Court Opinion

ID: 47757
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:29:12+00
Date Added: 2024-06-11T09:03:45.553629
License: Public Domain

United States Court of Appeals
                                                             Fifth Circuit

               IN THE UNITED STATES COURT OF APPEALS F I L E D
                       FOR THE FIFTH CIRCUIT       December 29, 2006

                                                   Charles R. Fulbruge III
                               No. 05-41792                Clerk

In The Matter Of:    VERNA KAY HERMAN

                  Debtor

JOHNNY MILEN NEELY; GARY DEAN JACKSON

                  Appellants

     v.

VERNA KAY HERMAN

                  Appellee

          Appeal from the United States District Court
             for the Eastern District of Texas, Tyler
                          No. 6:04-CV-172

Before KING, GARZA, and OWEN, Circuit Judges.

PER CURIAM:*

     In this appeal, appellants Johnny Neely and Gary Jackson

contend that the district court improperly interpreted a 1994

divorce decree as establishing an equitable lien on property in

Lindale, Texas (the “Lindale Property”) rather than granting a

money judgment.    If appellants are correct, their interests are

     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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subject to Texas’s ten-year statute of limitations for the

execution of a judgment rather than Texas’s four-year statute for

the collection of a debt.    Compare TEX. CIV. PRAC. & REM. CODE ANN.

§ 34.001 (Vernon 2002), with id. § 16.004.

     Appellee Verna Herman and her husband William Chappell

acquired the Lindale Property in 1988, financing the purchase

with loans from Herman’s children, Jeff Brown, Natalie Brown, and

Wendy Melton (collectively, the “Children”).      When Herman

petitioned for divorce from Chappell, the Children intervened to

protect their interests.    The resulting divorce decree contains

the following language:

          [The Lindale Property] on which land and
          improvements several indebtednesses presently
          exist, which by this Decree are the sole
          responsibility of [Verna Herman] to whom this
          real property is being awarded, and which are
          further impressed with a resulting trust for
          consideration paid for said property from the
          social security payments of Jeff Brown in the
          sum of $32,815.02 . . . and Natalie Sherie
          Brown in the sum of $33,270.77 . . . and child
          support payments of Wendy Kay Melton in the
          sum of $28,169.00 . . ., said trust being
          secured by the imposition of an equitable lien
          in the stated sums for the benefit of [the
          Children].

In 2002, Jeff Brown and Natalie Brown transferred the interests

awarded to them under the divorce decree to Neely, and Wendy

Melton transferred 80% of her interest to Neely and the remaining

20% to Jackson.

     Despite appellants’ claim that the divorce decree granted a

money judgment to the Children, the district court properly

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concluded that the decree established an equitable lien.     Not

only does the provision explicitly provide for an equitable lien,

it is entirely devoid of any language that could be construed as

ordering Herman to pay any sum to the Children.

     At oral argument, appellants directed the court’s attention

to the following portion of the divorce decree:

               IT IS FURTHER ORDERED AND DECREED that
          [Herman] and [Chappell], respectively, shall
          pay, as a part of the division of the estate
          of the parties, all of the debts, charges,
          liabilities, and obligations of the parties
          existing as of the date hereof which are
          secured by property awarded to [Herman] or
          [Chappell] . . . .

This provision does not, as appellants assert, order Herman to

pay her debt to the Children, but instead merely allocates

Herman’s and Chappell’s debts between them without altering the

terms by which those debts must be paid.   This meaning is

illustrated not only by the language of the provision in its

context within the divorce decree, but also by the lack of any

antecedent demand by the Children that Herman pay the debt owed.1

     1
        We are unpersuaded by appellants’ claim that section 3.06
of the Children’s motion to intervene in the divorce proceedings
establishes that they were seeking a judgment against Herman.
The provision speaks of a money judgment only against Chappell,
not Herman, as one of several options to secure the Children’s
interests, and only in the unrealized situation where the court
orders the property sold and the money recovered is insufficient
to pay the total amount owed to them.
     Further, despite the importance that appellants place on the
fact that the Children were parties to the divorce proceedings,
there is no basis to conclude that their mere intervention in the
proceedings has any relevance to whether the disputed language
grants an equitable lien or a money judgment.

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     Because the Children did not enforce the underlying debt and

foreclose on the equitable lien before the four-year statute of

limitations applicable to the underlying debt had run, the

district court properly concluded that the equitable liens

granted to Jeff Brown and Natalie Brown are now unenforceable.

See Holcroft v. Wheatley, 112 S.W.2d 298, 299 (Tex. Civ. App.--

Amarillo 1937, writ dism’d) (“[I]f no action to enforce the

payment and foreclose the lien was brought thereon within four

years from said date, limitation, if invoked, would bar a

recovery on the notes, and since the lien is only an incident to

the debt, no foreclosure of the lien could be enforced.”).

     AFFIRMED.   Costs shall be borne by appellants.

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