Court Opinion

ID: 883574
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:29:42.276663+00
Date Added: 2024-06-11T15:12:20.478422
License: Public Domain

NO.     94-425
             IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1995

WILLIAM LEE JONES, d/b/a JONES EQUIPMENT,
            Plaintiff and Respondent,
     v.
GARY ARNOLD AND JANISE ARNOLD, f/k/a
JANISE AMENT, husband and wife, ROBERT RUBEN
HAYES and MAY ROSEMARIE HAYES, husband and
wife, VERE SIPES, the Estate of BURTON SIPES,
and all other persons, known or unknown
claiming or who might claim any right, title,
estate or interest in or lien or encumbrance
upon the real property described in the Complaint,
adverse to Plaintiff's ownership, or any cloud
upon Plaintiff's title thereto, whether such
claim or possible claim be present or contingent,
            Defendants and Appellants.

APPEAL FROM:     District Court of the Fourth Judicial District,
                 In and for the County of Missoula,
                 The Honorable John W. Larson, Judge presiding.

COUNSEL OF RECORD:
            For Appellants:
                 Raymond P. Tipp; Tipp & Buley, Missoula,      Montana
            For Respondent:
                 Don Torgenrud, Attorney at Law, St. Ignatius,
                 Montana

          AUG11 1995                Submitted on Briefs:   March 9, 1995
                                                Decided:   August 11, 1995
Justice     James C.    Nelson delivered the Opinion of the Court.

     The plaintiff, William Lee Jones (Jones), brought this action
to attach the proceeds from the sale of certain real property by
defendant,     Janise Ament Arnold.              Following a bench trial, the
District Court for the Fourth Judicial District, Missoula County,
entered judgment for plaintiff and ordered execution on the
proceeds from the sale of the property at issue.                      The court also
concluded    that      punitive   damages       were   appropriate,    subject to a
later hearing to determine the amount.                         From that judgment,
defendants appeal.         We reverse.
     We address the following issues on appeal:
     1.     Did the District Court err in determining that the series
of conveyances of the subject property were fraudulent under § 31-
2-314, MCA (1989)?
     2.     Did the District Court err by failing to determine that
the judgment lien was extinguished by operation of law,                         thus
terminating any rights the plaintiff                    may    have to the subject
property?
     On March 10, 1986,           Jones obtained a judgment, against Gary
Arnold    (Arnold),      individually,      in the Fourth Judicial District
Court, Missoula County.           On February 10,      1989,   Arnold and his wife,
Janise Ament Arnold (Ament-Arnold), purchased real property,
secured by a trust indenture,            from the executors of an estate,
Charles and Gladys Hall and Vere Sipes, for $11,883.                      Under the
terms of the sale, Arnold and Ament-Arnold paid $2,000 down, with

                                            2
the remainder due in May of 1989.

        Shortly after entering into this agreement, Arnold learned of

Jones'       March 10, 1986,        judgment against him.      Unable   to    borrow

money due to this judgment, Arnold               and   Ament-Arnold   quit-claimed

the property back to the sellers on April 10, 1989.                   The property

was then purchased by Ament-Arnold's step-father,                     James    Clark

(Clark).

        On May 10, 1989,           Clark executed a quit-claim deed for the
property to Ament-Arnold.             The deed was made out to "Janise Ament,
a married woman in her own right . . . . 'I                   The deed was not

recorded until October 3, 1990.

        On December 12, 1990, Ament-Arnold sold the property to Robert

and May Hayes (Hayes) under a contract for deed for $38,500.                  Under

the     terms of     the   sale,    payments are deposited into an account

bearing the name "Janise Arnold."                This is an individual account

and not a joint account with her husband.

        Jones filed an action on February 15, 1991, seeking to attach

the proceeds from the sale to Hayes on the basis that the series of

transactions concerning the purchase and sale of the property were

fraudulent.          Subsequently, on March 10, 1992, Jones filed a motion

to renew his judgment.             The court granted the motion on March 23,

1992,    and entered an order renewing the judgment for an additional

6   years.

