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295 Nebraska Reports

O’CONNOR v. KEARNY JUNCTION

Cite as 295 Neb. 981

Raymond J. O’Connor and Jennifer S. O’Connor, 

husband and wife, appellees, v. Kearny

Junction, L.L.C., a Nebraska limited

liability company, appellant.

___ N.W.2d ___

Filed March 3, 2017. No. S-16-230.

1. Specific Performance: Equity: Appeal and Error. An action for specific performance sounds in equity, and on appeal, an appellate court 

tries factual questions de novo on the record and, as to questions of both 

fact and law, is obligated to reach a conclusion independent from the 

conclusion reached by the trial court.

2. Equity: Appeal and Error. On appeal from an equity action, when 

credible evidence is in conflict on material issues of fact, the court considers and may give weight to the fact that the trial court observed the 

witnesses and accepted one version of the facts over another.

3. Actions: Final Orders: Appeal and Error. The law-of-the-case doctrine reflects the principle that an issue litigated and decided in one stage 

of a case should not be relitigated at a later stage. The doctrine requires 

a final order. A party is not bound by a court’s findings in an order that 

it was not required to appeal.

4. Summary Judgment: Final Orders. Partial summary judgments are 

usually considered interlocutory. They must ordinarily dispose of the 

whole merits of the case to be considered final.

5. Estoppel. When a party has unequivocally asserted a position in a 

proceeding and a court accepts that position, judicial estoppel can bar 

that party’s inconsistent claim against the same or a different party in a 

later proceeding.

6. ____. Judicial estoppel should be applied with caution within a single action.

7. Contracts: Specific Performance. In an action where specific performance is decreed, courts ordinarily attempt to place the parties in 

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the same position in which they would have been if the contract had 

been performed at the time agreed upon.

8. Damages: Proof. While damages need not be proved with mathematical 

certainty, neither can they be established by evidence which is speculative and conjectural.

9. ____: ____. Mitigation of damages is an affirmative defense, as to 

which the defendant has the burden of proof.

10. Vendor and Vendee: Specific Performance. The general rule is that 

from the time when a contract of sale of land should be performed the 

land is in equity the property of the vendee held by the vendor in trust 

for him, and the purchase price is the property of the vendor held in trust 

for him by the vendee, and that upon specific performance the vendor is 

liable to account for the rents and profits and the vendee for the interest 

on the purchase price.

11. Equity. Equity treats things agreed to be done as actually performed.

12. Courts: Equity. Where a situation exists which is contrary to the principles of equity and which can be redressed within the scope of judicial 

action, a court of equity will devise a remedy to meet the situation.

Appeal from the District Court for Buffalo County: Mark J. 

Young, Judge. Affirmed as modified.

Kenneth F. George and Luke M. Simpson, of Ross, Schroeder 

& George, L.L.C., for appellant.

Arend R. Baack, of Leininger, Smith, Johnson, Baack, 

Placzek & Allen, for appellees.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, 

Kelch, and Funke, JJ.

Cassel, J.

I. INTRODUCTION

The assignees of a purchase option in a lease of real estate 

sought specific performance. The landlord initially resisted, 

asserting that a condition precedent had not been fulfilled. 

The landlord later moved for specific performance, which was 

ordered, but now appeals from a judgment awarding equitable 

monetary relief for lost rentals. We conclude that based on 

the content of the motion and the resulting order, the landlord 
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was judicially estopped from asserting the condition precedent 

in avoidance of equitable monetary relief. Because we also 

conclude that the landlord was entitled to offset the monetary 

award with the interest on the unpaid purchase price, we 

modify that part of the judgment. As so modified, we affirm 

the court’s judgment.

II. BACKGROUND

Kearny Junction, L.L.C. (Landlord), leased commercial real 

estate to a third party (Tenant), who was not a party to this 

suit. The lease agreement provided an option to purchase “conditional upon [Tenant’s] full and faithful performance of all 

of [Tenant’s] duties and obligations under the Lease.” These 

words created a condition precedent.

