Court Opinion

ID: 4157652
Source: CourtListenerOpinion
Date Created: 2017-04-04 14:10:28.522139+00
Date Added: 2024-06-11T14:34:37.507457
License: Public Domain

IN THE NEBRASKA COURT OF APPEALS

               MEMORANDUM OPINION AND JUDGMENT ON APPEAL
                        (Memorandum Web Opinion)

                                        EHRKE V. MAMOT

  NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
 AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

                  SHELBEA EHRKE, SPECIAL ADMINISTRATOR OF THE ESTATE OF
                      MONTY M. MAMOT, DECEASED, ET AL., APPELLANTS,
                                                V.

                       JAMIE P. MAMOT AND HERITAGE BANK, APPELLEES.

                              Filed April 4, 2017.   No. A-16-282.

       Appeal from the District Court for Howard County: KARIN L. NOAKES, Judge. Affirmed.
        Barry D. Geweke, of Stowell & Geweke, P.C., L.L.O., for appellants Mamot Land and
Cattle Co., Mamot Trucking, and Mamot Feedlots.
       Larry W. Beucke, of Parker, Grossart, Bahensky, Beucke, Bowman & Symington, L.L.P.,
for appellees.

       MOORE, Chief Judge, and INBODY and RIEDMANN, Judges.
       MOORE, Chief Judge.
                                       INTRODUCTION
       This is the second appearance of this case before this court. As summarized in this court’s
previous memorandum web opinion:
               Following Monty Mamot’s death, various parties disputed whether Monty’s estate
       was entitled to certain contractual payments and whether it remained obligated to pay an
       outstanding bank loan. In an attempt to clarify those disputes, the special administrator of
       Monty’s estate and three Mamot business entities jointly brought declaratory judgment
       actions. The special administrator also sought judgments against Monty’s former wife,
       Jamie Mamot, for unjust enrichment. Finally, the Mamot business entities brought an

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       interpleader action to determine the proper recipient of the final payment under a contract.
       The district court dismissed the declaratory judgment actions after determining other
       adequate remedies were available to the parties. The court also concluded Jamie had not
       been unjustly enriched and ordered the interpleader funds returned to the Mamot business
       entities.

Helzer v. Heritage Bank, No. A-14-683, 2015 WL 3580736 at *1 (Neb. Ct. App. June 9, 2015)
(selected for posting to court website).
          In deciding the previous appeal, this court reversed the district court’s dismissal of the
declaratory judgment and interpleader actions, and we remanded the cause with directions to
consider and decide the merits of the parties’ claims based upon the evidence previously presented
at trial. However, we affirmed the court’s determination that Jamie was not unjustly enriched. See
Helzer v. Heritage Bank, supra.
          On remand, in determining the amount of contractual payments owed by the Mamot
entities to Monty’s estate, the district court found a provision of a contract with respect to the
maintenance of life insurance void. It also found that Jamie was entitled to keep certain life
insurance proceeds and that Monty’s estate remained obligated to pay an outstanding bank loan.
The Mamot entities appealed from the court’s order on remand.
          As discussed below, the district court’s order on remand was within the scope of this court’s
mandate. The court did not err in finding the life insurance provision of the 2006 stock purchase
agreement was void or in relying on the remaining terms of the agreement to find that Mamot
Entities owed Monty $572,706.36 plus interest. Further, the court did not err in determining that
Monty’s estate was required to pay the entire mortgage at Heritage Bank, finding that Jamie was
entitled to retain the life insurance proceeds, or in determining that no interpleader funds were
currently held by the court. Accordingly, we affirm.
                                          BACKGROUND
Factual Background.
       As the complex factual background of this case and the evidence presented at trial was
thoroughly described in our previous opinion, we cite extensively from that opinion:
               Monty owned stock in two family businesses; Mamot Land & Cattle Co., Inc. and
       Mamot Trucking, Inc., and he also had an undivided one-fourth partnership interest in
       Mamot Feedlots (hereinafter referred to collectively as “Mamot Entities”). On August 31,
       2006, Monty entered into a contract with Mamot Entities for the sale of his shares of
       corporate stock and his partnership interest (hereinafter “stock purchase agreement”) for a
       purchase price of $1,700,000, payable as follows: 25-percent of the purchase price, or
       $425,000, due at closing and the balance with interest to be paid over 10 years starting in
       2007. Each yearly payment totaled $162,659.39 and became due on February 1. Following
       the execution of the stock purchase agreement, Monty resigned from his roles in Mamot
       Entities.
               As collateral for the payments due under the contract, Mamot Entities agreed to
       keep two $250,000 whole life insurance policies, # 44599169 and # 42488631, insuring

