Mutual of Omaha Bank v. Kassebaum

decree should be set aside. Todd, who did nothing to inves-
tigate whether Amy was pregnant with his child, cannot now
seek equitable relief to intervene and set aside the paternity
decree in this action, especially when doing so negates the
effect of statutes duly enacted by the Legislature.
CONCLUSION
Todd attempted to intervene in the pending action to modify
the 2001 paternity decree. The trial court erred in relying upon
§ 25-2001 in order to permit Todd to intervene and set aside
the 2001 decree of paternity that Jeffrey is Fianna’s father. For
the foregoing reasons, we conclude the trial court abused its
discretion in allowing Todd to intervene and in setting aside the
paternity decree of 2001.
The judgment of the trial court is reversed, and the cause is
remanded with directions to dismiss Todd from the action and
to proceed on Amy’s request to modify the paternity decree.
R eveRsed and Remanded with diRections.
mutual of omaha Bank , appellee , v.
patRick J. kasseBaum and apRil m.
kasseBaum , appellants , and
timothy R. engleR, appellee .
814 N.W.2d 731
Filed June 1, 2012. 	No. S-11-749.
1. Judgments: Appeal and Error. An appellate court reviews questions of law
independently of the lower court’s conclusion.
2. Judgments: Moot Question: Appeal and Error. When a party voluntarily com-
plies with the mandate of the trial court, satisfying the judgment, the appeal no
longer presents an actual controversy, but an abstract question.
3. ____: ____: ____. Where the payment of a judgment compelled by law is not
voluntary, payment will not render an appeal moot.
4. Torts: Claims: Assignments: Death: Abatement, Survival, and Revival. The
common-law rule regarding the assignability of tort claims is that such a right of
action is not assignable where the tort causes a strictly personal injury and does
not survive the death of the person injured.
5. ____: ____: ____: ____: ____. The prohibition against the assignability of a
tort claim is grounded on two principles: (1) that prior to more recent statutory
952 	283 NebrASkA repOrTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:42 AM CST

amendments, personal claims did not survive the death of the victim, and (2) that
prohibiting the assignment of tort claims prevents champerty and maintenance.
6. Assignments: Words and Phrases. Champerty consists of an agreement whereby
a person without interest in another’s suit undertakes to carry it on at his own
expense, in whole or in part, in consideration of receiving, in the event of success,
a part of the proceeds of the litigation.
7. Actions: Words and Phrases. Maintenance exists when a person without interest
in a suit officiously intermeddles therein by assisting either party with money or
otherwise to prosecute or defend it.
8. Claims: Assignments. Where only the proceeds of the litigation, and not control
of the litigation, have been assigned, there is little or no concern of intermeddling
as a reason for declining to allow the assignment of the claim.
Appeal from the District Court for Lancaster County: steven
d. BuRns, Judge. Affirmed.
katie Martens, of ritnour & Associates, p.C., L.L.O., and,
on brief, Matthew S. Torres for appellants.
William F. Austin, of erickson & Sederstrom, p.C., and, on
brief, William C. Nelson for appellee Mutual of Omaha bank.
heavican, c.J., wRight, connolly, mccoRmack , and milleR-
leRman, JJ.
heavican, c.J.
INTrODUCTION
Mutual of Omaha bank (bank) filed a petition seeking
declaratory judgment against patrick J. kassebaum and April
M. kassebaum. In particular, the bank sought to have the
district court declare the rights of the parties with respect to
an assignment executed by the kassebaums. The kassebaums
filed a motion to dismiss or, in the alternative, a motion for
summary judgment, alleging that the assignment was inef-
fective. The district court denied the motion, and the matter
proceeded to trial. A jury entered a verdict in favor of the
bank in the amount of $126,376.42. The kassebaums appeal.
We affirm.
