Court Opinion

ID: 3018063
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:18:33.024371+00
Date Added: 2024-06-11T11:40:02.468770
License: Public Domain

_____________

                                   No. 96-1183
                                  _____________

Federal Deposit Insurance              *
Corporation,                           *
                                       *
           Appellee,                   *
                                       *
     v.                                *
                                       *
Melvyn Bell,                           *
                                       *
           Defendant,                  *   Appeal from the United States
                                       *   District Court for the
Darlene Bell,                          *   Eastern District of Arkansas.
                                       *
           Appellant,                  *
                                       *
Bell Holdings, Inc.,                   *
                                       *
           Defendant,                  *
                                       *
Bell Equities, Inc.,                   *
                                       *
           Appellant.                  *

                                  ____________

                   Submitted:      November 18, 1996

                         Filed:    February 6, 1997
                                  ____________

Before RICHARD S. ARNOLD, Chief         Judge,    MAGILL,   Circuit   Judge,   and
     LONGSTAFF,1 District Judge.

                                  _____________

MAGILL, Circuit Judge.

     This case is a diversity action based on the Arkansas Fraudulent
Transfer Act, Ark. Code Ann. §§ 4-59-201-213, between

      THE HONORABLE RONALD E. LONGSTAFF, United States District
Judge for the Southern District of Iowa, sitting by designation.
plaintiff the Federal Deposit Insurance Corporation (FDIC) and defendants
Darlene Bell and Bell Equities, Inc.2      Darlene Bell and Bell Equities
appeal the district court's3 grant of injunctive relief and partial summary
judgment against them, contending that the existence of a contingent
liability on an asset transferred to Darlene Bell creates a question of
fact regarding the value of that asset.   The FDIC contends that we do not
have jurisdiction to decide this question at this time because it is a
nonfinal order.    We hold that we do have jurisdiction and affirm.

                                     I.

     Richardson Savings & Loan, the predecessor in interest to American
Federal and, ultimately, the FDIC, made loans in 1986 and 1987 in the
amounts of $11,550,000.00 and $519,819.20 to Melvyn Bell, the then-husband
of Darlene Bell.    Melvyn Bell defaulted on the loans in 1988 and brought
suit against American Federal for breach of contract.     American Federal
counterclaimed for the default on the loans and, on July 31, 1991, obtained
a judgment against Melvyn Bell for $11,127,467.70.

     Meanwhile, on March 22, 1991, Darlene Bell filed a complaint for
divorce against Melvyn Bell in Arkansas state court.      The divorce was
granted on April 26, 1991, and the Bells entered into a property settlement
agreement.   Pursuant to the agreement, Melvyn Bell retained ownership of
Bell Holdings, while Darlene Bell

      This action was originally brought on March 5, 1992, by the
American Federal Bank, F.S.B. (American Federal) against Melvyn
Bell, Darlene Bell, Bell Holdings, Inc. (Bell Holdings) and Bell
Equities, Inc. (Bell Equities). On June 29, 1994, Melvyn Bell and
Bell Holdings were dismissed as defendants. On August 3, 1994,
Guaranty Federal Bank, F.S.B. (Guaranty Federal) was substituted as
plaintiff in place of American Federal. On May 1, 1996, the FDIC
was substituted as plaintiff in place of Guaranty Federal.

     The Honorable G. Thomas Eisele, United States District Judge
for the Eastern District of Arkansas.

                                    -2-
acquired ownership of Bell Equities.4     Based on the valuation schedules
submitted by the Bells to the state court, the assets distributed to Melvyn
Bell had a gross value of $33,663,067.00 and liabilities of $27,744,252.00,
for a net value of $5,918,815.00.   The assets distributed to Darlene Bell
had a gross value of $31,748,935.00 and liabilities of $24,422,585.00, for
a net value of $7,326,353.00.   The state court questioned Darlene Bell as
to the accuracy of the valuation schedules, and Bell confirmed that they
were accurate:

     THE COURT: With respect to the valuations on the        assets, I
     noticed that they're fairly even in terms of value.       It looks
     like Bell Holdings has about $34 million and you have   about $32
     million assets, according to these sheets.         Do    you feel
     comfortable with what has been disclosed to you about   value and
     liability?

