David Looney v. Kay Raby

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DIVISION IV  CA 07­49  NOVEMBER 14, 2007  DAVID LOONEY  APPELLANT  APPEAL FROM THE CRITTENDEN  COUNTY CIRCUIT COURT  [NO. CV1997­237]  V. HONORABLE JOHN FOGLEMAN,  JUDGE  KAY RABY  APPELLEE  AFFIRMED  JOHN B. ROBBINS, Judge  The Crittenden County Circuit Court rejected appellant David Looney’s objections  to a writ of execution and affirmed a sale held pursuant to the writ. Mr. Looney now argues  that the court erred in (1) denying his motion for a continuance; (2) relating appellee Kay  Raby’s substitution as the real party in interest back to the date of the writ; (3) ruling that  Mr. Looney’s response to the writ of execution did not comply with Ark. Code Ann. § 16­  66­301; (4) ruling that the Arkansas Farm Mediation Act did not apply to this case; and  (5) enforcing the sale where the sheriff failed to follow the statutory requirements in levying  execution. We find no error and affirm.  Background Facts  On July 23, 1997, the Bank of West Memphis obtained a judgment against David  Looney for $58,079.67, plus interest and attorney fees, due to nonpayment of a promissory note. Writs of garnishment were issued but not pursued, and the record reflects no further  activity on the case for seven years.  In 2004, the Bank’s successor­in­interest, the National Bank of Commerce, assigned  the  judgment  to  Bill  McAuley,  III,  and  McAuley  assigned  it  to  appellee  Kay  Raby  on  February 11, 2005. Ms. Raby immediately began collection efforts, procuring, among other  writs, the February 22, 2005, writ of execution that is the subject of this appeal. The writ of  execution listed the Bank of West Memphis as the plaintiff, despite the assignment to Raby,  and commanded the sheriff to seize various property from Mr. Looney, including his stock  in Arkansas Environmental Waste Recycling Corporation (the Corporation) and Riverside  Environmental  Disposal,  LLC  (the  LLC).  Mr.  Looney  responded  on  March  17,  2005,  pleading  the  defenses  of  exemption,  accord  and  satisfaction,  laches,  estoppel,  payment,  release, and violation of the Arkansas Farm Mediation Act.  A hearing on Mr. Looney’s response and other matters was set for August 10, 2005.  Before that date, the sheriff issued a notice that Mr. Looney’s interest in the Corporation and  the LLC would be sold on August 22, 2005.  On August 9, 2005, the day before the hearing, Mr. Looney’s counsel, Richard West,  moved to withdraw from the case. Mr. West stated that the case had evolved into a complex  matter  that  he  was  unqualified  to  handle.  Based  on  his  counsel’s  motion  to  withdraw,  Mr.  Looney  moved  for  a  continuance  and  stated  that  he  was  currently  seeking  a  new  attorney. The trial court reluctantly continued the hearing until September 8, 2005, and gave  Mr. Looney the option of stopping the August 25 sale by posting a bond. Mr. Looney did not ­2­  do so. The sale took place, and Kay Raby purchased Mr. Looney’s stock in the Corporation  and his membership units in the LLC for a total of $2000.  At the September 8 hearing, Mr. Looney again requested a continuance on the ground  that his new attorney, hired on September 2, had not had time to prepare. That motion was  denied. The hearing went forward, and the court considered Mr. Looney’s defenses to the  writ of execution. The court also heard Ms. Raby’s motion to substitute herself as the real  party in interest and to have that substitution relate back to the February 22, 2005, writ.  Following the hearing and briefing on some issues, the court entered an order on June 19,  2006, substituting Ms. Raby as the real party in interest; declaring that Mr. Looney did not  properly challenge the writ under Arkansas law; finding that the Arkansas Farm Mediation  Act did not apply; and “affirming” the August 25, 2005, sale of Mr. Looney’s interest in the  Corporation and the LLC. Mr. Looney appeals from that order.  Denial of Continuance  Mr. Looney first argues that the trial court erred in denying his motion to continue the  September 8, 2005, hearing. He claims that his new counsel had insufficient time to prepare  for the hearing and that he was deprived of the opportunity to subpoena witnesses and file  amended pleadings.  The grant or denial of a motion for continuance is within the sound discretion of the  trial court. City of Dover v. City of Russellville, 346 Ark. 279, 57 S.W.3d 171 (2001). The  court’s  decision  on  a  continuance  will  not  be  reversed  absent  an  abuse  of  discretion  amounting to a denial of justice. See id. An appellant must show prejudice from the denial ­3­  of a continuance, and when a motion is based on a lack of time to prepare, the appellate court  considers the totality of the circumstances. See id.  