TERRY A. GUENGERICH and LORRAINE GUENGERICH v. KAYLA BARKER and CLARENCE EDWARD HIGGINS, JR., Defendants-Respondents. , 2014 Mo. App. LEXIS 244 ( 2014 )

TERRY A. GUENGERICH and )
LORRAINE GUENGERICH, )
)
Plaintiffs-Appellants, )
)
v. ) No. SD31479
) Filed: 3-10-14
KAYLA BARKER and CLARENCE )
EDWARD HIGGINS, JR., )
)
Defendants-Respondents. )
APPEAL FROM THE CIRCUIT COURT OF DOUGLAS COUNTY
Honorable R. Craig Carter, Associate Circuit Judge
AFFIRMED AS MODIFIED
Terry and Lorraine Guengerich (hereinafter referred to individually by their given
names and collectively as Sellers) appeal from a judgment ordering them to pay damages
arising out of a contract to sell real estate to Kayla Barker and Clarence Higgins
(hereinafter referred to individually by their given names and collectively as Buyers).
The trial court found for Buyers on their counts alleging unjust enrichment and breach of
contract. Sellers contend: (1) the trial court erred in finding that Sellers had been
unjustly enriched; (2) the trial court erred in finding that Sellers had materially breached
the contract; and (3) Buyers failed to present substantial evidence to support certain items
awarded as damages. Because the trial court correctly found for Buyers on their breach
of contract count, they were entitled to recover damages on that count. Since it is clear
from the judgment that the damages from the breach of contract duplicated the amounts
awarded on the unjust enrichment count, any error as to the latter count was immaterial
and need not be addressed. We agree with Sellers, however, that the trial court erred in
two respects in assessing Buyers’ damages. Pursuant to Rule 84.14, we affirm the
judgment as modified.1
I. Standard of Review
We will affirm the decision in a court-tried case unless there is no substantial
evidence to support it, it is against the weight of the evidence, or it erroneously declares
or applies the law. Greenstreet v. Fairchild, 313 S.W.3d 163, 168 (Mo. App. 2010).
The trial court’s judgment is presumed correct, and Sellers have the burden of proving it
erroneous. Surrey Condominium Ass’n, Inc. v. Webb, 163 S.W.3d 531, 535 (Mo. App.
2005). An appellate court is primarily concerned with the correctness of the trial court’s
result, rather than the route taken by the trial court to reach that result. Business Men’s
Assur. Co. of America v. Graham, 984 S.W.2d 501, 506 (Mo. banc 1999). Therefore,
we will affirm the trial court’s judgment under any reasonable theory supported by the
evidence, even if the reasons advanced by the trial court were wrong or insufficient.
Ewanchuk v. Mitchell, 154 S.W.3d 476, 481 (Mo. App. 2005); Jackson v. Cannon, 147
S.W.3d 168, 173 (Mo. App. 2004).
In conducting our review, “we accept as true the evidence and permissible
inferences favorable to the prevailing party and disregard contrary evidence and
1
All references to rule are to Missouri Court Rules (2013).
2
inferences.” Gordon A. Gundaker Real Estate Co., Inc. v. Maue, 793 S.W.2d 550, 551
(Mo. App. 1990). “We defer to the trial court’s determinations regarding credibility;
however, we review issues of law de novo.” Greenstreet, 313 S.W.3d at 169. The
following summary of the facts has been prepared in accordance with these principles.
II. Factual and Procedural Background
Sellers owned 71 acres of land in Douglas County. The property consisted of two
adjoining parcels of land, separated by a county road. Sellers had orally leased both
parcels of land to Rick and Nicole Dehaan (the Dehaans) to pasture their cattle for a per-
head monthly fee.
Sellers decided to sell the parcel of land lying south of the county road. This
fenced parcel, which Sellers believed to be 20 acres in size, contained a 3,800-square-foot
home and a barn. Shortly after Buyers moved from Colorado to Missouri, they offered to
purchase this parcel of land (hereinafter referred to as the 20-acre parcel) from Sellers.
