Huntington v. Pedersen
294 Neb. 294
| Neb. | 2016Background
- Judgment creditors (Huntington et al.) held judgments exceeding $2M against debtors including Donald Pedersen.
- Debtor paid attorney K.C. Engdahl $15,000 to pursue an appeal; Engdahl filed a notice of appeal on August 23, 2013.
- Creditors served garnishment summonses on Engdahl in 2013; Engdahl answered on September 11, 2013, denying possession of any funds belonging to the debtors. Creditors did not file a §25-1030 application within 20 days to challenge those answers.
- After a debtor’s exam showed the $15,000 payment, creditors served a second garnishment on Engdahl in July 2014; Engdahl again answered denying possession.
- Creditors filed a timely motion under §25-1030 after the second answers, seeking to garnish the $15,000 as unpaid/unearned fees. The district court denied relief, concluding the first unchallenged answers discharged Engdahl and claim preclusion barred relitigation.
- Creditors appealed; Nebraska Supreme Court affirmed the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether creditors could pursue garnishment of the $15,000 in the second proceeding despite failing to challenge Engdahl's first answers within 20 days | Creditors argued the second garnishment raised new facts (e.g., fee unearned) and was timely; they should be allowed to pursue liability | Engdahl argued his unchallenged 2013 denial triggered §25-1030 discharge, releasing him as to those funds and precluding relitigation by claim preclusion | Court held §25-1030 required timely challenge; failure to file within 20 days discharged Engdahl as to the subject funds, and claim preclusion barred the second action |
Key Cases Cited
- ML Manager v. Jensen, 287 Neb. 171 (clarifying statutory interpretation of garnishment rules and reviewing garnishment findings)
- NC+ Hybrids v. Growers Seed Assn., 228 Neb. 306 (holding unchallenged garnishee answer and statutory discharge is a judgment on the merits and bars relitigation)
- NC+ Hybrids v. Growers Seed Assn., 219 Neb. 296 (earlier related opinion addressing initial garnishment proceedings)
- Spaghetti Ltd. Partnership v. Wolfe, 264 Neb. 365 (garnishee liability measured at time of service)
- Gerdes v. Klindt, 253 Neb. 260 (plaintiff bears burden to show garnishee liability and frames issues via application)
- Hara v. Reichert, 287 Neb. 577 (explaining claim preclusion elements)