Benefit Bank v. Rogers

2012 Ark. 419, 424 S.W.3d 812, 2012 WL 5456110, 2012 Ark. LEXIS 434
CourtSupreme Court of Arkansas
DecidedNovember 8, 2012
DocketNo. 12-163
StatusPublished
Cited by4 cases

This text of 2012 Ark. 419 (Benefit Bank v. Rogers) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Benefit Bank v. Rogers, 2012 Ark. 419, 424 S.W.3d 812, 2012 WL 5456110, 2012 Ark. LEXIS 434 (Ark. 2012).

Opinion

PAUL E. DANIELSON, Justice.

| Appellant Benefit Bank appeals from the Sebastian County Circuit Court’s order finding that the mortgage it held to certain property was second and subordinate to the interest of appellee Marilyn Rogers obtained in her divorce.1 Benefit Bank originally appealed the circuit court’s order to our court of appeals, which reversed and remanded the matter. See Benefit Bank v. Rogers, 2012 Ark. App. 134, 2012 WL 387864. Rogers petitioned for review, which this court granted. When we grant a petition for review, we consider the appeal as though it had originally been filed in this court. See Orr v. Hudson, 2010 Ark. 484, 374 S.W.3d 686. Benefit Bank asserts two points on appeal: (1) that the circuit court erred in finding that Rogers’s interest was prior to its interest because the divorce court lacked authority to impose |ga lien on real property to secure alimony payments, and (2) that the circuit court erred in finding that the lis pendens filed by Rogers created or perfected a lien. We affirm the circuit court’s order.

The underlying facts are these. On November 30, 2007, a divorce decree was entered, pursuant to “the stipulated agreement of the parties,” granting Marilyn Rogers a divorce from William Morgan. In the decree, Rogers was granted right, title, interest, and possession to a home located on Beverly Drive in Fort Smith, and William Morgan was granted right, title, interest, and possession to a home and twenty-seven acres located on Cook Terrace in South Sebastian County, “provided however, [Rogers] shall retain a lien, and a lis pendens shall be filed, as collateral security for [Morganj’s obligations to [Rogers] hereunder.” In addition, the decree awarded Rogers spousal support in the amount of $3600 per month for seven and one-half years, “provided, however, that [Rogers] shall retain a lien against the home and 27 acres on Cook Terrace in Sebastian County, Arkansas, as collateral security for the continued payment of spousal support and an appropriate lis pendens or other such document shall be recorded to evidence said lien.”

The record reflects that a notice of lis pendens was filed in the Sebastian County Circuit Court.2 The notice stated that Rogers had begun an action against Morgan and referenced the docket number of the divorce proceedings. It further stated that a lien had been granted by Morgan in Rogers’s favor upon the property now at issue and noted that, by |sagreement of the signatories, which included Rogers; Morgan, individually; and Morgan, as authorized representative of W.C.M. Investments, LLC, the lis pendens “shall continue to be in effect” on the properly in accordance with the terms of the divorce decree.

On July 16, 2010, Benefit Bank filed in the' Sebastian County Circuit Court its complaint for foreclosure against Morgan and W.C.M. Investments, LLC. The complaint alleged that the action was to foreclose a mortgage on real property owned by W.C.M. Investments, of which Morgan was the owner and managing member. It further alleged that on or about May 19, 2008, for value received, W.C.M. Investments executed a note for $323,000 on the property at issue and that the mortgage was recorded on May 20, 2008. In addition, the complaint averred, Morgan executed and delivered a continuing guaranty, as additional collateral for the note, thereby unconditionally promising to pay all indebtedness of W.C.M. Investments. Alleging that W.C.M. Investments and Morgan had defaulted on their obligations, Benefit Bank asserted that it was entitled to foreclose its mortgage on the property and that its mortgage should be declared a first lien on the properly.

Subsequently, Benefit Bank filed an amended complaint, in which it added Rogers as a defendant and asserted that Rogers may have, or claim to have, an interest in the property involved “by virtue of a Notice of Lis Pendens recorded November 13, 2007.” Benefit Bank claimed that any interest of Rogers was secondary and subordinate to its first mortgage lien. Rogers answered, asserting that her lien/lis-pen-dens interest had priority over Benefit Bank’s 14lien.3

Following a bench trial, held November 80, 2010, the circuit court entered its order on January 14, 2011, in which it concluded that a lien was established to Rogers’s benefit by lawful order of the divorce court. The circuit court further found that the divorce court’s order that a lis pendens be executed and filed was satisfied and that Benefit Bank was or should have been on notice of Rogers’s interest in the properly. Accordingly, the circuit court found for Rogers as to Benefit Bank’s prayer that her interest be found second and subordinate to the mortgage held by Benefit Bank. It further found in favor of Rogers as to Benefit Bank’s prayer that its mortgage be declared a first lien on the property and found W.C.M. Investments and Morgan in default, awarding Benefit Bank judgment for $308,676.55 along with late fees, costs, prejudgment interest, and additional prejudgment interest. Benefit Bank also moved for and was awarded attorney’s fees. Benefit Bank now appeals.

For its first point on appeal, Benefit Bank asserts that the circuit court erred in finding that Rogers’s interest in the subject property was superior to its mortgage interest because the divorce court lacked authority to impose a lien on real properly to secure alimony payments. It 'avers that the long-standing rule in Arkansas has been that alimony cannot constitute a lien on a husband’s land and that, accordingly, a divorce court cannot order a lien to secure alimony payments. Benefit Bank urges that where the alimony payments granted to Rogers Rwere in the form of monthly payments rather than a fixed amount upon which execution might issue, the decree could not create a lien to secure alimony.

Rogers counters, asserting that divorce courts have every right to use marital property to secure alimony payments if it is done with the consent of the parties. She contends that the “no-security-for-alimony rule” applies only if it is imposed involuntarily. She further urges that a lien is not defeated merely because payments on the debt secured by the lien are made periodically.

In bench trials, the standard of review on appeal is whether the circuit court’s findings were clearly erroneous or clearly against the preponderance of the evidence. See McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (1998); Ark. R. Civ. P. 52(a) (2012). We view the evidence in the light most favorable to the appellee, resolving all inferences in favor of the appellee. See McQuillan, 331 Ark. 242, 961 S.W.2d 729. Disputed facts and determinations of the credibility of witnesses are within the province of the fact-finder. See id.

A review of this court’s precedent does reveal that, as early as 1881, this court held that there was no lien on a husband’s land for future alimony payments, and that by 1921, this concept was held to have become a rule of property. See Warren v. Warren, 273 Ark. 528, 537-A, 623 S.W.2d 813, 819 (1981) (supplemental opinion on denial of rehearing) (citing Kurtz v. Kurtz, 38 Ark. 119 (1881); Whitmore v. Brown, 147 Ark. 147, 227 S.W. 34 (1921)). As we noted in Massengale v.

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Bluebook (online)
2012 Ark. 419, 424 S.W.3d 812, 2012 WL 5456110, 2012 Ark. LEXIS 434, Counsel Stack Legal Research, https://law.counselstack.com/opinion/benefit-bank-v-rogers-ark-2012.