Griffith v. Juarez

2022 Ark. App. 206

645 S.W.3d 339

Kimberly Stone GRIFFITH, Appellant

v.Desiderio JUAREZ, Pulaski Bank & Trust Co., M. Shane Brosh, Lee Ann Brosh, Veronica Kaye Allen, Richard N. Allen, and Estate of Charlotte Jeanne Stone, Appellees

No. CV-21-243

Court of Appeals of Arkansas, DIVISION III.

Opinion Delivered May 11, 2022

Rehearing Denied July 13, 2022

Gill Ragon Owen, P.A., by: Christopher L. Travis, P. Drake Mann, Drew Benham, Little Rock, and Samuel H. Piazza, for appellant.

Wright, Lindsey & Jennings LLP, Little Rock, by: Stephen R. Lancaster and P. Collins Hickman Jr., for separate appellees Kaye Allen and Richard N. Allen.

McMullan & Brown, Little Rock, by: Amy Clemmons Brown, for separate appellee Desiderio Juarez.

BART F. VIRDEN, Judge

Kimberly Stone Griffith appeals the circuit court's dismissal with prejudice of her petition to quiet title as to Desiderio Juarez and Veronica and Richard Allen. We affirm.

I. Relevant Facts

On July 23, 2020, Kimberly Stone Griffith filed a petition to determine heirship and quiet title, naming Veronica Allen, Richard Allen, Estate of Charlotte Stone, Shane Brosh, Lee Ann Brosh, Desiderio Juarez, and Quicken Loans, Inc., as respondents.¹ In the petition, Kimberly recounted that on February 27, 1975, her grandparents, Celestia and OC Stone, delivered and recorded a quitclaim deed conveying an undivided, one-half interest in approximately two acres of commercial property located on Highway 10 to both her father, Darrell Stone, and Celestia Stone (as trustee for Darrell's brother, Mark Stone.) On January 8, 1979, Celestia recorded a quitclaim deed conveying Mark's one-half interest to Darrell. Darrell died intestate in 1981, and his estate was not probated. He was survived by his wife, Veronica, and two daughters, Kimberly (age seven) and Charlotte (age twelve). Three years later, Veronica married Richard Allen (Allens). In 1988, the Allens decided to obtain a bank loan for $35,000, intending to secure the loan with a mortgage on the property; however, the Allens discovered they had no interest in the property as shown by Pulaski County real estate records. On January 10, 1989, Veronica, Richard, and Charlotte executed a warranty deed purporting to convey the property to Veronica and Richard (the forged deed.) The deed listed Richard and Veronica Allen, Charlotte, and Kimberly, a minor, as the grantors, and Kimberly's signature appeared on the deed. The deed was recorded on April 26, 1989, in Pulaski County.² In August 1996, the Allens executed and filed a deed conveying the property in fee simple absolute to M. Shane and Lee Ann Brosh. In June 2002, the Broshes executed a warranty deed conveying the property to Desiderio Juarez, and the deed was recorded in Pulaski County. In 2008, Juarez mortgaged the property to Pulaski Bank & Trust Co.

In her petition, Kimberly requested that the court (1) determine her heirship under Ark. Code Ann. § 28-53-101 (Repl. 2012), (2) declare the forged deed fraudulent and void as applied to her heirship in the property, (3) quiet title pursuant to Ark. Code Ann. §§ 18-60-501 to -511 (Repl. 2015 & Supp. 2021), (4) vest the title in her as Juarez's cotenant, and (5) declare that any existing or potential claims adverse to her interest be declared a nullity and canceled. She also requested any monetary damages to which she is entitled. The Allens and Juarez filed separate motions to dismiss.

On December 4, the circuit court granted the Allens’ and Juarez's motions to dismiss with prejudice. Kimberly filed a motion to modify the order and a petition for Rule 54(b) certification. Specifically, she requested a ruling on her heirship claim against any of the applicable respondents and the title claim against the Broshes and Pulaski Bank & Trust Co., which remained pending. The modified order dismissed with prejudice the claim for quiet title as to Juarez and the Allens, finding that the seven-year statute of limitations barred Kimberly's petition as to those parties, and the statute of limitations began to run on October 13, 1992, when Kimberly reached eighteen years of age and she had actual or constructive notice of the warranty deed dated January 10, 1989, filed April 26, 1989. The petition for quiet title with respect to the Broshes, Charlotte's estate, and Pulaski Bank & Trust Co.; and the petition for heirship filed against Juarez, the Allens, and Charlotte's estate were both deemed pending, and a Rule 54(b) certificate was attached to the order. Kimberly timely filed her notice of appeal.

