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Case Summaries
Administrative Law, Appeal and Error

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This case before the Nebraska Supreme Court, involves the determination of a patient's ability to pay for mental health care provided by the Nebraska Department of Health and Human Services and whether the Department properly determined the patient’s ability to pay for his care.

Holmes v. State, 275 Neb. 211 (2008)

Supreme Court Headnotes

Administrative Law:

1.  Agency regulations that are properly adopted and filed with the Secretary of State of Nebraska have the effect of statutory law.

2.  Judgments: Appeal and Error. A judgment or final order rendered by a district court in a judicial review pursuant to the Administrative Procedure Act may be reversed, vacated, or modified by an appellate court for errors appearing on the record. When reviewing an order of a district court under the Administrative Procedure Act for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

3.  Statutes: Appeal and Error. The meaning of a statute is a question of law, and a reviewing court is obligated to reach its conclusion independent of the court below and the administrative agency.

Date Filed and Case No.: March 7, 2008. No. S-06-1141.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s06-1141.pdf

Court Appealed From: District Court for Lancaster County: Steven D. Burns, Judge.

Attorneys for the Appeal: Jon Bruning, John L. Jelkin, and, on brief, Douglas D. Dexter for State of Nebraska Department of Health and Human Services and Nancy Montanez, director of the Nebraska Department of Health and Human Services, appellants. Joseph C. Byam for Roy T. Holmes, Individually, and Patricia G. Holmes, Conservator of the Estate of Joy I. Holmes, a Protected Person, appellees.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Wright, J.

Summary: This case involves the determination of Roy T. Holmes’ ability to pay for mental health care provided by the Nebraska Department of Health and Human Services (DHHS) for inpatient and outpatient treatments at the Norfolk Regional Center (NRC). DHHS notified Patricia G. Holmes (Patricia), Holmes’ mother and conservator that it had determined that Holmes was able to pay for his care at the NRC. DHHS calculations were that she was obligated to pay Holmes’ Social Security benefits for his care, $2,099 effective December 3, 2003, and $2,115 effective January 1, 2004, for each following month. Patricia appealed to the DHHS.

     DHHS offered into evidence a revised determination of Holmes' ability to pay which reduced Holmes' total ability to pay for his inpatient care. Further, DHHS acknowledged that its calculations did not take into account Holmes' monthly liabilities, including the monthly mortgage payment and the utilities for his house. However, DHHS' representative testified that DHHS had not been provided with that information but even if it was provided, DHHS would consider these monthly liabilities only in an undue hardship determination. Because Holmes had excess assets, he would not qualify for such a determination. In response, Patricia offered into evidence the monthly calculations of Holmes' mortgage payment, his utilities, and his food (exhibit 20.) When asked if the new evidence rendered DHHS' calculations incorrect, DHHS' representative stated that she would have "some more questions that need to be answered" in relation to whether that would change her calculations. DHHS' calculations of Holmes' ability to pay also did not provide for the equity in his house to be set off from his chargeable assets because Holmes was "not living in home." However, Patricia testified that Holmes had moved back into his house for a short time after he was released from the NRC, but that in June 2004, he moved into an apartment pursuant to a recommendation from his doctor. Patricia testified that an order authorizing the sale of Holmes' house was entered in July 2005, but that the house had not yet been sold. After the hearing, DHHS' director found that DHHS' calculations were consistent with the rules and regulations and therefore must be affirmed.

     Patricia appealed the director's decision to the district court, claiming that DHHS' determination was erroneous because it did not consider all of Holmes' liabilities in determining his chargeable assets and his available unearned income. The district court concluded that only events that occurred prior to February 2004 (when DHHS determined Holmes' ability to pay) were relevant to the determination of whether it was reasonable to assume Holmes would return to his house at some time in the future. The court found that as of February 2004, Holmes had, previous to his commitment to the NRC, resided in the house for many years. The district court concluded that there was no evidence whether, as of February 2004, it was reasonable to assume that Holmes would return to his house at some time in the future. As such, pursuant to DHHS regulations, DHHS was required to conduct an analysis as to whether, at the time of its ability-to-pay determination in February 2004, Holmes might reasonably be expected to live in his house in the future. Because DHHS had not done so, the district court remanded the case for further proceedings on the issue of whether it was reasonable in February 2004 for DHHS to assume that Holmes would, in the future, reside in his house and for a personal needs allowance analysis to be conducted, including consideration of monthly liabilities under DHHS rules

