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09/02/94 BECKY W. HELMS AND CHRIS B. HELMS v.

September 2, 1994

BECKY W. HELMS AND CHRIS B. HELMS
v.
HELMS' KENNELS, INC., ET AL.



Appeals from Jefferson Circuit Court. (CV-90-5214). Marvin Cherner, TRIAL JUDGE.

Released for Publication December 7, 1994.

Hornsby,

The opinion of the court was delivered by: Hornsby

HORNSBY, CHIEF JUSTICE.

The plaintiffs, Becky and Chris Helms, appeal from judgments for the defendants, Helms' Kennels, Inc. ("the corporation"), and John Oliver, as executor of the estate of John Bankhead III ("the estate"). We reverse and remand.

I.

In 1986, the Helmses entered into the greyhound dog training business with Bankhead. The three of them formed Helms' Kennels, Inc., with Bankhead listed as the sole incorporator, director, and shareholder. The corporation purchased approximately 40 acres of land at McCalla, Alabama, and constructed a house and a greyhound training facility on the property. Thereafter, the Helmses moved into the house and began operating the training facility.

Bankhead died in 1988. After his death, a dispute arose about the ownership of the corporation and its only assets, the house and greyhound training facility. The Helmses sued the estate and the corporation in the Birmingham Division of the Jefferson Circuit Court, seeking among other things, a judgment (1) declaring that they owned half the stock in the corporation; (2) requiring the corporation to issue them half of the shares of the corporation's stock, and (3) giving them title to the house and damages for breach of contract.

The corporation counterclaimed, alleging that the Helmses owed it money. The estate cross-claimed against the corporation, alleging that the corporation owed money to the estate. On April 9, 1993, the trial court entered a judgment for the estate for $21,744 against the Helmses, a judgment for the estate against the corporation in the amount of $581,918, and, critical to this appeal, a judgment for the Helmses against the corporation in the amount of $91,075. It also entered a judgment for the corporation as to the Helmses' claim for compensation and their claim seeking title to the real property. Moreover, the trial court declared that the estate was the sole stockholder of the corporation.

Although the parties filed several post-trial motions, they never appealed the final judgment. On May 14, 1993 (more than 30 days after the trial court's final judgment), the Helmses recorded a certificate of judgment in the Bessemer Division of the Probate Court of Jefferson County. The real property is located in the Bessemer Cut-Off, served by the Bessemer Division. The Helmses did not notify the Birmingham Division of the circuit court or the other parties that they had filed a lien on the property based on the judgment. Although the Helmses recorded the entire court order with the certificate of judgment, the certificate itself referred only to the $91,075 judgment for the Helmses. The estate did not record a lien based on the trial court's judgment.

In September 1993, the estate (as sole owner of the corporation) secured a written contract for the sale of the house and 10 acres of the land ("the sale property") for $167,500. However, the Helmses refused to release their judgment lien on the sale property, so that the title to the property would be marketable, unless the estate agreed to fully satisfy the Helmses' lien from the sale proceeds. On October 28, 1993, the estate and the corporation filed a "motion for order approving sale of property" *fn1 with the Birmingham Division of the Jefferson Circuit Court requesting that the court order the Helmses to release their lien on the sale property and, because the sale proceeds would be insufficient to satisfy both the Helmses' and the estate's judgments against the corporation, to accept a pro rata portion of the sale proceeds.

On November 5, 1993, the court ordered the Helmses to release their lien on the property. The court also ordered that the sale proceeds be paid into court and that the rights of the parties as they existed before the sale would attach to the proceeds. The court did not determine how the proceeds would be distributed. In response, the Helmses petitioned this Court for a writ of mandamus and an emergency stay to stop the sale of the property, arguing that the Birmingham Division of the Jefferson Circuit Court did not have jurisdiction over the property, which was located in the area served by the Bessemer Division. We denied the Helmses' petition. On November 12, 1993, the Helmses appealed the November 5, 1993, order of the Birmingham Division, arguing that the court could not order the sale of the property clear of their lien and that the court did not have jurisdiction over the sale property.

While their appeal was pending, the Helmses moved the Birmingham Division to transfer the action to the Bessemer Division of the circuit court. The Birmingham Division denied the motion and on November 23, 1993, the court amended its final judgment, per Rule 60(b), A.R.Civ.P., to require a pro rata distribution of the proceeds to the parties. The Helmses then filed a second appeal, contending that the Birmingham Division of the circuit court did not have the authority to order the sale proceeds ...


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