Sunday, April 27, 2008

Nebraska Steps To Forefront Of Efforts To Protect Seniors And Secure Social Purpose Of Life Insurance. Insurance Nebraska lawmakers have acted to protect senior citizens and to secure the good social purpose of life insurance as financial protection for families and businesses, said Frank Keating, president and CEO of the American Council of Life Insurers (ACLI). By a final vote of 40-2, the Nebraska Senate approved Legislative Bill 853, which would deter a practice called stranger-originated life insurance (STOLI). In STOLI transactions, speculators such as hedge funds, or their representatives, induce seniors to purchase life insurance solely to sell the death benefits to the speculators. The speculators hope to profit when the seniors die, and the sooner they die, the higher the profits. LB 853, which is based on model legislation developed by the National Association of Insurance Commissioners (NAIC), would require the speculators in STOLI arrangements to wait at least five years before acquiring the rights to the death benefits, thus reducing the economic incentives for STOLI. This five-year period applies only to STOLI policies and would not affect the ability of good-faith life insurance consumers to sell their policies if they decide they no longer need or want their life insurance protection. “STOLI transactions pose numerous risks to seniors and we applaud Nebraska lawmakers for being among the first in the nation to adopt strong measures against this abuse. Life insurance is for financial protection of families and businesses. It should never be purchased solely as an investment scheme for hedge funds. Fortunately, states around the nation are following Nebraska’s lead and considering legislation to deter this abuse of their seniors,” Keating said. “Nebraska Insurance Director Ann Frohman and Sen. Rich Pahls (District 31-Omaha), who chairs the Banking, Commerce and Insurance Committee, took the lead in advancing the vital consumer protections in LB 853 over the objections of the hedge funds who profit from these abuses. Nebraska seniors—indeed, all consumers—can thank them for standing up for the people of Nebraska,” Keating said. The bill now goes to Gov. Dave Heineman (R), who is expected to sign it. The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 353 member companies account for 93 percent of the life insurance industry’s total assets in the United States, 93 percent of life insurance premiums and 94 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at
Nebraska Supreme Court considers whether divorced wife may compel business executive husband to undergo medical examination so she could purchase a $1million life insurance policy to secure his payments. Nebraska Judicial Branch Case Summaries April 29 through May 2, 2008. S-07-529, Mary Kay Davis (Appellant) v. Henry Alan Davis (Appellee)

Douglas County District Court, Judge Patrick Mullen

Attorneys: William G. Dittrick and Kirk S. Blecha of Baird Holm (Appellant); John S. Slowiaczek and Virginia A. Albers of Lieben, Whitted, Houghton, Slowiaczek, and Cavanagh (Appellee).

Civil: Marital Dissolution

Proceedings Below: Parties stipulated to a “Post-Marital Agreement” which provided for dissolution of the marriage and division of property. The district court upheld the agreement and dissolved the marriage. Shortly thereafter, Mary attempted to take out life insurance on Henry’s life, which required that Henry submit to a physical examination. Henry declined and Mary petitioned for the district court to order Henry’s compliance. The district court denied Mary’s request and this appeal followed.

Issues: Whether the district court erred when it failed to order Henry to submit to a physical exam for purposes of allowing Mary Kay to obtain a life insurance policy on Henry’s life.

