McMahen v. Robinson
2017 Ark. App. 270
| Ark. Ct. App. | 2017Background
- In 2007 David McMahen quitclaimed real property to his wife, Rebecca McMahen; David was insolvent and the property was mortgaged.
- American Express Centurion obtained a judgment against David in April 2010; Kenneth Robinson obtained a consent judgment against David on October 12, 2010 (filed November 1, 2010).
- Rebecca filed a declaratory-judgment action in March 2015 seeking a ruling that Arkansas’s Fraudulent Transfers Act three-year limitation (Ark. Code Ann. § 4-59-209) barred any attack on the 2007 quitclaim deed.
- Robinson argued the deed was a fraudulent, considerationless transfer and that equitable doctrines (including laches under § 4-59-210) could permit rescission despite the statute; he also argued David retained an interest (curtesy) to which his judgment lien attached.
- The trial court denied Rebecca’s petition, treating timeliness as a factual laches question and refusing to hold the statutory limitation dispositive.
- The Court of Appeals reversed, concluding the three-year statutory limitation extinguished any fraudulent-transfer claim attacking the 2007 quitclaim deed and that § 4-59-210 could not be used to circumvent § 4-59-209 once the judgment was obtained after the statutory window had closed.
Issues
| Issue | Plaintiff's Argument (McMahen) | Defendant's Argument (Robinson) | Held |
|---|---|---|---|
| Whether § 4-59-209’s three-year limitation bars an action to set aside the 2007 quitclaim deed | The three-year period expired Aug 23, 2010, so any fraudulent-transfer claim is extinguished and the deed cannot be rescinded | Statute of limitations should not permit attachment of a judgment executed after the period; equitable relief may still attach via other doctrines | Court: § 4-59-209 barred any fraudulent-transfer claim attacking the 2007 deed because Robinson obtained his judgment after the three-year window; reversal of trial court |
| Whether equitable doctrines under § 4-59-210 (e.g., laches, insolvency) can revive or override the § 4-59-209 limitation so Robinson can rescind the deed | N/A (McMahen argued statute controls) | Laches and other equitable principles permit rescission despite the statutory limitation; homestead waiver in 2011 reopened vulnerability | Court: § 4-59-210 does not displace § 4-59-209 where the judgment was obtained after the statutory window; trial court erred to apply laches to defeat the statute |
Key Cases Cited
- Self v. Self, 319 Ark. 632 (Ark. 1995) (laches doctrine and delay in seeking equitable relief)
- Anadarko Petroleum Co. v. Venable, 312 Ark. 330 (Ark. 1996) (principles underpinning laches and detrimental reliance)
- Stone v. Bowling, 191 Ark. 671 (Ark. 1935) (homestead waiver by sale/contract)
- Beeson v. Byars, 187 Ark. 966 (Ark. 1936) (homestead waiver principles)
- O'Neal v. B.F. Goodrich Rubber Co., 204 Ark. 371 (Ark. 1944) (duty to exercise reasonable diligence to set aside a judgment)