United States District Court, D. Nebraska
MEMORANDUM AND ORDER
Smith Camp Senior United States District Judge
matter is before the Court on several motions. For the
reasons discussed below, Defendants’ Motion for Summary
Judgment against the State of Nebraska, Member Case ECF No.
216,  will be
granted. The State’s Motion for Partial Summary
Judgment, ECF No. 221, will be denied. Defendants’
Statement of Objections to Magistrate Judge’s Order,
ECF No. 263, will be overruled as moot. The United
States’ Joint Motion for Summary Judgment, ECF No. 225,
will be granted in part; and Defendants’ Motion for
Summary Judgment against the United States, ECF No. 229, will
be granted in part.
compliance with the Court’s local rules, the parties
submitted numbered statements of facts and corresponding
responses. Unless otherwise indicated, the following facts
are undisputed for purposes of the pending Motions for
Stabl, Inc. (Stabl) was a Nebraska corporation. Defendant
Lant, Inc. (Lant) was also a Nebraska corporation and was the
sole owner of Stabl. Lant owned several other companies:
Tri-State By-Products, Inc. (Tri-State); Dodge City Services,
Inc. (Dodge City); and Great Plains Sales, Inc. (Great
Plains). Defendant Leon Johnson was the sole owner of Lant
and the president of Lant and Stabl. Leon Johnson also owned
Plum Creek Transport, Inc. (Plum Creek). Defendant Ann
Johnson is married to Leon Johnson and was an employee of
Stabl and Lant.
October 1995 until May 28, 2010, Stabl operated a rendering
facility in Lexington, Nebraska. In the course of its
operations, Stabl violated the Clean Water Act (CWA), 33
U.S.C. §§ 1251–1388 and the Nebraska
Environmental Protection Act (NEPA), Neb. Rev. Stat.
§§ 81-1501 to 81-1532. The United States
Environmental Protection Agency (EPA) and Nebraska Department
of Environmental Quality (NDEQ) brought enforcement actions
against Stabl, and this Court entered judgment for the
plaintiffs in the amount of $2, 285, 874 to be divided
equally between the plaintiffs. United States v. Stabl,
Inc., No. 8:11CV274, 2014 WL 12576928 (D. Neb. Jan. 10,
28, 2010, Darling International, Inc. (Darling), purchased
assets from Stabl, Lant, Tri-State, Dodge City, Great Plains,
Plum Creek, and Leon Johnson for $15, 200, 000. The sale
included virtually all Stabl’s assets. The funds were
deposited into an account at Platte Valley State Bank and
Trust Company (Platte Valley) under the name of Nebraska
By-Products. Leon and Ann Johnson were signatories to the
account. The same day, approximately $3.84 million was
deducted from the account to pay off Stabl’s bank
13, 2010, three wire transfers caused a withdrawal of funds
from the Platte Valley account, totaling $8 million. Two
transfers were for “$2 million to Waddell and Reed,
received by UMB Bank of Kansas City, Missouri, listing the
originator as ‘Nebraska By-Products, Inc.’ and
the originator to beneficiary information as: ‘Leon A.
Johnson and Ann M. Johnson . . . .’” Pls. Br.
¶ 33, ECF No. 226. The third transfer was for “$4
million to Edward Jones, received by the Northern Trust
Company of Chicago, Illinois, listing the originator as
‘Nebraska By-Products, Inc.’ and the originator
to beneficiary information as ‘Leon and Ann Johnson . .
. .’” Id. On July 14, 2010, there was
$1.437 million remaining in the Platte Valley account, and
Stabl had $665, 000 across other accounts. The Platte Valley
account was emptied and closed by October 3, 2011.
Plaintiffs’ expert witnesses claim the Johnsons
received $10, 853, 589 from the sale. ECF No. 236-8 19.
own tax documents and those of its subsidiaries for November
2009 through October 2010 included Form 8594, entitled
“Asset Acquisition Statement.” This document
allocated the sale proceeds of the May 28, 2010, sale. Form
8594 was not produced in discovery in these enforcement
February of 2016, Stabl’s counsel sent a letter to
Plaintiffs stating that after the sale, Stabl’s
liabilities exceeded its assets by $3, 956, 225. On June 6,
2018, Leon Johnson testified in a deposition that sometime
near the asset sale Stabl became insolvent.
26, 2016, the United States brought an action to collect on
its judgment under the Federal Debt Collection Procedures Act
(FDCPA), 28 U.S.C. §§ 3001–3308. ECF No. 47.
