Opinion ID: 2234227
Heading Depth: 1
Heading Rank: 7

Heading: judicial sale of real estate

Text: The Siegels next claim that the district court should have ordered a resale of the property and that the court improperly accepted Deutsche Bank's second bid of $206,000 after the judicial sale. Nebraska law provides that a court shall confirm a judicial sale if the court is satisfied that the sale has in all respects been made in conformity to the provisions of [chapter 25 of the Nebraska Revised Statutes] and that the said property was sold for fair value, under the circumstances and conditions of the sale, or, that a subsequent sale would not realize a greater amount. Neb.Rev.Stat. § 25-1531 (Reissue 2008). It is the general rule that confirmation of judicial sales rests largely within the discretion of the trial court, and will not be reviewed except for manifest abuse of such discretion. Michelson v. Wagner, 170 Neb. 28, 101 N.W.2d 498 (1960). The hearing to confirm the judicial sale of the property took place on two different days. On the first day, the Siegels offered an appraisal that valued the property at $206,000. On the second day, they offered Weis' affidavit stating his willingness to bid an unknown amount greater than $154,050 at a resale. They claim this is evidence that the sale price was inadequate and that a subsequent sale would realize a greater amount. Whether the court should confirm a judicial sale is determined on the facts of each case. Evidence that another party who did not bid at the original judicial sale would pay more for the property is not sufficient to prevent the court from confirming the sale. In Kleeb v. Kleeb, 210 Neb. 637, 316 N.W.2d 583 (1982), property was sold at judicial sale to a purchaser for $181,440. After the sale, an anonymous bidder offered an upset bid of $189,540, good for 1 day only. The court determined that the amount of the new offer was not a substantial increase and that there was no evidence that a new sale could start at the point of the upset bid, which was only open for that day. It confirmed the judicial sale. On appeal, this court affirmed the decision of the trial court and stated that the court was well within its discretion in refusing to set aside the alleged upset bid made by the unknown party, particularly because there was no evidence that a resale would result in a higher price. In the present case, the district court was within its discretion to refuse to order a resale based on the Siegels' evidence. Weis' affidavit does not indicate how much he would bid if there were a resale, and there is no evidence that his theoretical bid would be substantially more than Deutsche Bank's bid of $154,050. The court was within its discretion in declining to speculate that Weis or any other bidder would pay significantly more than $154,050 at a resale. The Siegels characterize Deutsche Bank's second bid of $206,000 as an upset bid and claim that it should not have been accepted and that the district court should have held a resale instead. Generally, an upset bid following a judicial sale and before a final confirmation should be considered only when it affords convincing proof that the property was sold at an inadequate price and that a just regard for the rights of all concerned and the stability of judicial sales permits its acceptance. Destiny 98 TD v. Miodowski, 269 Neb. 427, 693 N.W.2d 278 (2005) (citing Kleeb v. Kleeb, supra ). However, when the upset bid is offered by the original bidder, it is not error for the court to allow the bidder to increase his bid at the hearing for confirmation of the sale if the property owner is not injured. See Gordon State Bank v. Hinchley, 117 Neb. 211, 220 N.W. 243 (1928). In Gordon State Bank, following the judicial sale, the court stated its opinion that the winning bid was not a fair value for the real estate. The winning bidder increased its bid, and the court confirmed the sale. On appeal, we noted that with respect to a judicial sale, the court may exercise its discretion. Considering that the appellants were not prejudiced and that any error was in their favor, we determined the court did not err in allowing the bidder to increase his bid at the hearing for confirmation of the sale. Deutsche Bank was the only bidder at the sale and the only party to offer a subsequent bid. The amount of the second bid, $206,000, was equal to the Siegels' proffered appraisal value of the property. In accepting the upset bid, the district court stated: Solely for the protection of the defendants, and not because the court believes the original bid offer by the plaintiff does not represent fair value of the property, the court will accept the subsequent bid of the plaintiff of $206,000.00 for the property. The Siegels have not offered any evidence that the property was not sold for fair value under the circumstances or that a subsequent sale would have realized an amount greater than $206,000. Rather, the court's acceptance of Deutsche Bank's increased bid was in conformity with the value of the property asserted by the Siegels. Typically, the concern regarding acceptance of upset bids is that the practice would render judicial sales meaningless because bidders could skip the judicial sale and place their bids with the court right before the confirmation hearing. Michelson v. Wagner, 170 Neb. 28, 101 N.W.2d 498 (1960). Here, this is not a concern because the upset bidder was Deutsche Bank, which merely outbid itself. There were no other bidders. The second bid matched the property value asserted by the Siegels and was a significant benefit to them. The district court did not abuse its discretion in accepting Deutsche Bank's second bid of $206,000 and confirming the sale.