Red Lake Indian Tribal Court lacks jurisdiction on highway within reservation boundaries, Eighth Circuit Court of Appeals rules in affirming defendant's summary judgment from the US District Court for Minnesota. Falmouth Institute American Indian Law Blog. The Court of Appeals for the Eighth Circuit ruled that the Red Lake Nation court did not have the authority to hear a case involving a car accident on the reservation in which a non-member was involved. In Nord v. Kelly (No. 07-1564) the court affirmed a district court decision that the tribe did not have jurisdiction to hear a lawsuit brought by a tribal member against a non-member, non-Indian, for damages sustained in accident that took place on a state highway within the reservation. The tribal court took over four years to deny the defendant's motion to dismiss the tribal court lawsuit against him for a car accident. Then he filed a declaratory judgment action in Federal Court , District of Minnesota to declare no jurisdiction for the case. The Eighth Circuit Court of Appeals affirms summary judgment for the defendant who had filed the declaratory complaint. "Consistent with the reasoning of Strate v. A-1 Contractors, 520 U.S. 438, 442 (1997) (holding "tribal courts may not entertain claims against nonmembers arising out of accidents on state highways, absent a statute or treaty authorizing the tribe to govern the conduct of nonmembers on the highway in question"), we give effect to the plain language of the right-of-way granting instruments. There is no indication in the public records that the Red Lake Band retained any "gatekeeping right" over the public highway, no assertion that the right-of-way is no longer maintained as part of the State's highway, and no assertion that any statute or treaty grants or retains tribal authority over nonmembers in this situation. See Strate, 520 U.S. at 456. Therefore, the Red Lake Band has no "right of absolute and exclusive use and occupation" of that land, id. (internal marks omitted), and the public highway at issue, as in Strate, is the equivalent of alienated, non-Indian land for purposes of regulating the activities of nonmembers.
During a dental malpractice trial in Gage county district court the judge kept a trial schedule so tight that the jury heard the entire case in one week with over sixty hours of trial time. Malchow v. Doyle, S-06-219, 275 Neb. 530The jury verdict went to the dentist and the plaintiff appealed claiming the grueling trial schedule and possible juror misconduct prejudiced the plaintiff. Nebraska Supreme Court finds no abuse of discretion in the lengthy court sessions and no juror misconduct after it refused to admit affidavits from jurors who claimed the foreman was injecting his own legal standards of proof into the case. The Supreme Court did modify the court's discovery sanction against the defendant to remove the plaintiff's expert's extra costs to prepare for testimony when the defendant delayed submitting discovery materials. "the trial was conducted over a 5-day period and 62 hours were devoted to the trial. T he record does not show that either party was restricted in the presentation of its evidence. Malchow has not demonstrated that she was prejudiced in presenting her case based on the length of each trial day, and she is not entitled to an inference that the jury resented her because of the length of the trial. We conclude that the district court did not arbitrarily place time limits on either party or restrict the presentation of evidence. Thus, the court did not abuse its discretion in overruling any motions for mistrial on the basis of the conduct of the trial." juror’s knowledge about the burden of proof is personal knowledge that is not directly related to the litigation at issue and is not extraneous information. Doyle did not pay certain specified fees to Miloro in advance as agreed upon, which resulted in the deposition’s being canceled. We conclude that the district court abused its discretion in ordering Doyle to pay the $6,000 charged by Miloro as compensation for time he spent preparing for the deposition. Whether Miloro needed to spend 12 additional hours to prepare for a 2-hour discovery deposition by Doyle is not the question, but, rather, whether Doyle should have been ordered to pay such charges. We conclude that the district court’s order on this issue was in error.
Excellent example of the Nebraska Supreme Court's use of the "absurdity" method of statutory interpretation: An agricultural services company sued the personal representative of an estate for its past due account. J.R. Simplot Co. v. Jelinek, S-06-666, 275 Neb. 548The Nebraska Supreme Court agreed with the estate's personal representative that the agricultural services company missed its deadline to file suit against the estate. The services the company provided to the estate's farming operations were not "administrative expenses" that do not have a four month limitation period on them because these expenses arose from the contract between the company and the personal representative. Section 30-2485(b)1 includes contracts with the personal representative in the claims subject to the four month deadline. The Nebraska Supreme Court falls back on the "absurdity" argument, " If this court were to adopt Simplot’s reasoning—that the services in question should be considered administration expenses—then § 30-2585(b)(1) (sic) would be rendered virtually meaningless." Indeed, there is no 30-2585(b)1 in my code book.

