Missouri Bankers Association, Inc., and Jonesburg State Bank v. St. Louis County, Missouri, and Charlie A. Dooley

SUPREME COURT OF MISSOURI
en banc
MISSOURI BANKERS )
ASSOCIATION, INC., and )
JONESBURG STATE BANK, )
)
Appellants, )
)
vs. ) No. SC93848
)
ST. LOUIS COUNTY, MISSOURI, )
and CHARLIE A. DOOLEY, )
)
Respondents. )
APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY
The Honorable Brenda Stith Loftin, Judge
Opinion issued November 12, 2014
Missouri Bankers Association, Inc. and Jonesburg State Bank (hereinafter and
collectively, “Bankers”) sought a judgment declaring an ordinance that implemented a
foreclosure mediation program invalid. This Court holds St. Louis County (hereinafter,
“the County”) exceeded its charter authority when enacting the ordinance and the
ordinance was void ab initio. This Court further holds Bankers are not entitled to an
award of attorneys’ fees pursuant to their Hancock Amendment claim. The circuit
court’s judgment is reversed, and the case is remanded. 1
1
This Court transferred this case after an opinion by the Missouri Court of Appeals,
Eastern District. Portions of the court of appeals opinion are incorporated without further
attribution.
Factual and Procedural History
In 2012, the St. Louis County Council adopted an ordinance titled the “Mortgage
Foreclosure Intervention Code.” The ordinance stated it addressed “the national
residential property foreclosure crisis” and the negative impact this national crisis had on
the County’s property values, tax base, budget, assessments, and collection of real
property taxes. The ordinance recognized that “unsecured and unmaintained properties
present a danger to the health, safety and welfare of the public … and as such, constitute
a public nuisance.” In response to this nuisance, the ordinance implemented a mediation
program requiring lenders to provide residential borrowers an opportunity to mediate
prior to foreclosure.
The ordinance mandates the lender provide the homeowner with written notice of
the mediation process, the homeowner’s right to request mediation, and a notice of
foreclosure. Along with these notices, the lender must pay a nonrefundable fee of $100
to a mediation coordinator who manages and oversees the mediation program. The
mediation coordinator must make at least three attempts to contact the homeowner
regarding participation in the mediation program.
If the homeowner chooses to participate in the mediation program, the mediation
must be scheduled within sixty days. The lender must pay an additional $350 fee to the
mediation coordinator. If the parties are able to reach a settlement regarding the
foreclosure prior to the mediation, the $350 fee is refunded to the lender. If the parties
are unable to reach a settlement during the mediation conference, the lender is deemed to
have satisfied the ordinance’s requirements so long as the lender has made “a good faith
effort” to settle the matter.
After satisfying the ordinance’s requirements, the mediation coordinator must
issue the lender a certificate of compliance attesting the lender has complied with the
ordinance and is eligible to record the foreclosure deed without penalty. If the
homeowner fails to respond or declines to participate in the mediation program, the
lender shall be deemed to have satisfied the ordinance’s requirements and will receive a
certificate of compliance within one business day. The certificate of compliance must be
filed with the county assessor simultaneously with the filing of a conveyance of the
foreclosed property with the county recorder of deeds. Failure to obtain and file a
certificate of compliance does not prevent the recording of the conveyance; however, the
ordinance subjects the lender to criminal prosecution and a fine up to $1,000 for failure to
comply. 2
Bankers filed suit against the County and Charlie A. Dooley, the county executive
(hereinafter and collectively, “the County”), seeking a declaratory judgment and
injunctive relief. Bankers presented six counts, alleging the ordinance: (1) conflicted
with state statutes; (2) violated the Hancock Amendment, Mo. Const. art. X, sec. 22; (3)
violated Missouri constitutional taxation provisions; (4) violated Missouri constitutional
restrictions on charter county authority; (5) violated Bankers’ rights; and (6) violated the
2
Actual compliance with the ordinance constitutes a complete defense for the lender if
subsequently prosecuted.
3
County charter. The circuit court issued a temporary restraining order enjoining the
County from enforcing the ordinance. Both parties filed motions for summary judgment.
