Gerald Poger v. Missouri Department of Transportation , 2016 Mo. App. LEXIS 581 ( 2016 )

In the Missouri Court of Appeals
Eastern Dtstmct
DIVISI()N 'I``WO
GERALD POGER, et al., ) EDl()3293
)
Appellants, )
) Appeal from the Circtlit Court
v. ) of St. Louis County
) l2SL-CC00042
MISSOURI DEPARTMENT OF )
TRANSPORTATION, et al., ) Honorable Thomas J. Prebil
)
Respondents. ) Filed: Jnne 7, 2016
hitroductiori
Appellants, a class of liomeowners, filed several claims against Respondelits
Missonri Departlnent of Transportatiori (MODOT), Wood Lake Residents Association
(Associatiori), and Cotntntmity Maliagers Association, Inc. (CMA), after the Assooiation
negotiated with MoDOT for the purchase of a portion of common land in the Wood Lake
Snbdivision (Stlbdivision). Appellants appeal the trial court’s summary judgments in favor
of all Respondents. We affirm in part and reverse in part.
Background
Appellants are a class of llomeowiters who own lots in the Subdivision. In October'
of 2009, MoDOT paid the Association $l .5 million in exchange for 27.05 acres of property
(the Property) within the Stlbdivision, all of which was designated as common land.
MoDOT acquired the Property in order to complete a project extending and widening
Missottri State Highway 141.
The Association sought input from liomeowners regarding how the proceeds from
the sale should be spent, asking that ltomeo\vners respond by February 28, 2010. The
Association tlltiinately spent $250,000 on a new swimming pool and distributed
approximately $500,000 to 28 lioineowners whose property value had diminished because
of the liighway project.
On Jariuary 5, 2012, twelve liomeowners initiated the present lawsuit. After rounds
of amended pleadings, Appeilants filed their fifth amended petition, \vhicli became a class
action representing all lioineovviiers in the Subdivision, including over 450 separate
individuals and entities. This petition brought four claims against MoDOT: inverse
condemnation, taking, violation of equal protection, and unlawful seizure All of these
claims were preinised on the argument that the Association had no authority to sell the
Property. Appellants’ petition also contained five claims against the Assooiation and
CMA, the nranagirig and servicing agent of the Association. These included claims for
money had and received, breach of fiduciary duty, negligence, an accounting, and violation
of the Missotlri Merchandisiiig Practices Act (MMPA).
The trial court granted sunnnary judgment in favor of all defendants, finding that
the Association had the authority to sell the Property and that Appellaiits were estopped
from bringing their claims because they accepted the proceeds from the sale. This appeal
follows
in the Inderiture." i_d. Tlrerefore, our task in interpreting this contract "is to ascertain the
pa1ties’ intent and give effect to that intent." Capitol Group v. Collier, 365 S.W.Sd 644,
649 (Mo. App. E.D. 2012).
As we have already seen from the language of the Indenture, the intent is clear:
more land will be added to the Sttbdivisioir as common land, and the indenture will govern
such land. When that land was added later by five additional general warranty deeds, those
deeds also stated that they were recorded in accordance with and pursuant to the Indenture.
Thus, the language in the indenture applies to all six deeds cornprisirig the Propeity.
Specitically, as relevant liere, the indenture contains a restriction on Appellarits’
rights to sell the common land, and all six of the general \varrarity deeds contain the same
restriction. By acquiring lots or dwelling units in the Subdivision, which are subject to the
Indenture, Appellants have relinquished any individual rights they may otherwise lrave had
to sell their interests in the Property except as incident to sales of their lots or dwelling
units. In fact, had any of the Appellants attempted to independently sell the Property, any
liorneotvner' in the Subdivision could have brought a suit in equity to enforce the Indenture.
§e_e Hoag v. McBride & Son Inv. Co., 967 S.W.Zd 157, 168 (Mo. App. E.D. 1998)
(Missotlri courts "aliow[] landowners to bring actions seeking to enjoin the improper use
of the btlrdetied larid").
'I``his right of sale has been contractually granted to the Trustees, and it exists
regardless of the holder of legal title at the time of sale. We find that the same language
contained in the six deeds, along with their enactment "pursttarit to the Indenture,"
expresses the parties’ intent to ltarmoliize these documents and all liomeowners agreed that
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the Trustees will continue to exercise their rights and duties over the common land,
including the power of sale, regardless of which party holds title.
