Butcher v. Beatty

345 S.W.3d 216, 2009 Ark. App. 662, 2009 Ark. App. LEXIS 827, 2009 WL 3199151
CourtCourt of Appeals of Arkansas
DecidedOctober 7, 2009
DocketCA 08-1226
StatusPublished
Cited by2 cases

This text of 345 S.W.3d 216 (Butcher v. Beatty) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Butcher v. Beatty, 345 S.W.3d 216, 2009 Ark. App. 662, 2009 Ark. App. LEXIS 827, 2009 WL 3199151 (Ark. Ct. App. 2009).

Opinions

D.P. MARSHALL, JR., Judge.

[¡This is a dispute about assets between the respective descendants of an older couple in a second marriage. The critical facts are undisputed, and we review the legal issues presented in this guardianship case de novo. Craven v. Fulton Sanitation Service, Inc., 361 Ark. 390, 392-93, 206 S.W.3d 842, 843 (2005).

I.

John and Thelma Healy both had children from their first marriages. The couple married each other in 1979 and held their assets jointly. Those assets included the marital home and two rent houses, all owned as tenants by the entirety. In late 2006, Thelma’s son and grandson (appellant Butcher) petitioned to be named guardians of her estate and person. John agreed that Thelma was incapacitated, but he counterpetitioned to be her sole guardian. |2In early 2007, the probate division of the circuit court found that Thelma was incompetent due to the effects of Alzheimer’s. The court appointed Butcher and John as co-guardians of her estate. The court also placed one-half of John and Thelma’s liquid assets in a guardianship account solely for Thelma’s benefit.

During the next year, the parties wrangled over what to do with the three homes. In September 2007, John filed a divorce complaint against Thelma in another case. The parties also squabbled about personal property, although they would eventually divide it by agreed order. In September 2007, they reached a preliminary agreement about the three homes. But this deal fell apart because the rent houses could not be sold for more than their appraised value.

In early December 2007, the parties finally settled all the real-property issues. The court entered an order reflecting the parties’ agreement. John would pay Thelma $21,000.00 for her interest in the marital home, and in turn her co-guardians would convey her interest to John. Thelma would pay John $40,000.00 for his interest in the two rent houses, and he would convey his interest in that real property to her. The order required the parties to accomplish these transactions by 7 February 2008.

John sent his check for $21,000.00, and Butcher eventually executed and returned a fiduciary deed for the marital home. Apparently a sale was pending on one of the rent houses, and so consummation on the rent-house part of the agreement was delayed. John died unexpectedly on 24 January 2008. Butcher (now the sole guardian of his grandmother’s Restate) refused to pay John’s estate the $40,000.00 for the two rent houses. John’s daughter (appellee Beatty, the personal representative of her father’s estate) petitioned the court to make Butcher fulfill the parties’ agreement and pay John’s estate the $40,000.00. She pleaded no particular legal or equitable theories. With court approval, Butcher eventually sold the two rent houses for approximately $100,000.00.

The circuit court ordered “specific performance” of the parties’ agreement. The court required Thelma (through her guardian) to pay John’s estate the $40,000.00. As guardian of Thelma’s estate, Butcher appeals.

II.

Butcher is correct: The circuit court’s decision cannot be affirmed on its own terms.

As the surviving spouse, Thelma became the sole owner of the two rent houses by operation of law when John died. Robertson v. Robinson, 87 Ark. 367, 368, 112 S.W. 883, 883 (1908). The vesting of title in Thelma alone made performance of the parties’ agreement about the rent houses impossible as a matter of fact and law. “[S]pecific performance would not lie where performance is impossible.” Dennis v. Binz, 230 Ark. 1010, 1012, 328 S.W.2d 85, 87 (1959). In other words, the circuit court erred by granting specific performance because there was no mutuality of remedy. McIllwain v. Bank of Harrisburg, 18 Ark. App. 213, 221, 713 S.W.2d 469, 473-74 (1986). John was dead; he could not convey to Thelma what she already owned in return for the $40,000.00.

Butcher also argues that the parties’ agreement did not convert their tenancies by the |4entirety in the rent houses into tenancies in common. Butcher is correct here too. The circuit court had authority under the controlling statute to terminate the entirety tenancies and order the properties’ sale. Ark.Code Ann. § 18-60-426 (Repl.2003). But the parties’ agreed order reflects an intent to convey the property within the next two months; it does not reflect an unequivocal intent to terminate the tenancies by the entirety immediately on the date that the order wás entered. Compare Rucks v. Taylor, 282 Ark. 200, 667 S.W.2d 365 (1984), with Killgo v. James, 236 Ark. 537, 367 S.W.2d 228 (1963).

We conclude, however, that this is a right result/wrong reason case. We hold that the rent houses were subject to an equitable lien in John’s favor. This argument was not made below and is not made on appeal. But the hydraulic pressure from the judgment means that “[w]e will affirm the court’s ruling if it is correct for any reason.” Alexander v. Chapman, 299 Ark. 126, 130, 771 S.W.2d 744, 746 (1989); see also Russell v. Watson Chapel School District, 2009 Ark. 79, at 6 n. 2, 313 S.W.3d 1; Norman v. Norman, 347 Ark. 682, 685, 66 S.W.3d 635, 637 (2002).

Here, the probate division of the circuit court “reached the right result, even though it may have announced the wrong reason.” Norman, supra. Thelma’s estate owed John’s estate $40,000.00 from the rent-house sale proceeds because the property (both the realty and then the sale proceeds) was subject to an equitable lien. The lien arose from the parties’ agreed order and the resulting unjust enrichment to Thelma’s estate from getting all the sale proceeds notwithstanding the parties’ agreement.

“An equitable lien is a right to have a demand satisfied from a particular fund or | r,specific property.” C.A.R. Transportation Brokerage Co. v. Seay, 369 Ark. 354, 361, 255 S.W.3d 445, 451 (2007). The lien may arise by implication from the parties’ conduct and dealings or from an agreement. Ibid. This remedy “awards a nonpossessory interest in property to a party who has been prevented by fraud, accident, or mistake from securing that to which he was equitably entitled.” Ibid.; see generally Howard W. Brill, Equity and the Restitutionary Remedies: Constructive Trust, Equitable Lien, and Subrogation, 1992 Ark. L. Notes 1, 7-9; Restatement (Third) of Restitution and Unjust Enrichment § 56 (Tentative Draft No. 6, 2008).

As Professor Brill has noted, Arkansas law on equitable liens is underdeveloped. Brill, supra, at 7. Seay’s list of doctrinal categories (fraud, accident, or mistake) is illustrative, not exhaustive. The Seay court made this clear when it emphasized the many kinds of situations where this equitable remedy may be appropriate.

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Butcher v. Beatty
345 S.W.3d 216 (Court of Appeals of Arkansas, 2009)

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Bluebook (online)
345 S.W.3d 216, 2009 Ark. App. 662, 2009 Ark. App. LEXIS 827, 2009 WL 3199151, Counsel Stack Legal Research, https://law.counselstack.com/opinion/butcher-v-beatty-arkctapp-2009.