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AGO Opinion 97055

Application of the Nebraska Budget Act and Other Nebraska Statutes to the Activities of a Court-Appointed Receiver for a Bridge Commission
Opinion 97055

DATE: October 16, 1997

SUBJECT: Application of the Nebraska Budget Act and Other Nebraska Statutes to the Activities of a Court-Appointed Receiver for a Bridge Commission

REQUESTED BY: John Breslow

Nebraska Auditor of Public Accounts

WRITTEN BY: Don Stenberg, Attorney General

Dale A. Comer, Assistant Attorney General




Based upon the materials which you submitted to us, it appears

that the Bellevue Bridge Commission (the "Commission"), a political

subdivision created under Neb. Rev. Stat. § 39-868 (1993), has

defaulted on payments due to the holders of bridge revenue bonds

previously issued by the Commission. Consequently, the Commission

has been sued by the trustee for those bond holders, and on

application of the plaintiff in that lawsuit, the District Court of

Sarpy County, Nebraska, has appointed a receiver to take possession

of the Commission's property and to exercise all the rights and

powers of the Commission with respect thereto. You have now posed

several questions to us regarding the requirements placed upon that

receiver with respect to compliance with the Nebraska Budget Act

and other Nebraska statutes.




1. Application of the Nebraska Budget Act to the Activities of

the Receiver.




Your first question goes to application of the requirements of

the Nebraska Budget Act to the activities of the receiver for the

Bellevue Bridge Commission. You ask:




Is a court appointed Receiver for a body corporate and

politic required to submit budget documents to our office

under the provisions of the Nebraska Budget Act? We

believe they are.




For the reasons discussed below, we disagree with your stated

conclusion. We do not believe that the receiver for the Commission

appointed by the Sarpy County District Court is required to submit

budget documents to your office under the provisions of the

Nebraska Budget Act.




The numerous statutes which make up the Nebraska Budget Act

(the "Act") are set out at Neb. Rev. Stat. § 13-501 (Cum. Supp.

1996). The statutory purpose of the act is:




to require governing bodies of this state to which the

act applies to follow prescribed budget practices and

procedures and make available to the public pertinent

information pertaining to the financial requirements and

expectations of such governing bodies so that intelligent

and informed support, opposition, criticism, suggestions,

or observations can be made by those affected.




Neb. Rev. Stat. § 13-502 (Cum. Supp. 1996) (emphasis added). Under

Neb. Rev. Stat. § 13-503(1) (Cum. Supp. 1996), examples of

governing bodies subject to the Act include city councils, boards

of trustees for villages, cemetery districts, sanitary drainage

districts and road improvement districts, county and township

boards, school boards, and the governing boards of fire protection

districts, reclamation districts, natural resource districts and

hospital districts. The Act contains provisions for preparation of

annual budget statements by the entities included, for public

hearings on those budgets, and for tax levies based upon those

budgets. Under Neb. Rev. Stat. § 13-508 (Cum. Supp. 1996), the

governing bodies covered by the act are required to file copies of

their budget statements with your office.




Generally, a receiver in a lawsuit is appointed by a court of

equity under its equitable jurisdiction to enable the court to

complete justice between the parties before it. 75 C.J.S.

Receivers § 3; see Neb. Rev. Stat. §§ 25-1081 through 25-1092

(1995). A receiver is an officer of the court which appointed him,

and acts under the direction of the court for the benefit of all

the parties to the litigation. Lewis v. Gallemore, 175 Neb. 279,

121 N.W.2d 388 (1963); State ex rel.Beck v. Associates Discount

Corporation, 168 Neb. 298, 96 N.W.2d 55 (1959). While it may be

said that a receiver acts for all the parties to litigation and is,

in that sense, their agent, a receiver is not an agent of the

parties in the sense that the parties have employed him and can

control his actions. City Savings Bank v. Carlon, 87 Neb. 266, 127

N.W. 161 (1910). Rather, a receiver is an "arm of the court" and

"under the control of the court." Id. at 271, 127 N.W. at 163.




As noted above, the Nebraska Budget Act applies to the various

governing bodies of governmental subdivisions in Nebraska and

requires those entities to file budget statements with your office.

However, a receiver appointed by a court to conserve the assets of

a governmental subdivision is clearly not the governing body of

that subdivision or synonymous with the governing body of that

subdivision. Instead, a receiver in that situation is an officer

or arm of the court acting under the direction of the court. Since

the purpose of the Act is to require the governing bodies of

governmental subdivisions to prepare budget materials, and since §

13-503 does not, by its own terms, include receivers for any of the

entities listed therein, it seems to us that the Act does not reach

court-appointed receivers. Therefore, in the present instance, we

do not believe that the receiver for the Bellevue Bridge Commission

is subject to the requirements of the Nebraska Budget Act.




