- March 14, 2017
- All Oklahoma Issuing Offices
- UNDERWRITING - Judicially Imposed Liens as Liens without Recording with County Clerk
An Oklahoma Supreme Court case, Benefiel v. Boulton 350 P3rd 138, decided May 12, 2015, contains language that changes the way we must treat judgments. In this case, the Benefiels were divorced and the court awarded Christa Benefiel the property subject to a lien in favor of Alan Benefiel. Prior to paying the final installment Christa Benefiel sold the property to Jewel Boulton. As stated by the Court, “the divorce decree had not been filed with the County Clerk; however; it was made a part of the abstract of title. Despite its inclusion in the abstract, a title opinion issued prior to closing failed to identify the divorce judgment as a potential cloud or defect.”
The Court of Civil Appeals considered the case twice. In the first appeal the court held that a valid lien had been created and was applicable to the property because of the judgment’s inclusion in the abstract of title. The Court reconsidered the case and allowed Ms. Boulton to redeem the property. The Oklahoma Supreme Court then took the case on appeal and dealt with the issue of the redemption. It did not discuss or change the ruling of the court of appeals that the judgment was effective without recording in the county records.
Accordingly, when you have notice of a divorce or other case and determine that the court has imposed a lien on real property, you should include the case in your abstract. Any commitment for title insurance issued based on the abstract should show the judgment as a lien and require its release or exception to it.
If you have any questions about this case, please contact a Stewart underwriter for Oklahoma.
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