FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04CV-15-1301]
HONORABLE JOHN R. SCOTT, JUDGE
Sanford Law Firm, PLLC, by: Josh Sanford, for appellant.
& Associates, P.L.L.C., by: H. Keith Morrison, for
you may find yourself in a beautiful house
you may ask yourself, well How did I get
Vicki Kline owns a house located on Champions Boulevard in
Rogers, Arkansas, which is subject to a mortgage. Yet she
claims that, unbeknownst to her, her signature was forged on
numerous mortgage documents for the property.
litigation, Kline sought a declaration that the mortgage on
the property held by appellee PHH Mortgage Corporation (PHH)
is void. Kline pursued this relief on the basis of alleged
forgeries of her signature on certain mortgage documents and
pursuant to Arkansas Code Annotated section 18-12-403 (Repl.
2015) (sometimes referred to as Section 403).
did not prevail before the circuit court. There, the court
declined to grant her relief based on Section 403 and ordered
a decree of foreclosure in favor of PHH. Kline appeals to our
court. After due consideration, we affirm.
April 2000, Kline and her former husband, John Marquez,
purchased property located on Champions Boulevard in Rogers,
Arkansas, for $65, 000. In 2001, they executed a $765, 000
mortgage in favor of Arvest Bank to build a house on the
property. In the years that followed, several additional
loans would be taken out on the property in the names of both
Kline and Marquez.
2002, a $345, 000 second mortgage in favor of Arvest Bank was
executed in the names of Kline and Marquez. In 2003, a
mortgage in the amount of $1.2 million was executed in favor
of Regions Bank with Kline's and Marquez's names
appearing on the note. Shortly after the mortgage with
Regions Bank was entered into, a release of the Arvest
mortgages was recorded. In 2004, a $1.36 million mortgage in
favor of Merrill Lynch was executed in the names of Kline and
Marquez. A settlement statement reflects that the Merrill
Lynch mortgage was used to pay off the Regions mortgage. The
Merrill Lynch mortgage was recorded in November 2004.
Thereafter, the Regions mortgage was released, which was
recorded in December 2004. Subsequently, Merrill Lynch
assigned its mortgage to PHH, a subsidiary and loan-servicing
arm of Merrill Lynch.
2010, Kline and Marquez filed for Chapter 7 bankruptcy. Their
personal liability on the Merrill Lynch loan was discharged
in the Chapter 7 bankruptcy, and the bankruptcy terminated in
October 2010. Despite the discharge, Kline and Marquez
continued to voluntarily pay the Merrill Lynch loan to avoid
foreclosure proceedings and remain on the property.
2011, Kline and Marquez filed for Chapter 13 bankruptcy. In
the Chapter 13 schedules, Kline acknowledged the existence of
the Merrill Lynch loan. Additionally, Kline testified under
oath about the Merrill Lynch loan at a Chapter 13 meeting of
creditors in August 2011. She stated that she was personally
familiar with the information contained in the bankruptcy
documents; to the best of her knowledge, the information in
those documents was true and correct; she read through and
signed the documents; they were current on the Merrill Lynch
loan, the loan payment was low because it was an
interest-only loan, and they had contacted Merrill Lynch
seeking a modification of the loan. The Chapter 13 bankruptcy
was concluded in March 2015.
November 2014, Kline filed for divorce from Marquez. Kline
claims that in February 2015 during the pendency of the
divorce, she first learned that her signature had been forged
on numerous mortgage documents—including the Merrill
Lynch loan. Despite her alleged discovery, the parties
successfully mediated the division of their property in the
divorce action, and their mediated agreement was incorporated
into their divorce decree, which was entered in April 2015.
With respect to the property on Champions Boulevard, the
parties agreed that it would be the sole and separate
property of Kline and that she would be solely responsible
for any debt or liability associated with the property.
September 2015, five months after her divorce was finalized,
Kline filed this declaratory-judgment action, asserting that
the PHH mortgage is void because her signature was forged on
the mortgage documents. She relies on Arkansas Code ...