Court Opinion

ID: 9404559
Source: CourtListenerOpinion
Date Created: 2023-06-23 14:07:16.915168+00
Date Added: 2024-06-11T17:20:14.924878
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
06/23/2023 09:07 AM CDT

                                                      - 565 -
                               Nebraska Supreme Court Advance Sheets
                                        314 Nebraska Reports
                                          IN RE ESTATE OF WIGGINS
                                              Cite as 314 Neb. 565

                          In re Estate of Jordon R. Wiggins, deceased.
                          Allison Hardy, as guardian and next friend
                            of Elizabeth Wiggins and Leah Wiggins,
                          minor children, appellant, v. Jason Wiggins,
                            as interested party, and Robert Wiggins,
                                as Personal Representative of the
                                   Estate of Jordon R. Wiggins,
                                       deceased, appellees.
                                                  ___ N.W.2d ___

                                        Filed June 23, 2023.    No. S-22-543.

                 1. Declaratory Judgments. 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.
                 2. Contracts: Reformation: Equity. An action to reform a contract sounds
                    in equity.
                 3. Equity: Appeal and Error. On appeal from an equity action, an appel-
                    late court decides factual questions de novo on the record and, as to
                    questions of both fact and law, is obligated to reach a conclusion inde-
                    pendent of the trial court’s determination.
                 4. Actions: Rescission: Equity. An action for rescission sounds in equity.
                 5. Contracts. A settlement agreement is subject to the general principles of
                    contract law.
                 6. Reformation. Reformation is based on the premise that the parties had
                    reached an agreement concerning an instrument, but while reducing
                    their agreement to a written form, and as the result of mutual mistake or
                    fraud, some provision or language was omitted from, inserted, or incor-
                    rectly stated in the instrument intended to be an expression of the actual
                    agreement of the parties.
                 7. Reformation: Fraud. Reformation may be ordered where there has
                    been a mutual mistake or where there has been a unilateral mistake
                    caused by the fraud or inequitable conduct of the other party.
                                     - 566 -
            Nebraska Supreme Court Advance Sheets
                     314 Nebraska Reports
                         IN RE ESTATE OF WIGGINS
                             Cite as 314 Neb. 565

 8. Reformation: Intent. A mutual mistake exists where there has been a
    meeting of the minds of the parties and an agreement actually entered
    into, but the agreement in its written form does not express what was
    really intended by the parties.
 9. Contracts: Rescission. Rescission may be granted where the parties
    have apparently entered into a contract evidenced by a writing, but
    owing to a mistake, their minds did not meet as to all the essential ele-
    ments of the transaction, so that no real contract was made by them.
10. ____: ____. Generally, grounds for cancellation or rescission of a con-
    tract include fraud, duress, unilateral or mutual mistake, and inadequacy
    of consideration.
11. Equity. Equity strives to do justice; it is not a rigid concept, but, instead,
    is determined on a case-by-case basis according to concepts of justice
    and fairness.
12. Contracts: Rescission: Parties. The purpose of rescission is to place
    the parties in a status quo, that is, return the parties to their position
    which existed before the rescinded contract.

   Appeal from the County Court for Douglas County: Sheryl
L. Lohaus, Judge. Reversed and remanded with directions.
  Jarrod D. Reece, of Likes Meyerson Hatch, L.L.C., for
appellant.
  Jaynee M. Tyler and Brenda K. Smith, of Dvorak Law
Group, L.L.C., for appellee Jason Wiggins.
  Adam J. Wachal and James A. Tews, of Koley Jessen, P.C.,
L.L.O., for appellee Robert Wiggins.
  Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
   Funke, J.
                       INTRODUCTION
   The decedent’s brother; the decedent’s ex-wife, as guard-
ian and next friend of the minor children; and the decedent’s
father, as personal representative of the decedent’s estate,
entered into a settlement agreement to resolve a claim against
the estate regarding life insurance coverage that the decedent
                             - 567 -
         Nebraska Supreme Court Advance Sheets
                  314 Nebraska Reports
                   IN RE ESTATE OF WIGGINS
                       Cite as 314 Neb. 565

