Bank of America, N.A. v. Caruk Holdings Arkansas, LLC et al

Filing 63

DECREE of Foreclosure in Rem against the property, in amount of $153,418.32. Interest from date of judgment to accrue at the legal rate of.15% per annum. If judgment not paid within ten days, setting forth terms and conditions for judicial sale. Signed by Honorable Jimm Larry Hendren on March 28, 2013. (lw)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
BANK OF AMERICA, N.A.

PLAINTIFF

v.

Civil No. 11-2096

CARUK HOLDINGS ARKANSAS, LLC;
DENISE L. CARUK; and
GORDON C. CARUK

DEFENDANTS

DECREE OF FORECLOSURE
Now on this 28th day of March 2013, this case comes on to be
heard, and the Court being advised in the premises, finds as
follows:
1.

This Court has jurisdiction of the parties and subject

matter herein.
2.

Plaintiff

Bank

of

America,

N.A.

(BANA)

filed

its

Verified Complaint in Foreclosure against the defendants on May
27, 2011.
3.

The defendants were served with summonses and copies of

the Verified Complaint by personal service on or about June 3,
2011.
4.

On or about July 3, 2008, Stone Solutions, LLC executed

a Real Estate Loan Agreement in favor of BANA. The original
principal amount of the Loan Agreement was $80,000, bearing
interest at a rate of 7.100% per annum. Under the terms of the
Loan

Agreement,

Stone

Solutions

promised

to

pay

in

monthly

installments the outstanding balance of the Loan Agreement plus

interest, beginning August 3, 2008, and ending on July 3, 2023.
5.

Simultaneously with the execution of the Loan Agreement

and to secure its payment, Stone Solutions executed and delivered
to BANA a "Mortgage, Assignment of Rents, Security Agreement and
Fixture Filing." The Mortgage was filed for record in Sebastian
County, Arkansas, on July 16, 2008, as document number 7247351.
6.

On or about July 3, 2008, contemporaneous with the

execution of the Loan Agreement and Mortgage, defendants Gordon C.
Caruk

and

Denise

L.

Caruk

each

executed

a

"Continuing

and

Unconditional Guaranty" in favor of BANA. Pursuant to these
Guaranties, the Caruks irrevocably and unconditionally guaranteed
the payment and performance of Stone Solution's obligations to
BANA

as

and

when

due,

whether

at

stated

maturity,

upon

acceleration, or otherwise. The Caruks' liabilities were joint and
several with each other.
7.

Pursuant to the Mortgage, Stone Solutions granted to

BANA an interest in specific real property located in Mansfield,
Sebastian County, Arkansas, and is more particularly described as
follows:
Part of the Northeast Quarter Southwest
Quarter of Section 5, Township 4 North, Range
31 West,
Greenwood
District,
Sebastian
County, Arkansas
(the Real Property Collateral).
7.

The

Real

Property

Collateral

was

subsequently

transferred from Stone Solutions to Caruk Holdings by warranty
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deed on November 10, 2008.
8.

The Real Property Collateral was later transferred from

Caruk Holdings to the Caruks by warranty deed on August 10, 2012.
9.

On May 5, 2011, BANA sent a notice of default to Stone

Solutions, Caruk Holdings, Caruk Holdings Arizona, LLC, and the
Caruks at their last known addresses.
10.

BANA immediately exercised its right to accelerate the

debt represented by the Loan Documents, as that term is defined in
the Verified Complaint.
11.

On

August

27,

2012,

the

Caruks

filed

a

voluntary

petition seeking bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., in the
United States Bankruptcy Court for the District of Arizona, docket
number 2:12-bk-19096-SSC.
12.

On November 20, 2012, the Arizona Bankruptcy Court

granted BANA relief from the automatic stay, finding that "[a]ll
stays,

injunctions

automatic

stay

against

under

11

lien

U.S.C.

enforcement,
Section

including

362(a),

are

the

hereby

terminated with respect to [BANA's] interest in and to the subject
Real Property located in Mansfield, Sebastian County, Arkansas."
The order also authorized BANA to "exercise all of its remedies
under applicable non-bankruptcy law, including but not limited to
foreclosure proceedings with respect to the Real Property."
13.

Any interest of Caruk Holdings or the Caruks in the Real

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Property Collateral is inferior to the interest of BANA.
14.