     MRS BELL: I    feel that's pretty accurate. The gentlemen that
     worked with    us on this, their livelihood depends on their
     accuracy, so    I would imagine that they wouldn't mislead me
     because then   they wouldn't have a job.

Order Granting Partial Summ. J. at 4 n.3 (Aug. 4, 1995) (quoting Tr. of
H'rg at 17-18), reprinted in Appellants' Add. at 4.

     One of the assets acquired by Darlene Bell and held by Bell Equities
was Red Apple Enterprises, with a gross value of $5,500,000.00, liabilities
of $6,122,075.00, and a negative net value of $622,075.00.   See Appellants'
App. at 163 (valuation schedule).   A footnote indicated that this entry did
"not include contingent liability of $1.85 million related to Red Apple
Club notes currently owned by The Bank of Ozark."    Id.

     The property settlement included a transfer of assets between
Bell Holdings and Bell Equities.       In addition, Darlene Bell
received 80% of Melvyn Bell's future net salaries as child support.
See Order Denying Defs.' Mot. for Summ. J. at 3-4 (Nov. 3, 1993),
reprinted in Appellee's Add. at 3-4.

                                    -3-
     On March 5, 1992, American Federal brought the instant diversity
action against Melvyn Bell, Bell Holdings, Darlene Bell, and Bell Equities.
Relying on the Arkansas Fraudulent Transfer Act,5 American Federal alleged
that Melvyn Bell had made a fraudulent transfer to Darlene Bell in their
property settlement                     because   he   did   not   receive   the
reasonably equivalent value for the transferred assets.

     During the years of discovery and litigation that followed, the
district court granted partial summary judgment to American Federal and
held, "as a matter of law, [that] Melvyn Bell was either insolvent at the
time of the transfer [of property to Darlene Bell] or was rendered
insolvent by the transfer within the meaning of [the Arkansas Fraudulent
Transfer Act]."   Tr. of Telephone Conference of October 18, 1993, at 8,
reprinted in Appellants' App. at 30.      On November 3, 1993, the district
court denied summary judgment to the defendants, concluding that the
instant suit was not barred as a defaulted compulsory counterclaim or by
res judicata, the domestic relations exception, the full faith and credit
doctrine, or quasi-judicial immunity.     See Order Denying Defs'. Mot. for
Summ. J., reprinted in Appellee's Add. at 1.           Following a settlement
agreement, Melvyn Bell and Bell Holdings were dismissed as defendants on
June 29, 1994.       Guaranty Federal thereafter became the successor in
interest to American Federal and was substituted as plaintiff in this case
on August 3, 1994.

     The Arkansas Fraudulent Transfer Act provides, in part:

     (a) A transfer made or obligation incurred by a debtor is
     fraudulent as to a creditor, whether the creditor's claim
     arose before or after the transfer was made or the
     obligation was incurred, if the debtor made the transfer
     or incurred the obligation:
     . . .
     (2) Without receiving a reasonably equivalent value in
     exchange for the transfer or obligation . . . .

Ark. Code Ann. § 4-59-204.

                                    -4-
       On August 4, 1995, the district court granted partial summary
judgment   to    Guaranty   Federal,   holding   that,   based   on   the   valuation
schedules verified by Darlene Bell, Melvyn Bell had transferred at least
$1,407,538.00 to Darlene Bell in excess of what he had retained.             Dividing
this in half, the district court held that Darlene Bell and Bell Equities
were liable to Guaranty Federal for a minimum of $703,769.00.               See Order
Granting Partial Summ. J. at 5-6, reprinted in Appellants' Add. at 5-6.
The district court also granted prejudgment interest to Guaranty Federal
of 6% per annum from April 26, 1991, through November 15, 1995, in the
amount of $160,693.41, postjudgment interest at 5.45% per annum until paid,
and costs of $415.25, for a total judgment as of November 15, 1995, of
$864,877.66.     See Judgment (Nov. 20, 1995), reprinted in Appellants' Add.
at 14.