Buyers had a herd of 15 horses and needed a location suitable for that number of animals.
Buyers’ offer included, inter alia, the following provisions: (1) the purchased property
would be financed with a seller-financing agreement; (2) Buyers would execute a
promissory note for the purchase price, bearing interest at 5½ percent to Sellers; (3)
Sellers would provide title insurance; (4) the washer and dryer would be left in the home
and included in the purchase price; (5) Sellers would provide a one-year home warranty;
(6) Sellers would provide a termite clearance letter; and (7) Buyers would be entitled to
possession of the purchased property at the time of closing and a right of first refusal on
the adjoining 51 acres across the county road (hereinafter referred to as the 51-acre
3
parcel). Buyers also offered to maintain the 51-acre parcel in exchange for being able to
use it to pasture their horses. This offer was made on September 4, 2009.
Sellers’ agent prepared a counteroffer. This counteroffer proposed that the
interest rate on the promissory note be set at 6 percent and provided a right of first refusal
on the 51-acre parcel. The counteroffer did not mention the use of the 51-acre parcel
prior to exercise of the right of first refusal. The counteroffer also stated that any
“unchanged terms” remained part of the new offer. Buyers accepted the modifications
and signed the counteroffer.
The closing on the purchased property was conducted on September 24, 2009. At
that time, Buyers were not provided with a home warranty, a title insurance policy or a
termite clearance letter. Sellers did execute an affidavit stating that there were no leases
or encumbrances on the purchased property. At the closing, Sellers and Buyers executed
a contract for deed. Pursuant to that contract, Buyers paid $50,000 down and executed a
promissory note for the balance of the purchase price in the amount of $250,000 at 6
percent interest. The monthly purchase price payments were $1,791.08 to be paid on the
25th of each month. The agreement provided that Sellers would deposit a warranty deed
in escrow and that Sellers would provide a title insurance commitment. The warranty
deed would be delivered to Buyers upon payment of the full purchase price. Buyers
executed a quit claim deed to Sellers to be placed in escrow. The quit claim deed would
be delivered to Sellers upon default by Buyers. The contract for deed did not contain an
integration clause or a statement that it represented the entire agreement of the parties.
The contract for deed further contained the following two provisions regarding taxes and
insurance:
4
TAXES:
SELLER shall annually receive the annual real estate tax statement and
shall forward to BUYER the amount of real estate taxes due. BUYER
shall forward payment to SELLER by December 15th of each year.
Failure of BUYER to reimburse SELLER shall constitute default and the
escrow agent is authorized to deliver to SELLER the Quit Claim Deed
heretofore mentioned.
INSURANCE:
BUYER shall carry insurance equal to or in excess of the unpaid balance
of this agreement, with a loss-payable clause in favor of SELLER. IT IS
AGREED that the obligation to keep the premises insured is continuous
throughout the pendency of this agreement. IT IS AGREED that in the
event BUYER shall fail to keep the premises insured that same shall
constitute default and that SELLER shall, at their option, obtain insurance
and the ESCROW AGENT is authorized to deliver to SELLER the Quit-
Claim Deed heretofore mentioned.
Buyers provided a receipt for insurance coverage at closing.
When Buyers brought their horses to the purchased property on September 24th,
there was a herd of cows and a bull on the 20-acre parcel. The 51-acre parcel also had
cattle grazing on it. Nicole Dehaan, to whom the cattle belonged, stopped by the 20-acre
parcel on the 24th and said that the Dehaans had leased that property from Sellers on a
month-to-month basis to pasture her cattle. Buyers placed their horses in an enclosed,
one-acre paddock on the 20-acre parcel. There was not sufficient pasture in that
enclosure to feed the horses, so Buyers were required to purchase hay for the animals.
