Birdsong v. Bydalek

• Decision Date: 22 August 1997
• Docket Number: 21376 and 21390,Nos. 21369,s. 21369
• Parties: Roy BIRDSONG and Collyer Kelling, Plaintiffs/Appellants/Cross-Respondents, v. Bobbi BYDALEK, Hch Ozark Investors, Inc., Daniel C. Ruda, Santo M. Catanese, Vacation World, Inc., Dwight Sprague, and Branson Commercial Property Investors Joint Venture, Defendants/Respondents/Cross-Appellants.
• Court: Missouri Court of Appeals

Page 103

953 S.W.2d 103

Roy BIRDSONG and Collyer Kelling Plaintiffs/Appellants/Cross-Respondents, v. Bobbi BYDALEK, Hch Ozark Investors, Inc., Daniel C. Ruda Santo M. Catanese, Vacation World, Inc., Dwight Sprague, and Branson Commercial Property Investors Joint Venture Defendants/Respondents/Cross-Appellants.

Nos. 21369, 21376 and 21390.

Missouri Court of Appeals,

Southern District,

Division Two.

Aug. 22, 1997.

Motion for Rehearing or Transfer

Denied Sept. 15, 1997.

Application to Transfer Denied

Oct. 21, 1997.

Richard E. Dorr, J. Michael Bridges, Blackwell, Sanders, Matheny, Weary & Lombardi, LC, Springfield, for Appellants.

Craig A. Smith, Daniel, Clampett, Powell & Cunningham, Springfield, for Respondent/Cross-Appellant Bobbi Bydalek.

Charles B. Cowherd, Bryan O. Wade, Husch & Eppenberger, Springfield, for BCPI (HCH Ozark Investors, et al.)

SHRUM, Judge.

This case is about three tracts of land and some contracts pertaining to them. There are nine litigants, all of whom appeal. On April 16, 1993, HCH Ozark Investors, Inc. (HCH) and Bobbi Bydalek (Bydalek) signed a real estate purchase agreement. This document set forth the terms by which Bydalek was to purchase two tracts of land (29.03 acres and 3.84 acres) at Branson, Missouri, for $2,250,000. An abridged copy containing provisions pertinent to these appeals is attached to this opinion as "Document I."

Another tract, Lot 6 that adjoined the 29.03 acres and the 3.84 acres, was deemed critical to the development of this land. Around May 10, 1993, counsel for HCH notified counsel for Bydalek that HCH was negotiating to buy Lot 6. Counsel thereafter commenced drafting an agreement whereby HCH would sell Lot 6 to Bydalek.

On May 10, 1993, Bydalek contacted Roy Birdsong (Birdsong). According to Birdsong, Bydalek "was looking for potential investors to get involved" in the transactions described above. Birdsong understood Bydalek needed $100,000 for "her next payment" which was "due pretty quick."

On May 12, 1993, HCH assigned the Bydalek/Seller contracts to Branson Commercial Property Investors Joint Venture (BCPI). BCPI is a joint venture consisting of HCH, Vacation World, Inc. (Vacation World), and Dwight Sprague (Sprague).

Meanwhile, after Bydalek's visit, Birdsong informed Collyer Kelling (Kelling) about his conversation with Bydalek. Birdsong scheduled a meeting for 5:00 p.m., Thursday, May 13, 1993, at his office. Four people attended: Birdsong, Bydalek, Kelling and lawyer Ralph Hunt (Hunt) (at Kelling's request). During the meeting, Bydalek disclosed a $100,000 payment "was due the next day." The quartet discussed terms under which Birdsong and Kelling would participate in the project, including supplying the $100,000 for the upcoming payment.

The next day, May 14, the quartet met again at the office of Bydalek's lawyer, Larry Bratvold (Bratvold). Further negotiations resulted in a document titled Assignment of Real Estate Purchase Agreement and Agreement for Joint Venture. Bydalek, Birdsong and Kelling signed it that date. An abridged copy containing the provisions pertinent to these appeals is attached to this opinion as "Document II." That same day, Birdsong and Kelling arranged to obtain $50,000 each from State Bank of Southwest Missouri for the $100,000 payment.

On Sunday, May 16, 1993, Birdsong, Kelling and Bydalek met in Branson. Bydalek agreed to obtain an appraisal of the property. She also agreed to call a realtor, Jan James (James). Bydalek explained at trial, "[T]he object of contacting Jan James was to help with the financing because she had someone that was going to put in a mall, and if we could get up the appraisal high enough and the listing agreement high enough, that would help with the financing." Although James sent a proposed listing agreement to Bydalek on May 19, it was never signed by Bydalek.

By May 19 Bydalek had signed Addendum to Real Estate Purchase Agreement by which she agreed to buy the adjoining Lot 6 for $375,000. The Addendum was also signed by Santo Catanese on behalf of HCH, and by Catanese and Daniel C. Ruda (Ruda) on behalf of BCPI.