Did the district court err in ruling that DHHS had to perform an analysis of Holmes’ ability to return to his house as of the time of the ability-to-pay determination and in remanding the case for a personal needs analysis? In general, the Court said that DHHS is required to assess against a patient such part of the cost of the patient’s care by a state hospital for the mentally ill as the patient is able to pay. (Neb. Rev. Stat. § 83-366) DHHS regulations further outline the process to be followed in determining the ability of a patient at a state regional center to pay for his or her own care. Here, because Holmes had no taxable income, DHHS first looked to his chargeable assets for the purpose of determining his ability to pay and determined that the equity in his house qualified as a chargeable asset. While DHHS argued that implicit in its determination was that Holmes would not, in the future, reside in his house. The Court concluded that the evidence supported this determination and that the district court erred in remanding the case for further consideration of this issue.

     Next, DHHS assigned as error the district court’s determination that DHHS must deduct Holmes’ monthly mortgage payments from his unearned income. The issue here is whether DHHS is required to consider Holmes’ monthly mortgage payment, utilities, and food costs when it calculated unearned income. In the case at bar, Holmes did not request that DHHS consider his monthly liabilities, including his monthly mortgage payment, utilities, and food costs, until the time of the hearing. At the hearing, DHHS’ representative testified that Holmes’ monthly liabilities would be considered only in an undue hardship determination. She testified that because Holmes had chargeable assets, he would not qualify for relief through the undue hardship review. Because the Court had concluded that it was reasonable to assume Holmes would not return to his house, they determined that Holmes had chargeable assets, and therefore, DHHS was not required to make an undue hardship determination. The Court said that “[b]ecause of the way the Medical Assistance guidelines were phrased—including the term ‘standard of need’—the district court found that DHHS had made only a standard of need allowance assessment but had called it a personal needs allowance.” In actuality, DHHS had calculated a personal needs allowance, “albeit confusingly.” Since no standard of need allowance was available for inpatient care, DHHS’ assessment of Holmes’ personal needs allowance was the only allowance that DHHS was required to assess for inpatient care. Thus, DHHS was correct in determining that $50 should be deducted from Holmes’ unearned income for the time he spent in inpatient care and that $730 should be deducted from Holmes’ unearned income for the time he spent in outpatient care.

Conclusion: The Nebraska Supreme Court ruled that the district court erred in requiring DHHS to perform an analysis of Holmes’ ability to return to his house as of the time of the ability-to-pay determination made by DHHS and erred in remanding the case for a personal needs analysis. DHHS was correct in its determination of Holmes’ ability to pay for his care from the NRC. They therefore reversed the judgment of the district court and remanded the cause with directions to reinstate the director’s order. REVERSED AND REMANDED WITH DIRECTIONS.


Attorney Discipline, Application for Reinstatement

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The Nebraska Supreme Court here denies a motion for reinstatement of the bar license of a disbarred attorney.

State ex rel. Counsel for Dis. v. Scott, 275 Neb. 194 (2008)

Supreme Court Headnotes

Disciplinary Proceedings.

1.  In considering an application for reinstatement to the practice of law, the Nebraska Supreme Court owes a solemn duty to protect the public and the legal profession, which consideration must be performed without regard to feelings of sympathy for the applicant. ••• A mere sentimental belief that a disbarred lawyer has been punished enough will not justify his or her restoration to the practice of law. The primary concern is whether the applicant, despite the former misconduct, is now fit to be admitted to the practice of law and whether there is a reasonable basis to believe that the present fitness will permanently continue in the future.

2.  Appeal and Error. In attorney discipline and admission cases, the Nebraska Supreme Court reviews recommendations de novo on the record, reaching a conclusion independent of the referee’s findings. When credible evidence is in conflict on material issues of fact, however, the court considers and may give weight to the fact that the referee heard and observed the witnesses and accepted one version of the facts rather than another.