       On December 7, 1995, Darlene Bell and Bell Equities filed in the
district court a Motion to Reconsider Judgment under Federal Rules of Civil
Procedure 59(e) and 60(b), arguing that the court had erred by failing to
consider the $1.85 million contingent liability described in the valuation
schedules.      See Defs.' Mot. to Recons. J. at 2 (Dec. 7, 1995), reprinted
in Appellants' App. at 103.     The district court denied this motion, stating
that
       [t]he Court did consider the contingent liability. In fact,
       the defendants drew the contingent liability issue to the
       Court's attention in the defendants' Brief in Support of
       Response of Separate Defendants Darlene Bell and Bell Equities,
       Inc., to Plaintiff's Motion for Summary Judgment. . . . Even if
       the Court were to reconsider the issue the Court would maintain
       its position in relying upon the valuation schedules. It is
       generally held that speculative or contingent liabilities
       should not be considered in determining the net marital estate.
       See, e.g., Hansen v. Hansen, 302 N.W.2d 801 (S.D. 1981); see
       also Aaron v. Aaron, 281 N.W.2d 150 (Minn. 1979) (finding that
       if potential liability is too speculative, it should not be
       considered in the distribution of marital property).        The
       defendants have offered no new evidence to support the position
       that the contingent liability is not speculative.           The
       defendants

                                        -5-
        have not offered the notes themselves nor have they argued the
        terms of the notes.

Order Denying Mot. to Recons. J. at 2-3 (Dec. 21, 1995), reprinted in part
in Appellants' App. at 100.

        On December 19, 1995, the district court granted Guaranty Federal
injunctive     relief,   enjoining    Darlene   Bell   and   Bell    Equities    from
transferring    or   encumbering     certain    assets.      The    injunction    was
specifically premised on the need to protect the judgment entered in favor
of Guaranty Federal and against Darlene Bell and Bell Equities.           See Order
Granting Permanent Inj. at 4 (Dec. 19, 1995), reprinted in Appellants' Add.
at 10.     On May 1, 1996, the FDIC, as successor in interest to Guaranty
Federal, was substituted as plaintiff-appellee in this matter.              Darlene
Bell and Bell Equities now appeal the grant of injunctive relief and the
grant    of partial summary judgment holding them liable for at least
$864,877.66.

                                        II.

        The parties agree that the district court's grant of partial summary
judgment was not a final order for purposes of determining whether this
Court has jurisdiction.      See 29 U.S.C. § 1291; see also Fed. R. Civ. P.
56(c) ("A summary judgment, interlocutory in character, may be rendered on
the issue of liability alone although there is a genuine issue as to the
amount of damages.").6     The FDIC

     While the grant of partial summary judgment determined Darlene
Bell's and Bell Equities' liability to Guaranty Federal, the issue
of damages has not yet been finally determined.       Although the
district court issued a judgment of $864,877.66, this amount was
determined "solely on the basis of the valuation schedules as they
were presented and approved by the chancellor in the state court
proceedings." Order Granting Partial Summ. J. at 3 n.2, reprinted
in Appellants' Add. at 3. There appears to be a factual dispute as
to whether the valuation schedules overvalued Melvyn Bell's
retained assets:

        The Bank [Guaranty Federal] has also alleged that Bell
        Holdings was overvalued by at least $7,842,450, based on
        the September 5, 1991, foreclosure sale of one of its
        properties, Market Street Plaza.     While Market Street
        Plaza was valued at $12,592,450 on the schedules, it only

                                        -6-
contends that this Court therefore has no jurisdiction to consider either
the grant of injunctive relief or the grant of partial summary judgment.
We disagree.

      Under 28 U.S.C. § 1292(a)(1), this Court has jurisdiction over orders
of   the district court "granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify injunctions,
except where a direct review may be had in the Supreme Court . . . ."
Here, the district court specifically granted an injunction prohibiting
Darlene Bell and Bell Equities from disposing of property without notice
to and consent from the Bank.     See Order Granting Permanent Inj. at 4,
reprinted in Appellants' Add. at 10.