Sellers told Buyers that they would have to execute a written lease on the 51-acre
parcel to “trump” the Dehaans’ oral lease on the 20-acre parcel and thereby authorize the
removal of her cattle from that land. Buyers signed a written agreement leasing the 51-
acre parcel for $200 per month so they could get the Dehaans’ cattle off the 20-acre
5
parcel. Buyers also learned from the county assessor that the 20-acre parcel purchased by
Buyers included some acreage beyond the fence.
On October 4, 2009, Buyers called the sheriff’s department because the Dehaans’
cattle were still on the 20-acre parcel. The sheriff’s deputy who responded to Buyers’
call examined some paperwork provided by the Deehans and determined that they had
until November 1st to remove the cattle from the 20-acre parcel. The cattle remained on
Buyers’ land until that date. From the date of closing through November 1st, Buyers
spent $400 on hay to feed their horses. After the cattle were removed, Buyers still had to
purchase additional feed for the horses because the land had not recovered enough to
provide sufficient grazing for those animals.
When Buyers moved into the home, they discovered that Sellers had left some
furniture and other personal property in the home. Additionally, the washer and dryer
had been replaced with an older washer and dryer that did not work. Buyers rented a
washer and dryer set. By the time of trial, Buyers had spent $3,145 to rent those
appliances. Buyers also were concerned about the home warranty because they wanted to
make a claim about the washer and dryer on the home warranty. When Buyers spoke
with Sellers’ agent about the issue, she said she needed a check for $509 right then to
activate the home warranty. Buyers paid that amount to the escrow company so that they
could get the home warranty implemented.
Meanwhile, the check Buyers had used to pay the insurance premium had been
dishonored because of a bank error. A cancellation notice was sent to Sellers on October
23, 2009. Sellers did not forward that information to Buyers, and Buyers never received
that notice.
6
By December 15th, Buyers had not received any documentation about the tax bill.
On December 28th, Terry came to Buyers’ home and demanded the tax money. Buyers
refused because they thought those taxes had been paid at closing. Terry became angry,
and eventually Buyers asked him to leave.
On December 31, 2009, the attorney at the escrow company sent Buyers a default
letter. The body of that letter stated:
Pursuant to a request from [Sellers], this letter is to serve as notification
that you are in default in the terms under the above mentioned Contract for
Deed. The grounds for default are failure to keep insurance on property
and failure to pay the 2009 taxes to [Sellers] by December 15th deadline
listed in the Contract for Deed.
If you refute the grounds of the default you must contact our office within
twenty (20) days from receipt of this notice. If I do not hear from you
within the allotted time, I will be authorized to deliver the Quit Claim
Deed held in escrow to [Sellers]. Delivery of this Quit Claim Deed
releases any claim you have in the property held under the Contract for
Deed.
The letter was sent certified mail, and Buyers received it on January 5, 2010. On
January 14, 2010, Kayla responded to the notice in a seven-page letter with attachments.
Kayla sent copies of that letter to the escrow company, Buyers’ real estate agent and
Terry. In the letter, Kayla explained that her mother had wired $51,000 to the escrow
company prior to closing. Kayla also explained why they believed the 2009 taxes had
been paid at closing. She included a check for the amount of the 2009 taxes with the
copy of the letter that she sent to Terry. The letter also explained that Buyers had not
received the documentation regarding the tax bill to which they were contractually
entitled. Kayla further noted that, even after speaking with Terry on December 28th, she
had to clarify the amount of tax due with the assessor’s office. This letter also discussed
7
the issue with the cattle, the lack of a termite clearance letter, the lack of a home
warranty, and Buyers’ efforts to remedy the insurance issue.
The escrow company received Buyers’ letter on January 20, 2010. The quit claim
deed was recorded on January 22, 2010. The escrow company made no attempt to
address Buyers’ complaints prior to filing the quit claim deed. Sellers instructed the
escrow company not to deliver the quit claim deed on Buyers at that time.
