State of Florida v. Countrywide Truck Ins. Agency

842 	275 Nebraska reports
S tate of florida ex rel . department of inSurance of the
S tate of florida , receiver for united S outhern aSSurance
company , a florida corporation authorized to tranSact
an inSurance buSineSS in florida , appellee , v .
countrywide truck inSurance agency , inc .,
a florida corporation , appellee , and
countrywide inSurance agency , inc .,
a nebraSka corporation , and
david l. fulkerSon , appellantS.
749 N.W.2d 894
Filed June 6, 2008. 	No. s-06-1220.
1. Directed Verdict: Appeal and Error. In reviewing a trial court’s ruling on a
motion for directed verdict, an appellate court must treat the motion as an admis-
sion of the truth of all competent evidence submitted on behalf of the party
against whom the motion is directed; such being the case, the party against whom
the motion is directed is entitled to have every controverted fact resolved in its
favor and to have the benefit of every inference which can reasonably be deduced
from the evidence.
2. Conveyances: Fraud. the question whether a transfer of property was made with
intent to defraud creditors is a question of fact.
3. Debtors and Creditors: Conveyances: Fraud: Proof. the burden is upon the
creditor to prove by clear and convincing evidence that fraud existed in a ques-
tioned transaction.
4. Evidence: Proof: Words and Phrases. Clear and convincing evidence is that
amount of evidence which produces in the trier of fact a firm belief or conviction
about the existence of a fact to be proved.
appeal from the District Court for Douglas County: peter c.
bataillon, Judge. reversed and vacated, and cause remanded
for further proceedings.
William e. Gast and Michael D. McClellan, of Gast &
McClellan, for appellants.
robert F. Craig and Jenna b. taub, of robert F. Craig, p.C.,
for appellee state of Florida ex rel. Department of Insurance of
the state of Florida.
heavican, 	C.J., 	wright, 	connolly, 	gerrard, 	S tephan,
mccormack, and miller -lerman, JJ.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:54 AM CST

wright, J.
NatUre oF Case
the 	state 	of 	Florida 	(Florida), 	on 	the 	relation 	of 	the
Department of Insurance of the state of Florida, as the receiver
of United southern assurance Company (UsaC), an insol-
vent insurance company, brought suit against Countrywide
truck Insurance agency, Inc. (truck); Countrywide Insurance
agency, Inc. (agency); and David L. Fulkerson to recover
money truck allegedly owed UsaC. Florida alleged that
agency was the “alter ego” of truck and that Fulkerson was
the operator, director, and “controlling person” of both truck
and agency. Florida sought relief collectively against truck,
agency, and Fulkerson.
at 	the 	conclusion 	of 	trial, 	the 	district 	court 	sustained
Florida’s motion for a directed verdict, finding truck, agency,
and Fulkerson jointly and severally liable for fraudulently
transferring $2,235,361.95 from truck to agency. agency and
Fulkerson appeal, asserting that the uncontroverted evidence
shows that no such transfer occurred. the issue is whether the
court erred in directing a verdict in favor of Florida.
sCope oF reVIeW
[1] In reviewing a trial court’s ruling on a motion for directed
verdict, an appellate court must treat the motion as an admis-
sion of the truth of all competent evidence submitted on behalf
of the party against whom the motion is directed; such being the
case, the party against whom the motion is directed is entitled
to have every controverted fact resolved in its favor and to have
the benefit of every inference which can reasonably be deduced
from the evidence. LeRette v. American Med. Security, 270 Neb.
545, 705 N.W.2d 41 (2005).
FaCts
In 1989, UsaC and truck entered into a “General agency
agreement,” pursuant to which truck functioned as an insur-
ance agent on behalf of UsaC in Nebraska and numerous other
states. truck collected premiums for insurance products provided
by UsaC. truck’s principal office was in omaha, Nebraska.
Fulkerson managed truck, functioned as its president, and
state oF FLorIDa v. CoUNtryWIDe trUCk INs. aGeNCy 	843
Cite as 275 Neb. 842