        A bench trial was held on April 12, 1994.            The District Court

accepted the Agreed Facts as presented in the Pretrial Order, heard

testimony      and    admitted     documentary   exhibits.   Defendants'      motion

                                           3
for a directed verdict was denied.
         The District Court entered its Amended Findings of Fact and
Conclusions of Law and Judgment on July 6, 1994.               The court found
that this "series of transfers . . . had the effect of removing
Gary Arnold from the title," thereby preventing "execution against
the property by Jones . . . while the Arnolds retained the ultimate
benefit of the transaction."             The court concluded that the series
of conveyances were fraudulent,               in violation of § 31-2-314, MCA
(1989) I       that Ament-Arnold participated in the fraud,            and that
actual malice was present.
         The court ordered execution on the proceeds from the sale of
the property from Ament-Arnold to Hayes and awarded Jones his costs
of suit.        The court also ordered a subsequent proceeding pursuant
to   §    27-l-221(7),      MCA,   to determine punitive damages.            The
proceeding to determine punitive damages is pending determination
of this appeal.           Defendants appeal the judgment and the denial of
a directed verdict.
         The    Uniform     Fraudulent    Conveyance    Act   (UFCA)   was   the
substantive law in effect in 1989 when the series of transactions
at issue took place.          The Montana Legislature repealed the UFCA in
1991 and enacted the Uniform Fraudulent Transfer Act (UFTA). Since
the UFTA does not expressly state that it is retroactive, we will
apply the UFCA,           which was the law in effect at the time of the
conveyances at issue.          McDonald v. Anderson (19931, 261 Mont. 268,
272-73, 862 P.2d 402, 405.

                                          4
                                   Issue 1
         Did the District Court err in determining that the series of
conveyances of the subject property were fraudulent under 5 31-2-
314, MCA (1989)?
         The District Court found that the series of conveyances at
issue here contained several "badges of fraud" from which the court
inferred a "fraudulent intent" in violation of § 31-2-314, MCA
(1989).      Section 31-2-314, MCA (1989),    provides:
         Conveyance made with intent to defraud. Every conveyance
         made and every obligation incurred with actual intent, as
         distinguished from intent presumed in law, to hinder,
         delay, or defraud either present or future creditors is
         fraudulent as to both present and future creditors.
         This Court will affirm the findings of a trial court sitting
without a jury unless the findings are clearly erroneous.                    Rule

52(a),     M.R.Civ.P.;   Interstate Production Credit v. DeSaye (1991),
250 Mont. 320, 322, 820 P.Zd 1285, 1287.
         In DeSave, this Court adopted a three-part test to determine
if a finding is clearly erroneous.        The test provides that: (1) the
Court will review the record to see if the findings are supported
by     substantial   evidence;   (2) if the findings are supported by
substantial     evidence, the Court will determine if the trial court
has misapprehended the effect of             the     evidence;   and   (3)    if
substantial evidence exists and the effect of the evidence has not
been     misapprehended,   the Court may still find that a finding is
clearly erroneous although there is evidence to support it, if a
review of the record leaves the Court with the definite and firm
conviction that a mistake has been made.           DeSave, 820 P.2d at 1287.