Appellants argue that even if this is true, a problem reinaiiis, because the Trustees’
power of sale in the Indeiiture applies only to land not considered in the Subdivision’s
density computation as a planned-environment unit, and MoDOT failed to establish that
the land it purchased was not included in such computation. However, the indenture and
the six general warranty deeds rnust be read together. Q_f_. Paddock Forest Residents Ass’n
Inc. v. Ladue Serv. Corp., 613 S.W.Zd 474, 477 (Mo. App. E.D. ]981) ("Laiigtzage used in
the entire instrument, not just one clause, will be considered . . . Principles of construction
should not be applied in a way to defeat the plain purpose of the restriction").
There is one provision contained in all of the five later general warranty deeds that
does not appear in the indenture or the first general warranty deed, and it relates specifically
to conveying Stlbdivision property to a public agency:
ln the event it shall become necessary for any public agency to
acquire all of or any part of the property herein conveyed to the
said 'l``rustee, for any public purpose, the Trustee, during the
period of Trnst, is hereby authorized to negotiate with such
public agency for such acquisition and to execute instruments
iiecessary for that purpose Should acquisitions by eminent
domain become necessary, only the 'l``rtlstee need be made a
party . . . .
This provision einpowers the Trustee to negotiate with a public agency for the acquisition
of common land and does not restrict the land that the Trustee may convey to only that
which is not considered in determining the density computation for the Subdivision.
Appellants argue this provision is inapplicable because it states the 'l``rustee may
exercise this power "durilig the period of Trust," and the ZO-year periods contained in the
five later general warranty deeds have expired. However, reading this provision in
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accordance with other provisions stating that the powers of the Trustee are to continue,
even after title vests in the liomeowners, we must conclude that the "period of 'l``rtist"
includes this time during which the Trustee continues to act as Trustee.
Appellants urge that such a reading renders the words "period of Trust"
superfluous However, because the documents deny the ironieowriers a power of sale, to
read them as Appellants suggest would mean that no party has had the powver to sell the
common land that was conveyed under the five later general warranty deeds since 1992 or
1993, respectively This is an illogical result and does not comport with the parties’
intentions that the Trustee will continue to act as Trustee over the common land regardless
of who holds legal title. Appellants imply that the Association’s rights with regard to the
common land granted by the five later general warranty deeds have terminated; iio\vever,
there is no corresponding indication Appellants have assumed the duties related to
inaintaiiring the common land.
Appellants’ final argument is that even if this provision in the five later general
\varranty deeds regarding the sale of common land to a public entity applies, it only applied
to the five parcels of land granted by those deeds, and not to the one parcel conveyed
originally with the Indenture. The Property MoDOT purchased was cornprised of portions
of all six parcels However, we find that under the specific circumstances here, reading all
of the documents together, to interpret them as anything other than granting the Association
the power to carry out the sale in this case would be inconsistent with the intent of the
documents and lead to inconsistency in carrying out the Trustee’s duties across the
Subdivision.
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The deeds’ provision authorizing the Association to negotiate with a public entity
is a recognition that a future occasion may arise on which a public entity will seek to
acquire part of the coinmon land. Separate from a sale initiated by the Association, which
under the indenture must take into account the density determination, the deeds add the
possibility that this land may be taken by a public entity. lt seems in such a case, the
original grantors of the common land desired to einpower‘ the Assoeiation to negotiate,
perhaps for a better price through a sale than the public entity would pay as just
contpeiisation for a tal407 S.W.3d 676, 687
(Mo. App. E.D. 2013) (quoting Church v. Combs, 58 S.W.Zd 467, 470 (Mo. 1933)).