After reviewing the pleadings, the circuit court dissolved the restraining order and
sustained the County’s motion for summary judgment. The circuit court held the County
possessed the charter authority to enact the ordinance, the ordinance was a valid exercise
of the County’s police power, and the ordinance was not preempted by state law. The
circuit court further found the fees associated with the ordinance did not violate the
Hancock Amendment.
Bankers appealed. During the pendency of the appeal at the court of appeals, the
legislature enacted a new state mortgage law, section 443.454, RSMo Supp. 2013. This
statute, effective August 28, 2013, states:
The enforcement and servicing of real estate loans secured by mortgage or
deed of trust or other security instrument shall be pursuant only to state and
federal law and no local law or ordinance may add to, change, delay
enforcement, or interfere with any loan agreement, security instrument,
mortgage or deed of trust. No local law or ordinance may add, change, or
delay any rights or obligations or impose fees or taxes of any kind or
require payment of fees to any government contractor related to any real
estate loan agreement, mortgage or deed of trust, other security instrument,
or affect the enforcement and servicing thereof.
Section 443.454 expressly prohibits local municipalities from enforcing the type of
ordinance the County enacted. The court of appeals requested additional briefing
discussing the impact of the new legislation on the ordinance’s validity. The County
conceded there was an express conflict between section 443.454 and the ordinance and
stated it would not enforce the ordinance. The County then argued the statute’s passage
rendered the controversy moot. The court of appeals agreed, dismissed the appeal, and
4
ordered the case be remanded so that the circuit court could vacate the judgment and
dismiss the lawsuit. 3 This Court granted transfer. 4 Mo. Const. art. V, sec. 10.
Mootness
Initially, this Court must address whether this cause is moot due to the enactment
of section 443.454.
A cause of action is moot when the question presented for decision seeks a
judgment upon some matter which, if the judgment was rendered, would
not have any practical effect upon any then existing controversy. When an
event occurs which renders a decision unnecessary, the appeal will be
dismissed. And where an enactment supersedes the statute on which the
litigants rely to define their rights, the appeal no longer represents an actual
controversy, and the case will be dismissed as moot.
Humane Soc’y of United States v. State, 405 S.W.3d 532, 535 (Mo. banc 2013) (quoting
C.C. Dillon Co. v. City of Eureka, 12 S.W.3d 322, 325 (Mo. banc 2000)). Enactment of
subsequent legislation will cause a challenge to a law to become moot if the law being
challenged is repealed. C.C. Dillon Co., 12 S.W.3d at 325.
At the outset, the County argues the enactment of section 443.454 renders the
cause moot because the statute expressly prohibits what the ordinance permits. The
County stated on appeal it would not enforce the ordinance going forward. However, the
County concurrently argues this Court should hold the ordinance remains valid because
of the County’s charter authority granted to it pursuant to Missouri Constitution article
3
One judge dissented, arguing the mediation program was a valid exercise of the
County’s broad authority to regulate municipal services and functions under Missouri
Constitution article VI, section 18(c). The dissenting judge further argued the County
made no claim that it would repeal the ordinance and remained free to resume
enforcement at any time; hence, the controversy remained ripe for determination.
4
The Business Bank of St. Louis filed an amicus brief in support of Bankers.
5
VI, section 18(c), which it believes takes precedence over any state statute. Further, it is
undisputed the ordinance has not been repealed. Had the constitutional validity of the
ordinance in light of the enactment of the statute been the only issue in the case, and had
the ordinance been repealed after the statute’s enactment, this Court’s basis for deciding
the ordinance’s constitutional validity would have dissolved. C.C. Dillon Co., 12 S.W.3d
at 325. In light of the County’s argument concerning the scope of its charter authority,
and because the ordinance was not repealed after section 443.454 was enacted, the issues
presented are not moot.