                                      5
     In applying the DeSave test to the case before us on appeal,
we first review the record to see if the findings are supported by
substantial    evidence.      Substantial evidence is evidence that a
reasonable mind might accept as adequate to support a conclusion;
it consists of more than a scintilla of evidence and may be less
than a preponderance of evidence.         Yellowstone Basin Properties v.
Burgess (1992), 255 Mont. 341, 346, 843 P.2d 341, 344.
     The only evidence presented by Jones at trial to support his
contention that these conveyances are fraudulent were the deeds for
each transfer of the property.           There was no evidence presented
that would indicate that the transfers were made with actual intent
to hinder,     delay or defraud Jones as a judgment creditor as
prescribed by § 31-2-314, MCA (1989).
     The uncontroverted evidence presented at trial showed that
Arnold and Ament-Arnold purchased the subject property secured by
a trust indenture in February 1989.             Under the terms of the
agreement,    they paid $2,000 down against the total purchase price
of $11,883 and were required to pay the remaining $9,883 in May
1989. Unable to secure adequate financing for the May payment due
to Jones' March 10, 1986,        judgment lien,     they   transferred      the
property back to the original owners rather than be subjected to
foreclosure    proceedings.     Ament-Arnold   testified   that    they    lost
their original $2,000 investment in the property.
     The presumption that private transactions are fair and regular
is conclusive unless controverted by other evidence.              Lawrence v.
Clepper (1993), 263 Mont. 45, 56, 865 P.2d 1150, 1158.                    Jones

                                     6
presented no evidence at trial to indicate that this conveyance
back to the original sellers was made with an intent to defraud him
or prevent him from executing on the judgment lien.
        Neither did he present any evidence that would indicate that
the subsequent purchase of the property by Ament-Arnold's step-
father and the later transfer of the property to Ament-Arnold was
done with an intent to defraud Jones and prevent him from executing
on the judgment lien.      The uncontroverted evidence at trial showed
that Clark deeded the property to Ament-Arnold without her or her
husband's     knowledge.   In order to be a fraudulent conveyance, the
transfer must be at the hands of the debtor.               Beard v. Myers
(1959),    136 Mont. 350, 352-53, 347 P.2d 719, 720.
        The District Court relied on Montana Nat. Bank v. Michels
(1981),    193 Mont. 295, 631 P.2d 1260, to support its findings that
the series of transactions at issue contained "badges of fraud"
from which the court inferred a fraudulent intent.           In Michels, a
husband conveyed all of his property to his wife in consideration
of the sum of one dollar even though the fair market value of the
property was more than $40,000.         Michels, 631 P.2d at 1261.   Two
months    later,   the wife conveyed the property to the husband's
uncle.    The consideration for this conveyance included payment of
numerous creditors of the husband, none of which was owed by the
wife.      Michels, 631 P.2d at 1262.        In    addition,   after this
conveyance,     both husband and wife retained possession of the
property and continued to live on it without paying any rent.
Michels, 631 P.2d at 1264.

                                    7
        Although   the   District    Court   found that     the     series of
conveyances in the case before us on appeal contained "badges of
fraud"     similar to     those in     Michels,    the    instant     case is
distinguishable from Michels in several respects.                   Unlike   the
judgment debtor in Michels, where the husband conveyed the property
to his wife for one dollar,Arnold          did not convey property to his
wife.     Evidence at trial showed that when Arnold and Ament-Arnold
learned of the judgment lien they transferred the property back to
the original owners because they were unable to secure financing to
pay the obligation secured by the trust indenture.                In addition,
while in Michels part of the consideration of the sale to the
debtor's uncle included paying many of the judgment debtor's
creditors,    there was no evidence presented in the instant case to
show that Arnold received any funds from the subsequent sale of the
property by Ament-Arnold to Hayes.           Finally, while the debtor in
Michels continued to live on the property without paying rent,
there was no evidence presented in the instant case to show that
Arnold retained any possession or control over the property or the
proceeds from the sale of the property.
        It remained Jones‘ burden to prove that the transactions at
issue were fraudulent, but there was simply not enough evidence in
the record to support a conclusion that he had borne his burden of
proof.      Applying our test from DeSave,         we conclude that the
evidence in the record was not sufficient to support the District
Court's findings that the series of transactions at issue were
fraudulent.        Accordingly, we    hold that the District Court's

