Schaefer Shapiro v. Ball, 941 N.W.2d 755

Schaefer Shapiro obtained a money judgment against Rodien Ball and served a garnishment on Ball’s bank account alleging sufficient funds to satisfy the judgment.
The bank answered that the account contained nonwage funds in excess of the judgment; the county court initially ordered transfer of nonexempt funds to the court.
Ball requested a hearing and testified that he regularly received $1,790/month in Social Security and that the only remaining funds in the account were Social Security payments; he testified that he had previously deposited real-estate sale proceeds but had spent those nonexempt proceeds.
The county court credited Ball’s testimony and ruled the account funds exempt from garnishment; the district court affirmed on appeal, finding competent evidence supported the county court’s credibility determination.
Schaefer appealed, arguing that commingling Social Security with nonexempt funds destroys the exemption and that the garnishee should be required to prove the exempt status (or federal lookback rules should limit exemption).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Social Security funds retain exemption after commingling with nonexempt funds	Commingling removes exempt status; exempt funds become garnishable unless garnishee proves otherwise	Exempt Social Security funds remain exempt if their source can be reasonably traced	Exempt funds remain exempt when commingled, so long as the exempt source is reasonably traceable
Who bears burden to establish exemption when account is commingled	Garnishor argued garnishee should be required to show exempt status	Ball (claimant) bears burden to prove entitlement to the exemption	The claimant (Ball) bears the burden to prove the funds were exempt
Whether federal 2‑month lookback/regulations controlled and limited the exempt amount	Schaefer urged application of federal lookback to subject amounts above two months’ benefits to garnishment	Ball relied on his testimony that remaining funds were solely Social Security payments; record did not show direct-deposit coding required for regulation	Court declined to apply federal regs on this record; even if regs applied, exemption remains and Ball’s testimony supported exemption finding

Havelock Bank v. Hog Confinement Systems, 214 Neb. 783, 335 N.W.2d 765 (Neb. 1983) (held Social Security payments are exempt from garnishment)
Philpott v. Essex County Welfare Board, 409 U.S. 413 (U.S. 1973) (federal protection of Social Security benefits from execution/garnishment)
In re Lichtenberger, 337 B.R. 322 (C.D. Ill. 2006) (court recognized exempt status of Social Security benefits despite commingling, subject to traceability)
Bernardini v. Central Nat. Bank, 223 Va. 519, 290 S.E.2d 863 (Va. 1982) (contrary rule holding commingling defeats exemption)
ML Manager v. Jensen, 287 Neb. 171, 842 N.W.2d 566 (Neb. 2014) (standards for appellate review of county court factual findings)
Houser v. American Paving Asphalt, 299 Neb. 1, 907 N.W.2d 16 (Neb. 2018) (procedural/review authority cited by court)