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WALTERS v. SPORER

Cite as 298 Neb. 536

John D. Walters, appellant, v. Melanie Griffith Sporer

and Jay A. Sporer, Trustees of the Revocable Inter

Vivos Trust of Melanie Griffith dated December 5, 

2000, and Douglas M. Lau and Debra L. Lau, 

husband and wife, appellees.

___ N.W.2d ___

Filed December 29, 2017. No. S-16-623.

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. Deeds. The construction of language in a deed is a question of law.

3. Statutes. Statutory interpretation presents a question of law.

4. Appeal and Error. On a question of law, an appellate court reaches a 

conclusion independently of the court below.

5. Summary Judgment. Summary judgment is proper when the pleadings 

and evidence admitted at the hearing disclose no genuine issue regarding any material fact or the ultimate inferences that may be drawn from 

those facts and that the moving party is entitled to judgment as a matter 

of law.

6. 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 reasonable inferences deducible from 

the evidence.

7. Property: Options to Buy or Sell: Words and Phrases. Generally, 

a right of first refusal, or a preemptive right, is a right to elect to take 

specified property at the same price and on the same terms and conditions as those contained in a good faith offer by a third person if the 

owner manifests a willingness to accept the offer; essentially a dormant 

option, a right of first refusal is merely contingent until the condition 

Nebraska Supreme Court Online Library

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

02/08/2018 01:12 AM CST
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precedent is met, at which point the preemptive right ripens into a 

full option.

8. Property: Options to Buy or Sell. While a right of first refusal has no 

binding effect before it has ripened, upon doing so, it legally constrains 

an owner’s right to sell his property by compelling him to offer it first 

to the party who holds the right of first refusal.

9. Options to Buy or Sell: Specific Performance: Proof. A right of first 

refusal may be enforced by specific performance where it can be proved 

that the condition triggering the right has occurred and the option holder 

was ready, able, and willing to buy during the period.

10. Property: Options to Buy or Sell. A right of first refusal is a nonvested 

property interest.

11. Property: Conveyances: Words and Phrases. The purpose of a reservation is to reserve to the grantor something new out of that which is 

conveyed and which did not exist before as an independent right.

12. ____: ____: ____. A reservation is always something taken back out of 

that which is demised; accordingly, a reservation is a regranting of an 

interest in the property from the grantee to the grantor.

13. ____: ____: ____. Whether a provision is a reservation or an exception 

does not depend upon the use of a particular word, but upon the character and effect of the provision itself.

14. Deeds. The grantor of a deed may reserve any nonpossessory interest in the land that he could not have held separate from his ownership interest.

15. Property: Conveyances: Fraud. A reservation is subject to the statute 

of frauds.

16. Deeds: Parties. The general rule is that the grantee of a deed accepted 

by him is a party to the deed, even though he does not sign it, and that 

he is concluded by recitals in the deed and by reservations contained 

therein in favor of the grantor.

17. Fraud: Equity. The statute of frauds is based on principles of equity, 

in particular, recognition that the purpose of the statute of frauds is to 

prevent frauds, not to enable a party to perpetrate a fraud by using the 

statute as a sword rather than a shield.

18. Deeds. The acceptance of a deed operates to satisfy the requirement, 

under Neb. Rev. Stat. § 36-103 (Reissue 2016), that a contract creating 

an interest in land be signed by the party to be charged therewith.

19. Deeds: Fraud. In the absence of fraud, one who fails to read a deed 

cannot avoid the effect of accepting it.

20. Appeal and Error. An appellate court will not consider an issue on 

appeal that was not presented to or passed upon by the trial court.

21. ____. An appellate court is not obligated to engage in an analysis that is 

not necessary to adjudicate the case and controversy before it.
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Appeal from the District Court for Hitchcock County: 

David Urbom, Judge. Reversed and remanded for further 

proceedings.

George G. Vinton for appellant.

John D. Stalnaker, of Stalnaker, Becker & Buresh, P.C., for 

appellees Melanie Griffith Sporer and Jay A. Sporer.

Randy C. Fair, of Dudden & Fair, P.C., L.L.O., for appellees 

Douglas M. Lau and Debra L. Lau.

Wright, Miller-Lerman, Cassel, Kelch, and Funke, JJ.

Funke, J.

This is an action by appellant John D. Walters (John) to 

enforce a right of first refusal set forth in a 1998 warranty deed, 

by which he and his then-spouse (the Walterses) conveyed real 

property to appellees Douglas M. Lau and Debra L. Lau. The 

Laus later sold the property to appellees Jay A. Sporer and 

Melanie Griffith Sporer by a warranty deed, in 2013, without 

giving John notice of the Sporers’ offer.

The court granted summary judgment for the Laus and the 

Sporers against John because it ruled that the language in 

the deed did not satisfy the statute of frauds, Neb. Rev. Stat. 

§ 36-105 (Reissue 2016), and there was no other written agreement signed by the Laus. We hold that a right of first refusal in 

a deed is an enforceable agreement under the statute of frauds 

upon the acceptance of the deed. Therefore, we reverse the 

judgment and remand the cause for further proceedings consistent with this opinion.

