Triple D-R Development (LLC) v. FJN Contractors, Inc.

• Decision Date: 03 March 1999
• Docket Number: D-R,No. CA,CA
• Citation: 986 S.W.2d 429,65 Ark.App. 192
• Parties: TRIPLEDEVELOPMENT (LLC), Appellant, v. FJN CONTRACTORS, INC., Appellee. 98-829.
• Court: Arkansas Court of Appeals

Page 429

986 S.W.2d 429

65 Ark.App. 192

TRIPLE D-R DEVELOPMENT (LLC), Appellant, v. FJN CONTRACTORS, INC., Appellee.

No. CA 98-829.

Court of Appeals of Arkansas,

Division II.

March 3, 1999.

Marian M. McMullan, Little Rock, for Appellant.

Floyd M. Thomas, Jr., Robin J. Carroll, El Dorado, for Appellee.

JOHN MAUZY PITTMAN, Judge.

Appellee, FJN Contractors, Inc., d/b/a Julian Farms, Inc., obtained a judgment against Brooks Lisenbey in the Circuit Court of Pulaski County on November 20, 1995, and filed a certified copy of the judgment with the Grant County Circuit Clerk's office on December 15, 1995. Although the judgment was indexed in the clerk's Common Law Book A, it was not indexed in Judgment Book C until February 26, 1997. In March 1996, Brooks Lisenbey and his wife conveyed their real property in Grant County to appellant, Triple D-R Development, by warranty deed. Mr. Lisenbey did not satisfy appellee's judgment.

On June 10, 1996, appellee filed a complaint against appellant, requesting that its judgment lien be declared superior to appellant's interest in the property and seeking foreclosure. In its answer, appellant asserted that appellee's judgment could not have attached as a lien to Mr. Lisenbey's property because it was his homestead and because it was not properly indexed by the circuit clerk's office. Appellant also argued that because it had satisfied the Lisenbeys' mortgage on the property, it should be equitably subrogated to the interest of the mortgagee if appellee's judgment was determined to be a valid lien against the property.

Appellee moved for summary judgment and filed an affidavit by the Grant County Circuit Clerk, who attested that the copies filed with her affidavit were true and correct copies of records kept in her office and under her care and control. With her affidavit were copies of pages from Common Law Book A and Judgment Book C and the file-marked judgment against Brooks Lisenbey.

In response, appellant asserted that although the judgment was filed, it was not properly indexed and, therefore, did not constitute a lien upon the property; that it did not have actual notice of appellee's judgment; that the judgment could not constitute a lien against the Lisenbeys' homestead; and that because it had satisfied the Lisenbeys' mortgage, it should be equitably subrogated to the mortgagee's rights. Appellant filed the affidavit of Martha McCloud, an employee of Hot Spring County Title Company, who conducted the title search in connection with the sale of the property to appellant. She stated that before closing the transaction, she checked the judgment index records of Grant County and found no judgment against Brooks Lisenbey indexed therein. Ms. McCloud attested that from the proceeds of the sale, $70,511.58 was paid to the mortgagee and that she had had no actual knowledge of the judgment against Mr. Lisenbey. Appellant also filed the affidavit of Eva Denise Lisenbey, who stated that she and her husband had resided at the property in question as their primary residence from July 8, 1994, until March 11, 1996, and that they claimed this property as their homestead.

Appellant also moved for summary judgment on the basis of the property's status as the Lisenbeys' homestead at the time of the sale. In support of this motion, appellant filed Brooks Lisenbey's affidavit, wherein he stated that from July 8, 1994, until March 11 1996, he and his wife had lived at the property as their primary residence and that they claimed it as their homestead.

In its order of April 28, 1998, the Grant County Chancery Court granted appellee's motion for summary judgment and found:

2. The Court finds that the judgment was properly indexed by the Grant County Circuit Clerk in Common Law Book A. Because the judgment was properly indexed and recorded on December 15, 1995, it became a valid lien on the property in question at that time. The buyer of the property had proper notice of the lien when the property was purchased in March of 1996. A reasonable search of the clerk's records would have discovered this lien. The Plaintiff's judgment lien is now the senior lien on this property.

3. Because the Court finds that the judgment was properly recorded and indexed, the Court grants the Plaintiff's motion for summary judgment. The Plaintiffs may now proceed with their foreclosure action as prayed for in their complaint and provided for in the November 20, 1995 judgment.

