Mizan Rahman v. Bf Acquisitions, LLC, Assignee of Regions Bank Woodland Farm Estates, LLC And David Carl

2022 Ark. App. 465, 655 S.W.3d 732

• Court: Court of Appeals of Arkansas
• Decided: November 16, 2022
• Status: Published

Opinion

Cite as 2022 Ark. App. 465 ARKANSAS COURT OF APPEALS DIVISION II No. CV-21-14

MIZAN RAHMAN Opinion Delivered November 16, 2022 APPELLANT APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, V. SEVENTEENTH DIVISION [NO. 60CV-10-1700] BF ACQUISITIONS, LLC, ASSIGNEE OF REGIONS BANK; WOODLAND FARM ESTATES, LLC; AND DAVID HONORABLE MACKIE M. PIERCE, CARL JUDGE APPELLEES AFFIRMED

RAYMOND R. ABRAMSON, Judge

This case involves a 2006 real estate development that resulted in a foreclosure in

2010 and a deficiency judgment in 2011 against Mizan Rahman. That judgment was

ultimately purchased by, and assigned to, BF Acquisitions, LLC (BF). The Pulaski County

Circuit Court clerk, at BF’s request, issued a writ of execution against Rahman in February

2020. Rahman moved to quash the writ of execution, which the Pulaski County Circuit

Court denied on October 5, 2020. Rahman now appeals that order and argues that the

circuit court erred in ruling that the writ of execution on the judgment complied with

Arkansas Code Annotated section 16-66-106 (Repl. 2005) because it was not issued jointly

to all defendants; that the circuit court erred in finding that the writ of execution did not

violate Rahman’s due-process rights; and that the circuit court erred in ruling that BF was not required to be a licensed debt-collection agency pursuant to Arkansas Code Annotated

sections 17-24-101 et seq. (Repl. 2018 & Supp. 2021). We affirm.

Rahman, a licensed Arkansas professional engineer, was hired by David Carl, a real

estate developer, to perform civil-engineering services for a residential real estate project in

2006. Carl formed Woodland Farms Estates, LLC (Woodland Farms), for the project, and

Regions Bank was the lender. Carl, Woodland Farms, and Rahman signed a promissory note

in the principal amount of $351,000 on September 28, 2006. The note was secured by a

mortgage on the project real estate and filed of record on September 29, 2006.

When the loan went into default, Regions filed a foreclosure complaint on March

26, 2010, naming Rahman, Carl, and Woodland Farms as defendants.

On February 25, 2011, the circuit court entered a final judgment and decree of

foreclosure against Woodland Farms, Carl, and Rahman jointly and severally, in the amount

of $382,468.83 together with costs, attorney’s fees, and interest. A foreclosure sale occurred

on March 31, 2011; Regions was the successful bidder and purchased the property for

$174,818. The report of the foreclosure sale and the order confirming the sale were filed on

April 12, 2011. Rahman and Carl have not had contact since 2011.

In 2019, Regions assigned its deficiency judgment to Edgefield Holdings, LLC

(Edgefield). Edgefield then assigned its interest to BF, a limited liability company formed by

debt collector and lawyer Brian Ferguson. At the time of the sale, neither BF nor Edgefield

was a licensed debt-collection agency with the Arkansas Board of Debt Collection Agencies

nor had the Board determined that they needed to be licensed. After purchasing the

2 judgment, BF filed a notice of assignment, a motion to substitute the real party in interest,

and an application for charging order on October 21, 2019. The next day, the circuit court

clerk issued a writ of execution. Rahman was served with all of these documents; none of

Rahman’s property was ever sold or seized. Rahman subsequently filed in the circuit court a

motion to quash the writ of execution and stay collection actions.

An evidentiary hearing on various motions, including Rahman’s motion to quash the

writ of execution and to stay collection actions, was held on February 10, 2020.1 The circuit

court took the matter under consideration and ultimately issued a letter opinion on

September 2, 2020, denying Rahman’s motion; the letter ruling was confirmed by written

order on October 5, 2020.

