Leo Hrnicek and his wife had six children. Leo loaned one of his daughters, Brietzke, and her husband $85,000 with an interest rate of 7%. The loan was to be repaid over 15 years beginning on April 1, 1995, and ending in March 1, 2010. Leo died on November 2, 1997 and gave all of his property, including the note, to a trust. After contentious family litigation, the court approved a settlement that provided that: (1) Brietzke and her co-trustee would resign as trustees of the trust and be replaced by First National Bank North Platte (FNBNP); (2) Brietzke acknowledged her debt to the trust; and (3) Brietzke agreed to repay the debt in full pursuant to the terms of the note.
Despite the settlement, Brietzke made no payments under the note, and FNBNP as trustee filed a motion asking the court to approve the retention of a trust distribution otherwise owed to Brietzke on the grounds that she had not repaid amounts due under the court’s April 23, 2003 order approving the settlement. FNBNP also asked the court to find Brietzke in contempt of court. Brietzke objected.
The court found Brietzke in contempt of court and allowed FNBNP to retain sufficient funds from any future distributions to fully satisfy the outstanding balance owed the trust. Brietzke appealed.
On appeal, the Nebraska Supreme Court affirmed on the grounds that: (1) even though the Nebraska Uniform Trust Code did not allow for the retention of funds to satisfy the unpaid amounts owed on the loan, the Nebraska probate code did allow for retention of funds and codified the common law remedy; (2) the Nebraska Uniform Trust Code provides that the common law of trusts and principles of equity supplement the Nebraska Uniform Trust Code except to the extent modified by the trust code or other Nebraska statute; (3) the retention remedy of the Probate Code is equally applicable to trusts and retention of the trust funds was appropriate; and (4) Brietzke’s acknowledgement of the debt in the 2003 settlement precluded her asserting a statute of limitations defense, because the court’s order and the court’s exercise of its contempt powers were not subject to any statute of limitations.