Boulevard Bank v. Malott, WD 74917.
| Decision Date | 28 May 2013 |
| Docket Number | No. WD 74917.,WD 74917. |
| Citation | 397 S.W.3d 458 |
| Parties | BOULEVARD BANK, Respondent, v. Herb MALOTT, Appellant. |
| Court | Missouri Court of Appeals |
OPINION TEXT STARTS HERE
Dale K Irwin, Slough Connealy Irwin & Madden LLC, Kansas City, MO, Matt Wilson, Columbia, MO, Dave Angle, Angle Wilson Law LLC, Columbia, MO, for appellant.
Howard A. Wittner, David VonGontard, St. Louis, MO, for respondent.
Before Division Three: ALOK AHUJA, P.J., and VICTOR C. HOWARD and CYNTHIA L. MARTIN, JJ.
Herb Malott appeals from a judgment dismissing his claim that Boulevard Bank failed to comply with statutory notice requirements before selling Malott's automobile, in which the Bank held a security interest. Because the Bank's pre-sale notice failed to adequately advise Malott of the method of intended disposition of the vehicle, as required by §§ 400.9–613 and .9–614,1 we reverse, and remand the case to the circuit court for further proceedings.
On September 19, 2007, Malott and the Bank entered into a Promissory Note and Security Agreement to finance Malott's purchase of a 1992 BMW M5 automobile. The original principal amount of the Note was $9,502.50.
Based on its contention that Malott had defaulted on the Note, the Bank repossessed the car in January 2009. Following repossession, the Bank sent Malott a notice letter dated March 19, 2009. The Bank's letter stated that the Bank had repossessed Malott's vehicle, and that the estimated total amount due on the Note (including unpaid principal and interest, as well as “[r]epossession expenses, etc.”) was $6,395.14. The notice stated that “[t]he collateral will be sold at a public/private sale if the Total Amount Due is not received by April 9, 2009.” The letter advised Malott that he had the right to redeem the vehicle “at any time prior to the sale by paying the entire amount due,” and that he would be personally liable for any deficiency between the vehicle's sale price and the total amount due the Bank.
Malott did not redeem the vehicle and the Bank sold it. The Bank then sued Malott for a deficiency judgment in the Circuit Court of Cooper County, claiming that it was owed $3,195.14, plus interest, costs, and attorneys' fees. Malott's Answer admitted entering into the Promissory Note and Security Agreement, and that the Bank had repossessed and sold his car. His Answer denied, however, that he was in default on the Note, or that any deficiency was owed to the Bank. Malott's Answer also asserted a counterclaim, alleging that the Bank's pre-sale notice failed to meet the requirements of §§ 400.9–613 and .9–614, and that he was accordingly entitled to statutory damages under § 400.9–625(c)(2). Malott's counterclaim sought certification as a class action, based on his allegation “that Boulevard Bank regularly repossesses and sells collateral and has failed, and continues to fail, to follow the UCC's presale notice requirements in connection with such repossessions and sales.”
The Bank moved to dismiss Malott's counterclaim on July 11, 2011, contending that he had failed to state a claim upon which relief could be granted because its pre-sale notice satisfied all statutory requirements. The circuit court granted the Bank's motion to dismiss on October 28, 2011. Although the case was set for trial on the Bank's Petition seeking a deficiency judgment, the Bank voluntarily dismissed its affirmative claim without prejudice on January 11, 2012. Malott now appeals the circuit court's dismissal of his counterclaim.
The standard of review for a circuit court's grant of a motion to dismiss is de novo. A motion to dismiss for failure to state a claim on which relief can be granted is an attack on the plaintiff's pleadings. Such a motion is only a test of the sufficiency of the plaintiff's petition. The facts contained in the petition are treated as true and they are construed liberally in favor of the plaintiffs. The court makes no effort to weigh the credibility and persuasiveness of the facts alleged. Rather, the petition is reviewed in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case. In order to survive the motion, the petition must invoke substantive principles of law entitling plaintiff to relief and ultimate facts informing the defendant of that which plaintiff will attempt to establish at trial.
In re T.Q.L., 386 S.W.3d 135, 139 (Mo. banc 2012) (citations and internal quotation marks omitted).
