Brick Development v. CNBT II , 301 Neb. 279 ( 2018 )


Menu:
  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    10/19/2018 08:12 AM CDT
    - 279 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    Brick Development, appellant, v. CNBT II LLC
    and The Cattle National Bank &
    Trust Co., appellees.
    ___ N.W.2d ___
    Filed October 12, 2018.   No. S-17-865.
    1.	 Summary Judgment. Summary judgment is proper when the pleadings
    and evidence admitted at the hearing disclose no genuine issue regard­
    ing any material fact or the ultimate inferences that may be drawn from
    those facts and that the moving party is entitled to judgment as a matter
    of law.
    2.	 Summary Judgment: Appeal and Error. In reviewing a summary
    judgment, an appellate court views the evidence in the light most
    favorable to the party against whom the judgment is granted and gives
    such party the benefit of all reasonable inferences deducible from
    the evidence.
    3.	 Contracts: Real Estate: Leases. Neb. Rev. Stat. § 36-105 (Reissue
    2016) requires a signature by the party to be charged by the writing.
    4.	 Landlord and Tenant: Assignments. A lessee, during his occupancy
    of the demised premises, holds both by privity of estate and of contract.
    Assignment of the lease by the lessee divests him of this privity of estate
    and transfers it to his assignee, who thereafter holds in privity of estate
    with the lessor.
    5.	 Landlord and Tenant: Assignments: Breach of Contract. Privity
    of contract is not transmitted to the purchaser of the leasehold by an
    assignment of the lease alone; for the express covenants of the lessee
    contained in the lease will remain, during the continuance of the terms,
    obligatory upon the lessee. These obligations extend to breaches of cov-
    enant which have occurred after the assignment, and the lessee is not
    relieved therefrom by the mere acceptance of rent by the lessor from the
    person to whom such assignment has been made.
    6.	 Landlord and Tenant: Leases. A landlord is not necessarily entitled
    to enforce all of the terms of a lease merely because there is privity of
    - 280 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    estate; rather, such privity only gives the landlord the right to enforce
    covenants that run with the land.
    7.	 Contracts: Real Estate: Words and Phrases. Generally, the three
    essential requirements for a covenant of any type to run with land are
    (1) the grantor and the grantee intend that the covenant run with the
    land, as determined from the instruments of record; (2) the covenant
    must “touch and concern” the land with which it runs; and (3) the party
    claiming the benefit of the covenant and the party who bears the burden
    of the covenant must be in privity of estate.
    8.	 Contracts: Real Estate: Landlord and Tenant: Liability. The cov-
    enant to pay rent runs with the land, and a party in privity of estate with
    the landlord is directly liable to him for the installments accruing while
    that relation exists.
    9.	 Contracts: Real Estate: Liability. Liability for covenants which run
    with the land cease with cessation of possession.
    10.	 Real Estate: Leases. An express assumption of a real property lease
    requires specific affirmation by the assignee to bind itself to the lease
    obligations.
    11.	 Estoppel. The doctrine of equitable estoppel is applied to transactions in
    which it is found that it would be unconscionable to permit a person to
    maintain a position inconsistent with one in which he or she has acqui-
    esced or of which he or she has accepted any benefit.
    12.	 Contracts: Fraud: Estoppel. Only where a party to a written contract
    within the statute of frauds induces another to waive some provision
    upon which he is entitled to insist and thereby change his position to his
    disadvantage because of that party’s inducement will the inducing party
    be estopped to claim that such oral modification is invalid because not
    in writing.
    13.	 Contracts: Fraud. Sophisticated business entities are charged with
    knowledge of the statute of frauds and cannot reasonably rely on oral
    statements or conduct.
    Appeal from the District Court for Lancaster County: Robert
    R. Otte, Judge. Affirmed.
    Randall L. Goyette and Phoebe L. Gydesen, of Baylor,
    Evnen, Curtiss, Grimit & Witt, L.L.P, for appellant.
    John M. Guthery, Haleigh B. Carlson, and Derek A.
    Aldridge, of Perry, Guthery, Haase & Gessford, P.C., L.L.O.,
    for appellees.
    - 281 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    Heavican, C.J., Miller-Lerman, Cassel, Funke, Papik, and
    Freudenberg, JJ.
    Cassel, J.