was required under a divorce decree to maintain for the chil-
dren’s benefit. Subsequently, the parties jointly petitioned the
county court for Douglas County, Nebraska, for a declaration
of their rights and obligations under the agreement. The county
court ruled in favor of the brother and reformed the agreement
accordingly. The ex-wife appeals. We reverse the judgment and
remand the cause to the county court with directions to rescind
the settlement agreement and conduct further proceedings not
inconsistent with this opinion.
                        BACKGROUND
   Jordon R. Wiggins died on August 28, 2019. Prior to his
death, Jordon executed a will, which established the Jordon
R. Wiggins Family Trust (the Trust) for his children’s benefit.
Jordon’s father, Robert Wiggins, was appointed personal repre-
sentative of Jordon’s estate on October 17, 2019.
   Jordon was previously married to Allison Hardy, and two
minor children, Elizabeth Wiggins and Leah Wiggins, were
born to them during the marriage. The divorce decree required
Jordon and Allison each to “maintain a life insurance policy”
of at least $250,000 “to provide for the minor children” if
Jordon or Allison died.
   On December 20, 2019, Allison brought a claim for
$250,000 plus interest against the estate on the children’s
behalf, alleging that the personal representative had not yet
identified any life insurance policy maintained by Jordon for
the children’s benefit. However, after the claim was brought,
Jordon’s former employer informed Jordon’s brother, Jason
Wiggins, that Jason was the sole beneficiary of Jordon’s
two employer-provided life insurance policies, valued at
$360,000 total.
   Subsequently, on or around June 2, 2020, Jason, as an
interested party; Allison, on behalf of the minor children;
and Robert, as personal representative, agreed to settle
Allison’s claim against the estate. The settlement agreement
began by acknowledging that “to the best of the [p]arties’
                              - 568 -
         Nebraska Supreme Court Advance Sheets
                  314 Nebraska Reports
                    IN RE ESTATE OF WIGGINS
                        Cite as 314 Neb. 565

knowledge,” Jordon had not designated the children as ben-
eficiaries of a life insurance policy of at least $250,000. The
agreement then called for Jason to “gift” $250,000 of the insur-
ance proceeds that he received to the Trust, whereupon Allison
would withdraw the claim.
   However, after they entered the settlement agreement, the
parties learned that Jordon’s daughter Elizabeth was actu-
ally the beneficiary of one of Jordon’s life insurance policies,
while Jason was the beneficiary of the other policy. Thereafter,
the insurer paid $120,000 “directly” to Elizabeth; this money
was not placed in the Trust. The insurer also paid $240,000
to Jason, who then paid $130,000 into the Trust and retained
$110,000. Allison took issue with Jason’s action, arguing that
he was required under the divorce decree, the settlement agree-
ment, and Nebraska law to pay the entire $240,000 into the
Trust for the children.
   The parties jointly asked the county court to declare their
rights and obligations as to the life insurance proceeds and, in
particular, whether Jason must pay the remaining $110,000 into
the Trust. Simultaneously with their joint motion for declara-
tory judgment, the parties submitted a joint stipulation of facts,
which recited the foregoing facts as to the divorce decree, the
settlement agreement, and the discovery that Jordon had a life
insurance policy for Elizabeth’s benefit.
   At the hearing on the motion for declaratory judgment,
Jason argued that the settlement agreement should be
rescinded on various grounds, including the parties’ mutual
mistake as to Jordon’s life insurance coverage. Alternatively,
Jason argued that the agreement should be reformed due
to this mutual mistake. Allison countered that there was no
basis for reformation or rescission, because the agreement in
its written form correctly expressed the parties’ intent at the
time they entered the agreement and Jason assumed the risk
of mistake. Allison and Jason also disagreed as to whether
Jordon’s designation of Jason as the beneficiary of a life
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            Nebraska Supreme Court Advance Sheets
                     314 Nebraska Reports
                        IN RE ESTATE OF WIGGINS
                            Cite as 314 Neb. 565