      The FDIC argues that, despite § 1292(a)(1)'s textual clarity, this
Court does not have jurisdiction to hear an appeal of a grant of injunctive
relief where "the injunctive order is merely incidental to the substantive
relief sought and does not threaten to cause irreparable harm . . . ."
Appellee's Br. at 11.   This is simply an incorrect statement of the law of
this Circuit.   See, e.g., Morgenstern v. Wilson, 29 F.3d 1291, 1294-95 (8th
Cir. 1994) ("[I]f an interlocutory order expressly grants or denies a
request for injunctive relief, the [requirement of irreparable injury] need

      brought $4,750,000 at the foreclosure      sale. If the value
      of Market Street Plaza was accepted        as its sale value,
      then the property received by Darlene      Bell would be worth
      at least $9,249,988 [more] than that       retained by Melvyn
      Bell.

Id. On the basis of this limited factual dispute, the district
court held that "[i]f this case proceeds to trial, the Bank
[Guaranty Federal] will be allowed to argue about the overvaluation
of Market Street Plaza, in which case, it might be entitled to an
even larger judgment against Darlene Bell and Bell Equities." Id.

                                    -7-
not be met and the order is immediately appealable as of right under §
1292(a)(1).   By contrast, if an order merely has the practical effect of
granting or denying an injunction, the . . .   irreparable injury test must
be satisfied . . . ." (interpreting Carson v. American Brands, Inc., 450
U.S. 79 (1981) (citations omitted))), cert. denied, 115 S. Ct. 1100 (1995).
Darlene Bell and Bell Equities have an appeal as of right under §
1292(a)(1) to the district court's grant of injunctive relief against them,
and we therefore have jurisdiction over this order of the district court.

     In Fogie v. Thorn Americas, Inc., 95 F.3d 645 (8th Cir. 1996), this
Court described to what extent an appellate court has jurisdiction to
review interlocutory orders of a district court that are related to an
appeal of injunctive relief:

     We have jurisdiction to review the district court's issuance of
     the injunction under 28 U.S.C. § 1292(a)(1) which provides for
     appeal of interlocutory orders granting or refusing to grant
     injunctions. Our jurisdiction under section 1292(a)(1) also
     extends to the remainder of the appealed order to the extent
     the injunction is interdependent with the remainder of the
     appealed order. Under this standard, we have jurisdiction to
     review all portions of the order that are dependent on the
     resolution of the issues necessarily resolved in reviewing the
     injunction order.      In other words, in addition to the
     injunction order, we may review other issues only if they are
     inextricably bound up with the injunction.         We need not
     undertake a review of issues whose resolution is not necessary
     to effectively review the injunction.

Id. at 648 (quotations and citations omitted).

     We review the district court's grant of injunctive relief for abuse
of discretion.   See Goff v. Harper, 60 F.3d 518, 520 (8th Cir. 1995).   It
would not be possible for us to determine if the district court abused its
discretion in enjoining Darlene Bell and Bell Equities from encumbering or
transferring assets without also determining if the district court erred,
as a matter of law, in its

                                    -8-
determination   that    Darlene   Bell    and   Bell    Equities   were   liable    for
fraudulently-transferred assets.       The district court's grant of injunctive
relief was specifically predicated on its holding that Darlene Bell and
Bell Equities were liable to Guaranty Federal and upon its determination
that its judgment in favor of Guaranty Federal should be protected.                See
Order Granting Permanent Inj. at 3-4, reprinted in Appellants' Add. at 9-
10.   If Darlene Bell and Bell Equities are not liable, then the district
court necessarily abused its discretion in issuing the injunction.              In the
circumstances   of     this   case,   therefore,       we   conclude   that   we   have
jurisdiction to consider the district court's grant of partial summary
judgment.

                                         III.