FACTUAL bACkGrOUND
The kassebaums are the owners of residential real estate
located 	in 	Seward 	County, 	Nebraska. 	Financing 	for 	this
MUTUAL OF OMAhA bANk v. kASSebAUM 	953
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property was obtained through a series of promissory notes
and deeds of trust, first with Security Federal Savings, and
then with its successor, the bank. Two promissory notes
and deeds of trust were executed on July 1, 1999, one in the
amount of $240,000 and the other in the amount of $156,000.
On July 26, 2002, a third note and deed of trust were executed
in the amount of $31,692.56.
The kassebaums had difficulty paying the amounts due on
the notes. Various efforts were made to help the kassebaums
become current. Ultimately, on May 25, 2007, the kassebaums
refinanced the notes and executed two more notes and deeds of
trust in the amounts of $336,000 and $98,350.
On that same date, the kassebaums also executed an assign-
ment of settlement proceeds or monetary judgment in favor
of the bank. At the time they executed the assignment, the
kassebaums had pending in federal court a lawsuit against
bausch and Lomb, Inc. The basis of this suit was a claim for
damages suffered by patrick when a defective bausch and
Lomb product caused him to suffer severe injuries to his left
eye. patrick eventually settled the suit, and the proceeds were
deposited to the trust account of Timothy r. engler, patrick’s
counsel in the litigation. engler is a nominal defendant in
this case.
The bank filed a declaratory judgment action on January
19, 2010, seeking that the balance of the funds held by
engler be distributed to the bank as required by the assign-
ment. Specifically, the bank sought judgment in the amount of
$365,601.55 plus interest.
The kassebaums filed a motion to dismiss and/or a motion
for summary judgment on March 15, 2010, alleging that the
assignment was unenforceable. Specifically, the kassebaums
contended that the assignment occurred before the “claims
were liquidated by settlement or judgment” and that the assign-
ment was “against the public policy . . . and void as a matter of
law.” The district court denied this motion, concluding that the
assignment of a claim might be unenforceable, but that in this
case, it was only the proceeds that were assigned. As such, the
district court ruled that the assignment was not invalid for the
reasons raised by the motion.
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The matter then proceeded to trial. In their answer, the
kassebaums raised a number of affirmative defenses, none of
which are at issue on appeal. Following a jury trial, on August
11, 2011, the court accepted the verdict and entered a judg-
ment against the kassebaums and in favor of the bank for
$126,376.42, as well as judgment interest and costs. This amount
was stipulated to by the parties. engler subsequently paid and
distributed to the bank the funds held under his control.
This case raises the issue of whether an assignment of unliq-
uidated proceeds from a personal injury claim is valid and
enforceable under Nebraska law.
ASSIGNMeNTS OF errOr
On appeal, the kassebaums argue that the district court erred
in (1) denying their motion to dismiss/motion for summary
judgment and (2) enforcing the assignment.
STANDArD OF reVIeW
[1] An appellate court reviews questions of law indepen-
dently of the lower court’s conclusion.1
ArGUMeNT
Mootness.
The bank first asserts that because the kassebaums have
paid the judgment entered against them, this appeal is moot.
[2,3] When a party voluntarily complies with the mandate
of the trial court, satisfying the judgment, the appeal no longer
presents an actual controversy, but an abstract question.2 but
where the payment of the judgment compelled by law is not
voluntary, payment will not render an appeal moot.3 Thus, the
question presented here is whether the kassebaums’ payment
in this case was voluntary.
We addressed the voluntariness of the payment of a judg-
ment in Green v. Hall.4 There, we concluded that the payment
1 Tymar v. Two Men and a Truck, 282 Neb. 692, 805 N.W.2d 648 (2011).
2 Hormandl v. Lecher Constr. Co., 231 Neb. 355, 436 N.W.2d 188 (1989).
3 Green v. Hall, 43 Neb. 275, 61 N.W. 605 (1895).
4 Id.
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was involuntary because it was made to avoid a forced sale,
which could not be undone by legal process.5 Conversely, in
Hormandl v. Lecher Constr. Co.,6 we concluded that the pay-
ment was voluntary where the defendant’s insurer, also a third-
party defendant, paid the judgment.
