Burrows v. Burrows, 82913

• Decision Date: 29 November 1994
• Docket Number: No. 82913,82913
• Citation: 1994 OK 129,886 P.2d 984
• Parties: , 1994 OK 129 LaDonna Lea BURROWS, now Guinn, Appellant, v. Edwin BURROWS, W.E. Burrows and Jewell Burrows, husband and wife, Appellees.
• Court: Oklahoma Supreme Court

Page 984

886 P.2d 984

52 A.L.R.5th 843, 1994 OK 129

LaDonna Lea BURROWS, now Guinn, Appellant, v. Edwin BURROWS, W.E. Burrows and Jewell Burrows, husband and wife, Appellees.

No. 82913.

Supreme Court of Oklahoma.

Nov. 29, 1994.

Certiorari to the Court of Appeals, Division No. 1.

The appellant, LaDonna Lea Burrows (the mother) and the appellee Edwin Burrows (the father) were divorced. Pursuant to the divorce decree, she was awarded custody of their child, support alimony, and child support. He was awarded the family home on forty acres of land in Pontotoc County, Oklahoma. The mother secured three judgments against the father for past-due support alimony, child support, and support related attorney's fees. She initiated garnishment proceedings to recover a portion of the money. Subsequently, the father conveyed the home and forty acres to his parents, the appellees W.E. and Jewell Burrows (parents). In consideration of the conveyance, the parents paid the balance which was due on the father's mortgage debt and agreed to allow him to reside on the property rent-free for his lifetime. The mother sued the father and his parents pursuant to the Uniform Fraudulent Transfer Act (the Act), 24 O.S.1991 § 116. She sought to set aside the conveyance as fraudulent. The father and his parents denied the allegations and moved for summary judgment arguing that the property he conveyed was his homestead and that it was exempt from the claims of creditors and the Act. The trial judge, Honorable G.C. Mayhue, granted summary judgment, and the Court of Appeals affirmed. We find that, under the facts presented here, the father's attempt to convey property subject to a homestead exemption to avoid payment of past-due support alimony and child support may be fraudulent pursuant to 24 O.S.1991 § 116.

CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT REVERSED.

Robert T. Keel, Oklahoma City, for appellant.

Austin R. Deaton, Jr., Ada, for appellees, W.E and Jewell Burrows.

Thomas S. Landrith, Ada, for appellee, Edwin Burrows.

KAUGER, Justice:

The dispositive issue presented on certiorari is whether the trial court erred in granting summary judgment in favor of a father who claimed a homestead exemption in defending an action for fraudulent conveyance to prevent the collection of past-due alimony and child support. We find that, under the facts presented here, the father's attempt to convey property subject to a homestead exemption to avoid payment of past-due support alimony and child support may be fraudulent pursuant to 24 O.S.1991 § 116.¹

FACTS

In November of 1983, Edwin Burrows (the father) married LaDonna Lea Burrows (the mother). Subsequently, the couple had a child. Through loans secured from a local bank, they built a home on forty acres of land in Pontotoc County, Oklahoma, which was owned by the father prior to the marriage. On June 10, 1991, the couple divorced; and the mother was awarded custody of their child, support alimony, and child support. The father was awarded the home and the Following the divorce, three judgments were secured against the father in an effort to obtain the money owed as a result of the divorce.⁴ On January 15, 1992, the mother began garnishment proceedings to recover a portion of the money from an employer of the father.⁵ The father moved to quash the garnishment and requested a hearing. On February 12, 1992, a hearing was held; and the mother was allowed to retain the proceeds she was successful in recovering.

forty acres.² He was also ordered to pay child support, the child's accrued medical expenses and support alimony.³

On February 16, 1992, the father conveyed the forty acres he was granted in the divorce decree to his parents, W.E. and Jewell Burrows (parents) for $5,151.04, the amount remaining on his mortgage debt on the property. In exchange for the conveyance, the parents agreed to allow the father to remain on the property rent-free for his lifetime. Subsequently, the mother sued the father and his parents alleging that: 1) the father had three judgments against him for past-due support alimony, child support, and attorney's fees totaling $6,713.48; 2) he was behind on current child support in the amount of $5,577.49; 3) the father's only asset was his home and the forty acres in Pontotoc County, Oklahoma; 4) he transferred the property for inadequate consideration⁶ to his parents for the purpose of defrauding his ex-wife and hindering the collection of the debt; and 5) the parents knew that their son was insolvent and faced a lien being filed against him when he sold them the property.