I. BACKGROUND

In 1998, the Laus began looking for a wooded acreage to 

establish a home. Eventually, the Laus entered into negotiations with John to purchase approximately 8 acres of land and 

for the Walterses to finance the purchase. Subsequently, John 

and the Laus met with an attorney, chosen by John, to draft the 

sale documents.
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John testified that the attorney represented both him and 

the Laus because he never spoke with the attorney alone, only 

with the Laus. The Laus stated that they agreed to use John’s 

attorney because Debra Lau knew him but that the attorney did 

not represent them. The attorney testified that John had been a 

client of his prior to the transaction, and he stated that he had 

no documents indicating that the Laus were his clients or that 

he jointly represented those parties.

John stated that he and the Laus met with the attorney three 

times: The first time, the attorney gave them general instructions; the second time, they discussed the terms; and the third 

time was the closing.

In addition, John stated that he and the Laus had discussed 

and orally agreed to the right of first refusal before meeting 

with the attorney and that it was brought up at the second 

meeting with the attorney. John testified that he remembered 

asking at the meeting if they needed the right of first refusal 

in a separate document but that the attorney said it could just 

be included in the deed.

John stated that he wanted the right of first refusal for several reasons, including the following: He was not trying to sell 

the property at that time, but was willing to sell it to the Laus 

because they were friends; he could have extended a pivot on 

his abutting property to the east to irrigate a portion of the 

land; he had an oil well abutting the property; and there was a 

road on the land that he used to access his adjacent land. He 

testified that he would not have sold the property without the 

right of first refusal.

Debra Lau also believed the parties met three times. She 

stated she recalled that during the first two meetings, the discussion included the price per acre, the interest rate for the 

deed of trust, how payments would be made, an option for the 

Laus to purchase an additional 5.7 acres, and the paperwork 

needed for the sale. She admitted that it would be difficult 

to remember everything from the meetings, however. She 

stated that during closing, she read only the documents that 

she signed.
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Douglas Lau remembered the Laus’ having met with the 

attorney only once before closing. He stated that they told the 

attorney everything they wanted at the first meeting. He said 

that the Laus had few requests and accepted John’s first offer 

for price because they needed the land and were not in a position to barter. He testified that he did not remember discussing 

a right of first refusal with John. However, he testified that 

he would have had no objection to granting John a right of 

first refusal.

The Laus both testified that they believed paragraph 11 of 

the deed of trust was a right of first refusal and that it was 

the exclusive statement on the issue. Paragraph 11 of the deed 

of trust effectively contains a “due on sale” clause: “Should 

Trustors desire to sell or encumber the subject premises or 

any part thereof, they shall forthwith obtain the consent of 

Beneficiary to such sale or encumbrance while any sums 

remain due on the Note secured by this Trust Deed.” If the 

Laus violated this provision, the Walterses had the right to 

demand immediate payment of the balance owed and pursue 

any remedies provided under the deed.

The Laus both stated that they believed their right of first 

refusal obligation ended once the deed of trust was paid. Debra 

Lau also stated that this was discussed at the second meeting 

with the attorney and that she remembered saying that as long 

as they owed John money on the property, it was not an unreasonable request.

The attorney stated that he did meet with the parties and 

had discussions with them but that he had no recollection of 

the specific contents of any conversations he had with the 

Laus, including whether or not he discussed the right of first 

refusal with them. He believed that he purposefully included 

the right of first refusal in the deed, because it was the only 

time he could recall including such a right in a deed. The 

attorney also testified that it would have been routine for 

him to discuss all of the documents in a real estate transaction with the parties, as well as any nonstandard provisions. 

He believed the absence of a separate document for the right 
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of first refusal was probably a result of the parties’ desire to 

save expenses.

On September 15, 1998, the Walterses conveyed the 8-acre 

tract of land to the Laus by a joint tenancy warranty deed. At 

closing, the parties also executed a promissory note and trust 

deed for the Walterses to finance the Laus purchase of the 

property; a grant of a right of use, providing the Laus an easement over other property owned by the Walterses for ingress 

and egress; an option contract for a 5.7-acre section of land, 

which was surrounded on three sides by the 8-acre section the 

Laus had purchased; and other documents related to the transaction. John testified that the Laus also granted him an oral 

easement to use their driveway to access his adjacent land to 

the east.

The warranty deed included a reservation of mineral rights, 

as well as, the right of first refusal. In regard to the right of 

first refusal, the deed contained the following provision: “No 

sale of the above-described premises shall be consummated 

without giving at least 30 days written notice of the terms 

to Grantor. Grantor shall have the right to buy the lot on the 

same terms.”

The day after closing, Debra Lau, at the attorney’s direction, went to the courthouse to sign the “Form 521” “Real 

Estate Transfer Statement.” A Form 521 transfer statement 

sets forth information regarding the parties to the transaction, 

the type of property transferred, and the consideration paid.1

Nebraska law requires that a deed will not be recorded unless 

the transfer statement is signed by the grantee and filed with 

the deed.2

Debra Lau testified that she was not sure if the attorney told 

her why she needed to sign the transfer statement but that he 

might have said it was to get the deed recorded. She also testified that she did not recall discussing the form at closing.

1 See Neb. Rev. Stat. § 76-214(1) (Reissue 1996).

2 Id.
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The attorney sent the Laus and the Walterses letters, dated 

3 days after the closing, in which he enclosed all of the documents involved in the transaction—including copies of the 

joint tenancy warranty deed. He could not recall ever hearing 

from the Laus again after sending the letters.