By February 5, 2010, knowing that the quit claim deed had been recorded, Sellers
obtained insurance for the property. The parties then spent about two months attempting
to renegotiate the real estate sales contract. During this time, Sellers did not inform
Buyers that the quit claim deed had been recorded, and Sellers accepted a payment on the
contract for deed from Buyers. Sellers wanted Buyers to give back the property behind
the fence in exchange for a change in the due date for the monthly purchase price
payments. Even though such an arrangement would have left Buyers with about 12 acres
instead of 20, Terry refused to adjust the purchase price. These negotiations were not
fruitful. Eventually, Buyers received notice that their insurance policy had been canceled
because the quit claim deed had been filed.
On May 12, 2010, Sellers filed a petition against Buyers seeking ejectment and
rent. Buyers filed a counterclaim that included a count for breach of contract, a count for
unjust enrichment, and two counts alleging fraudulent misrepresentation.
A two-day bench trial was conducted in April 2011. The trial court found, inter
alia, that “[Sellers] failed to have the property vacant at the time of closing, swapped the
washer and dryer for less-valuable models, refused to purchase a home warranty, and
failed to properly deliver the yearly tax bill, all of which were their contractual duties.”
8
The court also found that Sellers had failed to deliver possession of the 20-acre parcel to
Buyers because the Dehaans’ cattle were on the property. Because Buyers no longer
wanted the 20-acre parcel and consented to the entry of a judgment in Sellers’ favor on
their ejectment count, the trial court found for Sellers and awarded them $16,150 in rent.
The court concluded that it was Sellers’ actions which caused the real estate transaction
to fail. The court awarded $59,792.09 in damages to Buyers on their unjust enrichment
count.2 The court also found that Sellers had materially breached the contract, but Buyers
were only awarded $12,154 in damages on that count to avoid a double recovery.3 After
subtracting Sellers’ damages from the total amount of Buyers’ damages, the trial court
entered a net judgment in favor of Buyers in the amount of $55,796.09. Sellers appealed.
III. Discussion and Decision
In Point I, Sellers contend the trial court erred in finding for Buyers on their
unjust enrichment count. In Point II, Sellers contend the trial court erred in finding that
they had materially breached the contract. In Point III, Sellers contend there was no
substantial evidence to support the award of damages. For ease of analysis, we will
address Sellers’ points out of order.
2
Those damages consisted of: (1) $49,836.69 paid by Buyers at closing; (2)
installment payments in the amount of $8,955.40; and (3) $1,000 paid by Buyers on the
lease agreement.
3
Allowing Buyers to recover the same damages via a breach of contract and an
unjust enrichment theory would violate Missouri’s rule that a party cannot be
compensated for the same injury twice. See, e.g., MECO Systems, Inc. v. Dancing Bear
Entertainment, Inc., 42 S.W.3d 794, 810-11 (Mo. App. 2001) (holding that a party could
not recover the same damages via a breach of contract and unjust enrichment theory).
The trial court recognized and applied that rule in the judgment by stating that, “for the
breach of contract claim, as the Court has already granted the [Buyers] damages on their
unjust enrichment count, the Court must not grant duplicate damages.”
9
Point II
In Sellers’ second point, they contend the trial court misapplied the law by finding
that Sellers had materially breached the contract. Sellers argue that: (1) they were
entitled to file the quit claim deed based on the provisions of the real estate contract; and
(2) their own breaches of contract were not material. We disagree.
Sellers’ argument that they were entitled to record the quit claim deed is based
upon the premise that Buyers’ failure to obtain insurance constituted a default. That
argument ignores the well settled principle that a party to a contract cannot claim its
benefit where he is the first to materially breach it. See, e.g., Boten v. Brecklein, 452
S.W.2d 86, 92 (Mo. 1970); Matt Miller Co., Inc. v. Taylor-Martin Holdings, LLC, 393
S.W.3d 68, 88 (Mo. App. 2012); Barnett v. Davis, 335 S.W.3d 110, 112 (Mo. App.