Bydalek contacted Swan Evaluation Group, a real estate appraisal firm, and scheduled a meeting with Hayden Harrison of that firm for May 19. The meeting with appraiser Harrison took place as scheduled. Bydalek asked Harrison to appraise the 29.03 acres and Lot 6. She told him the 3.84 acres were also "under contract," but were not to be appraised. Additionally, she cautioned him "not to speak to anybody about the appraisal," particularly Birdsong and Kelling.

On May 24, 1993, Bydalek sent Birdsong and Kelling a letter stating that all parties seemed "to be uneasy and uncomfortable" with each other and suggested "there should be no deal." She declared she would try to get financing on her own financial strength and would pay Birdsong and Kelling back $150,000 at closing.

As of June 11, an additional $50,000 earnest money payment was due under the Bydalek- Bydalek signed two other documents on June 11. Both concerned deals she had made with BCPI. One document was an "escrow agreement" that directed the escrow agent to release all earnest money to BCPI before closing. Such release was to occur when the escrow agent received warranty deeds signed by all BCPI parties conveying the subject property to Bydalek. Exactly when and why Bydalek and BCPI first discussed this agreement was unclear from the record. The other deal between Bydalek and BCPI on June 11, 1993, was an "extension agreement." It provided that Bydalek could extend the date for closing to August 9, 1993, by paying an extra $100,000 for the property. Under this agreement the extra $100,000 had to be paid by July 9, 1993.

/Seller contracts (see Document I). Faced with this deadline, Birdsong and Kelling, together with Bydalek, signed an agreement. This agreement declared that, despite the parties' conflicting views about the viability of the Bydalek/Plaintiff contract (see Document II), each was putting in another $16,666 so that the June 11 payment could be met. That same day, Birdsong wrote a $16,666 check, Kelling wrote a $16,666 check, and Bydalek wrote a $16,668 check to pay the amount due.

Bydalek insisted at trial that the escrow deal was negotiated before the extension agreement, that the two contracts were not connected, and the fact that both were signed the same date was merely a coincidence. Bydalek admitted, however, that she told neither Birdsong nor Kelling about either of these agreements. However, Bratvold sent details about the escrow agreement to Hunt on May 28, 1993. In that communication to Hunt, Bratvold stated: "If you have some input for me on it, please fax or call." Bratvold did not recall whether he got "input" or objection from Hunt about the proposed escrow agreement. Hunt testified that he told Bratvold that he saw no basis for early release of escrow funds, yet there is no evidence that Hunt ever instructed Bratvold that Bydalek should not agree to these terms.

As reported earlier, Birdsong and Kelling borrowed $100,000, in the aggregate, from State Bank of Southwest Missouri, to make the initial payment required of them under the Bydalek/Plaintiff contract. In arranging that loan, Birdsong informed Roger Terrill, senior vice-president of State Bank, about the project with Bydalek and asked about obtaining additional financing for it. Terrill informed Birdsong that the bank would require "two years tax returns, current financial statements and an overall scope of what the project was going to be...." Such documentation would be required "on all the principals involved." On June 23, 1993, Terrill sent Birdsong a letter reminding him of the documentation required by the bank to consider financing the project. By that time, lawyer Andy Dalton had replaced Bratvold as counsel for Bydalek.

The next day (June 24), Hunt informed Dalton that Birdsong and Kelling were ready to "do the financing," but must have the appraisal, financial statement, and tax returns from Bydalek.

The Swan Evaluation Group completed the appraisal of the 29.03 acres and Lot 6 about June 24, 1993. A copy of the appraisal was delivered to Dalton on June 28. He sent Hunt a copy the next day.

On July 1, 1993, Hunt notified Dalton that Birdsong and Kelling were able to obtain the financing but had been unable to proceed because Bydalek did not provide the appraisal until June 29 and it did not cover the 3.84 acres. Furthermore, said Hunt, Bydalek never provided a financial statement or tax returns. Hunt concluded Bydalek deliberately made it impossible for his clients to obtain financing.

On July 6, 1993, banker Terrill sent Birdsong and Kelling a letter stating that even if the bank received a complete financial package on the project that day it would be impossible to act by the proposed closing date of July 9.

Meanwhile, Birdsong and Kelling had retained new counsel, Bowlin & Johns, P.C. On July 6, Bowlin sent Dalton a letter complaining about Bydalek and demanding the documentation necessary to obtain financing. Bowlin also sent a letter that date to BCPI's On July 8, 1993, Birdsong and Kelling signed and filed in the Taney County Recorder's office a document entitled "Memorandum of Assignment of Real Estate Purchase Agreement and Agreement for Joint Venture." This document, which we refer to as "Assignment Memo," was an abbreviated version of the Bydalek/Plaintiff contract. The Assignment Memo contained only the language whereby Bydalek assigned two-thirds interest in her contracts to Plaintiffs.

lawyer, Debra Mallonee Shantz (Shantz), regarding the closing scheduled for July 9. ¹

The next day (July 9), Birdsong and Kelling (Plaintiffs) filed a petition against Bydalek, HCH, Ruda and Catanese. Simultaneously, Plaintiffs filed a "Notice of Lis Pendens" with the Taney County Recorder which described the 29.03 acres and the 3.84 acres, but not Lot 6. ² That same day, Plaintiffs filed an amended...