Douglas Lau stated that he read the deed when he received 

it in the mail a couple of weeks after closing. He stated that 

he believed the right of first refusal in the warranty deed was 

between the Walterses and had nothing to do with the Laus. He 

explained that he believed it was an attempt by John to protect 

himself in future divorce proceedings. He testified that this 

was his own belief and not based on any representations made 

by John.

Debra Lau testified that she remembered receiving the documents in the mail after closing but did not feel the need to 

read any of them because she had just signed them. She stated 

that she did not read the deed until she received notice of 

this litigation.

In 2003, the Laus exercised their option to purchase the 

5.7-acre tract, which John conveyed to them by a joint tenancy warranty deed. In 2007, the Laus finished paying John 

on the promissory note, and, upon their request, the Walterses 

executed a deed of reconveyance to them.

Around 2013, the Laus decided to sell the approximately 

13-acre tract of land with their trailer home. In order to do so, 

Debra Lau contacted a real estate agent and showed him the 

Laus’ transaction documents for the property, including the 

warranty deed.

When the Laus listed their property, they did not inform 

the Walterses, but their agent told them that he would mention the listing to John. John testified that the agent told him 

that the Laus had listed the property and their trailer home 

for $75,000. John told the agent that he was interested in the 

land, but not the trailer home. Later, the agent told John that 

the Laus might be interested in selling just the property. On 

both occasions, John told the agent to keep him informed but 
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did not mention his right of first refusal. John said he did not 

call the Laus about the property listing because they were 

not speaking.

The Sporers owned an adjacent acreage west of the Laus’ 

property, and Douglas Lau called Jay Sporer to see if he 

was interested in purchasing the Laus’ property. Douglas Lau 

did not mention the Walterses’ right of first refusal. The 

Laus entered a purchase agreement with Jay Sporer but neither the purchase agreement nor the Laus’ affidavit regarding 

debts, liens, and adverse claims to the property mentioned the 

Walterses’ right of first refusal. In 2013, the Laus conveyed the 

property to the Sporers, as trustees of Melanie Griffith’s revocable inter vivos trust, by warranty deed, which was recorded 

that year.

In 2014, John’s then-spouse assigned her entire interest in 

the right of first refusal to John, which he recorded.

John filed suit in February 2014, alleging that he had 

reserved a right of first refusal in the warranty deed. He 

claimed that each acre of land conveyed from the Laus to the 

Sporers is of equal value; accordingly, because the total price 

of the approximately 13 acres was about $27,000, he valued 

the 8 acres of land from the 1998 transaction at $16,615.36. He 

prayed for an order that (1) required the Sporers to convey the 

property to him after he paid them that amount and (2) quieted 

title to the property in him.

In their amended answer, the Sporers denied that (1) the 

warranty deed reflected the Laus’ agreement with John, (2) 

the Laus had agreed to grant the Walterses an indefinite and 

unlimited right of first refusal, (3) John had any right of 

first refusal, (4) the Laus were required to give John notice 

of the 2013 sale to the Sporers, and (5) the 8 acres all had 

equal value. They alleged that the right of first refusal, to 

the extent it existed, had expired under the terms of the trust 

deed. Alternatively, they alleged that there was no meeting of 

the minds between the Laus and the Walterses regarding the 

alleged right or that a mistake had been made in drafting the 
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warranty deed to include this right when the parties had not 

agreed to it.

For an affirmative defense, the Sporers alleged that John’s 

“[c]omplaint should be barred, in full or in part, due to its failure to comply with Neb. Rev. Stat. §76-301, et seq., providing 

for the reimbursement of an occupant for improvements made 

and taxes paid.” Finally, they alleged that John’s complaint was 

barred, in whole or in part, by the doctrines of unclean hands, 

unjust enrichment, estoppel, waiver, or laches.

In April 2015, the Sporers filed a cross-claim against the 

Laus. They sought an order that the Laus had breached the 

2013 warranty deed that conveyed the property to the Sporers 

and asked for damages, attorney fees, and costs.

In May 2015, the Laus filed an amended answer and counterclaim against John. Their amended answer is nearly identical 

to the Sporers’ amended answer, including the Sporers’ allegation regarding Neb. Rev. Stat. § 76-301 (Reissue 2009). In 

their counterclaim, the Laus alleged that John had commenced 

his action to harass them, because the parties had an ongoing 

boundary dispute, and that he had tortuously interfered in their 

business relationship with the Sporers. They requested damages, attorney fees, and costs.

In October 2015, John moved for summary judgment. The 

Laus filed a cross-motion for summary judgment against John 

and moved for summary judgment on the Sporers’ cross-claim 

against them. The Sporers filed a cross motion for summary 

judgment against John and opposed the Laus’ motion for summary judgment on their cross-claim.

At the hearing on these motions, the parties agreed to submit simultaneous briefs and rebuttal briefs by specified dates. 

At the end of the hearing, the Sporers argued that a right of 

first refusal is different from reserving mineral rights in a deed 

because the grantor has an existing right to the minerals. They 

argued that a right of first refusal is a property right that the 

buyers must grant to the seller. For that reason, they argued 
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that the statute of frauds requires an agreement in writing to 

be enforceable.

