and thus obtain the benefit of "closing out all past liabilities," and 

"washing out all the bad history of these kinds of situations." True to his 

plan, Hastings sold Safety's assets at auction to the sole bidder, the 

appellant Lionel Hastings Trust (the Trust), of which Hastings was the 

lone trustee, for $2,500 (1.5 percent of their book value). The Trust then 

transferred the assets to the appellant Driver Education Systems (DES)— 

a corporation that Hastings had organized two days prior that conducted 

the same business, in the same building, with the same three-person staff; 

using the same post office box, phone number, and web address, and which 

manufactured, shipped, and advertised the same products, in the same 

packaging and catalogs as Safety previously had—and loaned DES 

$125,000 in exchange for 100% of DES's shares. 

Perkins filed a traversing affidavit against Safety, DES, and 

the Trust under NRS 31.330, alleging that DES had obtained Safety's 

assets in violation of Nevada's Uniform Fraudulent Transfer Act 

(NUFTA), NRS Chapter 112, as a constructive fraudulent transfer.' To 

succeed on his claim, Perkins needed to demonstrate that Safety 

transferred its assets without receiving a "reasonably equivalent value" for 

them. NRS 112.180(1)(b); NRS 112.190(1). The district court determined 

that Safety had not received such value and that the transfer was 

therefore constructively fraudulent, and awarded Perkins a judgment for 

$200,000 and attorney fees of $78,500. Safety, DES, and the Trust appeal 

the court's determination, its rejection of their equitable defenses, and its 

award of attorney fees. 

'In the court below, Perkins also argued this was an actual 

fraudulent transfer, an argument the district court rejected and that is not 

raised again on appeal. 

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When deposed, Hastings admitted that he was prepared to 

pay at least $7,500 for the assets in question, so even under the most 

conservative estimation Safety received only one-third of the market value 

of its assets. And in an email to Perkins, Hastings indicated that Safety's 

assets actually had a book value of $200,000, 80 times what the Trust 

paid. An independent economist valued the property sold at auction even 

higher, at $300,000. Moreover, a 'reasonable" valuation should be an 

impartial one, Black's Law Dictionary 1265, 595 (6th ed. 1990) (defining 

"reasonable"as "[flair . .. under the circumstances," and "fair" as "[Waving 

the qualities of impartiality and honesty; free from .. . self-interest"), but 

the Trust was the lone bidder on the assets, and was directed and funded 

by the owner of those assets, seeming to preclude this possibility. See In 

re Murphy, 331 B.R. 107, 120 (Bankr. S.D.N.Y. 2005) (questioning 

whether value can be "reasonably equivalent" when there are "no market 

forces at work at all"). 

Further, though the appellants argue that BFP v. Resolution 

Trust Corp., 511 U.S. 531 (1994)—wherein the United States Supreme 

Court said that "a reasonably equivalent value, for foreclosed property, is 

the price in fact received at the foreclosure sale, so long as all the 

requirements of the State's foreclosure law have been complied with," id. 

at 545 (internal quotation marks omitted)—controls the outcome, it is not 

clear that BFP should apply outside the foreclosure context at all. 

Moreover, though BFP has been extended to apply to land sale contract 

forfeitures, see In re Vermillion, 176 B.R. 563, 569 (Bankr. D. Or. 1994); 

McCanna v. Burke, 197 B.R. 333, 339-40 (D.N.M. 1996), and tax 

foreclosures, see In re Grandote Country Club Co., Ltd., 252 F.3d 1146, 

1152 (10th Cir. 2001); In re Fisher, 355 B.R. 20, 22-23 (Bankr. W.D. Mich. 