“ As a threshold issue, Appellaiits advanced a second argument in Point lll, that the trial couit’s sunnnary
judgment in favor ot`` the Association and CMA was improper because these parties failed to file an answer
to the fifth ainended petition Point III is denied as moot in this respect To the extent Appellants argue,
however, that the Association and CMA have admitted the facts contained in the fifth amended petition by
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Appellants raised five claims against the Association and CMA. These included
claims for money had and received (Count 5), breach of fiduciary duty (Count 6),
negligence (Count 7), an accounting (Count 8), and violation of the Missotn'i
Merchatidising Practices Act (MMPA) (Count 9).
in their motion for stnninaryjudginerit, the Association and CMA asserted the same
argument that MoDOT relied upon: that the Association had the authority to sell the
Property. 'l``hey informed the trial court that ‘°the ground for [their] current motion is
substantially similar to that of [MoDOT].” The Association and CMA argued that finding
the Association had the power to sell the Property defeated all nine of Appellants’ claims.
The trial court’s stimniaryjudgnieiit in favor of the Association and CMA similarly focused
on this issue. The findings of fact and conclusions of law were identical to those contained
in the summary judgment in favor of MoD()'f .12
However, all of Appellants’ claims against the Association and CMA had to do
with the Association’s fulfillment of duties as Trustee, regarding the propriety both of
carrying out the sale of the Property and in managing the funds received from the sale.
Even assuming the Associatioii’s power to sell the Property, the trial court’s findings do
not dispose of Appellants’ claims in Counts 5 through 9 as a matter of law.
failing to file an answer, because this issue will surface upon reniand, we note that "[a]ltliougli the filing of
an answer is iiiandatory, the opposing party waives the requirement unless it requests enforcement by timely
and proper action." St Louis County v. St. Louis County Police Officers Ass’n Local 844, 652 S.W.Zd 142,
145 (Mo. App. E.D, 1983) (noting defendants did not admit averments in petition by failing to file ariswer
where plaintiff did not object to failure to file answer before proceeding on the inerits). We see nothing in
the record calling for the conclusion that the Association and CMA have admitted the facts contained in
Appel|aiits’ fifth amended petition, but we leave it to the trial court to determine upon reinand.
la 0ne paragraph of factual findings regarding the distribution of the sale proceeds front the judgment in
favor of MoDOT was oniitted from the judgment in favor of the Association and CMA, but all other findings
\vere identical.
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First, Count 5 was a claim for money had and received. Appellants alleged that the
Association and CMA "received money to be held in trust for [Appellartts}" and that "rather
than turning the money over to [Appellaitts]," they "inisappropriated the trust funds." On
a claim for money had and received when it relates to money received by the defendant to
be held in trust, a plaintiff must simply show that the defendant inisappropriated funds in
violation of the trust arid'tliat the plaintiff has an equitable right to the funds. Alarcon v.
Dickersoii, 719 S.W.Zd 458, 461-62 (l\/lo. App. W.D. ]986). Tlius, Appellaiits’ claim that
the Association and CMA inisappropriated the funds received front MoDOT in violation
of their duties as Trustee is a separate question from the determination of whether
Appellants legally obtained those funds through the sale of the Property. While we make
no judgment as to whether Appellants would actually succeed on this claim, neither the
motion for summary judgment nor the trial court’s sunimary judgment addressed it.
Siniilarly, in Count 6, Appellants alleged that the Association and CMA breached
their fiduciary duties, including that they "used and appropriated various funds received
front [MoDOT] improperly and incorrectly," and that they "concealed from Appellants
various aspects of the purchase . . . of the [Property].” Regardiitg the allegation that they
niisappropriated funds held in trust, we note only that when a plaintiff inakes such an
allegation, "the plaintiff may sue either for the breach of trust in tort or for the money had
and received." Perez v. Boatinen’s Nat’l Bank of St. Louis, 788 S.W.Zd 296, 299 (Mo.
App. E.D. 1990). As we have said, this issue is not addressed in the stunmary judgment
record. However, Appellaiits will have to elect their remedy on this claim. §§ igl_.
Count 6 also claims the Association and CMA breached their fiduciary duties by
concealing aspects of the purchase. Count 9 contains a similar factual allegation that the
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Association and CMA concealed material facts regarding the sale of the Property, and
claims they violated the l\/IMPA thereby. Regarding both of these claims, the summary
judgment record fails to establish the existence and extent of the Association’s and CMA’S
duty to inform Appellants of the details of the sale, and the record lacks establishment of
undisputed material facts related to any breach of such duty or obligation as a trustee or
under the MMPA.H 'l``lius, summary judgment was improper on Counts 6 and 9.
