### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT J anu ary 20, 20 06 THO MAS K. KAH N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 05- 1120 7

____ ____ ____ ____ ____ ____ D. C. Docket N o. 04-00196 CV -BH UNION PLANTE RS BANK, N.A., Plaintiff-Appellee, ve rs us THE PEOPLE OF THE STAT E OF NEW YORK, D ef

en dant- Appe llant.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court f o r t h e S o u t h e rn D i s t r i c to f

A l ab a ma

____ ____ ____ ____ ____ ____ _ (J an ua ry 20, 200 6) Be fo re A N D E RS O N , BL A CK

a nd C A RN E S, Ci rc uit

Jud ge s. PE R CU RIA M: I n t h i s l i e n p r i o r i t y c a s e , w e c e rt i f y t h r e e qu e s t i o n s t o t h e A l ab a maS up r e me Co urt be ca

use the re a re no c as es int er pr et ing the A la

ba m a sta tut es gov er

nin g property bail bond s and when they becom e liens, and because we do no t find clear2

gui danc e in the statut es the m se lve s. “ Whe re the re is doub t i n th e int er pr et at ionof state law , af

ed er al c ourt m ay

c er tif y the que sti on t o th e sta te sup re m e co urt t o av oid m ak ing unn ec es sary

E ri e gue sse s and t o of

fe r the state c ourt the opp ortun ity to i nte rp re t or

c hange e xis tin g law . ” T obi n v. Mi ch . Mu t. I ns. Co . , 398 F . 3d 1 267, 1274 (11th Cir. 2005).

I. FA CT S A

ND PRO CE DU RAL HI ST ORY InJul y 199 9, S er ag K

hodi r iss ue d am ortga ge to U nio n P lante rs Bank i n th e am ount of $48 0, 000, c ove ri ng a

pr ope rty in Ba ldw in C ounty , A la

ba m a. A lm ost tw o y ears la te r, K

hodi r an d hi s bu sin es s partne r, S al em H ady , w er e ind ic te d in N ewY ork. T he N ewY ork tr ia l c ourt se t an a ppe ar an ce bon d a t $3 00, 000 in f av or of N ewY ork a s se curi ty

f or Mr . H ady ’ s a

ppe ar an ce . K

hodi r ex ec ute d apr ope rty bail bon d for that am ount in favor of N ewYork, and on Dece m ber 7, 2001 , N ew Y ork pl ac ed

of r ec or d inthe Ba ldw in C ounty P ro ba te O ff

ic e a bond

e xe cu te d by Khodir in order to cre ate a lien on the property to secure the bond. K

hodi r then de ci de d t o re fin an ce h is 19 99 m or tg ag e, whi ch he ha d p ai d d own to $1 54 ,00 0. T he ne wm ortga ge w as f

or $35 0, 000, a nd r ep re se nte d ar ef inanc ing of

the $154 , 000 plu s $1 96, 000. I t w as r ec or de d onF eb ru ar y 12, 200 2, a nd the f

ir st m ortga ge w as r ec or de d a s c an ce lle d onMarc h 19 , 200 2. D ur ing the ti tle se ar ch ,On F e br ua ry 26 , 2 00 2, a

mor tg a g e in t he amou nt o f $ 95 ,0 00 wa s r e c or de d f ro m K ho dir 1 to Be g g s & L ane, L L P. However , it has been subor dinated to New York’s c laim and so was not at issue below or

on appea l. Also not at issue in thi s case is the $154,000 amount of Union Planters’ orig inal mortg ag e, which w as re financ ed in conne ction with its subs equent mortg ag e. Th e pa rt ie s a g re e that U nio n Pl ante rs ’ $ 15 4, 00 0 amou nt h a s th e fi rs t pr ior ity ; th e y c on te st o nly the balanc e of Union Planters’ mortg ag e which w as adva nced a fter the rec ordingof Ne w York’ s bail bond. 3 the ti tle c om

pany f ound the K hodi r af fi da vit r eg ar din g th e ba il bond

a nd d ee m ed

it un im po rta nt . On June 20, 2003, a j udge of the NewYork S tate Suprem e Court executed an ord er fo rfei ti ng ba il , whi ch was fi le d wi th th e Ci ty Clerkof Ne w YorkCo un ty. O n S ep te m