Standard of Review
This Court’s review of an appeal from summary judgment is de novo. ITT
Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.
banc 1993). Summary judgment is appropriate when the record demonstrates there are
no genuine issues of material fact and the moving party is entitled to judgment as a matter
of law. Hargis v. JLB Corp., 357 S.W.3d 574, 577 (Mo. banc 2011). “A summary
judgment, like any trial court judgment, can be affirmed on appeal by any appropriate
theory supported by the record.” Columbia Cas. Co. v. HIAR Holding, L.L.C., 411
S.W.3d 258, 264 (Mo. banc 2013).
Ordinances are presumed to be valid and lawful. McCollum v. Dir. of Revenue,
906 S.W.2d 368, 369 (Mo. banc 1995). “An ordinance must be construed to uphold its
validity unless it is ‘expressly inconsistent or in irreconcilable conflict’” with a statute or
provision of the Missouri Constitution. Home Builders Ass’n of Greater St. Louis, Inc. v.
City of Wildwood, 107 S.W.3d 235, 238 (Mo. banc 2003) (quoting McCollum, 906
6
S.W.2d at 369). Whether the ordinance conflicts with state law is a question of law this
Court reviews de novo. State ex rel. Sunshine Enterprises of Missouri, Inc. v. Bd. of
Adjustment of City of St. Ann, 64 S.W.3d 310, 314 (Mo. banc 2002).
Validity of the Ordinance
Bankers raise a number of arguments challenging the validity of the ordinance. 5
Among those arguments is whether Missouri Constitution article VI, section 18 grants the
County the charter authority to enact the ordinance and whether that enactment takes
precedence over other legislative enactments, such as section 443.454. 6 Bankers contend
the County cannot invade the province of general legislation involving the public policy
of the state as a whole, nor can it exempt itself from complying with state law by
characterizing inconsistent ordinances as an exercise of municipal police power.
5
Many of Bankers’ points on appeal contain multifarious allegations of error. Rule
84.04(d) requires that a point relied on shall: (1) identify the challenged ruling; (2)
concisely state the legal reasons for the claim of error; and (3) explain in summary
fashion why the reasons support the claim of error. A point relied on violates Rule
84.04(d) when it groups together multiple contentions not related to a single issue and is
subject to dismissal. Thummel v. King, 570 S.W.2d 679, 688 (Mo. banc 1978).
Nevertheless, when possible, “[t]his Court’s policy is to decide a case on its merits rather
than on technical deficiencies in the brief.” J.A.D. v. F.J.D., 978 S.W.2d 336, 338 (Mo.
banc 1998).
6
Bankers also allege the ordinance conflicts with section 362.109, RSMo. Supp. 2008
(mandating that ordinances “shall be consistent with and not more restrictive than state
law and regulations governing lenders or deposit-taking entities” regulated by the state
division of finance); chapter 443 (regulating foreclosure and not requiring mediation
prior to foreclosure); section 408.555, RSMo Supp. 2006 (entitling a lender to take
possession after a notice period); section 442.020 (providing conveyance of deeds shall
be made “without any other act or ceremony whatsoever”); chapter 53 (by creating
additional responsibility for the county assessor beyond those enumerated in the statute);
and Mo. Const. art. I, sec. 13 (prohibiting the passage of any law that impairs the
obligation of contracts or is retrospective in its operation). All statutory references are to
RSMo 2000 as supplemented.
7
Article VI, Section 18(b) Charter Authority
Article VI, section 18(b) provides that a charter county shall possess an implied
grant of power “for the exercise of all powers and duties of counties and county officers
prescribed by the constitution and laws of the state ….” See also Hellman v. St. Louis
Cnty., 302 S.W.2d 911, 915 (Mo. 1957). This power is limited, however, in that “a
charter or ordinance enacted under [section] 18(b), may not ‘invade the province of
general legislation’ involving the public policy of the state as a whole.” Flower Valley
Shopping Ctr., Inc. v. St. Louis Cnty., 528 S.W.2d 749, 754 (Mo. banc 1975) (quoting
State ex rel. Spink v. Kemp, 283 S.W.2d 502, 514 (Mo. banc 1955)).