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Monty’s life, in full force and effect during the term of the stock purchase agreement. The
agreement also required Monty to maintain two $250,000 universal life insurance policies,
# 63687601 and # 63711238, which also insured his own life, for the duration of the
agreement. In the event of Monty’s death during the effective period of the agreement, the
benefits from these four life insurance policies were to be applied to any remaining balance
due to Monty. The terms of the agreement provided that the benefits from policies
# 63687601 and # 63711238 were to be exhausted prior to the benefits from policies
# 44599169 and # 42488631. Any death benefits remaining from policies # 63687601 and
# 63711238 after the balance of the stock purchase agreement had been paid were to go to
Monty’s heirs, successors, or assigns. The excess benefits from policies # 44599169 and
# 42488631 were directed to the remaining directors of Mamot Entities; Daron Mamot and
Kevin Mamot, in equal shares.
         On December 19, 2011, Monty’s wife, [Jamie], filed for divorce. On February 15,
2012, while the dissolution proceedings were pending, Monty and Jamie obtained a loan
from Heritage Bank in the amount of $344,057. As collateral for this loan, they pledged
Monty’s contractual rights under the 2006 stock purchase agreement with Mamot Entities.
The consumer security agreement Monty and Jamie executed contains the following
statement describing the collateral pledged as security for the loan: “All contract rights
including proceeds of sale from the contract agreement for purchase of corporate stock and
partnership interest dated August 31, 2006 between Monty M. Mamot, hereinafter referred
to as seller, and Mamot Land & Cattle Co., Inc., a Nebraska corporation, Mamot Trucking,
Inc., a Nebraska corporation and Mamot Feedlots, a Nebraska partnership, hereinafter
collectively referred to as buyers; whether any of the foregoing is owned now or acquired
later; all accessions, replacements, and substitutions relating to any of the foregoing; all
records of any kind relating to any of the foregoing; all proceeds relating to the foregoing
(including insurance, general intangibles and account proceeds).” The first payment on this
loan became due on February 2, 2013, in the amount of $126,304.44.
         On May 30, 2012, Monty and Jamie were divorced pursuant to a decree of
dissolution. The court incorporated the parties’ property settlement agreement into the
decree. The property settlement agreement provided that Jamie would retain the family
residence and required Monty to pay off the remaining indebtedness on the residence by
using the annual payments he received under the 2006 stock purchase agreement. The
property settlement agreement further required Monty to maintain Jamie as the primary
beneficiary on life insurance policies # 63687601 and # 63711238.
         In July 2012, Monty borrowed a total of $5,000 from [one of the] Mamot Entities.
To memorialize these transactions, Monty executed two documents in which he stated that
he had borrowed this money against his February 2013 payment under the stock purchase
agreement.
         Monty died on July 23, 2012. At the time of Monty’s death, Mamot Entities owed
Monty $572,706.37 under the 2006 stock purchase agreement. Due to Monty’s death,
Jamie, as named beneficiary, received $501,273.98 in death benefits from life insurance
policies # 63687601 and # 63711238. Records from the life insurance company

                                       -3-
demonstrate that the additional $1,273.98 Jamie received was interest for the period
following Monty’s death until the date of payment. Per the terms of the stock purchase
agreement, Mamot Entities credited the insurance proceeds Jamie received against the
outstanding balance due to Monty under the agreement.
        On February 1, 2013, Mamot Entities deposited $87,112.06, an amount which
Mamot Entities believed represented the outstanding balance due to Monty under the stock
purchase agreement, along with applicable interest, into the Howard County District Court.
Mamot Entities later sought to adjust its final payment under the stock purchase agreement
to $85,808.25. This amount reflected Mamot Entities having deducted the full amount of
life insurance benefits Jamie received (which included interest) whereas the initial deposit
had been made under the assumption that the life insurance benefits only totaled $500,000.
        Also on February 1, 2013, the special administrator of Monty’s estate and Mamot
Entities jointly filed suit against Jamie and Heritage Bank. In their operative complaint, the
special administrator and Mamot Entities sought a declaratory judgment determining that
Mamot Entities owed Monty’s estate a total of $85,808.25 as the final payment under the
stock purchase agreement. The special administrator also sought a declaratory judgment
determining that the life insurance proceeds Jamie received were to be used to satisfy the
Heritage Bank loan and for judgment against Jamie, based on the theory of unjust
enrichment, in the amounts of the outstanding Heritage Bank loan and the last payment due
under the stock purchase agreement. Finally, Mamot Entities, through an interpleader
action, sought to have the court determine the proper recipient of the final payment due
under the stock purchase agreement.
        At the time of Monty’s death, the entire Heritage Bank loan debt remained as no
payments were due until February 2013. To avoid having interest accrue on the outstanding
loan balance, Jamie made a $250,000 payment on September 21, 2012. Following Jamie’s
payment, the outstanding balance on the loan was $104,522.07. Jamie has filed a claim in
Monty’s estate to recover the $250,000 payment she had made against the loan.
        At the time of trial in May 2014, a Heritage Bank official testified that $104,823.32
remained outstanding on its loan. To partially satisfy its loan, the bank sought to obtain the
funds Mamot Entities deposited into the district court. However, the bank was not seeking
to obtain any of the life insurance benefits Jamie had received. In addition to its
involvement in the present action, Heritage Bank has also filed a claim in Monty’s estate
to recover the remaining balance due on its loan.
        In a written order following trial, the district court dismissed the declaratory
judgment actions. The court found declaratory judgments were not appropriate because the
special administrator and Mamot Entities had not raised any questions as to the validity or
construction of the stock purchase agreement, the property settlement agreement in the
decree of dissolution, or the life insurance policies. The court further stated that declaratory
judgment was inappropriate because other remedies at law were available. Specifically, the
court remarked “In addition, these prayers for relief are not appropriate in a declaratory
action because Plaintiffs have other remedies at law available to them. For instance, suits
can be filed against [Mamot Entities] by Monty’s Estate for the remaining [. . .] payments,

