After the recreational vehicle (“RV”) owner was found guilty and sentenced for drug-related charges (including transporting drugs with the RV), the state filed a complaint for forfeiture of the RV. According to the RV owner, he had borrowed money from his father to purchase the RV, and still owed a significant amount on the loan. At the hearing, the RV owner agreed that the RV was subject to forfeiture but argued that the forfeiture should be subject to his father’s alleged security interest. The RV owner presented a loan agreement, which identified the RV owner as a “borrower” and his father as the “loaner,” and provided that the loan was to be paid in monthly installments. The RV owner also testified that the father had filed a security interest. The lower court found the evidence of the loan “insufficient” and held that the RV should be forfeited to the state, and was not subject to the father’s alleged security interest. The RV owner appealed, arguing that the Arkansas Code “is clear that the forfeiture of a conveyance is subject to any existing security agreement.”
In Stalik v. State, 2025 Ark. App. 235 (Ark. Ct. App. 2025), the court affirmed the lower court. The court reviewed the plain language of the relevant statute, which provides that a forfeiture “encumbered by a bona fide security interest is subject to the interest of the secured party if the secured party neither had knowledge of nor consented to the act or omission.” Arkansas Code Ann. § 5-64-505(a)(4)(D). The court applied Black’s Law Dictionary’s definition of “bona fide”: “made in good faith; without fraud or deceit.” It found that the lower court did not err in finding the evidence presented insufficient to prove that the father had a bona fide security interest in the RV. Specifically, the court noted that there was no evidence other than the RV owner’s own testimony to support his claims, “such as a title showing [the father]’s security interest or proof of payments he allegedly made,” or testimony from the father. The court also noted that even if there had been evidence of a bona fide security interest, no evidence had been presented regarding the father’s lack of knowledge or consent to the drug activity.
By Kristin Meurer [email protected]
Edited By Hayden Mariott [email protected]