The father and his parents moved for summary judgment arguing that the property he conveyed was his homestead and that it was exempt from the claims of creditors and from a fraudulent conveyance action.⁷ Prior to the conveyance, the father did not file for The trial court entered summary judgment for the father and his parents. The mother appealed and the Court of Appeals held that: 1) the property was the father's homestead when he conveyed it to his parents;⁹ 2) a homestead is exempt from the collection of debts owed to general creditors including alimony and child support debts; and 3) because the property was the father's homestead when he conveyed it to his parents, the transfer may not be set aside as fraudulent.¹⁰ We granted certiorari on July 7, 1994.

homestead exemption with the county assessor.⁸ The parents have their own homestead located on other property in the same county.

UNDER THE FACTS PRESENTED HERE, THE FATHER'S ATTEMPT TO CONVEY PROPERTY SUBJECT TO A HOMESTEAD EXEMPTION TO AVOID PAYMENT OF PAST-DUE SUPPORT ALIMONY AND CHILD SUPPORT MAY BE FRAUDULENT PURSUANT TO 24 O.S.1991 § 116.

On November 15, 1993, the father and his parents moved for summary judgment arguing that the property he conveyed to his parents was his homestead and that pursuant to 31 O.S.1991 § 1,¹¹ it was exempt from attachment, execution, or other forced sale. They relied on Oklahoma State Bank v. Van Hassel, 189 Okla. 48, 114 P.2d 912, 914 (1941) for the proposition that a homestead may be freely conveyed and that the purchaser takes free of any judgment lien or debts of the seller.

We find that Van Hassel is distinguishable from the instant case on its facts and is not The purpose of the Act is to allow a creditor the opportunity to invalidate the transfer of assets made by a debtor if the transfer has the effect of placing assets out of reach of present and future creditors.¹³ Spouses, to the extent they are asserting fraudulent conveyance claims against the other spouse attempting to collect for alimony and child support, may utilize the Act.¹⁴ The determinative question is whether the homestead exemption can be used to defeat past-due alimony and child support claims under the facts presented. The mother cites Breedlove v. Breedlove, 100 Nev. 606, 691 P.2d 426, 428 (1984) for the proposition that property cannot be transferred under the guise of a homestead exemption to defeat child support and alimony judgments.

dispositive of the issue of whether a homestead exemption may be used to defeat alimony and child support judgments. Van Hassel involved a bank creditor attempting to set aside the transfer of a homestead in order to collect on a past-due note. Here, the father conveyed his property to his parents to evade payment of alimony and child support to the family in which the homestead originated.¹²

In Breedlove, a couple divorced and the father was ordered to pay child support. Subsequently, the father defaulted on his child support payments and the mother obtained a judgment for child support arrearages and attorney's fees. In an effort to frustrate the mother's attempts to execute on the judgment, the father filed for a homestead exemption. The Nevada Supreme Court held that: 1) public policy requires an exception to the homestead laws in cases where a party is seeking to enforce a child support award against the homesteader; and 2) it would be unfair to permit the homestead to be used as a shield to insulate a father from being forced to pay support owed to his children.

The Court recognized that facially the Nevada homestead laws seemed to provide protection against a creditor unless the creditor falls within an express statutory exception and a mother seeking alimony and child support does not. However, it noted that applying the statutory exceptions in a technical fashion would contravene the Legislature's intent and the purpose of the homestead law. The Court found that: 1) homestead laws were designed for making families secure in their home from creditors they are unable to pay; 2) when an ex-wife or child attempts to enforce court-ordered support, the rationale behind the homestead exemption no longer applies because the policy of protecting the family would no longer be served by such an We find the Breedlove reasoning persuasive.¹⁵ This Court has recently noted that public policy dictates that exemption laws, such as homestead provisions, should be liberally construed to comport with their beneficent spirit of protecting the family home.¹⁶ Although the statutory exemption does not require that a person have a family in order to claim it,¹⁷ the homestead exemption was intended to protect the entire family in its occupancy from improvidence and the urgent demands of creditors,¹⁸--to prevent the family from becoming public charges. The homestead exemption is granted by law for the benefit of the family occupying the property as a home.¹⁹ It vests jointly in a husband and wife for the benefit of themselves and the family.²⁰ Its purpose is to afford protection to the family, not to enable one to escape just liabilities or to perpetrate a fraud or injustice.²¹

application; and 3) a former family member attempting to enforce a support judgment is not the sort of creditor which the homestead laws seek to defeat.

Under Oklahoma's homestead exemption ...