Filed: Dec. 29, 2006
Latest Update: Feb. 21, 2020
Summary: 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
Summary: 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 ..
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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this opinion should not be published and is not precedent except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
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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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