Count 7 is a negligence claim, alleging that the Associatiori and CMA breached
their "duty to Inanage and safekeep and properly apply monies received by [the
Associatioii} regarding the condominium association" by "negligeiitly paying monies out
9
in unequal portions to condominium owners.’ Agaiii, this claim does not concern the
Association’s power to sell the Property, but rather how it as Trtlstee managed the funds
received from the sale. _'l``liis is not addressed in the summary judgment record, and
summary judgment was improper on this count.
Finally, in Count 8, Appellants requested an accounting There is nothing in the
summary judgment record determining that Appellants are not entitled to such an
accounting, separate front the matter of whether the Association had the power to sell the
Property. In fact, keeping an account of trust funds and showing such account to the
beneficiaries is one of the duties of a trustee Pazdeinik v. Steinler, 804 S.W.Qd 789, 793
(Mo. App. E.D. 1990). 'l``hus, the trial court’s summary judgment regarding Count 8 was
improper.
ln summary, the record fails to contain tmdisputed rnaterial facts establishing that
the Association and CMA were entitled to judgment as a inatter of law on Counts 5 through
‘3 Appe[lants argue in Point ll that inaterial fact disputes exist regarding whether the Association iiotit``:ed
Appeliants of the sale of the Propeity beforehand. Point II is granted in this respect.
20
Staiidard of Review
Our review of summary judgment is essentially de Hovo. ITT Commercial Fin.
Corp. v. l\/Iicl-Alii. Marine Supply Corp., 854 S.W.Zd 371, 376 (Mo. banc 1993). We use
the same criteria for testing the propriety of summary judgment as the trial court eniploys
to determine whether to grant the motion initially. lcL We view the record in the light most
favorable to the lion-prevailing party and accord that party the benefit of ali reasonable
inferences from the 1'eco1'd. i_cL The burden is on the movant to show a lack of dispute
regarding material facts, and a right to judgment as a matter of law flowing from those
facts. § at 377. We will affirm a summary judgment on any basis supported by the record.
Leavitt v. Kakadiaris, 452 S.W.Sd 235, 239 (Mo. App. E.D. 2014).
Stlmiiiary
Appellants raise four points on appeal, directed to both summary judgments the
trial court entered. in Point I, Appellaiits argue that the trial court’s sunirnary judgment
was improper because (l) Appellants had fee simple title to five of the six parcels of land
constituting the Property; (2) none of the recorded instruments governing the Subdivision
granted the Associatiori the power to seli the Property; (3) Appellarits did not ratify the
sale; and (4) the Respondents waived their affirmative defenses. In Point H, Appellazits
argue there were various inaterial fact disputes precluding both suinmary judgments in
Point lll, Appellants raise two procedural issues: (l) that i\/ioDOT’s motion for summary
judgment was a successive motion that the trial court should have denied; and (2) that the
Association’s and CMA’S failure to file an answer precluded the trial court’s grant of
surnmary judgment in their favor. Finally, in Point IV, Appellants argue that the trial
9. Thus, summary judgment was improper regarding these claims. Leavitt v. Kakacliaris,
452 S.W.Bd 235 , 239 (Mo. App. E.D. 2014) ("This Court will affirm a sunnnary judgment
under any theory supported by the record; however, where it is unclear from the summary
judgment record that a basis exists for the grant of sunnnary judgment, this Court will
reverse"). Wiiile this by no means assures Appellants will prevail on these claims, they
were entitled to adjudicate them. Point IV granted.
Conclusion
The Association had authority under the indenture and the general warranty deeds
to sell the Property, and Appelialtts had no power to sell their interest in the Property
independent of a sale of their lots or dwelling ttnits, Appellants similarly ltad no direct
right to receive the proceeds of the sale, except as beneficiaries under the indenture 'l``hus,
MoDOT did not violate Appellants’ rights in purchasing the Property from the Association.