                                         -4-
       Mamot Entities can file suit against Monty’s Estate for breach of contract, Jamie Mamot
       could file a claim against Monty’s Estate for payments owing under the settlement
       agreement and Jamie Mamot and/or Monty’s Estate could seek an enforcement action in
       the dissolution case.”
               The court also determined that Jamie had not been unjustly enriched by receiving
       the life insurance proceeds. The court found adequate legal grounds existed for Jamie to
       retain the insurance proceeds; namely, the property settlement agreement in the decree of
       dissolution provided that Monty would maintain Jamie as the beneficiary. Finally, to
       address Mamot Entities’ interpleader action, the court ordered the funds deposited with the
       court to be returned to Mamot Entities.

Helzer v. Heritage Bank, No. A-14-683, 2015 WL 3580736 at *1-3 (Neb. Ct. App. June 9, 2015)
(selected for posting to court website).
First Appeal.
        The special administrator and Mamot Entities appealed from the district court’s order
following trial, arguing that the court erred when it (1) determined a declaratory judgment was not
an appropriate remedy, (2) determined Jamie was not unjustly enriched by receipt of the life
insurance benefits, and (3) failed to enter an order on the interpleader action. Jamie and Heritage
Bank cross-appealed, also arguing that the court erred in finding a declaratory judgment
inappropriate. They also asserted that the court should have determined the final amount owed by
Mamot Entities under the stock purchase agreement and ordered the interpleader funds be paid to
Heritage Bank.
        This court noted the parties’ various assertions with respect to the final payment under the
stock purchase agreement and the life insurance proceeds. Monty’s estate asserted entitlement to
the final payment, which it calculated to be $85,808.25. Heritage Bank and Jamie asserted Heritage
Bank was entitled to the final payment calculated to be $92,112.06 ($87,112.06 deposited in court
plus $5,000 in loans to Monty). Concerning the life insurance proceeds, Monty’s estate argued the
proceeds should be applied first to the outstanding Heritage Bank loan with any remainder passing
into the estate. Jamie asserted a contract right to the life insurance proceeds and argued she had no
obligation to pay Heritage Bank.
        We concluded that the district court abused its discretion in failing to rule on the declaratory
judgment actions, holding that the court should have (1) determined the amount of the final
payment due under the 2006 stock purchase agreement, (2) determined the proper recipient of that
final payment, and (3) addressed whether the life insurance proceeds received by Jamie should be
applied to the Heritage Bank loan. We found that the parties’ competing claims were clearly
capable of immediate judicial determination and that final resolution of the declaratory judgment
actions would have terminated the controversy as to these issues. We reversed the court’s order of
dismissal as to the declaratory judgment actions and remanded the cause to the district court for
its consideration of the underlying merits of the parties’ claims and a decision based upon the
evidence previously presented at trial.