844 	275 Nebraska reports
was one of the five directors of the corporation. UsaC was an
insurance company that wrote and issued policies of insurance
to truckdrivers. UsaC and truck were Florida corporations.
UsaC was regulated by the Florida Department of Insurance
(the FDI) and owned truck.
truck collected monthly premiums from its insureds. before
procuring insurance, it would collect 2.4 times the amount of
the monthly premium from the insured and place that amount
in a customer deposit account. each month, the insured paid the
monthly premium into the customer deposit account and truck
withdrew the monthly premium as it came due. this procedure
left an amount equal to 2.4 times the monthly premium in the
customer deposit account. If an insured was late in paying
the monthly premium, truck used the funds in the customer
deposit account to procure insurance on behalf of the insured.
because many insureds were out on the road and were not able
to pay the monthly premiums on time, this process prevented
gaps in coverage. the process continued until either the insured
or truck canceled the policy. once the policy was canceled,
any money belonging to the insured in the customer deposit
account was returned.
truck used this process to collect premiums and procure
insurance for its customers from UsaC. truck transferred the
insureds’ monthly premiums into UsaC’s trust account as the
premiums came due. UsaC then issued insurance and paid
truck a commission of 18.5 percent. Fulkerson testified that
from 1989 to 1991, this process “worked perfectly.”
In 1991, Concord General Corporation (Concord), a corpora-
tion owned by Jeff beresford-Wood, purchased UsaC. Concord
was a holding company that owned numerous insurance com-
panies and agencies. at that time, UsaC was in a poor finan-
cial position. as a condition for approval of the purchase and
the continued licensure of UsaC, the FDI required Concord
to remove certain assets or subsidiaries owned by UsaC and
replace them with cash. Concord consequently took $2 million
from truck’s customer deposit account and used that money to
purchase truck from UsaC. Concord replaced the $2 million
with a note receivable on truck’s balance sheet and extended
the time for payment of premiums to UsaC from 25 days to

90 days. this extension enabled truck to use the premium
money to replenish the $2 million taken from the customer
deposit account. Concord retained Fulkerson as truck’s presi-
dent, but he was instructed that bruce ricci, a board member of
Concord, UsaC, and truck, would be his supervisor. Concord
subsequently sold UsaC to JbW Corporation, which was also
owned by beresford-Wood.
FDI regulations stated that an insurance company could
write insurance for an amount up to three times the amount of
its assets. the FDI informed UsaC that because the value of
two of its subsidiary companies had depreciated, it must reduce
the amount of insurance it wrote. the reduction of UsaC’s
insurance created problems for truck because it relied on
UsaC to write insurance, and if UsaC did not write insurance,
truck might go out of business. other insurance companies
were reluctant to provide coverage to truck’s insureds because
it was known that truck was affiliated with UsaC and would
likely return its business to UsaC as soon as UsaC’s financial
problems were solved.
accordingly, Concord/JbW Corporation (the record does not
always distinguish between the two companies) decided to sell
truck to a person or entity that could find another company
to write insurance. truck would not be able to find another
company to write insurance if it was known that Concord/JbW
Corporation owned truck. thus, Concord/JbW Corporation
decided to sell truck quickly before all of its insureds moved
to other companies and truck lost all of its value.
Fulkerson was asked to buy truck. He agreed, with certain
conditions. on June 1, 1995, Fulkerson entered into a “stock
purchase agreement” in which Concord/JbW Corporation agreed
to sell truck’s stock. However, because beresford-Wood had
pledged truck’s stock as collateral, Concord/JbW Corporation
could not deliver the stock and the deal was put on hold. the
parties then entered into an “Interim Management agreement.”
Fulkerson agreed to manage truck until the parties could
close the stock purchase agreement or the “asset purchase
agreement” or until such time as the parties otherwise mutu-
ally agreed. Concord/JbW Corporation was unable to produce
the stock, and the record does not show that the stock purchase
state oF FLorIDa v. CoUNtryWIDe trUCk INs. aGeNCy 	845
Cite as 275 Neb. 842

