The Alabama Supreme Court recently held in Ex parte Arvest Bank, that an unexecuted judgment lien against the property interest of one joint tenant does not sever a joint tenancy with the right of survivorship, thereby extinguishing the lienholder’s rights in the property when that joint tenant dies.

After Evelyn and Raymond Niland purchased a parcel of real property as joint tenants with the right of survivorship, they quitclaimed the property solely to Evelyn and removed Raymond’s name from the title.  Raymond stopped paying the existing mortgage debt to Iberiabank, and Iberiabank obtained a judgment solely against Raymond.  Iberiabank recorded its judgment, creating a lien on all property owned by Raymond.  Three years later, Evelyn transferred the property back to herself and Raymond, again creating a joint tenancy with the right of survivorship.  That same day, the Nilands executed with Arvest Bank a mortgage on the property, and Raymond died less than three months later.

After Raymond died, Iberiabank obtained a writ of execution against the property, and Arvest moved to intervene and quash the scheduled sheriff’s sale of the property.  After the trial court denied Arvest’s motion to quash the sheriff’s sale, Arvest appealed to Alabama Supreme Court, arguing that Iberiabank’s interest was extinguished when Raymond died because Evelyn became the sole owner of the property pursuant to her right of survivorship.

The Court held that Iberiabank’s judgment lien only attached to Ramyond’s undivided interest in the joint tenancy he shared with Evelyn.  However, a judgment lien alone does not sever a joint tenancy with the right of survivorship; only an executed judgment against a joint tenant will sever the joint tenancy.  Because Iberiabank did not file the writ of execution until after Raymond died, the joint tenancy was never severed during his lifetime.  Accordingly, when Raymond died, his interest in the property (as well as Iberiabank’s corresponding interest) passed entirely to Evelyn, and Iberiabank had no interest in the property against which it could obtain a writ of execution.  The Court reversed the trial court’s order denying Arvest’s motion to quash the writ of execution, directing it to grant the motion.

Based on this ruling, lienholders with judgment liens on the interest of only one joint tenant in a joint tenancy with the right of survivorship should timely execute on the lien in order to sever the joint tenancy and preserve their lien interest before the joint tenant dies and his interest passes to the surviving joint tenants.