                                                 -5-
        We found, however, that the district court did not err in determining that Jamie was not
unjustly enriched by retaining the life insurance proceeds and affirmed that determination. We also
found that Jamie did not have any obligation to Monty’s estate to satisfy the Heritage Bank loan,
a debt which the divorce decree required Monty to assume solely. We noted that while Jamie might
have some obligation to the bank due to her status as a co-borrower, we were not called upon to
decide that issue on appeal.
        Finally, we determined that the district court erred in dismissing the interpleader action for
the same reasons as discussed in connection with the declaratory judgment actions. We noted that
the parties’ arguments in support of that assigned error mirrored those raised in support of their
claims with respect to dismissal of the declaratory judgment actions. We determined that upon
remand, the court should determine the interpleader issue based upon the evidence previously
presented at trial.
Proceedings on Remand and Present Appeal.
         This court’s mandate was filed in the district court on July 29, 2015. That court thereafter
ordered briefing by the parties.
         On December 14, 2015, the district court entered judgment on the mandate. The court first
considered the loans of $5,000 to Monty from Mamot Land and Cattle (the particular Mamot Entity
which made these loans). The court found that although the notes indicated the loans would be
repaid when Monty received his annual buyout payment, the notes were not properly secured. The
court stated that since Monty died before the loan was repaid, Mamot Land and Cattle should have
filed a claim against Monty’s estate for repayment. Because there was no dispute that Monty owed
$5,000 to Mamot Land and Cattle, the court found that Monty’s estate was obligated to pay Mamot
Land and Cattle $5,000 to satisfy the loans.
         Next, the district court examined the 2006 stock purchase agreement and determined that
the life insurance provision of the agreement was void, citing public policy, the insurable interest
doctrine, Neb. Rev. Stat. § 44-103(13)(b) (Reissue 2010), and Johnson v. Nelson, 290 Neb. 703,
861 N.W.2d 705 (2015). The court reasoned that the provision requiring Monty to maintain
insurance on his own life to pay the debt Mamot Entities owed him created a situation where
Mamot Entities benefited upon Monty’s death even though they had no continuing economic
interest in Monty’s life. The court observed that this type of agreement, considered a wager on the
life of another, was against public policy at common law. The court found that the provision also
circumvented the insurable interest doctrine, codified at § 44-103(13)(b), which requires
purchasers and beneficiaries of life insurance policies (except close family members of the insured)
to have a legal and economic interest in another person’s continued life and health. Relying on the
remaining terms of the agreement, the district court found that Mamot Entities owed Monty
$572,706.36 plus interest accruing at the rate of 5.3-percent since February 1, 2012.
         In addressing the Heritage Bank mortgage, which Monty was required to pay under the
terms of the property settlement agreement and divorce decree, the district court noted testimony
from a bank representative that there was “never an assignment or anything” against the life
insurance policies. The court also observed that the consumer security agreement executed by
Monty and Jamie did not indicate that the insurance policy proceeds were assigned to the bank,

                                                -6-
but rather, pledged the buyout payments as collateral. The court rejected the argument that Jamie
should be required to pay the mortgage to avoid an unconscionable division of property and debt
through the divorce. The district court noted this same argument had been made regarding Mamot
Entities’ unjust enrichment claim, the district court’s denial of which had previously been affirmed
by this court on appeal. The district court also noted this court’s determination that Jamie does not
have any obligation to Monty’s estate to satisfy the Heritage Bank loan and that any obligation she
might have on the note is to Heritage Bank due to her status as a co-borrower. The court determined
that Monty’s estate is obligated to pay the remaining mortgage at Heritage Bank and that Jamie
has the right to be reimbursed for all principal and interest payments she made on the mortgage.
        In addressing the proceeds of the life insurance policies, the district court observed that
Jamie was a named beneficiary of the policies and did not assign her rights under the policies to
Heritage Bank or anyone else. The district court noted this court’s determination that Jamie was
legally entitled to the proceeds upon Monty’s death. The court declared that the life insurance
proceeds received by Jamie do not satisfy the obligation under the decree that requires Monty, now
Monty’s estate, to pay off the mortgage. The court found that Jamie was entitled to keep the
proceeds of life insurance policy # 63687601 and # 63711238, that Jamie was not required to apply
the proceeds to the Heritage Bank loan, and again stated that Monty’s estate was required to pay
the entire mortgage at Heritage Bank.
        Finally, the district court observed that Mamot Entities deposited $87,112.06 with the court
on February 1, 2013, which was returned to Mamot Entities on June 30, 2014 when the initial
judgment was entered. Accordingly, the court determined that no interpleader funds were currently
being held by the court.
        Subsequently, the district court overruled a motion for new trial and supplement to that
motion filed by Mamot Entities, and Mamot Entities perfected the present appeal to this court.
                                   ASSIGNMENTS OF ERROR
        Mamot Entities asserts, reordered, that the district court erred in (1) finding the 2006 stock
purchase agreement void with respect to the provision requiring Monty to maintain life insurance
to satisfy a debt owed by Mamot Entities, (2) determining that Mamot Entities was obligated to
pay Monty’s estate $572,706.36 plus interest at the rate of 5.3-percent since February 1, 2012, (3)
determining that the over $500,000 of insurance proceeds received by Jamie did not satisfy
Monty’s obligation to pay the Heritage Bank loan under the decree and discharge the mortgage of
the parties, and (4) finding no interpleader funds were currently held by the court.
                                    STANDARD OF REVIEW
        The construction of a mandate issued by an appellate court presents a question of law.
Liljestrand v. Dell Enters., 287 Neb. 242, 842 N.W.2d 575 (2014). When reviewing questions of
law, an appellate court has an obligation to resolve the questions independently of the conclusion
reached by the trial court. Anderson v. Union Pacific RR. Co., 295 Neb. 785, ___ N.W.2d ___
(2017).
        An action for declaratory judgment is sui generis; whether such action is to be treated as
one at law or one in equity is to be determined by the nature of the dispute. Pettit v. Nebraska

