Sawyer v. State Surety Co.

558 N.W.2d 43, 251 Neb. 440, 1997 Neb. LEXIS 17
CourtNebraska Supreme Court
DecidedJanuary 10, 1997
DocketS-94-1085
StatusPublished
Cited by8 cases

This text of 558 N.W.2d 43 (Sawyer v. State Surety Co.) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sawyer v. State Surety Co., 558 N.W.2d 43, 251 Neb. 440, 1997 Neb. LEXIS 17 (Neb. 1997).

Opinions

Connolly, J.

John Darrin Sawyer (John D.) brought this action against State Surety Company to recover on a $20,000 guardian bond issued to his father, John R. Sawyer (John R.). Because John R. had filed for chapter 13 bankruptcy protection, the parties entered into a stipulation lifting the automatic stay in the bankruptcy court so that John D. could obtain a judgment against John R. in the district court for moneys owed. The stipulation provided that John D. would pursue the judgment against State Surety only. The district court dismissed this cause pursuant to Neb. Rev. Stat. § 30-2641(b) (Reissue 1995). We affirm, concluding that § 30-2641(b) prevents an obligee from pursuing a claim against a surety on a bond when the obligee has stipulated that no enforcement or collection action on the judgment will be taken against the primary obligor.

BACKGROUND

The proceedings in the district court were conducted largely upon a stipulation of the facts. For this reason, the facts underlying the present dispute are essentially undisputed.

John D.’s mother died on October 28, 1981, leaving him the beneficiary of insurance benefits from IBM. To facilitate the payment of these funds, the Saunders County Court appointed John R., John D.’s father, guardian on April 9, 1984. Shortly thereafter, on April 19, John R. filed a bond with the county court in the amount of $20,000, with State Surety being the surety.

Between the years 1984 and 1986 inclusive, John R., as guardian, received moneys belonging to John D. In particular, John R. received $25,585 from insurance proceeds from IBM and $15,786 from Social Security. Despite the fact that these funds were payable directly to his son, John R. failed to pay these sums to John D. when he reached the age of majority on October 11, 1987.

[442]*442On July 26, 1991, the county court ordered John R. to file a report accounting for all moneys he had received and expended as guardian for John D. An accounting was filed on November 7, 1991, with John D. filing objections on December 12. Before a hearing was held regarding the objections, John R., on April 15, 1992, filed a petition for relief in bankruptcy under chapter 13 of title 11 of the U.S. Code. A suggestion in bankruptcy was then filed by John R. in the county court 4 days later.

Both John D. and State Surety were listed as creditors in the bankruptcy petition. On or about June 9, 1992, John D. filed a proof of claim with the bankruptcy court. This claim was allowed in the sum of $41,370 and was classified as unsecured. Prior to the confirmation of a bankruptcy plan and the entry of any debt discharge, John D. filed a motion for relief from the automatic stay with the bankruptcy court in order to proceed with the accounting of the guardianship in the county court.

There was no contested hearing regarding the motion for relief. Instead, the parties entered into a stipulation whereby John R. agreed to a lifting of the automatic stay for the sole purpose of allowing John D. to obtain a judgment against him in the county court so that he could file an action against State Surety on the $20,000 bond. Paragraph 5 of the stipulation provides:

That John Darrin Sawyer shall not be permitted to take any action against any property or any part of the estate of John R. Sawyer. That John Darrin Sawyer be granted the necessary authority and permission to proceed on an action against the bonding company, State Surety Company, so that such action and/or proceeding effectively may proceed and that John Darrin Sawyer may take all necessary action to obtain the judgment against John R. Sawyer so that said amount due John Darrin Sawyer may be finally determined in order that an action on the bond of State Surety Company may proceed in the appropriate District Court. That in consideration for the Stipulation by John R. Sawyer to permit judgment to be entered against him in the matter of John Darrin Sawyer in the County Court of Saunders County, John Darrin Sawyer hereby provides his covenant against enforcements or collection [443]*443against John R. Sawyer personally and John Darrin Sawyer hereby agrees to use the judgment for the sole purpose of maintaining an action against State Surety on the bond.

(Emphasis supplied.)

The bankruptcy court, pursuant to this stipulation, granted John D. relief from the automatic stay on January 8, 1993. John D. then moved the county court to enter a judgment by stipulation against John R. for $41,370. The county court granted John D.’s motion and entered judgment against John R. in the amount of $41,370.

Having received only $390 from John R., John D. filed this action against State Surety on August 30, 1993, seeking a $20,000 judgment on the surety bond. The district court, pursuant to § 30-2641(b), dismissed the action, holding that “an action against the primary obligator, John R. Sawyer, has been barred by adjudication or limitation and therefore no proceeding may be commenced against the surety, State Surety Company.” John D. appeals.

ASSIGNMENT OF ERROR

In this appeal, John D. alleges the district court decision is contrary to law and is not supported by the facts.

STANDARD OF REVIEW

Whether a decision conforms to law is by definition a question of law, in connection with which an appellate court has an obligation to reach a conclusion independent of that of the inferior court. State v. Bundy, 250 Neb. 213, 549 N.W.2d 122 (1996); Bristol v. Rasmussen, 249 Neb. 854, 547 N.W.2d 120 (1996).

In a case in which the facts are stipulated, an appellate court reviews the case as if trying it originally in order to determine whether the facts warranted the judgment. Jindra v. Clayton, 247 Neb. 597, 529 N.W.2d 523 (1995); Douglas Cty. Bank & Trust v. Stamper, 244 Neb. 226, 505 N.W.2d 693 (1993).

ANALYSIS

The question before us is whether a surety (State Surety) is released from liability on a guardian bond when the obligee [444]*444(John D.) stipulates that no action for collection or enforcement of a judgment will be pursued against the primary obligor (John R.) for moneys owed. The answer to this question is controlled by § 30-2641 (b), which provides: “No proceeding may be commenced against the surety on any matter as to which an action or proceeding against the primary obligor is barred by adjudication or limitation.” Thus, we must determine whether a stipulation not to enforce or collect on a judgment is an adjudication or limitation.

In this appeal, John D. essentially argues that the stipulation entered into by the parties does not act as a limitation or adjudication which prevents the bringing of an action against State Surety, because it was simply a means by which to lift the automatic stay in the bankruptcy court. John D.

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Sawyer v. State Surety Co.
558 N.W.2d 43 (Nebraska Supreme Court, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
558 N.W.2d 43, 251 Neb. 440, 1997 Neb. LEXIS 17, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sawyer-v-state-surety-co-neb-1997.