Saturday, April 26, 2008

Appeal dismissed from multiple count lawsuit against former business partner and associates because trial court did not dismiss the plaintiff's cause of action in its entirety. Poppert v. Dicke, S-06-741, 275 Neb. 562 Disgruntled business partner sued other partners and associated professionals for breach of fiduciary duty and plead various claims against several parties. The district court dismissed the plaintiffs suit against the business partner for breach of fiduciary duty and certified it as final, appealable order. However the district court did not dismiss the plaintiff's suit for unjust enrichment and diverting profits. Because some of the remaining claims were identical with the dismissed claims, the district court failed to issue a certified final order. Nebraska Supreme Court dismisses appeal. 25-1315 requires the court to certify as appealable a final order as to a "claim for relief." "Claim for relief" and "cause of action" are synonymous, although theory of recovery is not. A cause of action comprises the common facts that establish the defendant's liability to the plaintiff although the difference between a cause and a theory is not too clear. Although the district court dismissed some of the plaintiff's theories of recovery, it did not dispose entirely of his cause of action against his partner. Therefore the Supreme Court lacked jurisdiction over the appeal. A “claim for relief” within the meaning of § 25-1315(1) is equivalent to a separate cause of action, as opposed to a separate theory of recovery. A cause of action consists of the fact or facts which give one a right to judicial relief against another; a theory of recovery is not itself a cause of action. the district court’s order dismisses some of those theories of recovery, i.e., “causes of action” Nos. 1 through 3, but does not dismiss all of them. The district court’s order was not a “‘final order’ . . . as to one or more but fewer than all of the causes of action.”
The defendant in a methamphetamine possession case from Buffalo County requested a special prosecutor because an associate attorney with his defense counsel's law firm moved to the prosecuting attorney's office. The former associate was not involved with the defendant's case while working for either office. Nebraska Supreme Court rejects the defendant's per se rule for disqualification, instead interpreting Model Rule 1.11 to allow the judge discretion to require proper screening procedures to ensure client confidentiality. State v. Kinkennon, S-07-654, 275 Neb. 570 "A per se rule would result in the unnecessary disqualification of prosecutors where the risk of a breach of confidentiality is slight, thus needlessly interfering with the prosecutor’s performance of his or her constitutional and statutory duties. Furthermore, a per se rule would unnecessarily limit mobility in the legal profession and inhibit the ability of prosecuting attorney’s offices to hire the best possible employees because of the potential for absolute disqualification in certain instances. Whether the apparent conflict of interest justifies the disqualification of other members of the office is a matter committed to the discretion of the trial court. What constitutes an effective screening procedure will depend on the particular circumstances of each case. However, at a minimum, the disqualified lawyer should acknowledge the obligation not to communicate with any of the other lawyers in the office with respect to the matter. S imilarly, the other lawyers in the office who are involved with the matter should be informed that the screening is in place and that they are not to discuss the matter with the disqualified lawyer.

Saturday, April 19, 2008

Nebraska Supreme Court reverses defendant's summary judgment from Douglas County District Court in wrongful death lawsuit from a fatal drowning accident at Lake Powell Utah. Plaintiff estate filed wrongful death action for decedent who drowned while vacationing on the defendants' houseboat. The plaintiff alleged the defendants allowed their boat to get too far ahead of the decedent who was swimming in the lake and were not careful in picking him up. Nebraska Supreme Court affirms summary judgment on the plaintiff's Jones Act claim but reverses on its general negligence claim. The district court should have allowed the plaintiff's affidavits by former career Coast Guard officers who stated expert opinions that the boat operators were negligent. Caguioa v. Fellman, S-06-1055, 275 Neb. 455
Nebraska Supreme Court denies defendant's claim of ineffective appellate counsel and opens the door slightly to post-conviction discovery proceedings, but holds further discovery would not have helped the defendant. State v. Jackson, S-06-1041, 275 Neb. 434. the defendant in his post-conviction action sought discovery from the prosecutor regarding any evidence the prosecutor had that would show that a drug dealer ordered another hit man to kill the man that the defendant was convicted of killing. The trial court overruled the defednat's request. The Supreme Court agrees that discovery was not appropriate in this case under State v. Thomas, 236 Neb. 553, 462 N.W.2d 862 (1990)., but suggests it might allow some discovery in the future. "when a postconviction discovery request is for evidence that the defendant would not have known to request until after the trial, the postconviction stage is the prisoner’s first opportunity to make such a request...there should be a limited exception for discovery requests concerning evidence which the prosecution withheld from the defendant at trial when there is a reasonable possibility that the requested evidence, if it exists, could have resulted in a different outcome at trial."

