Opinion ID: 1945691
Heading Depth: 1
Heading Rank: 9

Heading: was amwest insolvent at time of transfers to gilbane?

Text: The second, third, and fourth transfers from Amwest to Gilbane occurred within the 4-month period before Amwest filed its petition under NISRLA. Under § 44-4828(1)(b)(ii), the liquidator could avoid these transfers without proving that Amwest was insolvent at the time of the transfer. We conclude that the district court did not err in granting the liquidator's motion for summary judgment as to these transfers, totaling $245,664.39. The transfer in January 2001 is more problematic. Because it occurred outside the 4-month period, the liquidator alleged and was obligated under § 44-4828(1)(b)(i) to prove that Amwest was insolvent at the time of the transfer. An insurer is considered insolvent under NISRLA if it is unable to pay its obligations when they are due or when its admitted assets do not exceed its liabilities plus the greater of: (i) Any capital and surplus required by law to be maintained; or (ii) The total par or stated value of its authorized and issued capital stock. [30] As the party moving for summary judgment, the liquidator had the initial burden to show that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law. [31] Thus, the liquidator was required to produce evidence which, if uncontroverted, would establish that Amwest was insolvent at the time of the January 2001 payment to Gilbane. In preference cases arising under federal bankruptcy law, courts have held that the testimony of an accountant or other financial expert is generally necessary to prove insolvency at the time of a challenged transfer. [32] Michael James Fitzgibbons, an accountant who served as special deputy receiver for Amwest, testified that Joseph J. DeVito was retained to review certain financial records which Fitzgibbons and others under his supervision had prepared to show the financial condition of Amwest as of June 30, 2000, and to determine whether Amwest was insolvent as of that date. Fitzgibbons acknowledged that he had not made any determination that Amwest was insolvent as of January 5, 2001, the date of the initial transfer to Gilbane, but, rather, drew the conclusion that Amwest was continually insolvent after June 30, 2000. The record includes reports purportedly authored by DeVito, one dated February 28, 2006, and the second dated June 28, 2006. Both reports are attached to the affidavit of an attorney representing the liquidator, which merely indicates that the reports are true and correct copies. The reports set forth DeVito's opinion regarding the insolvency of Amwest as of June 30, 2000, and subsequent to that date. Gilbane objected to the relevancy, materiality and competency of the DeVito reports. The district court took the objection under advisement and overruled it in its final order. For the sake of completeness, we note that while Gilbane's counsel stated during a November 25, 2005, hearing that DeVito's deposition was taken, the deposition is not included in our record. Although Gilbane did not assign error with respect to the court's ruling on its objections to the DeVito reports, it argues on appeal that the reports do not support the liquidator's contention that Amwest was insolvent as of the January 2001 payment to Gilbane. We agree, although for a different, more basic reason than that advanced by Gilbane. Neb.Rev. Stat. § 25-1332 (Cum. Supp. 2006) provides that the evidence that may be received on a motion for summary judgment includes . . . affidavits. Such affidavits, however, shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. [33] The affidavit of counsel identifying the attached true and correct copies of DeVito's reports does not convert such reports into affidavits. The reports themselves are not sworn and do not meet the statutory definition of an affidavit. [34] Unsworn summaries of facts or arguments and of statements which would be inadmissible in evidence are of no effect in a motion for summary judgment. [35] Accordingly, we do not consider the DeVito reports on the question of whether Amwest's insolvency at the time of the first transfer was established as a matter of law. This leaves only the conclusion drawn by Fitzgibbons from operational results of Amwest . . . subsequent to June 30th of 2000 that Amwest was insolvent at all times subsequent to that date. The record does not reflect whether or not Fitzgibbons was qualified as an expert by knowledge, skill, experience, training, or education [36] to make this determination, or the methodology he utilized in doing so. Fitzgibbons' testimony is insufficient to meet the liquidator's prima facie burden on the issue of insolvency. As a procedural equivalent to a trial, a summary judgment is an extreme remedy because a summary judgment may dispose of a crucial question in litigation, or the litigation itself, and may thereby deny a trial to the party against whom the motion for summary judgment is directed. [37] On this record, we simply cannot conclude as a matter of law that Amwest was insolvent within the meaning of NISRLA at the time of its initial payment to Gilbane in January 2001.