                                       8
findings were clearly erroneous and we reverse the decision of the
District Court in that respect.
                                  Issue 2
     Did the District Court err by failing to determine that the
judgment    lien was   extinguished by operation of         law,   thus
terminating any rights the plaintiff may have to the subject
property?
     In order to resolve this issue,        it is necessary to keep in
mind that there is a difference between a judgment and the lien on
real property that is created when a judgment is docketed (judgment
lien).      Moreover, it is also        important to acknowledge that
Montana's statutes provide        for distinct times during which a
judgment may be enforced, during which an execution on a judgment
may be issued,   and during which a judgment lien encumbers real
property.    Finally, one must also appreciate that the ability to
execute on    a judgment is       distinct from whatever additional
advantages that a judgment creditor may acquire by virtue of his
judgment creating a lien on real property.       We will discuss these
various legal principles in the context of the facts of this case
and the District Court‘s decision.
     To summarize the following discussion, Montana law provides in
separate statutes that a judgment may be enforced for a period of
10 years from docketing,      §   27-2-201(l),   MCA; that a writ of
execution may be issued to enforce a judgment for a period of 6
years from entry, § 25-13-101, MCA, which period may be extended by
the court for up to an additional 4 years,       § 25-13-102, MCA, and

                                    9
Welch v. Huber (1993), 262 Mont. 114, 862 P.2d 1180; that a
judgment lien continues for 6 years following docketing of the
judgment and then expires by operation of law, § 25-g-301(2), MCA;
and that a judgment may be extended past its 10 year duration only
by filing a separate action to obtain a judgment on the judgment,
§ 27-2-201(l),    MCA, and Welch, 862 P.2d at 1181.
        In this case,   the District Court stated in its findings of
fact that Jones' March 10, 1986, judgment had been "renewed for an
additional six year period beginning March 23, 1992."      This finding
stems from Jones' motion to renew the judgment filed on March 10,
1992, which the District Court granted by order on March 23, 1992.
Our review of the District Court's conclusions of law is plenary.
We simply determine whether the trial judge's interpretation of the
law is correct.     Steer, Inc. v. Department of Revenue (1990),    245
Mont. 470, 474-75, 803 P.2d 601, 603.   We conclude that the court's
finding that the judgment, and, implicitly, its legal conclusion
that the judgment lien was "renewed" are incorrect.
        Under Montana law, liens are creatures of statute. Matter of
Estate of Wilhelm (1988), 233 Mont. 255, 262, 760 P.2d 718, 723.
With respect to liens created by entry of judgment, the applicable
statute provides:
             From the time the judgment is docketed, it becomes
        a lien upon all real property of the judgment debtor not
        exempt from execution in the county, owned by the
        judgment debtor at the time or which the judgment debtor
        may afterward acquire until the lien ceases.
Section 25-P-301(2), MCA.      Moreover, the judgment lien so created
continues for 6 years unless the judgment is previously satisfied.

                                   10
Section 25-g-301(2), MCA.
     Jones' judgment lien sprang into existence and attached to any
and all real property, not exempt from execution, owned by Arnold
in Missoula County as of March 10, 1986, the date his judgment
against Arnold was docketed.      That lien continued to exist until it
expired by operation of 5 25-g-301(2), MCA, 6 years from and after
March 10, 1986.    Moreover, under § 25-g-301(2), MCA, that judgment
lien attached to the real property which is the subject of this
case when Arnold and his wife purchased the property on February

10, 1989.   However, a judgment lien can only attach to the actual
interest of the judgment debtor and is subject to all prior liens,
whether equitable or legal.      Hannah v. Martinson (1988), 232 Mont.
469, 472, 758 P.2d 276, 278-79.
     Section 25-13-101(l), MCA, provides that "the party in whose
favor the judgment is given may, at any time within 6 years after
the entry thereof,      have a writ of execution issued for its
enforcement."     Accordingly,   Jones could have executed on Arnold's
interest in the subject property, during the 6 years from and after
March 10, 1986.     Section 25-13-101(l), MCA.     Furthermore,   during
the 6-year period that the judgment was a lien, Jones' ability to
execute on Arnold's interest in the subject real property was not
impaired by the subsequent transfers since the lien follows the
property.   Furthermore, any judgment or decree of any court of this
state affecting real property is         deemed to impart notice to
subsequent purchasers or encumbrancers.        Section 25-g-105, MCA.
Once a judgment lien expires by operation of § 25-g-301(2), MCA,