Saturday, April 12, 2008

A records storage management company charged its law firm customer a $10,000 fee to permanently remove all of its records from the storage facility. The Omaha law firm filed a declaratory judgment complaint against the company claiming the removal fee was an illegal penalty provision. the Douglas County District Court agreed finding the removal fee was a penalty and not a legitimate liquidated damages fee. The Nebraska Supreme Court reverses holding the removal fee was neither a liquidated damages provision nor a penalty, rather it was a fee for a service. Berens & Tate v. Iron Mt. Info. Mgmt., S-07-193, 275 Neb. 425 The district court erred in finding that the “Permanent Withdrawal” fee was unenforceable. We conclude that the “Permanent Withdrawal” fee is neither a liquidated damages clause nor an illegal penalty provision. Rather, the provision is an enforceable contractual term that sets forth the payment required for services to be performed under the contract. T he judgment of the district court is reversed."
Nebraska Supreme Court affirms dismissal of wife's fraudulent transfer complaint against ex-husband to reach business he liquidated to avoid including its assets in the couple's marital estate. Reed v. Reed, S-06-757, 275 Neb. 418. Shortly before the husband filed for divorce his parents repossessed stock they held in the couple's business; the husband also liquidated his interest in a real estate development partnership. Wife sued to reclaim her marital share of these interests using the Uniform Fraudulent Transfer Act (UFTA) Neb. R ev. S tat. §§ 36-701 to 36-712 (Reissue 2004). The Hall County District Court dismissed her complaint, the Supreme Court affirms. "a spouse’s right to an equitable distribution of the marital estate is not a “right to payment” under the UFTA . A ccordingly, the UFTA does not apply in cases where, as here, an individual believes that his or her former spouse fraudulently transferred assets before the divorce to prevent those assets from being equitably distributed as part of the marital estate. Instead, such a claim is perhaps more properly litigated as a claim for dissipation of marital assets."

Friday, April 11, 2008

Nebraska Unicameral amends medical lien statute Section 52-401 to clarify that medical providers may only claim their discounted fees and charges when they accepted discounts from private health insurance or health benefit plans. Amended law now allows chiropractors to file liens, but does not public insurance. Stinson Morrison Health Care E-Alert. "On March 10, 2008, Nebraska Governor Dave Heineman approved LB 586, amending Neb. Rev. Stat. 52-401, the Medical Lien Statute. The changes went into effect when approved. Of importance to health care providers is that the changes to the statute clarify that a provider's charges under a perfected lien are only subject to reduction when the provider has contracted for a discount or other limitation with a private medical insurance or health benefit plan. The limitation does not apply to reimbursement under public programs such as Medicare and Medicaid. The provider's option, if available, to pursue full payment when a public program is primary is not affected by LB 586. In 2004, the Nebraska Supreme Court ruled in Midwest Neurosurgery, P.C. v. State Farm Ins., that when a provider has entered into a managed care contract to accept a rate less than its full charge, the lower contracted rate becomes the provider's usual and customary charge for purposes of the Medical Lien Statute. Since that time there has been a question whether that decision applied to public programs such as Medicare. The changes made by LB 586 make it clear the discount provisions only apply to private programs; not public. When a patient has health benefits under a public program as his/her primary insurance, the provider has all options available under those public rules including, to waive billing Medicare and pursue the potential liability settlement at full charges. In addition to the above, LB 586 brought chiropractors under the statute's umbrella. Chiropractors now have the protections and the obligations of the Medical Lien Statute. Remember, that the Medical Lien Statute does not require a provider to pay the injured party's attorney's fees and costs. While these attorney's fees have precedence over a provider's lien, the provider is not obligated to pay, in any proportion, those fees. Also of note, a late amendment provides that even when there is a contractual discount or other limitation, the full provider charge is the measure of damages for medical expenses and not the discounted rate. This last amendment may, or may not, be a subject for future legislative sessions.