3.  Proof. A disbarred attorney has the burden of proof to establish, by clear and convincing evidence, good moral character to warrant reinstatement. ••• The proof of good character must exceed that required under an original application for admission to the bar because it must overcome the former adverse judgment of the applicant’s character. ••• The more egregious the underlying misconduct, the heavier an applicant’s burden to prove his or her present fitness to practice law.

Date Filed and Case No.: March 7, 2008. No. S-97-584.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s97-584.pdf

Court Appealed From: Original action.

Attorneys for the Appeal: Kent L. Frobish for State of Nebraska ex rel. Counsel for Discipline of the Nebraska Supreme Court, relator. David A. Domina for Richard E. Scott, respondent.

Justices: Wright, Connolly, Gerrard, Stephan, McCormack, and Miller-Lerman , J J.

Not Participating: Heavican, C.J.

Authored By: Per Curiam.

Summary: On June 20, 1997, the Nebraska Supreme Court imposed a 1-year suspension on Richard E. Scott for his violation of several disciplinary rules. A week later, they disbarred Scott after he pled guilty to one count of filing a false tax return.

In April 2007, Scott applied for reinstatement of his license to practice law in Nebraska. Counsel for Discipline filed a resistance to the application and the Court appointed a referee, who recommended that they readmit Scott contingent upon certain conditions. Counsel for Discipline filed exceptions to the referee’s recommendations.

The Nebraska Supreme Court’s decision. The record reflected that since his release from prison, Scott has taken positive steps to reestablish himself in the community. Furthermore, Scott’s testimony reflected that he now takes responsibility for his past mistakes and appears to be remorseful. However, the Court wrote that while Scott’s efforts in this regard are certainly commendable, they disagreed with the referee’s recommendation that Scott be reinstated to the practice of law at this time. “We find the evidence of Scott’s present moral character to be insufficient to overcome the heavy burden imposed by his past egregious misconduct” wrote the Court. In the present case, Scott has a significant history of dishonest conduct. Scott committed a serious crime in that he intentionally and grossly misstated his income and knowingly filed fraudulent tax returns for more than 10 years. Scott testified that he knew what he was doing was illegal, yet continued his illegal conduct until he was finally caught by the IRS. “In short,” the Court wrote “we are very troubled by the fact that for more than a decade, Scott made a conscious and continuous effort to defraud the government.” They further noted that Scott’s disbarment for filing fraudulent tax returns was not the first time they had disciplined Scott. Scott, in an incident unrelated to his tax fraud, was given a 1-year suspension for, among other things, lying to a court. Here, the Court pointed out that Scott failed to make a single payment in restitution to the IRS despite the fact that, including taxes, penalties, and interest, the total amount owed may be as high as $300,000 or $400,000. As justification for his lack of payment, Scott explained that the IRS has not attempted to collect the money from him for more than 3 years. While the Court recognized that Scott has made some payments to the State of Nebraska and recently made an effort to contact the IRS, before this time, insufficient effort was made. “And more importantly, no actual restitution payments have been submitted to the IRS.” As a result, the Court found Scott’s restitution efforts to be inadequate. Upon due consideration of the record, the Court concluded that given the egregious and prolonged nature of Scott’s past dishonest conduct, his prior discipline, and his insufficient efforts to make restitution, Scott had not met his burden of establishing sufficient moral character to warrant reinstatement.

Conclusion: The Court concluded on the basis of its independent review that Scott had not met his burden of showing by clear and convincing evidence that his license to practice law in Nebraska should be reinstated at this time. Scott’s application was therefore denied. APPLICATION FOR REINSTATEMENT DENIED.


Attorney Discipline, Attorney Trust, Failure to Account for Money

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This disciplinary proceeding which dealt primarily with an improper use and accounting of a trust account and a failure to respond to correspondence from the counsel for discipline, ends in the disbarment of the attorney.

State ex rel. Counsel for Dis. v. Smith, 275 Neb. 230 (2008)

Supreme Court Headnotes

Disciplinary Proceedings.