be r 9, 200 3, U nio n P lante rs ini tiate d af or ec los ur e sa le a nd s old

the property for $470,000. T he am ount due on the m ortgage wa s $358 ,709.25. Ne w Y ork do m es tic at ed

the bon d f

or fe iture a s aj udgm en t i n A la ba m a on M ay

10, 2004 . Union Planters brought su it to determ ine priority am ong th e three lienhol ders. A fter N ewYork r em oved the action to feder al court, the parties

1
m ove d f or sum m ar y j udgm en t. T he dis tr ic t c ourt gr an te d U nio n P lante rs ’ m oti on, re ly ing he av ily

on an op ini on i ssu ed

by the A la ba m a A tto rn ey

G en er al . T his opi nio n a ddr es se d th e iss ue of w he the r or

not apr ope rty

ba il bond

is inv al ida te d if the pr ope rty

is sol d. T he opi nio n he ld tha t i t w as not . H ow ev er , the opi nio n a lso indicated that the bail bo nd statut es apparently intended to cre ate a lien only after4

the f ina l f or fe iture is en te re d. T he dis tr ic t c ourt he ld tha t U nio n P lante rs ’
m ortga ge w as f

ir st i n li ne , c onstru ing the statut es a s pe rm itt ing the f ili ng and cr eatio n of

ali enonl y

a ft er the f or fe iture , a nd tha t t ook pla ce a ft er the se co nd
m ortga ge w as e nte re d. II. DISCUS SION A . D oe s aba il bond

be co m e a lie n w he n f

ile d c ont em

por an eo usl y

or onl y a ft er it ha s be enf

or fe ite d? T his que sti on t

ur ns o n th e co nstru ct ionof

A la ba m a sta tut es . A la

ba m a Co de § 15 -1 3- 152, w hic h e sta

bli she s th e pr oc ed

ur e fo r cr eatin g th e bond , r ea ds, in pe rt ine nt p ar

t: T he a ff idavit sha ll be sig ne d by

the ow ne rs of

the pr ope rt ie s and the af fi da vit sha ll be the sa m e as ali ena ga ins t the pr ope rty , a nd u pon the rendition o f a f

inal forfeiture, the state or its subdi visio ns m ay pr oc ee d onthe doc um en t f or sa le of the pr ope rty

to sa tis fy the j udgm en t. Ala. Code § 15-13-15 2. T his langu age w ould suggest that the affidavit cr eated an en fo rc ea ble li ena nd that the inquir y w oul d e nd the re . H ow ev er , § 15 -1 3- 156 pr ovi de s apr oc ed

ur e fo r fi lin g th e af

fi da vit a nd m uddi es the w at er . T his statut e re ad s: (a ) Cl er

ks o f al l c ourts o f the state a nd i ts s ubdi vis ion s m ay f ile the ' lie n and a ff

idavit ' f orm in the pr oba te c ourt of

the c ounty

w he re the pr ope rty is loc at ed

im m ed ia te ly a ft er af ina l f or fe iture is or de re d by5

an y c ourt of the S ta te of

A la ba m a or it s su bdi vis ion s. T he pr oba te court shall file and record it in its real pr operty rec ordings and there sha ll be no c harg e to the c ity or state a sse sse d or

c oll ec te d. (b ) Ina ll fi na l f

or fe iture c as es of

pr ope rty ba il, w he re the j udgm en t has been satisfied by

the sureties or the court has set aside the final fo rf ei tur e an d th e sur et ie s li ab ili ty ha s be endis ch ar ge d by

law , the cl er k of the c ourt sh al l se e tha t any ' lie n and a ff

idavit ' f orm pr ev iou sly fi le d is so c an ce lle d. T he c le rk m ay c an ce l i t by

iss uin g ac an ce llatio n of the lien. T he cancellation shall be in writing and filed and recorded by the j udge of