Sunday, April 06, 2008

Nebraska Supreme Court agrees that the Worker Compensation Court may grant default judgments under § 48-162.03(1) but the party moving for a default judgment must give the defaulted party notice of the motion under Worker Compensation Court rule 3. Cruz-Morales v. Swift Beef Co., S-07-812, 275 Neb. 407 The plaintiff sued the Defendant Swift Beef for a work injury and Swift received proper service of process. Swift failed to answer and the plaintiff moved for a default judgment but sent the notice to the wrong address for the Defendant's third party administrator. "we (under 48-162.03) conclude that the Workers’ Compensation Court has statutory authority to enter default judgments, however the Plaintiff needed to send proper notice to the defendant. Worker Compensation Court rule 3 which requires notice of the motion is not more restrictive than Supreme Court pleading rule 5 which does not require notice of a default judgment in general civil actions, see Phillips v. Monroe Auto Equip. Co., 251 Neb. 585, 558 N.W.2d 799 (1997) {worker compensation court rules may not be more restrictive than civil court rules as to admitting evidence}.
Injured worker who sometime after her work-related accident moved from Omaha to a smaller community could ask the court evaluate her lost earning capacity based upon her access to the labor market in the smaller community, as long as she could show her move was in good faith. Giboo v. Certified Transmission Rebuilders, S-07-139, 275 Neb. 369 "when an employee injured in one community relocates to a new community, the new community will serve as the hub community from which to assess the claimant’s earning capacity, provided that the “change of community was done in good faith, and not for improper motives.” Like the South Dakota Supreme Court (Reede v. State, Dept. of Transp., 620 N.W.2d 372 (S.D. 2000)), we believe the claimant carries the burden to establish that the move was made in good faith and not for the purpose of exaggerating the extent of his or her difficulty in finding suitable employment. If the claimant cannot show a legitimate motive behind his or her post-injury relocation, the community where the claimant resided at the time the injury occurred will serve as the hub community."
Immigrant who earlier plead guilty to two separate drug related felonies and had already served those sentences filed to withdraw those guilty pleas because he discovered the Federal Government would consider him deportable. Defendant plead guilty to the cases before Section 29-1819.02 required the court to advise immigrants of the consequences of pleading guilty to their immigration status. Nebraska Supreme Court holds the district court did not have jurisdiction to hear his motions to withdraw his guilty plea after already serving his sentences . State v. Rodriguez-Torres, S-06-1351, 275 Neb. 363 "Although § 29-1819.02 gives the trial court some discretion to allow a defendant to withdraw a guilty plea, the statute does not provide a separate procedure to accomplish that after the defendant’s conviction has become final. Since Nebraska statutes do not authorized any procedure allowing for the present action, the district court was without jurisdiction to address the merits of R odriguez-Torres’ motion."
Nebraska Supreme Court resolves tangled fee dispute between Law Offices of Ronald J Palagi and its former associate Steven Howard over a $2 million injury verdict from Phelps County District Court and some other large cases. Nebraska Supreme Court dismisses former associates appeal of the Buffalo County District Court's attorney lien division order {motion to alter or amend judgment to correct clerical errors did not toll 30 day appeal deadline}, affirms division of fees from same large case from Douglas County District Court and award of extra attorney fees for Palagi's untimely payment of a fee bonus to Howard under the Nebraska Wage Payment Collections Act. Nebraska Supreme Court invalidates provisions of the parties employment agreement that purported to require the associate attorney to turn over fees earned from cases the associate takes from the law firm after resigning as violating the Model Rule 5.6 {restrictions on lawyer's right to practice}. The Supreme Court also rules against the law firm's claim that the associate attorney's actions to advise the firms clients that he was leaving the firm violated the associate's fiduciary duty to the law firm because the law firm could not prove that the attorney's actions caused the firm any loss. Law Offices of Ronald J. Palagi v. Howard, S-06-384, S-06-665, S-07-757, 275 Neb. 334

Saturday, April 05, 2008

The Lancaster County District Court dismissed the State Attorney General's complaint against tobacco companies participating in the tobacco Master Settlement Agreement because the State of Nebraska agreed to arbitrate any annual payment reductions. The Nebraska Supreme Court affirms, while finding the District Court's dismissal in favor of arbitration was an appealable order, the Master Settlement Agreement arbitration requirement applied to whether the States adequately and diligently enforced tobacco marketing restrictions against companies that did not participate in the 1998 Master Settlement Agreement. State ex rel. Bruning v. R.J. Reynolds Tobacco Co., S-06-1027, 275 Neb. 310the district court’s order compelling arbitration and dismissing the State’s action for declaratory judgment was a final order and that this court has jurisdiction to determine this appeal. We further conclude that the district court did not err in determining that the MSA requires arbitration of the dispute over diligent enforcement of the qualifying statute. We therefore affirm the court’s order compelling arbitration and dismissing the State’s action for declaratory judgment.