Opinion ID: 1956316
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Heading: nebraska trust deeds act

Text: This appeal presents a question of first impression regarding a trustee's fee allowable under § 76-1011 of the Nebraska Trust Deeds Act, which states: The trustee shall apply the proceeds of the trustee's sale, first, to the costs and expenses of exercising the power of sale and of the sale, including the payment of the trustee's fees actually incurred not to exceed the amount which may be provided for in the trust deed, second, to payment of the obligation secured by the trust deed, third, to the payment of junior trust deeds, mortgages, or other lienholders, and the balance, if any, to the person or persons legally entitled thereto. Hoppe contends that § 76-1011 contains no mandate or prohibition regarding type, kind, quality, or quantity of fees that may be charged for acting as Trustee except as the same may be limited by the terms set forth in the Trust Deed. Brief for appellee at 3-4. Hoppe then argues that because there was a limitation set forth within the Trust Deed to five percent (5%) of the original amount secured by the Deed of Trust, the amount of the fee would have been for the first and second Trust Deeds, each $5,750.00; for the third Trust Deed, $1,000.00. Brief for appellee at 4. In contrast, Speedway contends that an actually incurred fee must necessarily be calculated according to the trustee's services actually rendered, and, therefore, is unascertainable before completion of the trustee's duties. Speedway argues that § 76-1011 imposes a limit on a trustee's fees, namely, a trustee's fee cannot exceed the amount which may be provided for in the trust deed. When asked to interpret a statute, an appellate court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense. A court has a duty to discover, if possible, legislative intent from the statute itself. NC + Hybrids v. Growers Seed Assn., 219 Neb. 296, 363 N.W.2d 362 (1985); Adkisson v. City of Columbus, 214 Neb. 129, 333 N.W.2d 661 (1983). When statutory language is plain and unambiguous, no judicial interpretation is needed to ascertain the statute's meaning so that, in the absence of a statutory indication to the contrary, words in a statute will be given their ordinary meaning. State v. Crowdell, 234 Neb. 469, 473-74, 451 N.W.2d 695, 699 (1990). Accord, Sports Courts of Omaha v. Meginnis, 242 Neb. 768, 497 N.W.2d 38 (1993); Maack v. School Dist. of Lincoln, 241 Neb. 847, 491 N.W.2d 341 (1992). As a series or collection of statutes pertaining to a certain subject matter, statutory components of an act, which are in pari materia, may be conjunctively considered and construed to determine the intent of the Legislature so that different provisions of the act are consistent, harmonious, and sensible. Wounded Shield v. Gunter, 225 Neb. 327, 333, 405 N.W.2d 9, 13 (1987). Accord, Maack v. School Dist. of Lincoln, supra ; Indian Hills Comm. Ch. v. County Bd. of Equal., 226 Neb. 510, 412 N.W.2d 459 (1987). [An appellate court], in construing a statute, looks to the objects to be accomplished, the evils and mischief sought to be remedied, or the purposes to be served, and places upon the statute a reasonable or liberal construction which will best effect its purpose rather than one which will defeat it. [Citation omitted.] Further, effect must be given, if possible, to all the several parts of a statute. No sentence, clause, or word should be rejected as meaningless or superfluous if it can be avoided. It is not within the province of this court to read meaning into a statute that is not warranted by legislative language; neither is it within the province of the court to read anything plain, direct, and unambiguous out of a statute. NC + Hybrids v. Growers Seed Assn., 219 Neb. at 299, 363 N.W.2d at 365. In Blair Co. v. American Savings Co., 184 Neb. 557, 558-59, 169 N.W.2d 292, 293-94 (1969), this court stated: The Nebraska Trust Deeds Act was enacted by the 1965 Legislature. Laws 1965, c. 451, p. 1423. It authorizes the use of trust deeds to secure the performance of obligations and prescribes, generally, the procedures for their execution and enforcement. The act provides that a trust deed may confer a power of sale upon the trustee. In the event of a default, the trust property may be sold by the trustee to satisfy the obligation secured. The act also provides for the substitution of trustees, reinstatement after default, and the procedure for the sale and conveyance of the trust property by the trustee. .... The Nebraska Trust Deeds Act authorizes the use of a security device which was not available prior to its enactment. The act permits the use of an instrument which may be foreclosed by sale without the necessity of judicial proceedings. It authorizes and permits a method of financing which was not formerly available, since trust deeds have been considered to be subject to the same rules and restrictions as mortgages. Our first inquiry concerns the meaning of the phrase actually incurred as used in § 76-1011, since neither the statute nor any other part of the Nebraska Trust Deeds Act supplies a definition of actually incurred. However, actual is defined in Webster's Third New International Dictionary, Unabridged 22 (1981) as existing in act ...: EXISTENTcontrasted with potential and possible ... existing in fact or reality: really acted or acting or carried outcontrasted with ideal and hypothetical.  