                                                -7-
Dept. of Corr. Servs., 291 Neb. 513, 867 N.W.2d 553 (2015). When a declaratory judgment dispute
sounds in contract, the action is treated as one at law. Timberlake v. Douglas County, 291 Neb.
387, 865 N.W.2d 788 (2015). In a bench trial of a law action, the trial court’s factual findings have
the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong. Donut
Holdings v. Risberg, 294 Neb. 861, 885 N.W.2d 670 (2016). When a declaratory judgment action
presents a question of law, an appellate court has an obligation to reach its conclusion
independently of the conclusion reached by the trial court with regard to that question. Adams v.
State, 293 Neb. 612, 879 N.W.2d 18 (2016).
                                            ANALYSIS
Life Insurance Provision of Stock Purchase Agreement.
         Mamot Entities asserts that the district court erred in finding the 2006 stock purchase
agreement void with respect to the provision requiring Monty to maintain life insurance to satisfy
a debt owed by Mamot Entities.
         We first address Mamot Entities’ argument that the district court’s finding, that the life
insurance provision of the stock purchase agreement was void, violated the law-of-the-case
doctrine. Mamot Entities argues that because Jamie never took the position that the provision was
void at trial, the district court did not have the power to decide that issue on remand. Mamot
Entities argues that this court’s mandate restricted the district court on remand to determining an
amount owed between $85,000 and $92,000 and that the court went too far in declaring the life
insurance provision void.
         Under the law-of-the-case doctrine, the holdings of an appellate court on questions
presented to it in reviewing proceedings of the trial court become the law of the case; those
holdings conclusively settle, for purposes of that litigation, all matters ruled upon, either expressly
or by necessary implication. State v. Merchant, 288 Neb. 439, 848 N.W.2d 630 (2014). The
law-of-the-case doctrine operates to preclude a reconsideration of substantially similar, if not
identical, issues at successive stages of the same suit or prosecution. Id. After receiving a mandate,
a trial court is without power to affect rights and duties outside the scope of the remand from an
appellate court. Klingelhoefer v. Monif, 286 Neb. 675, 839 N.W.2d 247 (2013). A district court
has an unqualified duty to follow the mandate issued by an appellate court and must enter judgment
in conformity with the opinion and judgment of the appellate court. Id.
         With respect to the stock purchase agreement, we concluded that the district court should
have determined the amount of the final payment due under the agreement as well as the proper
recipient of that payment. We found that the parties’ competing claims were clearly capable of
immediate judicial determination and that final resolution of the declaratory judgment actions
would have terminated the controversy as to these issues. We reversed the court’s order of
dismissal as to the declaratory judgment actions and remanded the cause to the court for its
consideration of the underlying merits of the parties’ claims and decision based upon the evidence
previously presented at trial. While we noted the parties’ claims on appeal as to the amount of the
final payment, we did not direct the district court to make a determination of an amount between
$85,808.25 (as claimed by Monty’s estate) and $92,112.06 (as claimed by Jamie and Mamot
Entities). Rather, we directed the court to determine the amount of the final payment due. Such a