In its order, the circuit court found that Arkansas Code Annotated section 16-66-106

did not apply to the facts of this case because to proceed with a writ of execution against Carl

would “be an exercise in futility.” The circuit court also found that the writ of execution was

constitutional and that Rahman received all notice to which he was entitled. The circuit

court found that BF, as a judgment purchaser, was not required to be a licensed debt-

collection agency. Ultimately, the circuit court denied Rahman’s motion to quash the writ

of execution. The circuit court also granted BF’s request for a charging order. The judgment

1 The circuit court found that the October 2019 writ contained an accounting error in that it did not give Rahman credit for a previously made $10,000 payment but agreed with BF that the proper remedy was to reform the writ. BF subsequently caused a second writ of execution to be issued on February 5, 2020. The court found this second writ contained a proper and accurate accounting of the balance due under the judgment and was the subject of the February 10, 2020 hearing. Rahman does not dispute this on appeal.

3 was revived and renewed against all judgment debtors for an additional ten-year period from

the date of the order. The court found that the balance of the judgment as of October 2,

2020, was $333,417.85. The circuit court granted Rahman’s motion to stay collection

proceedings on the judgment pending appeal and dismissed all other pending motions and

outstanding writs. This timely appeal followed.

“In civil bench trials, the standard of review on appeal is not whether there is

substantial evidence to support the findings of the court but whether the court’s findings

were clearly erroneous or clearly against the preponderance of the evidence.” Barnes v.

Wagoner, 2019 Ark. App. 174, at 3, 573 S.W.3d 594, 595 (internal citations omitted).

Further, “[a] finding is clearly erroneous when, although there is evidence to support it, the

reviewing court on the entire evidence is left with a firm conviction that a mistake has been

made. Where the issue is one of law, our review is de novo.” Id., 573 S.W.3d at 595–96.

Rahman’s first argument on appeal is that the circuit court erred by not following the

plain language of Arkansas Code Annotated section 16-66-106 that states in pertinent part:

“On a judgment or decree against several, the execution must be joint.” 2 Questions of

statutory interpretation are reviewed de novo. Buckley v. State, 349 Ark. 53, 76 S.W.3d 825

(2002).

In the case before us, the circuit court specifically found that “[t]he evidence is that

David Carl moved to Texas years ago and is likely dead. Whether he’s living in Texas or

2 We note that this section has been repealed by the General Assembly, effective July 28, 2021.

4 deceased, he’s beyond the execution power of this court.” Further, “[r]equiring Plaintiff to

execute on Carl undermines the entire concept of joint and several liability, and Plaintiff is

not obligated to do so.” This factual finding is not clearly erroneous because it was supported

by the testimony of Rahman himself, who testified that he did not know where Carl was and

that he believed he was likely dead. We cannot say that the circuit court committed an error

of law since it would have been impossible and futile for the execution to be joint when one

of the debtors is outside the execution power of the circuit court. It is well settled that “this

court does not engage in [statutory] interpretations that defy common sense and produce

absurd results.” Green v. Mills, 339 Ark. 200, 205, 4 S.W.3d 493, 496 (1999). Clearly,

requiring joint execution under the facts of this case would produce an absurd result.

Accordingly, we affirm the circuit court’s finding that Arkansas Code Annotated section 16-

66-106 does not apply to the facts of this case.

Rahman next argues that the circuit court erred in upholding the constitutionality of

the writ of execution. In support of his argument that notice is required to the judgment

debtor of the purchase and assignment of the judgment, he cites the due process clauses of

the Arkansas and United States Constitutions. Before the circuit court, Rahman challenged

the constitutionality of the writ of execution, arguing that it violated his due-process rights

because he did not receive notice of the assignment of the judgment. The circuit court found

that creditors are not required to notify a judgment debtor when a judgment is assigned and

that, consequently, Rahman received all notice to which he was entitled.

5 On appeal, Rahman reasserts his contention that his due-process rights were violated

and argues the lack of notice left him “confronted with an assignee of an assignee of the

judgment demanding full payment of the judgment, which it acquired for pennies on the

dollar, through writs of execution.” He contends that because BF was not the original

judgment holder, he was deprived “of a meaningful opportunity to protect his property

interests” and “should have been afforded the same opportunity to resolve” the judgment

interests with the original judgment holder.

In essence, Rahman acknowledges that he had the opportunity in the circuit court to

protect his property interests by virtue of his motion to quash the writ of execution, but he

argues that this opportunity was not meaningful and thus violated his due-process rights

because BF—not the original judgment holder—was seeking collection on the judgment.