      We review a grant of summary judgment de novo, applying the same
standard as the district court.       See Barge v. Anheuser-Busch, Inc., 87 F.3d
256, 258 (8th Cir. 1996).     A grant of summary judgment is proper if, after
viewing the evidence in the light most favorable to the nonmoving party,
there exists no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law.          See id.; see also Fed. R. Civ.
P. 56(c).    Mere arguments or allegations are insufficient to defeat a
properly supported motion for summary judgment; a "nonmovant must present
more than a scintilla of evidence and must advance specific facts to create
a genuine issue of material fact for trial."           Rolscreen Co. v. Pella Prods.
of St. Louis, Inc., 64 F.3d 1202, 1211 (8th Cir. 1995).            See also Kiemele
v. Soo Line R.R. Co., 93 F.3d 472, 474 (8th Cir. 1996) ("The nonmoving
party must do more than show that there is some metaphysical doubt as to
the material facts, and where the record as a whole could not lead a
rational trier of fact to find for the nonmoving party, there is no genuine
issue for trial." (quotations, citations, and alteration omitted)); JRT,
Inc. v. TCBY Sys., Inc., 52 F.3d 734, 737 (8th Cir. 1995) (A nonmoving
party has the burden of demonstrating to the district court "that

                                         -9-
at   trial it may be able to put on admissible evidence proving its
allegations." (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57
(1986))).

      Darlene Bell testified in Arkansas state court that the valuation
schedules used in her property settlement with Melvyn Bell were accurate.
See Order Granting Partial Summ. J. at 4 n.3 (quoting Tr. of H'rg at 17-
18), reprinted in Appellants' Add. at 4.                 Based on these valuation
schedules,   the   district   court   determined     that    Melvyn   Bell   retained
considerably less net assets than he transferred to Darlene Bell.            See id.
at 5, reprinted in Appellants' Add. at 5.           Because of this inequity, the
district court determined that, as a matter of law under the Arkansas
Fraudulent Transfer Act, Melvyn Bell did not receive the reasonably
equivalent value for the transferred property.              See id.   Based on this
determination, the district court granted partial summary judgment on
Darlene Bell's and Bell Equities' minimum liability for the excessive, and
thereby fraudulent, transfer.

      Darlene Bell and Bell Equities contend that there exists a question
of   material fact as to whether Melvyn Bell received the reasonably
equivalent value for the property transferred to Darlene Bell.             They argue
that the district court erred in failing to diminish the net value of the
assets   transferred   to   Darlene   Bell    by   the   $1.85   million   contingent
liability associated with Red Apple Enterprises.7                Because a question

     Darlene Bell and Bell Equities also contend that, because the
Arkansas state court that approved the Bells' property settlement
had a statutory obligation to divide the Bells' marital property
equally, see Ark. Code Ann. § 9-12-315, we should consider the
Bells' assets to have been equally divided for the purposes of this
diversity action. We reject this argument.

      As noted by the district court:

     We presume that a fifty-fifty split was intended under
     Arkansas law because the chancellor made none of the
findings that are required before deviating [from] the presumption
of an equal division of marital property. While the chancellor was
understandably not concerned with dividing the property to the
penny, particularly where the parties agreed with a division that
was approximate[ly] an equal division, this Court is so concerned.
Under Arkansas law, the Bank [Guaranty Federal], as a present
creditor of an insolvent debtor, has the right to half of every
dollar transferred by the debtor to Mrs. Bell over the fifty

                                       -10-
exists as to the value of the

percent to which she was entitled.

Order Granting Partial Summ. J. at 5 n.5, reprinted in Appellants'
Add. at 5. This construction is fully supported by the record of
the state court proceedings, in which the state court declared to
Darlene Bell that, "[w]ith respect to the valuations on the assets,
I noticed that they're fairly even in terms of value. It looks
like Bell Holdings has about $34 million and you have about $32
million assets, according to these sheets." Id. at 4 n.3 (quoting
Tr. of H'rg at 17-18) (describing gross assets, emphasis added),
reprinted in Appellants' Add. at 4. The valuation schedules show
that Melvyn Bell received $1,407,538.00 less in net value than
Darlene Bell.    While this disparity in net assets may appear
"fairly even" in a property settlement between consenting parties
pursuant to a marital dissolution, it is rather less even in an
action by a creditor to recover fraudulently-transferred assets
from an insolvent debtor.

                                -11-
contingent liability, Darlene Bell and Bell Equities contend that summary
judgment was improper.   We conclude that this argument misapprehends the
nature of a contingent liability and the burden placed on a nonmoving party
to defeat a summary judgment motion.

     A contingent liability is:

     One which is not now fixed and absolute, but which will become
     so in case of the occurrence of some future and uncertain
     event. A potential liability; e.g. pending lawsuit, disputed
     claim, judgment being appealed, possible tax deficiency. . . .

