Winberg v. Cimfel

In Winberg v. Cimfel, 248 Neb. 71, 532 N.W.2d 35 (1995), the parties entered into a real estate sales agreement for a 4-acre tract out of a 280-acre farm, which agreement included a provision giving the purchasers a right of first refusal in the sale of the remaining 276 acres of the farm if the sellers decided to sell the larger tract. After making all of the installment payments, the purchasers received a warranty deed from the sellers, which deed did not refer to the right of first refusal detailed in the sales agreement. The sellers later received inquiry from a third party interested in purchasing the remaining 276 acres. The sellers informed the purchasers that the tract was for sale, but ultimately sold the tract to the third party. The purchasers filed suit, seeking specific performance of the right of first refusal and asking the court to declare the conveyance between the sellers and the third party void. The district court held that the right of first refusal in the purchase agreement merged into the deed which conveyed the 4-acre tract to the purchasers and that this right ceased to exist because it was not specifically continued in the deed. On appeal, the Nebraska Supreme Court considered whether the right of first refusal in the purchase agreement merged into the warranty deed. The Supreme Court noted that for a merger of agreements to take place, the same parties and the same subject matter must be involved and there must be some showing of intent to merge the two agreements. The Winberg court found that the district court misconstrued the principle of merger. The Supreme Court reasoned that the purchase agreement concerned both the conveyance of the 4-acre tract and the right of first refusal to purchase the 276-acre tract. The court found that the deed only related to the conveyance of the 4-acre tract. The court concluded that the provisions of the purchase agreement related to the 4-acre tract merged into the warranty deed because that portion of the sales agreement was executed by delivery of the deed, but it concluded that the portion of the purchase agreement relating to the right of first refusal in the 276-acre tract remained executory and survived the deed. The Supreme Court reversed, and remanded for further proceedings.