2011). A breach of contract is material if the breach relates to a vital provision of the
agreement that goes to the substance or root of the agreement. G & J Holdings, LLC v.
SM Properties, LP, 391 S.W.3d 895, 903 (Mo. App. 2013). The materiality of a breach
is a question of fact. Matt Miller Co., 393 S.W.3d at 88; Classic Kitchens & Interiors v.
Johnson, 110 S.W.3d 412, 417 (Mo. App. 2003).
Here, the trial court found that Sellers were in breach of the real estate sales
contract immediately after the closing by: (1) failing to leave the house vacant; (2)
switching out the washer and dryer for less valuable models; (3) refusing to purchase a
home warranty as they promised; and (4) failing to remove the Dehaans’ cattle by the
date of closing. The first and fourth listed breaches tended to deprive Buyers of their
rightful possession of the property, which goes to the very substance or root of the
agreement. The third breach deprived Buyers of their home warranty, which was another
10
valuable benefit of the real estate sales contract. We reject Sellers’ argument that their
breaches of contract were not material.
Assuming arguendo that the foregoing breaches by Sellers were not material, our
disposition of this point would not change. Sellers argue that they were entitled to file
the quit claim deed because Buyers failed to keep the property insured. That argument
fails because the trial court implicitly found that: (1) Sellers waived their right to place
Buyers in default based on that breach; and/or (2) Buyers’ untimely performance in
obtaining insurance was excused because it was the result of a bank error.
With respect to the first issue, “[t]here is no doubt that any default in the
performance of a contract may be waived.” Donahue v. State, 655 S.W.2d 642, 645
(Mo. App. 1983). Whether a party has waived a right to declare a forfeiture is a question
of fact best left to the trial court. Langdon v. United Restaurants, Inc., 105 S.W.3d 882,
890 (Mo. App. 2003).
Here, the trial court found that a bank error caused Buyers’ check to be
dishonored. Sellers learned of the cancellation of Buyers’ insurance on October 23,
2009. Sellers did not forward that information to Buyers. After approximately two
months elapsed, Sellers then demanded that Buyers pay the property taxes on the 20-acre
parcel, which is inconsistent with an intention to declare a default. The December 31st
letter also did not declare a default. Instead, it gave Buyers 20 days to respond to the
allegations of default and implicitly offered them an opportunity to cure. Buyers’ timely
response tendered payment of the property taxes, and explained why the insurance had
11
lapsed and how they intended to remedy that problem.4 Notwithstanding that response,
and before expiration of the 20-day period granted in the letter, Sellers filed the quit
claim deed. Buyers were not notified of that event, and Sellers continued to treat the real
estate contract as being in effect. The parties continued to discuss a renegotiation of the
contract, and Sellers accepted one monthly installment on the contract from Buyers.
Under these circumstances, the trial court did not err in implicitly finding that Sellers
could not rely upon Buyers’ failure to maintain insurance to declare a default because the
Buyers’ breach was excused or because Sellers waived or were estopped from relying
upon that ground. See, e.g., Langdon, 105 S.W.3d at 890; Rietsch v. T.W.H. Co., Inc.,
702 S.W.2d 108, 117-18 (Mo. App. 1985); Fieser Services, Inc. v. Saline Sewer Co., 643
S.W.2d 92, 93 (Mo. App. 1982); Johnson v. Farrow, 594 S.W.2d 655, 658 (Mo. App.
1980). Point II is denied.
Point I
In Sellers’ first point, they contend the trial court misapplied the law in finding
that Buyers had been unjustly enriched. For the reasons that follow, it is unnecessary to
address this point.
“[A]ppellate courts are primarily concerned with the correctness of the result
reached by the trial court[.]” Hunt v. Estate of Hunt, 348 S.W.3d 103, 108 (Mo. App.
