Blue Ridge Bank and Trust Co. v. Trosen, No. WD 69880 (Mo. App. 2/9/2010)

• Decision Date: 09 February 2010
• Docket Number: No. WD 69880.,WD 69880.
• Citation: Blue Ridge Bank and Trust Co. v. Trosen, No. WD 69880 (Mo. App. 2/9/2010), No. WD 69880. (Mo. App. Feb 09, 2010)
• Parties: BLUE RIDGE BANK AND TRUST CO., Respondent, v. RHONDA TROSEN, et al., Respondents, RANDY and NANCY HANSON, Appellants.
• Court: Missouri Court of Appeals

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BLUE RIDGE BANK AND TRUST CO., Respondent, v.RHONDA TROSEN, et al., RespondentsRANDY and NANCY HANSON, Appellants.

No. WD 69880.

Court of Appeals of Missouri, Western District.

February 9, 2010.

Appeal from the Circuit Court of Jackson County, Missouri The Honorable Michael W. Manners, Judge.

Before Division Two: Victor C. Howard, Presiding Judge, Joseph M. Ellis, Judge and Mark D. Pfeiffer, Judge.

JOSEPH M. ELLIS, Judge.

Randy and Nancy Hanson appeal from a judgment entered in the Circuit Court of Jackson County in an interpleader action originally filed by Blue Ridge Bank and Trust ("the Bank") related to a piece of real property located on Lake Lotawana in Jackson County.The Hansons contend that the trial court improperly found that their preemptive right to purchase the property had been waived.They also challenge the trial court's conclusion that the restrictive covenant created an unreasonable restraint on the alienation of the property.For the following reasons, the judgment is affirmed.

Ownership of the piece of property at issue, Lot W-2 on Lake Lotawana, rests with the Donald L. Allen Revocable Trust.The Bank assumed the role of trustee of that trust following Mr. Allen's death in 2004.RespondentsRhonda Trosen and Donald Allen Jr. are the adult children of Donald Allen Sr. and beneficiaries of the trust.¹Following Mr. Allen's death, Trosen and Allen and their respective spouses sought to purchase Lot W-2, which had not been bequeathed to any trust beneficiary, from the trust.The provisions of the trust granted the Trustee discretion to sell, convey, transfer, or lease the property and "in general to deal otherwise with the trust property in such manner, for such prices, and on such terms and conditions as any individual might do as outright owner of the property."

Lot W-2 and all other pieces of property on Lake Lotawana are governed by restrictive covenants.The provision at issue in this case is the right of first refusal found in the covenants, which provides:

No sale, contract to sell, or conveyance of the real estate herein described shall be made or consummated without first giving at least fifteen (15) days written notice to Grantor [Lake Lotawana Association, Inc.], and to the owners of the two side adjoining lots, of the proposed sale price and terms thereof; and thereupon the Grantor and/or either of the side adjoining lot owners shall have the first and prior right, option, and privilege during said period of fifteen (15) days to buy said real estate at the same price and upon the same terms.

The Hansons own one of the two lots adjacent to Lot W-2.

In October 2004, the Bank obtained an appraisal for Lot W-2, which determined its market value to be $135,000.On February 3, 2005, the Hansons contacted the Bank and asked for the appraised value of the property.After receiving that information, the Hansons offered to purchase the property for the appraised value.When Respondents were informed of the Hansons' offer, they counter-offered to purchase the property for $135,500.The bank relayed that information to the Hansons and asked if they had a counteroffer of their own.The Hansons stated that they would not bid further on the property.A contract for the purchase of the property for $135,500 was then executed between Respondents and the trust.

On February 23, 2005, the Hansons sent a letter to the Bank stating their intent to exercise their right to purchase Lot W-2 pursuant to the provisions of the restrictive covenants.They asked the Bank to modify the closing date to comply with the fifteen day notice provision of the covenant and also asked the bank to confirm the selling price and terms of the contract.On March 1, 2005, counsel for the Hansons sent a letter to the Bank demanding that the Bank "cease and desist from the sale, contract to sell or conveyance of [Lot W-2] in breach of the violation of the Restrictions and the Hansons' right of first refusal."