pr oba te of

the c ounty

w he re the pr ope rty

is loc at ed . T he pr oba te c ourt sh al l no t c harg e a fi lin g or r ec or din g f

ee to the c ity or state. Ala. Code § 15-13-15 6. I t is unclear w hether subsection (a) shoul d be construed to p er m it fi lin g th e af

fi da vit onl y a ft er f ina l f or fe iture , a s U nio n P lante rs a rg ue s, or m erely m eans that if it is filed then there shall be no filing fee, as N ewYork ar gue s. U nio n P lante rs r el ie s up on the A tto rn ey G en er al O pin ion . T ha t O pin ion ind ic at ed that § 15- 13- 156 w as c ontro lli ng, e ve n th oughit did c ite the langua ge in §1 5- 13 -1 52 , whi ch st at es th e aff id av it is th e sa m e as a li en ag ai ns t t he pro pe rty. A la . O p. A tt’ y

G en . N o. 200 0- 140, 200 0 W L 333 1064 3 ( 2000 ). T he O pin ion state d: “ T he re is no p re sc ri be d pr oc ed ur e fo r fi lin g ali enor

oth er w ise se curi ng the pr ope rty f ro m sub se que nt e nc um

br an ce s or

sa le by the ow ne rs /sure tie s a ft er the property bond is approved and th e defe ndant released and prior to a final for feiture be ing e nte re d. ” I d. a t *1 . T he A tto rn ey G en er al a lso sa id: “ A lth oughthe6

L eg isl at ur e ap pare ntl y

did not int en d f or ali enon the pr ope rty

to be c re at ed

unt il af te r the e ntr

y of f ina l f or fe iture , f

ili ng the a ff

idavit in the of fi ce of the pr oba te j udge pr ior

to thi s ti m e to p ro vid e not ic e tha t the ow ne r( s) ha ve ple dge d th e pr ope rty a s se curi ty

f or ba il is n ot p ro hib ite d; i t j ust is not af ili ng w hic h is authorized without prepaym ent of costs.” I d. at *2. T he Opinion also no ted that the re w as no “ ex pr es s st at uto ry gui danc e on the pr oc ed

ur e to b e fo llo w ed

in ac ce pti ng a

ple dge of

r ea l pr ope rty

f or ba il or e nsur ing that the state ’ s in te re st i n the pledged prop erty

is adequately

protected” before the defendant’ s appearance at tr ia l or e ntr y of f ina l f or fe iture . I d. O n th e oth er

hand, N ewY ork no te s th at the A tto rn ey

G en er al O pin ionis onl y pe rs ua siv e au tho ri ty . A la . Co de 197 5, § 36 -1 5- 19; S ta te , D ep ’ t of Re ve nue v. A rn old , – S o. 2d – , 200 5 W L 628 883 at *2 ( A la . Mar. 18, 200 5) ( sta tin g op ini ons ar e not c ontro lli ng, but

m er el y a dvi sor y , a nd s er ve to of fe r pr ote ct ionf

ro m lia bil ity onl y to “ suc h of

fi ce r” to w hom

that op ini on i s di re ct ed ). N ewY ork a lso argues that Ala. Code § 15-13-15 6(a) m erely say s that the affidavit “ m ay ” be filed im m ediately after forfe iture; it does no t say that it m ay

be filed only

then. Rather, if filed af ter for feiture ( or filed again then), § 15-13-15 6(a) provides that there shou ld be no recording fee (or additio nal fee) . Ne w Y ork sugg ests that its lien
w as pr ope rl y

f ile d onD ec em

be r 7, 200 1, upo n paym en t of the usu al f

ili ng f ee s and7

pur suant t o A la

ba m a’ s ge ne ra l r ec or din g st at ute . S ee A la . Co de § 35 -4 -5 8. Be ca use the statut es c re at e ana m big uity about w he n th e pr ope rty

ba il bond be co m es ali en , a nd b ec au se the re a re no A la ba m a ca se s th at

ind ic at e w ha t the p r o p e r i n t e r p r e t a t i o n s h o u l db e , w e r e s p e c t f u l l y c e rt i f y t o t h e A l ab a maS up r e me Co urt the f

