Celtic Corporation v. Tinnea
| Decision Date | 25 March 2008 |
| Docket Number | No. ED 89925.,ED 89925. |
| Citation | 254 S.W.3d 137 |
| Parties | CELTIC CORPORATION, Plaintiff/Respondent, v. Carol TINNEA, Personal Representative of the Estate of Norma Bond, Deceased, C. Stephen Bond, Albert L. Bond, and Carol Bond Tinnea, Defendants/Appellants, v. Robert Hepp, Third-Party Defendant. |
| Court | Missouri Court of Appeals |
Rossiter & Boock, LLC, Matthew J. Rossiter, Jamie L. Boock, St. Louis, MO, for appellant.
Thomas A. Connelly, PC, Thomas A. Connelly, St. Louis, MO, for respondent.
Before MARY K. HOFF, P.J., and SHERRI B. SULLIVAN, J., and GEORGE W. DRAPER III, J.
Carol Tinnea, as Personal Representative for the Estate of Norma Bond, together with C. Steven Bond, Albert L. Bond, and Carol Tinnea, as individuals (collectively "the Bonds"),1 appeal from the judgment setting aside a Quit Claim Deed ("Deed") between the Celtic Corporation, Grantor, and Norma Bond, Grantee, who is now deceased. On appeal, the Bonds argue the trial court erred in (1) setting aside the Deed on the grounds of inadequate consideration alone; (2) allowing the admission of parol evidence beyond the issue of actual consideration; and (3) setting aside the Deed for failure to comply with Missouri's corporate acknowledgement statute. We reverse and remand.
Viewed in the light most favorable to the trial court's judgment, the record reveals the following: Celtic Corporation is a Missouri corporation that, at the time of the relevant facts of this case, was in the business of purchasing, rehabbing, and reselling homes and businesses. Robert Hepp is and has been the President of Celtic Corporation for the duration of its existence in Missouri. Norma Bond was the Secretary of Celtic Corporation.
On August 27, 1982, Celtic Corporation purchased 4825 Little Branch Place in St. Louis County ("Little Branch"), the property at issue in this cause of action, for $128,000. Celtic Corporation paid $50,000 of the purchase price with corporate funds and secured a bank loan for the remaining $78,000. Norma Bond moved into Little Branch in 1982 and Robert Hepp moved into Little Branch in 1983. The two shared an intimate relationship. At all relevant times, Robert Hepp was married to Patricia Hepp.
On October 22, 1997, Norma Bond and Robert Hepp became joint owners with right of survivorship in all of the outstanding stock of Celtic Corporation. On December 9, 1998, Celtic Corporation, through Robert Hepp, as President, executed a Deed transferring Little Branch to Norma Bond. The Deed states as follows:
THIS QUITCLAIM DEED, Executed this 9th day of December, 1998 (year), By first party, Grantor, Celtic Corporation, Robert C. Hepp, President whose post office address is 4825 Little Branch, St. Louis, Mo. 63128 to second party, Grantee, Norma J. Bond whose post office address is 4825 Little Branch, St. Louis, Mo. 63128
WITNESSETH, That the said first, for good consideration and for the sum of * * * * One * * * * Dollars ($1.00) paid by the said second party, the receipt whereof is hereby acknowledged, does hereby remise, release and quitclaim unto the second party forever, all the right title, interest and claim which the said first party has in and to the following described parcel of land, and improvements and appurtenances thereto in the County of St. Louis, State of Missouri to wit:
4825 Little Branch Place
On the following page of the Deed, Robert Hepp's signature appears both as "Signature of First Party" and also as "Signature of Preparer." Robert Hepp's signatures were notarized and witnessed twice with acknowledgements that Robert Hepp executed the same in his authorized capacity on behalf of the entity. The acknowledgement specifically provides that Robert Hepp appeared before the Notary on December 9, 1998 and
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the WITNESS my hand and official seal.
At trial, Robert Hepp testified he did not know who prepared the Deed. He testified the Deed was a mistake and that he thought he was signing an instrument to verify the ownership of the corporate stock as joint tenants with the right of survivorship. Robert Hepp also testified he did not read the Deed.