Bankers argue the County exceeded its charter authority under article VI, section
18(b) because the ordinance conflicts with the general laws and public policy of the state
regarding foreclosures, particularly with section 443.454. The County acknowledges the
legislature stated its express intent to regulate issues related to real property foreclosure
as a statewide concern by passage of section 443.454, thus limiting a municipality’s
power to govern in this area. While the County concedes there is a direct conflict
between the ordinance and section 443.454, it asserts that article VI, section 18(c) grants
the County superior legislative authority and, as such, the ordinance supersedes the
statute and remains valid.
Article VI, Section 18(c) Charter Authority
Article VI, section 18(c), as amended in 1970, authorizes a charter county to
“provide for the vesting and exercise of legislative power pertaining to any and all
services and functions of any municipality or political subdivision, except school
8
districts, throughout the entire county within as well as outside incorporated
municipalities ….” A charter county “functions in a dual capacity, sometimes
performing state functions and sometimes performing municipal functions ….” Schmoll
v. Housing Auth. of St. Louis Cnty., 321 S.W.2d 494, 498 (Mo. 1959). A charter county
is not required to exercise the powers and duties granted to it in precisely the same
manner as prescribed by the general law of the state. Hellman, 302 S.W.2d at 916.
One of the powers delegated by the state to charter counties pursuant to article VI,
section 18(c) is the police power. Casper v. Hetlage, 359 S.W.2d 781, 789 (Mo. 1962).
“Generally, the function of the police power has been held to promote the health, welfare,
and safety of the people by regulating all threats either to the comfort, safety, and welfare
of the populace or harmful to the public interest.” Craig v. City of Macon, 543 S.W.2d
772, 774 (Mo. banc 1976). A charter county’s exercise of the police power delegated by
the state pursuant to article VI, section 18(c) is a governmental function. Casper, 359
S.W.2d at 789.
Several cases support the County’s argument that the police powers delegated to a
charter county are constitutional grants of authority that are not subject to, but take
precedence over, the legislative power. See State on Info. of Dalton ex rel. Shepley v
Gamble, 280 S.W.2d 656, 660 (Mo. banc 1955) (resolving quo warranto dispute
concerning newly created charter county police department and conflicting state statutes);
Casper, 359 S.W.2d at 789-90 (holding statutory provision requiring unanimous vote on
rezoning was superseded and did not apply to charter county); State ex rel. City of Creve
Coeur v. St. Louis Cnty., 369 S.W.2d 184, 187 (Mo. 1963) (same); St. Louis Cnty. v. City
9
of Manchester, 360 S.W.2d 638, 641 (Mo. banc 1962) (permitting charter county to zone
for sewage disposal plant). Here, however, the question becomes whether the area the
County intends to regulate pursuant to its police power is a matter of purely local
concern. See State ex rel. St. Louis Cnty. v. Campbell, 498 S.W.2d 833, 836 (Mo. App.
1973) (holding when a county is addressing a matter of purely local concern, the
procedures specified in the charter supersede the statutes).
Regardless of its charter, the County remains a legal subdivision of the state.
Casper, 359 S.W.2d at 784. As such, it can only control “[m]atters of purely municipal,
corporate concern …” and its actions “must be in harmony with the general law where it
touches upon matters of state policy.” Kansas City v. J.I. Case Threshing Mach. Co., 337
Mo. 913, 87 S.W.2d 195, 202 (Mo. banc 1935). This Court has long recognized, “It is an
essential element of all constitutional provisions establishing the principle of municipal
home rule that the constitution and general laws of the state shall continue in force within
the municipalities which have framed their own charters, and that the power of the
municipality to legislate shall be confined to municipal affairs.” Id. (emphasis added).
See also Grant v. Kansas City, 431 S.W.2d 89, 93 (Mo. banc 1968). “Little purpose
would be served in authorizing the adoption of charters of local self-government in the
more populous counties if such counties could not adopt reasonable means and methods
of carrying out their governmental functions in such a manner as to meet the peculiar
needs of such counties.” Hellman, 302 S.W.2d at 916 (holding the problems attendant to
uniform assessment of taxable property in the county was “unique”) (emphasis added).