On February 19, 2013, this Court entered its Amended and

Substituted Memorandum Opinion granting summary judgment in favor
of BANA against defendants Gordon and Denise Caruk.1 Judgment in
rem in the amount of $87,688.52 was entered on that same date, as
well as attorneys' fees and costs in the amount of $65,729.80,
bearing post-judgment interest at the rate of 0.15% per annum.
15.

Despite notice and demand, defendants Gordon and Denise

Caruk have neglected and refused to pay their obligation on this
Loan Agreement and Mortgage and are in default thereon. BANA has
declared the entire indebtedness due and payable and has elected
to seek judgment and judicial aid of its claim, as allowed in said
Mortgage and by law. There is due to BANA on account of this Loan
Agreement the sum of $87,688.52, plus attorneys' fees and costs in
the amount of $65,729.80, for a total of $153,418.32.
16.

For a valuable consideration, defendants Gordon and

Denise Caruk in said Mortgage waived all rights of dower, curtesy,
homestead, appraisement, and redemption as to the property.
IT IS THEREFORE ORDERED AND DECREED:
*

That BANA have and recover judgment in rem against the

property, and not in personam against the defendants, the amount
of $153,418.32 (comprised of $87,688.52 due on the loan and the

1

Defendant Caruk Holdings Arkansas, LLC was dismissed from the action in the
February 19, 2013 Amended and Substituted Memorandum Opinion (document #61).

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sum of $65,729.80 for attorneys' fees and costs), together with
interest accruing thereon at the legal rate of 0.15% per annum
pursuant to 28 U.S.C. § 1961(a) from the date of the judgment
until paid, and costs herein laid out and expended.
*

That BANA's prayer for a Decree of Foreclosure should

be, and is hereby, granted.
IT IS FURTHER ORDERED that, if the judgment herewith granted
is not paid within ten (10) days from the date of this Order, the
Commissioner of this Court -- hereinafter named -- shall advertise
the time, place, and terms of judicial sale according to law and
this decree, at least once weekly for four weeks prior to sale in
a newspaper having a general circulation in Sebastian County,
Arkansas, and he shall sell at public outcry, to the highest
qualified

bidder,

at

the

main

door

of the

Sebastian County

Courthouse in Fort Smith, Arkansas, on a credit of three months,
the property above described.

That the purchaser at said sale

shall be required to give bond as proof of security, securing the
payment of such purchase price and a lien shall remain on said
land to further secure said purchase price until it be paid in
full.
Provided however, that if BANA purchases the property for an
amount not in excess of its judgment and costs, which are hereby
granted, it may credit the amount of its bid, less all court costs
(including Commissioner's fees and attorney's fees) against the

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judgment at the time of the confirmation of such sale and need not
give bond to secure the purchase price.
IT

IS

FURTHER

ORDERED

that

upon

judicial

sale

of

this

property, and confirmation thereof by this Court, then all right,
title, and interest of all parties in and to said property,
including any rights or possibility of curtesy, dower, homestead,
appraisement, and redemption are forever barred and FORECLOSED.
Should the sale bring proceeds or credits in excess of BANA's
claim and costs, the Court will determine the rightful owner
thereof.
IT IS FURTHER ORDERED that Harold M. Oglesby, United States
Marshal for the Western District of Arkansas, be -- and is hereby
-- appointed Commissioner of this Court to execute this Decree; to
make the sale of the aforesaid property per this Order; and to
report his action herein to the Court within five (5) days after
such sale.
IT IS FURTHER ORDERED that upon a sale of the aforementioned
property and confirmation thereof by this Court, the proceeds
therefrom shall be paid by the Commissioner in the following
priorities:
* To the Clerk of this Court for the costs of sale, including
payment of the Commissioner's fees;
* To the Sebastian County Tax Collection for any unpaid
general ad valorem taxes which might be due on the land sold; and
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*

To

BANA

in

satisfaction

of

its

judgment,

including

attorneys' fees, interest, and costs.
Any surplus proceeds remaining after payment of the above
shall be paid into the registry of the Court to be distributed
pursuant to further orders of the Court.
IT IS FURTHER ORDERED that, upon confirmation of such sale,
the purchaser shall be entitled upon application to the Clerk of
this Court to a writ of assistance to place him or her in
possession of said land or property.
JURISDICTION of this case is retained.
IT IS SO ORDERED.
/s/ Jimm Larry Hendren
JIMM LARRY HENDREN
UNITED STATES DISTRICT JUDGE

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