                                    11
however, there is no statutory provision which allows the lien to
continue past the original 6 years provided by § 25-9-301(Z), MCA,
or allows it to be "renewed."    In other words, on March 10, 1992,
Jones' judgment lien on the subject real property terminated and
the property thereafter existed free of the judgment lien.
     While the judgment lien expired, that is not to say, however,
that the judgment itself could not be enforced following the
expiration of the lien.    Section 25-13-102, MCA, provides:
           In all cases, the judgment may be enforced or
     carried into execution after the lapse of 6 years from
     the date of its entry by leave of the court, upon motion,
     or by judgment for that purpose founded upon supplemental
     pleadings.
     Accordingly, Jones' judgment lien on the subject real property
terminated by operation of law on the expiration of 6 years from
March 10, 1986.   The March 10, 1986, judgment continued to exist,
however.   Thereafter, if Jones desired to execute on that judgment,
it was incumbent upon him to obtain a new execution upon motion by
leave of court or by judgment for that purpose founded upon
supplemental   pleadings, in accordance with § 25-13-102, MCA.
     In that respect, and assuming that the procedure set forth in
5 25-13-102, MCA, is followed,    our recent decision in Welch v.
Huber (19931, 262 Mont. 114, 862 P.2d 1180, comes into play. In
that case we held that while the time to execute on a judgment
could be extended beyond the original 6 years, that time could not
be extended beyond the 10 years provided for actions on judgments
under.5 27-2-201(l), MCA. Welch, 862 P.2d at 1181.    Applying those
legal principles here, while Jones could obtain an execution on the

                                 12
March 10, 1986,         judgment following the expiration of the 6-year
execution     period,    pursuant to 5 25-13-102, MCA, his ability to
obtain such further execution was limited to an additional 4 years.
         Importantly,    and contrary to the District Court's March 23,
1992,     order,     the original March 10,    1986,   judgment was not
"renewed."        That judgment continued to exist; the judgment lien,
however, terminated permanently on the expiration of 6 years from
March 10, 1986, and that lien was not "renewed" under the court's
March 23, 1992, order.
        Moreover, the District Court's finding that the judgment was
renewed     for    "an additional six year period beginning March 23,
1992,"    is also incorrect.      In Welch we held that while a judgment
cannot be extended past 10 years by ex parte motion, nevertheless,
a judgment creditor may file an action to extend a district court's
judgment beyond its initial lo-year duration.          Welch, 862 P.2d at
1181.     In other words, enforcement of a judgment is barred by 5 27-
2-201(1), MCA, after the judgment's lo-year duration has expired.
Welch, 862 P.2d at 1181.         If before that lo-year duration expires
the judgment creditor desires to extend the judgment past 10 years,
then he must file a separate action on the existing judgment and
obtain a new judgment.         Section 27-2-201(l), MCA; Welch, 862 P.2d
at 1181.       From the date that the new judgment on the original
judgment     is    docketed,   then it also follows that a new 6 year
judgment lien commences to run (5 25-g-301(2), MCA),        and that the
provisions of § 25-13-101(l), MCA, § 25-13-102, MCA, and § 27-2-
201(l),    MCA, would apply, as discussed above.

                                      13
     Accordingly, we hold that the District Court erred by failing
to determine      that   Jones'   judgment lien was extinguished by
operation of 5 25-g-301(2), MCA, on the expiration of 6 years from
March 10, 1986.
     Reversed.

We concur.