insurance policy was effective under Jantzen v. Jantzen 1 and
related cases, or whether those cases apply only to changes
in beneficiaries made after the entry of a divorce decree. The
personal representative took no position on these matters.
   The county court ruled in Jason’s favor. The county court
found that Jordon had partially satisfied his obligations
under the divorce decree by providing a $120,000 policy
for Elizabeth’s benefit and that the use of the word “gift” in
the settlement agreement reflected the parties’ understanding
that Jason had no legal obligation to pay any life insurance
proceeds to the Trust. Accordingly, the county court ordered
that the $130,000 that Jason paid into the Trust satisfied his
obligation under the settlement agreement, because he was
entitled to a credit of $120,000 for the life insurance proceeds
that Elizabeth received. Believing that this $120,000 had been
placed in the Trust, the county court also ordered that the
$250,000 received into the Trust for the children’s benefit sat-
isfied the claim against the estate. It ordered that the settlement
agreement be reformed accordingly.
   Allison appeals, and we moved the matter to our docket. 2

                  ASSIGNMENTS OF ERROR
   Allison’s brief on appeal assigns multiple errors. However,
because they are dispositive, we need address only her assign-
ments, restated, that the county court erred in reforming the set-
tlement agreement and failing to declare that Jason is required
to pay the remaining $110,000 in life insurance proceeds into
the Trust.

                STANDARD OF REVIEW
  [1-4] An action for declaratory judgment is sui generis;
whether such action is to be treated as one at law or one
1
    Jantzen v. Jantzen, 257 Neb. 78, 595 N.W.2d 230 (1999).
2
    See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2022).
                                  - 570 -
            Nebraska Supreme Court Advance Sheets
                     314 Nebraska Reports
                        IN RE ESTATE OF WIGGINS
                            Cite as 314 Neb. 565

in equity is to be determined by the nature of the dispute. 3 An
action to reform a contract sounds in equity. 4 On appeal from
an equity action, an appellate court decides factual questions
de novo on the record and, as to questions of both fact and
law, is obligated to reach a conclusion independent of the trial
court’s determination. 5 The same standard applies to an action
for rescission, which also sounds in equity. 6

                           ANALYSIS
   Allison argues that the settlement agreement should be
enforced against Jason because the agreement as written accu-
rately reflects the parties’ intent at the time they signed the
agreement. As such, she argues, there is no mutual mistake
warranting reformation or rescission. Alternatively, she argues
that insofar as the parties were mistaken about Jordon’s insur-
ance coverage, Jason bears the risk of mistake, because he
signed the agreement “despite being fully aware that he had
limited facts regarding what (if anything) he would ultimately
receive from the life insurance company.” 7 Jason counters that
the agreement should be reformed or rescinded because “both
parties were influenced by inaccurately presented facts” when
drafting the agreement. 8 We agree with Allison that the county
court erred in reforming the agreement; however, contrary to
Allison’s argument that the agreement is enforceable, we find
that it should be rescinded.
3
    Malousek v. Meyer, 309 Neb. 803, 962 N.W.2d 676 (2021).
4
    R & B Farms v. Cedar Valley Acres, 281 Neb. 706, 798 N.W.2d 121
    (2011).
5
    Darling Ingredients v. City of Bellevue, 313 Neb. 853, 986 N.W.2d 757
    (2023).
6
    See In re Claims Against Pierce Elevator, 291 Neb. 798, 868 N.W.2d 781
    (2015).
7
    Brief for appellant at 33.
8
    Brief for appellee Jason at 21.
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                         IN RE ESTATE OF WIGGINS
                             Cite as 314 Neb. 565

