Antiwaiver Rule for Nebraska Trust Deed Antideficiency Protection When Power-of-Sale Is Used

1. Introduction

In American Exch. Bank v. Topp, 321 Neb. 409 (May 15, 2026), the Nebraska Supreme Court reversed a summary judgment that had awarded American Exchange Bank (AEB) a multi-million-dollar deficiency judgment against Luke G. Topp and Ria N. Topp (the “Topps”) under four guaranties securing loans made to their business, Topp’s Mechanical, Inc. (TMI).

The case centers on three interlocking questions: (1) whether Nebraska’s trust-deed antideficiency statute, Neb. Rev. Stat. § 76-1013, applies when the deficiency is sought against guarantors; (2) whether guarantors can waive § 76-1013’s fair-market-value limitation by contract; and (3) whether the Topps produced enough evidence of fair market value to defeat summary judgment.

2. Summary of the Opinion

The court held (i) § 76-1013 applies to the Topps’ guaranty obligations because the Topps’ trust deeds secured not only TMI’s notes but also the Topps’ own “indebtedness and obligations” to AEB, including obligations arising “by ... guaranty”; (ii) a contractual waiver that would allow a beneficiary to use a trustee’s power-of-sale and still evade § 76-1013’s antideficiency limitation violates Nebraska public policy and is unenforceable; and (iii) assessed values and prior appraisals are relevant circumstantial evidence of at least a minimum value and created a genuine issue of material fact on fair market value, precluding summary judgment.

The judgment was reversed and remanded for further proceedings to determine fair market value and any allowable deficiency under § 76-1013.

3. Analysis

A. Precedents Cited

1) The Trust Deeds Act’s structure and the choice between power-of-sale and judicial foreclosure

  • Blair Co. v. American Savings Co., 184 Neb. 557, 169 N.W.2d 292 (1969): Used to frame the Trust Deeds Act as a legislative innovation authorizing trust deeds and prescribing procedures for their execution and enforcement. The court invoked Blair to underscore that power-of-sale is a statutory creature and comes with statutory constraints.
  • First Nat. Bank of Omaha v. Davey, 285 Neb. 835, 830 N.W.2d 63 (2013): Key to explaining that the Act authorizes nonjudicial trustee sales and that the Act’s detailed procedures govern such sales. The opinion relies on Davey to emphasize that, while a beneficiary may choose judicial foreclosure, choosing trustee sale means accepting the Act’s limits—including § 76-1013.

2) Whether § 76-1013 can apply to guarantors

  • Mutual of Omaha Bank v. Murante, 285 Neb. 747, 829 N.W.2d 676 (2013): The central interpretive battleground. AEB argued Murante categorically excludes guarantors from § 76-1013. The court rejected that reading, explaining that Murante turned on a narrower point: the guarantor’s obligation there was not an obligation “for which the trust deed was given as security.” Here, by contrast, the Topps’ trust deeds expressly secured their own obligations to AEB, including obligations “by ... guaranty.” Thus, the guaranties themselves fell within § 76-1013’s text.

3) The antideficiency limitation as public policy and the antiwaiver holding

  • New Light Co. v. Wells Fargo Alarm Servs., 247 Neb. 57, 525 N.W.2d 25 (1994): Cited for the general definition of public policy and the principle that freedom of contract may be restricted for the public good.
  • Green Plains Trade Group v. Archer Daniels Midland Co., 320 Neb. 882, 31 N.W.3d 577 (2026), and Wilke v. Woodhouse Ford, 278 Neb. 800, 774 N.W.2d 370 (2009): Used to reinforce that the Legislature declares the public policy of the state through statutes; courts enforce that policy.
  • Lincoln Cty. Bd. of Equal. v. Western Tabor Ranch Apts., 314 Neb. 582, 991 N.W.2d 889 (2023): Supports the mandatory nature of “shall,” bolstering the view that § 76-1013 is not a personal, waivable “benefit,” but a statutory constraint on judicial power to award a deficiency following a trustee sale.
  • Persuasive authorities cited to show a broad judicial trend against prospective waiver of antideficiency protections: CSA 13-101 Loop, LLC v. Loop 101, LLC, 236 Ariz. 410, 341 P.3d 452 (2014); Founders Bank and Trust Co. v. Upsher, 830 P.2d 1355 (Okla. 1992); Brunsoman v. Scarlett, 465 N.W.2d 162 (N.D. 1991); Barnaby v. Boardman, 313 N.C. 565, 330 S.E.2d 600 (1985); Freedland v. Greco, 45 Cal. 2d 462, 289 P.2d 463 (1955); and Stretch v. Murphy, 166 Or. 439, 112 P.2d 1018 (1941). The Nebraska court used these cases to validate its conclusion that antideficiency limitations can reflect systemic policy judgments (allocation of risk, limits on deficiency recovery) that parties should not be permitted to contract around when invoking the statutory power-of-sale remedy.

