Barkley v. Carter County State Bank, 16449

• Decision Date: 18 June 1990
• Docket Number: No. 16449,16449
• Citation: 791 S.W.2d 906
• Parties: L.L. BARKLEY and Marguerite Barkley, his wife, Plaintiffs-Appellants, v. CARTER COUNTY STATE BANK, Jeff Featherston, individually and as president of Carter County State Bank, Claude Kennedy and Gertie Kennedy, his wife, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 906

791 S.W.2d 906

L.L. BARKLEY and Marguerite Barkley, his wife, Plaintiffs-Appellants, v. CARTER COUNTY STATE BANK, Jeff Featherston, individually and as president of Carter County State Bank, Claude Kennedy and Gertie Kennedy, his wife Defendants-Respondents.

No. 16449.

Missouri Court of Appeals,

Southern District,

Division Two.

June 18, 1990.

Mark A. Kennedy, Kennedy & Kennedy, Poplar Bluff, for plaintiffs-appellants.

L. Joe Scott, Daniel T. Moore, Poplar Bluff, for defendants-respondents.

FLANIGAN, Presiding Judge.

On August 30, 1988, plaintiffs L.L. Barkley and Marguerite Barkley filed this action in the Circuit Court of Oregon County against defendants Carter County State Bank ("the bank"), Jeff Featherston, Claude Kennedy, and Gertie Kennedy, his wife. Featherston was sued individually and as president of the bank. The bank and Featherston filed a motion for summary judgment. Rule 74.04. ¹ Claude Kennedy and Gertie Kennedy filed a separate motion for summary judgment. The trial court sustained both motions. Plaintiffs appeal.

The judgment recited that the motion of the bank and Featherston was sustained on the ground that a judgment entered on May 15, 1984, in Case No. CV-584-26CC, Circuit Court of Oregon County, L.L. Barkley and Marguerite B. Barkley, his wife, Plaintiffs, vs. L. Joe Scott, Trustee for Carter County State Bank, and Carter County State Bank, Defendants, "is a final judgment and is res judicata as to and bars the issues pled in plaintiffs' petition against said defendants herein." Case No. CV-584-26CC will be called "the first action," and the judgment of May 15, 1984, will be called "the first judgment."

The court also found "that plaintiffs do not have any right, title or interest in and to the real estate described in [the first judgment] and have no right to possession thereof and are not entitled to their prayer for judgment and damages against defendants Claude Kennedy and Gertie Kennedy, either actual or punitive."

Plaintiffs' sole point is that the trial court erred in sustaining the two motions for summary judgment and in dismissing the action because the present action is not barred by the doctrines of res judicata or collateral estoppel in that: (a) there was never a final adjudication of the first action on its merits; (b) the first action and this action do not have identity of issues; (c) the first action and this action do not have identical parties; and (d) plaintiffs did not have a full and fair opportunity to litigate in the first action all of the issues presented in the present action.

"On review of defendants' motion for summary judgment, this Court must view the record in the light most favorable to the plaintiffs, according to plaintiffs all reasonable inferences which may be drawn from the evidence. Summary judgment is inappropriate unless the defendants have shown by unassailable proof that they are entitled to judgment as a matter of law. The burden is on the defendants to demonstrate that there are no genuine issues of material fact. A genuine issue of fact exists when there is the slightest doubt about a fact."

Madden v. C & K Barbecue Carryout, Inc., 758 S.W.2d 59, 61 (Mo. banc 1988).

It is necessary to examine the record in the first action in order to determine what effect its outcome may have had upon the respective defendants in this action. The First Action

On March 15, 1984, plaintiffs L.L. Barkley and Marguerite Barkley filed civil action No. CV-584-26CC in the Circuit Court of Oregon County against the bank and L. Joe Scott, trustee for the bank.

The petition alleged: On September 9, 1983, plaintiffs executed a note and deed of trust in favor of the bank. The note was in the amount of $141,803.98, and of that amount the bank disbursed "money to plaintiffs but withheld approximately $51,000." Plaintiffs did not receive full consideration for the deed of trust because of that withholding. On February 23, 1984, defendant Scott, as trustee, published a notice of a foreclosure sale to be held on March 16, 1984, of the land described in the deed of trust. Scott was not the trustee named in the deed of trust and had no authority to act as trustee.

The petition prayed that the court issue its order "temporarily restraining and preliminary (sic) enjoining defendant (sic) from proceeding with a trustee's sale under the ... deed of trust."

Also on March 15, 1984, plaintiffs filed a "Motion for Temporary Restraining Order," seeking to enjoin the defendants from conducting the foreclosure sale scheduled for March 16, 1984.