oll ow ing que sti ons: 1. DOES THE PROPER CONSTRUCTION OF ALA. CODE § 15 -1 3- 15 2 AND § 1 5- 13 -1 56 PERMI T THE HOLDER OF TH E BAIL BOND TO FILE THE AFFIDAVIT BEFORE FORF EITURE OF THE BOND; AND IF SO, DOES TH AT FIL IN G C RE AT E A N ENF ORC EA BL E L IEN A T T HA T T IME ? IF YE S, DOES THAT FILING MEAN THAT THE FILER W OULD TA KE PRECEDENCE IN A FORECLOSURE OVER THE L IENS OF SUBSEQUENT FIL ER S SU CH AS UN IO N P LA NT ER S?

B. Did the bail bond affidavit create an equitable m ortgage? Ne w Y ork argues in the alternative that, a ssum ing arguendo that its lien m ay lack som e form al requisites, the af fidavit would create an equitable m ortgage. Ne w Y ork cites as authority Murphy v. Carrigan, 116 So.2d 56 8, 571-72 (Ala. 1959 ), which sets out the requirem ents for an equitable m ortgage, and no tes that

“ [a]lt ho ug h a co nv ey an ce . . . m ay lac k t he for m al req ui si te s o f a m or tg ag e . . .8

equity w ill loo k to the sub stanc e. ” N ewY ork a lso c ite s B ar ne tt v. W ad de ll, 27 So . 2d 1 ( A la . 194 6) , a nd M oor er v. T en san L an d & T im

be r Co . , 20 S o. 2d 1 05 (A la . 194 4) . U nio n P lante rs a rg ue s th at N ewY ork w ai ve d th is arg um en t by failing to raise it properly below. H owever , our r eview of the rec ord reveals that th e arg um en t was fai rly pres en te d t o t he di st ric t co ur t an d t he is su e was joi ne d. T he re fo re , the iss ue w as pr es er ve d, e ve n th oughthe dis tr ic t c ourt di d no t a ddr es s i ts p e c i f i c a l l y. Alab am a la w req ui res th ata li en be ba se d o n d eb t t ha t i s n ot co nt in ge nt . See, e.g ., Firs t St at e Ban k v . Sou th Trus t Ba nk , 51 9 S o.2 d 4 96 , 49 7 (Al a. 19 87 ).

“ Inor de r fo r ane qui ta

ble m ortga ge to ex ist , it

is es se nti al that the m ortga gor ha ve a m ortgageable interest in the property sough t to be charged as security ; that there be c le ar pr oof of the sum w hic h it w as to se cure ; tha t the re be ade fi nit e de bt, obl iga tio n or

li ab ili ty to be se cure d, due f

ro m the m ortga gor

to the m ortga ge e; a nd the int en t of

the part ie s to c re at e a m ortga ge , li enor c harg e on p ro pe rty sufficiently

described or identified to secure an obligation .” Murphy , 116 So.2d at 571. N ewY ork arg ue s th at e ac h r equir em en t i s satis fi ed : tha t K hodi r cl earl y

ha d a
m ortgageable interest in the property ; that the $30 0,000 sum secured w as clear ; tha t the obl iga tio n to pr oduc e the a cc use d inc ourt w as de fi nit e an d a bsol ute ( an d no m ore contingent o r inchoate than any other m ortgage); that the intent to create a9

li en was c le ar; an d t ha t t he pro pe rty was ad eq ua te ly des cri be d. Be ca use the re a re no A la

ba m a ca se s a ddr es sin g th is i ssu e in the c ont ex t of ba il bond s, w e ce rt if

y the f oll ow ing que sti on: 2. I F N EW

YO RK IS P RE CL UD ED FRO M T AK IN G P RE CE DENCE PU RSU AN T T O T HE RE SO LU TI ONOF TH E P RE CE DI NGQU ES TI ON , D ID THE AFFIDAVIT NEV ERTHELESS CREATE AN EQUITABLE MORTGAGE; AND IF SO, W OULD NE W YORK TAKE PRECEDENCE OVER THE LIENS OF SU BSE QU EN T F IL ER S SU CH AS UN IO N P LA NT ER S?