                                                 -8-
determination required the court to examine the terms of the stock purchase agreement, which it
did. The court’s examination of the terms of the stock purchase agreement was within the scope
of this court’s mandate, and the court did not violate the law-of-the-case doctrine.
        With respect to the district court’s determination that the life insurance provision was void,
we find no error. A similar situation was discussed by the Nebraska Supreme Court in Johnson v.
Nelson, 290 Neb. 703, 861 N.W.2d 705 (2015). In that case, a tenant farmer had a written
agreement with his landlord to purchase farmland the tenant had been renting from the landlord
and the landlord’s sister after the landlord’s death. The purchase price was funded by an insurance
policy owned by the tenant on the landlord’s life. After the landlord’s death, the life insurance
proceeds were paid to the tenant, who tendered them per the agreement, but the landlord’s estate
refused to complete the sale. The tenant filed suit for specific performance, and the estate
answered, alleging the agreement was void for various reasons, including that the tenant lacked an
insurable interest in the landlord’s life. The trial court found the land purchase agreement
unenforceable because the landlord did not have authority to make the sale on behalf of his sister
and the purchase price could not be allocated to a portion of land owned only by the landlord. The
court rejected the estate’s claim the agreement was void, reasoning that the estate had no standing
to make the claim. The court also rejected a counterclaim by the estate for equitable distribution
of the insurance proceeds.
        On appeal, the Nebraska Supreme Court addressed the estate’s claim that the agreement
was void because the tenant lacked an insurable interest in the landlord’s life. The Court noted that
at common law, life insurance policies issued to a party not having an insurable interest in the life
of an insured are considered a wager on the life of another and therefore void as being against
public policy. Johnson v. Nelson, supra. A contract which is clearly contrary to public policy is
void. Id. The determination of whether a contract violates public policy presents a question of law.
Id.
        The Nebraska Supreme Court then reviewed certain case law with respect to standing and
rejected the lower court’s conclusion, in reliance on Ryan v. Tickle, 210 Neb. 630, 316 N.W.2d
580 (1982), that only the insurer can assert a claim against a beneficiary based on a lack of
insurable interest. The Johnson court found that Ryan, which dealt with a challenge to an insurable
interest in the context of standing to claim insurance proceeds, did not preclude the estate’s defense
that the agreement in Johnson was void because it was funded by insurance on the life of someone
in whom the owner and beneficiary of the policy had no insurable interest.
        In determining whether the defense had merit, the Nebraska Supreme Court looked to
§ 43-103(13)(b), which provides that an “[i]nsurable interest, in the matter of life and health
insurance, exists when the beneficiary because of relationship, either pecuniary or from ties of
blood or marriage, has reason to expect some benefit from the continuance of the life of the
insured.” Because the landlord and tenant were not related by blood or marriage, the Court
examined their “pecuniary” relationship. The Court observed that the landlord and tenant were not
business partners, had no employment relationship, and did not have a debtor-creditor relationship.
The Court concluded that the landlord-tenant relationship in that case was not a pecuniary
relationship that could provide the tenant with an insurable interest in the landlord’s life. The tenant
had no reason to expect pecuniary benefit from the landlord’s continued life and benefited from a

                                                 -9-
sooner death by having to pay fewer insurance premiums. The Court stated that the tenant was
effectively gambling that the landlord would die sooner rather than later, which “is precisely the
reason why an insurance policy on the life of one in whom the owner and beneficiary of the policy
lacks an insurable interest is void as against public policy.” 290 Neb. at 715, 861 N.W.2d 715
(2015). The Court concluded that the agreement was void as against public policy because it
incorporated a financing mechanism comprised of an insurance policy in which the tenant, as
owner and beneficiary, lacked an insurable interest in the life of the insured landlord.
         In the present case, the district court first noted that the 2006 stock purchase agreement
eliminated any ownership interest Monty had in Mamot Entities, the only remaining relationship
being the payments of $162,659.39 per year until 2016. The court stated that the agreement
contained a provision requiring that the proceeds of an insurance policy on Monty’s life be used
to satisfy a debt owed by Mamot Entities to Monty, creating a situation where Mamot Entities
benefited upon Monty’s death even though it had no continuing economic interest in his life. The
court determined that at the time the agreement was made, Mamot Entities could not legally be
named as the beneficiary or owner of a policy insuring Monty’s life because Mamot Entities did
not have a legal and economic interest in Monty’s life. The court stated, “Although Mamot Entities
is not the named beneficiary on the life insurance policies, if this provision of the [stock purchase
agreement] were enforced, they would become the de facto beneficiaries.” The court found the
financing agreement in this case similar to that presented in Johnson v. Nelson, 290 Neb. 703, 861
N.W.2d 705 (2015) and concluded that public policy, the insurable interest doctrine,
§ 44-103(13)(b), and Johnson v. Nelson required the portion of the agreement requiring Monty to
maintain insurance on his own life to pay the debt owed to him by Mamot Entities be declared
void.
         The district court then examined the other terms of the 2006 stock purchase agreement to
determine if they were enforceable. The court observed that while the unenforceable portion of the
agreement might be financially important to Mamot Entities, it was not an essential or crucial term
of the agreement. The court noted that Monty and Mamot Entities agreed on a buyout amount and
the terms of the buyout, observing that if Monty had lived through 2016, the provision regarding
his life insurance policy would have had no effect. The court reasoned that Mamot Entities would
have continued to pay installments as agreed, and thus, the term regarding Monty’s life insurance
was not an essential part of the agreement and did not affect the amount or terms of the buyout.
The court concluded that the essential terms of the agreement were that Monty leave the businesses
and that Mamot Entities pay the agreement amount. The court found that these were common and
conventional terms which did not violate public policy and were thus enforceable. Relying on the
essential terms of the stock purchase agreement, the court found that Mamot Entities owed Monty
$572,706.36 plus interest accruing at the rate of 5.3-percent since February 1, 2012.
         We agree with the district court’s analysis. As set forth above, there were four whole life
insurance policies on Monty’s life referenced in the stock purchase agreement--two owned by
Mamot Entities and two owned by Monty. Mamot Entities did not have an insurable interest in
Monty’s life. The corporate entities, as opposed to the shareholders, were not related to him by
blood or marriage. Through the stock purchase agreement Monty sold his shares of corporate stock
and his partnership interest to Mamot Entities. The remaining pecuniary relationship was that of

