Plan To Acquire Farmland Goes Awry.

The plaintiff had been the decedent’s long-term farm tenant on land the decedent solely owned and on another tract that the decedent owned with the decedent’s sister as tenants in common.  In 2007, the plaintiff and the decedent entered into buyout agreement under which the plaintiff would buy both tracts upon the decedent’s death with proceeds from an insurance policy that the plaintiff obtained on the decedent’s life.  The plaintiff and the decedent were unrelated.  The agreement was signed by the plaintiff, the decedent and the decedent’s sister by the decedent under a power of attorney (which all parties agreed the decedent had no such authority).  The decedent died in 2012 after the plaintiff had paid $170,000 in insurance premiums.  The policy proceeds of $500,000 were paid to the plaintiff and he tendered that amount the decedent’s personal representative.  The personal representative refused to convey the farmland to the plaintiff on the grounds that the buyout agreement was void because the plaintiff lacked an insurable interest in the decedent’s life.  The trial court held that the buyout agreement could not be specifically performed because there was no way to apportion the purchase price between the decedent’s interest and his sister’s interest, and that the plaintiff’s damage claim was time barred.  The court ruled that the estate had no standing to raise the defense of lack of insurable interest.   On appeal, the court declared the buyout agreement void on public policy grounds for lack of an insurable interest.  The court also agreed that the damage claim was time-barred.  Johnson v. Nelson, 290 Neb. 703 (2015).

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