4) Evidence of fair market value and summary judgment

  • First Nat. Bank of York v. Critel, 251 Neb. 128, 555 N.W.2d 773 (1996): The key Nebraska authority on the relevance of assessed/appraised values outside taxation. The court used Critel to hold that assessed values can be relevant circumstantial evidence of at least a minimum value, contrary to AEB’s attempt to treat assessed value as categorically irrelevant.
  • Lienemann v. City of Omaha, 191 Neb. 442, 215 N.W.2d 893 (1974), and Holman v. Papio-Missouri River Nat. Resources Dist., 246 Neb. 787, 523 N.W.2d 510 (1994): Distinguished as condemnation cases where assessed values were offered as direct proof of fair market value, a different evidentiary posture from using assessed/appraised values as circumstantial minimum-value evidence to contest a sale price or asserted value.
  • Estate of Block v. Estate of Becker, 313 Neb. 818, 986 N.W.2d 726 (2023): Used to explain direct vs. circumstantial evidence and that circumstantial evidence can be equally probative; a factfinder may draw reasonable inferences. This supported the holding that conflicting value evidence creates a triable issue.
  • The court’s summary judgment framing relied on: U.S. Specialty Ins. Co. v. D S Avionics, 320 Neb. 287, 26 N.W.3d 761 (2025); Boone River, LLC v. Miles, 318 Neb. 760, 18 N.W.3d 802 (2025); State ex rel. Douglas Cty. Sch. Dist. No. 66 v. Ewing, 319 Neb. 663, 24 N.W.3d 861 (2025); and Bruce Lavalleur, P.C. v. Guarantee Group, 314 Neb. 698, 992 N.W.2d 736 (2023).

B. Legal Reasoning

1) Textual hook: “obligation for which the trust deed was given as security”

The court’s statutory analysis turns on § 76-1013’s scope: it applies to an “action ... to recover the balance due upon the obligation for which the trust deed was given as security.” The court treated that phrase as dispositive. Unlike in Mutual of Omaha Bank v. Murante, where the trust deed did not secure the guarantor’s own obligation, the Topps’ trust deeds expressly secured (a) TMI’s note and (b) “all indebtedness and obligations of Borrower to Lender ... whether arising by note, guaranty, overdraft or otherwise.” Because the Topps were the trust-deed “Borrowers,” their guaranty obligations were among the secured obligations. Therefore, when AEB used the trustee sale and later sued for a deficiency under those guaranties, § 76-1013 applied.

2) The antiwaiver holding as a structural consequence of choosing power-of-sale

The court framed the Trust Deeds Act as offering a choice of remedies: proceed by trustee’s sale (nonjudicial) or by judicial foreclosure (mortgage-style). Critically, § 76-1013 limits the court’s power to render a deficiency judgment “after any sale of property under a trust deed.” The opinion reasoned that allowing a beneficiary to use the statutory privilege of nonjudicial sale while contracting around the statutory deficiency limitation would undermine the Legislature’s design.

The court also leaned on statutory language and judicial role: § 76-1013 repeatedly uses mandatory phrasing (“shall”), and it is the Legislature’s role to set policy through statutes. On this view, § 76-1013 is not merely a private “defense” that a party may bargain away; it is a constraint on the deficiency remedy available after a trustee sale. That logic produced the case’s central new rule:

A waiver of the limitation on deficiency judgments in § 76-1013 is unenforceable when a trust deed is given to secure an obligation, the power of sale is exercised, and a deficiency judgment is sought.