1.  A proceeding to discipline an attorney is a trial de novo on the record. ••• Neb. Ct. R. of Discipline 4 (rev. 2004) provides that the following may be considered by the Nebraska Supreme Court as sanctions for attorney misconduct: (1) disbarment; (2) suspension for a fixed period of time; (3) probation in lieu of or subsequent to suspension, on such terms as the court may designate; (4) censure and reprimand; or (5) temporary suspension. ••• For purposes of determining the proper discipline of an attorney, the Nebraska Supreme Court considers the attorney’s acts both underlying the events of the case and throughout the proceeding. ••• To determine whether and to what extent discipline should be imposed in a lawyer discipline proceeding, the Nebraska Supreme Court considers the following factors: (1) the nature of the offense, (2) the need for deterring others, (3) the maintenance of the reputation of the bar as a whole, (4) the protection of the public, (5) the attitude of the offender generally, and (6) the offender’s present or future fitness to continue in the practice of law. ••• Responding to disciplinary complaints in an untimely manner and repeatedly ignoring requests for information from the Counsel for Discipline indicate disrespect for the Nebraska Supreme Court’s disciplinary jurisdiction and a lack of concern for the protection of the public, the profession, and the administration of justice. ••• An attorney’s failure to respond to inquiries and requests for information from the Office of the Counsel for Discipline is a grave matter and a threat to the credibility of attorney disciplinary proceedings. ••• The failure of a respondent to answer the formal charges subjects the respondent to a judgment on the formal charges filed. ••• The determination of an appropriate penalty to be imposed on an attorney requires consideration of any aggravating or mitigating factors.

Records:

1.  Appeal and Error. A party’s brief may not expand the evidentiary record.

Date Filed and Case No.: March 7, 2008. No. S-07-397.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s07-397.pdf

Court Appealed From: Original action.

Attorneys for the Appeal: Kent L. Frobish for State of Nebraska ex rel. Counsel for Discipline of the Nebraska Supreme Court, relator. Stephen L. Smith, respondent, pro se.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Per Curiam.

Summary: Relator, filed formal charges against respondent, Stephen L. Smith. The charges related to Smith’s representation of Thomas J. Kawa who had, in February 2005, hired Smith to represent him on several matters, and Kawa delivered a check for $3,000 as a deposit. Smith did not deposit the funds into his attorney trust account and on April 6, 2006, Kawa filed a grievance against Smith alleging, in part, that Smith had failed to provide an accounting of Kawa’s advance payment. Relator’s correspondence with Smith over the next year oftentimes went without a response from Smith. Finally, statements from Smith’s trust account, indicated that the balance was at various times below the amount that should have remained from Kawa’s funds. According to relator, the review of the bank statements showed that Smith was improperly using the trust account as a business account or as his personal checking account by leaving personal funds in the account and using the account to pay personal expenses.

     Upon the recommendation of the Committee on Inquiry of the Second Disciplinary District, formal charges were filed against Smith on April 16, 2007.  The charges stated that Smith’s acts and omissions that occurred prior to September 1, 2005, constituted violations of his oath of office as an attorney and the following provisions of the Code of Professional Responsibility: Canon 1, DR 1-102(A)(1), and Canon 9, DR 9-102(A)(l) and (2). Those acts and omissions that occurred after September 1, 2005, constituted violations of Smith’s oath of office as an attorney and Neb. Ct. R. of Prof. Cond. 8.4 (rev. 2005). Smith was personally served and did not file an answer. On August 29, the Nebraska Supreme Court granted in part relator’s motion for judgment on the pleadings, finding that “Smith has violated Code as alleged in formal charges.”