    INTRODUCTION
    An owner of one property seeks to bind a purchaser of
    another property to the terms of a 50-year lease agreement
    entered into between different parties. Because there is no priv-
    ity of contract and the purchaser did not expressly assume the
    lease, the statute of frauds bars the owner’s claim for breach
    of contract. We further conclude that equitable estoppel does
    not prevent the purchaser from raising the statute of frauds as
    a defense and that there is no genuine issue of material fact.
    We affirm.
    BACKGROUND
    Parking Lot Lease
    In 1978, D. William Smith and Joyce Smith owned a park-
    ing lot located on N Street in Lincoln, Nebraska. Two Twenty
    Enterprises, L.L.C. (TTE), owned an office building located
    on 17th Street west of the parking lot. The Smiths, as lessors,
    entered into a lease agreement with TTE, as lessee, to lease the
    parking lot to TTE (parking lot lease). The original term of the
    lease was for 50 years.
    One section of the parking lot lease allowed the lessee to
    encumber the leasehold interest by mortgage or other proper
    instrument. The lease provided in part:
    The execution of any such mortgage or other instrument,
    or the foreclosure thereof, or any sale thereunder, . . .
    shall not be held as a violation of the terms or conditions
    hereof, or as an assumption by the holder of such indebt-
    edness of the obligations hereof. No such encumbrance,
    foreclosure, conveyance, or exercise of right shall relieve
    LESSEE of its liability hereunder.
    The parking lot lease contained several other sections per-
    tinent to this appeal. One section authorized assignment of
    - 282 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    the lease. A different section set forth a right of first refusal
    in the event that either the lessor or the lessee decided to sell
    its property or the lessee wished to transfer its interest in the
    leasehold. And under a rent escalation clause, the rent was to
    be adjusted in the 11th year and every 5th year thereafter.
    Lease With DAS
    On May 24, 2004, TTE entered into a lease with the
    Nebraska Department of Administrative Services (DAS) on
    behalf of a tenant. TTE agreed to lease space at the office
    building and to provide parking stalls in the parking lot for
    use by the tenant’s clients. The lease was set to end on August
    30, 2015.
    Purchase and Assignment
    In 2006, Raasch Enterprises, Inc. (Raasch), purchased the
    office building from TTE. The purchase was financed by a
    loan from The Cattle National Bank & Trust Co. (the Bank),
    and Raasch executed a deed of trust to secure the loan. The
    deed of trust, signed only by Raasch, stated that Raasch
    “irrevocably assigns, grants and conveys” to the Bank “all
    the right, title and interest” in existing or future leases “for
    the use and occupancy of the Property.” The deed of trust
    identified the “Property” as the office building. The deed of
    trust did not contain any language concerning the parking lot
    parking property; nor did it identify the parking lot lease as
    an encumbrance.
    On the same day, TTE assigned the parking lot lease to
    Raasch. Raasch accepted the assignment and assumed the
    liabilities and duties to perform the terms and conditions of
    the parking lot lease. The Smiths gave their written consent to
    the assignment.
    Default and Sale of
    Office Building
    After Raasch failed to timely pay indebtedness secured by
    the deed of trust, the Bank issued a notice of default. As a
    - 283 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    result of Raasch’s default, a trustee’s sale was arranged. The
    published notice of trustee’s sale stated that the property “will
    be sold subject to any and all . . . leases, subleases, assign-
    ments, amendments, and other rights and interests, if any,
    which are specifically announced by the Trustee at the sale.”
    According to the sale announcement, the real estate would be
    subject to the parking lot lease, the 2006 assignment of lease,
    and the lease between TTE and DAS.
    CNBT II LLC (CNBT), whose sole member is the Bank,
    purchased the office building at the trustee’s sale. In February
    2012, the Bank filed a trustee’s deed conveying the office
    building to CNBT. In conformity with the sale announcement,
    the deed stated that the property transfer was “subject to” the
    parking lot lease along with the 2006 assignment of the lease
    and the lease between TTE and DAS. The deed further stated
    that the transfer was subject to those leases “provided that the
    Grantee is not assuming any liabilities, and shall not be liable,
    for any act or omission of the landlord or any other party
    under, without limitation, any of the Leases.” The president of
    the Bank signed the deed. CNBT used the parking lot and paid
    rent to the Smiths.
    Brick Becomes Lessor
    In December 2012, the Smiths conveyed to Brick
    Development (Brick), via a quitclaim deed, the parking lot.
    Brick is the successor in interest to the Smiths as lessor under
    the parking lot lease.