                                               - 10 -
parties to the stock purchase agreement. Monty was no longer a business partner, was not an
employee, and at the time of the 2006 agreement did not have a debtor-creditor relationship with
Mamot Entities. In the event of Monty’s death, however, Mamot Entities’ obligation to Monty
would be reduced by up to $500,000 from the life insurance proceeds.
         A contractual provision should not be declared void as contrary to public policy unless it
is clearly and unmistakably repugnant to the public interest. Hearst-Argyle Prop. v. Entrex Comm.
Servs., 279 Neb. 468, 778 N.W.2d 465 (2010). Although the stock purchase agreement, unlike the
agreement in Johnson v. Nelson, was not financed solely through the life insurance policy
provision, it was still a gamble by Mamot Entities that Monty would die sooner rather than later.
Because Mamot Entities lacked an insurable interest in Monty’s life, the life insurance provision
of the 2006 stock purchase agreement is clearly void as against public policy. See Johnson v.
Nelson, 290 Neb. 703 at 715. We find no error in the court’s conclusion in this regard.
         Nebraska case law shows that contract provisions may be severable. See, e.g., Suburban
Air Freight, Inc. v. Aust, 262 Neb. 908, 636 N.W.2d 629 (2001) (finding void provision in
employment contract severable from rest of contract which had legitimate purpose independent of
void provision); Gaspar v. Flott, 209 Neb. 260, 307 N.W.2d 500 (1981); Edwards v. Edwards, 16
Neb. App. 297, 298, 744 N.W.2d 243, 246 (2008). A contract based on considerations, a part of
which may be illegal, and a part legal and valid in all respects, will, if separable, be enforced as to
its legal provision. Shevalier v. Doyle, 88 Neb. 560, 130 N.W. 417 (1911). See, also, Union Tank
Car Co. v. Lindsay Soft Water Corp. of Omaha, 257 F. Supp. 510 (D. Neb. 1966), affirmed sub
nom. Heaton Distrib. Co. v. Union Tank Car Co., 387 F.2d 477 (8th Cir. 1967) (fact that one part
of agreement may be void or unenforceable does not render void entire agreement); Restatement
(Second) of Contracts § 184 (1981) (stating the rule of partial enforcement with the omission of
an offending but not essential provision).
         As determined by the district court, the life insurance provision was not an essential part
of the stock purchase agreement. The essential terms were that Monty leave the business and
Mamot Entities pay the agreed amount. The district court did not err in finding these provisions
enforceable.
Amount Owed for Final Payment Under Stock Purchase Agreement.
        Mamot Entities asserts that the district court erred in determining that Mamot Entities were
obligated to pay Monty’s estate $572,706.36 plus interest at the rate of 5.3-percent since February
1, 2012. Mamot Entities does not dispute that $572,706.36 was the amount still owed at the time
of Monty’s death, but it maintains that the life insurance proceeds should be offset against the
amount owed. We have already determined that the court did not err in finding that the life
insurance provision of the stock purchase agreement was void. The district court relied on the
remaining provisions of the agreement to find that Mamot Entities owed Monty $572,706.36 plus
interest. We find no error in this determination.
Jamie’s Retention of Life Insurance Proceeds.
        Mamot Entities asserts that the district court erred in determining that the over $500,000
of insurance proceeds received by Jamie did not satisfy Monty’s obligation to pay the Heritage

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Bank loan under the decree and discharge the mortgage of the parties. Mamot Entities also argues
that Jamie’s retention of the life insurance proceeds results in an inequitable division of the marital
estate in the divorce action.
        Mamot Entities previously made this argument in connection with its unjust enrichment
claim, which was denied by the district court following trial. In affirming that determination in the
first appeal, we stated:
        The property division in the divorce decree unambiguously required Monty to maintain
        Jamie as the beneficiary under the two life insurance policies. As the beneficiary under
        those policies, Jamie was legally entitled to the proceeds upon Monty’s death. Because
        Jamie has chosen to exercise her rights under the divorce decree, she cannot have been
        unjustly enriched by retaining the life insurance proceeds.

