Cmty. Bank of Raymore v. Patterson Oil Co.

• Decision Date: 03 March 2015
• Docket Number: WD 77275
• Citation: 463 S.W.3d 381
• Parties: Community Bank of Raymore, Respondent, v. Patterson Oil Co., Inc., Appellant.
• Court: Missouri Court of Appeals

463 S.W.3d 381

Community Bank of Raymore, Respondent

v.Patterson Oil Co., Inc., Appellant.

WD 77275

Missouri Court of Appeals, Western District.

OPINION FILED: March 3, 2015

Motion for Rehearing and/or Transfer to Supreme Court Denied March 31, 2015

Application for Transfer Denied June 30, 2015

Greer S. Lang and Justin Nichols, Kansas City, MO, Attorneys for Respondent.

John M. Duggan and Deron A. Anliker, Overland Park, KS, Attorneys for Appellant.

Before Division I: Cynthia L. Martin, Presiding Judge, and Thomas H. Newton and Mark D. Pfeiffer, Judges

Opinion

Mark D. Pfeiffer, Judge

Community Bank of Raymore (“Bank”) brought an action against Patterson Oil Co., Inc. (“Patterson Oil”) for unlawful detainer. The Circuit Court of Cass County, Missouri, Associate Circuit Division (“trial court”), granted summary judgment to Bank on the issue of right to possession, and a jury returned a verdict for damages. The trial court entered judgment on the jury verdict in favor of Bank. Patterson Oil appeals. We affirm.

Facts and Procedural History

Patterson Raymore, LLC executed a Deed of Trust dated June 15, 2009, on certain real property located at 715 Foxwood Drive, Raymore, Missouri (“Property”), to Bank, which deed was recorded with the Cass County Recorder of Deeds at Book 3262, Page 407 (“P–R Deed of Trust”).

SM Disposition, Inc. was appointed to serve as the successor trustee (“Successor Trustee”) under the P–R Deed of Trust. On November 30, 2012, the Successor Trustee sent notice of foreclosure of the P–R Deed of Trust and of the trustee's sale scheduled to take place on January 2, 2013, to Patterson Oil, Patterson Raymore, LLC, PHC Development, LLC, Gary A. Hawkins, Valerie J. Hawkins, Chris L. Patterson, and Janice A. Patterson. Although all of these individuals and entities each received a copy of the foreclosure notice on or before December 6, 2012, none of them sought to enjoin the foreclosure sale in advance of the sale.

On January 2, 2013, the Successor Trustee foreclosed on the P–R Deed of Trust and held a non-judicial foreclosure sale of the Property. Bank was the highest bidder at the foreclosure sale. Following the foreclosure sale, the Successor Trustee issued a Trustee's Deed in favor of Bank conveying title to the Property to Bank on January 2, 2013, which deed was recorded with the Cass County Recorder of Deeds on January 3, 2013, at Book 3645, Page 0086 (“Trustee's Deed”). When Bank purchased the Property at the foreclosure sale, Patterson Oil was occupying the Property. On January 4, 2013, Bank sent Patterson Oil notice of the foreclosure sale and its ownership of the Property and demanded that Patterson Oil vacate the Property no later than January 18, 2013. A copy of the notice to vacate was also personally served upon Patterson Oil's President, Chris L. Patterson, on January 9, 2013. Despite this demand, Patterson Oil refused to relinquish possession of the Property.

Bank filed its Verified Petition for Unlawful Detainer on January 22, 2013. Bank moved for partial summary judgment on the issue of its right to possession of the Property and Patterson Oil opposed Bank's motion. On July 24, 2013, the trial court entered its Findings of Fact and Conclusions of Law, granting Bank's partial summary judgment motion.

Thereafter, the issue of Bank's damages was tried to a jury on October 18, 2013. The jury returned a verdict in Bank's favor for the loss of rents and profits from January 18, 2013, to the date of its verdict in the amount of $27,000, finding that the monthly value of the rents and profits from the date of its verdict was $3000 per month. The trial court entered its final judgment in favor of Bank on October 22, 2013. The judgment awarded Bank “restitution of the Property” and damages in the “sum of $54,000, double the sum assessed by the jury, and also at the rate of $6000, double the sum found per month, for rents and profits,”¹ from October 18, 2013, until restitution of the Property to Bank, together with post-judgment interest and Bank's costs.

Patterson Oil filed a motion for judgment notwithstanding the verdict (“JNOV”) and/or for a new trial, which the trial court denied on January 27, 2014.

Patterson Oil timely appeals, raising five points of error. Points I and V assert error in the trial court's grant of summary judgment; Point II challenges the trial court's denial of Patterson Oil's motion for JNOV/new trial; and Points III and IV assert instructional error.