2. Submission of Audit Reports by the Receiver.




Your second question involves the auditing requirements placed

upon a court-appointed receiver. You ask:




Is a court appointed Receiver required to submit audit

reports to the Auditor of Public Accounts? We believe

they are.




Once again, we do not believe that a court-appointed receiver such

as the receiver for the Bellevue Bridge Commission is required to

submit audit reports to your office under the pertinent Nebraska

statutes.




The general authority and duties of the Nebraska Auditor of

Public Accounts (the "State Auditor") are set out at Neb. Rev.

Stat. §§ 84-301 through 84-321 (1994, Cum. Supp. 1996). Section

84-304(3)(b) lists a series of political subdivisions which are

subject to audits by the State Auditor, and § 84-304.01 provides,

in pertinent part, that:




It shall be the duty of the Auditor of Public Accounts to

establish, by rule and regulation, minimum standards

applicable to all audit, financial, or accounting reports

or copies of such reports required to be filed with the

Auditor of Public Accounts by any political subdivision

of the State of Nebraska. . . . Audit reports of

any political subdivision required to file such reports

with the Auditor of Public Accounts shall be prepared in

conformity with generally accepted auditing standards and

government auditing standards.




After discussion of those two statutes, we concluded, in our Op.

Att'y Gen. No. 94041 (May 31, 1994), that the public building

commissions in Lancaster and Douglas counties were not required to

file audit reports with your office because they were not

specifically listed in the predecessor statute to § 84-304(3)(b),

and also because the statutes pertaining to those entities did not

require them to file audit reports with your office.




Bridge commissions and receivers for such entities are not

listed as political subdivisions subject to audit by your office

under § 84-304(3)(b). Nor have we found any other statutes which

specifically require those entities to file audit reports with the

State Auditor. As a result, we do not believe that the receiver

for the Bellevue Bridge Commission is required to file an audit

report with your office. Our conclusion in that regard is

supported by the fact that, as noted above, a receiver is an

officer of the court and under the court's direction and control.

A receiver is not synonymous with the governing body of a political

subdivision involved in a receivership. Furthermore, Nebraska

cases establish that:




A receiver, as an officer of the court appointing him, is

required to account to the court for the receipts and

disbursements of all money and property received by him

as receiver.




State ex rel. Beck v. Associates Discount Corporation, 168 Neb.

298, 334, 96 N.W.2d 55, 78 (1959). It is then the duty of the

court which appointed the receiver to examine and rule upon his or

her account. Id. As a result, the audit function for a

receivership is performed by the court which appointed the

receiver.




3. Application of the Nebraska Public Records Statutes to a

Receiver.




Your final question goes to the application of the Nebraska

Public Records Statutes, Neb. Rev. Stat. §§ 84-712 through 84-

712.09 (1994 and Cum. Supp. 1996), to the records of a

receivership. You ask:




Is a court appointed Receiver required to comply with

State Statutes regarding public records? We believe they

are.




In our view, court-appointed receivers are required to comply with

the requirements of the Nebraska Public Records Statutes.




The Nebraska Public Records Statutes generally allow

interested persons in Nebraska the right to examine public records

in the possession of public agencies during normal agency business

hours, and to make memoranda and abstracts therefrom. Public

Records subject to the requirements of the Public Records Statutes

are defined under § 84-712.01 as:




. . . all records and documents, regardless of

physical form, of or belonging to this state, any county,

city, village, political subdivision, or tax-supported

district in this state, or any agency, branch,

department, board, bureau, commission, council, subunit,

or committee of any of the foregoing.




Since, as discussed above, a receiver is an officer of the court

which created the receivership and an "arm of the court," it

appears to us that the records of the receiver directly related to

the receivership are, in essence, records of the court which are

subject to the Public Records Statutes. Our conclusion in that

regard is supported by Torgeson v. Department of Trade and Commerce

of Nebraska, 127 Neb. 38, 48, 254 N.W.735, 740 (1934), in which the

court stated:




The books and accounts of the receiver and all other

papers in or upon which appears anything pertaining to

the trust or his administration thereof are quasi-public

in character and so open to examination not only by the

court but by all persons interested in the estate,

subject to the qualification that the time and manner of

such examination may not be such as to interrupt the

business of the receiver or prevent resort to the books

and accounts by other interested persons.




For that reason, we believe that the records of a court-appointed

receiver such as the receiver for the Bellevue Bridge Commission

which are directly related to the receivership are public records

subject to the Public Records Statutes.




Sincerely yours,




DON STENBERG

Attorney General




Dale A. Comer

Assistant Attorney General