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                                                       - 669 -
                               Nebraska Supreme Court Advance Sheets
                                        305 Nebraska Reports
                                         SCHAEFER SHAPIRO v. BALL
                                             Cite as 305 Neb. 669




                             Schaefer Shapiro LLP, a Nebraska limited
                                 liability partnership, appellant,
                                     v. Rodien Ball, appellee.
                                                  ___ N.W.2d ___

                                        Filed April 23, 2020.    No. S-19-547.

                 1. Garnishment: Appeal and Error. Garnishment is a legal proceeding.
                    To the extent factual issues are involved, the findings of a garnishment
                    hearing judge have the effect of findings by a jury and, on appeal, will
                    not be set aside unless clearly wrong.
                 2. Courts: Appeal and Error. The district court and higher appellate
                    courts generally review appeals from the county court for error appear-
                    ing on the record.
                 3. Judgments: Appeal and Error. When reviewing a judgment for errors
                    appearing on the record, the inquiry is whether the decision conforms
                    to the law, is supported by competent evidence, and is neither arbitrary,
                    capricious, nor unreasonable.
                 4. Garnishment: Social Security. As a general rule, Social Security pay-
                    ments to a recipient on deposit with a bank are exempt from garnish-
                    ment under both federal and state law.
                 5. ____: ____. Exempt funds such as Social Security payments remain
                    exempt from garnishment, even when commingled with nonexempt
                    funds, so long as the source of the exempt funds is reasonably traceable.
                 6. Garnishment: Attachments: Proof. One who seeks exemption from
                    attachment and garnishment should prove entitlement to the exemption.
                 7. Verdicts: Appeal and Error. In determining the sufficiency of the evi-
                    dence to sustain a verdict in a civil case, an appellate court considers the
                    evidence most favorably to the successful party and resolves evidential
                    conflicts in favor of such party, who is entitled to every reasonable
                    inference deducible from the evidence.

                 Appeal from the District Court for Douglas County, Leigh
               Ann Retelsdorf, Judge, on appeal thereto from the County
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         Nebraska Supreme Court Advance Sheets
                  305 Nebraska Reports
                   SCHAEFER SHAPIRO v. BALL
                       Cite as 305 Neb. 669

Court for Douglas County, Lawrence E. Barrett, Judge.
Judgment of District Court affirmed.

  James E. Riha and Michael J. Wilson, of Schaefer Shapiro,
L.L.P., for appellant.

  No appearance for appellee.

  Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.

  Cassel, J.
                       INTRODUCTION
   A judgment creditor sought to garnish the judgment debtor’s
bank account, which at one time contained funds both exempt
and nonexempt from garnishment. We hold that funds exempt
from garnishment remain exempt, even when commingled with
nonexempt funds, so long as the source of exempt funds is rea-
sonably traceable. Because competent evidence supported the
county court’s finding that the bank account consisted solely of
exempt funds, we affirm.

                         BACKGROUND
   Schaefer Shapiro LLP (Schaefer) obtained a judgment
against Rodien Ball. On December 26, 2018, Schaefer filed
an affidavit and praecipe for summons in garnishment, assert-
ing that the judgment against Ball totaled $1,994.99 and that a
bank held assets of Ball.
   The bank answered garnishment interrogatories indicating
that Ball’s account contained funds other than wages in excess
of $1,994.99. Upon Schaefer’s application to deliver nonex-
empt funds, the court ordered that “the non-exempt earnings,
property, credits, or money withheld by the garnishee in the
amount of $1,994.99 be transferred to the Court.”
   Ball requested a hearing, claiming that the funds were
exempt from garnishment. At the January 2019 hearing, Ball
testified that he received $1,790 in Social Security every month
and that the only funds in his garnished account were Social
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            Nebraska Supreme Court Advance Sheets
                     305 Nebraska Reports
                      SCHAEFER SHAPIRO v. BALL
                          Cite as 305 Neb. 669