    Proposed Sale of Office Building
    In 2013, CNBT received an offer to purchase the office
    building. It gave notice to Brick of the offer “[p]ursuant to”
    the right of first refusal interest contained in the parking lot
    lease. The notice stated, “Per the lease you have 30-days
    from the date of this notice to notify us of your intent to pur-
    chase the Property on the same terms and conditions as the
    Buyer . . . .”
    - 284 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    Brick notified CNBT of a concern. Brick stated that it had
    “not been able to find any language in the Real Estate Purchase
    Agreement which refers to the Buyer’s assumption of the exist-
    ing lease on the parking lot . . . which language [Brick] would
    have expected to see as a Buyer’s Condition of Closing.”
    CNBT’s president responded: “I believe the terms of the previ-
    ous lease on the parking lot carry over to . . . the new owner. If
    you would like us to get a written agreement to this affect [sic]
    as a condition of closing we can do this.”
    Brick later sent a letter to CNBT along with a proposed
    assignment of lease between CNBT and the buyer. The pro-
    posed assignment had been signed by Brick, as lessor, giv-
    ing its consent, and Brick requested that CNBT sign it. The
    letter further stated, “In the event the proposed sale does not
    close, then we will of course continue to look to CNBT . . .
    as ­successor-in-interest from Raasch . . . to fulfill the obli-
    gations of the [parking lot lease].” Ultimately, the sale did
    not occur.
    Other Communications Between
    Brick and CNBT
    In January 2014, Brick sent a letter to the Bank and CNBT
    “to both reconcile unpaid previously scheduled monthly rental
    increases and inform [them] of the new monthly lease pay-
    ment for the five year period of September of 2013 through
    September of 2018 for the parking lot.” The letter pointed out
    that under the parking lot lease, the monthly lease payment was
    scheduled to increase every 5 years beginning in 1988, but that
    the increase to begin in September 2008 had not been imple-
    mented. Brick also sent an email to counsel for CNBT and
    the Bank. It stated, in part, “[W]e’d like to get something on
    record that your client has assumed, or has accepted an assign-
    ment of, the [parking lot lease].”
    In February 2014, Brick filed with the register of deeds a
    notice of lease and right of first refusal. The document con-
    tained Brick’s signature only. The purpose of the notice was to
    - 285 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    confirm that the parking lot lease “is currently in full force and
    effect, and has not been modified other than by conveyance of
    the interest of the original Lessor to the current owners of the
    Property, and from the original Lessee . . . to CNBT . . . , the
    current Lessee and owner of [the office building].”
    On August 7, 2015, CNBT sent Brick a notice of termination
    and cancellation of the parking lot lease effective September
    10. There is no dispute that CNBT paid rent to Brick through
    September 10.
    Pleadings
    Brick sued CNBT and the Bank. Brick alleged that as of
    February 2012, CNBT assumed the parking lot lease as les-
    see. According to Brick, CNBT had paid rent and taxes, had
    maintained the property, and had complied with the right of
    first refusal terms of the lease. Brick claimed that CNBT’s
    actions were “tantamount to and act as an assumption of the
    [lease].” Brick also alleged that CNBT was equitably estopped
    from asserting that it was not contractually bound as the les-
    see because CNBT acquiesced to or accepted a benefit under
    the lease.
    CNBT responded that it did not receive an assignment or
    transfer of interest by Raasch and that it did not assume the
    parking lot lease. CNBT and the Bank both alleged that the
    conveyance stated CNBT was not assuming any liabilities
    under the lease. They also both alleged that Brick’s claims
    were barred by the statute of frauds, including Neb. Rev. Stat.
    §§ 36-105 and 36-202 (Reissue 2016). CNBT claimed that
    its use of the parking lot property was on a month-to-month
    basis from the time that it became the owner of the office
    building.
    CNBT, the Bank, and Brick each moved for summary
    judgment.
    District Court’s Decision
    In resolving the motions for summary judgment, the district
    court first considered whether the trustee’s deed to CNBT
    - 286 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    satisfied the statute of frauds. It noted that neither Brick nor
    CNBT was a party to the trustee’s deed and that it was signed
    by the Bank only. The court determined that “the documents do
    not show CNBT’s assumption of the obligations of the [park-
    ing lot lease].”