                                    14
Justice Fred J. Weber dissents as follows:

        Issue     1    considers   whether     the District    court     erred in
determining that the series of conveyances were fraudulent. In

substance,       the opinion concludes that Jones failed to present any

evidence which would indicate that the subsequent purchase of the

property by Ament-Arnold's stepfather and the later transfer of the

property to Ament-Arnold was done with an attempt to defraud Jones

and to prevent him from executing on the judgment lien.                         The
opinion concludes that the uncontroverted evidence showed that

Clark deeded the property to Ament-Arnold without her or her

husband's       knowledge.     I do not agree with those conclusions.           The

opinion further emphasizes that it was Jones' burden to prove the

transactions          were   fraudulent   and there was     simply     not   enough

evidence to support a conclusion that "he had born his burden of
proof."       While that conclusion may be correct with regard to Jones

only,        I believe that it is         essential to consider the entire

transcript which is primarily the testimony on the part of Gary

Arnold (Arnold) and Janise Arnold (Ament-Arnold).                   I emphasize it

is the testimony of the two Arnolds which convinced the District

Court that the transactions were fraudulent.
        After reviewing the transcript and other evidence, I conclude

there is a sufficient basis to affirm the majority of the findings

of fact of the District Court.                  Without   exactly    quoting,   the

following are the key aspects of various findings of fact:

        1.     Jones obtained a judgment against Arnold on March 10,

1986.

                                          15
      2.    On February 10, 1989, Arnold and Amen&Arnold          purchased
the property under a contract for $II,OOO.

      4.    On April 10, 1989,   the Arnolds quitclaimed the property

back to Sipes (original sellers).

      5.   On April 18, 1989, Sipes deeded the property by warranty

deed under a trust indenture to James Clark, stepfather of Ament-
Arnold.

      6. On May 10, 1989, James Clark quitclaimed the property back

to   his   stepdaughter,   Janise Arnold,    using the name of "Janise
Ament, a married woman in her own right."

      7.    On December 12, 1990,   Janise Arnold (Amen&Arnold)       sold

the property to Hayes for $38,500.

      8. The property's present buyers made payments into an escrow

to Janise Arnold (Ament-Arnold)--the        proceeds of the escrow have a
balance of $23,936.11.

      Here I wish to emphasize finding of fact 9 which was incorrect

as a matter of law and which I believe has essentially caused the

misdirection of the opinion.     Finding of fact 9, in effect, pointed

out that the series of transfers had the effect of removing Arnold

from the title--," [tlhis prevented execution against the property by

Jones"--while the Arnolds retained the ultimate benefit of the

transaction.     As a matter of law,     as pointed out by the opinion,

that is of course incorrect.      The lien of Jones' judgment attached

to any interest which Arnold had in the property at the time Arnold

and Ament-Arnold gained an interest of record.         However,    I do not

conclude that negates the balance of the findings and conclusions

of the District Court.

                                    16
        Finding of fact 10 stated in substance that the series of

conveyances and transfers between husband and wife to stepfather
via the original sellers and back to the wife in her maiden name

contained the following badges              of fraud from which the court
inferred a fraudulent intent:

        (a) Lack of consideration of the conveyance from stepfather to

Ament-Arnold who is identified by her maiden name in the quitclaim
deed.

        (b) Familial relationship between stepfather and Ament-Arnold

and also between Ament-Arnold and Arnold.                The effect of the

transfers was to transfer the property from husband and wife to

wife alone.

        Cc)      Arnold and Ament-Arnold knew at          the time of the

conveyances that Jones had an outstanding judgment against Arnold.

        Cd)     The quitclaim deed from stepfather to Ament-Arnold was

not filed until seventeen months after it was executed and just two

months before Ament-Arnold sold the property.             The court inferred

that the Arnolds may not              have wanted Jones to know about the

transfers.

        (e)     It is an unusual method of business for property to

change        hands   three   times   in   one month--Arnolds   to   Sipes   to

stepfather to Amen&Arnold.

        (f)     The series of transactions had the effect of removing

Arnold from the title while allowing Arnold and Amen&Arnold to

obtain possession of the property and reap the benefit of the sale.
        14. The Amolds'       conduct, resulting in the transfer from both

of the Arnolds to Ament-Arnold in her maiden name, was designed to

                                           17
frustrate plaintiff's efforts at executing on his judgment and to

unjustly enrich the Amolds.