Additionally, because Appellants accepted the benefits of the sale as beneficiaries of at
least the pool improvement project tindertaken by the Association as Trustee, they are
estopped from contesting the validity of the sale. The trial court’s summary judgment in
favor of MoDOT is affirmed
However, the trial court’s summary judgment, as well as the suinmary judgment
record, fail to establish the facts necessary to properly grant sunimary judgment on
Appellaiits’ claims against the Assoeiatioii and CMA as a lnatter of law. Thus, the trial
court’s sunnnary judgment in favor of the Association and CMA is reversed and remanded
21
for further proceedings consistent with this <)pinion.
Philip M. Hess, P.J., concurs. ' x
Angela T. Quigless, J., cc)ncurs.
22
court’s summary judgment in favor of the Association and CMA was improper because it
failed to address the elements of Appellants’ claims against those parties.
We discuss Appellartts’ arguments in the most logical order. First, we address the
trial court’s summary judgment in favor of MoDOT, and Appellants’ corresponding
arguments in Points l, ll, and lll. The main issue is whether the Association had authority
to negotiate and execute the sale of the Property, and whether, regardless of the
Association’s authority, Appellalits were estopped from bringing their claims. Some of
Appellants’ claimed fact disputes in Point ll are questions of law that we address together
with Point l. We find Appellams’ claims in Point lll are ancillary procedural issues, and
we address them in footnotes. We conclude the trial court’s judgment in favor of MoDOT
was proper.
Second, we address the trial court’s summary judgment in favor of the Association
and CMA, which corresponds to Appellants’ Point lV, and parts of Points ll and lIl. We
conclude the trial court’s summary judgment in favor of the Association and CMA does
not fully dispose of Appellants’ claims against these parties and must be reversed.
Jtldgriierit in Favor of MoDOT
ln Point I, Appellants raise several arguments that the trial court’s judgment was
improper as a rnatter of law, The trial court’s finding central to its grant of strmniary
judgment in favor of MoDOT was that the Association had authority to convey the Property
to MoDOT by virtue of the recorded indenture of Trust and Restrictions of Wood Lal175 S.W.3d 708, 713-14 (Mo. App. S.D. 2005); see also Gillespie v. Gillespie, 634 S.W.Zd
493, 494 (Mo. App. E.D. 1982) (order deriying motion for stnn:naryjiidgiiient is interloeutory). Moreover,
additional inotions for siimniary judgment are perinitted upon an expanded record, and here MoDOT
submitted additional exhibits and put forth different |egat arguments §mee_: M & P Eriterprises, lnc. v.
Transain. Finaneial Servs., 944 S.W.Zd £54, !62 (Mo. banc 1997). Point III is denied in this respect. We
address Appellants’ rexnairiirig argument in Point lII, which is related to the trial court``s suinmary judgment
in favor of the Association and CMA, f);fi'a.
971 S.W.Zd 946, 950 (Mo. App. E.D. 1998). "An appellant, however, may impliedly or
expressly consent to trying the case on the defense." id The issue is whether allowing the
defense prejudices the plaintiff in that the plaintiff did not have sufficient notice to prepare
to address the issue. § L; 1 Greeii v. City of St. Louis, 870 S.W.Zd 794, 797 (l\/Io.
banc 1994) (noting that court may permit affirmative defense raised for first time in
summary judgment motion if court would have allowed defendant to amend answer to
include it; renianding for determination of factors under Rule 55.33(a) for permitting
amendment of answer, including prejudice to plaintiff).
Here, Appellants’ claims against MoDOT all alleged that Appellaiits had an
ownership interest in the Property and MoDOT appropriated the Property in violation of
Appellaiits’ rights. Counts 1 and 2 both alleged MoDOT took or damaged the land without
just coinpensation to Appellants; Count 3 alleged that in doing so, MoDOT discriminated
against Appellants in violation of their right to equal protection under the law; and Count
4 alleged an iiiilawftil seizure in violation of the Fourtli Ainendnient to the United States
Constitution. Thus, MoDOT’s argument that the Association had the power to sell the
Property to MoDOT can be true along with the fact that Appellants had an ownership
interest in the Property and the fact that MoDOT did not coinpensate Appellants directly
for the Property; and such an argument would defeat MoDOT’s liability. This was
therefore an affirmative defense
Regarding Appeliants’ argument that MoDOT failed to timely raise this defense,
MoDOT pleaded the following in its answer to Appellants’ fifth amended petition:
[MoDOT] . . . negotiated with the owner of the [P]roperty in
question, and paid Sl,SO0,000.00 to the owner thereof in
exchange for a General Warraiity Deed to the [P]roperty. In the
alternative, if [Appellants] had an ownership interest in the
[P]roperty, which is denied, [l\/IoDOT] negotiated with
[Appellarit]s’ agent who had express or apparent authority to
negotiate with it for the purchase of the [P]roperty and
[Appellaiits] did not complain about the alleged wrongful
acquisition of the [P]roperty by [MoDOT] for a period of time,
to the detriment of [MoDOT], and [Appellants] are, therefore,
estopped from attacking the sale of the [P]ropei'ty as alleged
above.
