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Bill would require corporate garnishment summons be served on registered agent; supporters say current 10‑day rule creates unfair liability
Summary
LB 136 would require garnishment service on a corporation’s registered agent instead of the local business location; proponents — largely retail and hospitality trade groups — said Nebraska’s 10‑day response window plus service at storefronts risks default liability for employers, while collectors urged caution about restricting service options
Senator Rick Holcroft introduced LB 136 to the Judiciary Committee, asking the Legislature to require that garnishment interrogatories and related documents be served to a corporation’s registered agent rather than to the local branch where a debtor works.
Holcroft and business groups told the committee Nebraska’s 10‑day statutory response window for employers — shorter than neighboring states’ 30‑day window — creates a real risk that an interrogatory served at a retail location or small office will not be routed to headquarters in time. If the employer does not file timely answers the collector can seek to hold the employer liable for the underlying judgment, supporters said.
Representatives of the Nebraska Grocery Industry Association, Nebraska Hospitality Association and the Nebraska Retail Federation testified that the bill aims to “treat corporations like financial institutions”—in other words, require service on a central registered agent as is typical for banks. Ansley Fellers, testifying for the trade groups, described examples in which local staff were served at retail counters and corporate headquarters later defended that the response had been timely but not docketed on time, leading to liability hearings and legal expense for the employer.
Ken Wentz, labor and employment counsel for national clients, described a Nebraska Supreme Court decision (Florence Lake Investments v. Berg, 2022) in which the court allowed a collector to pursue a large judgment after an employer’s attorney returned garnishment interrogatories two days late. Wentz said Nebraska is unique among surrounding states for the 10‑day deadline and the lack of a registered‑agent requirement for garnishments.
Opponents, led by the Nebraska Collectors Association and creditor attorneys, argued the change would unduly restrict service options and might hamper collections against small businesses that lack an active registered agent; they urged non‑legislative fixes and cautioned that registered agents can sometimes be unreachable or inactive. Attorney Robert Bryant said the bill, as drafted, would prevent fleet‑of‑small‑business service options and could cause practical problems when a registered agent is unavailable.
Holcroft said he is willing to work with opponents and that earlier iterations of the bill had attempted to lengthen the employer response time; trade groups indicated they could accept technical fixes that preserve the bill’s intent of avoiding surprise liability at local retail counters.
Ending: The committee took testimony without a vote and sponsors said they would continue to seek technical language to resolve opponents’ operational concerns.
