Florence Lake Invs. v. Berg
| Decision Date | 12 August 2022 |
| Docket Number | S-21-350 |
| Citation | 312 Neb. 183 |
| Court | Nebraska Supreme Court |
| Parties | Florence Lake Investments, LLC, appellant, v. Jason Berg and Mary Berg, appellees, David M. Kroeger, intervenor-appellee, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and Zoetis, Inc., garnishees-appellees. |
1. Jurisdiction: Appeal and Error. A jurisdictional question that does not involve a factual dispute is determined by an appellate court as a matter of law.
2. Judgments: Appeal and Error. When reviewing questions of law, an appellate court resolves the questions independently of the lower court's conclusions.
3. Garnishment: Appeal and Error. Garnishment is a legal proceeding. To the extent factual issues are involved, the findings of the fact finder will not be set aside on appeal unless clearly wrong; however, to the extent issues of law are presented, an appellate court has an obligation to reach independent conclusions irrespective of the determinations made by the court below.
4 Jurisdiction. Parties cannot confer subject matter jurisdiction upon a judicial tribunal by either acquiescence or consent, nor may subject matter jurisdiction be created by waiver, estoppel, consent, or conduct of the parties.
5. Jurisdiction: Appeal and Error. Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.
6. Jurisdiction: Final Orders: Appeal and Error. For an appellate court to acquire jurisdiction of an appeal, the party must be appealing from a final order or a judgment.
7. Judgments: Final Orders: Words and Phrases. A judgment is the final determination of the rights of the parties in an action 8. Judgments: Words and Phrases. Every direction of the court made or entered in writing and not included in a judgment is an order.
9. Judgments: Final Orders: Statutes: Appeal and Error. While all judgments not incorrectly designated as such are appealable, an order may be appealed only if a statute expressly makes the order immediately appealable or the order falls within the statutory definition of a final order.
10. Final Orders: Appeal and Error. To be a final order subject to appellate review, the lower court's order must (1) affect a substantial right and determine the action and prevent a judgment, (2) affect a substantial right and be made during a special proceeding (3) affect a substantial right and be made on summary application in an action after a judgment is entered, or (4) deny a motion for summary judgment which was based on the assertion of sovereign immunity or the immunity of a government official.
11. Final Orders. Substantial rights under Neb Rev. Stat. § 25-1902 (Cum. Supp. 2020) include those legal rights that a party is entitled to enforce or defend.
12. Judgments: Final Orders: Garnishment: Liability. An order overruling an application to determine garnishee liability in a postjudgment garnishment proceeding is an order affecting a substantial right made on a summary application in an action after a judgment is entered.
13. Judgments. A summary application in an action after judgment is an order ruling on a postjudgment motion in an action.
14. Judgments: Final Orders: Garnishment: Liability. A court's order overruling an application to determine garnishee liability affects a garnishor's substantial rights, because it undermines a garnishor's ability to satisfy its judgment against a judgment debtor.
15. Statutes: Legislature: Intent. When construing a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense.
16. Statutes: Courts. A court must reconcile different provisions of the statute so they are consistent, harmonious, and sensible.
17. Statutes: Intent. In construing a statute, the court must look at the statutory objective to be accomplished, the problem to be remedied, or the purpose to be served, and then place on the statute a reasonable construction which best achieves the purpose of the statute, rather than a construction defeating the statutory purpose.
18. Judgments: Debtors and Creditors: Garnishment: Property. Generally, executions and garnishments in aid of executions are mechanisms by which a judgment creditor can seek judicial enforcement of a monetary judgment-usually by seizing and selling the judgment debtor's property.
19. Final Orders: Garnishment: Property. Neb. Rev. Stat. § 25-1315 (Reissue 2016) is inapplicable to a final order regarding a postjudgment garnishment in aid of execution directed to specific property where all rights of all parties claiming an interest in the specific property garnished have been adjudicated.
20. Garnishment: Liability: Service of Process: Time. A garnishee's liability is to be determined as of the time the garnishment summons is served.
