Background
Between 2015 and 2017, Topp’s Mechanical, Inc. (TMI) executed four promissory notes with American Exchange Bank (AEB) for a total principal of $4,715,150. Luke and Ria Topp personally guaranteed all four notes and, critically, conveyed their own real property to a trustee by two deeds of trust naming AEB as beneficiary. The trust deed language was broad: it secured not only TMI’s notes but also “all indebtedness and obligations of Borrower [the Topps] to Lender.” TMI defaulted and filed for Chapter 11 bankruptcy in 2021; the Topps followed with a Chapter 12 filing in 2022.
In November 2023, AEB exercised the power of sale under Nebraska’s Trust Deeds Act and conducted trustee sales of the Topps’ three parcels, purchasing all of them itself for $310,000. AEB then brought a deficiency action against the Topps under their guaranties, seeking over $3 million. The Topps argued they were entitled to credit for the fair market value of the sold properties under Nebraska’s antideficiency statute, Neb. Rev. Stat. § 76-1013, and that the guaranties’ waiver of that protection was void as against public policy. They also produced AEB’s own 2021 appraisals ($1,278,000 aggregate) and 2023 assessed values ($1,253,071 aggregate) to show fair market value far exceeded the $310,000 sale price.
The Johnson County District Court granted summary judgment for AEB, concluding the Topps had contractually waived any defense based on AEB’s failure to obtain fair market value for the collateral. The Topps appealed, and the Nebraska Supreme Court moved the case to its own docket.
The Court’s Holding
The court reversed on all three issues. First, it held that § 76-1013 applied to the Topps’ guaranty obligations because the trust deeds expressly secured those obligations. The court distinguished its prior decision in Mutual of Omaha Bank v. Murante, 285 Neb. 747 (2013), explaining that Murante denied antideficiency protection only because the guarantor there had not given a trust deed to secure his own guaranty. Here, the Topps’ guaranty obligations were themselves secured by their trust deeds, bringing them squarely within § 76-1013’s command that courts credit the fair market value of property sold at a trustee’s sale.
Second, the court held the guaranties’ waiver provision unenforceable as a violation of public policy. Section 76-1013 uses mandatory language—”the court shall not render judgment” for more than the statutory cap—which the parties cannot contract away. AEB had a choice: proceed by judicial foreclosure, which falls outside § 76-1013, or proceed by trustee sale, which triggers it. Having chosen the trustee sale route to avoid court involvement, AEB could not simultaneously escape the statute’s antideficiency limits through a pre-dispute waiver.
Third, the court held that a genuine issue of material fact remained as to fair market value. AEB’s own earlier appraisals and the properties’ tax-assessed values—both substantially higher than the $310,000 trustee-sale price—constituted circumstantial evidence from which a fact-finder could reasonably infer that the properties’ fair market value exceeded AEB’s asserted figures. Because that inference was available, summary judgment was improper. The court remanded for further proceedings.
Key Takeaways
- Nebraska’s antideficiency statute (§ 76-1013) can protect guarantors, not just primary borrowers, when the guaranty obligation itself is secured by the trust deed—the touchstone is whether the trust deed was “given as security” for the obligation at issue.
- A lender that elects the trustee-sale remedy under the Nebraska Trust Deeds Act cannot use a pre-dispute contractual waiver to circumvent § 76-1013’s fair-market-value credit requirement; such a waiver violates public policy and is void.
- Tax-assessed values and prior appraisals are competent circumstantial evidence of a property’s minimum fair market value at the time of a trustee sale and are sufficient to defeat summary judgment on the deficiency amount.
- Justice Papik dissented, arguing the Legislature had not expressly prohibited waiver of § 76-1013 protections and that courts should be slow to void bargained-for contractual terms on public policy grounds absent clear legislative direction.
Why It Matters
This decision significantly limits a lender’s ability to use the non-judicial trustee-sale process while insulating itself from the statute’s antideficiency protections through boilerplate guaranty waivers. Nebraska lenders who rely on trust deeds and conduct trustee sales must now account for the fair market value of the sold collateral before pursuing guarantors for any remaining balance—regardless of waiver language in the guaranty documents. Lenders who wish to avoid § 76-1013 altogether must instead proceed through judicial foreclosure.
The ruling also clarifies Nebraska’s understanding of Murante, resolving ambiguity about whether § 76-1013 can ever apply to guarantors. The answer is fact-specific: what matters is whether the guarantor’s own obligation was secured by a trust deed, not whether the guarantor is the primary borrower. Attorneys drafting loan documents and guaranties in Nebraska—particularly in agricultural and commercial lending contexts where personal guaranties secured by real property are common—should treat this case as resetting the floor for deficiency exposure calculations after a trustee sale.