Ella Mae Reynolds v. LaSalle Bank, N.A.

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CA 04-160

November 17, 2004


[NO. PR 2002-39-I]




Terry Crabtree, Judge

This is an appeal from an order denying appellant's motion to stay enforcement of a writ of assistance in a foreclosure action. Appellant raises three issues for reversal of that decision. She contends: (1) that the trial court erred in not conducting a hearing to inquire into her mental soundness, as requested; (2) that, if such a hearing had been convened, the trial court would have been authorized to consider a motion to quash service of process upon the appellant; and (3) that the trial court erred in entering a default judgment because no guardian had been appointed on her behalf. Because the arguments appellant raises provide no grounds for reversal, we affirm.

On August 30, 2000, appellant executed a note in the principal amount of $33,000 and a deed of trust in connection with her purchase of property in Altheimer, Arkansas. On March 22, 2002, appellee filed a complaint in foreclosure against appellant alleging that she had defaulted in her payments on the note. Appellant was personally served, but she filed no answer to the complaint, and a foreclosure decree was entered by default on March 17, 2003. Appellee thereafter purchased the property at the Commissioner's sale, and an order confirming the sale was entered on May 6, 2003.

On September 25, 2003, appellee applied for a writ of assistance to oust appellant from the property. On November 19, 2003, appellant filed a motion to stay the writ of assistance. In this motion, appellant alleged that she was sixty-four years old and that she had been diagnosed with "symptoms of Alzheimer's Disease" on May 3, 2003. She asked that her removal from the property be postponed pending a hearing to determine whether she was competent and whether proper service and procedure had been had in the foreclosure proceedings. On that same date, the court entered a stay-order and set a hearing at 9:00 a.m. on November 25, 2003. The trial court denied appellant's motion by an order dated December 2, 2003. This appeal followed.

As her first point on appeal, appellant asserts that on the day set for the hearing the court called the parties into chambers, stated that there was no reason for a hearing, and that as a result no hearing was held. She contends that the court was obliged to hold a hearing once the issue of her mental soundness was raised.

We first observe that the trial court, by proceeding in chambers, transgressed Rule 4 of the Administrative Orders of the Supreme Court. See George v. State, ___ Ark. ___, ___ S.W.3d ___ (March 4, 2004). This rule provides that, unless waived on the record by the parties, it shall be the duty of any circuit court to require that a verbatim record be made of all proceedings pertaining to any contested matter before it. Secondly, we agree with appellant that, once a party's competency is called into question, it is incumbent on the court to inquire into the matter. See Peters v. Townsend, 93 Ark. 103, 124 S.W. 255 (1910). However, we do not agree with appellant that either of these failures warrants reversal in this case.

As reflected in her second argument on appeal, appellant has contended that, if she were deemed incompetent, then the court was required to quash the service of process because personal service on an incompetent is not valid. That is not the law. Incompetent persons can sue and be sued, and their property can be executed upon to satisfy any judgment. Banks v. Howell, 220 Ark. 439, 248 S.W.2d 95 (1952); Peters v. Townsend, supra. Where an incompetent is the defendant in a lawsuit, our law requires the appointment of a guardian to defend the suit for her.1 Ark. Code Ann. §§ 16-61-106, 16-61-107 & 16-61-108 (1987). Personal service on the incompetent is a prerequisite to the appointment of a guardian. Ark. Code Ann. §§ 16-61-106(c) & 16-61-108(b); Crossell v. Linder, 226 Ark. 853, 294 S.W.2d 493 (1956). Thus, it cannot be said that personal service on an incompetent person is invalid. The cases cited by appellant do not support her position. In Dabbs v. Dabbs, 224 Ark. 699, 276 S.W.2d 73 (1955), the court approved service by warning order on a non-resident incompetent. In Floyd, Guardian v. Isbell, 211 Ark. 631, 201 S.W.2d 755 (1947), it was held that the incompetent must be personally served. We cannot conclude that reversible error occurred because the trial court met with the parties off the record or failed to hold a hearing. Even if the court had held a hearing on the record and determined that appellant was not competent, quashing the service of process was not an appropriate remedy.

The same principle applies to appellant's final argument that the default judgment should be set aside because no guardian had been appointed for her. It is a correct statement of the law that no judgment can be rendered against an incompetent person without the appointment of a guardian. White v. Garrison, 271 Ark. 487, 609 S.W.2d 111 (Ark. App. 1980);Ark. R. Civ. P. 17(b). However, Rule 55(c) of the Arkansas Rules of Appellate Procedure provides that "[t]he party seeking to have the judgment set aside must demonstrate a meritorious defense to the action; however, if the judgment is void, no other defense to the action need be shown." It has been held that judgments entered against an incompetent without the appointment of a guardian are voidable, not void, and thus it is necessary to present a meritorious defense before the default will be set aside. See Zardin v. Terry, 275 Ark. 452, 631 S.W.2d 452 (1982). Appellant, however, has not asserted a meritorious defense to the foreclosure action. Therefore, even if the trial court had ruled that she was incompetent, appellant has not shown that she was entitled to set aside the default judgment because she did not assert a meritorious defense.

In sum, because appellant has failed to demonstrate reversible error, we must affirm.


Griffen and Baker, JJ., agree.

1 Circuit courts have the authority to appoint a guardian for an incompetent party for the purpose of assisting that party in the particular case before it. Peters v. Townsend, infra.