However, Rahman does not present a compelling argument or applicable legal authority to

support his position. We have long held that we do not consider assertions of error that are

unsupported by convincing legal authority or argument unless it is apparent without further

research that the argument is well taken. See Pitchford v. City of Earl, 2019 Ark. App. 251, 576

S.W.3d 103; Hanks v. Sneed, 366 Ark. 371, 235 S.W.3d 883 (2006). Such is the case here.

Accordingly, we affirm the circuit court’s finding that Rahman received all the notice to

which he was entitled and that the writ of execution was not unconstitutional.

Rahman’s final appellate argument is that the circuit court erred in ruling that BF

was not required to be licensed pursuant to Arkansas Code Annotated sections 17-24-101 et

6 seq. Rahman argues that in order for BP to collect on an assigned judgment, BF had to be a

licensed debt-collection agency.

Arkansas Code Annotated section 17-24-101 provides:

As used in this chapter, unless the context otherwise requires, “collection agency” means any person, partnership, corporation, association, limited liability corporation, or firm which engages in the collection of delinquent accounts, bills, or other forms of indebtedness owed or due or asserted to be owed or due to another or any person, partnership, corporation, association, limited liability corporation, or firm using a fictitious name or any name other than its own in the collection of their own accounts receivable, or any person, partnership, corporation, association, limited liability corporation, or firm which solicits claims for collection or any person, partnership, corporation, association, limited liability corporation, or firm that purchases and attempts to collect delinquent accounts or bills.

Our court reviews a circuit court’s statutory interpretation de novo and is not bound

by the circuit court’s determination. Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179.

However, we will accept a circuit court’s interpretation of the law unless it is shown that the

court’s interpretation was in error. Cockrell v. Union Planters Bank, 359 Ark. 8, 194 S.W.3d

178 (2004). The basic rule of statutory construction is to give effect to the intent of the

legislature. Calaway v. Prac. Mgmt. Servs., Inc., 2010 Ark. 432. When the language of a statute

is plain and unambiguous, this court determines legislative intent from the ordinary meaning

of the language used. Id. In considering the meaning of a statute, we construe it just as it

reads, giving the words their ordinary and usually accepted meaning in common language.

Id. We construe the statute so that no word is left void, superfluous, or insignificant, and we

give meaning and effect to every word in the statute, if possible. Id.

7 If the language of a statute is clear and unambiguous and conveys a clear and definite

meaning, there is no need to look further and apply the rules of statutory construction. Brown

v. State, 375 Ark. 499, 292 S.W.3d 288 (2009). We will not read into a statute language that

was not included by the legislature. Ark. Dep’t of Corr. v. Shults, 2018 Ark. 94, 541 S.W.3d

410.

Rahman argues that the judgment upon which BF was attempting to collect was

“another form of indebtedness” because it was an assigned judgment, and BF was not the

original judgment holder. The statute contains four separate and distinct definitions of what

constitutes a collection agency under the statute. Rahman attempts to conflate two of the

definitions; namely, he argues that BF “engages in the collection of accounts, bills, or other

forms of indebtedness . . .” and “purchases and attempts to collect delinquent accounts or

bills.”

The statute, however, provides that in order for a limited liability corporation that

engages in the collection of an “other form of indebtedness” to be a collection agency and

be required to be licensed, it must be collecting that indebtedness “owed or due or asserted

to be owed or due to another.” That is, the statute requires a limited liability corporation

such as BF to be licensed only if it is collecting “an other form of indebtedness” on behalf of

someone else.

BF argues it was not attempting to collect “an other form of indebtedness” on behalf

of someone else. We agree. It purchased the judgment, and it therefore was attempting to

collect the indebtedness on behalf of itself. Because it was collecting on the judgment in its

8 own name, for itself, and not on behalf of another, we hold that the circuit court’s finding

that BF was not required to be a licensed debt collector was not in error. As such, we affirm.

Affirmed.

GLADWIN and MURPHY, JJ., agree.

Watts, Donovan, Tilley & Carson, P.A., by: David M. Donovan, for appellant.

Baxter Law Firm, PLLC, by: James R. Baxter, for separate appellee BF Acquisitions,

LLC.