We find no abuse of discretion here. The continuance of the hearing from August 10  to September 8 was at Mr. Looney’s request. The court expressed misgivings but allowed  the continuance based on Mr. Looney’s assurances that he would have new counsel by that  time:  COURT:  Mr. Looney, do you understand if I allow Mr. West to withdraw you  have less than a month to find a lawyer that will be ready to go because  I am not going to continue this again?  LOONEY:  Yes, sir. I have probably met so many lawyers in town that will not  only take me but will do a good job.  COURT:  What is your position about Mr. West requesting to withdraw?  LOONEY:  I understand  that  it  has  grown  so  much  in  the  past  week  that  it  has  overwhelmed him and it has overwhelmed me. I might have to hire two  people just to take his place. I can understand where he is coming from  but I will hire me an attorney soon.  COURT:  At least at this point so you will have somebody. I am not allowing you  [Mr. West] to withdraw. If you don’t get anybody, it will be Mr. West  whether he feels confident or not.  Despite being forewarned that he had a short time within which to find a new attorney and  that the court would not continue the September 8 hearing, Mr. Looney did not secure new  counsel  until  September  2.  He  then  sought  another  continuance  on  the  day  before  the ­4­  hearing, asserting a lack of time to prepare. This lack of diligence alone was sufficient cause  to deny a continuance. See id. 1  Additionally,  Mr.  Looney  does  not  demonstrate  prejudice  from  the  lack  of  a  continuance. His new counsel ably examined and cross­examined witnesses at the hearing  and  made  cogent  arguments  on  all  points.  Further,  the  primary  issues  in  this  case  were  addressed either in post­hearing briefs or at the August 10 hearing, where Mr. Looney was  represented  by  Mr.  West.  Moreover,  Mr.  Looney’s  claim  that  he  was  deprived  of  the  opportunity  to  subpoena  witnesses  or  file  amended  pleadings  is  not  well  taken.  Until  September  2,  he  continued  to  be  represented  by  Mr.  West,  who  could  have  obtained  subpoenas or filed any amendments.  Based on the totality of the circumstances, we find no abuse of discretion in the trial  court’s denial of the continuance.  Relation Back of Substitution of Real Party In Interest  The February 22, 2005, writ of execution named the original judgment creditor, the  Bank of West Memphis, as plaintiff even though the judgment had been assigned to appellee  Kay Raby. On September 7, 2005, Ms. Raby asked to be substituted as the real party in 1  Mr. Looney argues that he underwent surgery sometime after August 10, but he  cites no such testimony in the record as abstracted; nor was this pled as a ground in his  motion for a continuance. Looney’s counsel told the court, “If I could say one thing on  his behalf, he has had surgery in the meantime and has had some difficulty in being able  to find counsel,” but we do not consider that statement evidence, see Alltel Ark., Inc. v.  Ark. Pub. Serv. Comm’n, 70 Ark. App. 421, 19 S.W.3d 634 (2000), and we cannot  ascertain from that statement the nature of Mr. Looney’s surgery and how he was  prevented from finding an attorney.  ­5­  interest and that her substitution relate back to the February 22, 2005, writ. Mr. Looney  argues that Ms. Raby’s status as the real party in interest should not relate back and that the  February 22 writ, bearing the name of the Bank of West Memphis as plaintiff, is a nullity.  We have some doubt that Mr. Looney’s argument is preserved for appeal. The trial  court did not clarify until after entry of the order appealed from that the substitution related  back to the issuance of the writ. In any case, the Arkansas Rules of Civil Procedure permit  2  relation back in this instance.  Rule 25(c) provides that, in the case of any transfer of interest,  the action may be continued by or against the original party, unless the court upon motion  directs the person to whom the interest is transferred to be substituted. Rule 17(a) provides  that no action shall be dismissed on the ground that it is not prosecuted in the name of the  real party in interest “until a reasonable time has been allowed after objection for ratification  of commencement of the action by . . . or substitution of, the real party in interest.” The rule  further declares that such substitution “shall have the same effect as if the action had been  commenced in the name of the real party in interest.”  Additionally, Ark. R. Civ. P. 15(c)(1) states that amendment of a pleading relates back  to  the  date  of  the  original  pleading  when  the  claim  or  defense  asserted  in  the  amended  pleading “arose out of the conduct, transaction, or occurrence set forth or attempted to be set  forth in the original pleading.” At the time Ms. Raby moved to substitute herself as the real  party in interest, she did not change the nature of her claim; she was pursuing execution of 2  Neither party argues that the Rules of Civil Procedure do not apply to execution  proceedings.  ­6­  the same judgment that was the subject of the February 2005 writ. Her efforts therefore arose  out of the same “conduct, transaction, or occurrence” that existed when the original writ of  3  execution was issued.  Challenging the Writ Under Ark. Code Ann. § 16­66­301  Arkansas Code Annotated section 16­66­301(a) (Repl. 2005) provides:  If any person against whom any execution has been issued applies to the judge of the  court out of which the execution or order of sale was issued, by petition verified by  affidavit, setting forth good cause why the execution ought to be stayed, set aside, or  quashed, reasonable notice of the intended application having been previously given  to the adverse party or his or her agent or attorney of record, the judge shall, upon the  application, hear the complaint.  Mr. Looney did not file a petition verified by affidavit; he filed a simple response listing his  defenses to the writ. The trial court ruled that Mr. Looney’s response failed to comply with  the above statute, and Mr. Looney argues that this ruling was erroneous. We disagree.  Section 16­66­301(a) and its accompanying statutes contain the exclusive means of  staying or vacating writs of execution, and all other means are excluded. See Battle v. Harris,  298 Ark. 241, 766 S.W.2d 431 (1989); Taylor v. O’Kane, 185 Ark. 782, 49 S.W.2d 400  (1932). It is undisputed that Mr. Looney did not file a petition verified by affidavit as the  statute requires. It also appears that, despite the court’s ruling that Mr. Looney’s response  did not comply with the statute, the court considered most if not all of the pled defenses at  the September 8, 2005, hearing. Thus, we see no reason for reversal on this point. 3  Rule 15(c)(2) contains a provision concerning relation back when the names of  parties are changed, but that provision applies to a change in the name of a party against  whom a claim is asserted.  ­7­  Farm Mediation Act  Arkansas’s Farm Mediation Act, codified at Ark. Code Ann. §§ 2­7­101 to 310 (Repl.  1998),  provides  that,  in  connection  with  secured  indebtedness  of  $20,000  or  more,  no  proceeding against a farmer shall be commenced to enforce any judgment against agricultural  property unless the creditor has first obtained a release. Ark. Code Ann. § 2­7­302 (Repl.  1996).  In  the  absence  of  a  release,  the  creditor  must,  prior  to  the  commencement  of  a  proceeding, give notice to the farmer that he may request mandatory mediation. Ark. Code  Ann. § 2­7­303 (Repl. 1996). The trial court ruled that the Act did not apply in this case. We  agree.  The Act defines a “farmer” as:  any person who is engaged in farming or ranching, who has at least twenty thousand  dollars ($20,000) in outstanding agricultural loans that are secured by real estate,  crops, livestock, farm machinery, or other agricultural supplies, and who either:  (A)  Owns  or  leases  a  total  of  fifty  (50)  acres  or  more  of  land  that  is agricultural  property; or  (B) Has had gross sales of farm products of at least twenty thousand dollars ($20,000)  in any of the preceding three (3) years.  Ark. Code Ann. § 2­7­102(4). “Farming” or “ranching” means the employment or operation  of real property for the production of agricultural products. Ark. Code Ann. § 2­7­102(5).  Mr. Looney testified that, among the tracts of real estate mentioned in the writ of  execution, at least eighty acres were used as farmland to grow soybeans, and that he leased  this  land  to  tenant  farmers.  He  also  testified  that  he  had  over  $20,000  in  outstanding  agricultural loans. However, he did not make it clear that those loans were “secured by real ­8­  estate, crops, livestock, farm machinery, or other agricultural supplies” as required in the  definition of a “farmer.” Further, as Ms. Raby points out, that portion of the Act requiring  a release from mediation before proceeding against a farmer applies “in connection with a  secured indebtedness of $20,000 or more.” Ark. Code Ann. § 2­7­302. Mr. Looney has not  shown that this proceeding was in connection with a secured indebtedness. In fact, it was  simply an execution on a judgment. The trial court, therefore, did not err in refusing to apply  4  the Act to this case.  Sheriff’s Failure to Properly Levy Execution  Mr. Looney argues that the sheriff did not endorse the February 22, 2005, writ or  return it within sixty days, as required by statute. See Ark. Code Ann. § 16­66­110 (Repl.  2005); Ark. Code Ann. § 16­66­416(a) (Repl. 2005). The trial court did not rule on this  argument in the order appealed from. We therefore do not consider it. See Britton v. Floyd,  293 Ark. 397, 738 S.W.2d 408 (1987).  The trial court’s order is affirmed in all respects.  Affirmed.  VAUGHT and BAKER, JJ., agree. 4  The question of whether the Act would have applied to the original action on Mr.  Looney’s indebtedness is not at issue. The Bank of West Memphis obtained a release  from mandatory mediation before suing Mr. Looney in 1997. See Ark. Code Ann. § 2­7­  310 (Repl. 1996).  ­9­ 

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