Cleary v. Sledge Properties, Inc.
2010 Ark. App. 755
Ark. Ct. App.2010Background
- Cleary entered a November 1989 contract with Gardner Investments for property in Drew County, with deeds to Cleary upon full payment of the price.
- The contract was unrecorded and obligated Cleary to pay taxes and maintain insurance; Gardner would deliver a deed when paid in full.
- Cleary reduced monthly payments from $277.53 to $175 in 1993 and later stopped paying in April 1998.
- Gardner Investments allegedly paid real property taxes; Cleary remained in possession since 1989.
- Gardner conveyed the property to Community Radio Network, Inc. in 2004, which then conveyed to Sledge Properties, Inc. in March 2007.
- Cleary filed a complaint in May 2007 claiming ownership by adverse possession; Sledge counterclaimed for unlawful detainer seeking possession, rent, and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cleary’s post-breach possession was hostile to the owner | Cleary argues possession became adverse after renegotiation and breach. | Sledge contends continued possession under contract cannot be hostile. | Cleary’s possession post-breach was not established as hostile. |
| Whether the 1995 amendment to 18-11-106 applied and credit for taxes | Cleary was not required to prove tax payments under pre-amendment law. | Sledge argues the amendment applied and Cleary failed to prove tax payments. | Amendment did not vest until after hostile possession; Cleary failed to show tax payments. |
| Whether the contract constitutes color of title | Cleary contends contract provided color of title. | Sledge maintains contract did not provide color of title; purchaser under executory contract cannot adverse-possess. | Court did not reach color-of-title issue because other elements failed. |
| Whether the contract modification negates adverse-possession claim | Renegotiation or modification tolled or altered possession characterization. | Modification does not support hostility to defeat ownership by adverse possession. | Court held modification/renegotiation did not salvage adverse-possession claim. |
| Award of back rent under unlawful detainer (18-60-309) | Sledge entitled to liquidated damages for unlawful detainer. | Court denied damages; no discretion to refuse. | Reversed and remanded to award fair rental value as damages. |
Key Cases Cited
- Mask v. State, 314 Ark. 25 (1993) (courts may control seating absent prejudice to a party)
- Webster v. State, 284 Ark. 206 (1984) (evidence-rule seating discretion under Rule 615)
- Schrader v. Schrader, 81 Ark.App. 343 (2003) (amendment to 18-11-106; vesting of claims)
- Tillar v. Clayton, 76 Ark. 405 (1905) (purchaser under executory contract cannot establish hostility)
- Cleveland v. Aldridge, 94 Ark. 51 (1910) (possession under contract affects adverse-possession status)
- Dickson v. Sentell, 83 Ark. 385 (1907) (traditional elements of adverse possession)