BULLOCKS KENTUCKY FRIED CHICKEN, INC.; Karen King; and Arkansas Pulpwood Company, Inc., Appellants
CITY OF BRYANT, Arkansas, Municipal Property Owners Multipurpose Improvement District No. 84; Bank of the Ozarks; and TND Developers, LLC, Appellees
[Copyrighted Material Omitted]
FROM THE SALINE COUNTY CIRCUIT COURT [NO. 63CV-15-228],
HONORABLE GARY ARNOLD, JUDGE
House Downing & Lueken, P.A., Little Rock, by: Richard C.
Downing, Little Rock and Charley E. Swann, for appellants
Bullocks Kentucky Fried Chicken and Karen Bullock King.
Lindsey & Carr, P.A., Camden, by: Paul E. Lindsey, for
appellant Arkansas Pulpwood Company, Inc.
Eilbott - Attorney, PLC, by: Don A. Eilbott, Little Rock, for
appellee City of Bryant Municipal Property Owners
Multipurpose Improvement District No. 84.
Williams, Selig, Gates & Woodyard, P.L.L.C., Little Rock, by:
Lance R. Miller and Megan D. Hargraves, for appellee Bank of
A. WOMACK, Associate Justice
case comes to this court from a decision of the Saline County
Circuit Court entered on April 28, 2017, and supplemented on
May 23, 2017. The Appellants are Bullocks Kentucky Fried
Chicken, Inc. (KFC); Karen Bullock (King); and Arkansas
Pulpwood Company, Inc. (APW). Appellees are the City of
Bryant, Arkansas, Municipal Property Owners Multipurpose
Improvement District 84 (District 84); Bank of the Ozarks
(Ozarks); and TND Developers, LLC (TND). We affirm.
2007, TND began contracting to purchase lands comprising 195
acres in Saline County and closed on most of these
transactions in August 2007. Two of TNDs principals, Don
Spears and Aaron Jones, were also attorneys with the law firm
Spears & Jones, land developers, and managed a title company
that operated out of their law offices. Spears and Jones were
later appointed as initial commissioners of District 84. KFC
and King both sold land to TND and agreed to finance part of
the purchase prices. TND purchased land from KFC and Bullock
Investment for $2,680,000--$1,300,000 paid at closing to
Bullock Investment for a tract of land south of Hilltop Road
and a $1,380,000 promissory note was issued to KFC for a
tract north of Hilltop Road. The King sale was for $125,000
(paid by a $125,000 promissory note delivered at closing) for
her tract north of Hilltop Road. Under these two contracts,
the KFC and King promissory notes were secured by a first
mortgage in the real property they sold north of Hilltop
Road. To obtain the necessary funds to finance these
purchases, TND received a loan for $3,748,452 from Centennial
Bank and issued Centennial a promissory note secured by a
first mortgage on all 195 acres.
August 27, 2007, the Centennial loan and the TND real estate
purchases were closed by Spears & Jones. The firm prepared
the TND deeds, promissory notes, and mortgages. On August 30,
2007, Spears & Jones recorded the Centennial mortgage first
and then filed the KFC and King mortgages shortly thereafter.
Ultimately, APW paid off the Centennial mortgage and was
granted an assignment of all its interest. APW later
foreclosed its mortgage against lands owned by TND.
October 30, 2007, TND filed a petition with the City of
Bryant to form an improvement district for the purpose of
"constructing waterworks, sewers, recreational
facilities, and systems for gas pipelines, and ... grading,
draining, paving, curbing, and guttering streets and laying
sidewalks...." The petition was subsequently approved,
and District 84 was formed on November 26, 2007.
Commissioners for the improvement district were appointed and
they, in turn, appointed Alan King as assessor for the
district. Alan King appraised the benefits that would result
to tracts within the district and arrived at a total value of
improvements of $7,366,668. The assessment of benefits
identified real property by lot and block number and an
"Order of Assessment" was issued on January 4,
2008, setting the improvement-district taxes at 6 percent of
the assessed benefits for each lot or parcel. The lots and
parcels were eventually matched with the county assessor
records, and tract numbers were assigned
to District 84 lands. At issue in this appeal are tracts
840-11625-028 (tract 028), 840-11631-851 (tract 851), and
840-11811-000 (tract 000).
finance development and construction of the improvements,
District 84 entered into a bond indenture for the issuance of
$6,110,000 in improvement-district bonds. In conjunction with
the bond issuance, District 84 and Ozarks, as trustee,
entered into a "Pledge and Mortgage" agreement in
which District 84 pledged, mortgaged, assigned, transferred
and set over to Ozarks its interest in all special
improvement-district taxes then existing or thereinafter
levied, including the proceeds from the special taxes levied
by District 84.
2012, TND ceased payments of improvement-district taxes on
the lots it still owned. On March 30, 2015, District 84 filed
its complaint to foreclose its improvement-district tax liens
for delinquent taxes, naming TND, KFC, King, and APW as party
defendants. District 84 described the lands to be foreclosed
as all of District 84, less and except certain lots
previously sold by TND. On February 29, 2016, APW filed a
third-party complaint to bring in Ozarks, seeking an order
granting it the right to make a prepayment of the
improvement-district taxes under section 9.08 of the
"Trust Indenture" agreement. On March 14, 2016, APW
filed a ...