Discipline imposed. Relator suggested that the appropriate sanction in this case was disbarment. The Court laid out the lack of responsiveness by Smith and that when Smith provided copies of his monthly bank statements on November 8, a review showed that there was no record of the $3,000 deposit from Kawa and that the trust account had fallen below the balance it should have had on more than one occasion. The Court noted that Smith is subject to discipline for his failure to timely and adequately respond to requests for information from relator. The only information the Court had before it from Smith was his brief. Smith was unable to provide an adequate explanation of how he disbursed funds from his trust account prior to receiving a deposit from Kawa and of how he disbursed more than $3,000 from the account. His bank records did not show a corresponding deposit of $3,000. Smith failed to provide an adequate explanation for the discrepancies in his trust account related to the representation of Kawa. Smith’s actions demonstrated disrespect for this court’s disciplinary jurisdiction. “These actions also indicate a lack of concern for the protection of the public, the profession, and the administration of justice.” The Court considered the undisputed allegations of the formal charges and the applicable law. Upon due consideration, the Court found that Smith should be disbarred from the practice of law in the State of Nebraska.

Conclusion: The Court found that Smith violated DR 1-102(A)(1), DR 9-102(A)(l) and (2), rule 8.4, and his oath of office as an attorney. They concluded that disbarment is the appropriate sanction. JUDGMENT OF DISBARMENT.


Criminal Complaint, Timeliness of Filing, Successive Complaints for Same Action

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A look at the timeliness of filing a second complaint in county court, where the first complaint had been appealed to the district and Supreme Courts, only to find its way back down to the county court (a period exceeding 18 months) is examined here by the Nebraska Supreme Court.

State v. Loyd, 275 Neb. 205 (2008)

Supreme Court Headnotes

Statutes.

1.  In the absence of anything to the contrary, statutory language is to be given its plain and ordinary meaning.

2.  Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the determination made by the court below.

Date Filed and Case No.: March 7, 2008. No. S-06-1113.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s06-1113.pdf

Court Appealed From: District Court for Douglas County, John D. Hartigan, Jr., Judge, on appeal thereto from the County Court for Douglas County, Thomas G. McQuade, Judge.

Attorneys for the Appeal: David W. Jorgensen for Michael W. Loyd, appellant. Jon Bruning and James D. Smith for State of Nebraska, appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: McCormack, J.

Summary: On June 18, 2001, Loyd was arrested and cited for driving under the influence of alcoholic liquor (DUI). On June 29, Loyd was charged in county court with second-offense DUI under Omaha Mun. Code, ch. 36, art. Ill, § 36-115 (1998). Loyd moved to quash the complaint which on August 16, 2001, was granted by the county court. The State filed an exception, and on January 24, 2003, the Nebraska Supreme Court issued an opinion overruling the State’s exception. On March 18, 2003, Loyd was charged by complaint in the county court with second offense DUI. Loyd filed a motion for absolute discharge, asserting that the complaint had not been filed within the 18-month statute of limitations set forth in § 29-110(1). Loyd also filed a supplemental motion to discharge based upon his federal and state constitutional rights to a speedy trial. On May 22, the county court denied Loyd’s motion to discharge and on December 4, the court denied Loyd’s supplemental motion to discharge. Loyd appealed to the district court from both orders. The district court found no violation of Loyd’s rights to a speedy trial, and, without discussing Loyd’s statute of limitations argument, the district court affirmed the decision of the county court. Loyd then appealed to the Nebraska Supreme Court, and they affirmed. Thereafter, Loyd was tried in the county court and on August 4, 2005, was found guilty. Loyd appealed that conviction and the county court’s May 22, 2003, denial of his motion for absolute discharge to the district court. The district court affirmed the decisions of the county court and Loyd appealed to the Nebraska Supreme Court.

Did the district court err in failing to find that the March 18, 2003, complaint should be dismissed because it was not filed within 18 months after Loyd committed the alleged criminal act?

1.  Were the charges from the same “offense?” At the time it was filed, § 29-110(1) provided that no person shall:

[B]e prosecuted, tried, or punished for any misdemeanor or other indictable offense below the grade of felony . . . unless the indictment, information, or action for the same shall be found or instituted within one year and six months from the time of committing the offense.

Section 29-110(1) further provides, however, that

If any indictment, information, or suit is quashed . . . the time during the pendency of such indictment, information, or suit so quashed . . . shall not be reckoned within this statute so as to bar any new indictment, information, or suit for the same offense.