    Next, the court addressed whether CNBT was estopped from
    asserting the statute of frauds defense. The court found no
    evidence that CNBT induced Brick to believe that CNBT had
    assumed future obligations of the parking lot lease. It found
    that Brick qualified as a sophisticated business entity and that
    sophisticated business entities are charged with knowledge of
    the statute of frauds. The court determined that any reliance
    by Brick that CNBT had assumed the obligations under the
    lease was unreasonable. The court concluded that CNBT’s lia-
    bility ceased with its cessation of possession and that thus, it
    was not liable for its obligations as a tenant beyond September
    10, 2015. The court sustained CNBT’s and the Bank’s motions
    for summary judgment.
    Brick appealed, and we moved the case to our docket.1
    ASSIGNMENTS OF ERROR
    Brick assigns two errors. First, Brick alleges that the court
    erred in denying its motion for summary judgment for several
    reasons. Second, Brick claims that the court erred in granting
    CNBT’s and the Bank’s motions for summary judgment.
    STANDARD OF REVIEW
    [1,2] Summary judgment is proper when the pleadings and
    evidence admitted at the hearing disclose no genuine issue
    regarding any material fact or the ultimate inferences that
    may be drawn from those facts and that the moving party is
    entitled to judgment as a matter of law.2 In reviewing a sum-
    mary judgment, an appellate court views the evidence in the
    1
    See Neb. Rev. Stat. § 24-1106 (Supp. 2017).
    2
    Jordan v. LSF8 Master Participation Trust, 
    300 Neb. 523
    , 
    915 N.W.2d 399
          (2018).
    - 287 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    light most favorable to the party against whom the judgment
    is granted and gives such party the benefit of all reasonable
    inferences deducible from the evidence.3
    ANALYSIS
    Statute of Frauds
    Brick argues that the district court erred by concluding that
    CNBT and the Bank did not assume the parking lot lease and
    that the statute of frauds precluded the lease’s enforcement.
    Under Nebraska’s statute of frauds, “Every contract for the
    leasing for a longer period than one year . . . shall be void
    unless the contract or some note or memorandum thereof be
    in writing and signed by the party by whom the lease . . . is to
    be made.”4
    In this case, a relationship complying with the statute of
    frauds developed a new wrinkle: The 50-year parking lot lease
    between the Smiths and TTE complied with the statute of
    frauds. So, too, did TTE’s assignment of the lease to Raasch.
    And at the time of the assignment, TTE also conveyed the
    office building to Raasch. Thus, for approximately 6 years,
    Raasch owned the office building and, as assignee of the park-
    ing lot lease, was entitled to use the nearby parking lot. The
    statute of frauds problem crept in with Raasch’s executing the
    deed of trust to secure the loan from the Bank and the subse-
    quent trustee’s sale of the property.
    [3] Section 36-105 requires a signature by the party to be
    charged by the writing.5 Brick seeks to have CNBT bound by
    the parking lot lease. But as Brick forthrightly conceded at
    oral argument, there is no direct writing between Brick and
    CNBT that is also signed by CNBT. And neither the deed of
    trust nor the trustee’s deed is signed by CNBT.
    3
    Id.
    4
    § 36-105.
    5
    See Walters v. Sporer, 
    298 Neb. 536
    , 
    905 N.W.2d 70
    (2017).
    - 288 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    Brick directs us to the trustee’s deed, which stated that the
    property was “subject to” the parking lot lease. However, the
    deed of trust contains no reference to the parking lot property
    or to the parking lot lease. A deed of trust is a mortgage.6 In
    the context of mortgages, we have stated that a mortgage fore-
    closure sale transfers to the purchaser every right and interest
    of all parties to the foreclosure suit in the mortgaged property.7
    It follows then that a trustee’s sale transfers to the purchaser
    every right and interest of the parties to the property described
    in the deed of trust. And because the deed of trust concerned
    the office building only and not the parking lot, we reject
    Brick’s contention that the parking lot lease fell within the
    deed of trust’s clause where Raasch assigned to the Bank “all
    the right, title and interest in . . . existing or future leases . . .
    for the use and occupancy of the Property.”