II. Discussion

A. Standard of Review

When an appellant claims that the circuit court erred in granting a motion to dismiss, appellate courts review the circuit court's ruling using a de novo standard of review. Nucor Corp. v. Kilman , 358 Ark. 107, 186 S.W.3d 720 (2004). We will not reverse a finding of fact unless it is clearly erroneous. Sanford v. Sanford , 355 Ark. 274, 137 S.W.3d 391 (2003). We treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff. Biedenharn v. Thicksten , 361 Ark. 438, 206 S.W.3d 837 (2005). In viewing the facts in the light most favorable to the plaintiff, the facts should be liberally construed in plaintiff's favor. Id.

B. Issues on Appeal

1. Can a forged deed filed of record divest a minor owner of an estate in land inherited by intestate succession?

Kimberly contends that her signature on the 1989 deed was forged and that her mother and stepfather repeatedly told her that she inherited nothing from her father; thus, her interest in the property was concealed from her until 2019 when she found a copy of the deed in her mother's house. Because her signature was forged, she argues, "Arkansas law protects [her] vested interests in the Property," and the circuit court erred when it found that the statute of limitations, Ark. Code Ann. § 18-61-101(a), barred her 2020 petition because she had actual or constructive notice of the deed.

Ark. Code Ann. § 18-61-101(a) provides,

(1) No person or his or her heirs shall have, sue, or maintain any action or suit, either in law or equity, for any lands, tenements, or hereditaments after seven (7) years once his or her right to commence, have, or maintain the suit shall have come, fallen, or accrued.

(2) All suits, either in law or equity, for the recovery of any lands, tenements, or hereditaments shall be had and sued within seven (7) years next after the title or cause of action accrued and no time after the seven (7) years shall have passed.

Kimberly argues that our caselaw provides examples of when forged deeds do not divest a vested interest in property, and indeed, our caselaw is replete with the holding that a forged deed cannot pass title. See Coulter v. Clemons , 237 Ark. 227, 234, 372 S.W.2d 396, 400 (1963) ; Bird v. Jones , 37 Ark. 195 (1881) ; Wilson v. Biles , 171 Ark. 912, 287 S.W. 373 (1926) ; McCarley v. Carter , 187 Ark. 282, 59 S.W.2d 596 (1933) ; Williams v. Warren , 214 Ark. 506, 507, 216 S.W.2d 879, 879 (1949). However, the fact that a deed is forged does not overcome the statute of limitations.

Jaramillo v. Adams , 100 Ark. App. 335, 268 S.W.3d 351 (2007), is instructive regarding the interplay of the statute of limitations and forged deeds. In Jaramillo , Leonard discovered a deed twelve years after his mother had died intestate in 1992, and twenty years after his mother's signature had been forged on that deed. The forged deed conveyed his mother's property interest in certain property solely to Leonard's sister. This court held that the statute of limitations began to accrue at least by the date of his mother's death in 1992. Specifically, we held that

[a]ny reasonable inquiry would have led to the discovery of the deed, which was filed for record in 1984, and any potential forgery would have become apparent at that time. However, it was not until 2004 that Leonard filed the complaint in this case alleging that the signature on the deed was a forgery.

... Here, the question concerning the applicability of the defenses raised by Shirley was not whether the deed was forged; but rather, whether Leonard still had the right to question the authenticity of the signature on the deed twenty years after it was executed and recorded and twelve years after the death of Grace Adams. We hold that he did not.

Jaramillo , 100 Ark. App. at 343, 268 S.W.3d at 358. There are factual differences between the instant case and Jaramillo , namely, that Kimberly was fourteen years old when her signature was forged in 1989, and her mother and stepfather repeatedly told her that she had inherited nothing from her father. By contrast, Leonard was an adult who knew of the property's existence, and he claimed his interest in the property through his deceased mother whose signature was forged; however, even accepting the facts in Kimberly's complaint as true—that she was unaware of her property interest, her signature was forged, and she had no idea that any conveyance occurred—Jaramillo dictates that the petitioner is required to make a "reasonable inquiry" in such cases. Kimberly's second point on appeal involves the meaning of "reasonable inquiry" as we discuss below.

2. Does filing a forged deed of record affect a true owner's title to her land within the meaning of the recording statute?

The recording statute, Ark. Code Ann. § 14-15-404(a)(1) (Repl. 2013) provides that

[e]very deed bond, or instrument of writing affecting the title, in law or equity, to any real or personal property within this state which is or may be required by law to be acknowledged or proved and recorded shall be constructive notice to all persons from the time the instrument is filed for record in the office of the county recorder of the proper county.

Continuing the discussion above, in Hughes v. McCann , 13 Ark. App. 28, 31–32, 678 S.W.2d 784, 786 (1984), the appellant's fraud claim was barred by the statute of limitations. This court held that

[b]ecause the Ferguson mortgages were

...