The court found that the right of first refusal in the warranty 

deed was not a reservation of a right because it did not reserve 

to John the right to use or enjoy any portion of the property. 

Further, it held that the contract in the deed was void, under 

§ 36-105, because it was not signed by the Laus. Accordingly, 

the court found that because there was no contract, there could 

be no breach. The court ruled that the Laus and the Sporers 

were entitled to judgment as a matter of law against John 

and granted their motions for summary judgment. The court 

denied John’s motion for summary judgment.

John then appealed. The Nebraska Court of Appeals dismissed the appeal because the district court had not resolved 

the Laus’ counterclaim against John or the Sporers’ crossclaim against the Laus. On remand, John moved the court for 

a final order. The court concluded that the Laus’ counterclaim 

against John should be dismissed and that the Sporers’ crossclaim against the Laus was moot because of its summary 

judgment. John perfected a timely appeal. We removed the 

case to our docket on our own motion pursuant to our authority to regulate the caseloads of the Court of Appeals and 

this court.3

II. ASSIGNMENTS OF ERROR

John assigns, restated and reordered, that the court erred in 

(1) concluding that the right of first refusal was void under 

§ 36-105; (2) failing to conclude that a right of first refusal is 

a contract that is not subject to real property statutes of frauds; 

(3) holding that the right of first refusal was not a reservation; 

(4) considering the statute of frauds defense, because it was 

not pled as an affirmative defense; (5) granting the Laus and 

the Sporers summary judgment; and (6) denying John’s motion 

for summary judgment.

3 See Neb. Rev. Stat. § 24-1106(3) (Reissue 2016).
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III. STANDARD OF REVIEW

[1] 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.4

[2-4] The construction of language in a deed is a question of 

law.5 Statutory interpretation presents a question of law.6 On a 

question of law, an appellate court reaches a conclusion independently of the court below.7

[5,6] Summary judgment is proper when the pleadings and 

evidence admitted at the hearing disclose no genuine issue 

regarding any material fact or the ultimate inferences that may 

be drawn from those facts and that the moving party is entitled 

to judgment as a matter of law.8 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 reasonable inferences 

deducible from the evidence.9

IV. ANALYSIS

1. Right of First Refusal Between John

and Laus Is Enforceable

(a) Rights of First Refusal

[7,8] Generally, a right of first refusal, or a preemptive 

right, “is a right to elect to take specified property at the same 

4 O’Connor v. Kearny Junction, 295 Neb. 981, 893 N.W.2d 684 (2017).

5 See Schram Enters. v. L & H Properties, 254 Neb. 717, 578 N.W.2d 865 

(1998).

6 In re Estate of Fuchs, 297 Neb. 667, 900 N.W.2d 896 (2017).

7 In re Interest of Becka P. et al., ante p. 98, 902 N.W.2d 697 (2017).

8 Hike v. State, 297 Neb. 212, 899 N.W.2d 614 (2017).

9 Id.
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price and on the same terms and conditions as those contained 

in a good faith offer by a third person if the owner manifests a 

willingness to accept the offer.”10 Essentially a dormant option, 

a right of first refusal is merely contingent until the condition 

precedent is met, at which point the preemptive right ripens 

into a full option.11 However, a right of first refusal may never 

ripen into an option if the grantor disposes of the property in 

a way that does not trigger the condition precedent.12 While a 

right of first refusal has no binding effect before it has ripened, 

upon doing so, it legally constrains an owner’s right to sell his 

property by compelling him to offer it first to the party who 

holds the right of first refusal.13

An option to purchase real estate, on the other hand, is a 

unilateral contract by which the owner of the property agrees 

with the holder of the option that he has the right to buy the 

property according to the terms and conditions of the option.14

By such an agreement, the owner does not sell the land; nor 

does the owner at the time contract to sell.15 The owner does, 

however, agree that the person to whom the option is given 

shall have the right, at his election or option, to demand the 

conveyance in the manner specified.16 Options, however, may 

also be subject to a condition precedent which suspends the 

10 92 C.J.S. Vendor and Purchaser § 180 at 156-57 (2010), citing Old Port 

Cove Holdings v. Condo. Ass’n, 986 So. 2d 1279 (Fla. 2008). See, also, 

Jonathan F. Mitchell, Note, Can a Right of First Refusal Be Assigned?, 68 

U. Chi. L. Rev. 985 (2001).

11 See 92 C.J.S., supra note 10. See, also, Jones v. Stahr, 16 Neb. App. 596, 

746 N.W.2d 394 (2008).

12 See, e.g., Park Station v. Bosse, 378 Md. 122, 835 A.2d 646 (2003).

13 See Winberg v. Cimfel, 248 Neb. 71, 532 N.W.2d 35 (1995). See, also, 

Peters v. Smolian, 49 Misc. 3d 408, 12 N.Y.S.3d 824 (2015); Manufactured 

Housing Cmtys. v. State, 142 Wash. 2d 347, 13 P.3d 183 (2000).