10
Here, the County explicitly states the ordinance was enacted to address “the
national residential property foreclosure crisis” and its impact on the County. The
County argues the municipal enactment of foreclosure mediation programs similar to its
own had been recognized consistently as a valid exercise of municipal police power,
citing one case from Rhode Island and two from Massachusetts for persuasive support.
See Deutsche Bank Nat’l Trust Co. v. City of Providence, P.C. No. 10-1240 (Providence
Superior Ct., May 17, 2010) (upholding city ordinance requiring foreclosure mediation,
but severing deed recording requirements that conflicted with state law); Easthampton
Savings Bank v. City of Springfield, 874 F. Supp. 2d 25 (D. Mass. 2012) (upholding city’s
foreclosure mediation ordinance in face of contracts clause, state preemption, and police
powers challenges); and Jepson v. Deutsche Bank Nat’l Trust Co., 969 F. Supp. 2d 202
(D. Mass. 2013) (discussing general benefits of pre-foreclosure mediation programs, but
dismissing cause of action). While two of the three cases the County relies upon upheld
municipal enactments in other jurisdictions, this Court is not bound by their holdings. 7
Municipal regulations meant to address a national crisis, which affect every state
in the country, are not a matter of such distinctly local concern that the County is
authorized to legislate pursuant to its delegated police power. The question of whether
7
The enactment of statewide programs across the country further undercuts the County’s
argument that its program addresses a purely local matter. At least twenty-three states
have enacted some type of statewide foreclosure mediation program, either through state
legislation or by way of state court rule, to address this national crisis. See Resolution
Systems Institute, Foreclosure Dispute Resolution Program Models State-By-State,
compiled by Heather Scheiwe Kulp,
http://www.aboutrsi.org/pfimages/ForeclosureMediationProgramModels_September2012
.pdf. (last accessed October 8, 2014; copy added to file).
11
lenders and residential borrowers should be required to participate in a mediation
program prior to foreclosure and that mandates a lender obtain a certificate of compliance
prior to filing a conveyance or face criminal prosecution is one of state interest. This
finding is supported by the legislature’s enactment of section 443.454, which explicitly
limits a municipality’s authority to govern this area. Accordingly, this issue is not a
purely local concern that authorizes the County to regulate by local ordinance under the
charter authority granted to it by article VI, section 18(c).
Acts performed by a county that are beyond the powers granted or necessarily
implied from its charter are void. Schmoll, 321 S.W.2d at 498. To declare legislation
“‘void’ means that it never had the authority to create any legal rights or responsibilities
whatsoever.” R.E.J., Inc. v. City of Sikeston, 142 S.W.3d 744, 746 (Mo. banc 2004). As
a general rule, legislation that is unconstitutional is void ab initio. State ex rel. Pub.
Defender Comm’n v. Cnty. Court of Greene Cnty., 667 S.W.2d 409, 413 (Mo. banc
1984). This Court holds the circuit court erred in sustaining summary judgment in the
County’s favor on this claim because the County’s implementation of the mediation
program was void and unenforceable ab initio.
Hancock Amendment
Bankers also brought a claim challenging the ordinance’s validity under the
Hancock Amendment. The Hancock Amendment prohibits a county from “levying any
tax, license, or fees” without voter approval. Mo. Const. art. X, sec. 22(a). Any taxpayer
may file suit to enforce a Hancock Amendment provision, and, “if the suit is sustained,
shall receive from the applicable government his [or her] costs, including reasonable
12
attorneys’ fees incurred in maintaining such suit.” Mo. Const. art. X, sec. 23. Bankers
claim their declaratory judgment action precipitated the invalidation of the ordinance and
should be deemed “sustained” for purposes of an award of attorneys’ fees.
Bankers’ Hancock Amendment claim fails because this Court holds the County’s
implementation of the foreclosure mediation program was void ab initio. Even assuming
the County obtained voter approval for levying the fees ordered by the ordinance, the
County still lacked the charter authority to enact the program at its inception, much less
impose any fees. Accordingly, the County could not violate the Hancock Amendment. It
follows that that Bankers’ claims for attorneys’ fees must fail because their suit has not
been “sustained” to warrant an award pursuant to article X, section 23.
