Korth v. LutherAnnotate this Case
The Supreme Court affirmed the judgment of the district court in favor of Defendants in two actions brought under Nebraska's Uniform Fraudulent Transfer Act (UFTA), Neb. Rev. Stat. 36-701 to 36-712, but reversed the court's grant of attorney fees as sanctions on the grounds that both actions were frivolous, holding that the fraudulent transfer actions lacked merit but that the district court abused its discretion in finding the actions as frivolous.
The creditors here alleged that a blanket security agreement guaranteeing repayment of a loan by a wife to her husband was a fraudulent transfer under the UFTA. The district court concluded, after a trial, that there was no actual intent to hinder, delay, or defraud any creditor under the UFTA and that the wife had proved good faith. The court then granted the wife attorney fees. The Supreme Court (1) reversed the award of sanctions, holding that the actions were not frivolous under Neb. Rev. Stat. 25-824; and (2) affirmed the judgments of dismissal, holding that the creditors failed to identify and prove there was any "property" at issue in these cases and thus failed to prove that there was a "transfer" under the UFTA.