        In a brief summary,     I will review testimony on the part of

Arnold and Ament-Arnold at trial.          Arnold testified he did tell his

wife's stepfather about the purchase of the property and did tell

him they were not able to buy it and that the stepfather decided to

buy it on his own account.          Arnold then professed that he had

nothing to do with the stepfather's dealing with the property,

including the terms of the purchase.           Arnold said that he was not

interested in the purchase and that Ament-Arnold had nothing to do

with the fact the stepfather purchased the property.          He concluded

by saying "it was bought for himself."           I emphasize this in order

to point out the contradiction between this and the actual effect

of     the    transaction.    It is clear that the District Court had

substantial credible evidence to conclude this was a fabrication on

the part of Arnold.

        Ament-Arnold testified that they talked to an attorney who

prepared the papers which they signed.            She also stated she and

Arnold had dinner at her parents' house and discussed with them

what    had    happened.     She told her stepfather about it and the

stepfather indicated to her that it would have been a good deal.

The stepfather was interested in the property. Ament-Arnold stated

that the stepfather was doing something for himself when he bought

the property.        She further contended she had made no arrangements

with him.       It is significant here to keep in mind that the Arnolds

quitclaimed the property back to the Sipes on April 10, 1989; the

Sipes deeded the property to the stepfather on April 18, 1989; and

                                      18
the stepfather deeded the property back to Ament-Arnold on May 10,

1989.     Again,   it is clearly possible for the District Court to
conclude that the testimony was a fabrication.       The District Court
heard and observed the witnesses.

        Amend-Arnold testified with regard      to the deed from the
stepfather to herself.      The deed was kept in his safety deposit box
for the next year and a half.       That way,   if the stepfather died,

the property would go to Ament-Arnold.

        Ament-Arnold then testified as to how the stepfather was using

the proceeds of the sale as a loan to her.           She   contended   the

monies would come to her as a loan and she would have to pay the

stepfather back.      She had emphasized that her stepfather was not in

good health.       She testified that if her stepfather died then she

would pay the estate back the amount of money.             Consider    this
testimony along with the following with regard to the method of

taxation.

        In testifying that she received the property as a loan, Ament-
Arnold stated she had to pay the loan back with interest.              When

questioned by the District Court, she stated that she paid both the
state and federal income tax on the money received from the sale of

the property, and that the payment of these taxes was considered to

be interest by her stepfather.       Again the testimony here clearly

affords a basis for the District Court to conclude that, in fact,

the entire transaction was considered by the stepfather and the

Arnolds to be an original sale by Ament-Arnold under which she

would have to pay the income taxes due as a result of the gain from
the sale.     We may also note the inconsistency between her payment

                                    19
of   income   taxes    and her original claim that the stepfather
purchased this for his own benefit.

      In its conclusions of law, the District Court held that the
badges of fraud identified in the findings of fact demonstrated

that the Arnolds engaged in a series of conveyances with the actual

intent to hinder,       delay or defraud Jones.     The   District   Court
concluded the evidence was clear and convincing that the Arnolds

acted with actual malice.

      Applying the DeSave test,       I conclude there is substantial
evidence which a reasonable mind could accept as adequate to

support the conclusions of the District Court.      I   would, therefore,
affirm the District Court's         determination that the series of

conveyances   was     fraudulent.   I would not find it necessary to

determine the question as to the extinguishment of the judgment
lien by operation of law as set forth in issue 2.          I would affirm

the District Court.

Chief Justice J.A. Turnage concurs in the foregoing dissent.

                                //        L ”   Chief Justice

                                     20
                                         August 11, 1995

                                  CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:

Raymond P. Tipp
TIPP & BULEY
P.O. Box 3778
Missoula, MT 59806

DONTORGENRUD
Attorney at Law
P.O. Box 490
St. Ingnatius, MT 59865

                                                     ED SMITH
                                                     CLERK OF THE SUPREME COURT