United States District Court, D. Nebraska
MEMORANDUM AND ORDER
F. BATAILLON Senior United States District Judge.
matter is before the court on the plaintiffs' motions for
attorney fees and expenses, Filing No. 835 in Sampson v.
Schenk, No. 8:07cv155 (“Livers”)
and Filing No. 787 in Livers v. Schenk, No.
8:08cv107 (“Sampson”); motions for money
judgments and orders of garnishment, Samspon, Filing
No. 838 and Livers, Filing No. 789; and motions for
a partial summary judgment on the issue of bad faith,
Sampson, Filing No. 841, and Livers, Filing
No. 792. These are garnishment proceedings in aid of
execution under Fed.R.Civ.P. 69 and Neb. Rev. Stat. §
25-1010 et seq. in connection with underlying
actions for civil rights violations under 42 U.S.C. §
1983. This court has jurisdiction under 28 U.S.C. §
facts are set forth in a number of previous opinions and need
not be repeated herein. See Livers v. Schenck, 700
F.3d 340, 344-50 (8th Cir. 2012); State v. Kofoed,
817 N.W.2d 225, 231-38 (Neb. 2012); Sampson, No.
8:07CV155, Filing No. 829, Memorandum and Order at 3-11 (D.
Neb. March 30, 2016); Filing No. 782, Memorandum and Order at
1-8 (D. Neb. Mar. 31, 2014); Filing No. 772, Memorandum and
Order at 1-14 (D. Neb. Sept. 13, 2013); Filing No. 458,
Memorandum and Order at 1-6 (D. Neb. Mar. 28, 2011);
Livers, No. 8:08CV107, Filing No. 781, Memorandum
and Order at 3-11 (D. Neb. March 30, 2016); Filing No. 726,
Memorandum and Order at 1-8 (D. Neb. Mar. 31, 2014); Filing
No. 658, Memorandum and Order at 1-14 (D. Neb. Sept. 13,
2013); Filing No. 340, Memorandum and Order at 1-6 (D. Neb.
Mar. 28, 2011).
relevant to the present motion, the salient facts are that
Sampson and Livers each filed actions for civil rights
violations against several defendants in connection with
their arrests for two murders. All of the defendants except
David Kofoed settled with the plaintiffs. This court entered
default judgments against Kofoed for Sampson in the amount of
$2, 258, 716.09 and for Livers in the amount of $4, 352,
637.82. Sampson, Filing No. 783;
Livers, Filing No. 727.
effort to enforce the judgments against Kofoed, Sampson and
Livers filed motions to determine garnishee liability of St.
Paul Fire and Marine Company a/k/a/ The Saint Paul Travelers
Companies, Inc. (“St. Paul” or
“garnishee”) with respect to a policy of
insurance St. Paul issued to Kofoed's employer, Douglas
County, Nebraska. The policy provided Law Enforcement
Liability Protection, with a five-million dollar total limit
of liability. See Filing No. 829, Memorandum and
Order at 12. This court determined that the policy afforded
coverage and found that the policy's self-insured
retention (“SIR”) operated as a large deductible
meaning that “St. Paul is not responsible for the first
$250, 000.00 of the judgments [entered in the two
cases].” Id. at 42.
motion for a judgment on garnishment, Sampson moves for an
order directing the garnishee to pay into court the total sum
of $2, 895, 267.89. That amount represents the original
judgment ($2, 258, 716.09) plus prejudgment interest in the
amount of $542, 091.86 and post judgment interest in the
amount of $94, 459.93. Livers moves for an order directing
St. Paul to pay into the court the total amount of $5, 579,
298.22, representing the original judgment ($4, 352, 637.82)
plus prejudgment interest in the amount of $1, 044, 633.08,
and postjudgment interest in the amount of $182,
addition, the plaintiffs move for a partial summary judgment
seeking a declaration that St. Paul acted in bad faith by
breaching its duty to defend and to indemnify Kofoed, and in
refusing to settle for less than the policy limit. They argue
that, on a finding of bad faith, St. Paul is legally
obligated to pay the judgments in full and asks the court to
order St. Paul to pay into the court an amount in excess of
the policy limits.
response to the motions for a garnishment judgment, St. Paul
first contends that it does not owe prejudgment interest. It
argues that the present proceeding is a garnishment action to
enforce a judgment, and the judgment did not include
prejudgment interest. It also argues that the plaintiffs cannot
recover punitive damages.