   [5] As we have previously stated, a settlement agreement
is subject to the general principles of contract law. 9 This
means that settlement agreements are subject to reformation
and rescission (also referred to in our opinions as cancellation).
Both reformation and rescission are equitable remedies that can
relieve a party from performing obligations under a contract
or an apparent contract. However, although reformation and
rescission have been described as “analogous,” 10 they differ in
their bases and effects. In particular, as relevant here, reforma-
tion and rescission differ in what constitutes a mutual mistake
warranting equitable relief under Nebraska law.
   [6,7] We turn first to reformation. Reformation is based
on the premise that the parties had reached an agreement
concerning an instrument, but while reducing their agree-
ment to a written form, and as the result of mutual mistake
or fraud, some provision or language was omitted from,
inserted, or incorrectly stated in the instrument intended to
be an expression of the actual agreement of the parties. 11 In
such cases, reformation may be granted to correct an errone-
ous instrument to express the true intent of the parties to the
instrument. 12 Specifically, reformation may be ordered where
there has been a mutual mistake or where there has been a
unilateral mistake caused by the fraud or inequitable conduct
of the other party. 13
   [8] For purposes of reformation, a mutual mistake exists
where there has been a meeting of the minds of the parties
and an agreement actually entered into, but the agreement in
its written form does not express what was really intended by
the parties. 14
 9
     Village of Memphis v. Frahm, 287 Neb. 427, 843 N.W.2d 608 (2014).
10
     Boyd v. Realty Co., 131 W. Va. 150, 157, 46 S.E.2d 633, 637 (1948).
11
     Jelsma v. Acceptance Ins. Co., 233 Neb. 556, 446 N.W.2d 725 (1989).
12
     Id.
13
     Id.
14
     R & B Farms, supra note 4.
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                         IN RE ESTATE OF WIGGINS
                             Cite as 314 Neb. 565

   For example, in Newton v. Brown, 15 we found a mutual
mistake warranting reformation where because of a scrivener’s
error, a deed failed to include a reservation of mineral rights
that was provided for in the contract for the sale of the prop-
erty. Similarly, in Johnson v. Stover, 16 we found a mutual mis-
take warranting reformation where because of the “inequitable
conduct” of a party, the deed did not correctly describe the land
that the parties had agreed would be conveyed.
   [9,10] Rescission, in contrast, may be granted where the
parties have apparently entered into a contract evidenced by
a writing, but owing to a mistake, their minds did not meet as
to all the essential elements of the transaction, so that no real
contract was made by them. 17 Generally, grounds for cancella-
tion or rescission of a contract include fraud, duress, unilateral
or mutual mistake, and inadequacy of consideration. 18
   When used in reference to rescission, however, the term
“mutual mistake” is not limited to a mistake in drafting the
instrument. 19 Instead, it refers to a mistake of fact “in the mak-
ing of the contract. . . . If there has been any misunder­standing
between the parties, or a misapprehension by one or both,
so that there is no mutuality of assent, then the parties have
not made a contract, and neither will the court do so for
them.” 20 Specifically, for purposes of rescission, a mutual
mistake of fact must relate to either a present or past fact or
15
     Newton v. Brown, 222 Neb. 605, 386 N.W.2d 424 (1986). See, also,
     Nebraska State Bank v. Pedersen, 234 Neb. 499, 452 N.W.2d 12 (1990)
     (reformation warranted where there was clear and convincing evidence
     parties intended two persons as mortgagors, but their names were excluded
     from grantor’s clause in mortgage due to scrivener’s error).
16
     Johnson v. Stover, 218 Neb. 250, 256, 354 N.W.2d 142, 146 (1984).
17
     See In re Estate of Potthoff, 6 Neb. App. 418, 573 N.W.2d 793 (1998).
18
     Turbines Ltd. v. Transupport, Inc., 285 Neb. 129, 825 N.W.2d 767 (2013).
19
     27 Richard A. Lord, A Treatise on the Law of Contracts by Samuel
     Williston § 70:19 (4th ed. 2020).
20
     Id. at 241-42.
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                        IN RE ESTATE OF WIGGINS
                            Cite as 314 Neb. 565