In 2007, Tenant assigned this purchase option to Raymond 

J. O’Connor and Jennifer S. O’Connor, husband and wife 

(Assignees). At the time, Tenant had fully performed all obligations under the lease.

But for several years after the assignment, Tenant paid less 

than the full amount of the rent. The parties disputed who 

discovered the underpayment. But Landlord conceded that it 

had agreed Tenant could pay the delinquent rent and continue 

the lease. Tenant did so and thereafter paid the full monthly 

rental payments.

1. Assignees’ Attempt to

Exercise Option

In October 2013, Assignees attempted to exercise the purchase option. At the time of the attempted exercise, no rent 

was past due. Nonetheless, Landlord rebuffed their attempt, 

returning their tendered downpayment. Landlord maintained 

that because of the rental underpayments, Tenant had failed to 

satisfy the condition precedent. Further, Landlord maintained 

that the condition precedent could never be met.

Assignees objected and argued that the default had been 

cured. But Landlord contended that with respect to the purchase option, the acceptance of rent did not waive the default.
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Cite as 295 Neb. 981

2. Settlement Negotiations

and Lawsuit

Assignees and Landlord attempted to resolve the dispute 

by negotiating through counsel. After these negotiations were 

unsuccessful, Assignees filed a complaint in March 2014 and 

sought (1) a declaratory judgment determining that they had 

a valid purchase option and had duly exercised that option to 

purchase and (2) specific performance of the purchase option 

and costs associated with the action. Landlord filed an answer 

that asserted the option was lost and forfeited upon the default 

in rent.

Despite its stated position, Landlord offered in October 

2014 to sell the property to Assignees and value the property 

pursuant to the terms of the purchase option by averaging 

three appraisals. However, a disagreement arose as to the 

selection of the three appraisers and the negotiations apparently halted.

In November 2014, Assignees obtained permission to amend 

their complaint. Before they filed their amended complaint, 

Landlord filed a motion. The district court treated it as a 

motion for summary judgment. We pay particular attention to 

its content.

Landlord’s motion requested the court to declare that 

“[Assignees] have an option to purchase from [Landlord] 

the real property” and that “[Assignees] have duly exercised 

the Option.” Landlord stated that it was making the motion 

“[n]otwithstanding the affirmative defense specifically and particularly alleged in [p]aragraph 17” of its earlier answer.

Assignees then filed their amended complaint that purported to add a third “cause of action” that sought “damages” 

for Landlord’s delay in allowing Assignees to exercise the 

purchase option. Landlord filed an answer to the amended 

complaint, once again denying that Assignees had a right to 

exercise the purchase option. But in this answer, Landlord suggested that it had “consented to [Assignees’] exercise of the 

option” and requested that “both parties should be specifically 
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ordered to perform all of the terms and provisions of the 

Purchase Option.”

3. Partial Summary

Judgment Order

After a hearing on Landlord’s motion, the district court 

issued an order sustaining it. Landlord’s counsel prepared both 

the motion and the order. The order declared that “[p]ursuant to the Lease . . . [Assignees] have an option to purchase 

. . . and [Assignees] have duly exercised the Option to purchase.” It also ordered specific performance by both parties 

pursuant to the purchase option agreement in the lease. The 

order continued a previously scheduled trial, apparently on 

the third “cause of action,” to be rescheduled “upon motion of 

either party.”

Pursuant to this order, the purchase price was calculated by 

averaging three appraisals. Landlord then sold the property to 

Assignees, and the sale closed in March 2015. The matter proceeded to trial on the remaining issue of monetary relief.

4. Judgment

After the trial, the district court entered a judgment, styled 

as an order, in Assignees’ favor. The court found that the summary judgment order had already determined that Assignees 

had a purchase option and that they had exercised it. And the 

court stated that its previous determination was “the law of 

the case.”