Security payments. He estimated that the total balance in the
garnished bank account was “[$]30,000, probably.” In October
2017, Ball sold real estate and received “[p]robably about a
hundred thousand.” Although Ball deposited those proceeds
into the same bank account as his Social Security payments, he
testified: “[I]t’s all gone. Been spent, and I owed bills.” Ball
iterated that he spent the sale proceeds but did not spend Social
Security funds. The county court ruled from the bench: “Show
that the testimony’s been given that the funds are exempt. They
are ruled exempt.”
   Upon Schaefer’s appeal, the district court affirmed the county
court’s judgment. The district court highlighted the absence of
evidence regarding how much money was in the bank account
in October 2017, or anytime thereafter, aside from Ball’s esti-
mation. And there was no evidence as to how much money was
in the account before any commingling occurred or at the time
the interrogatories were completed. The district court observed
that the county court apparently found Ball to be credible, and
the district court found no error by the county court appearing
on the record.
   Schaefer appealed, and we moved the case to our docket. 1
                 ASSIGNMENT OF ERROR
   Schaefer assigns that the lower courts erred because the
act of depositing and commingling otherwise exempt Social
Security funds into the same bank account as nonexempt pro-
ceeds from the sale of real estate removes the exempt status,
thereby allowing garnishment of the Social Security funds
unless the garnishee proves the exempt status of the funds.
                  STANDARD OF REVIEW
   [1] Garnishment is a legal proceeding. To the extent factual
issues are involved, the findings of a garnishment hearing
judge have the effect of findings by a jury and, on appeal, will
not be set aside unless clearly wrong. 2
1
    See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2018).
2
    ML Manager v. Jensen, 287 Neb. 171, 842 N.W.2d 566 (2014).
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            Nebraska Supreme Court Advance Sheets
                     305 Nebraska Reports
                        SCHAEFER SHAPIRO v. BALL
                            Cite as 305 Neb. 669

   [2,3] The district court and higher appellate courts generally
review appeals from the county court for error appearing on
the record. 3 When reviewing a judgment for errors appearing
on the record, the inquiry is whether the decision conforms
to the law, is supported by competent evidence, and is neither
arbitrary, capricious, nor unreasonable. 4
                          ANALYSIS
   [4] As a general rule, Social Security payments to a recipi-
ent on deposit with a bank are exempt from garnishment under
both federal and state law. 5 In an earlier case decided by this
court, 6 there was no dispute that the bank account consisted
solely of checks directly deposited by the Social Security
Administration. This appeal presents a twist: What is the
effect, if any, on exempt funds when commingled with nonex-
empt funds?
   [5] The majority of federal 7 and state 8 courts have deter-
mined that Social Security benefits maintain their exempt
status, even if commingled with nonexempt funds. A Virginia
court took the contrary view, 9 but the continued validity of that
3
    Houser v. American Paving Asphalt, 299 Neb. 1, 907 N.W.2d 16 (2018);
    Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., 295 Neb. 419,
    889 N.W.2d 596 (2016).
4
    Id.
5
    See, Philpott v. Essex County Welfare Board, 409 U.S. 413, 93 S. Ct.
    590, 34 L. Ed. 2d 608 (1973) (implementing 42 U.S.C. § 407(a) (2018));
    Havelock Bank v. Hog Confinement Systems, 214 Neb. 783, 335 N.W.2d
    765 (1983).
6
    Havelock Bank v. Hog Confinement Systems, supra note 5.
7
    See, S & S Diversified Services, L.L.C. v. Taylor, 897 F. Supp. 549 (D.
    Wyo. 1995); NCNB Financial Services, Inc. v. Shumate, 829 F. Supp. 178
    (W.D. Va. 1993); In re Lichtenberger, 337 B.R. 322 (C.D. Ill. 2006); In re
    Moore, 214 B.R. 628 (D. Kan. 1997).
8
    See, In re Estate of Merritt, 272 Ill. App. 3d 1017, 651 N.E.2d 680, 209
    Ill. Dec. 502 (1995); Dean v. Fred’s Towing, 245 Mont. 366, 801 P.2d 579
    (1990); General Motors Acceptance Corp. v. Deskins, 16 Ohio App. 3d
    132, 474 N.E.2d 1207 (1984).
9
    Bernardini v. Central Nat. Bank, Etc., 223 Va. 519, 290 S.E.2d 863 (1982).
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              Nebraska Supreme Court Advance Sheets
                       305 Nebraska Reports
                         SCHAEFER SHAPIRO v. BALL
                             Cite as 305 Neb. 669