In addition, this issue was addressed in Ray v. Sullivan.7 In
that case, the Nebraska Court of Appeals found that an appeal
was moot where the record did not show that the defendants
were aware that execution of the judgment had been ordered
by the district court. The Court of Appeals reasoned that in the
absence of this showing, it could not be determined whether
the motivation in paying the judgment was the execution of
judgment or if the payment was made voluntarily. The Court
of Appeals concluded that it was the burden of the appealing
party to show why any payment was not voluntary.
The record shows that the settlement proceeds from the
bausch and Lomb litigation were held in engler’s trust account.
Following the jury’s finding in this case, engler was served
with the judgment entered by the district court. That judgment
specifically ordered engler to pay the funds over to the bank.
engler averred to all these facts in an affidavit contained in
the record.
engler was presented with a judgment of the district court
ordering him to perform a legal duty. engler performed that
duty. On these facts, any payment by engler is not considered
voluntary on the part of the kassebaums. We therefore reject
the bank’s argument that this appeal is moot.
Assignment.
The primary issue presented by this appeal is whether an
assignment of proceeds made at a time when the amount to
be assigned was unliquidated is valid and enforceable under
Nebraska law. This is an issue of first impression in Nebraska.
[4,5] The common-law rule regarding the assignability of
tort claims is that such a right of action is not assignable where
5 Id. See, also, Burke v. Dendinger, 120 Neb. 594, 234 N.W. 405 (1931).
6 Hormandl, supra note 2.
7 Ray v. Sullivan, 5 Neb. App. 942, 568 N.W.2d 267 (1997).
956 	283 NebrASkA repOrTS

the tort causes a strictly personal injury and does not survive
the death of the person injured.8 This prohibition is grounded
on two principles: (1) that prior to more recent statutory
amendments, personal claims did not survive the death of the
victim, and (2) that prohibiting the assignment of tort claims
prevents champerty and maintenance.9
[6,7] “‘Champerty consists of an agreement whereby a per-
son without interest in another’s suit undertakes to carry it on
at his or her own expense, in whole or in part, in consideration
of receiving, in the event of success, a part of the proceeds of
the litigation.’”10 “‘Maintenance exists when a person without
interest in a suit officiously intermeddles therein by assist-
ing either party with money or otherwise to prosecute or
defend it.’”11
There is a split of authority regarding whether an assign-
ment of the proceeds of litigation violates this common-law
prohibition12:
It has been held that, although a personal injury claim
is not assignable before judgment, an assignment of the
proceeds of whatever recovery is had in such an action
is enforceable, at least where the plaintiff retains control
of the lawsuit without any interference from the assignee.
however, it has also been held that even the proceeds of
such a claim are not assignable, since an assignment of
the proceeds is, in effect, an assignment of the claim.13
Those 	courts 	that 	hold 	proceeds 	are 	assignable 	gener-
ally conclude that the reasons behind the prohibition against
assigning a claim do not apply in the case of the proceeds.
8 6 Am. Jur. 2d Assignments § 55 (2008). Cf. Milbank Ins. Co. v. Henry, 232
Neb. 418, 441 N.W.2d 143 (1989).
9 See, e.g., A. Unruh Chiropractic v. De Smet Ins. Co., 782 N.W.2d 367
(S.D. 2010).
10 Andersen v. Ganz, 6 Neb. App. 224, 230, 572 N.W.2d 414, 418 (1997)
(quoting 14 C.J.S. Champerty and Maintenance § 2 a. (1991)).
11 Id. at 230, 572 N.W.2d at 418-19 (quoting 14 C.J.S., supra note 10,
§ 2 b.).
12 Annot., 33 A.L.r.4th 82 (1984).
13 6 Am. Jur. 2d, supra note 8, § 58 at 188.