The judgment also required Landlord to pay “damages” 

of $135,426 to Assignees. This figure represented lost profits between May 1, 2014—“the date provided for closing in 

[the purchase option]”—and the date when the sale closed—

which was March 18, 2015 (although the court once referred 

to March 10, which appears to be a scrivener’s error). The 

amount was calculated by subtracting the costs of maintaining 

the property from the total lost rents.

Landlord filed a motion for new trial, requesting a new 

trial or, in the alternative, to amend or alter the district court’s 
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Cite as 295 Neb. 981

judgment. The district court revised minor details of the judgment but in all material aspects overruled the motion. Landlord 

timely appealed, and we granted its petition to bypass review 

by the Nebraska Court of Appeals.

III. ASSIGNMENTS OF ERROR

Landlord assigns that the district court erred in (1) finding 

that the Assignees had duly exercised the purchase option “as 

a matter of right”; (2) finding that under the law-of-the-case 

doctrine, the Assignees had a right to exercise the option 

“as a matter of law”; and (3) awarding damages of $135,426 

plus costs.

IV. STANDARD OF REVIEW

Although Assignees characterized their claim as three “causes 

of action” (for declaratory judgment, specific performance, 

and damages), in substance, they asserted only one cause of 

action—for specific performance of the purchase option. This 

subsumed both the declaratory and the monetary relief. In that 

light, we recite the appropriate standard of review.

[1,2] An action for specific performance sounds in equity, 

and on appeal, an appellate court tries factual questions de 

novo on the record and, as to questions of both fact and law, 

is obligated to reach a conclusion independent from the conclusion reached by the trial court.1

 On appeal from an equity 

action, when credible evidence is in conflict on material issues 

of fact, the court considers and may give weight to the fact that 

the trial court observed the witnesses and accepted one version 

of the facts over another.2

V. ANALYSIS

1. Law of the Case

[3] The law-of-the-case doctrine reflects the principle that 

an issue litigated and decided in one stage of a case should 

1 Ficke v. Wolken, 291 Neb. 482, 868 N.W.2d 305 (2015).

2 Id.
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not be relitigated at a later stage.3 The doctrine requires a final 

order.4 A party is not bound by a court’s findings in an order 

that it was not required to appeal.5

[4] But, here, before the judgment, there was no final, 

appealable order. Partial summary judgments are usually considered interlocutory.6

 They must ordinarily dispose of the 

whole merits of the case to be considered final.7 Here, the 

summary judgment order did not decide the issue of monetary 

relief. Between the filing of the motion and the order sustaining it, Assignees filed their amended complaint. And the summary judgment order expressly reserved the unresolved issue 

of the third “cause of action.” Thus, it did not dispose of the 

whole merits of the case and was not a final, appealable order. 

It necessarily follows that the law-of-the-case doctrine did 

not apply.

[5,6] Although the law-of-the-case doctrine did not apply, 

another rule of law dictated the same result. When a party has 

unequivocally asserted a position in a proceeding and a court 

accepts that position, judicial estoppel can bar that party’s 

inconsistent claim against the same or a different party in a 

later proceeding.8 Although we have said that judicial estoppel should be applied with caution within a single action,9

 the 

circumstances here support its use.

Landlord’s motion and the resulting order established 

both elements of judicial estoppel. In its motion, Landlord 

admitted that Assignees “h[ad] an option to purchase” and 

that they had “duly exercised the Option.” If the condition 

3 In re 2007 Appropriations of Niobrara River Waters, 283 Neb. 629, 820 

N.W.2d 44 (2012).

4 Id.

5 Id.

6 Big John’s Billiards v. State, 283 Neb. 496, 811 N.W.2d 205 (2012).

7 Id.

8 TFF, Inc. v. SID No. 59, 280 Neb. 767, 790 N.W.2d 427 (2010).

9 See id.
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precedent had not been satisfied, there would have been no 

contract and, thus, nothing to exercise. But Landlord’s motion 

expressly stated otherwise. In this regard, Landlord’s position 

was unequivocal. And by ordering the sale, the district court 

accepted Landlord’s position.