Because “[w]e have a duty to determine sua sponte whether we have jurisdiction over [Malott's] appeal,” Melson v. Traxler, 356 S.W.3d 264, 268 n. 9 (Mo.App. W.D.2011), we begin by addressing appellate jurisdiction.
The trial court dismissed Malott's counterclaim without specifying whether the dismissal was entered with or without prejudice. Given the court's silence, the dismissal is presumed to be without prejudice by operations of Rules 67.03 and 67.04. “[T]he general rule is that a dismissal without prejudice is not a final judgment from which an appeal may be taken,” because the dismissal leaves the claimant free to re-assert his claim. BH Holdings, LLC v. Bank of Blue Valley, 340 S.W.3d 340, 342 (Mo.App. W.D.2011). A dismissal without prejudice is appealable, however, where “the dismissed party will be unable to maintain their action in the court where the action was filed presuming the reason for dismissal was proper.” Palisades Collection, LLC v. Watson, 375 S.W.3d 857, 860 (Mo.App. W.D.2012).
Here, the trial court gave no reason for its dismissal of Malott's counterclaim, and we therefore presume that the trial court acted for the reasons stated in the motion to dismiss. Id. The Bank's motion to dismiss argued that Malott's counterclaim failed to state a claim because the Bank's pre-sale notice (which was attached to Malott's Answer, and incorporated by reference in the counterclaim) complied with all relevant statutory requirements; the Bank did not argue that the manner in which Malott pleaded his counterclaim was somehow defective. Therefore, we presume that the trial court's dismissal of the counterclaim was based on its determination that the Bank's notice was legally sufficient. This ruling would prevent Malott from re-asserting his claim that the Bank violated the notice requirements of §§ 400.9–613 and .9–614.2 The circuit court's dismissal was accordingly appealable, despite the fact that it was entered without prejudice.
Malott alleges that the Bank's March 19, 2009 notice was deficient in multiple respects. We need only address one of his claims: that the notice failed to specify the method by which the Bank intended to dispose of his repossessed vehicle.
Missouri law provides that, “[a]fter default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.” § 400.9–610(a). With exceptions not relevant here, “a secured party that disposes of collateral under section 400.9–610 shall send to [the debtor and certain other interested persons] a reasonable authenticated notification of disposition.” § 400.9–611(b).
Section 400.9–614 provides that, in a consumer-goods transaction like this one,
(1) A notification of disposition must provide the following information:
(A) The information specified in section 400.9–613(1);
(B) A description of any liability for a deficiency of the person to which the notification is sent;
(C) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under section 400.9–623 is available; and
(D) A telephone number or mailing address from which additional informationconcerning the disposition and the obligation secured is available....
Section 400.9–614(1)(A) incorporates the notice requirements found in § 400.9–613(1). That section provides:
The contents of a notification of disposition are sufficient if the notification:
(A) Describes the debtor and the secured party;
(B) Describes the collateral that is the subject of the intended disposition;
(C) States the method of intended disposition;
(D) States the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and
(E) States the time and place of a public disposition or the time after which any other disposition is to be made....
Section 400.9–614(2) specifies that “[a] particular phrasing of the notification is not required.” Nevertheless, “[a] notification that lacks any of the information set forth in [§ 400.9–614(1) ] is insufficient as a matter of law.” § 400.9–614, comment 2. Mancuso v. Long Beach Acceptance Corp., 254 S.W.3d 88, 92 (Mo.App. W.D.2008) (citations omitted); see also States Res. Corp. v. Gregory, 339 S.W.3d 591, 596 (Mo.App. S.D.2011).
The purpose of statutory notice is to apprise a debtor of the details of a sale so that the debtor may take whatever action he deems necessary to protect his interest. Proper notice provides the debtor the opportunity to: (1) discharge the debt and reclaim the collateral, (2) find another purchaser, or (3) verify that the sale is conducted in a commercially reasonable manner.
States Res., 339 S.W.3d at 596 (citations, footnote, and internal quotation marks omitted).
Under § 400.9–613(1)(C), a lender's pre-sale notice must “[s]tate [ ] the method of intended disposition” of the collateral securing a loan. In this case, the Bank's notice stated that “[t]he collateral will be sold at a public/private sale if the Total Amount Due is not received by ...
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