Points I and V—Summary Judgment

Standard of Review

When we consider an appeal from the grant of summary judgment, we view the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). “The burden on a summary judgment movant is to show a right to judgment flowing from facts about which there is no genuine dispute. Summary judgment tests simply for the existence, not the extent, of these genuine disputes.” Id. at 378. Because the propriety of summary judgment is purely an issue of law, our review is de novo . Id. at 376.

Point I

In Point I, Patterson Oil argues that the trial court erred in granting summary judgment (for possession) in Bank's favor because Bank did not prove the authenticity of the P–R Deed of Trust under which the foreclosure proceedings occurred.

Patterson Oil essentially asserts that Successor Trustee wrongfully foreclosed on the Property because the P–R Deed of Trust, under which the foreclosure occurred, was forged. However, a defendant cannot assert wrongful foreclosure as a defense to an unlawful detainer action. Cent. Bank of Kansas City v. Mika, 36 S.W.3d 772, 775 (Mo.App.W.D.2001) ; see also Mortg. Assocs., Inc. v. Wiley, 650 S.W.2d 13, 15 (Mo.App.E.D.1983) (holding that defendant in an unlawful detainer action cannot attack the validity of the foreclosure sale under the deed of trust as a means of attacking the validity of the trustee's deed conveying title to the plaintiff).

“Issues relating to title or matters of equity, such as mistake, estoppel[,] and waiver cannot be interposed as a defense” to an unlawful detainer action. Wells Fargo Bank v. Smith, 392 S.W.3d 446, 450 (Mo. banc 2013) (internal quotation omitted). Section 534.210 explicitly states that “[t]he merits of the title shall in nowise be inquired into, on any complaint which shall be exhibited by virtue of the provisions of this chapter.”

Property owners who dispute a lender's right or ability to foreclose upon their property have two options. They may either “(1) sue to enjoin the foreclosure sale from occurring, or (2) if the sale has occurred and the buyer has sued for unlawful detainer, bring a separate action challenging the foreclosure purchaser's title² and seek a stay of the unlawful detainer action in that separate case.” Wells Fargo, 392 S.W.3d at 461. “What a [property owner] may not do is wait until after the foreclosure and then challenge the validity of the sale as a defense in a subsequent unlawful detainer action.” Fed. Nat'l Mortg. Ass'n. v. Wilson, 409 S.W.3d 490, 495 (Mo.App.E.D.2013). Our Missouri Supreme Court has made clear that:

Even where there may be latent defects in the foreclosure purchaser's title (or in the chain of interests preceding it) sufficient to support a claim that the purchaser's title is void, and even where there may be an adequate basis at law or equity to set aside the trustee's deed or the foreclosure sale which led to it, a foreclosure purchaser is entitled to bring an unlawful detainer action using the deed as evidence of the fact of the sale unless and until that deed has been declared void in a proper action.

Wells Fargo, 392 S.W.3d at 461.³ An unlawful detainer action is not the proper action in which to challenge the validity of the foreclosure proceeding. “[S]tatutory unlawful detainer actions do not, cannot, and never were intended to resolve questions of ownership or the validity of title.” Id. at 456. Patterson Oil is “not barred from raising equitable theories, claims of wrongful foreclosure, or other challenges to [Bank's] title. However, [it is] barred from trying to litigate such issues in response to [Bank's] limited action for possession under chapter 534.” Id. Nothing in chapter 534 prevented Patterson Oil from raising any or all of its claims before the foreclosure sale occurred in an action to enjoin the sale; but since it did not do so, its claims must be litigated in a proceeding separate and apart from the unlawful detainer proceeding. See id.⁴

“To prevail in an unlawful detainer action [after property foreclosure proceedings], a plaintiff must demonstrate: (1) that the property was purchased at a foreclosure sale, (2) the defendant received notice of the foreclosure, and (3) the defendant refused to surrender possession of the property.” Wilson, 409 S.W.3d at 495. Here, it is undisputed that Bank purchased the property at a foreclosure sale. It is also uncontested that the Trustee's Deed states that Successor Trustee gave more than twenty days' notice of the foreclosure sale by publication and by sending a copy of the advertisement by certified mail to Patterson Oil and to Patterson Raymore, as required by section 443.325. Pursuant to section 443.380, recitals in a trustee's deed after a foreclosure sale “shall be received as prima facie evidence in all courts of the truth thereof.” Finally, there is no dispute that Patterson Oil has refused to surrender the Property. Bank thus, via undisputed facts, met the “narrowly define[d] ... proof required [of] a plaintiff in an unlawful detainer action.” Wilson, 409 S.W.3d at 495 (internal quotation omitted).

Point I is denied.

Point V

Similarly, in Point V, Patterson Oil contends that the trial court erred in granting summary judgment (for possession) in favor of Bank because Bank did not prove that its claimed right to possession was superior to Patterson Oil's right of possession. Patterson Oil asserts that it was a party...