In arguing that the condition precedent was not satisfied, 

Landlord merely attempts to escape the consequences of the 

unequivocal position taken in its motion. Because the court 

accepted Landlord’s position, Landlord was estopped from 

later asserting an inconsistent position.

2. Equitable Monetary Relief

[7,8] In an action where specific performance is decreed, 

courts ordinarily attempt to place the parties in the same position in which they would have been if the contract had been 

performed at the time agreed upon.10 While damages need not 

be proved with mathematical certainty, neither can they be 

established by evidence which is speculative and conjectural.11

The term “damages” is not precisely correct in this context. 

Because the monetary relief flows from a claim for specific 

performance and not for breach of contract, it is not “legal 

damages” or awarded as a matter of a right. It is equitable 

compensation to make the injured party whole.

Landlord assigns that the district court erred in awarding 

compensatory damages of $135,426 plus costs. In its brief, 

Landlord sets forth three supporting arguments.

(a) Mitigation of Damages

[9] Landlord argues that Assignees failed to offer evidence showing that they attempted to mitigate their damages. 

However, mitigation of damages is an affirmative defense, as 

to which the defendant has the burden of proof.12 Therefore, 

10 III Lounge, Inc. v. Gaines, 227 Neb. 585, 419 N.W.2d 143 (1988).

11 Gary’s Implement v. Bridgeport Tractor Parts, 281 Neb. 281, 799 N.W.2d 

249 (2011).

12 Roth v. Wiese, 271 Neb. 750, 716 N.W.2d 419 (2006).
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Landlord, not Assignees, was required to present evidence of 

Assignees’ failure to mitigate. This argument lacks merit.

(b) Calculation of Ownership 

Expenses and Costs

Landlord argues that the monetary award was improper 

because the district court did not account for all the costs 

and expenses associated with obtaining the rents and profits. 

Specifically, Landlord argues that the court failed to subtract 

from the award the monthly interest charges the Assignees 

would have had to pay on a loan for the purchase money 

between May 2014 and March 2015 as “costs associated 

with purchasing and owning the Property in order to collect rent.”13

Landlord relies upon our decision in III Lounge, Inc. v. 

Gaines.

14 There, we articulated a rule that “governs the vendor’s right to allowance for expenses.”15 In that context, we 

stated that “if the [purchaser] is awarded rents, rental value, or 

profits from the premises during the delay [in performance], 

the [vendor] may deduct from them ordinary carrying charges 

he may have paid during the delay, including taxes, insurance, 

utilities, and reasonable repairs.”16 But Landlord focuses on 

the language that followed immediately after the rule, where 

we explained that “if the [purchaser] were awarded rents or 

profits, [the purchaser] would also be saddled with expenses 

associated with obtaining the rents or profits.”17 Landlord 

is arguing that as part of these expenses, Assignees should 

have proved what their mortgage interest payments would 

have been.

13 Brief for appellant at 22.

14 III Lounge, Inc. v. Gaines, supra note 10.

15 Id. at 592, 419 N.W.2d at 148 (emphasis supplied).

16 Id.

17 Id.
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But, here, Landlord is mixing apples and oranges. Read 

in context, we were explaining the rule governing the vendor’s right to expenses. Assignees were the purchasers, not 

the vendor. The rule allows the vendor to deduct its expenses 

during the period of delay so that it disgorges only the net 

rentals it collected during the delay. And our language makes 

clear that it applies only to those costs actually expended by 

the vendor.

The district court allowed Landlord to deduct its real estate 

taxes and insurance. The court excluded the evidence of any of 

Landlord’s other expenses. No error is assigned to those evidentiary rulings. Thus, Landlord failed to prove that it had any 

other expenses. This argument also lacks merit.