facts that are material to the contract, and not to an opinion as
to future conditions as the result of present known facts. 21
   This difference as to what constitutes a mutual mistake
for purposes of reformation and for purposes of rescission
means that a mistake which is not ground for reformation
may give a right to rescind, as we explained over a century
ago in Farmers Loan & Trust Co. v. Suydam. 22 The parties
in Suydam were unaware of a tax lien from a specific year
when they drafted a deed. We found that reformation was
not warranted because the “deed was made by the parties
precisely as they intended it.” 23 Nonetheless, we found that
rescission was appropriate due to the mutual mistake of fact,
which precluded a meeting of the minds. More recently, the
Nebraska Court of Appeals took a similar view in Stitch
Ranch v. Double B.J. Farms, 24 finding that recission was
warranted where the parties attached different meanings to a
phrase used in the contract. After observing that “nobody has
asserted [the phrase] was a nonessential term,” the Court of
Appeals concluded that there was no meeting of the minds as
to the term. 25
   In the present case, Allison is correct that there was no
mutual mistake for purposes of reformation. No one has
argued that any provision or language was omitted from,
inserted in, or incorrectly stated in the settlement agreement
as written, causing it to differ from the parties’ intent. To the
contrary, the parties jointly stipulated that “[t]he [s]ettlement
[a]greement accurately reflects the agreement that the parties
hereto reached on or about June 2, 2020.” As such, the county
court erred in reforming the settlement agreement. We offer
21
     Oliver v. Clark, 248 Neb. 631, 537 N.W.2d 635 (1995).
22
     Farmers Loan & Trust Co. v. Suydam, 69 Neb. 407, 95 N.W. 867 (1903).
23
     Id. at 410, 95 N.W. at 868.
24
     Stitch Ranch v. Double B.J. Farms, 21 Neb. App. 328, 837 N.W.2d 870
     (2013).
25
     Id. at 352, 837 N.W.2d at 887.
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                         IN RE ESTATE OF WIGGINS
                             Cite as 314 Neb. 565

no opinion regarding Allison’s related arguments that refor-
mation was erroneous because the county court mistakenly
believed Jason had a legal right to the life insurance proceeds
and improperly inferred the parties’ intent from their use of
the word “gift” in the settlement agreement. 26
   The situation is different as to rescission. Here, as in
Suydam and Stitch Ranch, the evidence clearly and convinc-
ingly shows that the parties were mutually mistaken as to
a fact which was a material inducement for the contract.
Specifically, their mutual mistake of fact was their belief that
Jordon failed to maintain any life insurance for the benefit of
the children and instead named Jason as the sole beneficiary.
The parties acknowledge this in the stipulated facts, stating
as follows:
      At the time of entering into the [s]ettlement [a]greement,
      the parties hereto had been informed by the relevant
      insurance companies and [Jordon’s] previous employers,
      and they therefore believed, that [Jordon] had not named
      either of the [m]inor [c]hildren as beneficiaries on any
      life insurance policy. Instead, they were under the impres-
      sion that [Jordon] had named his brother, Jason . . . , as
      the beneficiary on . . . a life insurance policy or policies
      maintained through his previous employer . . . in the
      aggregate amount of $360,000.00.
   Both the settlement agreement and the stipulated facts
similarly show that this mutual mistake of fact was a mate-
rial inducement to the agreement. The settlement agreement
recites the parties’ belief that Jordon maintained no life
insurance for the children and that Jason was the beneficiary
of Jordon’s life insurance policy or policies immediately
before, stating:
26
     Cf. Avis Rent A Car Sys. v. McDavid, 313 Neb. 479, 984 N.W.2d 632
     (2023) (appellate court not obligated to engage in analysis that is not
     necessary to adjudicate case and controversy before it).
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                        IN RE ESTATE OF WIGGINS
                            Cite as 314 Neb. 565