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2006), these circumstances, unlike the auction in question here and like 

foreclosure sales, involve: (1) the forced sale of real property; (2) sales 

conducted pursuant to legislative controls; (3) competitive bidding; and (4) 

sellers motivated to obtain the highest price. Thus even if we might, given 

some hypothetical set of facts, extend BFP to situations other than 

foreclosure sales, this case—where an indebted owner who had previously 

touted the economic benefits of fraudulent transfer conducted (1) an 

unforced sale of personal corporate property; (2) in the absence of 

legislative controls; (3) to the sole bidder at auction; and (4) where any 

proceeds of which would only go to satisfy a "a crock of bull" judgment that 

he felt, "[m]orally," no obligation to pay—does not present them. 

Thus the district court did not clearly err by finding that 

$2,500 was not "reasonably equivalent" to the value of Safety's property 

sold at the auction (whether that value was $7,500, $200,000, or 

$300,000), or by determining that equity could not offer the appellants 

relief. See Herup v. First Bos. Fin., LLC, 123 Nev. 228, 237, 162 P.3d 870, 

876 (2007) (noting that the determination of reasonably equivalent value 

is a factual finding); Mahban v. MGM Grand Hotels, Inc., 100 Nev. 593, 

596, 691 P.2d 421, 424 (1984) (noting that a determination of the 

availability of equitable relief due to waiver is a factual finding). One who 

seeks equity cannot do so with unclean hands, Las Vegas Fetish & Fantasy 

Halloween Ball, Inc. v. Ahern Rentals, Inc., 124 Nev. 272, 276, 182 P.3d 

764, 767 (2008), and by arguing that they disclosed their intent to 

fraudulently transfer assets to Perkins (and that through his 

"acquiescence" to their plan he thus estopped or waived his claims), the 

appellants also admit their misconduct. Also, the equitable defenses 

asserted do not defeat the constructive fraud claims asserted. Cf. 

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Monastra v. Konica Bus. Machs., U.S.A., Inc., 51 Cal. Rptr. 2d 528, 534 

(Ct. App. 1996) ("It simply does not comport with this court's sense of 

justice or sound public policy to say that if A gives notice that he is about 

to cheat B, he then has a license to do so."). 

Only the appellants' attorney fees challenge remains. 

According to the appellants, attorney fees for work performed prior to the 

filing of the traversing affidavit were awarded in error because NRS 

31.340 only permits the award of attorney fees for post-filing work. But 

there is nothing in the plain language of the statute that would so limit 

attorney fee awards: 

New matter in the affidavit replying to the answer 

of the garnishee . . . shall be tried in the same 

manner as other issues of like nature ... ; but if 

the verdict or finding is as favorable to the 

garnishee as the garnishee's answer, the 

garnishee shall recover costs of the proceeding 

against the plaintiff, together with a reasonable 

attorney's fee, otherwise the plaintiff shall recover 

costs against the garnishee, together with a 

reasonable attorney's fee. 

NRS 31.340 (emphasis added). And the appellants strained reading to the 

contrary—that the statute says "be tried"; a "trial" is an "action"; an 

"action" is commenced upon filing of the formal complaint; a traversing 

affidavit is a de facto complaint; and that therefore attorney fees can be 

awarded only for the period after the traversing affidavit is filed—is 

unavailing because "be tried" refers only to the procedure for deciding the 

pleadings, and does not in any way limit or modify the phrase "reasonable 

attorney's fees." The appellants' argument that the phrase "of the 

proceeding" temporally limits the award to the period after this de facto 

complaint was filed likewise fails because "of the proceeding" modifies 

costs to the garnishee, not fees to the plaintiff Thus "[wile think the better 

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J. 

Parraguirre 

J. 

view is that [pre-affidavit] investigation and evaluation of the potential 

claim is part of the process and expense of litigation," First Nat. Bank of 

Arizona v. Cont'l Bank, 673 P.2d 938, 944 (Ariz. Ct. App. 1983), and so 

that the district court's award of attorney fees was proper. 

We therefore AFFIRM. 

Saitta 

cc: Hon. Allan R. Earl, District Judge 

Michael H. Singer, Settlement Judge 

Marquis Aurbach Coffing 

Lewis Roca Rothgerber LLP/Las Vegas 

Eighth District Court Clerk 

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