J.M., AS GUARDIAN AND CONSERVATOR FOR HIS MINOR CHILD, C.M., APPELLANT AND CROSS-APPELLEE,
BILLY L. HOBBS, APPELLEE AND CROSS-APPELLANT
As Amended August 14, 2014.
[Copyrighted Material Omitted]
Appeal from the District Court for Lancaster County: PAUL D. MERRITT, JR., Judge.
John W. Ballew, Jr., and Adam R. Little, of Ballew, Covalt & Hazen, P.C., L.L.O., for appellant.
Dana M. London for appellee.
HEAVICAN, C.J., CONNOLLY, STEPHAN, MCCORMACK, and MILLER-LERMAN, JJ., and PIRTLE and RIEDMANN, Judges.
[288 Neb. 547] Connolly, J.
Before 2012, under Neb. Rev. Stat. § 81-2032 (Reissue 2008), a Nebraska State Patrol officer's retirement assets had absolute protection from " garnishment, attachment, levy, the operation of bankruptcy or insolvency laws, or any other process of law." Such provisions are called anti-attachment statutes.
But in 2012, the Legislature amended § 81-2032(2) and other anti-attachment statutes to allow a civil judgment to attach to the distributed retirement assets of State Patrol officers and other public employees who have committed six specified crimes--if the public employee was convicted of the crime in a criminal prosecution. The amendment applies retroactively to past civil judgments predicated on such crimes.
The appellant, Billy L. Hobbs, is a retired State Patrol officer who was convicted of one of the specified crimes--first degree sexual assault of a child. J.M., the victim's guardian and conservator, obtained a civil judgment against Hobbs and has twice sought an order in aid of execution. In response to J.M.'s second attempt, after the statute was amended to apply retroactively, Hobbs challenged the constitutionality of the amendment on multiple grounds. The district court determined that the amendment was unconstitutional as special legislation and dismissed J.M.'s motion.
We agree with the court that L.B. 916 arbitrarily benefits the select crime victims
of its specified crimes. Simultaneously, L.B. 916 arbitrarily benefits those public employees and [288 Neb. 548] officers whose retirement assets are not subject to attachment because (1) the act does not apply to their retirement plans or (2) they pleaded no contest or were convicted of a serious crime that is not included in the act. We conclude that under the act's stated purpose of providing compensation to the victims of serious crimes, no substantial difference exists between the favored groups of victims and employees and those victims and employees who do not receive the act's benefits. Because the class members are not substantially different, the act is special legislation. We affirm.
In 2006, Hobbs was convicted of first degree sexual assault of a child, C.M., when she was between the ages of 12 and 14. The assaults occurred while Hobbs was married to C.M.'s mother and living with them. A court sentenced Hobbs to 25 to 30 years' imprisonment. J.M. then sued Hobbs on C.M.'s behalf, and a court awarded J.M. a civil judgment of $325,000.
1. J.M.'s First Appeal to This Court
In J.M.'s first attempt to obtain an order in aid of execution, he alleged that Hobbs was a judgment debtor and, although incarcerated, was receiving a retirement pension from the State Patrol. Hobbs objected that under § 81-2032, his retirement assets were exempt from legal process. At that time, § 81-2032 provided that " [a]ll annuities or benefits which any person shall be entitled to receive under [the Nebraska State Patrol Retirement Act] shall not be subject to garnishment, attachment, levy, the operation of bankruptcy or insolvency law, or any other process of law whatsoever . . . ." The district court agreed that Hobbs' retirement assets were exempt from process, and we affirmed on appeal.
We noted that under Neb. Rev. Stat. § 25-1572 (Reissue 2008), a court may order the execution of a judgment only against a debtor's nonexempt property. But J.M. relied on [288 Neb. 549] Neb. Rev. Stat. § 25-1563.01 (Reissue 2008), which permits a judgment to attach to a judgment debtor's retirement assets except those that are reasonably necessary for the support of the debtor and any beneficiaries. J.M. argued that § 81-2032 only protected the retirement assets that Hobbs was " entitled to receive" and that once the assets were distributed, § 25-1563.01 governed whether the assets were subject to attachment. We rejected that argument.
We concluded that § 81-2032 was the more specific and, therefore, the applicable statute and that it provided broader protections than § 25-1563.01. We explained that the words " annuities" and " benefits" under § 81-2032 referred to required future payments of money. We cited federal and state court decisions rejecting a distinction between owed future payments and distributed payments under similar statutes, even if the statute did not explicitly protect future payments. We agreed that the legislative intent behind anti-attachment statutes is to protect these assets from legal process regardless of whether the payments have become due.
We further agreed with the U.S. Supreme Court that exemptions are justified by broad social policies that take precedence over courts doing equity between particular parties. So a court's carving out of particular exceptions when the exemption is especially inequitable is impracticable. We agreed that any such exceptions should be left to the Legislature.
2. Legislature Amends § 81-2032 Retroactively
In 2012, the year after we issued our opinion in J.M.'s first appeal, the Legislature amended § 81-2032 and other anti-attachment statutes for some retirement plans. For retirement plans affected by the amendment, a limited attachment remedy now exists against the retirement assets of a public employee or officer who (1) was convicted of, or pleaded no contest to, one of six enumerated crimes, and (2) found liable for civil damages. The affected retirement plans include the plan for [288 Neb. 550] State Patrol officers, and the six enumerated crimes include sexual assault.
After this amendment, J.M., on C.M.'s behalf, filed a new motion for an order in aid of execution. Hobbs challenged the amendment as unconstitutional. As stated, the district court concluded that the statute was unconstitutional as special legislation and dismissed J.M.'s motion.
3. Scope of L.B. 916
The amendment to § 81-2032 is representative of the way that L.B. 916 amended anti-attachment statutes for all affected public employees' retirement plans. Subject to assignment under a qualified domestic relations order, an absolute exemption from attachment of retirement assets still exists for most State Patrol officers under § ...