C. D id U nio n P lante rs ' a ct ua l no tic e of

the ba il bond

m ean th at

it s m ortga ge is s e c o n d a ry? Finally , N ewYork argues that because Union Planters had ac tual know le dge of

the ba il bond , the ba il bond take s pr ec ed en ce . N ewY ork po int s to the f ac t tha t i t i s un dis put ed

that U nio n P lante rs ’ a ge nt, the ti tle se ar ch er , a ct ua lly co pie d th e af

fi da vit dur ing the ti tle se ar ch . N ewY ork arg ue s th at asub se que nt purchaser or m ortgagee w ho has actual noti ce of a previouslyexisting lien takes subj ec t t o th e pr ior

li en . S ee , e . g. , O ly

m pia P ro duc e v. A sso ci at es F in. S er v. , 584 So . 2d 4 77, 479 ( A la . 199 1) ( “ A pe rs on t ak ing ar ea l pr ope rty int er es t c anha ve either ac tual or constructive kn owledge of a prior interest in the property , or can10

ha ve both ki nds of

kno w le dge . E ith er

giv es the hol de r of

the pr ior int er es t pr ior ity over the person taking the subsequ ent interest.”) . Union Planters re plies that even thou gh it di d have notice of the affidavit, the affidavit did not create an en fo rc ea ble li en . T he re fo re , U nio n P lante rs c ont inu es , a ct ua l no tic e doe s no t cr eate ac hange in pr ior iti es . T hus w e ce rt if

y thi s f ina l qu es tio n: 3. IF NEW YO RK DOES NOT T AKE PRECEDENCE PURSUANT TO THE RE SO LU TI ONOF EI TH ER OF TH E T W O P RE CE DI NGQU ES TI ON S, CA N I T NE VE RT HE LE SS T AKE P RE CE DENCE BE CAU SE UN IO N P LA NT ER S’ AGENT, THE TITL E SEARCHER, HAD ACTUAL KNOW LEDGE OF THE AFFIDAVIT? O ur state m en t of

the que sti ons to b e ce rt if ie d is not m eant t o li m it the sc ope o f i n qu i ry b y t h e A l ab a maS up r e me C o u rt . “T h i s l a t i tu d e e x t e n d s t o t h e S up r e me Court's restate m ent of the issue or issues and the m anner in which the answ ers ar e given.” W ashburn v. Rabun, 755 F.2d 1404, 1406 (11th Cir. 1985). As m entioned above, an answ er to one of the questions m ay render r esolutio n of the other ones unnecessary . I n order to assist the court's consid eration of the case, the entire
r e c o r d , a l o n g w i t h t h e b r i e f s o f t h e p a rt i e s , s h a l l b e t r a n s mi t t e dt o t h e A l ab a maUn ion Plante rs a lso argue s in

its br ie f o n a

pp e a l th at N e w Y or

k h a s n ot p ro pe rl y 2 domesticated a

nd rec orded its judg ment of for feiture , and thus that NewYork c annot y et enf orce its judgment. Howe ver, if the Alabama Supreme Court answe rs one of the three cer

tified questions in favor of

New Y ork, it is our understandingthat that would constitute a holding that New Y ork’s pre viously

filed lien has pr iority

over the Fe bruar

y 12, 2002, incre ase in Union Plante rs ’ m or

tg a g e , a nd thu s w ou ld a

ns we r t he pr ior ity

of lie ns qu e sti on s p os e d in

thi s decla ratory judgme nt action. I t is our understandingthat New Y ork could then pr ocee d in the appropr iate manne r to enfor ce its lien. On the othe r hand, if the Alabama Supreme Court dec ides a ll thr e e c e rt if

ie d q ue sti on s in

fa vo r o f Unio n Pl ante rs , th e n it is o ur un de rs tand ingthat it

wi ll have be e n d e c ide d th at U nio n Pl ante rs ha s p ri or ity , a nd thu s a ns we r t he qu e sti on s p os e d in

thi s a pp e a l. 11 Su pr em e Co urt. 2 QUESTIONS CERTIFIED.