(c) Equitable Placement of Parties in 

Grant of Specific Performance

Third, Landlord argues the court failed to place both parties in the same position they would have been if the purchase 

option had been exercised in October 2013. Landlord argues 

that Landlord should have received interest on the purchase 

money between May 2014 and March 2015. We agree.

[10,11] Long ago, we articulated a rule derived from basic 

underlying principles. The general rule is that from the time 

when a contract of sale of land should be performed the 

land is in equity the property of the vendee held by the vendor in trust for him, and the purchase price is the property 

of the vendor held in trust for him by the vendee, and that 

upon specific performance the vendor is liable to account for 

the rents and profits and the vendee for the interest on the 

purchase price.18 In other words, Landlord owes Assignees 

the property’s rents and profits and Assignees owe Landlord 

interest on the purchase price. These consequences flow from 

18 Russell v. Western Nebraska Rest Home, Inc., 180 Neb. 728, 144 N.W.2d 

728 (1966). See, also, Sechovec v. Harms, 187 Neb. 70, 187 N.W.2d 296 

(1971).
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the idea that equity treats things agreed to be done as actually performed.19

Once again, we stated this rule somewhat differently in 

III Lounge, Inc. v. Gaines.

20 There we said, “If the delay in 

the performance of a contract was caused by the vendor, and 

the purchaser is not awarded rents, rental value, or profits, and 

has not been in possession of the property during the delay, 

the purchaser is not liable for interest on the unpaid purchase 

money.”21 But our language in that case was focused on a 

situation where the purchaser was not awarded rents. In the 

present case, rents were awarded. Thus, under the general rule, 

Assignees are liable to account for the interest on the purchase price.

We have treated rents and profits as analytically distinct 

from interest on the purchase price. Other jurisdictions sometimes blend these concepts. Thus, some jurisdictions allow a 

vendor to offset an award of ancillary damages in a decree 

for specific performance with expenses of owning the property, as well as the legal rate of interest on the sale price 

since the scheduled closing date.22 But where the vendor 

wrongfully delayed performance, the vendor will typically 

not be allowed to collect interest that exceeds the ancillary 

19 See Dixon v. O’Connor, 180 Neb. 427, 143 N.W.2d 364 (1966).

20 III Lounge, Inc. v. Gaines, supra note 10.

21 Id. at 595, 419 N.W.2d at 149.

22 See, generally, Qantum Communications Corp. v. Star Broadcasting, 491 

F. Supp. 2d 1123 (S.D. Fla. 2007); Lewis v. Lockhart, 379 P.2d 618 

(Alaska 1963); Dato v. Mascarello, 197 Ill. App. 3d 847, 557 N.E.2d 

181, 145 Ill. Dec. 411 (1989); Crockett v. Gray, 39 Kan. 659, 18 P. 905 

(1888); Wilcox v. Commonwealth R. & T. Co., 248 Mich. 527, 227 N.W. 

678 (1929); Bonds v. Rhoads, 203 Miss. 440, 35 So. 2d 437 (1948); Volk 

v. Atlantic Acceptance & Realty Co., 142 N.J. Eq. 67, 59 A.2d 387 (1948); 

Leafgreen v. Drake’s Exrs., 300 Pa. 369, 150 A. 656 (1930); Greensleeves, 

Inc. v. Smiley, 942 A.2d 284 (R.I. 2007); Amoss v. Bennion, 23 Utah 2d 40, 

456 P.2d 172 (1969); Barnett v. Cloyd’s Ex’rs, 125 Va. 546, 100 S.E. 674 

(1919).
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damages awarded to the purchaser or the purchaser may 

waive reasonable rents so as not to pay interest on the 

sale price.23

Of course, these jurisdictions are applying equitable principles to specific situations, as we are here. We perceive two 

common threads in the case law. First, the vendor should not 

profit from its own delay. Second, the purchaser should not 

receive a windfall that unfairly penalizes the vendor. This 

aligns with our understanding of the applicable equitable principles and is compatible with our case law.