On July 15, 2016, the State of Nebraska brought a similar
action to collect under Federal Rule of Civil Procedure 69
and the Nebraska Uniform Fraudulent Transfer Act (NUFTA),
Neb. Rev. Stat. §§ 36-701 through 36-712,
repealed by 2019 Neb. Laws 70, § 20 (repeal
effective Sept. 1, 2019). Member Case ECF No. 15. The cases
were consolidated for purposes of discovery and pretrial
management on February 28, 2017. ECF No. 37. On March 22,
2019, The State filed a Motion for Partial Summary Judgment,
ECF No. 221, both Plaintiffs filed a Joint Motion for Summary
Judgment, ECF No. 225, and Defendants filed a Motion for
Summary Judgment against both Plaintiffs, ECF No. 229.
judgment is appropriate when the evidence, viewed in the
light most favorable to the nonmoving party, presents no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law.” Garrison
v. ConAgra Foods Packaged Foods, LLC, 833 F.3d 881, 884
(8th Cir. 2016) (citing Fed.R.Civ.P. 56(c)). “Summary
judgment is not disfavored and is designed for every
action.” Briscoe v. Cty. of St. Louis, 690
F.3d 1004, 1011 n.2 (8th Cir. 2012) (quoting Torgerson v.
City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011)
(en banc)). In reviewing a motion for summary judgment, the
Court will view “the record in the light most favorable
to the nonmoving party . . . drawing all reasonable
inferences in that party’s favor.” Whitney v.
Guys, Inc., 826 F.3d 1074, 1076 (8th Cir. 2016) (citing
Hitt v. Harsco Corp., 356 F.3d 920, 923–24
(8th Cir. 2004)). Where the nonmoving party will bear the
burden of proof at trial on a dispositive issue, “Rule
56(e) permits a proper summary judgment motion to be opposed
by any of the kinds of evidentiary materials listed in Rule
56(c), except the mere pleadings themselves.” Se.
Mo. Hosp. v. C.R. Bard, Inc., 642 F.3d 608, 618 (8th
Cir. 2011) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986)). The moving party need not produce
evidence showing “the absence of a genuine issue of
material fact.” Johnson v. Wheeling Mach.
Prods., 779 F.3d 514, 517 (8th Cir. 2015) (quoting
Celotex, 477 U.S. at 325). Instead, “the
burden on the moving party may be discharged by
‘showing’ . . . that there is an absence of
evidence to support the nonmoving party’s case.”
St. Jude Med., Inc. v. Lifecare Int’l, Inc.,
250 F.3d 587, 596 (8th Cir. 2001) (quoting Celotex,
477 U.S. at 325).
response to the moving party’s showing, the nonmoving
party’s burden is to produce “specific facts
sufficient to raise a genuine issue for trial.”
Haggenmiller v. ABM Parking Servs., Inc., 837 F.3d
879, 884 (8th Cir. 2016) (quoting Gibson v. Am. Greetings
Corp., 670 F.3d 844, 853 (8th Cir. 2012)). The nonmoving
party “must do more than simply show that there is some
metaphysical doubt as to the material facts, and must come
forward with specific facts showing that there is a genuine
issue for trial.” Wagner v. Gallup, Inc., 788
F.3d 877, 882 (8th Cir. 2015) (quoting Torgerson,
643 F.3d at 1042). “[T]here must be more than the mere
existence of some alleged factual dispute” between the
parties in order to overcome summary judgment. Dick v.
Dickinson State Univ., 826 F.3d 1054, 1061 (8th Cir.
2016) (quoting Vacca v. Viacom Broad. of Mo., Inc.,
875 F.2d 1337, 1339 (8th Cir. 1989)).
other words, in deciding “a motion for summary
judgment, facts must be viewed in the light most favorable to
the nonmoving party only if there is a genuine dispute as to
those facts.” Wagner, 788 F.3d at 882 (quoting
Torgerson, 643 F.3d at 1042). Otherwise, where the
Court finds that “the record taken as a whole could not
lead a rational trier of fact to find for the non-moving
party, ” there is no “genuine issue of material
fact” for trial and summary judgment is appropriate.
Whitney, 826 F.3d at 1076 (quoting Grage v. N.
States Power Co.-Minn., 813 F.3d 1051, 1052 (8th Cir.
State seeks partial summary judgment dismissing
Defendants’ third affirmative defense, which states
that Nebraska filed its complaint out of time due to the
statute of limitations in the NUFTA. Plaintiffs jointly move
for summary judgment on the merits. Defendants move for
summary judgment dismissing both cases.
NUFTA Statute of Limitations
State moves for partial summary judgment dismissing
Defendants’ third affirmative defense, which asserts
that the NUFTA statute of limitations bars the State of
Nebraska’s action. ECF No. 221. Defendants move for
summary judgment dismissing the State’s action under
the NUFTA as time-barred by the statute of limitations.