846 	275 Nebraska reports
agreement was completed. Instead, Fulkerson exercised his
option to purchase truck’s assets and assigned this option to
agency, a Nebraska corporation that he and Usa Insurance
Group, Inc., owned in equal shares.
subsequently, truck’s board of directors voted 3 to 2 to sell
truck’s assets to agency, and an asset purchase agreement
was signed on september 8, 1997, to be effective september 1,
1997. agency acquired all of truck’s assets except (1) truck’s
bank accounts and petty cash accounts, (2) Concord’s $2 mil-
lion promissory note owed to truck, (3) the lawsuits pend-
ing in which truck was a plaintiff, and (4) truck’s accounts
receivable. the price consisted of $168,003.68 for furniture,
fixtures, equipment, trade name, and telephone numbers, and
also the balance of assets and $831,996.36 for truck’s “book of
business.” Fulkerson continued in a similar position at agency
as he had held at truck.
the “book of business” included all of truck’s interest in
insurance policies written by truck and the customer deposit
account, which on september 1, 1997, amounted to $2,480,431.
to the extent there was a shortfall in such deposits, agency was
assigned an interest in truck’s receivables to collect any such
shortfall until the above amount was collected.
between september 8 and 18, 1997, truck canceled all
UsaC’s policies, and agency rewrote most of the policies
with acceleration National Insurance Company (acceleration).
Fulkerson testified that all of the money held in the customer
deposit account ($2,325,401) was either returned to the insureds
or applied to new policies for the benefit of the insureds.
on september 22, 1997, the Circuit Court of the second
Judicial Circuit in and for Leon County, Florida, placed UsaC
into receivership for the purpose of liquidation. the court
appointed the FDI as receiver.
In January 1998, the state of Florida, on the relation of the
FDI, filed a petition in the district court for Douglas County,
alleging that truck collected premiums for UsaC but failed
to remit them pursuant to the parties’ agency agreement. the
petition alleged that agency was the alter ego of truck and that
Fulkerson was the operator, director, and controlling person of
both truck and agency.

Florida alleged that in 1989, UsaC and truck entered into
a “General agency agreement” in which truck functioned as
an insurance agent on behalf of UsaC in Nebraska and numer-
ous other states and collected premiums for insurance products
provided by UsaC. Florida alleged that during the months
of May through august 1997, truck collected and reported
the collection of UsaC premiums which, after deducting the
18.5-percent commission to which truck was entitled, amounted
to $3,171,817. Florida further alleged that “defendants” col-
lected additional premium deposits totaling $2,325,401 and that
“defendants” remitted only about $500,000, leaving a balance
due and owing of at least $4,997,218.
based upon these factual allegations, Florida sought relief
against truck, agency, and Fulkerson on nine separately des-
ignated causes of action: conversion of trust funds, statutory
obligation to remit premium, enforcement of security inter-
est, fraudulent conveyance, receivership fraudulent conveyance,
conversion, breach of contract, breach of fiduciary duty, and
accounting. each cause of action referred to truck, agency,
and Fulkerson collectively as “defendants.” truck did not file
a responsive pleading, and Florida moved for default judgment
against truck.
agency and Fulkerson, who were not in default, moved to
stay the entry of default judgment against truck until after
trial. because Florida sought relief jointly against all named
defendants, agency and Fulkerson claimed the entry of a
default judgment against truck would prejudice them. the dis-
trict court overruled the motion to stay and entered judgment
against truck.
agency and Fulkerson appealed to this court, and we con-
cluded that the district court erred in entering the default judg-
ment. see State of Florida v. Countrywide Truck Ins. Agency,
258 Neb. 113, 602 N.W.2d 432 (1999) (Countrywide I). We
held that although truck was in default, the district court
should have deferred entry of judgment until the claims against
agency and Fulkerson were adjudicated. Florida sought to hold
all three defendants jointly liable as a single entity. It alleged
joint and collective action by the defendants as opposed to
independent acts on the part of each named defendant. We
state oF FLorIDa v. CoUNtryWIDe trUCk INs. aGeNCy 	847
Cite as 275 Neb. 842

848 	275 Nebraska reports
construed the operative petition to allege that the three named
defendants were jointly liable as a single entity. We reversed
and vacated the judgment and remanded the cause for further
proceedings consistent with our opinion.
thereafter, a jury trial commenced on august 14, 2006.
Florida presented evidence as to the amount of premiums written
and collected by truck for the months of May through august
1997. It was undisputed that truck had collected $3,171,817
($809,384.04 for May, $781,421.71 for June, $790,490.83 for
July, and $790,520.42 for august). also undisputed were the
credits given by Florida to the defendants in the total amount
of $846,455.05, resulting in a net amount of $2,325,361.95 in
collected premiums.
agency and Fulkerson presented evidence that the parties had
agreed that collected premium money was not to be remitted to
truck at the time it was collected, but was instead to be used
as customer deposit account money for 90 days. the record
reflects that as part of Concord’s consideration for the $2 mil-
lion from truck, UsaC was required to allow truck 90 days
to remit collected premiums. agency and Fulkerson’s evidence
showed that 90 days’ worth of premiums was roughly equivalent
to the amount needed to replenish the $2 million taken from the
customer deposit account.
When UsaC stopped providing insurance, no additional
premiums were paid to truck. agency and Fulkerson adduced
evidence that truck was forced to either use the money in the
customer deposit account to procure insurance from a dif-
ferent company for its insureds or return the money to them.
Instead of a $2 million deficit in the customer deposit account,
there was a deficit in the premium account. although truck’s
records showed that it had collected monthly premiums of
$2,325,361.95, nearly all of that money had been placed in
the customer deposit account. this money was either returned
to the insureds or used to procure insurance for the customers
from a different company. this exhausted most, if not all, of
the 90 days’ worth of collected premiums. the only evidence
of money transferred from truck to agency or Fulkerson was
the transfer of $2,325,401 found within the customer deposit
account. there was no evidence of any other transfer.