With this understanding, we turn to the specific remedy 

applicable to this appeal. Assignees have already received 

specific performance of the conveyance. At this point, we are 

concerned only with the accounting attributable to the delay 

in performance.

As we have already explained, equity requires us to treat 

the real estate as held by Landlord in trust for Assignees. 

Accounting for the net rents and profits is straightforward. 

The district court awarded rents, net of taxes and insurance, of 

$135,426. Other than Landlord’s argument regarding Assignees’ 

interest expenses, which we have rejected, it does not quarrel 

with this aspect of the equitable accounting.

But the other side of the equitable accounting requires us 

to hold Assignees liable for interest on the purchase price. 

There may be circumstances where a vendor’s conduct in 

delay of performance is so egregious that equity would deny 

any interest on the purchase price. That is not the situation here.

23 See, id. See, also, Reis v. Sparks, 547 F.2d 236 (4th Cir. 1976) (within trial 

court’s discretion to award or deny interest to vendors on purchase price); 

A., T. & S.F. R.R. Co. v. C. & W.I. R.R. Co., 162 Ill. 632, 657, 44 N.E. 

823, 830 (1896) (disallowing interest entirely where vendor “willfully” 

and “wrongfully” delayed performance of contract); Coal Co. v. Findley, 

128 Iowa 696, 105 N.W. 206 (1905) (disallowing interest entirely where 

vendor delayed performance of contract).
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The difficulty stems from the imprecise evidence regarding 

an appropriate rate of interest. While mathematical certainty is 

not required for Assignees’ remedy, the mathematics of interest requires a rate. Ordinarily, the interest rate on a purchase 

price is set forth in the contract between the parties. Here, the 

parties failed to agree upon a rate.

[12] Where a situation exists which is contrary to the principles of equity and which can be redressed within the scope 

of judicial action, a court of equity will devise a remedy to 

meet the situation.24 One option would be a legal rate. In 

Nebraska, the legal interest rate is 6 percent.25 But to allow 

Landlord to offset the award to Assignees with interest at a 

rate of 6 percent would reward it for the delay in performance. 

There is no evidence that it could have invested the purchase 

price at that rate. However, not allowing Landlord to offset the 

award with at least some interest on the unpaid purchase price 

would grant a windfall to Assignees. One of the Assignees testified that the interest rate on the loan to purchase the property 

was more than 3 percent and that he was unsure whether it 

was less than 4 percent. This provides some evidence of a rate 

of interest on the purchase price.

Upon our de novo review and in order to ensure an equitable result, we reduce the Assignees’ monetary relief by the 

amount of $65,000, which approximates interest on the purchase price of $2.4 million, less the $50,000 deposit, for the 

period of delay, at a rate somewhat in excess of 3 percent. We 

modify the district court’s judgment in this respect and subtract 

this interest from the award to Assignees, thereby reducing 

the monetary relief granted to Assignees from $135,426 to 

$70,426 and the taxable costs in the district court.

24 Strunk v. Chromy-Strunk, 270 Neb. 917, 708 N.W.2d 821 (2006).

25 Neb. Rev. Stat. § 45-102 (Reissue 2010).
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VI. CONCLUSION

Because Landlord’s motion admitted that Assignees had 

an option and that the option was exercised and because the 

district court expressly entered an order relying upon these 

admissions, Landlord was judicially estopped from asserting 

its inconsistent position that the condition precedent was not 

satisfied. We also conclude that Landlord was entitled to interest on the purchase price for the period of delay and reduce 

the monetary relief granted to Assignees from $135,426 to 

$70,426 and the taxable costs in the district court. As so modified, we affirm the judgment of the district court.

Affirmed as modified.