      [Jason] desires to gift $250,000.00 of this life insurance
      policy to [the Trust] to be held and administered for
      the benefit of [the children] in exchange for [Allison’s]
      release of [the claim against the estate.]
         . . . [t]he parties desire to enter into this [a]greement to
      satisfy and release [the claim] and to fulfill the terms and
      provisions of the [divorce decree].
The stipulated facts likewise link Jason’s receipt of life insur-
ance proceeds and his subsequent payment of $250,000 into
the Trust with the withdrawal of the claim against the estate.
   The fact that the settlement agreement does not expressly
call for Jason to retain any life insurance proceeds is immate-
rial. Allison suggests that the absence of such language indi-
cates that it was not the “purpose of any party for Jason to
ultimately receive any life insurance proceeds.” 27 However,
Jason does not argue that it was. Instead, he references the
parties’ initial belief that he was to receive $360,000 and his
ultimate receipt of $240,000 solely to argue that “[w]hen draft-
ing the [s]ettlement [a]greement, both parties were influenced
by inaccurately presented facts. . . . On its face, the [s]ettle-
ment [a]greement calls for Jason to pay money that he did not
receive from the life insurance proceeds.” 28
   Alternatively, Allison argues that if there was a mistake,
equitable relief is not warranted because Jason assumed the
risk of mistake. Allison points to language in the settlement
agreement stating that “to the best of the [p]arties’ knowl-
edge,” the minor children are not the designated beneficiaries
of a life insurance policy of at least $250,000. She relies on
case law from other jurisdictions to argue that this phrase
“inherently ‘embodies a level of uncertainty.’” 29 She also
argues that Jason signed the settlement agreement despite
27
     Brief for appellant at 18.
28
     Brief for appellee Jason at 21.
29
     Brief for appellant at 32 (quoting Berg v. Berg, No. M2018-01163-COA-
     T10B-CV, 2018 WL 3612845 (Tenn. App. July 27, 2018)).
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                          IN RE ESTATE OF WIGGINS
                              Cite as 314 Neb. 565

not knowing how much money he would ultimately receive
and without the inclusion of language stating that he would
be credited with any life insurance proceeds that Jordon was
later found to have provided for the children. We disagree.
   The two cases cited by Allison regarding the meaning of
the phrase “to the best of the [p]arties’ knowledge” do not
involve reformation or rescission and, as such, do not address
the role of such language in determining whether a particular
party assumed the risk of mistake. 30 However, even if we were
to construe the settlement agreement’s language consistently
with those cases to mean that the parties had limited knowl-
edge about Jordon’s insurance coverage, that does not neces-
sarily mean that Jason assumed the risk of mistake under the
present circumstances.
   Notably, this is not a case where the party who purportedly
assumed the risk had limited knowledge because he or she
failed to make inquiries that reasonably would be expected of
a person in the party’s position. 31 To the contrary, the parties
jointly stipulate that when they entered the settlement agree-
ment, they had been “informed by the relevant insurance com-
panies and [Jordon’s] previous employers, and they therefore
believed, that [Jordon] had not named either of the [m]inor
[c]hildren as beneficiaries on any life insurance policy.”
   It is also not a case where one party should be deemed to
bear the risk of mistake because that party is experienced in
or has superior knowledge about a certain type of transac-
tion. 32 Allison cites to such a case, State v. Alba, 33 in support
of her argument that Jason assumed the risk. In Alba, the
30
     See, e.g., Muskin v. Assessments, 422 Md. 544, 30 A.3d 962 (2011); Berg,
     supra note 29.
31
     27 Lord, supra note 19 §§ 70:69 (discussing, inter alia, DeVenney v. Hill,
     918 So. 2d 106 (Ala. 2005)) and 70:77 (discussing, inter alia, Land Baron
     Inv. v. Bonnie Springs Family LP, 131 Nev. 686, 356 P.3d 511 (2015)).
32
     Id.
33
     State v. Alba, 13 Neb. App. 519, 697 N.W.2d 295 (2005).
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                         IN RE ESTATE OF WIGGINS
                             Cite as 314 Neb. 565