at 	the 	conclusion 	of 	the 	evidence, 	Florida 	moved 	for
directed verdict of $2,325,361.95. It claimed that after apply-
ing all credits truck asserted, the evidence was undisputed
that truck still owed earned premiums totaling $2,325,361.95
($3,171,817 minus $846,455.05) for the months of May through
august 1997.
agency and Fulkerson objected to the motion. In opposi-
tion, they averred that although truck had collected premiums
over the previous 90 days, the parties had agreed that the most
recent 90 days’ worth of earned premiums would be transferred
into the customer deposit account to replenish the $2 mil-
lion deficit owed by Concord. they argued that the premiums
became customer deposit account money, rather than earned
premium money.
the district court entered judgment in favor of Florida and
against agency and Fulkerson in the amount of “$2,235,361.95.”
It concluded that “there was a fraudulent transfer by all
Defendants of this amount from [truck] to [agency].” (the
discrepancy in the amount appearing in the court’s order was
presumably a result of the court’s transposing the “3” and
“2” in error ($2,325,361.95 versus $2,235,361.95).) the court
imposed prejudgment interest on the judgment in the amount
of $2,442,584.70, for a total amount of $4,677,946.65. the
court entered the judgment against all the defendants, jointly
and severally.
Florida also moved for directed verdict in the amount of
$2,325,401, which it claimed was money held in the customer
deposit account. It claimed that the defendants had not proved
that the money was returned to the policyholders or used to
secure insurance for the policyholders with another insurance
company. Florida claimed the law required that if that money
went to the policyholders or to secure insurance on behalf of
the policyholders, all the assets of truck, including this money,
must be collected and used to pay UsaC’s claimants in order
of priority.
In opposition to this motion, agency and Fulkerson asserted
that the money was not an asset of UsaC and that the evi-
dence was undisputed that the customer deposit account money
was used to secure insurance on behalf of the policyholders
state oF FLorIDa v. CoUNtryWIDe trUCk INs. aGeNCy 	849
Cite as 275 Neb. 842

850 	275 Nebraska reports
or returned to the policyholders. agency and Fulkerson refer-
enced exhibit 136, which stated that acceleration had informed
Florida that acceleration had rewritten 1,120 policies of for-
mer truck policyholders and had received $1,793,526 from
agency after subtracting agency’s commission. agency and
Fulkerson averred that the difference between the $2,325,401
and the $1,793,526 was the commission on the 1,120 poli-
cies and money used to secure insurance for policyholders
that acceleration could not insure because it was not licensed
in some states. they claimed that an additional $54,000 was
returned directly to policyholders who did not wish to be
insured through agency.
as to Florida’s second motion for directed verdict, the dis-
trict court concluded that no factual question existed on this
matter either, and it dismissed the jury. the court overruled this
motion for directed verdict.
agency and Fulkerson’s motion for new trial was overruled,
and they appeal.
assIGNMeNts oF error
agency and Fulkerson assign nine errors, including that the
district court erred (1) in finding that “[truck] and [agency]
were the alter egos of . . . Fulkerson,” (2) in finding there was
a fraudulent transfer, and (3) in granting Florida’s motion for
directed verdict.
aNaLysIs
agency and Fulkerson claim the district court erred in direct-
ing a verdict in favor of Florida and in finding there was a
fraudulent transfer of $2,235,361.95 from truck to agency.
We agree. the record shows that truck transferred to agency
$2,325,401. there was evidence presented that this money
was in the customer deposit account and was used to purchase
replacement insurance for the former clients of truck. the
record does not establish that any other transfer occurred.
In reviewing Florida’s motion for a directed verdict, we treat
the motion as an admission of the truth of all competent evi-
dence submitted on behalf of agency and Fulkerson, who are
entitled to have every controverted fact resolved in their favor