Black's Law Dictionary 321 (6th ed. 1990) (citation omitted).    To assume
that a contingent liability necessarily diminishes by its face amount the
value of an asset would be

                                   -12-
     absurd; it would mean that every individual or firm that had
     contingent liabilities greater than his or its net assets was
     insolvent--something no one believes. Every firm that is being
     sued or that may be sued, every individual who has signed an
     accommodation note, every bank that has issued a letter of
     credit, has a contingent liability. . . .           There is a
     compelling reason not to value contingent liabilities on the
     balance sheet at their face amounts, even if that would be
     possible to do because the liability, despite being contingent,
     is for a specified amount (that is, even if there is no
     uncertainty about what the firm will owe if the contingency
     materializes). By definition, a contingent liability is not
     certain--and often is highly unlikely--ever to become an actual
     liability.

In re Xonics Photochemical, Inc., 841 F.2d 198, 199-200 (7th Cir. 1988).
See also In re Chase & Sanborn Corp., 904 F.2d 588,   594 (11th Cir. 1990)
("It is well established, however, that a contingent liability cannot be
valued at its potential face amount . . . .").

     To correctly "value the contingent liability it is necessary to
discount it by the probability that the contingency will occur and the
liability become real."   Xonics Photochemical, 841 F.2d at 200; see also
In re Davis, 169 B.R. 285, 302 (E.D.N.Y. 1994) ("In order to value a
contingent liability, a bankruptcy court must determine the likelihood that
the contingency will occur, and multiply the total debt guaranteed by that
probability.").   Where a liability is contingent on an impossible or an
extremely unlikely event, its value will be nothing or close to nothing,
and will have negligible or no effect on the net value of an asset.     In
such a circumstance, a contingent liability need not be considered in
determining the net worth of an asset.    See Hansen v. Hansen, 302 N.W.2d
801, 802 (S.D. 1981) ("'Contingent liabilities that may never be paid or
that may be paid only in part need not be deducted in determining net
worth.   Speculative contingent liabilities should not be considered in
apportioning the parties' assets for purposes of a property division.'"
(quoting Wallahan v. Wallahan,

                                   -13-
284 N.W.2d 21, 26 (S.D. 1979)) (alterations and additional quotations
omitted)).

     In this case, Darlene Bell and Bell Equities have never submitted any
evidence regarding the likelihood that the $1.85 million contingent
liability associated with Red Apple Enterprises would ever materialize.
As noted by the district court, "[t]he defendants have not offered the
notes themselves nor have they argued the terms of the notes."      Order
Denying Mot. to Recons. J. at 2-3, reprinted in part in Appellants' App.
at 100.      Without such evidence, there was no rational means for the
district court to assign a value to the contingent liability.8    Because
Darlene Bell and Bell Equities have failed to meet the burden placed on a
nonmoving party to present evidence demonstrating that a material question
of fact exists, see, e.g., Rolscreen, 64 F.3d at 1211, the

      Indeed, we cannot even say that the value of the contingent
liability was somewhere between $0 and $1.85 million, as it appears
that the "liability" may have actually been an asset. Guaranty
Federal alleged, on information and belief, that

     not only is the contingent liability referred to by the
     defendants no longer in existence, but litigation took
     place which resulted in a settlement under which Ms. Bell
     actually received rather than paid money.

Pl.'s Resp. to Defs.' Mot. to Recons. J. at 5 (citing in a footnote
Richard H. Upton & R. Ryder Mortgage & Inv. Co. v. Red Apple
Enters. Ltd. Partnership, Cleburne Chancery No. 94-31-1; and
Stephen L. Gershner v. Melvyn Bell, Urban Enters., Inc., &
Southwest Resorts, Inc., Pulaski Circuit No. 95-2649). Darlene
Bell and Bell Equities did not challenge this recitation of
subsequent events, but insisted that

     [w]hether the contingent liability was extinguished by
     acts subsequent to the transfer between the Bells is
     irrelevant and has no bearing on whether reasonably
     equivalent value was given, at the time of the transfer.
     To suggest otherwise lacks any legal basis or support.