Here, Loyd was arrested for the DUI on June 18, 2001. Based on that incident, a complaint was filed on June 29 which complaint was quashed on August 16, and, on appeal, the Supreme Court overruled the State’s exception to the court’s order. The March 18, 2003, is also based on Loyd’s June 18, 2001, arrest, but charges Loyd with violation of § 60-6,196(2). In order for the tolling provision under § 29-110(1) to apply, the subsequent indictment, information, or suit must charge the “same offense” as the prior indictment, information, or suit. The Court said the applicability of § 29-110(1) here depends in part on whether “offense” constitutes the conduct of the defendant or the charge itself. The Court found that each “offense” consisted of the same elements of the crime of DUI, under §§ 36-115 and 60-6,196.

2.  Was there “pendency” under § 29-110? Does “pendency” under § 29-110 include only that time the complaint was before the county court, or from while it was on appeal? Loyd maintains that “pendency” does not include the time period in which the State appealed to the district court and to the Supreme Court the county court’s order granting Loyd’s motion to quash. As pointed out by the district court, under Loyd’s logic, the statute of limitations to file a complaint against Loyd was extended from December 18, 2002, by 48 days, or until February 4, 2003. Looking to the word “pending” the Court concluded that Loyd’s case remained pending while on appeal to the district court and the Supreme Court. Therefore, the statute of limitations under § 29-110(1) was tolled during that period, and the March 18, 2003, complaint was timely filed.

Conclusion: For the reasons discussed above, the Court affirmed. AFFIRMED.


Garnishment, Garnishee, Interrogatories

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The Nebraska Supreme Court here affirms the judgment of a district court awarding $19,137.00 against a garnishee who failed to answer the questions put to him/his company in a garnishment summons.

Petersen v. Central Park Properties, 275 Neb. 220 (2008)

Supreme Court Headnotes

Garnishment:

1.  Appeal and Error. Garnishment is a legal proceeding. To the extent factual issues are involved, the findings of a garnishment hearing judge have the effect of findings by a jury and, on appeal, will not be set aside unless clearly wrong.

2.  Pretrial Procedure. As a general rule, a garnishee owes a duty to act in good faith and answer fully and truthfully all proper interrogatories presented to him. ••• A garnishee is expected to, in some appropriate manner, properly disclose all relevant facts within his knowledge at the time of submitting an answer concerning his indebtedness to the judgment debtor or concerning money or property of the judgment debtor then in his possession.

Judgments:

1.  Debtors and Creditors: Garnishment. Upon establishing through pleadings and trial that the garnishee holds property or credits of the judgment debtor, the garnishee must then pay such amounts to the court in satisfaction of the judgment against the judgment debtor, subject to certain statutory exceptions with regard to wages.

Date Filed and Case No.: March 7, 2008. No. S-06-1289.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s06-1289.pdf

Court Appealed From: District Court for Hall County: James Livingston, Judge.

Attorneys for the Appeal: Todd V. Elsbernd for Realty Line, Inc., Doing Business as ERA Realty Center, Garnishee-appellant. Mark Porto for appellee Jennifer A. Bauer.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Wright, J.

Summary: The Merrick County Court entered a judgment on a promissory note for Larry E. Petersen and Joyce A. Petersen against four parties, one of whom was Jennifer A. Bauer. The judgment with interest totaled $30,291.40. Bauer filed a cross-claim against two of the parties and the court entered judgment for Bauer. Those two parties were ordered to reimburse Bauer for any payments made by her against the judgment.

     In order to collect on the cross-claim, Bauer sought to garnish wages from E. W. Skala, the remaining promissee, who was a real estate agent with Realty Line. On September 8, 2006, a “Summons and Order of Garnishment in Aid of Execution” was filed naming Realty Line, as the garnishee. Interrogatories were answered by Gary Thompson, as president of Realty Line, with little information other then that Skala was paid on a commission and no money was owed to him by Realty Line.

