State of Florida v. Countrywide Truck Ins. Agency, 294 Neb. 400

Background

The State of Florida, as receiver for United Southern Assurance Company, sued Countrywide Truck Insurance Agency, Countrywide Insurance Agency, and David Fulkerson in 1998 alleging fraudulent transfers.
The case proceeded through multiple appeals and rulings; Fulkerson died in 2009, his wife Diederike became involved, and probate proceedings occurred addressing transfers to her. Florida sought revivor and substituted parties; the district court later entered a judgment on May 12, 2015, against Truck, Agency, and Diederike finding fraudulent transfers.
Agency and Diederike (represented by William E. Gast) filed a notice of appeal from the May 12 judgment; that appeal was later dismissed for failure to file briefs.
On May 29, 2015, the district court entered a sanctions order requiring Gast personally to pay $15,000 in attorney fees for filing a frivolous motion to recuse the trial judge.
Gast appealed the sanctions order (while his law license had been suspended). The Nebraska Supreme Court limited review to Gast’s personal claims (he could not represent others) and considered whether the district court had jurisdiction to impose sanctions even if it lacked jurisdiction over the underlying merits.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did the district court have jurisdiction to enter the sanctions order against Gast?	Gast argued the district court lacked subject-matter jurisdiction over the underlying case (because of probate discharge and necessary-party issues), so it also lacked power to sanction him.	Florida argued the court could sanction an attorney for frivolous filings irrespective of jurisdiction over the merits.	The court held the district court had jurisdiction to impose sanctions under Neb. Rev. Stat. § 25-824 for frivolous/bad-faith recusal motions even if it lacked jurisdiction over the underlying dispute.
Could Gast, with a suspended law license, assert appellate claims on behalf of Agency and Diederike?	Gast advanced assignments challenging the denial of recusal and failure to sanction Florida.	Florida and the court noted Nebraska prohibits unlicensed persons from prosecuting actions or filing papers on behalf of others.	The court held Gast could not represent Agency or Diederike; those claims were not considered.
Did Gast have standing to assert the recusal denial and failure-to-sanction claims personally?	Gast attempted to raise those claims on appeal.	Florida argued Gast had no personal interest and lacked standing as a nonparty.	The court held Gast lacked standing to assert those claims for others and could not pursue them on their behalf.
Were the factual basis and amount of the sanction reviewable on appeal?	Gast did not challenge the factual basis or amount in his brief.	Florida relied on procedural defaults.	The court declined to consider these matters because errors must be specifically assigned and argued.

Key Cases Cited

Willy v. Coastal Corp., 503 U.S. 131 (1992) (federal court may uphold attorney sanctions even if it lacked subject-matter jurisdiction over underlying case because sanctions are collateral to merits)
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (Rule 11 sanctions relate to abuse of judicial process rather than merits)
Despain v. Despain, 290 Neb. 32 (2015) (appellate review of jurisdictional questions as matter of law)
In re Claims Against Pierce Elevator, 291 Neb. 798 (2015) (errors must be specifically assigned and argued on appeal)
Steinhausen v. HomeServices of Neb., 289 Neb. 927 (2015) (unauthorized practice of law prohibits filing on behalf of another)
Sherman T. v. Karyn N., 286 Neb. 468 (2013) (standing requires asserting one’s own rights)
Salkin v. Jacobsen, 263 Neb. 521 (2002) (finality and appealability principles)
Deuth v. Ratigan, 256 Neb. 419 (1999) (appellate jurisdiction depends on jurisdiction of lower court)