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Heinrich v. Anders

Court of Appeals of Arkansas, Division IV

August 30, 2017

LARRY DEWAYNE HEINRICH AND SETH HEINRICH APPELLANTS
v.
ALLISON ANDERS APPELLEE

         APPEAL FROM THE JEFFERSON COUNTY CIRCUIT COURT [NO. 35CV-13-253] HONORABLE ROBERT H. WYATT, JR., JUDGE

          The Brad Hendricks Law Firm, by: Lloyd W. Kitchens, for appellants.

          Maxie G. Kizer, P.A., by: Maxie G. Kizer, for appellee.

          LARRYD. VAUGHT, JUDGE.

         Appellants Larry Heinrich and Seth Heinrich appeal from the Jefferson County Circuit Court's findings of fact and conclusions of law entered on May 24, 2016, in which the court found that (1) David Myhand breached the contract for the sale of real property located at 6712 Sheridan Road, Pine Bluff, Arkansas ("the property"), that he entered into with Larry and appellee Allison Anders (formerly Heinrich); (2) Larry fraudulently transferred the property to Seth, the son of Larry and Allison; (3) Allison's March 5, 2001 power of attorney in favor of Larry was not used in the conveyance of the property; and (4) the unrecorded and unsigned assignment of the real-estate contract did not meet the requirements of the statute of frauds. On appeal, Larry and Seth[1] argue that (1) the circuit lacked subject-matter jurisdiction based on the doctrine of res judicata and (2) the circuit court clearly erred in concluding that the power of attorney was not used in the conveyance of the property from David to Seth. We affirm.

         Allison and Larry were married when they entered into the contract for the sale of the property with David in May 2009. Under the terms of the contract, Allison and Larry made a cash payment of $1000 to David when the contract was executed and thereafter paid David $1050.42 in eleven monthly installments. The facts are undisputed that Allison and Larry made all payments in a timely fashion. Pursuant to the contract, David was required to execute and deliver to Allison and Larry a warranty deed conveying the property free and clear of all liens and encumbrances. However, on July 8, 2010, David signed a warranty deed granting title to the property to Seth.

         On May 16, 2013, Allison filed this action against Larry, Seth, and David alleging that David was in breach of the contract for the sale of real property that he had entered into with Larry and Allison. Her complaint also alleged that Larry fraudulently conveyed the property in question to Seth.

         At trial, Jimmy Dill testified that he was serving as David's attorney in 2009 and that he prepared the contract for the sale of the property from David to Allison and Larry. Jimmy stated that David called to advise that the contract had been paid in full and that it was time for him (David) to deliver the deed. According to Jimmy, David said that Allison and Larry did not want the deed to be in their names; rather, they wanted the deed to be in Seth's name. Jimmy did not talk with Seth or Allison about this, but he did recall talking to Larry. Jimmy told Larry that David was contractually obligated to grant the property to Allison and Larry but that he (Jimmy) could draft an assignment of the contract in order to permit David to grant the property to Seth.

         Jimmy prepared an assignment wherein Allison and Larry authorized David to grant the property to Seth. It had signature lines for David, Allison, Larry, and Seth. Jimmy also prepared the warranty deed granting the property to Seth. Jimmy testified that he told David not to sign the deed until the assignment had been executed by all parties and that David signed the assignment in his (Jimmy's) presence. Jimmy could not recall whether Allison, Larry, or Seth signed the assignment in his presence or whether Allison signed it at all. Jimmy further stated that he did not have a signed copy of the assignment, yet David signed the deed, which was introduced at trial. Jimmy produced only an unsigned, unacknowledged, and unrecorded copy of the assignment, which was also introduced at trial.

         According to Jimmy, at some point Larry came to his office with a durable power of attorney that Allison had signed in favor of Larry in March 2001. Jimmy agreed that under the power of attorney, Larry had the authority to sign an assignment on behalf of Allison in order to transfer property. However, Jimmy said that he had no knowledge that Allison and Larry were using the power of attorney as part of the real-estate transaction with David and that he (Jimmy) would have prepared the assignment differently had he known that Larry was signing on behalf of Allison. Jimmy said that he would have stated in the assignment that Larry was appearing personally and as attorney-in-fact for Allison and that the signature lines would have had the same designations.

         David testified that after Allison and Larry had paid the full amount of the contract, Larry called David and requested that David convey the property to Seth. David told Larry to contact Jimmy. David acknowledged that his signature was on the warranty deed. He did not recall signing an assignment.

         Allison testified that she and Larry separated in February 2010, after they had entered into the contract to purchase the property in question, but before they had paid the contract in full. She testified that the divorce was a "real rough situation."[2] Allison said that in August 2010, she and Larry retained an attorney to file for bankruptcy, and during that process, she learned that the property was not in her and Larry's names. She learned that David had transferred the property to Seth. Allison testified that when she discovered this, she "fell to the ground. I freaked out. I had no idea that it wasn't in my name or Larry's name." She said that she, Larry, and Seth never had any discussions about putting the property in Seth's name to help him with college expenses. She said that if Seth testified that such conversations took place, he was lying because he was afraid that Larry would stop giving him money.

         Allison further stated that she had never seen the unsigned, unrecorded assignment until trial, she had never been asked to sign it, and she did not sign it. She agreed that she had signed the power of attorney in 2001; however, she said that she and Larry did not discuss using the power of attorney in any way in connection with the purchase of the property and that she did not authorize Larry to use it to convey title to the property to their son.

         Seth[3] testified that he was not a party to the contract and that he did not pay for the property. He stated that he remembered signing the assignment, although he could not remember where he signed it, when he signed it, or who was present. He said that he had not lived on the property since it was deeded to him; Larry had been living there with his girlfriend. Seth also ...


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