Conclusion
The circuit court erred in sustaining summary judgment in the County’s favor
because the ordinance implementing the mediation program was void and unenforceable
ab initio. Bankers are not entitled to an award of attorneys’ fees for their Hancock
Amendment claim. The circuit court’s judgment is reversed, and the case is remanded.
______________________________
GEORGE W. DRAPER III, JUDGE
Russell, C.J., Breckenridge, Fischer, Stith
and Wilson, JJ., concur; Teitelman, J.,
dissents in separate opinion filed.
13
SUPREME COURT OF MISSOURI
en banc
MISSOURI BANKERS ASSOCIATION, )
INC., and JONESBURG STATE BANK, )
)
Appellants, )
)
vs. ) No. SC93848
)
ST. LOUIS COUNTY, MISSOURI, and )
CHARLIE A. DOOLEY, )
)
Respondents. )
Dissenting Opinion
I respectfully dissent from the principal opinion’s holding that the County’s
foreclosure ordinance is void because it exceeds the County’s legislative power
granted by article VI, section 18(c) of the Missouri Constitution. I would hold that
the ordinance is a valid exercise of the County’s legislative power because the
ordinance is precisely tailored to the local symptoms of the foreclosure crisis. 1
Article VI, section 18(c) authorizes a charter county to enact legislation
concerning “any and all services and functions of any municipality or political
subdivisions, except school districts ....” Mo. Const. art. VI, sec. 18(c). As used
1
This opinion draws on the well-reasoned dissent authored by the Honorable Lisa Van
Amburg of the Missouri Court of Appeals, Eastern District.
in article VI, section 18(c), the County’s “functions” include “all of the activity
appropriate to the nature of political subdivisions or municipalities which combine
to produce services, those specific acts performed by political subdivisions or
municipalities for the benefit of the general public.” Chesterfield Fire Prot. Dist.
Of St. Louis Cnty. v. St. Louis Cnty., 645 S.W.2d 367, 371 (Mo. banc 1983)
(holding that St. Louis County’s charter authority permitted the County to
establish a countywide fire standards commission). The legislative powers
granted by article VI, section 18 “are constitutional grants which are not subject
to, but take precedence over, the legislative power.” State on Info. of Dalton ex
rel. Shepley v. Gamble, 280 S.W.2d 656, 660 (Mo. banc1955). Thus, if the
County enacts an ordinance that pertains to a County “function,” that ordinance
will supersede a state statute that touches upon that same issue. See State ex rel.
St. Louis Cnty. v. Campbell, 498 S.W.2d 833, 836 (Mo. App. 1973) (St. Louis
county charter provisions regulating the appointment of condemnation appraisers
supersedes general state condemnation statutes). The dispositive question is
whether the foreclosure ordinance pertains to a County “function” so that the
County is empowered to legislate pursuant to article VI, section 18(c).
In Casper v. Hetlage, 359 S.W.2d 781, 789 (Mo. 1962), this Court
specifically recognized that “the exercise of police power is a governmental
function, [a portion of which] . . . has been delegated to St. Louis County by
Section 18(c) of Article VI of the Constitution of Missouri.” A traditional and
long-recognized incident of the local government police power is the regulation of
2
the use and disposition of real property. Consequently, Missouri cases have
recognized that perhaps the “only consistent thread in the whole tangled skein of
cases” on charter county power is that charter counties have substantial autonomy
to regulate the disposition of real property within their borders. See State ex rel.
St. Louis Cnty, 498 S.W.2d 833 at 836 (explaining that “the power of
condemnation is a matter of local concern so that the procedure specified in the
charter supersedes the statutes”); Williams v. White, 485 S.W.2d 622, 624 (Mo.
App. 1972) (“[T]he power of a county under a Home Rule Charter to exercise
legislative powers, including the adoption of zoning ordinances, is derived directly
from the Constitution[;] ... when adopted such ordinances supersede statutory
zoning provisions.”).