    We briefly digress to distinguish Walters v. Sporer.8 In that
    case, the original grantor sought to enforce a right of first
    refusal contained in a warranty deed. We stated that the right
    of first refusal was within Neb. Rev. Stat. § 36-103 (Reissue
    2016) of the statute of frauds, which required a signature by
    the party to be charged by the writing. But we determined
    that acceptance of the deed satisfied the statute of frauds. We
    reasoned that “[t]o hold otherwise would be a misapplication
    of the statute of frauds by inequitably allowing the [original
    grantees] to retain the benefit of the deed while escaping
    a clear statement of intent on its face.” 9 But in the instant
    case, there is no such clear statement of intent. The deed of
    trust did not specifically mention the parking lot lease. Thus,
    there is no inequity in not binding the grantee to the terms of
    the lease.
    6
    Fiske v. Mayhew, 
    90 Neb. 196
    , 
    133 N.W. 195
    (1911).
    7
    See Clements v. Doak, 
    140 Neb. 265
    , 
    299 N.W. 505
    (1941).
    8
    Walters v. Sporer, supra note 5.
    9
    
    Id. at 558,
    905 N.W.2d at 86.
    - 289 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    In an attempt to circumvent the statute of frauds, Brick
    focuses on CNBT’s actions. For over 3 years, CNBT made
    monthly rent payments for use of the parking lot, including
    rental increases called for in the parking lot lease. CNBT also
    reaped the benefits of the 2004 lease that TTE entered into
    with DAS and that expired on August 30, 2015. And CNBT
    complied with the right of first refusal language contained in
    the parking lot lease. Brick points to language in cases from
    other jurisdictions stating that possession plus paying rent
    gives rise to a presumption of an assignment sufficient to sat-
    isfy the statute of frauds.10 But those jurisdictions also make
    clear that an assignee will be liable for covenants that run with
    the land only while in privity of estate.11
    [4,5] A lease of real property implicates principles of both
    privity of contract and privity of estate. A lessee, during his
    occupancy of the demised premises, holds both by privity
    of estate and of contract. Assignment of the lease by the les-
    see divests him of this privity of estate and transfers it to his
    assignee, who thereafter holds in privity of estate with the
    lessor.12 Privity of contract, however, is not transmitted to
    the purchaser of the leasehold by an assignment of the lease
    alone; for the express covenants of the lessee contained in the
    lease will remain, during the continuance of the terms, obliga-
    tory upon the lessee. These obligations extend to breaches of
    covenant which have occurred after the assignment, and the
    lessee is not relieved therefrom by the mere acceptance of rent
    by the lessor from the person to whom such assignment has
    been made.13
    10
    See, Gateway I Group v. Park Ave. Physicians, 
    62 A.D.3d 141
    , 
    877 N.Y.S.2d 95
    (2009); 8182 Maryland Associates v. Sheehan, 
    14 S.W.3d 576
    (Mo.
    2000); Abbott v. Bob’s U-Drive et al, 
    222 Or. 147
    , 
    352 P.2d 598
    (1960).
    11
    See, Beltrone Marital Trust v. Lavelle and Finn, 
    22 A.D.3d 936
    , 
    803 N.Y.S.2d 211
    (2005); 8182 Maryland Associates v. Sheehan, supra note
    10; Abbott v. Bob’s U-Drive et al, supra note 10.
    12
    Mayer v. Dwiggins, 
    114 Neb. 184
    , 
    206 N.W. 744
    (1925).
    13
    
    Id. - 290
    -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    [6-9] If privity of estate is present, a party is typically
    liable only for covenants that run with the land. A landlord is
    not necessarily entitled to enforce all of the terms of a lease
    merely because there is privity of estate; rather, such privity
    only gives the landlord the right to enforce covenants that run
    with the land.14 Generally, the three essential requirements for
    a covenant of any type to run with land are (1) the grantor and
    the grantee intend that the covenant run with the land, as deter-
    mined from the instruments of record; (2) the covenant must
    “‘touch and concern’” the land with which it runs; and (3) the
    party claiming the benefit of the covenant and the party who
    bears the burden of the covenant must be in privity of estate.15
    The covenant to pay rent runs with the land, and a party in
    privity of estate with the landlord is directly liable to him for
    the installments accruing while that relation exists.16 Liability
    for covenants which run with the land cease with cessation
    of possession.17
    [10] Privity of contract does not run with the land. Privity
    of contract is not transmitted to the purchaser of a leasehold.18
    Thus, unless a new tenant assumes the lease, the tenant will
    not be bound under privity of contract.19 An express assump-
    tion of a real property lease requires specific affirmation by
    the assignee to bind itself to the lease obligations.20 CNBT
    has not specifically stated, orally or in writing, that it agreed
    14
    See Excel Willowbrook v. JP Morgan Chase Bank, 
    758 F.3d 592
    (5th Cir.
