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Inc. v. Thompson

Court of Appeals of Arkansas, Division I

October 1, 2014

SMG 1054, INC., APPELLANT
v.
JAMES E. THOMPSON, APPELLEE

APPEAL FROM THE RANDOLPH COUNTY CIRCUIT COURT. No. CV-2013-6. HONORABLE KEVIN KING, JUDGE.

Stanley & Woodard, PLC, by: Bill Stanley, for appellant.

Don R. Brown, for appellee.

LARRY D. VAUGHT, Judge. GRUBER and WHITEAKER, JJ., agree.

OPINION

Page 575

LARRY D. VAUGHT, Judge

Appellant SMG 1054, Inc. (SMG), appeals the order of foreclosure entered by the Randolph County Circuit Court in favor of appellee James E. Thompson. On appeal, SMG contends that the trial court abused its discretion in denying its motion for continuance and in refusing to admit certain documentation into evidence.[1] We reverse and remand, holding that the trial court abused its discretion in denying SMG's motion for continuance. SMG's second point on appeal is moot.

Thompson filed a complaint for foreclosure against SMG on January 10, 2013. The complaint alleged that on December 30, 2010, Thompson loaned $47,500 to Cedar Break LLC, and in return he received a promissory note signed by T.V. Wallis (agent of Cedar Break--now deceased), who promised to repay the loan on or before March 31, 2011. The complaint also alleged that Wallis, on behalf of Cedar Break, signed a mortgage in favor of Thompson, securing the indebtedness of Cedar Break by conveying to him a lien that was first in priority on property located on Highway 62 in Randolph County, Arkansas (the property). The mortgage was filed December 30, 2010. The foreclosure complaint further alleged that Cedar Break failed and refused to make payments due under the note; therefore, Thompson was exercising his right to declare the entire debt due and payable. The complaint continued, alleging that on May 3, 2011, Cedar Break conveyed to SMG, by warranty deed,[2] the property secured by the mortgage and that SMG had failed to make payments on the loan. Thompson prayed for judgment in rem against SMG in the amount of $47,500, plus interest, attorney's fees, and costs, and further prayed that should the judgment not be paid within a reasonable time the property be sold.

On February 14, 2013, Shirley Matthews, a nonlawyer, on behalf of SMG filed

Page 576

an " answer to summons," disputing all claims made in the foreclosure complaint. Matthews further responded by stating that Cedar Break, along with Wallis, unlawfully obtained the deed to the property and made the agreement with Thompson without her permission.

A foreclosure hearing was held on April 8, 2013. Matthews appeared on behalf of SMG. The Honorable Philip G. Smith presided over the hearing. Upon learning that the foreclosure was contested, the trial judge stated that he had a conflict with Thompson and refused to hear the case. The case was transferred to another judge.

Two weeks later, on April 22, 2013, a second foreclosure hearing was held. Again, Matthews appeared on behalf of SMG. At the onset of the hearing, she requested a continuance to retain an attorney. She stated that she initially believed that she was capable of representing SMG but ultimately concluded that there were matters involved that she did not know how to handle, e.g., SMG's potential claims against Cedar Break and Wallis. She advised the court that she had talked to three different attorneys, but they had conflicts. Counsel for Thompson objected to the motion for continuance, contending that Matthews had had sufficient time to hire an attorney. The trial court denied the motion for continuance, focusing on the fact that this was the second time that the foreclosure hearing had been set.

The hearing proceeded, and both Thompson and Matthews testified.[3] During Matthews's testimony, she again requested additional time to hire an attorney. Once all of the evidence had been submitted, Matthews requested additional time " to get this sorted out." The trial court denied these requests and found in favor of Thompson, ordering foreclosure if SMG failed to redeem the ...


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