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First, statutes now exist which allow certain personal causes of
action to nevertheless survive the death of the victim.14
And more and more courts are finding that the second rea-
son is also inapplicable to an assignment of proceeds, at least
in cases where the assignee has no control over the litigation:
Where the assignee has no control, champerty and mainte-
nance are not as great a concern.15 As was noted by the North
Carolina Supreme Court:
There is a distinction between the assignment of a
claim for personal injury and the assignment of the pro-
ceeds of such a claim. The assignment of a claim gives
the assignee control of the claim and promotes cham-
perty. . . . The assignment of the proceeds of a claim does
not give the assignee control of the case and there is no
reason it should not be valid.16
however, other courts have declined to enforce the assign-
ment of proceeds. Usually those courts base their decision
on a rejection of the conclusion that the fears of champerty
and maintenance are lessened when the assignment is one
of proceeds,17 further reasoning that the distinction between
the claim and the proceeds is a “fiction,”18 or one without a
“‘difference.’”19
14 See, e.g., Hernandez v. Suburban Hosp., 319 Md. 226, 572 A.2d 144
(1990). Cf. Neb. rev. Stat. § 25-1401 (reissue 2008).
15 See, e.g., Hernandez, supra note 14; Achrem v. Expressway Plaza Ltd.,
112 Nev. 737, 917 p.2d 447 (1996); Charlotte-Mecklenburg Hospital Auth.
v. First of Ga. Ins. Co., 340 N.C. 88, 455 S.e.2d 655 (1995); In re Musser,
24 b.r. 913 (D.C. Va. 1982) (concluding assignment would be enforceable
under Virginia law).
16 Charlotte-Mecklenburg Hospital Auth., supra note 15, 340 N.C. at 91, 455
S.e.2d at 657.
17 Karp v. Speizer, 132 Ariz. 599, 647 p.2d 1197 (Ariz. App. 1982); Town
& Country Bk v. Country Mu. In. Co., 121 Ill. App. 3d 216, 459 N.e.2d
639, 76 Ill. Dec. 724 (1984); Quality Chiropractic v. Farmers Ins. Co., 132
N.M. 518, 51 p.3d 1172 (N.M. App. 2002); A. Unruh Chiropractic, supra
note 9.
18 Town & Country Bk, supra note 17, 121 Ill. App. 3d at 218, 459 N.e.2d at
640, 76 Ill. Dec. at 725.
19 A. Unruh Chiropractic, supra note 9, 782 N.W.2d at 371 (quoting Karp,
supra note 17).
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Neb. rev. Stat. § 25-1563.02 (reissue 2008) is also instruc-
tive. This section provides that lump-sum or periodic payment
settlements made as compensation for personal injury or death
shall be exempt from attachment, garnishment, or other legal
or equitable process and from all claims of creditors. Notably,
however, this section protects these proceeds “unless a written
assignment to the contrary has been obtained.”20
[8] We find the cases holding that an assignment of proceeds
is enforceable to be the better reasoned position. Where only
the proceeds of the litigation, and not control of the litigation,
have been assigned, there is little or no concern of intermed-
dling as a reason for declining to allow the assignment of the
claim. Section 25-1563.02, though concerned with liquidated
amounts, lends further support to this conclusion. While the
Legislature enacted § 25-1563.02 to provide some protection
to certain types of personal injury “proceeds” similar to the
ones at issue in this case, it did not see fit to prohibit writ-
ten assignment of those proceeds. We therefore conclude that
the kassebaums’ assignment is valid and enforceable under
Nebraska law.
CONCLUSION
We conclude that this appeal is not rendered moot by
engler’s payment of the judgment. We also conclude that the
unliquidated proceeds of personal injury litigation are assign-
able. As such, the decision of the district court is affirmed.
affiRmed.
stephan, J., not participating.
20 § 25-1563.02(1).
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