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Mortgage holder does not have same rights as landowner, court rules Friday, Jan 11, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - A Crawford County couple should not have been awarded attorney's fees in an eminent domain lawsuit because the couple did not own the land that was the subject of the lawsuit, the state Supreme Court ruled Thursday. The Supreme Court reversed a circuit court ruling that granted attorney's fees to Lee and Patricia Hackler in a lawsuit over the city of Fort Smith's acquisition of land near Lake Fort Smith in Crawford County. Although the Hacklers held a mortgage on the land, they did not meet the definition of landowners, the state's highest court ruled. In 2001, the Hacklers sold 20 acres of land to J.D. and Mary Lois Carter, but the Hacklers held the mortgage. In 2002, the city of Fort Smith acquired the land through eminent domain in connection with a project to expand the lake, which provides much of the drinking water for Crawford and Sebastian counties. After the Carters rejected the city's offer of $14,000 in compensation, they and the Hacklers agreed to settle with the city for $48,250, but the Fort Smith Board of Directors refused to approve the settlement. In July 2004, a jury awarded the Carters $30,000. Crawford County Circuit Judge Gary Cottrell later awarded the Carters and the Hacklers partial attorney's fees of $7,000 for the increased cost and delay that resulted from the board's rejection of the settlement. The state Supreme Court overturned Cottrell's ruling on appeal, saying the judge incorrectly interpreted state law when he awarded only partial fees. The court sent the case back to Cottrell to determine what amount of fees should be awarded to the Carters and whether the Hacklers qualified as landowners - which the court said was a prerequisite for an award of attorney's fees. Cottrell ruled that the Hacklers were entitled to attorney's fees, but on Thursday the Supreme Court again ruled that Cottrell had erred. A "landowner" is commonly understood to be a person who is entitled to possess land, but as mortgage holders the Hacklers could not possess the land unless the Carters defaulted on the mortgage, the court said in its opinion. "In the instant case, the Hacklers held a mortgage on the condemned property, but at the time that the city filed its condemnation action the Carters had not defaulted on the mortgage, and, therefore, the Hacklers did not have a right to possess the property" and did not qualify as landowners, Justice Annabelle Clinton Imber wrote. |