3) Valuation proof and why summary judgment failed

On the record, AEB asserted fair market values at the time of sale, while the Topps pointed to (i) county assessed values and (ii) AEB’s own earlier appraisals. The court held those materials were relevant circumstantial evidence under First Nat. Bank of York v. Critel, capable of supporting an inference that fair market value exceeded AEB’s asserted values. Because differing inferences could reasonably be drawn, valuation was for a factfinder, not summary judgment.

C. Impact

1) Contract drafting and enforcement

The decision substantially limits lenders’ ability to use boilerplate “fair market value” waiver language to preserve full deficiency exposure after a trustee sale. If the secured obligation is pursued via power-of-sale and a deficiency is sought, § 76-1013’s fair-market-value ceiling cannot be waived in advance.

2) Remedy selection: trustee sale vs. judicial foreclosure

The opinion is likely to influence foreclosure strategy. The court expressly noted that a beneficiary that wishes to avoid § 76-1013 may elect judicial foreclosure, because § 76-1013 is inapplicable there. Going forward, creditors must evaluate the procedural speed/efficiency of trustee sale against the statutory limit on deficiency recovery.

3) Guarantor litigation and “Murante” repositioned

Mutual of Omaha Bank v. Murante remains significant, but its reach is narrowed. The key inquiry is not whether the defendant is labeled “guarantor,” but whether the deficiency action is on an obligation the trust deed secured. Guarantors may fall within § 76-1013 when their guaranty obligations are themselves secured by the trust deed language.

4) Evidentiary consequences in deficiency cases

The opinion strengthens the use of assessed values and appraisals as circumstantial evidence on fair market value, making it harder to win deficiency suits by summary judgment where valuation is contested and some competent circumstantial evidence is offered.

5) Relationship to the dissent and possible legislative response

Justice Papik’s dissent argued Nebraska courts should be reluctant to invalidate waiver clauses absent explicit antiwaiver statutory language, and pointed to other jurisdictions enforcing waivers where legislatures did not prohibit them. That dissent signals two possible future developments: (i) continued litigation over how far the antiwaiver rule extends (e.g., to sophisticated commercial parties, post-default waivers, or settlement agreements), and (ii) potential legislative clarification if the Legislature wishes to authorize or forbid waiver expressly.

4. Complex Concepts Simplified

  • Trust deed / deed of trust: A security instrument conveying title to a trustee to secure performance of an obligation. In Nebraska, it can include a statutory “power of sale” allowing nonjudicial foreclosure.
  • Trustee sale (power-of-sale foreclosure): A nonjudicial sale conducted by a trustee after default, governed by the Trust Deeds Act’s procedures.
  • Deficiency judgment: A money judgment for the unpaid balance after collateral is sold. If sale proceeds (or the statutorily required credit) do not cover the debt, the creditor seeks the remainder as a deficiency.
  • Antideficiency statute (§ 76-1013): A statute limiting a court’s ability to award a deficiency after a trustee sale. The court must determine fair market value at the date of sale and cap any deficiency accordingly.
  • Guaranty vs. note: The note is the borrower’s promise to pay; the guaranty is a separate contract in which a guarantor promises to pay if the borrower does not. Whether a trust deed secures the guaranty depends on the trust deed’s language.
  • Summary judgment: A pretrial judgment entered only when there is no genuine dispute of material fact. If fair market value is reasonably disputable, it generally must be decided by a factfinder.
  • Circumstantial evidence of value: Indirect proof from which value can be inferred (e.g., assessed values and appraisals), which can be sufficient to create a fact dispute even if not definitive proof of exact fair market value.

5. Conclusion

American Exch. Bank v. Topp establishes a significant new Nebraska rule: when a creditor uses the Trust Deeds Act’s power-of-sale mechanism and then seeks a deficiency on an obligation secured by the trust deed, § 76-1013’s fair-market- value limitation cannot be prospectively waived by contract. The decision also clarifies that § 76-1013 may apply to guarantors when their guaranty obligations are secured by the trust deed itself, and it confirms that assessed values and appraisals can serve as relevant circumstantial evidence creating a triable dispute over fair market value.