     After the interrogatories were filed, Bauer filed an application against Realty Line, the garnishee, seeking to determine liability. She alleged that the answers and disclosures given by Gary Thompson were not satisfactory, were wholly inadequate, and failed to provide the information requested in the garnishment. Thompson was a witness at the hearing, as was Alvin Avery, managing broker for the Woods Brothers Realty office in Grand Island. Avery testified that two properties closed in the 3-week period prior to the hearing in which Woods Brothers Realty was involved, and Skala was was entitled to commissions. Avery provided information that Skala was involved in six additional closings between September 7 and 22, 2006 and that the total of commissions due to Realty Line for the eight properties sold in the 3-week period after September 7 equaled approximately $19,000.

     The district court determined that Thompson knew or should have known that Skala had commissions to be paid within the 60 days following the completion of the interrogatories, in which Thompson denied that he owed Skala money. The court found that the answers given by Thompson were not accurate and entered judgment in favor of Bauer and against Realty Line in the sum of $19,137 plus costs.

Did the district court err in finding that Thompson, on behalf of Realty Line, did not accurately answer the interrogatories? The Nebraska Supreme Court said that here, a hearing was held to determine whether Thompson had satisfactorily responded to the interrogatories. The record indicated that he did not, in that although Thompson indicated in the interrogatories that he did not owe Skala any money for wages and that he would not owe Skala any earnings within the next 60 days, Thompson admitted that he knew there were closings scheduled within the next 60 days for properties either listed or sold by Skala. Even though Skala had on average received a commission at least monthly in the past, Thompson claimed he did not know that the company would owe Skala any money in the next 60 days. Avery’s testimony was that Skala had commissions that would be paid within the 60 days following service of the interrogatories on Thompson. Bauer established at the hearing that Realty Line held commissions due to Skala, which in turn could be used to satisfy his debt to Bauer.

Was the district court’s determination as to the amount of liability in error? Realty Line also appeared to object to the district court’s determination that Realty Line was liable to Bauer in the amount of $19,137, rather than solely the amount of commissions earned by Skala. Section 25-1028 provides a rebuttable presumption that if the garnishee fails to answer, it is presumed that the garnishee is indebted in the full amount of the judgment creditor’s claim. In this case, although Realty Line answered the interrogatories, the court found that the answers were not accurate. Though this failure to accurately answer the interrogatories may have potentially subjected Realty Line to a judgment in the full amount of $33,868.25, Realty Line’s appearance at the hearing to determine liability defeated this claim. Thus, the most Bauer could garnish is the amount Realty Line owed Skala, as shown by the pleadings and evidence.The only evidence as to the value of the closings that took place within the 60-day period after the interrogatories were issued came from Avery and the commissions he earned ($19,000.00). Realty Line did not offer any evidence concerning the division of commissions. The district court entered judgment against Realty Line for $19,137 plus costs.

Conclusion: There is no evidence that the judgment in this case was clearly wrong. The judgment of the district court is affirmed. AFFIRMED.

 

Garnishment, Garnishee Liability

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The Nebraska Supreme Court here affirms the judgment of a district court awarding $19,137.00 against a garnishee who failed to answer the questions put to him/his company in a garnishment summons.

Petersen v. Central Park Properties, 275 Neb. 220 (2008)

Supreme Court Headnotes

Garnishment:

1.  Appeal and Error. Garnishment is a legal proceeding. To the extent factual issues are involved, the findings of a garnishment hearing judge have the effect of findings by a jury and, on appeal, will not be set aside unless clearly wrong.

2.  Pretrial Procedure. As a general rule, a garnishee owes a duty to act in good faith and answer fully and truthfully all proper interrogatories presented to him. ••• A garnishee is expected to, in some appropriate manner, properly disclose all relevant facts within his knowledge at the time of submitting an answer concerning his indebtedness to the judgment debtor or concerning money or property of the judgment debtor then in his possession.

Judgments:

1.  Debtors and Creditors: Garnishment. Upon establishing through pleadings and trial that the garnishee holds property or credits of the judgment debtor, the garnishee must then pay such amounts to the court in satisfaction of the judgment against the judgment debtor, subject to certain statutory exceptions with regard to wages.

Date Filed and Case No.: March 7, 2008. No. S-06-1289.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/march/mar7/s06-1289.pdf

Court Appealed From: District Court for Hall County: James Livingston, Judge.