Defs.' Reply to Pl.'s Resp. to Defs.' Mot. to Recons. J. at 4
(emphasis in original). Neither party has submitted the Arkansas
cases cited nor has the issue been argued on appeal.

                                  -14-
district court properly granted partial summary judgment.9

       For the $1,850,000.00 contingent liability on Red Apple
Enterprises to have reduced the value of Darlene Bell's transferred
assets to the equivalent value of Melvyn Bell's retained assets, it
would have been necessary, at the time of the transfer of assets,
for there to have been at least a 76% likelihood that the
contingent liability would occur ($1,850,000.00 x .7608313513514 =
$1,407,538.00). Darlene Bell and Bell Equities failed to present
any evidence which could have supported such a finding and, as a
matter of law, would have been unsuccessful on this point had the
issue been tried by a jury. Because of their failure to present
any evidence supporting the valuation of the contingent liability,
summary judgment was properly granted against them. See JRT, Inc.
v. TCBY Sys., Inc., 52 F.3d 734, 737 (8th Cir. 1995) (A nonmoving
party has the burden of demonstrating to the district court "that
at trial it may be able to put on admissible evidence proving its
allegations." (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 256-57 (1986))). The dissent nevertheless asserts that:

     Because the moving party in the present case failed to
     properly support its motion for summary judgment
     regarding the valuation of the contingent liability, the
     nonmoving parties were not required to advance specific
     facts demonstrating that a genuine issue of material fact
     existed. While it may have been more prudent to resist
     the summary judgment motion by advancing specific
     evidence creating a contested issue of material fact,
     Darlene Bell and Bell Equities' failure to do so should
     not result in the grant of partial summary judgment when
     the moving party failed to properly support its motion
     for summary judgment.

Dissenting Op. at 16-17 (citations and note omitted). We disagree.
It was not merely imprudent for Darlene Bell and Bell Equities to
fail to advance evidence to support their allegations; it was
necessarily fatal to their defense. We do not allow a case to go
forward to trial on the mere chance that a jury will disregard all
evidence and accept the unsupported speculation of a party
litigant. See Gregory v. City of Rogers, 974 F.2d 1006, 1010 (8th
Cir. 1992), cert. denied, 507 U.S. 913 (1993) ("To withstand the
appellees' motion for summary judgment, the appellants had the
burden of presenting evidence sufficiently supporting the disputed
material facts that a reasonable jury could return a verdict in
their favor.    The object of our review, then, is to determine
whether the appellants submitted sufficient probative evidence that
would permit a finding in their favor on more than mere
speculation, conjecture, or fantasy." (citations, quotations, and
alterations omitted)).

                                  -15-
      Because the district court properly granted partial summary judgment
against Darlene Bell and Bell Equities, it did not abuse its discretion by
granting injunctive relief to prevent the defendants from transferring or
encumbering certain assets.         See Ark. Code Ann. § 4-59-207(a)(3)(i)
(provision of Arkansas Fraudulent Transfer Act authorizing "injunction
against further disposition by the debtor or a transferee, or both, of the
asset transferred or of other property").       Accordingly, we affirm both the
district court's grant of partial summary judgment and its grant of
injunctive relief.

LONGSTAFF, District Judge, concurring and dissenting.

      I concur in Part II of the majority's opinion determining that this
Court has jurisdiction to consider the district court's grant of partial
summary judgment.      The majority also affirms the district court's grant of
partial summary judgment in Part III of its opinion.           Because a question
of   material   fact   exists   regarding   whether   Melvyn   Bell   received   the
reasonably equivalent value for his transferred property, I respectfully
dissent to Part III of the majority's opinion.

      As noted by the majority, a "nonmovant must present more than a
scintilla of evidence and must advance specific facts to create a genuine
issue of material fact for trial," to defeat a properly supported motion
for summary judgment.      Rolscreen Co. v. Pella Prods. of St. Louis, Inc.,
64 F.3d 1202, 1211 (8th Cir. 1995).           However, a "party seeking summary
judgment always bears the initial responsibility of informing the district
court of the basis for its motion, and identifying those portions of 'the
pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,' which it believes demonstrate the
absence of a genuine issue of material fact."         Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986) (quoting Federal Rule of Civil Procedure 56(c)).
In addition, in determining

                                       -16-
whether summary judgment is proper, the evidence must be viewed in the
light most favorable to the nonmoving party.   See Barge v. Anheuser-Busch,
Inc., 87 F.3d 256, 258 (8th Cir. 1996).