2011). Thus, “[a] correct result will not be disturbed on appeal merely because the trial
4
Sellers were required to provide notice of default to Buyers even though the
contract was silent on that issue. As explained in Long v. Smith, 776 S.W.2d 409 (Mo.
App. 1989), “[f]orfeitures are not favored and, if the contract does not provide for it or if
time is of the essence but has been waived, it is necessary that the vendor give the vendee
notice of his intention to forfeit the contract before the vendee may be deprived of
equitable relief against the forfeiture.” Id. at 414. Assuming time was of the essence
with respect to insurance, Sellers’ conduct furnished clear evidence of their intent to
waive that requirement.
12
court gave a wrong or insufficient reason for its judgment.” Harris v. Desisto, 932
S.W.2d 435, 443 (Mo. App. 1996).
Assuming arguendo that the trial court erred in granting relief on the unjust
enrichment count, the error did not materially affect the outcome. We have already
determined that the trial court properly found for Buyers on their breach of contract
count. It also is clear from the judgment that Buyers would have been awarded the same
total amount of damages, even if the trial court had found for Sellers on the unjust
enrichment count. Rule 84.13(b) states that “[n]o appellate court shall reverse any
judgment unless it finds that error was committed by the trial court against the appellant
materially affecting the merits of the action.” Id. Because any error the trial court may
have committed with respect to the unjust enrichment count is immaterial, Point I is
denied. See Harris, 932 S.W.2d at 443; Rule 84.13(b).
Point III
In Sellers’ third point, they contend the trial court erred in awarding various types
of damages to Buyers because the evidence was insufficient to support those awards.
Sellers argue that: (1) the trial court made a mathematical error with respect to the
amount of Buyers’ down payment; (2) the court should not have awarded $1,000 that
Buyers paid to lease the 51-acre parcel; (3) the court should not have awarded Buyers the
$500 they paid for horse feed; (4) the court should not have awarded the rental cost of the
washer and dryer because it was not the proper measure of damages and included costs
that accrued after forfeiture; and (5) the court should not have awarded $8,000 to Buyers
to repay a first-time homebuyers’ tax credit because it was uncertain to occur and would
not cause a loss even if repaid.
13
Substantial evidence is evidence “which a reasonable mind would accept as
sufficient to support a particular conclusion, granting all reasonable inference[s] which
can be drawn from it.” Catroppa v. Metal Bldg. Supply, Inc., 267 S.W.3d 812, 817 (Mo.
App. 2008) (alteration in original). “The trial court’s findings related to actual damages
are entitled to great weight on appeal and will not be disturbed unless the damages
awarded are clearly wrong, could not have been reasonably determined, or were
excessive.” Williams v. Williams, 99 S.W.3d 552, 557 (Mo. App. 2003). Furthermore,
“[i]f accepted as true by the fact trier, the testimony of a single witness is sufficient to
establish any fact, including the amount of damages.” McClelland v. Williamson, 627
S.W.2d 94, 98 (Mo. App. 1982); see also Roark Printing, Inc. v. Worm World, Inc., 974
S.W.2d 613, 615 (Mo. App. 1998).
Sellers’ first complaint is that the trial court erred in awarding $49,836.69 to
Buyers to reimburse them for their down payment. A purchaser’s damages in an action
for breach of a contract to sell land generally are measured by the difference between the
unpaid portion of the purchase price and the value of the land at the time the contract was
to be completed. See, e.g., Wilt v. Waterfield, 273 S.W.2d 290, 296 (Mo. 1954); Wooten
v. DeMean, 788 S.W.2d 522, 527 (Mo. App. 1990). This measure of damages does not
apply, however, when the vendor retains the land and the contract is rescinded. Snowden
v. Gaynor, 710 S.W.2d 481, 487 (Mo. App. 1986). In the latter situation, Missouri courts
have relied on § 373 of the Restatement (Second) of Contracts. Kim v. Conway & Forty,
Inc., 772 S.W.2d 723, 727 (Mo. App. 1989). When a purchaser proves a breach of
contract, but nonetheless relinquishes the property to the seller after a period of
occupation, the purchaser is entitled to recover: (1) any purchase price payments; (2)
14
other expenses incurred in reliance on the contract; (3) reduced by an amount
representing the reasonable value of the use of the property for the time the purchaser
was in possession. Snowden, 710 S.W.2d at 488.