Actually means in act or in fact: REALLY. Id. Hoppe asserts that the deed of trust, as a contract between Cornhusker Bank and Hoppe, established the fee to be paid to the trustee. According to Hoppe, inasmuch as the deed of trust stated the trustee's fees would be deemed reasonable `if they [were] the greater of either the actual costs incurred by the Trustee or 5% of the balance of the original amount secured hereby,' brief for appellee at 1, the predetermined trustee's fee was actually incurred on completion of the trustee's required duties. Section 76-1005 of the Nebraska Trust Deeds Act provides that [a] power of sale may be conferred upon the trustee which the trustee may exercise and under which the trust property may be sold ... after a breach of an obligation for which the trust property is conveyed as security.... Under § 76-1011, the proceeds from the sale of the trust property apply first, to the costs and expenses of exercising the power of sale and of the sale, including the payment of the trustee's fees. Based on the foregoing statutory provisions, a trustee's fee is an expense engendered by the sale of real estate that is security under a trust deed. Although a trust deed may confer the power of sale, this authority for a sale is not activated without a trustor's default on the secured obligation. Thus, a trustee's services, as a basis for compensation related to a deed of trust, do not arise before a trustor's default, and, indeed, will never materialize in the absence of a trustor's default. Consequently, a trustee's fee cannot be actually incurred before a trustor's default and, therefore, cannot be ascertained at the time the deed of trust is signed. Considering the Nebraska Trust Deeds Act as a whole and giving the words of § 76-1011 their ordinary meaning, a fee actually incurred means a fee that is based on services rendered. Because the duty to perform services arises only on a trustor's default, a trustee's fees cannot be fixed at the time the trust deed is executed. Therefore, the contract between Hoppe and Cornhusker Bank could not establish the fee due Hoppe as trustee. We must also examine the language of § 76-1011 which provides that proceeds from a sale are applied to fees actually incurred not to exceed the amount which may be provided for in the trust deed. Hoppe argues that this language implies that any fee which does not exceed that amount set forth in the trust deed would be allowed. Brief for appellee at 3. As we interpret § 76-1011, the statute clearly authorizes a contractual limit on a trustee's fee. Nevertheless, a trustee's fee is governed by § 76-1011 and must be actually incurred. A hypothetical example may illustrate the situation contemplated by the Nebraska Trust Deeds Act. Assume a deed of trust secures a promissory note in the original principal amount of $100,000. Under the deed of trust, a trustee has the power of sale in accordance with § 76-1005, but the deed provides that the trustee's fee shall not exceed 5 percent of the original principal amount of the secured note. The trustor defaults, and the trustee, pursuant to the Nebraska Trust Deeds Act, sells the security. Assume further that the trustee's services warrant a fee of $3,000 based on reasonable time and labor expended. This $3,000 fee is actually incurred under § 76-1011, and, consequently, the trustee is entitled to receive payment of the $3,000 fee as a cost and expense of the trustee's sale. However, in our illustration, if the trustee's services warrant a fee of $6,000 based on reasonable time and labor expended, the limiting provision in the trust deed serves as a cap on the fee which the trustee may receive, and, for that reason, the trustee would be paid only $5,000, 5 percent of the original principal amount secured by the deed of trust. The trust deeds in this action stated that the trustee's fees would be reasonable if they [were] the greater of either the actual costs incurred by the Trustee or 5% of the balance of the original amount secured hereby. In view of § 76-1011, the language of the trust deeds imposes a limit of 5 percent on the trustee's fee for services actually rendered. We note that even if we were to accept the interpretation which Hoppe urges, Hoppe is still required to substantiate his services because a trustee would be required to show his or her actual services as the basis for a fee versus a percentage fee, to establish which is greater.