Paul resists the plaintiffs' summary judgment motions,
contending it did not act in bad faith and is not liable for
amounts in excess of the policy limits. It argues that the
plaintiffs' bad faith is an action sounding in tort and
is not based on the policy. Further, St. Paul contends that
plaintiffs lack standing to bring a bad faith claim absent a
specific assignment to that effect from Kofoed. St. Paul also
argues that the plaintiffs' motions are improper and
their motions for attorney fees, the plaintiffs ask the court
to award attorney fees the amount of $15, 298.50
(representing 66.10 hours of work at rates of $195.00 to
$250.00 dollars per hour) and expenses in the amount of
$739.52 for services rendered to Sampson in the garnishment
proceedings and attorney fees of $217, 614.50 (representing
909 hours of work at rates of $135.00 to $275.00 per hour)
for services rendered to Livers. St. Paul acknowledges that
plaintiffs are the prevailing parties at this point in the
litigation and does not dispute the amount of attorney fees
requested, stating it “has elected not to contest the
amount of attorney fees”. Filing No. 848, Response at
1. St. Paul argues only that the award would be premature
pending the result of St. Paul's eventual appeal of the
court's decision on coverage. St. Paul alternatively asks
that “if an order is entered, [the order] should state
that it is contingent upon Sampson remaining the prevailing
party after completion of the appellate process and is
subject to reversal if St. Paul prevails.”
Sampson, Filing No. 848, Response at 2.
court is under an independent obligation to assure itself
that it has subject matter jurisdiction. Arbaugh v.
Y&H Corp., 546 U.S. 500, 514 (2006).
“Subject-matter jurisdiction is a threshold requirement
which must be assured in every federal case.”
Kronholm v. Fed. Deposit Ins. Corp., 915 F.2d 1171,
1174 (8th Cir. 1990).
court has ancillary enforcement jurisdiction over claims that
have “a factual and logical dependence on ‘the
primary lawsuit.'” Peacock v. Thomas, 516
U.S. 349, 355 (1996). The court has inherent power to enforce
its judgments. Id. at 356. A federal court may
assert ancillary jurisdiction “to enable a court to
function successfully, that is, to manage its proceedings,
vindicate its authority, and effectuate its decrees.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 380 (1994). The Supreme Court has approved the use of
ancillary jurisdiction “over a broad range of
supplementary proceedings . . . to assist in the protection
and enforcement of federal judgments-including attachment,
mandamus, garnishment, and the prejudgment avoidance of
fraudulent conveyances.” See Peacock, 516 U.S.
jurisdiction, however, may not extend ‘beyond attempts
to execute, or to guarantee eventual executability of, a
federal judgment.'” Deretich v. City of St.
Francis, 149 F.3d 1187, 1998 WL 327207, *1 (8th Cir.
1998) (per curiam) (quoting Peacock, 516 U.S. at
357). The reach of the federal courts' ancillary
jurisdiction does not extend to “the exercise of
jurisdiction over proceedings that are ‘entirely new
and original, ' or where ‘the relief [sought is] of
a different kind or on a different principle' than that
of the prior decree.” Id. at 358 (quoting
Krippendorf v. Hyde, 110 U.S. 276, 285 (1884) and
Dugas v. American Surety Co., 300 U.S. 414, 428,
(1937) (internal citations and quotation omitted)). Also,
ancillary jurisdiction is not justified over a new lawsuit to
impose liability for a judgment on a third party.
Peacock, 516 U.S. at 357-58.
earlier Order, this court summarized the law with respect to
The Federal Rules provide the "procedure on
execution-and in proceedings supplementary to and in aid of
judgment or execution-must accord with the procedure of the
state where the court is located." Fed.R.Civ.P.
69(a)(1). Under Nebraska law, garnishment is a legal, not
equitable, remedy unknown at common law and is a purely
statutory remedy. Gerdes v. Klindt, 570 N.W.2d 336,
341 (Neb. 1997). The garnishee is not liable unless the
defendant had a right of action against him for the legal
demand due or to become due. Id. In an action to
determine the liability of the garnishee, the plaintiff has
the burden to establish why the garnishee was liable to the
defendant at the time notice of garnishment was served.
Id. The claim of the judgment creditor garnishor can
rise no higher than the claim of the garnishor's judgment
debtor against the garnishee. Meyers v. Christensen,
776 N.W.2d 201, 205 (Neb. 2009). The test is whether, as of
the time the summons in garnishment was served, the facts
would support a recovery by the garnishor's judgment
debtor against the garnishee. Id.
Sampson, Filing No. 829, Memorandum and Order at
[Nebraska] garnishment statutes furnish a judgment creditor a
means through which to satisfy a judgment, not a means
through which to modify the underlying judgment.”
ITT Hartford v. Rodriguez, 543 N.W.2d. 740, 742
(Neb. 1996). Under Nebraska law, “[t]he garnishment
proceeding must be supported by a ‘judgment in
esse, ' that is, a judgment ‘[i]n actual
existence' or, literally, in being.'”
Cattle Nat'lBank & Trust Co. v.
Watson, 880 N.W.2d 906, 923 (Neb. 2016). Thus, the
judgment must be in existence before a garnishment in aid of
execution. Id.; see Neb. Rev. Stat. § 25-1056.
On establishing that the garnishee holds property or credits
of the judgment debtor, the garnishee must then pay such
amounts to the ...