Helzer v. Heritage Bank, supra at *6. We also found that Jamie did not have any obligation to
Monty’s estate to satisfy the Heritage Bank loan and that any obligation she might have was to
Heritage Bank due to her status as a co-borrower.
        The issue of unjust enrichment was conclusively settled for purposes of this litigation at
the time of the previous appeal. See State v. Merchant, 288 Neb. 439, 848 N.W.2d 630 (2014)
(law-of-the-case doctrine operates to preclude reconsideration of substantially similar, if not
identical, issues at successive stages of the same suit or prosecution). Further, the decree dissolving
Jamie and Monty’s marriage and settling and dividing their marital property is final and is res
judicata as to the rights of the parties to the divorce. See Neujahr v. Neujahr, 223 Neb. 722, 393
N.W.2d 47 (1986) (absent appeal, decree of dissolution is final and is res judicata as to rights of
parties); White v. White, 203 Neb. 782, 280 N.W.2d 78 (1979) (decree of dissolution settling and
dividing property of parties is not subject to appellate review respecting such division and
assignment of property absent timely appeal and when final, is res judicata as to parties on award
and assignment of property therein). Mamot Entities was not a party to the dissolution action and
may not challenge the provisions of the decree.
        In our previous opinion, we determined that the district court should have addressed
whether the life insurance proceeds Jamie received should be applied to the Heritage Bank loan.
On remand, the court found that Jamie was entitled to keep the proceeds because she was named
as the beneficiary of the life insurance policies, the decree required Monty to maintain her as a
beneficiary, and Jamie did not assign her rights under the policies to Heritage Bank or anyone else.
The court found that the evidence conclusively showed that Heritage Bank did not have an
assignment and/or security interest in the life insurance proceeds and determined that the proceeds
received by Jamie do not satisfy the obligation of Monty, via his estate, to pay off the mortgage.
The court determined that Monty’s estate was required to pay the entire mortgage at Heritage
Bank. The court did not err in making this determination.
Interpleader Funds Held by District Court.
        Mamot Entities asserts that the district court erred in finding no interpleader funds were
currently held by the court. The court noted that the $87,112.06 deposited by Mamot Entities with
the court in February 2013 was returned to Mamot Entities at the time the initial judgment was

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entered. Mamot Entities argues that this determination was in error, because Mamot Entities did
not cash the check from the court. It also argues that the district court did not follow this court’s
mandate to determine the interpleader issue based upon the evidence presented at trial.
        There was some discussion about the uncashed check at the hearing on the motion for new
trial. While it is clear that Mamot Entities did not cash the check for the funds returned by the court
prior to that hearing, it is not clear from the record what actually happened with regard to the check
upon the conclusion of the hearing. The parties discussed a supersedeas bond in the event the court
overruled the motion for new trial. Mamot Entities’ attorney suggested that the amount that had
been returned by the court be credited toward the cash deposit for a supersedeas bond. The court
observed that “if you want to cash the check and deposit some more money with the Court that’s
fine,” but that otherwise payment would have to be stopped on the check originally issued to
Mamot Entities by the court. Mamot Entities’ attorney observed that the check for the funds
returned by the court, dated June 30, 2014, was “already stale.” The court observed that if Mamot
Entities presented the check to its bank and the check was not accepted, the court could have the
clerk issue a new check. The court then declined to discuss the check further and stated that it
would take the matter under advisement and set the cash bond in the amount it deemed appropriate.
In the order overruling the motion for new trial, the court set an appeal bond in the amount of
$713,000 cash to be deposited with the clerk of the court.
        It is clear that the court returned the funds which had been deposited with it by Mamot
Entities as a result of its first order. We find no error in the district court’s determination in its
December 2015 judgment on mandate that no interpleader funds were currently held by the court.
        The court entered judgment in conformity with this court’s opinion and judgment in the
previous appeal. See Klingelhoefer v. Monif, 286 Neb. 675, 839 N.W.2d 247 (2013). The court
followed our mandate by determining that Mamot Entities was obligated to make the final payment
under the 2006 stock purchase agreement and that Monty’s estate was obligated to pay the Heritage
Bank loan. This assignment of error is without merit.
                                          CONCLUSION
        The district court’s order on remand was within the scope of this court’s mandate. The
court did not err in finding the life insurance provision of the 2006 stock purchase agreement was
void or in relying on the remaining terms of the agreement to find that Mamot Entities owed Monty
$572,706.36 plus interest. Further, the court did not err in determining that Monty’s estate was
required to pay the entire mortgage at Heritage Bank, finding that Jamie was entitled to retain the
life insurance proceeds, or in determining that no interpleader funds were currently held by the
court.
                                                                                         AFFIRMED.

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