Attorneys for the Appeal: Todd V. Elsbernd for Realty Line, Inc., Doing Business as ERA Realty Center, Garnishee-appellant. Mark Porto for appellee Jennifer A. Bauer.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Wright, J.

Summary: The Merrick County Court entered a judgment on a promissory note for Larry E. Petersen and Joyce A. Petersen against four parties, one of whom was Jennifer A. Bauer. The judgment with interest totaled $30,291.40. Bauer filed a cross-claim against two of the parties and the court entered judgment for Bauer. Those two parties were ordered to reimburse Bauer for any payments made by her against the judgment.

     In order to collect on the cross-claim, Bauer sought to garnish wages from E. W. Skala, the remaining promissee, who was a real estate agent with Realty Line. On September 8, 2006, a “Summons and Order of Garnishment in Aid of Execution” was filed naming Realty Line, as the garnishee. Interrogatories were answered by Gary Thompson, as president of Realty Line, with little information other then that Skala was paid on a commission and no money was owed to him by Realty Line.

     After the interrogatories were filed, Bauer filed an application against Realty Line, the garnishee, seeking to determine liability. She alleged that the answers and disclosures given by Gary Thompson were not satisfactory, were wholly inadequate, and failed to provide the information requested in the garnishment. Thompson was a witness at the hearing, as was Alvin Avery, managing broker for the Woods Brothers Realty office in Grand Island. Avery testified that two properties closed in the 3-week period prior to the hearing in which Woods Brothers Realty was involved, and Skala was was entitled to commissions. Avery provided information that Skala was involved in six additional closings between September 7 and 22, 2006 and that the total of commissions due to Realty Line for the eight properties sold in the 3-week period after September 7 equaled approximately $19,000.

     The district court determined that Thompson knew or should have known that Skala had commissions to be paid within the 60 days following the completion of the interrogatories, in which Thompson denied that he owed Skala money. The court found that the answers given by Thompson were not accurate and entered judgment in favor of Bauer and against Realty Line in the sum of $19,137 plus costs.

Did the district court err in finding that Thompson, on behalf of Realty Line, did not accurately answer the interrogatories? The Nebraska Supreme Court said that here, a hearing was held to determine whether Thompson had satisfactorily responded to the interrogatories. The record indicated that he did not, in that although Thompson indicated in the interrogatories that he did not owe Skala any money for wages and that he would not owe Skala any earnings within the next 60 days, Thompson admitted that he knew there were closings scheduled within the next 60 days for properties either listed or sold by Skala. Even though Skala had on average received a commission at least monthly in the past, Thompson claimed he did not know that the company would owe Skala any money in the next 60 days. Avery’s testimony was that Skala had commissions that would be paid within the 60 days following service of the interrogatories on Thompson. Bauer established at the hearing that Realty Line held commissions due to Skala, which in turn could be used to satisfy his debt to Bauer.

Was the district court’s determination as to the amount of liability in error? Realty Line also appeared to object to the district court’s determination that Realty Line was liable to Bauer in the amount of $19,137, rather than solely the amount of commissions earned by Skala. Section 25-1028 provides a rebuttable presumption that if the garnishee fails to answer, it is presumed that the garnishee is indebted in the full amount of the judgment creditor’s claim. In this case, although Realty Line answered the interrogatories, the court found that the answers were not accurate. Though this failure to accurately answer the interrogatories may have potentially subjected Realty Line to a judgment in the full amount of $33,868.25, Realty Line’s appearance at the hearing to determine liability defeated this claim. Thus, the most Bauer could garnish is the amount Realty Line owed Skala, as shown by the pleadings and evidence.The only evidence as to the value of the closings that took place within the 60-day period after the interrogatories were issued came from Avery and the commissions he earned ($19,000.00). Realty Line did not offer any evidence concerning the division of commissions. The district court entered judgment against Realty Line for $19,137 plus costs.

Conclusion: There is no evidence that the judgment in this case was clearly wrong. The judgment of the district court is affirmed. AFFIRMED.