Hoyt v. American Traders, Inc.

• Jurisdiction: Oregon
• Court: Oregon Court of Appeals
• Writing for the Court: BUTTLER; RICHARDSON; RICHARDSON
• Citation: Hoyt v. American Traders, Inc., 709 P.2d 1090, 76 Or.App. 253 (Or. App. 1986)
• Decision Date: 28 January 1986
• Docket Number: NJ-2
• Parties: Martha W. HOYT, Appellant, v. AMERICAN TRADERS, INC., a Washington corporation, Respondent. 84-1701-; CA A33635.

Page 1090

709 P.2d 1090

76 Or.App. 253

Martha W. HOYT, Appellant, v. AMERICAN TRADERS, INC., a Washington corporation, Respondent.

84-1701-NJ-2; CA A33635.

Court of Appeals of Oregon In Banc.

Argued and Submitted May 13, 1985.

Resubmitted In Banc Sept. 11, 1985.

Decided Nov. 14, 1985.

Reconsideration Denied Jan. 10, 1986.

Review Allowed Jan. 28, 1986.

A.E. Piazza, Medford, argued the cause and filed the brief for appellant.

Richard A. Stark, Medford, argued the cause for respondent. With him on the brief was Stark and Hammack, Medford.

BUTTLER, Judge.

In this declaratory judgment action, plaintiff contends that her interest in a parcel of real property that was awarded to her in the decree dissolving her marriage should be free of the lien of a foreign judgment that defendant obtained against plaintiff's former husband and registered in the county where the property is located while the dissolution proceeding was pending. The trial court granted defendant's and denied plaintiff's motion for summary judgment ¹ and entered judgment accordingly. Plaintiff appeals; we reverse.

The only facts before the trial court were those to which the parties stipulated, which we summarize: Prior to March 20, 1980, plaintiff Martha W. Hoyt and Edwin R Hoyt were husband and wife and the owners of certain real property as tenants by the entirety, described as follows, to-wit:

"Lot 1 in Block 3 of ROGUE VALLEY ESTATES SUBDIVISION in Jackson County, Oregon, according to the Official Plat thereof, now of record."

On March 20, 1980, plaintiff filed a petition for dissolution of her marriage and requested, among other things, that the real property, which was specifically described, be awarded to her as her sole and separate property.

On April 26, 1980, plaintiff's husband was served personally with a summons and the petition, and on July 16, 1980, defendant, American Traders, Inc., obtained a judgment against the husband in the Superior Court of Snohomish County, Washington, in the amount of $601,951.52. On August 20, 1980, defendant caused that judgment to be registered in Jackson County, Oregon, in accordance with the provisions of ORS chapter 24. On April 27, 1981, a decree of dissolution of the Hoyt marriage was entered, which, among other things, awarded plaintiff, as her sole and separate property, all right, title and interest in the described real property and specifically provided that the decree operated as a deed of conveyance of that property.

There are no issues of fact presented; the only issue is one of law--whether the doctrine of lis pendens applies in dissolution cases. Defendant's judgment did not become a lien on plaintiff's husband's interest in real property in Jackson County until it was registered there, ORS 18.350, after the dissolution action was commenced. If lis pendens does apply, the judgment lien would be subject to the outcome of the dissolution proceeding; because the decree awarded the property to plaintiff, her interest would be ahead of defendant's lien. If lis pendens does not apply, defendant prevails, because its judgment lien against plaintiff's husband's interest was of record before the property was awarded to plaintiff.

In Slauson v. Usher, 39 Or.App. 303, 592 P.2d 247, rev. den. 287 Or. 129 (1979), we discussed, but did not decide, the question presented here; we noted:

"As an alternative to his principal argument, plaintiff contends that the doctrine of lis pendens should be extended to dissolution proceedings which, under ORS 107.105(1)(e) make all property of the parties subject to distribution by the court. Twice, prior to the enactment of ORS 107.105(1)(e), the Supreme Court declined to decide whether lis pendens applies in dissolution cases. Houston v. Timmerman, 17 Or 499, 21 P 1037, 11 AS 848, 4 LRA 716 (1889); and Burnett et al. v. Hatch, 200 Or 291, 266 P2d 414 (1954). The enactment of ORS 107.105(1)(e) created logical reasons both for applying lis pendens to dissolution cases and for rejecting the doctrine's application. The trial court has jurisdiction over all property of the parties under that statute, and the argument for applying lis pendens to dissolution proceedings is, for that reason, more compelling than was the case when Houston and Burnett were decided. The property is now automatically a 'subject' of a dissolution suit. However, the court's plenary authority to distribute the parties' property also has the effect of eliminating the need for the petitioner to specify in his pleadings what property of his spouse he claims. The absence of such specification is inconsistent with the application of lis pendens under prior interpretations of the doctrine. See Walker v. Goldsmith, 14 Or 125, 12 P 537 (1886); Burnett et al. v. Hatch, supra; and Annotation, 166 ALR 406. Because we decide this appeal in favor of plaintiff on other grounds, we too decline to reach the question of whether lis pendens applies to dissolution cases and, if so, what pleading requirements would be necessary to invoke the doctrine." 39 Or.App. at 308 n. 3, 592 P.2d 247. (Emphasis in original.)

We must now decide the question we left open in Slauson and we hold that the doctrine of lis pendens does apply in dissolution cases if the property is described with particularity in a pleading. In Houston v. Timmerman, 17 Or. 499, 21 P. 1037, 11 AS 848, 4 LRA 716 (1889), the court set forth two requirements for the applicability of the doctrine:

" * * * Two things, however, seem indispensable to give [lis pendens] effect: 1. That the litigation must be about some specific thing, which must necessarily be affected by the termination of the suit; and 2. That the particular property involved in the suit 'must be so pointed out by the proceeding as to warn the whole world that they intermeddle at their peril.' * * * " 17 Or at 504, 21 P. 1037. (Citation omitted.)

The dissolution action involved here met both requirements. The first requirement is that the litigation must be about some specific thing, which must necessarily be affected by the termination of the action. We do not understand that requirement to be that the litigation be only about one specific thing; it is enough that the ownership of that specific thing (the particularly described real property) necessarily be involved in the litigation. Here, plaintiff, as the wife in the dissolution proceeding, described the real property and prayed that it be awarded to her. Accordingly, the disposition of that real property had to be affected by the termination of that proceeding; it had to be awarded to one or both of the parties. The second requirement is that the particular property "must be so pointed out by the proceedings as to warn the whole world that they intermeddle at their peril." That was done here.

The dissent argues that the first requirement can never be met in a dissolution proceeding, because the litigation is not about particular property. Although there was a time when it was the status of the parties that was the subject of divorce proceedings and, once it was determined that one of the parties was entitled to a divorce, certain property consequences followed as a matter of law, see Houston v. Timmerman, supra, that is no longer true. Either party is entitled to dissolve the marriage without regard to fault, ORS 107.025, 107.036, and the only issues, other than the custody of children, are economic--support and property division. Accordingly, in dissolution cases in which there is property to be divided, the litigation is about property and, if the real property is particularly described, it is about particular real property.

The dissent also argues that there is no certainty that any particular property of a party or the parties necessarily will be affected. It is true that one cannot determine in advance who will be awarded particular property; however, all of the property will be affected in the sense that it will be awarded to one or both of the parties. Furthermore, when, as here, one of the parties describes particular property and prays that it be awarded to him or her, the court must necessarily dispose of that claim. Accordingly, the Houston requirements were satisfied.

The broader policy question is whether lis pendens ought to apply to dissolution proceedings. As the dissent points out, it is not necessary to describe specific real property in the pleadings in dissolution cases, because the court necessarily divides the property between the parties "as may be just and proper in all the circumstances." ORS 107.105(1)(f). Therefore, the dissent argues, if we were to apply lis pendens when a petition contains "superfluous property descriptions," "the practical effect would be a tail-wagging-the-dog phenomenon in which descriptions would be included in petitions, not because of any relevance they have to the dissolution process, but for the sole purpose of making lis pendens applicable." That objection seems to us to be the precise reason for applying lis pendens. We perceive no reason why either of the spouses should not be entitled to put everyone in the world on notice that people may deal with the property only at their peril.

That protection is particularly important with respect to judgments against one of them that become liens after the dissolution proceedings are commenced. ORS 93.- 740 ² permits any party to an action in which the title or any interest in real property is involved to file with the recorder of deeds of any county in which any part of the property lies, other than the one in which the action is brought, a notice of lis pendens. From the time of filing, "purchasers and incumbrancers" are on notice of the rights and equities in the property of the party filing the notice. There is nothing in the statute that even suggests that it does not apply to dissolution proceedings. By its terms, it does apply and we perceive no reason why it should not be applied. ³

The application...