14 Winberg, supra note 13.

15 Id.

16 Id.
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holder’s right to elect to demand conveyance until the condition has been satisfied.17

Options and rights of first refusal are sometimes confused 

but there is a clear and classic distinction: The option compels performance within the time limit specified or, if none is 

mentioned, then within a reasonable time, whereas the right of 

first refusal has no binding effect unless the offeror decides to 

sell.18 Nevertheless, in differentiating between rights of first 

refusal and options, the word “first” has special significance: 

“‘“[T]he limiting word ‘First’ indicates that there is no intention to create a power of acceptance in the promisee; instead it 

indicates that the promisee shall be the first party to be given 

such a power.”’”19

[9] A right of first refusal may be enforced by specific performance where it can be proved that the condition triggering 

the right has occurred and the option holder was ready, able, 

and willing to buy during the period.20

(b) Right of First Refusal Is 

Nonvested Property Interest

All of the parties argue that a right of first refusal is a contract right and not an interest in real estate. John directs us to 

case law from Nebraska21 and foreign jurisdictions22 to support 

17 See Bauermeister v. Waste Mgmt. Co., 280 Neb. 1, 783 N.W.2d 594 

(2010). See, also, Restatement (First) of Property § 393, comment f. 

(1944).

18 Winberg, supra note 13.

19 Id. at 77, 532 N.W.2d at 39, quoting Landa v. Century 21 Simmons & Co., 

237 Va. 374, 377 S.E.2d 416 (1989).

20 See, Jones, supra note 11; Hongsermeier v. Devall, 16 Neb. App. 379, 744 

N.W.2d 481 (2008). 21 Bauermeister, supra note 17; Schupack v. McDonald’s System, Inc., 200 Neb. 

485, 264 N.W.2d 827 (1978); Jones, supra note 11.

22 Peters, supra note 13; Old Nat’l Bank v. Arneson, 54 Wash. App. 717, 776 

P.2d 145 (1989).
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his contentions that a right of first refusal creates no interest 

in property.

Contrary to John’s assertion, neither Schupack v. McDonald’s 

System, Inc.,

23 nor Jones v. Stahr24 supports a finding that a 

right of first refusal does not create an interest in land.

In Schupack, we held that a right of first refusal to acquire 

future restaurant franchises in the Omaha, Nebraska-Council 

Bluffs, Iowa, area—granted to the right holder by the restaurant corporation—was intended to be personal in nature and 

could not be transferred or assigned without the corporation’s 

consent, which it had not provided. Whether the right of first 

refusal gave the right holder an interest in any future franchises 

that would have allowed him to seek a remedy of specific 

performance was not at issue in the case, and we made no 

statements on the subject.25 Instead, our decision was limited 

to whether the right of first refusal concerning franchise rights, 

not real property, was assignable.26

In Jones, the Nebraska Court of Appeals considered whether 

an offer to purchase property, as required by a right of first 

refusal, had been accepted.27 Therese Dorenbach had granted 

Daniel F. Stahr and Georgia A. Stahr a subordinate right of 

first refusal to purchase her property in a sales agreement 

for adjoining property. In accordance with the agreement, 

Dorenbach offered the Stahrs the opportunity to purchase her 

land on the terms and conditions of a purchase agreement she 

had entered with Wesley J. Jones. The Stahrs accepted the 

offer but reserved the right to assign the sale contract before 

closing. Dorenbach rejected the Stahrs’ acceptance because 

23 Schupack, supra note 21.

24 Jones, supra note 11.

25 See Schupack, supra note 21.

26 Id.

27 Jones, supra note 11.
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she considered the reservation of the right to assign the contract to be a material deviation from the offer, constituting a 

counteroffer. After the parties initiated litigation, the trial court 

ruled in favor of Dorenbach, reasoning that the Stahrs’ acceptance was a material deviation from the offer because the right 

of first refusal was personal.

The Court of Appeals reversed the judgment and remanded 

the cause for entry of specific performance in favor of the 

Stahrs. It reasoned that the right of first refusal ripened into 

an option contract when Dorenbach accepted Jones’ offer. 

Because the Court of Appeals determined that option contracts 

are assignable, it held that the Stahrs’ acceptance was not a 

material deviation from the offer.

John relies on a portion of dicta in Jones28 in which the 

Court of Appeals acknowledged that many courts presume 

rights of first refusal to be personal in nature. The appellate 

court stated that courts have justified such a presumption on 

two bases: either to avoid a conflict with the rule against perpetuities or because “the holder of a right of first refusal holds 

only a general contract right to acquire a later interest in real 

estate should the property owner decide to sell.”29

These statements in Jones are neither those relied on by the 

Court of Appeals in Jones nor binding on our decision in the 

present matter.

In Bauermeister v. Waste Mgmt. Co.,

30 the sole issue presented was whether the common-law rule against perpetuities applied to an option subject to a condition precedent. 

There, family members contracted to sell land to a waste 

management company to be used as a landfill.31 Under the contract, the company was to pay the sellers a monthly rent and 

28 Id.

29 Id. at 602, 746 N.W.2d at 399 (emphasis supplied).

30 Bauermeister, supra note 17.

31 Id.
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royalty.32 The contract also provided that upon the termination 

of the purchase agreement, the sellers had the option to repurchase the land.33

We held that the common-law rule against perpetuities 

should no longer apply to certain commercial transactions, 

as a matter of policy.34 In doing so, we explicitly classified 

the option contract at issue as a nonvested property interest.35 This classification was relevant because Nebraska’s 

Uniform Statutory Rule Against Perpetuities Act36 specifically excluded “‘[a] nonvested property interest . . . arising 

out of a nondonative transfer’” from the rule against perpetuities.37 We reasoned, in part, that because the option would 

not have been subject to the rule against perpetuities if it 

was made after the enactment of the Uniform Statutory Rule 

Against Perpetuities Act, it should also be excluded from the 

common-law rule.38

Similarly, the Court of Appeals has treated a right of first 

refusal as a nonvested property interest for applying the 

Uniform Statutory Rule Against Perpetuities Act.39

[10] As discussed above, there is little distinction between 

a right of first refusal and an option subject to a condition 

precedent. Accordingly, we hold that a right of first refusal 

is also a nonvested property interest. In doing so, we follow 

32 Bauermeister Deaver Ecol. v. Waste Mgmt. Co., 290 Neb. 899, 863 

N.W.2d 131 (2015).