Also on March 15, 1984, the court issued a temporary restraining order stopping the foreclosure sale.

On May 7, 1984, the court held an evidentiary hearing on "plaintiffs' request for a permanent injunction."

On May 15, 1984, the court entered judgment finding the issues in favor of the defendants and against plaintiffs Barkley. An excerpt from the judgment reads: "After having heard testimony pursuant to plaintiff's (sic) request for a permanent injunction, said evidence being heard on May 7, 1984, [the court] hereby finds that plaintiffs executed a promissory note and deed of trust to secure said promissory note and are presently in default on said promissory note. The court further finds that plaintiff (sic) has failed to meet their burden of proof in sustaining their allegations as to the purpose for which an injunction should be made permanent."

The judgment dissolved the temporary restraining order, denied plaintiffs' request for a permanent injunction, awarded defendants damages in the amount of $1,229 against the plaintiffs and their surety, and taxed the costs against plaintiffs. ²

The Present Action

On August 30, 1988, a three-count petition was filed by plaintiffs L.L. Barkley and Marguerite Barkley, who are the same persons who were plaintiffs in the first action. The four defendants are the bank, Jeff Featherston (individually and as president of the bank), Claude Kennedy and Gertie Kennedy, his wife.

Count I of the petition, directed against all four defendants, alleged in general:

The Kennedys are presently in possession of 440 acres of certain described real estate located in Oregon County, and they purport to be owners of the land pursuant to a warranty deed from the bank dated August 24, 1987. On September 9, 1983, plaintiffs were in possession of the real estate and on that date gave a deed of trust on it to one Reed as trustee for the bank. ³ On February 13, 1984, L. Joe Scott, purporting to act as trustee, caused a notice of foreclosure sale to be mailed to the plaintiffs advising them of a foreclosure sale to be held on March 16, 1984. Scott, purporting to act as trustee, later notified plaintiffs of a foreclosure sale to be held on June 22, 1984. On March 13, 1985, the bank, through defendant Featherston, appointed Scott as trustee of the deed of trust "in direct contravention of the terms of the deed of trust." On April 12, 1985, Scott, purporting to act as successor trustee, sold the land to the bank and gave the bank a trustee's deed purporting to transfer ownership of the land to the bank. The trustee's deed is void under Missouri law. On August 24, 1987, the bank, by warranty deed, purported to transfer title to the land to the Kennedys, who thereupon entered into unlawful possession of plaintiffs' land and who continue to withhold possession from plaintiffs.

The prayer of Count I was that the court declare that "the foreclosure of the deed of trust" was illegal and the trustee's deed of April 12, 1985, was a nullity, that the deed transferred no interest in the land to any subsequent purchaser, and that the "transactions regarding" the land after April 12, 1985, are void and should be set aside. The prayer also requested that the court issue to the sheriff a writ of possession ejecting the Kennedys from the land and placing plaintiffs in possession.

Count II, which was directed against all four defendants, incorporated the allegations of Count I and further alleged: As a result of the wrongful taking and withholding of the land, plaintiffs have been deprived of rents and profits since April 12, 1985, to their damage in the amount of $250,000. All actions taken by the bank, Featherston, and Claude Kennedy, were willful, wanton and malicious. Prior to the foreclosure sale, Featherston was employed by the Missouri Department of Finance as a bank examiner, and he examined and classified the "plaintiffs' loans." Pursuant to the classification of the loans, the value of the bank "was depleted" and the bank was sold and Featherston was hired as executive vice president of the bank. As executive vice president Featherston proceeded to foreclose deeds of trust securing loans which he had classified as a bank examiner. Thereafter the land was sold to the bank pursuant to an illegal foreclosure and sold to individuals (sic) on the board of the bank. At the time the Kennedys purchased the property, Claude Kennedy was serving on the board of the bank and purchased the land for "a small percentage of its fair market value," and such purchase was approved by the board of the bank and by Featherston as president of the bank.

The prayer of Count II was for actual damages in the amount of $250,000 against all defendants and for punitive damages "in an amount adequate to sufficiently punish the defendants and deter them and others from like conduct," and for other relief.

Count III, directed against the bank and defendant Featherston "as president of [the bank]," alleged: On September 9, 1983, the plaintiffs were in possession of 440 acres of land in Oregon County and on that date gave a deed of trust to one Reed as trustee for the bank. Also on September 9, 1983, the plaintiffs "in order to secure future advances and secure a line of credit" gave the bank "a deed of trust securing future advances." The amount of the deed of trust for future advances was $141,803.98, and in addition to the land...