decision has been questioned due to later legislation. 10 Most
courts, however, require that the exempt source of the funds
be traceable. 11 We now hold that exempt funds such as Social
Security payments remain exempt from garnishment, even
when commingled with nonexempt funds, so long as the source
of the exempt funds is reasonably traceable.
   [6] When there is a dispute about whether funds are exempt,
which party carries the burden of proof becomes key. One
who seeks exemption from attachment and garnishment should
prove entitlement to the exemption. 12 This is in accord with the
general rule that the burden of proving an exemption rests on
the party claiming it. 13 It is also in line with the teaching of a
treatise concerning Social Security: “[O]nce it is determined
that an account contains commingled funds, the burden shifts
to the claimant to prove that the remaining funds constitute
exempt social security funds.” 14 Ball, as the party claiming
that the funds were exempt, had the burden to prove that they
were exempt.
   [7] In considering whether Ball met his burden, we are
constrained by our standard of review. The county court deter-
mined that all of the funds in the bank account were exempt.
And the findings of the county court have the effect of findings
10
     See, In re Delima, 561 B.R. 647 (E.D. Va. 2016); In re Meyer, 211 B.R.
     203 (E.D. Va. 1997).
11
     See, In re Lichtenberger, supra note 7; In re Moore, supra note 7; In re
     Estate of Merritt, supra note 8; Dean v. Fred’s Towing, supra note 8;
     General Motors Acceptance Corp. v. Deskins, supra note 8.
12
     See Novak v. Novak, 2 Neb. App. 21, 508 N.W.2d 283 (1993), affirmed in
     part and in part reversed and remanded 245 Neb. 366, 513 N.W.2d 303
     (1994). See, also, Scottsbluff Nat. Bank v. Pfeifer, 126 Neb. 852, 254 N.W.
     494 (1934); Stull v. Miller, 55 Neb. 30, 75 N.W. 239 (1898).
13
     See, State v. Erpelding, 292 Neb. 351, 874 N.W.2d 265 (2015) (exemption
     to criminal nonsupport); Hamilton Cty. EMS Assoc. v. Hamilton Cty., 291
     Neb. 495, 866 N.W.2d 523 (2015) (Industrial Relations Act exemption);
     Fort Calhoun Bapt. Ch. v. Washington Cty. Bd. of Eq., 277 Neb. 25, 759
     N.W.2d 475 (2009) (tax exemption).
14
     2A Social Security Law and Practice § 34:8 (2019).
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             Nebraska Supreme Court Advance Sheets
                      305 Nebraska Reports
                        SCHAEFER SHAPIRO v. BALL
                            Cite as 305 Neb. 669