    2014).
    15
    Regency Homes Assn. v. Egermayer, 
    243 Neb. 286
    , 296, 
    498 N.W.2d 783
    ,
    789 (1993).
    16
    Hogg v. Reynolds, 
    61 Neb. 758
    , 
    86 N.W. 758
    (1901).
    17
    See Kelly v. Tri-Cities Broadcasting, Inc., 
    147 Cal. App. 3d 666
    , 195 Cal.
    Rptr. 303 (1983).
    18
    See Mayer v. Dwiggins, supra note 12.
    19
    See Kelly v. Tri-Cities Broadcasting, Inc., supra note 17.
    20
    Landlord v. Farmers & Merchants, 
    14 Cal. App. 5th
    992, 
    222 Cal. Rptr. 3d 435
    (2017).
    - 291 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    to be bound by the parking lot lease. Because CNBT did not
    expressly assume the lease, it is not bound by the obligations
    contained therein, other than covenants which run with the land
    during CNBT’s occupancy. We conclude that paying rent while
    in possession is not an exception to the requirement under the
    statute of frauds that an assumption of a lease for a period
    greater than 1 year must be in writing.
    Equitable Estoppel
    [11] Brick assigns that the district court erred in deter-
    mining that equitable estoppel did not apply. It contends
    that CNBT should be estopped from relying on the statute
    of frauds as a defense. The doctrine of equitable estoppel
    is applied to transactions in which it is found that it would
    be unconscionable to permit a person to maintain a position
    inconsistent with one in which he or she has acquiesced or of
    which he or she has accepted any benefit.21 Brick contends
    that CNBT both acquiesced to and received benefits as a les-
    see under the parking lot lease agreement and should not now
    be allowed to disclaim it.
    [12,13] Equitable estoppel does not apply under the circum-
    stances. Only where a party to a written contract within the
    statute of frauds induces another to waive some provision upon
    which he is entitled to insist and thereby change his position
    to his disadvantage because of that party’s inducement will the
    inducing party be estopped to claim that such oral modification
    is invalid because not in writing.22 There is no evidence that
    CNBT induced Brick to believe that CNBT assumed the long-
    term obligations of the lease or that Brick changed its position
    to its disadvantage in reliance upon such a belief. Further,
    the district court found that Brick qualified as a sophisticated
    21
    Becher v. Becher, 
    299 Neb. 206
    , 
    908 N.W.2d 12
    (2018).
    22
    Fast Ball Sports v. Metropolitan Entertainment, 
    21 Neb. Ct. App. 1
    , 
    835 N.W.2d 782
    (2013). See Farmland Service Coop, Inc. v. Klein, 
    196 Neb. 538
    , 
    244 N.W.2d 86
    (1976).
    - 292 -
    Nebraska Supreme Court A dvance Sheets
    301 Nebraska R eports
    BRICK DEVELOPMENT v. CNBT II
    Cite as 
    301 Neb. 279
    business entity, and Brick does not challenge this finding on
    appeal. Sophisticated business entities are charged with knowl-
    edge of the statute of frauds and cannot reasonably rely on oral
    statements or conduct.23 Because Brick was a sophisticated
    business entity, CNBT is not estopped from raising the statute
    of frauds as a defense.
    No Genuine Issue
    Finally, Brick argues that an issue of fact remained regard-
    ing whether CNBT and the Bank intended to assume the
    assignment of the parking lot lease by continuing to rent the
    parking lot and complying with all provisions of the lease
    agreement. But there is no genuine issue of material fact that
    CNBT never signed anything expressly assuming the obliga-
    tions of the parking lot lease. Because the statute of frauds bars
    Brick’s claims, CNBT’s conduct and intent are irrelevant.
    CONCLUSION
    Because there is no privity of contract and CNBT did not
    expressly assume the lease, Brick’s breach of contract claim is
    barred by the statute of frauds. We further conclude that CNBT
    is not estopped from raising the statute of frauds as a defense.
    And because there was no genuine issue of material fact, the
    district court did not err in granting summary judgment in
    favor of CNBT. We affirm.
    A ffirmed.
    Stacy, J., not participating.
    23
    See 168th and Dodge, LP v. Rave Reviews Cinemas, LLC, 
    501 F.3d 945
          (8th Cir. 2007).