     To support its conclusion that the moving party established its right
to summary judgment as a matter of law, the majority initially relies upon
the testimony provided by Darlene Bell in an April 26, 1991 hearing in
state court concerning the approval of her property settlement agreement.
In response to a question, Darlene Bell indicated that the "value and
liability" in the schedules used in her property settlement agreement with
Melvyn Bell were accurate.   It is true that the valuation schedules showed
that Melvyn Bell received $1,407,538.00 less in net value, absent the
contingent liability, than Darlene Bell.   However, the valuation schedules
also showed that Darlene Bell incurred a 1.85 million dollar contingent
liability as a result of the property settlement.       Construing Darlene
Bell's testimony in the light most favorable to the nonmoving parties, I
do not believe it supports the finding of an absence of a genuine issue of
material fact concerning the issue of "reasonably equivalent value."
Rather, her testimony indicates that she received reasonably equivalent
value in the property settlement.

     Second, the majority discusses the nature of a contingent liability
in concluding that the moving party fulfilled its initial burden.        As
recognized by the majority, a contingent liability should be discounted by
the probability that the contingency will occur.         See In re Xonics
Photochemical, Inc., 841 F.2d 198, 199-200 (7th Cir. 1988).   However, this
does not mean that a contingent liability should not receive any value.

     The record before the district court failed to give any indication
as to what the proper valuation of the contingent liability, at the time
of the property settlement agreement, should be.   Because the moving party
in the present case failed to

                                    -17-
properly support its motion for summary judgment regarding the valuation
of the contingent liability, the nonmoving parties were not required to
advance specific facts demonstrating that a genuine issue of material fact
existed.10   See Heath v. John Morrell & Co., 768 F.2d 245, 249 (8th Cir.
1985) (reversing the grant of summary judgment because the moving party
failed to properly support its motion for summary judgment even though the
nonmoving party failed to present opposing evidence) (citing Adickes v.
Kress & Co., 398 U.S. 144, 160 (1970); Stubbs v. United States, 428 F.2d
885, 888 (9th Cir. 1970), cert. denied, 400 U.S. 1009 (1971)).     While it
may have been more prudent to resist the summary judgment motion by
advancing specific evidence creating a contested issue of material fact,
Darlene Bell and Bell Equities' failure to do so should not result in the
grant of partial summary judgment when the moving party failed to properly
support its motion for summary judgment.
      Viewing the record in the light most favorable to the nonmoving
party, the district court erred by concluding that the contingent liability
should not receive any value.   Partial summary judgment regarding the value
of the contingent liability and whether Melvyn Bell received reasonably
equivalent value for the

         Because the moving party, the FDIC, had no evidence
demonstrating that the contingent liability was without value, for
purposes of summary judgment, it must "affirmatively show the
absence of evidence in the record" regarding the value of the
contingent liability. See Hanson v. F.D.I.C., 13 F.3d 1247, 1253
(8th Cir. 1994) (reversing the district court's grant of summary
judgment because the moving party failed to demonstrate that there
was no evidence negating an element of the nonmoving party's case).
As a result of the FDIC acknowledging the existence of the
contingent liability by producing the valuation schedules to
support their motion for summary judgment, "the FDIC would have
needed to have affirmatively pointed to evidence or lack thereof"
that the contingent liability was of no value. See Id. However,
it failed to do so. In addition, the FDIC did not base its summary
judgment motion on the argument that Darlene Bell and Bell Equities
could not produce any evidence to support their valuation of the
contingent liability. Rather, the FDIC asserted that the valuation
schedule, on its face, indicated that Melvyn Bell did not receive
reasonably equivalent value for the transferred property.

                                    -18-
transferred property should not have been granted.   Therefore, I would
reverse the district court's grant of partial summary judgment against
Darlene Bell and Bell Equities.

     A true copy.

           Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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