Member Case ECF No. 216.
action under section 36-705(a)(1) of the NUFTA must be
brought “within four years after the transfer was made
. . . or, if later, within one year after the transfer . . .
was or could reasonably have been discovered by the claimant
. . . .” Neb. Rev. Stat. § 36-710. The State filed
its original complaint on July 15, 2016, more than six years
after the July 13, 2010, wire transfers. For the State to
show that its action was timely, it must show that it was
brought within the discovery rule of the statute. In other
words, it must show that it could not reasonably have
discovered the transfers or their fraudulent nature before
July 15, 2015-one year prior to the date of the State’s
State argues that this case is analogous to Indiana Bell
Telephone Co. v. Lovelady, No. SA-05-CA-285-H, 2008 WL
11408781 (W.D. Tex. Mar. 5, 2008). In Indiana Bell,
the court held that the defendants did not meet their burden
to prove the affirmative defense of the statute of
limitations in their motion for summary
Id. at *2, *4. The court determined that the
defendants did not show, as a matter of law, that the
plaintiff could reasonably have found the transfers more than
one year before they brought their claims against the
defendants. The plaintiff learned of two of the three
transfers from discovery in the underlying litigation and
learned of the third transfer in post-judgment discovery
within three months of receiving its judgment. The plaintiff brought its
suit against the first group of defendants within a month of
receiving the post-judgment discovery.
statute of limitations under the Texas Uniform Fraudulent
Transfer Act (TUFTA), Tex. Bus. & Com. Code §§
24.001–24.013, is nearly identical to that in the
NUFTA. Compare Tex. Bus. & Com. Code §
24.010, with Neb. Rev. Stat. § 36-710. Also,
both statutes instruct courts to use “the principles of
law and equity, including . . . the law relating to . . .
fraud” to supplement interpretation of the statutes.
Tex. Bus. & Com. Code § 24.011; Neb. Rev. Stat.
Nebraska, “[a]n action for fraud does not accrue until
there has been a discovery of the facts constituting the
fraud, or facts sufficient to put a person of ordinary
intelligence and prudence on inquiry which, if pursued, would
lead to such discovery.” Chafin v. Wis. Province of
Soc’y of Jesus, 917 N.W.2d 821, 824 (Neb. 2018)
(citing Fitzgerald v. Cmty. Redevelopment Corp., 811
N.W.2d 178 (Neb. 2012)). However, this does not require
“that a plaintiff have knowledge of the exact nature or
source of a problem, but only that a problem exists.”
Kalkowski v. Neb. Nat’l Trails Museum Found.,
Inc., 826 N.W.2d 589, 597 (Neb. Ct. App. 2013) (citing
Nuss v. Alexander, 691 N.W.2d 94 (Neb. 2005)). In
other words, “[d]iscovery, as applied to the statute of
limitations, occurs when one knows of the existence of an
inquiry or damage and not when he or she has a legal right to
seek redress in court.” Chafin, 917 N.W.2d at
824 (citing Andres v. McNeil Co., 707 N.W.2d 777
(Neb. 2005); Kalkowski, 826 N.W.2d 589).
plaintiff in Indiana Bell sued at least one group of
defendants within the four-year statute of limitations for
two of the transfers and conducted post-judgment discovery
within three months of receiving its judgment for the sole
purpose of investigating the defendants’ ability to
pay. Here, the State learned on December 3, 2012, in response
to discovery in the underlying action, that Stabl had sold
virtually all its assets in 2010 as part of a $15.2-million
sale. Pl.’s Br ¶ 24, ECF No. 222. That same day,
the State learned that Stabl had negative retained earnings
of $3, 956, 225 at the end of the 2010 tax year. Id.
The State received its judgment against Stabl on January 10,
2014. At that point, a reasonable litigant in the
State’s position-with a $1 million judgment against a
dissolved corporate defendant whose retained earnings were
negative almost $4 million the same year it sold nearly all
its assets-would engage in post-judgment discovery to ensure
it could recover on its judgment.
State argues that it was reasonable not to engage in
post-judgment discovery because Stabl sought to appeal the
judgment. Stabl filed its notice of appeal in the underlying
case on May 2, 2014, and the Eighth Circuit rendered its
judgment on August 27, 2015, and issued its mandate on
October 21, 2015. That appeal did not prevent the State from
conducting post-judgment discovery or seeking to enforce its
This Court denied Stabl’s motion to stay, 8:11cv267,
ECF No. 163, and it does not appear that Stabl filed a motion
to stay with the Eighth Circuit. Stabl also did not post a
bond pursuant to Federal Rule of Civil Procedure 62 or
Federal Rule of Appellate Procedure 8. The State could have
and should have discovered the transfers and their fraudulent
nature before July 15, 2015. The State’s complaint was,
therefore, not timely under the NUFTA statute of limitations
and is dismissed.
their Answer, ECF No. 71, Defendants assert ten affirmative
defenses. The Court has already granted the United
States’ Motion to Strike the third affirmative defense
of statute of limitations. United States v. Stabl,
Inc., No. 8:16CV233, 2018 WL 3758204 (D. Neb. Aug. 8,
2018) (Nelson, Mag. J.). Defendants’ fourth, sixth,
seventh, eighth, and tenth purported affirmative defenses are
not affirmative defenses, but are defenses to the elements
the United States must prove and accordingly are discussed
where they are relevant to those claims. The remaining affirmative
defenses are discussed below.
purported waiver and estoppel defenses appear to be based on
the same argument. Defendants cite no support for either
defense-other than to say that they are valid defenses