C & M Developers, Inc. v. Berbiglia, Inc.

• Citation: 585 S.W.2d 176
• Decision Date: 29 June 1979
• Docket Number: Nos. KCD,s. KCD
• Court: Court of Appeal of Missouri (US)
• Parties: C & M DEVELOPERS, INC., Plaintiff-Respondent, v. BERBIGLIA, INC. et al., Defendants-Appellants. 29551, KCD 29602.

Page 176

585 S.W.2d 176

C & M DEVELOPERS, INC., Plaintiff-Respondent, v. BERBIGLIA, INC. et al., Defendants-Appellants.

Nos. KCD 29551, KCD 29602.

Missouri Court of Appeals, Western District.

June 29, 1979.

Daniel S. Millman, Kansas City, Mo., for defendant-appellant berbiglia, inc.

R. Dennis Wright, Daniel R. Cofran, Kansas City, Mo., for appellant Forum Restaurants, Inc.; Hillix, Brewer, Hoffhaus & Whittaker, Kansas City, Mo., of counsel.

Herbert Horowitz, Kansas City, Mo., for respondent C & M Developers Inc.; Horowitz & Shurin, P. C., Kansas City, Mo., of counsel.

Before SOMERVILLE, P. J., and DIXON and TURNAGE, JJ.

SOMERVILLE, Presiding Judge.

The litigation spawning this appeal is rich in legal diversity as garnered from a voluminous transcript and untold exhibits revealing an action by a lessor for damages for breach of a lease of real property, enforcement of a written guaranty securing the lessee's performance of the terms of the lease, and a counterclaim for alleged tortious interference with the lessee's reasonable expectancy of a business relationship pointing toward acquisition of a favorable sublease. A far ranging prologue of facts and appropriate observations will be indulged at the outset in order to elucidate the various issues which were litigated, while reserving the liberty throughout treatment of the several points raised on appeal to intersperse and elaborate upon additional facts deemed germane to resolution of the various points.

On March 1, 1971, Manfred G. Martin, as lessor, entered into a written lease with Berbiglia, Inc., as lessee, for the letting of a commercial building then yet to be constructed on certain real property located at 2919 Vivion Road, Kansas City, Missouri. On March 30, 1971, after encountering difficulty in securing financing to construct the proposed commercial building, Martin assigned all of his "right, title and interest in and to" said lease to C & M Developers, Inc., which obtained a loan from North Hills Bank to finance construction of the proposed commercial building. As conditions to making the construction loan, North Hills Bank demanded and received (1) a written assignment dated March 31, 1971, for rents owing under said lease and (2) a written guaranty whereby Forum Restaurants, Inc., guaranteed to C & M Developers, Inc. and North Hills Bank, "jointly and severally", the "punctual and faithful performance of the terms of said lease by Berbiglia, Inc. for and during the ten year term thereof and any renewal or extension thereof." Construction of the proposed commercial building was completed in early December, 1971, and occupancy thereof by Berbiglia, Inc., as tenant under said lease, commenced on December 8, 1971. Monthly rental under the terms of the lease was "$1,250.00, payable on the first day of each month in advance." Berbiglia, Inc. occupied the commercial building until April 30, 1973, at which time it voluntarily vacated the leased premises because the volume of business it was doing at the location had not lived up to expectations. Berbiglia, Inc. stopped making rental payments after August, 1973.

Berbiglia, Inc.'s default in rental payments during the term of said lease eventually precipitated the filing of a petition in two counts in the Circuit Court of Jackson County, Missouri, by C & M Developers, Inc. (hereinafter C & M) as plaintiff against Berbiglia, Inc. (hereinafter Berbiglia) and Forum Restaurants, Inc. (hereinafter Forum) as defendants. Count I of said petition sought judgment against Berbiglia for damages for breach of contract in the prayed for amount of $37,000.00 and Count II of said petition sought judgment against Forum under the written guaranty executed by it in the prayed for amount of $37,000.00. Berbiglia, by way of answer to Count I of C & M's petition, denied that it was in default and affirmatively pleaded that C & M (1) had wrongfully disturbed its right of "quiet" possession, and (2) had terminated said lease by leasing said premises directly to another tenant (Custom Music Corporation) without the knowledge or consent of Berbiglia. Berbiglia also filed what was captioned "Setoff, Recoupment and Counterclaim Against Plaintiff (C & M) and Defendant Martin", and Manfred G. Martin (hereinafter Martin) was made a party to the claims asserted therein pursuant to Rule 55.32(g). Berbiglia's theory of setoff or recoupment was its right to receive credit for any rental payments paid to C & M by any third party during the balance of Berbiglia's original term under the lease, and its theory of recovery under its counterclaim was that C & M and Martin tortiously interfered with a reasonable expectancy on Berbiglia's part of securing a favorable sublease of the premises from Custom Music Corporation for the balance of Berbiglia's term under its original lease with C & M.