The closing documents show that Buyers paid $49,327.69 in cash at closing. The
trial court appears to have made a mathematical error by adding the later $509 home
warranty payment to the down payment figure. The trial court also awarded $509 for the
home warranty when discussing Buyers’ breach of contract claim. As Buyers
acknowledge, a double recovery is not permitted. See Catroppa, 267 S.W.3d at 817;
MECO, 42 S.W.3d at 810-11. Consequently, it was error for the trial court to award the
$509 twice, and the appropriate amount for the award based on the down payment should
have been $49,327.69. This prong of Sellers’ argument has merit.
Sellers’ second complaint is that the trial court erred in awarding Buyers $1,000
as reimbursement for the amounts they paid to lease the 51-acre parcel. Sellers argue that
these payments should not have been awarded because they involved a separate piece of
property. We disagree. When Buyers brought their horses to the 20-acre parcel on
September 24th, the Dehaans’ cattle herd was on the property. Sellers told Buyers that
they would have to sign a written lease on the 51-acre parcel to “trump” the Dehaans’
oral lease on the 20-acre parcel and get their cattle removed from that land. Therefore,
Buyers’ expenditure of $1,000 to lease the 51-acre parcel was directly caused by Sellers’
breach of contract in not placing Buyers in full possession of the 20-acre parcel. This
prong of Sellers’ argument lacks merit.
Sellers’ third complaint is that the trial court erred in awarding Buyers the $500
they paid for horse feed because it was not based upon any changed condition in the land.
15
That argument ignores the evidence favorable to the judgment. As noted above, the
Dehaans’ cattle were on the 20-acre parcel when Buyers took possession. Because
Sellers were honoring the Dehaans’ oral lease of Buyers’ property, they had to place their
horses in an enclosed, one-acre paddock on the 20-acre parcel. There was not sufficient
pasture in that enclosure to feed the horses, so Buyers were required to purchase hay for
the animals. After the cattle were removed, Buyers still had to purchase additional feed
for the horses because the land had not recovered enough to provide sufficient grazing for
those animals. Thus, Buyers’ expenditure of money for horse feed was directly caused
by Sellers’ breach of contract in not placing Buyers in full possession of the 20-acre
parcel. This prong of Sellers’ argument lacks merit.
Sellers’ fourth complaint is that the trial court erred by awarding Buyers the
amount they spent to rent a washer and dryer. Sellers argue that the award is not
supported by the evidence because the correct measure of damages should have been the
fair market value of the appliances. We disagree. Viewed most favorably to the
judgment, Buyers proved the following facts: (1) the real estate sales contract provided
that the washer and dryer would be left in the home and included in the purchase price;
(2) when Buyers took possession of the house, the washer and dryer had been replaced
with an older washer and dryer that did not work; (3) for that reason, Buyers rented a
washer and dryer set by the week; and (4) as of the date of trial, Buyers had paid $3,145
to rent those appliances. Therefore, the trial court’s award was supported by substantial
evidence. All of that evidence was admitted without objection. Sellers simply took the
position that the washer and dryer had not been switched, as Buyers contended. The trial
court resolved that factual dispute in favor of Buyers. So far as we can determine from
16
the record before us, Sellers’ current argument that the trial court used the wrong measure
of damages was not advanced below and is being made for the first time on appeal.