by a jury—they will not be set aside unless clearly wrong. 15
With respect to a jury verdict, we have stated that it is suffi-
cient if there is competent evidence presented to the jury upon
which it could find for the successful party. 16 And in determin-
ing the sufficiency of the evidence to sustain a verdict in a civil
case, an appellate court considers the evidence most favorably
to the successful party and resolves evidential conflicts in favor
of such party, who is entitled to every reasonable inference
deducible from the evidence. 17
    Viewing the evidence most favorably to Ball and giving
him the benefit of every reasonably inference, we cannot say
that the county court’s finding was clearly wrong. Ball testi-
fied that the bank account contained only his Social Security
payments and that he spent all of the nonexempt money that
had been deposited in the account. The county court accepted
this testimony.
    Schaefer argues that it is “mathematically impossible” for
the $30,000 balance in the account to consist solely of exempt
Social Security funds. 18 According to Schaefer, it would take
at least 17 months for the account balance to go from $0 to
$30,000 at $1,790 per month, but that only 14 months passed
from the commingling of the funds in October 2017 to the
filing of the garnishment in December 2018. Presumably,
then, it would be mathematically possible for Ball’s account
to contain $25,060 as of December 2018 (time of service of
garnishee summons) or $26,850 as of January 2019 (time
of hearing).
    The county court was not bound to accept Ball’s estima-
tion of the account balance. The question posed at the hear-
ing was, “And how much is in the account?” The question
inquired about the present balance of the account rather than
the balance at the time of the garnishment filing, although that
15
     See ML Manager v. Jensen, supra note 2.
16
     See Wulf v. Kunnath, 285 Neb. 472, 827 N.W.2d 248 (2013).
17
     Id.
18
     Brief for appellant at 5.
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             Nebraska Supreme Court Advance Sheets
                      305 Nebraska Reports
                        SCHAEFER SHAPIRO v. BALL
                            Cite as 305 Neb. 669

hearing occurred approximately 3 weeks later. Ball answered,
“I don’t know. Thirty — 30,000, probably.” The county court
may have believed that the account contained an amount lesser
than $30,000.
   Schaefer further argues that federal law should govern a
bank’s review of an account to determine whether an exempt
benefit was paid during the 2-month lookback period. 19 Under
federal regulations, a financial institution must issue a notice to
the account holder named in the garnishment order where (1)
a benefit agency deposited a benefit payment into an account
during the lookback period, (2) the balance in the account on
the date of the account review was above $0 and the finan-
cial institution established a protected amount, and (3) there
are funds in the account in excess of the protected amount. 20
Schaefer asserts that applying the 2-month lookback period to
Ball’s Social Security benefits would leave any amount in the
bank account over $3,580 ($1,790 per month × 2 months) sub-
ject to being garnished.
   It is not clear from the record whether the federal regu-
lations apply here. The federal regulations were added “to
implement statutory provisions that protect Federal benefits
from garnishment by establishing procedures that a financial
institution must follow when served a garnishment order
against an account holder into whose account a Federal
benefit payment has been directly deposited.” 21 The regula-
tions specify:
         Benefit payment means a Federal benefit payment
      referred to in § 212.2(b) paid by direct deposit to an
      account with the character “XX” encoded in positions 54
      and 55 of the Company Entry Description field and the
      number “2” encoded in the Originator Status Code field
      of the Batch Header Record of the direct deposit entry. 22
19
     See 31 C.F.R. § 212.3 (2018).
20
     31 C.F.R. § 212.7(a) (2018).
21
     31 C.F.R. § 212.1 (2018) (emphasis supplied).
22
     31 C.F.R. § 212.3 (emphasis omitted) (emphasis supplied).
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             Nebraska Supreme Court Advance Sheets
                      305 Nebraska Reports
                        SCHAEFER SHAPIRO v. BALL
                            Cite as 305 Neb. 669

Because our record contains no evidence that Ball’s Social
Security payments were directly deposited into his account,
we cannot speak to whether the federal regulations apply. But
even if they did apply, exempt funds remain exempt, 23 and
Ball testified that his account contained only Social Security
funds.
   The parties presented scant evidence to the county court.
But Ball’s testimony that the account contained only exempt
funds, if believed, provided a basis for the county court to rule
accordingly. We cannot say that the county court’s finding was
clearly wrong. Like the district court, we see no error appear-
ing on the record.
                         CONCLUSION
   Because the county court’s decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable, we affirm the decision of the dis-
trict court affirming the judgment of the county court.
                                                   Affirmed.
23
     See, 42 U.S.C. § 407(a); Tuan Thai v. Ashcroft, 366 F.3d 790 (9th Cir.
     2004) (federal regulation cannot empower action prohibited by federal
     statute).