Among innumerable stipulations entered into between the parties, the following are deemed most pertinent at the moment for giving a broad overview of the case: (1) during March of 1971 Berbiglia was a Missouri corporation whose stock was wholly owned by Forum; (2) any and all acts or transactions engaged in by Martin appertaining to the lease were done for and on behalf of both himself and C & M; (3) Count I of C & M's petition and Berbiglia's counterclaim were to be tried to a jury and Count II of C & M's petition was to be tried to the court; (4) the "sole issue" for trial in Count II was that of "Forum's defense that there was no consideration for the guaranty"; (5) in the event the court returned a verdict in favor of C & M and against Forum under Count II of C & M's petition upholding enforcement of the guaranty and the jury returned a verdict in favor of C & M and against Berbiglia under Count I of C & M's petition the court was directed and authorized to render a "joint" judgment in the same amount against Forum; (6) in the event the jury returned a verdict in favor of Berbiglia and against C & M under Count I of C & M's petition the court was authorized and directed to render and enter a judgment in favor of Forum under Count II of C & M's petition; and (7) in the event the court returned a verdict in favor of Forum and against C & M under Count II of C & M's petition the court was authorized and directed to render a judgment in favor of Forum and against C & M whether or not C & M recovered against Berbiglia under Count I of C & M's petition.

The trial court directed a verdict in favor of C & M and Martin and against Berbiglia on Berbiglia's counterclaim; a jury found in favor of C & M and against Berbiglia under Count I of C & M's petition and awarded damages totaling $41,951.00; and the court found the sole issue of "consideration for the guaranty" under Count II of C & M's petition in favor of C & M and against Forum. Per stipulation of the parties, judgment in the amount of $41,951.00 was rendered against Berbiglia and Forum "jointly and severally". A timely motion for new trial filed by Berbiglia was first overruled and then reinstated with C & M thereafter being advised that in the event it failed to make remittitur in the sum of $1,975.00 Berbiglia's motion for new trial would be sustained. C & M responded by making remittitur in the sum of $1,975.00, and the trial court responded by rendering a final judgment in the amount of $39,976.00 against Berbiglia and Forum "jointly and severally" and overruling Berbiglia's motion for new trial. Timely appeals by both Berbiglia and Forum followed.

Berbiglia and Forum, after probing all facets of this convoluted litigation at the trial court level for signs of error, retreated to four points and two points respectively in their separate briefs on appeal. The four points ultimately advanced by Berbiglia on appeal are: (1) C & M was not the real party in interest in the cause of action alleged by C & M in Count I of its petition by reason of the assignment of rents to North Hills Bank; (2) error on the part of the trial court in directing a verdict in favor of C & M and Martin and against Berbiglia on Berbiglia's counterclaim; (3) error on the part of the trial court in refusing to sustain Berbiglia's motion for a new trial because of excessiveness of the verdict; and (4) the remittitur ordered by the trial court was "inadequate" and so beset with vagueness and uncertainty that it did not adequately cure the excessive verdict returned by the jury. The two points ultimately advanced by Forum on appeal are: (1) no consideration existed to support the guaranty as it was executed subsequent to the lease and therefore required a new and independent consideration for its support; and (2) C & M was not the "proper party" to enforce the guaranty. The various points will hereinafter be separately addressed in the order of their reference.

Berbiglia's first point, resting as it does on the contention that C & M was not the real party in interest by reason of an absolute assignment of rents due and owing under the lease to North Hills Bank, is countered by C & M's contention that it was a real party in interest as the assignment was not absolute but was merely given as collateral security for the loan made by North Hills Bank to C & M.

Rule 52.01 leads off with the positive command that "(e)very civil action shall be prosecuted in the name of the real party in interest . . .". Concomitantly, the general rule is that an absolute assignment of an entire right or interest works a divestiture of all right or interest of the assignor therein and for purposes of maintaining a civil action thereon the assignee becomes the real party in interest. Lumbermen's Mutual Casualty Co. v. Norris Grain Co., 343 F.2d 670, 688 (8th Cir. 1965); Milliken-Helm Commission Co. v. C. H. Albers Commission Co., 244 Mo. 38, 147 S.W. 1065, 1067 (1912); and Guerney v. Moore, 131 Mo. 650, 32 S.W. 1132, 1137 (1895). On the other hand, a conditional assignment made as collateral security for a debt does not work a...