id. A court is not free to rewrite a contract or to speculate as to terms of the contract which the 

parties have not seen fit to include. Id. Extrinsic evidence is 

not permitted to explain the terms of a contract that is unambiguous. Id.

[12] A latent ambiguity exists when collateral facts make the 

meaning of the contract uncertain. Kluver v. Deaver, 271 Neb. 

595, 714 N.W.2d 1 (2006). For example, the Supreme Court, 

in a contested will case, explained that if two or more persons 

satisfy a description of one devisee, there is a latent ambiguity, 

and extrinsic evidence is admissible to disclose and remove 

that ambiguity. Id. In such a case, extrinsic evidence becomes 

necessary to properly construe the contract. Id.

In the present case, the county court found a latent ambiguity because, although the RSPA defines fair market value, the 

definition provided was actually the formula for calculating 

book value. See, also, Smith v. Fettin Roofing Co., 213 Neb. 

184, 328 N.W.2d 470 (1982) (generally, book value of stock 

in corporation means figure obtained by dividing difference 

between assets and liabilities by number of outstanding shares 

of stock). According to the county court, fair market value 

and book value are “radically different concepts, and language 

defining one as the other leaves an ambiguity.” The court 

therefore concluded that the RSPA was ambiguous because 

it was unclear whether the parties intended the value of the 
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Cite as 31 Neb. App. 250

shares to be calculated using the commonly understood definition of fair market value or using book value.

We disagree that a latent ambiguity exists here. The RSPA 

provides a formula for calculating the value of Steven’s shares 

of stock, and there is no dispute as to the resulting value 

utilizing that formula. In other words, the parties agree that 

subtracting liabilities from assets using the figures from the 

Company’s previous yearend balance sheet and dividing by 

the number of outstanding shares of stock results in a total 

value for Steven’s shares of $723,113.10. Even though the 

RSPA classifies the formula as one for calculating fair market 

value, which is contrary to the commonly understood definition of that term, we do not find that this discrepancy creates 

a latent ambiguity. The parties were free to define terms in 

their agreement, and those terms are to be enforced according 

to their contractual definitions. See Fokken v. Steichen, 274 

Neb. 743, 744 N.W.2d 34 (2008) (contracts are to be construed 

according to sense and meaning of terms which parties have 

used). See, also, Jones v. Shelter Mut. Ins. Cos., 274 Neb. 

186, 738 N.W.2d 840 (2007) (upholding restrictive definition 

of word contained within contract despite it generally having 

broader application); Kingsley Properties v. San Jacinto Title, 

501 S.W.3d 344 (Tex. App. 2016) (when contracting parties 

set forth their own definitions of terms they employ, courts 

are not at liberty to disregard these definitions and substitute 

other meanings); 2 Restatement (Second) Contracts § 201 at 

83 (1981) (stating that “[w]here the parties have attached the 

same meaning to a promise or agreement or a term thereof, it 

is interpreted in accordance with that meaning”).

Specifically, the Nebraska Supreme Court has held that 

the term “fair market value” is not a term of art necessitating reliance on factors outside of an agreement. See Benjamin 

v. Bierman, 305 Neb. 879, 943 N.W.2d 283 (2020). There, 

the Supreme Court held that the plain language of the relevant agreements set forth how fair market value was to be 
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IN RE ESTATE OF CLARK

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determined, and as such, the court need not rely on anything 

further to interpret the agreements’ definition of that term. See 

id. Likewise, here, the RSPA defines fair market value, and 

the definition is written in clear, unambiguous language. How 

to follow that formula is not in dispute; rather, the parties disagree on whether they are required to follow the formula.

Moreover, the Supreme Court has continuously upheld the 

freedom of contract right, under which people have the right to 

enter into binding private agreements with others. See, State ex 

rel. Wagner v. United Nat. Ins. Co., 277 Neb. 308, 761 N.W.2d 

916 (2009); Black’s Law Dictionary 807 (11th ed. 2019). And 

courts construe contracts according to the meaning of the terms 

the parties have used. See Gage County v. Employers Mut. 

Cas. Co., 304 Neb. 926, 937 N.W.2d 863 (2020) (refusing to 

apply definitions from case law to phrase which parties had 

defined in contract). If the definitions in a contract are clearly 

stated and unambiguous, the parties are entitled to have such 

terms enforced. See Hillabrand v. American Fam. Mut. Ins. 

