August 19, 2010
FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK, ET AL., APPELLANTS,
GEORGE E. TILLERSON, III, ET AL., APPELLEES.
Appeal from the Superior Court of the District of Columbia, (CAB-6083-98), (Hon. Lynn Leibovitz, Trial Judge).
The opinion of the court was delivered by: Kramer, Associate Judge
Argued March 24, 2010
Before KRAMER, FISHER, and BLACKBURNE-RIGSBY, Associate Judges.
This case comes to us after the trial court forced the sale of a piece of real property in satisfaction of a Superior Court judgment won by appellee George Tillerson in 2000. On appeal, we are asked to consider whether a motion to execute a judgment reopens a case so that it once again becomes lis pendens.*fn1 The answer to that question determines the priority of security interests in the real property at issue.
Appellants EMC Mortgage Corporation ("EMC") and Fidelity Title Insurance Corporation ("Fidelity"), creditors with security interests in the real property, argue that the trial court erred in granting appellee George Tillerson's motion for aid in the execution of a writ of fieri facias.*fn2 They contend that this litigation is pending and that Tillerson failed to properly record his interest in the property in accordance with the lis pendens recording statute, depriving them of notice of his claim to the property and subordinating his interest in the property to theirs. We conclude that D.C. Code § 15-102 (a), and not the lis pendens statute, is the applicable recording statute here. Therefore, we agree with the trial court that Tillerson had the superior interest in the property because he properly recorded his lien in accordance with § 15-102 (a) before the creditors obtained their interests, and we affirm.
I. Factual Background
This appeal follows a decade of litigation and a prior appeal.*fn3 The following facts are not disputed by the parties. On June 27, 2000, George Tillerson won a monetary judgment of $727, 315 against Rufus Stancil.*fn4 Tillersonrecorded the judgment in the name of Rufus Stancil in the general index of the Recorder of Deeds on October 6, 2000. Stancil never appealed the final judgment against him, nor did he pay his debt to Tillerson. Since 2000, Tillerson has been attempting to locate assets to satisfy the judgment against Stancil. These efforts have culminated in the current appeal before us.
In early 2007, Tillerson discovered that Stancil owned a piece of real property located at 421 12th Street, Southeast ("property").*fn5 On March 27, 2007, Tillerson filed a request for a writ of fieri facias to force the sale of the property in satisfaction of his monetary judgment.*fn6 The trial court issued the writ on April 9, 2007, and the United States Marshal posted the writ on Stancil's property on April 16, 2007. The property, however, was never successfully seized because Stancil conveyed the property to his wife, Dolores Stancil, the very next day, April 17, 2007. Stancil conveyed the property for no consideration other than "the sum of Zero Dollars and my love and affection...." When the United States Marshal learned of the transfer of ownership, it postponed the sale of the property. The sale of the property has been in limbo ever since.*fn7
After Mr. Stancil conveyed the property to Mrs. Stancil, they applied for and received a loan from appellant EMC, using the property as collateral. Mrs. Stancil executed the promissory note insured by Fidelity, but both Mr. and Mrs. Stancil signed the Deed of Trust securing the note.
After three hearings over the course of nearly a year, the trial court held that the conveyance from Mr. Stancil to Mrs. Stancil was fraudulent*fn8 and that Tillerson's interest in the property was superior to EMC's and Fidelity's interests, regardless of whether their title was valid or not, because he recorded his judgment lien before the creditors obtained their interest. Thus, the trial judge concluded that the interests of EMC and Fidelity were subordinate to Tillerson's. The court's judgment empowered the U.S. Marshal to seize and sell the real property to satisfy Tillerson's 2000 judgment against Mr. Stancil.
II. Legal Analysis
EMC and Fidelity contend that Tillerson failed to properly record his judgment lien because the parties are currently engaged in pending litigation, in which the District's lis pendens statute, D.C. Code § 42-1207,*fn9 governs. That statute requires recordation of the specific address of property with the land records department of the Recorder of Deeds, which Tillerson failed to do.*fn10 Tillerson argues, and the trial judge found, that the lis pendens statute, and its attendant requirements, are irrelevant because there is no "pending litigation." Accordingly, the trial judge concluded that Tillerson did in fact properly record his lien in compliance with the relevant recording statute, the recording statute governing the recording of final judgments. The trial court's construction of the lis pendens statute involves questions of law, which we review de novo.*fn11
"It is axiomatic that a prior lien gives a prior legal right ('first in time, first in right')...."*fn12 Tillerson recorded his lien in October of 2000, while EMC did not issue its loan related to the property until August 16, 2007. Therefore, if we find that Tillerson's recording of his lien complied with the applicable recording statute, we must conclude that his interest in the property was superior to EMC's and Fidelity's interests in the property because it was "first in time." The trial judge held that D.C. Code § 15-102 (a), the recording statute governing the recording of final judgments, controlled because Tillerson's lien arose from the final judgment in the 2000 litigation between Tillerson and Stancil. Critically, § 15-102 (a) only requires that a final judgment be recorded with the Recorder of Deeds,*fn13 which Tillerson indisputably did.*fn14
EMC and Fidelity challenge the trial judge's conclusion that § 15-102 (a) controls. They contend that litigation is pending in this case and that D.C. Code § 42-1207 (the lis pendens statute) controls instead. They base their contention on the fact that Tillerson filed a motion in aid of execution of his writ on this property, which they allege has reopened the case so that the litigation once again became "pending." If § 42-1207 were to govern, they argue that Tillerson's recording of his lien would be deficient because he did not include a "[d]description of the real property sought to be affected" as required by § 42-1207 (b)(8). EMC and Fidelity assert that they were not properly notified of Tillerson's claim to the property because of Tillerson's failure to include the address of the property in his recorded lien. Moreover, they contend that Tillerson's failure to record his lien in accordance with § 42-1207 rendered his lien subordinate to their interests.
We agree with the trial judge that § 42-1207 is irrelevant here. The passage of § 42-1207 in 2000, titled the "Fairness in Real Estate Transactions and Retirement Funds Protection Amendment Act of 2000," was undoubtedly of great import in that it "require[d] that notice of litigation concerning real estate be filed with the Recorder of Deeds, thus providing persons with notice of litigation that could affect good title to real estate."*fn15
Nonetheless, as the legislative history makes clear, the relevance of § 42-1207 is limited to pending litigation.*fn16 When litigation has concluded and a final judgment has been rendered, as here, §15-102 controls. We disagree that Tillerson's motion in aid of execution of his writ on this property reopened the case, so that the litigation once again became "pending."
"Actions to recover a debt," like Tillerson's action in this case, "do not give rise to lis pendens because no specific property is designated for relief in the judgment. No lis pendens is involved merely because a money judgment gives the prevailing party a judgment lien in real property owned by the defeated party."*fn17
The monetary judgment which Tillerson received in 2000 was a final judgment which Mr. Stancil did not appeal. That case thus ended and Tillerson properly recorded his judgment lien pursuant to §15-102, the D.C. recording statute that governs final judgments. The motion in question here is simply an attempt to execute that final judgment, not to reopen the litigation. The trial judge's comments on this point are instructive:
This is a closed case. The only proceeding before me is the motion for aid in execution of writ of fieri facias. In other words, this is not an active litigation. The only matter that's being litigated is whether or not I should void a transfer and permit plaintiff, or rather order the marshals to sell this property.
EMC and Fidelity were thus on notice of Tillerson's claim to the property and their interests in the property were subordinate to Tillerson's.
We conclude that Fidelity's and EMC's interests in the real property were subordinate to Tillerson's interest because Tillerson properly recorded his interest first. Thus, the decision of the lower court is