Like ordinances regulating condemnation or zoning, the County’s
foreclosure mediation ordinance is essentially a regulation of the disposition of
real estate within the County’s borders. The County foreclosure ordinance does
nothing more than require mediation before homeowners are forced to
involuntarily sell and vacate their homes. The ordinance regulates the disposition
of real estate and is, therefore, a valid exercise of the County’s police power that is
within the purview of a governmental “function” subject to the County’s
legislative power granted by article VI, section 18(c).
The principal opinion holds that the ordinance exceeds the County’s
legislative authority because it does not regulate local concerns. More
specifically, the principal opinion reasons that the ordinance (1) was enacted to
3
address a national crisis and (2) the ordinance is inconsistent with section 443.454,
which provides that the enforcement and servicing of loans secured by mortgages
shall be pursuant to state and federal law. I respectfully disagree with both
propositions.
It is true, as the principal opinion notes, that the County enacted the
ordinance to “address the national foreclosure crisis” and its impacts on the
County. The fact that the underlying reasons for the foreclosure crisis involve
national and international macroeconomic trends does not compel the conclusion
that the localized symptoms of this crisis are beyond the County’s constitutionally
granted legislative power. For instance, the summary judgment record
demonstrates that prior to enacting the foreclosure ordinance, the County
experienced a substantial increase in the rate of foreclosures and an attendant
decrease in property values and tax revenues. 2 In 2010, the foreclosure rate in St.
Louis County was more than four times the historical norm. In some areas,
foreclosure-related sales outnumbered owner-initiated sales by a factor of eight.
The County’s ordinance is directed specifically at ameliorating these purely local
impacts or symptoms of the broader foreclosure crisis. I would hold, consistent
with the cases cited by the principal opinion, that foreclosure mediation programs
2
See also Karen Tokarz, Kim L. Kirn, & Justin Vail, FORECLOSURE MEDIATION
PROGRAMS: A CRUCIAL AND EFFECTIVE RESPONSE BY STATES, CITIES, AND COURTS TO
THE FORECLOSURE CRISIS, ST. LOUIS B.J., Summer 2013, at 28 (discussing the problems
increased foreclosures impose on local governments).
4
like the one established by the County can be a valid exercise of local government
police power. 3
The principal opinion also asserts that section 443.454 explicitly limits the
Count’s power to regulate foreclosures and establishes that the County’s ordinance
conflicts with state law. It is true that a charter county ordinance cannot “invade
the province of general legislation involving the public policy of the state as a
whole ….” Flower Valley Shopping Cntr, Inc. v. Saint Louis County, 528 S.W.2d
749, 754 (Mo. banc 1975). It is also indisputable that statutes passed by the
legislature are an expression of public policy. See State ex rel. Equality Sav. &
Bldg. Ass’n v. Brown, 334 Mo. 781, 68 S.W.2d 55, 59 (Mo. banc 1934). However,
as noted, article VI, section 18(c) grants to charter counties legislative powers that
are grounded in the constitution and “which are not subject to, but take precedence
over, the legislative power.” Gamble, 280 S.W.2d at 660. If the passage of
section 443.454 could render the mediation program contrary to the “general
legislation of the public policy of the state as a whole,” then the scope of the
County’s constitutional grant of legislative power would be defined not by the text
3
See Deutsche Bank Nat’l Trust Co. v. City of Providence, P.C. No. 10-1240
(Providence Superior Ct., May 17, 2010) (upholding city ordinance requiring
foreclosure mediation, but severing deed recording requirements that conflicted
with state law); Easthampton Sav.Bank v. City of Springfield, 874 F. Supp. 2d 25
(D. Mass. 2012) (upholding city’s foreclosure mediation ordinance in face of
contracts clause, state preemption, and police powers challenges); and Jepson v.
Deutsche Bank Nat’l Trust Co., 969 F. Supp. 2d 202 (D. Mass. 2013) (discussing
general benefits of pre-foreclosure mediation programs, but dismissing cause of
action).
5
of the constitution but by the whim of the legislature. Section 443.454 has no
application in this case.
For the foregoing reasons, I would hold that the foreclosure ordinance is a
valid exercise of the County’s legislative power as granted by article VI, section
18(c) of the Missouri Constitution.
_________________________________
RICHARD B. TEITELMAN, Judge
6