21. Judgments: Debtors and Creditors: Garnishment. The claim of a judgment creditor garnishor against a garnishee can rise no higher than the claim of the garnishor's judgment debtor against the garnishee.
22. Judgments: Debtors and Creditors: Garnishment: Subrogation. A garnishor is subrogated to the rights of the judgment debtor and can recover only by the same right and to the same extent that the judgment debtor might recover from the garnishee.
23. Garnishment: Liability: Service of Process: Time. In determining the liability of a garnishee to a garnishor, the test is whether, as of the time the summons in garnishment was served, the facts would support a recovery by the garnishor's judgment debtor against the garnishee.
24. Federal Acts: Pensions. The Employee Retirement Income Security Act of 1974 provides a uniform and systematic framework for regulation of employee benefit plans to ensure that the employee's accrued benefits are actually available for retirement purposes.
25. Federal Acts: Pensions: Debtors and Creditors. The Employee Retirement Income Security Act of 1974 utilizes an anti-alienation statute to bar creditors from collecting undistributed funds in an employee benefit plan.
26. Federal Acts: Pensions: Garnishment. The restrictions of the Employee Retirement Income Security Act of 1974 on assignment or alienation of pension benefits apply to garnishment.
27. Constitutional Law: Statutes. Federal preemption arises from the Supremacy Clause of the U.S. Constitution and is the concept that state laws that conflict with federal law are invalid.
28. Federal Acts: Pensions: Garnishment: Statutes. The anti-alienation statute of the Employee Retirement Income Security Act of 1974 preempts conflicting state garnishment laws.
29. Federal Acts: Pensions: Garnishment: Liability. The Employee Retirement Income Security Act of 1974 does not preempt a garnishee, acting as a plan administrator, from being found liable under Neb. Rev. Stat. § 25-1030.02 (Reissue 2016). 30. Debtors and Creditors: Garnishment. It is an invariable rule that under no circumstances shall the garnishee, by operation of the proceedings against him or her, be placed in a worse condition than the garnishee would be in if the judgment debtor's claim against the garnishee were enforced by the judgment debtor himself or herself.
31. Judgments: Appeal and Error. An appellate court may affirm a lower court's ruling that reaches the correct result, albeit based on different reasoning.
Appeal from the District Court for Lancaster County: Robert R. Otte, Judge. Affirmed.
John F. Zimmer V and Andre R. Barry, of Cline, Williams. Wright, Johnson & Oldfather, L.L.R, for appellant.
Kenneth M. Wentz III and Caitlin J. Ellis, of Jackson Lewis, PC, for garnishee-appellee Zoetis, Inc.
A garnishor appeals from an order overruling its application to determine garnishee liability against a plan administrator whose interrogatory answers failed to disclose a judgment debtor's 40IK account. The central issue is whether the Employee Retirement Income Security Act of 1974 (ERISA)[1]-particularly, ERISA's anti-alienation statute[2]-shields the administrator from state garnishment law liability. Because we conclude that it does under the circumstances here, we affirm.
Florence Lake Investments, LLC (Florence), obtained a judgment against Jason Berg (Berg) and his wife, Mary Berg (Mary). The judgment totaled over $4 million with postjudgment interest continuing to accrue.
Florence's collection efforts employed numerous postjudgment proceedings for garnishment or execution. We summarize only those events, parties, and filings pertinent to the instant appeal. Many are pertinent only to the discussion of our jurisdiction. We address the merits only as to a single postjudgment garnishment.
In attempting to collect the judgment against property that was not subject to Berg's bankruptcy proceeding, Florence utilized two methods: (1) postjudgment garnishments of Berg's wages and financial accounts and (2) executions against Berg and Mary's personal property. These efforts occurred more or less contemporaneously.
Although the timing of the answers to garnishment interrogatories was pertinent to issues before the district court, no error is assigned regarding the court's resolution of timing issues. Thus, we omit unnecessary dates.
(a) Garnishments
Florence sought to garnish Berg's wages and financial accounts. Florence's primary target was Berg's 401K account, which totaled over $1 million.
Florence first served Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), with...
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