A Mortgagee is not a Landowner, at Least for Arkansas Eminent Domain Law
The Arkansas Supreme Court reversed a grant of attorney's fees in City of Ft. Smith v. Carter, No. 07-220 (1/10/08).
The Hacklers sold a parcel of land to the Carters for $60,000; and the Hacklers held a mortgage for the outstanding debt. The city obtained an order of immediate possession by depositing $14,000. At the trial, the jury determined that the land was worth $30,000. A statute provides that, if the jury award is more than 20% of the deposit, then the landowner is entitled to attorney's fees. See A.C.A. § 18-15-605(b). The trial court found that both the mortgagor and mortgagee are landowners and awarded attorney's fees to both the Hacklers and Carters.
In its reversal, the supreme court held that only the party in possession of the land can be considered a landowner. While a mortgagee has an interest in the land, it cannot possess the land unless and until the mortgagor defaults. The court reversed the award of attorney's fees to the Hacklers.