4. The Defendant has argued that summary judgment should not be granted because the Lisenbys [sic] have claimed a homestead exemption. The Court finds this argument to be inapplicable because the Lisenbys [sic] receive no benefit from claiming the exemption.

5. The Defendant further argues that the doctrine of equitable subrogation applies and should reduce the amount of the Plaintiff's interest. This argument is also inapplicable because this case does not involve one person paying the debt of another and receiving the rights and defenses of the person for whom the debt was paid.

The court granted foreclosure on appellee's lien and ordered a commissioner's sale of the property. It is from this order that appellant has appealed.

The legal principles that govern this court's review of a trial court's grant of summary judgment are well established. Summary judgment should be granted only when a review of the pleadings, depositions, and other filings reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Johnson v. Harrywell, Inc., 47 Ark.App. 61, 885 S.W.2d 25 (1994). In considering a motion for summary judgment, the court may also consider other documents such as pleadings, answers to interrogatories, admissions, and affidavits. Muddiman v. Wall, 33 Ark.App. 175, 803 S.W.2d 945 (1991). When the movant makes a prima facie showing of entitlement, the respondent must meet proof with proof by showing a genuine issue as to a material fact. Johnson v. Harrywell, Inc., supra. In appeals from the granting of summary judgment, this court reviews facts in a light most favorable to the appellant and resolves any doubt against the moving party. Id. Summary judgment is not proper where evidence, although in no material dispute as to actuality, reveals aspects from which inconsistent hypotheses might reasonably be drawn and reasonable minds might differ. Id. On appellate review, this court need only decide if the granting of summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of a motion left a material question of fact unanswered. Id.

On appeal, appellant argues that a question of fact exists as to whether the judgment was properly indexed by the Grant County Circuit Clerk pursuant to Ark.Code Ann. § 16-65-117 (Supp.1997), and also argues that the chancellor erred in finding that the homestead exemption is inapplicable.

Although we agree that issues of fact remain as to the Grant County Circuit Clerk's procedures for indexing judgments and whether these procedures were followed properly, we do not reverse on this point because we believe that the issues regarding the homestead defense control the outcome of this appeal. We think that the chancellor erred in finding that the homestead exemption is inapplicable because the Linsenbeys receive no benefit from claiming it. Appellee argues that the homestead exemption does not apply here because the property involved is no longer the Lisenbeys' homestead and because they conveyed away their homestead interest in the warranty deed to appellant. Again, we disagree. Even if the Lisenbeys did waive their homestead rights in this warranty deed, they only did so as between themselves and appellant; they are not claiming the homestead exemption as a defense to any sort of action brought by appellant.

Article 9, Section 3, of the Arkansas Constitution provides:

The homestead of any resident of this State who is married or the head of a family shall not be subject to the lien of any judgment, or decree of any court, or to sale under execution or other process thereon, except such as may be rendered for the purchase money or for specific liens, laborers' or mechanics' liens for improving the same, or for taxes, or against executors, administrators, guardians, receivers, attorneys for moneys collected by them and other trustees of an express trust for moneys due from them in their fiduciary capacity.

Appellee cites the general rule of law that the homestead exemption is a personal right that must be exercised by the party seeking its benefits. State v. Sheriff of Lafayette County, 292 Ark. 523, 731 S.W.2d 207 (1987); Jones v. Thompson, 204 Ark. 1085, 166 S.W.2d 1036 (1942). Homestead laws are remedial and should be liberally construed to effectuate the beneficent purposes for which they were intended. Smith v. Flash TV Sales and Service, Inc., 17 Ark.App. 185, 706 S.W.2d 184 (1986). It is generally accepted that the homestead exemption has no creditors except those mentioned in the constitution, and the only way the exemption may be removed is by waiver or abandonment. Northwestern Nat'l Ins. Co. v. Sulcer, 267 Ark. 31, 588 S.W.2d 442 (1979). In that case, the court stated: "It has been said by one text writer that the homestead is as completely beyond the reach of ordinary creditors as if it were on another planet." 267 Ark. at 33-34, 588 S.W.2d at 444. Accord White v. Turner, 203 Ark. 95, 155 S.W.2d 714 (1941).

We hold that the chancellor erred in finding that the Lisenbeys receive no...