33 Bauermeister, supra note 17.

34 Id.

35 Id.

36 Neb. Rev. Stat. §§ 76-2001 through 76-2008 (Reissue 2003).

37 Bauermeister, supra note 17, 280 Neb. at 7, 783 N.W.2d at 598. See 

§ 76-2005(1).

38 Bauermeister, supra note 17.

39 Greenhall Investments v. Wiese Dev. Corp., 14 Neb. App. 155, 706 N.W.2d 

552 (2005).
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the majority of courts in the country.40 While John has cited 

precedent from foreign jurisdictions holding otherwise, we do 

not find their reasoning persuasive or binding.

(c) Right of First Refusal 

Was Reserved in Deed

John argues that reserving a right of first refusal in a deed 

does not bring the right within the statute of frauds because it 

is an interest that is not transferred. The Laus and the Sporers 

argue that a right of first refusal is not an “exception” because 

it is not a right that a grantor possesses at the time of a conveyance and that it is not a “reservation” because, as the court 

ruled, it does not create an easement. Additionally, the Laus 

and the Sporers argue that a right of first refusal is something 

that the grantee would have to regrant to the grantor, which 

would bring the creation of a right of first refusal under the real 

property statute of frauds.

[11,12] The purpose of a reservation is to reserve to the 

grantor something new out of that which is conveyed and 

which did not exist before as an independent right.41 A reservation is always something taken back out of that which is 

demised.42 Accordingly, a reservation, in its technical sense, is 

40 See, e.g., Bortolotti v. Hayden, 449 Mass. 193, 866 N.E.2d 882 (2007); Park 

Station v. Bosse, 378 Md. 122, 835 A.2d 646 (2003), citing Ferrero Constr. 

v. Dennis Rourke Corp., 311 Md. 560, 536 A.2d 1137 (1988); Barnhart v. 

McKinney, 235 Kan. 511, 682 P.2d 112 (1984), citing Henderson v. Bell, 

103 Kan. 422, 173 P. 1124 (1918); South Kitsap Family Worship Center v. 

Weir, 135 Wash. App. 900, 146 P.3d 935 (2006); In re Estate of Owen, 855 

N.E.2d 603 (Ind. App. 2006); Webb v. Reames, 326 S.C. 444, 485 S.E.2d 

384 (S.C. App. 1997); Southall v. Humbert, 454 Pa. Super. 360, 685 A.2d 

574 (1996). See, also, Restatement (Third) of Property (Servitudes) § 3.3, 

comment b. (2000); 61 Am. Jur. 2d Perpetuities, Etc. § 61 (2012).

41 See Elrod v. Heirs, Devisees, etc., 156 Neb. 269, 55 N.W.2d 673 (1952). 

See, also, Bauer v. Lancaster Cty. Sch. Dist. 001, 243 Neb. 655, 501 

N.W.2d 707 (1993).

42 Elrod, supra note 41.
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a regranting of an interest in the property from the grantee to 

the grantor.43 On the other hand, an exception is some existing 

part of the estate excluded from the grant and retained by the 

grantor as if there had been no conveyance made by him to 

the grantee.44

[13] Whether a provision is a reservation or an exception does not depend upon the use of a particular word, 

but upon the character and effect of the provision itself.45

The terms “exception” and “reservation” are frequently used 

synonymously, conjunctively, and interchangeably.46 It is 

not necessarily conclusive, and many times not even significant, whether the word “except” or “reserve” is selected.47

The intent is the primary matter to be considered.48 The 

Legislature’s intent to modify and eliminate such commonlaw technicalities and exactions was codified in its adoption 

of the Uniform Property Act, Neb. Rev. Stat. § 76-101 et seq. 

(Reissue 2009).49 Specifically, § 76-106 provides that “[a]n 

otherwise effective reservation of property by the conveyor 

reserves the interest the conveyor had prior to the conveyance 

unless an intent to reserve a different interest is effectively 

manifested.”50

In its order, the court relied on a statement in Schaffert v. 

