Archive for the ‘Property Law’ Category

In recent years, Warren Jeffs, incarcerated leader of the Fundamentalist Church of Jesus Christ of Latter-Day Saints, has been charged with bigamy, sexual assault, and rape in multiple states. The $110 million trust for the polygamist sect owns more than 700 houses, farms, dairies, and other businesses on land in two communities along the Arizona-Utah border. Several entities have sued the trust as an accomplice to Jeffs, and Utah intervened in the trust amid claims of mismanagement stemming from the alleged crimes of Jeffs.

A federal trial court entered an order returning control of the trust, including financial and property records and all of the trust’s assets, to the Fundamentalist Church of Jesus Christ of Latter-Day Saints. Then a state trial court filed a motion with the Tenth Circuit Court of Appeals, requesting a stay of the first order. The Tenth Circuit agreed and indefinitely stayed that order, halting the return of control of a $110 million trust to the polygamist sect.

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Butcher v. Beatty, No. 09-1169.

Thelma and John Healy were married in 1979. In 2006, a trial court found that Thelma was incapacitated and appointed Troy Butcher as guardian of Thelma’s person and Butcher and John as co-guardians of her estate. Butcher later filed a motion to sell the couple’s rental property held as tenants by the entirety, and the trial court that the real property be sold and the proceeds divided between Thelma and John. The rental property could not be sold for the appraised value, so the trial court ordered Thelma to pay John $40,000 for sole ownership of the property. A deed to that effect was drafted and signed by Butcher as Thelma’s guardian. Before John could sign the deed, he passed away.

Believing that John’s death vested sole title to the rental property in Thelma, Butcher refused to pay the $40,000 to Diane Beatty, executor of John’s estate. Beatty sued Butcher to compel specific performance of the agreement, and the trial court agreed, ordering Butcher to pay John’s estate $40,000. Butcher appealed to the Arkansas Court of Appeals, who affirmed the trial court’s decision. Butcher then requested review of the decision by the Arkansas Supreme Court, and the court accepted the case for review.

The court noted that, at the time of John’s death, Thelma and John held the rental property as tenants by the entirety. As such neither spouse owned an undivided one-half interest in the property, and both owned the entire estate with the right of survivorship. This right of survivorship to the whole could be dissolved only by (1) a divorce proceeding, (2) death, (3) voluntary action of both parties. Because John had not executed the deed prior to his death, it was not fully executed and delivered; therefore, the rental property was held by Thelma and John as husband and wife, and she became sole owner upon his death.

The court further explained that specific performance is not available if performance is impossible. Upon John’s death, his estate no longer had any interest in the rental property from which to compel Butcher to perform under the previous agreement.

The court then remanded the case for further proceedings.

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Pine Meadow Autoflex, LLC v. Taylor, No. CA08-299.

Pine Meadow sold and financed a used vehicle to David Cates, who became delinquent on his payments and then filed for bankruptcy.  While seeking bankruptcy, Cates applied for a duplicate title to the vehicle and supplied the State with a fraudulently executed release of lien by Pine Meadow.  The State issued Cates another title to the vehicle, which he then sold to Walt Asher, who sold it to Recovery Files.  Susan Taylor purchased the vehicle from Recovery Files.  Approximately two months later, Pine Meadow repossessed the vehicle from Taylor.  Taylor brought suit to recover the vehicle, arguing that she was a good-faith purchaser for value and, therefore, had good title to the vehicle.  The trial court agreed.

On appeal, Pine Meadow argued that, because he fraudulently obtained clear title to the vehicle, Cates could pass only void title to the vehicle.  The Arkansas Court of Appeals disagreed, noting that title was voidable instead of void.  The court explained that the assurance of good title to good-faith purchasers of second-hand goods increases the value of the goods and the volume of such sales.

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Osborn v. Bryant, No. CA 08-589

Lacy Bryant died in 1994, leaving a will that allowed a life estate for his wife in a twenty-acre tract of land, with an option to purchase to Brenda Bryant Osborn.  Ms. Osborn filed an affidavit for collection of small estate and attached Mr. Bryant’s will.  She later executed an “Administrator’s Deed,” which conveyed the property as outlined in the will. 

After Mr. Bryant’s widow died, other members of the family filed a declaratory judgment action, seeking to have Mr. Bryant’s will and the “Administrator’s Deed” declared invalid.  The other family members argued that, because the will itself was never probated, the will and the deed were nullities under Ark. Code Ann. 28-40-104.  The trial court agreed.

On appeal, the Arkansas Court of Appeals explained that small-estate proceedings were exempted under Ark. Code Ann. 28-40-104.  By specifically exempting such estate proceedings, the Arkansas legislature intended that such a will could be offered as evidence of a devise of real property.  Accordingly, the court reversed the trial court’s ruling.

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