Bi-State Development Agency of Missouri-Illinois Metropolitan Dist. v. Nikodem

• Decision Date: 29 June 1993
• Docket Number: BI-STATE,No. 62141,MISSOURI-ILLINOIS,62141
• Parties: DEVELOPMENT AGENCY OF THEMETROPOLITAN DISTRICT, Plaintiff, v. Francis T. NIKODEM, Jr. and Raymond R. NIKODEM, Defendants/Respondents, Ronald A. Leggett, Collector of Revenue, Defendant, Edison Brothers Stores, Inc., Defendant/Appellant, and Other Unknown Individuals, Defendants.
• Court: Missouri Court of Appeals

Page 775

859 S.W.2d 775

BI-STATE DEVELOPMENT AGENCY OF THE MISSOURI-ILLINOIS

METROPOLITAN DISTRICT, Plaintiff, v. Francis T. NIKODEM, Jr. and Raymond R. NIKODEM, Defendants/Respondents, Ronald A. Leggett, Collector of Revenue, Defendant, Edison Brothers Stores, Inc., Defendant/Appellant,

and

Other Unknown Individuals, Defendants.

No. 62141.

Missouri Court of Appeals,

Eastern District,

Division Four.

June 29, 1993.

Motion for Rehearing and/or Transfer to

Supreme Court Denied July 28, 1993.

Application to Transfer Denied Sept. 28, 1993.

Alan David Pratzel, St. Louis, for appellant.

Robert Denlow, Paul G. Henry, Robert Theodore Haar, Lisa A. Pake, St. Louis, for respondent.

CRAHAN, Judge.

Edison Brothers Stores, Inc. ("Lessee"), appeals from a judgment denying its motion for apportionment of the proceeds of condemnation of a parcel it leased from Francis T. Nikodem, Jr. and Raymond R. Nikodem ("Lessors") and granting Lessors' motion for distribution of the entire proceeds to them. Lessee contends that the trial court erroneously construed the automatic termination clause in the lease as depriving it of any compensable leasehold interest upon condemnation of the property. We affirm.

This appeal is an outgrowth of a condemnation proceeding instituted by Bi-State Development Agency ("Bi-State") in connection with the Metro-Link light rail project. The parcel of land condemned is located at Sixteenth and Poplar Streets in the City of St. Louis. At the time of condemnation, the parcel was used by Lessee as an employee parking lot. Lessee has had continuous possession of the property since 1969 pursuant to a written lease. The initial lease was with Lessors' predecessors-in-interest for a term of twenty years and provided for rent of $6,000 per year. In 1989, Lessors, having inherited the property from their parents, entered into an extension of the lease for a period of ten years, renewable at Lessee's option for ten additional years. The extension incorporated the terms of the original lease except for the term and the amount of rent, which was set at $20,800 per year.

Bi-State's First Amended Petition for Condemnation was filed against Lessors, Lessee, and certain governmental entities on June 10, 1991. On June 28, 1991, the court entered an Order of Condemnation and Appointment of Commissioners. After a hearing in September, 1991, the Commissioners awarded damages for the taking in the amount of $430,000. Lessors had sought an award of approximately $1.75 million. Both Lessors and Lessee filed exceptions to the award. ¹ The amount of the award was paid into the registry of the court by Bi-State on December 12, 1991, and the property was surrendered to Bi-State shortly thereafter.

On December 14, 1991, Lessors filed a Motion for Distribution, alleging that there were no other parties with an interest in the property and that they were therefore entitled to the full award. Lessee opposed the motion for distribution and timely filed a motion to apportion damages. The trial court scheduled the respective motions for an evidentiary hearing. On the date of the hearing, the court did not take testimony but heard argument on the single issue of whether the terms of the lease terminated Lessee's interest in the property upon condemnation and thereby precluded Lessee from asserting any claim to the condemnation proceeds. The lease provision at issue states, in pertinent part:

In the event all of said premises shall be appropriated or taken under the power of eminent domain by any public or quasi-public authority, this lease shall terminate and expire as of the date of such taking; and the Lessor and Lessee shall thereupon be released from any further liability hereunder....

On May 19, 1992, the trial court entered an order awarding one hundred percent of the Commissioners' award to the Lessors. The court ruled that under the terms of the lease Lessee had no compensable leasehold interest upon condemnation of the subject property.

Before addressing the merits of Lessee's appeal, we must first address Lessors' contention that Lessee's "points relied on" do not comply with Rule 84.04(d). Lessee's points relied on are as follows:

THE TRIAL COURT ERRED IN HOLDING THAT THE TERMS OF THE LEASE BETWEEN APPELLANT AND RESPONDENT FORFEITED AS A MATTER OF LAW APPELLANTS' CONSTITUTIONAL RIGHT TO AN APPORTIONMENT OF THE CONDEMNATION PROCEEDS.