Before recordation of the Deed, the Real Estate Tax Bills were addressed solely to the Celtic Corporation. After the Deed was recorded, the name "Norma J. Bond" was added to the Real Estate Tax Bills. Robert Hepp testified he personally reviewed those tax bills as they were paid. The Deed was recorded on January 12, 1999.
By 1999, Celtic Corporation had paid off the loan on Little Branch. Celtic Corporation paid a total of $174,000 consisting of principal and interest. Celtic Corporation made most of the mortgage payments on Little Branch but Robert Hepp also made some payments from a joint account between himself and Norma Bond when Celtic Corporation had insufficient funds. The fair market value of Little Branch was $172,000 in December 1999 and $235,000 in December 2006, the time of trial.
Norma Bond died on February 25, 2005. Robert Hepp testified Celtic Corporation saw the Deed for the first time, following its execution, after Norma Bond's burial. On May 25, 2005, Norma Bond's Last Will and Testament was admitted to probate. The Will devised and bequeathed the residue and remainder of her property, which included Little Branch, to her three children, in equal shares. The Inventory and Appraisement in the Estate of Norma Bond listed Little Branch as an asset belonging to Norma Bond. The record reveals that a letter report prepared by U.S. Title as well as the Deed clearly indicate Little Branch was an asset belonging to Norma Bond at the time of her death. Carol Tinnea, daughter and Personal Representative for the Estate of Norma Bond, testified she discovered the Deed in a safe deposit box at the time of her mother's death. Robert Hepp continues to live at Little Branch and has paid no rent to the Estate of Norma Bond despite demand having been made.
On December 28, 2005, Celtic Corporation filed its Petition to Quiet Title to Real Property, For Declaratory Judgment and For Quantum Meruit. On February 3, 2006, Carol Tinnea2 filed her Answers to Celtic Corporation's Petition to Quiet Title to Real Property, For Declaratory Judgment and For Quantum Meruit, Affirmative Defenses and Counterclaims. She also filed a Third-Party Petition seeking back rent from Robert Hepp in the amount of $1,000 per month since the death of Norma Bond.
Following a bench trial, in which both parties presented evidence, the trial court entered judgment in favor of Celtic Corporation on its petition to quiet title and declared the Deed void and of no legal effect. The trial court entered judgment against the Bonds on their counterclaims and dismissed the Third-Party Petition with prejudice. This appeal follows.
A suit to set aside a deed is an action in equity. Landers v. Sgouros, 224 S.W.3d 651, 655 (Mo.App. S.D.2007). The standard of review in a court-tried action in equity is the same as that for any court-tried case, namely, the trial court's judgment will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or unless it erroneously applies the law. Id.; Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We will set aside a decree or judgment on the ground that it is against the weight of the evidence only if there is a firm belief that the decree or judgment is wrong. Landers, 224 S.W.3d at 655. We view all evidence and inferences in the light most favorable to the judgment and disregard all contrary evidence and inferences. Id. We defer to the trial court's determinations on matters of witness credibility. Id.
Setting aside a deed is an extraordinary proceeding in equity requiring that the evidence in support of the result be clear, cogent, and convincing. Lee v. Hiler, 141 S.W.3d 517, 523 (Mo.App. S.D. 2004). The evidentiary burden imposed by the clear, cogent, and convincing standard of proof requires that the trial court be clearly convinced of the proposition to be proved. Id. (citing Robertson v. Robertson, 15 S.W.3d 407, 415 (Mo.App. S.D. 2000)).
We address the Bonds' first and second points together as they are interrelated. In their first two points, the Bonds argue the trial court erred in setting aside the Deed on the grounds of inadequate consideration and in allowing the use of parol evidence to create an ambiguity in an otherwise unambiguous deed. The Bonds argue the trial court erroneously declared and applied the law regarding the cancellation of a properly executed and recorded deed on the grounds of inadequate consideration without a finding or evidence of other inequitable incidents. We agree.
In its judgment, the trial court found that the "purported deed is not supported by adequate consideration." It further found that Citing to Allan v. Allan, 364 S.W.2d 578, 582 (Mo. banc 1963), the trial court concluded "the fact that the consideration was nominal standing alone, in and of itself is sufficient to invalidate a deed." In making these findings, the trial...
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