Hartman51 to determine that a right of first refusal is not a 

valid reservation because it does not create a right to use and 

43 Restatement (First) of Property, supra note 17, § 473.

44 Elrod, supra note 41.

45 Id. See, also, 23 Am. Jur. 2d Deeds §§ 265 and 267 (2013).

46 Elrod, supra note 41.

47 See id.

48 Id.

49 Id.

50 See id.

51 Schaffert v. Hartman, 203 Neb. 271, 278 N.W.2d 343 (1979), disapproved

on other grounds, Anderson v. Service Merchandise Co., 240 Neb. 873, 

485 N.W.2d 170 (1992).
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enjoy the land. In Schaffert, we stated that “‘a reservation, 

while not affecting the title to the thing granted, may reserve 

to the grantor the right to the use or enjoyment of a portion 

thereof, as an easement, the right to pass over, or the like.’”52

[14] However, as our opinion in Elrod v. Heirs, Devisees, 

etc.53 makes clear, reservations may create easements but are 

not limited to creating interests permitting the use and enjoyment of the land. Instead, a grantor may reserve any nonpossessory interest in the land that he could not have held separate from his ownership interest.54

In the instant case, the deed contained the following provision: “No sale of the above-described premises shall be consummated without giving at least 30 days written notice of the 

terms to Grantor. Grantor shall have the right to buy the lot on 

the same terms.”

While the provision does not contain the terms “except” or 

“reserve,” it shows that John intended to create a right of first 

refusal in himself through the conveyance. Accordingly, we 

must give such effect to the provision, under § 76-106.

[15] John’s argument that a reservation is not subject to the 

statute of frauds confuses the terms “exceptions” and “reservations.” Only an exception is outside of the statute of frauds 

by causing an interest to be withheld from the conveyance. 

Instead, as a re-granting of an interest in land by the grantee, 

a reservation is subject to the statute of frauds, Neb. Rev. 

Stat. § 36-103 (Reissue 2016), which provides, in relevant 

part, the following language: “No estate or interest in land . . . 

shall hereafter be created, granted, assigned, surrendered, or 

declared, unless . . . by deed of conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same.”

52 Id. at 274, 278 N.W.2d at 346, quoting Eiseley v. Spooner, 23 Neb. 470, 36 

N.W. 659 (1888).

53 Elrod, supra note 41.

54 Restatement (First) of Property, supra note 17, § 473.
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Here, the court applied § 36-105 instead of § 36-103. 

Section 36-105, in relevant part, states: “Every contract . . . for 

the sale of any lands, shall be void unless the contract or some 

note or memorandum thereof be in writing and signed by the 

party by whom . . . sale is to be made.”

Based on our discussion above, the right of first refusal in 

this case does not resemble a contract for the sale of land. The 

right of first refusal was only a right to elect to purchase the 

property at the same price and on the same terms and conditions as those contained in a good faith offer that the Laus 

manifested a willingness to accept. Accordingly, the right of 

first refusal in the deed was within § 36-103, not § 36-105. 

Nevertheless, both statutes require a signature by the party to 

be charged by the writing.

(d) Laus’ Acceptance of Deed Binds 

Them to Right of First Refusal 

Contained Therein

John argues that the Laus consented to the right of first 

refusal by their words, conduct, and acquiescence, which 

consent is indicated primarily by their acceptance of the 

deed and not seeking reformation for over 16 years. The 

Laus and the Sporers argue that the right of first refusal is 

not enforceable because they did not sign the deed or receive 

consideration for granting the right and never agreed orally to 

the right.

[16] “‘The general rule is that the grantee in a deed 

accepted by him is a party to the deed, even though he does 

not sign it, and that he is concluded by recitals in the deed and 

by reservations contained therein in favor of the grantor.’”55

Similarly, Corpus Juris Secundum provides the following on 

the effect of a grantee accepting a deed that imposes an obligation on the grantee:

55 XTO Energy Inc. v. Nikolai, 357 S.W.3d 47, 56 (Tex. App. 2011), quoting 

Greene v. White, 137 Tex. 361, 153 S.W.2d 575 (1941).
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Where a deed by which property is conveyed to the 

grantee, and which purports to be between the parties, 

is accepted by him or her, the fact that it is signed and 

sealed by the grantor only will not render it void for 

want of mutuality, but it will be construed as the deed 

of both parties. Thus, if the deed contains covenants 

or restrictions, its delivery to and acceptance by the 

grantee is deemed equivalent to the grantee’s signature 

so as to the [sic] supply the mutual consent necessary to 

form a contract and make the covenants or restrictions 

enforceable.56

Other sources have held the same to be true regarding easements57 and options to repurchase.58 The enforceability of reservations and covenants included in deeds is a widely accepted 

and longstanding principle of law.59 Courts have tested this 

principle and found it remains valid under both the doctrine 

of estoppel by deed60 and doctrine of part performance,61

56 26A C.J.S. Deeds § 65 at 93-94 (2011). Accord, Murphey v. Gray, 84 Ariz. 

299, 327 P.2d 751 (1958); Carlson v. Libby, 137 Conn. 362, 77 A.2d 332 

(1950); Harris & Gurganus v. Williams, 37 N.C. App. 585, 246 S.E.2d 791 

(1978); 20 Am. Jur. 2d Covenants, Etc. §§ 4 and 151 (2015); 9 Richard 

R. Powell & Michael Allan Wolf, Powell on Real Property § 60.02 n.16 

(2000).

57 See, e.g., Chase v. Nelson, 507 N.E.2d 640 (Ind. App. 1987). See, also, 

Evans v. Board of County Com’rs, 97 P.3d 697 (2004), affirmed 123 P.3d 

432 (2005).

58 See, e.g., Scutti Enterprises v. Wackerman Guchone, 153 A.D.2d 83, 

548 N.Y.S.2d 967 (1989); Mearida v. Murphy, 106 Ill. App. 3d 705, 435 

N.E.2d 1352, 62 Ill. Dec. 380 (1982).