and to have the benefit of every inference which can reasonably
be deduced from the evidence. see LeRette v. American Med.
Security, 270 Neb. 545, 705 N.W.2d 41 (2005). Florida charac-
terized the named defendants as a single entity. It alleged that
agency was the alter ego of truck and referred to Fulkerson as
the “controlling person” of both corporations. based on these
allegations, we concluded in Countrywide I that no one defend-
ant could be liable unless all were liable.
UsaC and truck were owned by Concord or JbW Corporation
at all times relevant. Concord and JbW Corporation were, in
turn, owned and controlled by beresford-Wood. Fulkerson was
truck’s president, but he was supervised by ricci, who was a
board member of Concord, UsaC, and truck. Fulkerson did
not own stock in any of these companies. He was one of five
members of truck’s board of directors. In 1997, truck’s board
of directors voted to sell truck to agency. as a part of the
agreement, agency was given the right to collect and use the
premiums of truck to fund truck’s customer deposit account
up to $2,480,431.
the evidence introduced by agency and Fulkerson supports
the fact that the customer deposit account was in fact funded
with premiums collected by truck. there is evidence that the
money from this account was either returned to the insureds
or applied to new policies purchased for the benefit of such
insureds. there was no evidence that Fulkerson used the funds
from the premiums in this account for his own benefit. there
was evidence that the only transfer that occurred from truck to
agency was money in the customer deposit account that was
used to purchase replacement insurance.
[2-4] the question whether a transfer of property was made
with intent to defraud creditors is a question of fact. First State
Bank of Scottsbluff v. Bear, 172 Neb. 504, 110 N.W.2d 83
(1961). the burden is upon the creditor to prove by clear and
convincing evidence that fraud existed in a questioned trans-
action. see Eli’s, Inc. v. Lemen, 256 Neb. 515, 591 N.W.2d
543 (1999). Clear and convincing evidence is that amount of
evidence which produces in the trier of fact a firm belief or
conviction about the existence of a fact to be proved. In re Trust
Created by Isvik, 274 Neb. 525, 741 N.W.2d 638 (2007).
state oF FLorIDa v. CoUNtryWIDe trUCk INs. aGeNCy 	851
Cite as 275 Neb. 842

852 	275 Nebraska reports
Whether agency or Fulkerson committed a fraudulent trans-
fer was a question of fact for the jury. the district court erred
in granting Florida’s motion for directed verdict and in enter-
ing judgment in favor of Florida. accordingly, we reverse and
vacate the judgment of the district court.
CoNCLUsIoN
the district court erred in granting a directed verdict in
favor of Florida. Giving all reasonable inferences to agency
and Fulkerson, there is a question of fact whether a fraudulent
transfer occurred between truck and agency. there is evidence
that the transfer of $2,235,401 represented the amount held in
the customer deposit account on behalf of truck’s insureds and
that agency used this money to purchase insurance for truck’s
insureds. there is no evidence of any other transfer.
For the reasons set forth herein, the judgment of the dis-
trict court is reversed and vacated, and the cause is remanded
for further proceedings. We decline to consider the remaining
assignments of error.
reverSed and vacated , and cauSe remanded
for further proceedingS.
in re application of mark olmer .
mark olmer , appellant , v . madiSon county
board of commiSSionerS, appellee .
752 N.W.2d 124
Filed June 6, 2008. 	No. s-07-247.
1. Political Subdivisions: Appeal and Error. a party may seek review of a decision
regarding a conditional use or special exception permit either by appealing to the
district court under Neb. rev. stat. § 23-114.01(5) (Cum. supp. 2006) or by filing
a petition in error under Neb. rev. stat. § 25-1901 (supp. 2007).
2. Political Subdivisions: Judgments: Appeal and Error. When a decision regard-
ing a conditional use or special exception permit is appealed under Neb. rev.
stat. § 23-114.01(5) (Cum. supp. 2006) and a trial is held de novo under Neb.
rev. stat. § 25-1937 (reissue 1995), the findings of the district court shall have
the effect of a jury verdict and the court’s judgment will not be set aside by an
appellate court unless the court’s factual findings are clearly erroneous or the
court erred in its application of the law.