Appellants argue that this defense is in fact an agency defense, which is distinct from
MoDOT’s argument that the Association had the power of sale, in that it alleges that
Appellants actually had the authority to sell and then conferred that power on the
Association. MoDOT’s argument in its suinmary judgment motion, which the trial court
eventually agreed with, was that the Associatioii had the power to sell the Property
regardless of Appeilaltts’ wishes
The issue becomes then whether Appellants impliedly consented to trying this
power of sale defense through the summary judgment motions. Appellants argue they
moved to strike the power of sale argument from MoDOT’s motion for summary judgment
because they argued all affirmative defenses not pled were waived; ltowever, their motion
to strike discusses only l\/loDOT’s equitable estoppel affirmative defense and their prayer
for relief requests that the court strike MoDOT’s “purported affirmative defense," in the
singular. Moreover, Appellants filed their motion to strike over two months after filing
their response to l\/loDOT’s motion for suimnary judgment, \vhiclt included arguments that
MoDOT was ntistal261 S.W.3d i, 4 (Mo. App. E.D. 2008). Because the indenture is recorded, Appellants have at
least constructive notice of its terms, and it is therefore binding upon their ownership interests in the
Subdivision, regardless of \vhetlier it runs \vith the land. §c_e_ Wolfnei' v. Miller, 711 S.W.Zd 580, 583 (Mo.
App. E.D. 1986) (ptircliaser has constructive notice of subdivision restrictions recorded prior to ptircliase).
Point II is denied in this respect.
indenture . . . for a period of twenty (20) years . . . after which period of tiine, fee simple
title shall vest in the then property owners of [the S11bdivision], as joint tenants." By their
terms, the ZO-year periods contained in these general warranty deeds have expired.
i~lowever, this grant of title to the homeowners in these five conveyances contains similar
qualification language as the Indenture; namely, that none of the joint tenants retain the
right to convey their interests in the common iand, except as incident to sales of their lots
or dwelling units. The five deeds similarly provide that the powers of the Trtlstee shall
continue even after title to the land vests in the owners.$
Therefore, all six of the deeds and the lndertture similarly restrict the homeowners’
rights to independently sell the Property, and these documents prescribe similar powers
and rights of the Association as Trustee as it relates to the Property. While Appellants
dispute that the indenture applies to all of the Property here, we find the plain language of
the Indenture, the original general warranty deed, and the five later general warranty deeds
expresses an intent that the indenture govern all connnon ground in the Subdivision.‘i
"The indenture of Trust and Restrictions is a contract to which each homeowner
becomes a party when acquiring property in the subdivision." Maryland Estates
Holneowners’ Ass’n v. Puckett, 936 S.W.Zd 2]8, 219 (Mo. App. E.D. 1996). "By
acquiring the property the owners agree to the terms of the restrictive covenants contained
5 Specifically, the five deeds provide the following:
[T]he rights of said joint tenants shall be only appurtenant to and in
conjunction \vitlt their o\viiership of lots in [tlie Stibdivision] . . . and none of
the owners of cornmon property shall have such rights of ownership as to
perinit them to convey their interest in the connnon property, except as an
incident to the ownership of a regularly platted lot[.] . . . [A]ll the rights,
powers and authority conferred upon the 'i``rustee . . . shall continue to be
possessed by the said Trustee.
6 In Poi11t H, Appe|lants also argue that whether the Iridenture applies to all of the Propeity is a disputed fact.
However, we find that this is a question of iaw based on the language in the Indenture, and we have found
the indenture applies to all of the Property. Point ll is denied in this rcspect.
10