59 See The Midland Railway Company v. Fisher, 125 Ind. 19, 24 N.E. 756 

(1890). See, also, Employers Indemnity Corp. v. Garrett, 327 Mo. 874, 38 

S.W.2d 1049 (1931).

60 XTO Energy Inc., supra note 55, citing Greene, supra note 55; Mearida, 

supra note 58; 28 Am. Jur. 2d Estoppel and Waiver §§ 15 and 18 (2011).

61 Scutti Enterprises, supra note 58; Terrell v. Messenger, 428 So. 2d 1241 

(La. App. 1983).
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which is codified in Nebraska as Neb. Rev. Stat. § 36-106 

(Reissue 2016).

[17] Further, this principle’s utility in protecting a grantor 

from having a reservation invalidated under the statute of 

frauds is consistent with the policy of the statute of frauds. The 

statute of frauds “is based on principles of equity, in particular, 

recognition that the purpose of the Statute of Frauds is to prevent frauds, not to enable a party to perpetrate a fraud by using 

the statute as a sword rather than a shield.”62

[18] We are persuaded by the great weight of authority that 

the acceptance of a deed operates to satisfy the requirement, 

under § 36-103, that the contract creating an interest in land be 

signed by the party to be charged therewith.

[19] Further, in the absence of fraud, one who fails to read 

a contract cannot avoid the effect of signing.63 Because accepting a deed has the legal effect of signing it, this principle 

applies with equal force.64 Accordingly, if a deed contains an 

unsatisfactory reservation, the grantee may avoid it by refusing acceptance.

Here, the Laus accepted the deed and enjoyed the benefit 

of it for 15 years. While they claim to have been unaware of 

the right of first refusal in the deed, the Laus’ testimony shows 

that they believed that they were granting John a right of first 

refusal through the trust deed. Accordingly, their argument that 

they did not agree to such a right is more properly characterized as not agreeing to the right for an indefinite duration.

Nevertheless, the attorney testified that it would have 

been his course of practice to explain the documents in the 

62 Scutti Enterprises, supra note 58, 153 A.D.2d at 87, 548 N.Y.S.2d at 970. 

See, also, Corcoran v. Leon’s, Inc., 126 Neb. 149, 252 N.W. 819 (1934).

63 Eicher v. Mid America Fin. Invest. Corp., 270 Neb. 370, 702 N.W.2d 792 

(2005).

64 See, Hughes v. Pontotoc County, 242 So. 2d 438 (Miss. 1970); Evans,

supra note 57.
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transaction to the parties and highlight the provision in the 

deed because it was unique. Further, John testified that it was 

discussed and agreed to by the Laus before and during a meeting with the attorney.

Further, it is undisputed that the Laus accepted the deed and 

that Debra Lau recorded it. Douglas Lau testified that he read 

the deed and that any confusion he had regarding the right of 

first refusal was not based on any misrepresentations by John. 

While Debra Lau claims she did not read the deed until this 

litigation was initiated, she cannot escape the effect of accepting it when she had ample opportunity to read the document. 

Accordingly, we find that the Laus in effect signed the deed 

and are bound by its terms.

Therefore, we hold that the reservation of the right of first 

refusal in the deed satisfied the statute of frauds. Consequently, 

the court erred in granting the Laus’ and the Sporers’ motions 

for summary judgment against John. To hold otherwise would 

be a misapplication of the statute of frauds by inequitably 

allowing the Laus to retain the benefit of the deed while escaping a clear statement of intent on its face.

[20] Regarding the argument of the Laus and the Sporers 

concerning consideration, the record does not show that they 

raised the issue of consideration before the court, and the court 

did not rule on the issue in its order. An appellate court will not 

consider an issue on appeal that was not presented to or passed 

upon by the trial court.65 Therefore, we do not consider this 

argument on appeal.

2. Remaining Assignments of

Error and Arguments

[21] Because the right of first refusal was not voidable 

under the statute of frauds, we do not consider whether the 

statute of frauds defense was properly raised as an affirmative 

65 deNourie & Yost Homes v. Frost, 295 Neb. 912, 893 N.W.2d 669 (2017).
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defense. An appellate court is not obligated to engage in an 

analysis that is not necessary to adjudicate the case and controversy before it.66

John also claims that the court erred in denying his motion 

for summary judgment. Nevertheless, we find that John is 

not entitled to summary judgment at this time because material issues of fact remain that have not been considered by 

the court. As recognized above, an appellate court will not 

consider an issue on appeal that was not decided by the 

trial court.

V. CONCLUSION

We hold that a right of first refusal may be reserved in a 

deed. Further, the acceptance of a deed, absent fraud, satisfies 

the requirements of the statute of frauds for any reservations 

contained therein. Accordingly, the court erred by finding that 

no contract binding the Laus to a right of first refusal existed 

and by granting summary judgment for the Laus and the 

Sporers, as a matter of law, against John.

 Reversed and remanded for

further proceedings.

Heavican, C.J., participating on briefs.

Wright, J., not participating in the decision.

Stacy, J., not participating.

66 Salem Grain Co. v. Consolidated Grain & Barge Co., 297 Neb. 682, 900 

N.W.2d 909 (2017).