On March 4, 2005, the Bank filed a petition for interpleader and declaratory relief in the Circuit Court of Jackson County asking the court to determine the proper buyer for the property.The Hansons subsequently filed an answer and counter-claim against the Bank for declaratory relief and specific performance.They also filed a cross-claim against Respondents for declaratory relief.In answer to the petitions, Respondents asserted that the restrictions were unenforceable and had been waived.

The case was tried to the circuit court, which ultimately found that the Hansons had waived their preemptive right when they told the Bank that they would not bid more than $135,000 on the property.On appeal, this Court held that the Hansons had not waived their preemptive right and had properly executed that right.Blue Ridge Bank & Trust Co. v. Trosen,221 S.W.3d 451, 462-63(Mo. App. W.D.2007)("Trosen I").We remanded the case for determination of all remaining issues.

On remand, following an evidentiary hearing, the trial court entered its judgment in favor of Respondents.The court found that the preemptive right covenant had been waived by the Lake Lotawana Association with regard to all intra-family transfers of property.The court also concluded that the covenant, as written, posed an unreasonable restraint on the alienation of the property.The Hansons bring four points on appeal.

As in any court tried case, we review the trial court's judgment under the standard of review established in Murphy v. Carron,536 S.W.2d 30, 32(Mo. banc 1976).Id. at 457."Accordingly, the judgment of the trial court will be affirmed unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law."McNabb v Barrett,257 S.W.3d 166, 169(Mo. App. W.D.2008)(internal quotation omitted)."We view the evidence, and permissible inferences therefrom, in the light most favorable to the trial court's judgment, and we disregard all contrary evidence and inferences."Brown v. Mickelson,220 S.W.3d 442, 447(Mo. App. W.D.2007)(internal quotation omitted)."We defer to the trial court's factual findings, giving due regard to the trial court's opportunity to judge the credibility of the witnesses."Id.(internal quotation omitted).This court"is primarily concerned with the correctness of the trial court's result, not the route taken by the trial court to reach that result.Thus, the judgment will be affirmed if cognizable under any theory, regardless of whether the reasons advanced by the trial court are wrong or not sufficient."Trosen I,221 S.W.3d at 457(internal quotation and citation omitted).

In their first point, the Hansons claim that the trial court erroneously declared and applied the law in finding that the sale of the property from the trust to Respondents was an intra-family transfer for which the Lake Lotawana Association had waived the preemptive right contained in the covenant.They claim that the Association cannot be deemed to have waived their personal right of first refusal of the individual property owners as to intra-family or any other transfers.They further assert that this transaction cannot be viewed as an intra-family transfer because the Bank, as successor trustee, is not related to Respondents.In their second point, the Hansons claim the judgment is against the weight of the evidence for the same reasons.

We first address whether the trial court erred in finding that the Association had waived the preemptive right with regard to intra-familial transfers of property.As noted in our prior opinion, lawfully recorded restrictive covenants govern all real property situated at Lake Lotawana, and one of those covenants affords the Association and adjoining land owners with a preemptive right when a property owner seeks to sell or otherwise convey the property to a new owner.Id. at 454.

Under Missouri law, a right of first refusal, or preemptive right, requires the seller, when or if she decides to sell the stipulated piece of property, to first offer the property to the holder of the right, either at a stipulated price or at the price and on the terms the seller is willing to sell.

Schroeder v. Duenke,265 S.W.3d 843, 847(Mo. App. E.D.2008)."The preemptive right is merely contingent until the owner arrives at a decision to sell the property, at which point the preemptive right ripens into a full option."McNabb,257 S.W.3d at 170(internal quotation omitted).²

"A restrictive covenant [like the preemptive right at issue herein] may be waived and abandoned by a conscious acquiescence as evidenced by persistent violations of the covenant."Mackey v. Griggs,61 S.W.3d 312, 318(Mo. App. S.D.2001)."It can also be waived by failure to object to violations of the restriction."Id."The violation must be widespread to constitute waiver or abandonment and it must be so general as to indicate an intention or purpose to abandon the scheme intended to be maintained by the restriction."Id.Waiver of restrictive covenants may be accomplished through the action or inaction of a home owners' association.SeeLake St. Louis Cmty. Ass'n v. Kamper,503 S.W.2d 447, 449-50(Mo. App. E.D.1973)(holding that home owners' association had...