Co., 271 Neb. 585, 713 N.W.2d 494 (2006).

In the context of an insurance policy, the Supreme Court 

rejected arguments suggesting that the court apply definitions 

of the term “professional services” from case law because the 

parties’ contract defined the term, and thus, that definition 

resolved the case. See Gage County v. Employers Mut. Cas. 

Co., supra. The Supreme Court observed that contracts are 

to be construed according to the meaning of the terms that 

the parties have used. Id. Applying definitions from case law 

rather than the definitions the parties used would result in the 

court rewriting the policies, and the Supreme Court reiterated 

that it is imperative that the contract made by the parties be 

respected and that a new contract is not interpolated by construction. Id.

Similarly, in Jones v. Shelter Mut. Ins. Cos., 274 Neb. 186, 

738 N.W.2d 840 (2007), the Supreme Court considered whether 

the definition of “use” of a motor vehicle in an insurance policy 
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IN RE ESTATE OF CLARK

Cite as 31 Neb. App. 250

violated the public policy embodied in Nebraska statutes. The 

court recognized that an insurance policy is a contract between 

an insurance company and an insured, and as such, the insurance company has the right to limit its liability by including 

limitations in the policy definitions. Id. And if the definitions 

in the policy are clearly stated and unambiguous, the insurance 

company is entitled to have such terms enforced. Id.

The Jones court ultimately held that the insurance company had chosen to limit its coverage for a person “using” the 

vehicle and that such limitation did not violate public policy 

expressed in Nebraska statutes. Or, as succinctly stated in the 

concurrence, because of the language of the relevant Nebraska 

law, the insurance company was left free to define “‘use’” in 

a way that was inconsistent with the well-established meaning 

of the word and in a way that would not have met the minimum standards required nearly everywhere else. Id. at 197, 738 

N.W.2d at 848 (Gerrard, J., concurring). Thus, the court was 

required to apply the definition as set forth in the policy.

In the instant case, although the RSPA’s definition of fair 

market value is inconsistent with the commonly understood 

definition of the term, the parties were free to agree to a different definition. And because that definition is written in clear 

and unambiguous language, it is to be enforced. We are less 

focused on the parties’ use of the term “fair market value” than 

we are on the language of the RSPA as a whole.

[13-15] A contract must receive a reasonable construction, 

and a court must construe it as a whole and, if possible, give 

effect to every part of the contract. Hearst-Argyle Prop. v. 

Entrex Comm. Servs., 279 Neb. 468, 778 N.W.2d 465 (2010). 

And a contract is viewed as a whole in order to construe it. Id. 

Whatever the construction of a particular clause of a contract, 

standing alone, may be, it must be read in connection with 

other clauses. Id.

Reading the RSPA as a whole, we understand that despite 

the label used, the parties intended that the value of the 
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decedent’s shares be calculated by utilizing the formula provided, completed by using information set forth on the previous yearend balance sheet. Stated differently, we construe the 

RSPA in its entirety as providing a formula for calculating the 

price at which the Company may purchase Steven’s or Brian’s 

shares of stock in the event of the death of either man. And 

even though the formula was labeled as a formula for calculating the fair market value, the parties were free to agree to a 

definition of fair market value, and because that definition is 

clear and unambiguous, we are required to enforce it as defined 

by the RSPA. To hold otherwise would require us to disregard 

paragraph 3 of the RSPA in which the parties agreed to the 

formula establishing how “[f]air market value” for the stock 

would be determined.

As such, we disagree with the county court’s conclusion that 

the RSPA contains a latent ambiguity and its use of extrinsic 

evidence to ascertain the value of Steven’s shares. We therefore 

reverse the court’s order and remand the cause with directions 

for the court to set the value of Steven’s shares following the 

formula in the RSPA for a total value of $723,113.10. Given 

this conclusion, we need not address the remaining arguments 

raised on appeal or cross-appeal. See Mays v. Midnite Dreams, 

300 Neb. 485, 915 N.W.2d 71 (2018) (appellate court not obligated to engage in analysis not necessary to adjudicate case 

and controversy before it).

CONCLUSION

For the foregoing reasons, the decision of the county court is 

reversed and the cause is remanded with directions.

Reversed and remanded with directions.