Therefore, it is not preserved for appellate review. See Arnold v. Minger, 334 S.W.3d
650, 653-54 (Mo. App. 2011) (appellant waived any argument that the adverse party’s
testimony constituted an improper measure of damages by not objecting at trial);
Waldroup v. Dravenstott, 972 S.W.2d 364, 371 (Mo. App. 1998) (the appellant’s failure
to object to evidence about the inflationary rate of lumber allowed the trial court to
include the inflationary rate in its damages award). An appellate court will not convict a
trial court of error with respect to an issue that was not put before it to decide. Arnold,
334 S.W.3d at 654; Baker v. Gonzalez, 315 S.W.3d 427, 435 (Mo. App. 2010). This
prong of Sellers’ argument lacks merit.
Sellers’ fifth complaint is that the court should not have awarded $8,000 to
Buyers to repay a first-time homebuyers’ tax credit because it was uncertain to occur and
would not cause a loss even if repaid.5 We agree with the latter part of that argument. As
noted above, Buyers opted to seek rescission of the purchase contract.6 Therefore, they
were entitled to recover their purchase price payments and any other expenses incurred in
reliance on the contract. See Snowden, 710 S.W.2d at 488. The first-time homebuyers’
tax credit does not fall into either category. Additionally, Buyers were only able to claim
this tax credit because they made a qualifying home purchase. It was Buyers’ election to
5
The recapture provisions for the first-time homebuyer’s credit are found in 26
U.S.C. § 36(f) (2010); see Woods v. C.I.R., 137 T.C. 159, 164 (U.S. Tax Ct. 2011). At
trial, Kayla testified that the IRS told Buyers to repay the tax credit because they only
owned the home for three to four months.
6
The purpose of rescission is to restore the parties to the status quo that existed
before they entered into the contract. See Ehlert v. Ward, 588 S.W.2d 500, 503 (Mo.
banc 1979); Patel v. Pate, 128 S.W.3d 873, 878 (Mo. App. 2004).
17
rescind that caused them to no longer qualify for the tax credit. Therefore, it was error
for the trial court to require Sellers to pay $8,000 as damages so that Buyers could repay
the first-time homebuyers’ tax credit. This prong of Sellers’ argument has merit.
“In the interest of judicial economy, this Court may exercise its judicial
prerogative to enter the judgment the trial court should have entered.” Lynn v. TNT
Logistics North America, Inc., 275 S.W.3d 304, 312 (Mo. App. 2008); see Rule 84.14.
The judgment is modified to reduce Buyers’ damages to the amount of $47,287.09. In all
other respects, the judgment is affirmed.
JEFFREY W. BATES, J. – OPINION AUTHOR
ROBERT S. BARNEY, Sr. J. – CONCUR
DANIEL E. SCOTT, J. – CONCUR IN PART AND DISSENT IN PART
18
TERRY A. GUENGERICH and )
LORRAINE GUENGERICH, )
)
Plaintiffs-Appellants, )
)
v. ) No. SD31479
)
KAYLA BARKER and CLARENCE )
EDWARD HIGGINS, JR., )
)
Defendants-Respondents. )
OPINION CONCURRING IN PART AND DISSENTING IN PART
I would reverse the $3,145 awarded to Buyers for renting a washer and dryer by
the week for some 17 months, and remand for further proceedings on that issue.7 Cases
cited by the principal opinion (and cases cited in those cases) do not persuade me that
Sellers have waived their well-based complaint that this award was improperly calculated
and excessive. I concur in the principal opinion in all other respects.
DANIEL E. SCOTT, J. – SEPARATE OPINION AUTHOR
7
See Cason v. King, 327 S.W.3d 543, 554 & n.12 (Mo.App. 2010); Boyd v.
Lollar, 985 S.W.2d 403, 406 (Mo.App. 1999). Thus, and purely as a procedural
preference, I also would have the trial court make the other reductions indicated by the
principal opinion, as opposed to this court doing so under Rule 84.14.
19