I. The Trial Court's Opinion Did Not Take Into Consideration A Lessee's Constitutional Right To Compensation And The Presumption Against Waiver

II. The Logic Of Termination Clauses And The Illogical Implications Of The Decision Below

III. The Trial Court's Holding Is Unsupported By Relevant Missouri Cases

IV. The More Well-Reasoned Authorities In Other Jurisdictions Support Reversal Of The Trial Court's Decision

As Lessors correctly observe, such points relied on do not satisfy the requirements of Rule 84.04(d) that the points set forth "wherein and why" the trial court erred. See Thummel v. King, 570 S.W.2d 679, 684-690 (Mo. banc 1978). Instead, Lessee has simply stated a general proposition that the trial court's action was error but fails to state why the trial court's action was error. Lessee then states four abstract propositions of error, the first of which could arguably be construed as a statement of the legal reason Lessee maintains the trial court's ruling was error (i.e., the why component) and the balance of which are completely uninformative with respect to the nature of Lessee's complaint. As Lessors point out, it is not clear whether Lessee is attempting to state one point or four but there is plainly no reference to the lease itself or any other material which would support the ruling for which Lessee contends (the wherein component). See Thummel, 570 S.W.2d at 685.

As the Missouri Supreme Court explained in Thummel the requirements of Rule 84.04(d) are rooted in sound policy. The functions of the points relied on are (1) to give notice to the opposing parties of the precise points which must be contended with and answered on appeal and (2) to inform the court of the issues to be resolved on appeal. Id. at 686. Absent compliance with Rule 84.04(d), there is a danger that the court may unfairly interpret the thrust of the appellant's contention differently than the opposing party (or differently than the appellant). If so, the court may unwittingly become an advocate for one side or the other or decide the case without the robust advocacy essential to the proper exercise of the judicial function. Id.

Having determined that Lessee's points relied on are not in compliance with Rule 84.04(d), we are confronted with the problem of what to do about it. ² Our preference is to address the merits of the appeal whenever possible. Aside from pointing out the difficulty encountered in preparing a responsive brief, Lessors have not suggested that it would be inappropriate to address the merits here. Based on our review of the argument portion of Lessee's brief, it appears that the single issue presented is the legal effect of the clause quoted above, a question fully briefed by Lessors. Therefore, solely as a matter of discretion, we will proceed as if that issue had been properly presented in the points relied on. Our consideration will be limited, however, to the arguments recognized and addressed in Lessors' brief. Such procedure should minimize any possible prejudice to Lessors and avoid the dangers identified in Thummel.

Lessee maintains that the meaning and legal effect of the termination clause at issue is a question of first impression in Missouri. According to Lessee, the trial court erred in interpreting the clause as a waiver or forfeiture of its constitutional right to compensation for the value of its leasehold interest. According to Lessee, such interpretation is contrary to well-established precedent that courts must indulge in every reasonable presumption against waiver of fundamental constitutional rights and that a finding of such a waiver must be established by clear and convincing evidence. Further, Lessee maintains that interpretation of the termination clause as a waiver or forfeiture of its constitutional right to compensation would logically bar compensation to all leaseholders of condemned property inasmuch as it has long been established that condemnation divests all rights of private property in the condemned property and has the effect of terminating any further obligation to pay rent. Finally, Lessee maintains that the trial court's ruling is not supported by relevant Missouri case law and is contrary to the more well-reasoned authority in other states.

Although the meaning and effect of the precise language at issue does appear to be a question of first impression in Missouri, the principles dispositive of Lessee's contentions are not. Lessee's claim to compensation is predicated on the Fifth and Fourteenth Amendments to the United States Constitution and Article I, §§ 10 and 26 of the Missouri Constitution of 1945. The Fifth Amendment guarantees that no person shall be deprived of property without due process of law, nor shall private property be taken for public use without just compensation. Under the Fourteenth Amendment, these protections apply to actions taken by the states. Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980). Likewise, Article I, Section 10 of the Missouri Constitution provides that "no person shall be deprived of life, liberty or property without due process of law" and Article I, Section 26 requires that "private property shall not be taken for public use without just compensation."

As applied to tenants in condemnation proceedings, these provisions give rise to two distinct constitutional rights: the right to due process of law and the right to compensation for the value of the leasehold interest at the time of condemnation. J.B. Millhouse v. Drainage District No. 48 of...