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The Nebraska Court of Appeals has issued an important decision that clarifies the right to set aside default judgments, regardless of how old the judgment is, when the defendant had no actual service of the lawsuit papers. Well, the issue is now clear, except when it is not clear, which is to say I’m confused again.
In Capital One Bank vs. Lehmann, the defendant, Nelseena J. Lehman was sued in  November of 2009 for $2,942.37 for an unpaid credit card account.  The court summons was sent by Certified Mail and was signed by her estranged husband who did not inform her of the lawsuit.   Since Lehmann did not respond to the lawsuit, a motion for default judgment was awarded in February 2010.
Lehmann claims that she had no actual notice of the lawsuit since she moved to Oklahoma in September of 2009 and did not return to Nebraska until June of 2011.  Upon receiving a garnishment notice she motioned the court to set aside the default judgment in June 2014. That motion was denied and Lehmann filed her appeal.
The first half of the court ruling gives great assurance that default judgments obtained without notice to the defendant may be set aside at any time.  “A judgment entered without personal jurisdiction is void.”  The court cites the case of Ehlers vs. Grove, 147 Neb. 704 (1946) to underscore the basic rule that “every court possesses the inherent power to vacate void judgment, either during the term at which it was rendered or after its expiration.”  The Ehlers case states declared that “. . . Nor is it necessary that a meritorious defense be shown on the part of the defendant . . .” The fact that no service was obtained is enough to set aside a default judgment at any time for any reason or no reason at all.
The second half of the opinion was not so great.
The Court of Appeals focused on Nebraska’s service of summons law, Neb. Rev. Stat. §25-505.01 which provides that “Certified mail service which shall be made by (i) within ten days of issuance, sending the summons to the defendant by certified mail with a return receipt requested showing to whom and where delivered and the date of delivery, and (ii) filing with the court proof of service with the signed receipt attached.”
Citing a prior case, the court declared that “due process requires notice to be reasonably calculated to apprise interested parties of the pendency of the action and to afford them the opportunity to present their objections.”  Doe v. Board of Regents, 280 Neb. 492, 508 (2010).
The court noted that here was no record of Lehmann notifying the bank that she moved to Oklahoma or that she forwarded her mail.  “It is unclear how Lehmann’s temporary marital or living status affects Capital Ones’ reasonable reliance on, presumably, an address provided to them by Lehmann for the purpose of her maintaining an account.”  Unlike the Ehlers case where there was no service of summon at all, in this case due process was not violated because notice was reasonably calculated to apprise Lehmann of the lawsuit.  So, the court ruled that Lehmann was properly served and her appeal was dismissed.
The court’s conclusion is difficult to comprehend.  Why does it matter that Lehmann failed to provide a new address?  Has it been determined that it was, in fact, her account?  Was that fact admitted in the motion?  Would it have made a difference if Lehmann was a battered spouse requiring an immediate exit from the family home?  Would that make her failure to change the address more reasonable?  If her estranged husband admitted that he purposely hid the lawsuit to get back at her would that have made a difference?  If the certified mail receipt was signed by a subsequent tenant of the home instead of the estranged husband, would that make a difference? Of course it would.  The court seems to be saying that it is Lehmann’s fault for not getting notice. The court talks about whether notice was reasonably calculated to apprise the interested parties, but then it goes on to attack Lehmann’s conduct as not being reasonable.
Is it the the plaintiff’s conduct that must be reasonable in serving notice or is it the defendant’s behavior that must be reasonable to be available for notice?  Isn’t every notice sent by a creditor to the last know address of the customer reasonably calculated to provide notice?
The undisputed fact in this case is that the defendant never received notice until her paycheck was being garnished.  That should have made a difference.
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David Siegel:   Of course, the creditors have an opportunity to show up at this meeting, and witness it, ask a few questions, possibly tell the trustee about something that they may know about the debtor.  For example, if there’s property in Wisconsin that was not disclosed or an old Corvette that miraculously didn’t make the schedules. + Read More
The post What’s Is The Meeting Of Creditors Under Section 341 Of The Bankruptcy Code? appeared first on David M. Siegel.

Florida law provides for a certain exemption for annuities. Florida Statute section 222.14 provides that "the proceeds of annuity contracts issued to citizens or residents of the state,  upon whatever form, shall not in any case be liable to attachment, garnishment ... or legal process in favor of any creditor ... of the person who is the beneficiary of such annuity contract, unless the  ... annuity contract was effected for the benefit of such creditor.

One requirement is that the annuity must be issued to a "citizen" or "resident" of Florida. Sometimes there is a question of whether the item in question constitutes an "annuity" and whether the involved person is a "beneficiary" within the meaning of the statute. 

Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com

The first, and by far, most common type of bankruptcy is liquidation under Chapter 7 of the Bankruptcy Code, also referred to as a straight bankruptcy. In this type of bankruptcy all of the debtor's (or, the person filing the bankruptcy) assets which are nonexempt are sold and the proceeds of the sales are distributed amongst creditors (everyone who is owed money by the debtor.) After doing so, the remaining debt is wiped out giving the debtor what is known as a "fresh start."
The second commonly used type of bankruptcy is known as a reorganization under Chapter 11 or 13 of the Bankruptcy Code. Chapter 11 is most commonly used by companies and Chapter 13 is most commonly used by individuals. In this reorganization, the debtor still pays some or all of his or her debt under a 3-5 year agreed-upon plan.
In a Chapter 11 bankruptcy, creditors have the right to vote on or approve of the companies proposed reorganization.
Under Chapter 13 bankruptcy, the companies or individuals you owe money to don’t vote on or approve your proposed plan for paying back some of what you owe. And unlike Chapter 11, only you propose the plan for some or all of your debts. In Chapter 11, your creditors can also propose plans.
If you consider that Chapter 11 is most often used by large companies, it makes sense that creditors have the right to propose or vote on the plan to repay debt. Because very large sums of money that impact multiple companies are usually involved, creditors have a much larger stake in what happens in the bankruptcy.
Just as in Chapter 7 bankruptcy, at the end of payment plan period under Chapter 13 you will receive a discharge.
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