A Nebraska statute gives relief to any holder of a superior security interest or superior lien (as covered by the law) whose name may appear on a check with other security interest holders or lienholders. This provision of law prevents persons in a junior position to hold a check “hostage” to a superior security interest holder or lienholder.
The statute, in its entirety, is reproduced below:
25.21,188.01. Check or instrument; wrongful refusal to endorse; liability; attorney’s fees; awarded when. Any payee, endorser, or endorsee on a check or instrument issued in payment for property subject to a lien under Chapter 52, article 2, 5, 7, 9, 11, 12, or 14, or Chapter 54, article 2, or farm products subject to a security interest under article 9, Uniform Commercial Code, or Chapter 52, article 13, who wrongfully refuses to endorse such check or instrument to any other payee, endorser, or endorsee on such check or instrument who is a superior lienholder, superior secured party, or other person legally entitled to such check or instrument shall be liable to any payee, endorser, or endorsee entitled to such endorsement on such check or instrument for damages. A court shall assess attorney’s fees and costs if, upon the motion of any party or the court itself, the court finds that any payee, endorser, or endorsee on a check or other instrument wrongfully refused to endorse such check or instrument in payment for property subject to a lien or farm products subject to a security interest or that an attorney or party brought or defended an action or any part of an action that was frivolous or that the action or any part of the action was interposed solely for delay or harassment. If a court finds that an attorney or party unnecessarily expanded the proceedings by other improper conduct, including, but not limited to, abuses of civil discovery procedures, the court shall assess attorney’s fees and costs.
Source: Laws 1988, LB 987, § 6.