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Federal National Mortgage Association v. Taylor

Supreme Court of Arkansas

February 26, 2015

FEDERAL NATIONAL MORTGAGE ASSOCIATION, APPELLANT
v.
JOLYNN TAYLOR, APPELLEE

APPEAL FROM THE CARROLL COUNTY CIRCUIT COURT, WESTERN DISTRICT. NO. CV2012-112WD. HONORABLE GERALD K. CROW, JUDGE.

Wilson & Associates, PLLC, by: H. Keith Morrison, for appellant.

Jon Comstock, Legal Aid of Arkansas, Inc., for appellee.

ROBIN F. WYNNE, Associate Justice. WOOD, J., dissents.

OPINION

Page 812

ROBIN F. WYNNE, Associate Justice

Federal National Mortgage Association appeals from an order of the Carroll County Circuit Court granting summary judgment in favor of appellee Jolynn Taylor and dismissing its petition to redeem property with prejudice. Appellant argues that the trial court erred by granting summary judgment in appellee's favor because the redemption period stated in the decree was binding and that appellee is estopped from arguing otherwise. As this case was certified to us by our court of appeals, our jurisdiction is pursuant to Arkansas Supreme Court Rule 1-2(d) (2014). We reverse and remand.

On September 14, 2011, a Judgment in Rem and Decree of Foreclosure was entered by the Carroll County Circuit Court that gave the Board of Commissioners, Holiday Island Suburban Improvement District Number 1 (HISID) a lien against certain pieces of property for unpaid assessments.

Page 813

Among those property owners was appellant, which owned Unit 1, Block 1, Lot 7. The properties were ordered to be sold at a Commissioner's sale if the indebtedness was not paid within seven days of the decree. The decree states that any sale of the properties listed would be subject to the rights of redemption provided for in Arkansas Code Annotated section 14-121-432. That section is part of the chapter of the Arkansas Code governing drainage improvement districts and states that the owner of land foreclosed under that chapter for delinquent taxes may file a petition within two years from the date of the foreclosure decree alleging that the taxes have been paid in order to redeem the property. Ark. Code Ann. § 14-121-432(a) (Repl. 1998).

The parties disagree regarding whether the redemption period applicable to drainage improvement districts or the period applicable to suburban improvement districts should apply. Pursuant to Arkansas Code Annotated section 14-92-232(c) (Repl. 1998), a suburban improvement district may enforce collection of delinquent assessments in the same manner provided for municipal property owners' improvement districts under Arkansas Code Annotated section 14-94-122. Section 14-94-122(j) (Repl. 1998) allows redemption of property within thirty days of the filing of the final decree of foreclosure.

HISID was granted the property formerly owned by appellant, subject to appellant's redemption rights, via a Commissioner's Deed filed on October 28, 2011. HISID then executed a Limited Warranty Deed granting the property to appellee. The deed, which was filed on November 30, 2011, recites that it is " subject to the rights of redemption of the former record owners of the property as set forth in Ark. Code Ann. Section 14-212-432." There is no such section of the Arkansas Code. The sale contract between appellee and HISID states that the property is subject to the rights of redemption of the former owners set forth in section 14-121-432 and that there is no warranty of title.

Appellant filed a Petition to Redeem Property on December 14, 2012. In the petition, appellant alleged that it had paid delinquent improvement district taxes due to HISID. Appellant further alleged that the petition was filed within the two-year redemption period provided in section 14-121-432. Attached to the petition was a receipt dated November 8, 2012, reflecting payment in the amount of $2,518.42. HISID responded to the petition and indicated that it had no objection to redemption by appellant. Appellee filed an answer and counterclaim in which she denied that the allowable redemption period was two years and, alternatively, sought judgment in the amount of $2,873.42, which is the amount she paid for the property, in the event appellant's petition were granted.[1] In response to appellant's counterclaim, HISID petitioned to interplead funds in the amount of $2,873.42 into the registry of the court. The petition was granted by the trial court on October 28, 2013.

Appellee filed a motion for summary judgment on September 30, 2013. In the motion, appellee argued that, although the decree applied the two-year redemption period for drainage improvement districts, the thirty-day period applicable to suburban improvement districts should apply. She further contended that, as a result, she was entitled to judgment as a matter

Page 814

of law based on appellant's failure to redeem the property within thirty days. Appellant filed an amended complaint on October 14, 2013, which added a contention that the foreclosure decree was " subject to the rights of redemption provided for in Ark. Code Ann. ยง 14-121-432." On October 23, 2013, appellant filed a response to appellee's motion for summary judgment wherein it argued that the decree provided for a two-year redemption period, it acted in reliance on the provision in the decree, there was no appeal from the decree, which is a valid final order, and, as a result, the language of the decree should control. Appellant subsequently filed a supplemental response to the motion for summary judgment in which it argued ...


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