Nebraska Court of Appeals found that the risk of a mutual
mistake of law as to a plea bargain should be placed upon the
State, not the defendant, because prosecutors “must be held
to know the very simple and fundamental law essential to
their duties—the classification of the felonies involved in the
plea bargains they are about to strike.” 34 However, a similar,
professional duty-based rationale for assigning the risk of
mistake to a specific party is lacking here.
    [11] Accordingly, we decline to find that Jason assumed the
risk of mistake when signing the settlement agreement, even
though the agreement stated that “to the best of the [p]arties’
knowledge,” Jordon had failed to provide life insurance cov-
erage for the minor children. Under the standard previously
noted, recission sounds in equity. Equity strives to do justice;
it is not a rigid concept, but, instead, is determined on a case-
by-case basis according to concepts of justice and fairness. 35
Here, it does not seem just and fair to require Jason to pay
an additional $110,000—which would result in a total of
$360,000 in life insurance proceeds’ being available to the
children—where the divorce decree contemplated a minimum
of $250,000 in life insurance proceeds, Elizabeth received
$120,000 of life insurance proceeds directly from the insurer,
and Jason has already paid $130,000 into the Trust, which is
available to both Elizabeth and Leah.
    Allison’s suggestion that Jason waived his argument that
there was a “mutual mistake of fact between the parties” 36 is
similarly without merit. Allison argues that Jason “change[d]
his argument” on appeal by citing a case and a proposi-
tion of law regarding mutual mistakes of fact, after having
relied on cases involving scrivener’s errors before the county
court. 37 However, even if we were to construe the cases that
34
     Id. at 534-35, 697 N.W.2d at 307.
35
     Wisner v. Vandelay Investments, 300 Neb. 825, 916 N.W.2d 698 (2018).
36
     Brief for appellee Jason at 21.
37
     Reply brief for appellant at 12.
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             Nebraska Supreme Court Advance Sheets
                      314 Nebraska Reports
                          IN RE ESTATE OF WIGGINS
                              Cite as 314 Neb. 565

Jason cited below as limited to scrivener’s errors, as Allison
argues, Jason nonetheless made clear to the county court that
his claim for equitable relief was based on a mutual mistake
of fact, not a purported scrivener’s error. Jason’s brief on the
motion for declaratory judgment, which is part of the record
on appeal, states that there was a “mutual mistake of fact
between the parties regarding the beneficiary of the Term
Policy.” Jason similarly stated in oral arguments before the
county court that all parties to the settlement agreement were
operating under the assumption that Jason was the sole benefi-
ciary of Jordon’s life insurance policies. As such, the present
case is distinguishable from those cases where we have held
that a party waived an argument by failing to raise it before
the trial court. 38
   [12] The purpose of rescission is to place the parties in a
status quo, that is, return the parties to their position which
existed before the rescinded contract. 39 In their briefs on
appeal, both Allison and Jason contemplate further proceed-
ings or, alternatively, agreements between them and the estate
to address related matters. Among those matters is the estate’s
disallowance of Allison’s claim for $250,000 plus interest,
about which the estate notified Allison after the joint motion
for declaratory judgment was filed, but prior to the hearing
on that motion before the county court. 40 Allison subsequently
petitioned the county court for allowance of her claim, with
a credit of $130,000 for the payment that Jason made to the
Trust, and that claim remains pending.
38
     See, e.g., Noah’s Ark Processors v. UniFirst Corp., 310 Neb. 896, 970
     N.W.2d 72 (2022).
39
     Cinatl v. Prososki, 307 Neb. 477, 949 N.W.2d 505 (2020).
40
     Cf. In re Estate of Dickie, 261 Neb. 533, 623 N.W.2d 666 (2001) (failure
     of personal representative of estate to give timely notice of disallowance
     of claim against estate did not preclude personal representative from
     thereafter disallowing claim).
                            - 579 -
         Nebraska Supreme Court Advance Sheets
                  314 Nebraska Reports
                   IN RE ESTATE OF WIGGINS
                       Cite as 314 Neb. 565

                        CONCLUSION
   A mutual mistake as to the existence of a fact that was a
material inducement to the contract is not ground for reforma-
tion, although it may be ground for rescission. Accordingly, we
reverse the judgment of the county court and remand the cause
with directions for the county court to rescind the settlement
agreement and conduct further proceedings not inconsistent
with this opinion.
                 Reversed and remanded with directions.