Chesus v. Watts, WD

Decision Date03 March 1998
Docket NumberNo. WD,WD
Citation967 S.W.2d 97
PartiesEdward J. CHESUS, Charles & Janice Cantrell, Larry Rohovit, William Raup, and Cedar Creek Homes Association, Respondents, v. Dennis and Roxie WATTS, Appellant. 52746.
CourtMissouri Court of Appeals

James G. Trimble, Parkville, for Appellant.

Alex M. Lewandowski, Kansas City, for E. Chesus and C. & J. Cantrell.

Larry Rohovit, Lee's Summit, pro se.

William Raup, Lee's Summit, pro se.

David B. Raymond, Kansas City, for Cedar Creek Homes Association.

Before LOWENSTEIN, P.J., and SPINDEN and HOWARD, JJ.

LOWENSTEIN, Presiding Judge.

This is a suit arising out of the failure of defendants Dennis and Roxie Watts ("Watts"), the developers of Cedar Creek, to carry out stated plans for the Cedar Creek residential housing development including: (1) transfer of common areas to the Cedar Creek Homes Association ("Association"); (2) construction of a water drainage system, sewer system, and roadway in compliance with state laws and Lee's Summit ordinances; (3) providing accessibility to ten acres of common areas; (4) development of the common areas, and (5) landscaping along the road at Cedar Creek. The plaintiffs-respondents include some individual purchasers of lots as well as the Cedar Creek Homes Association. 1 This case comes to this writer on reassignment.

At trial, the Watts were not represented by counsel, but instead made the decision to proceed pro se. During the court-tried case, the Watts did not present any evidence on their own behalf. Thus, the only evidence considered at trial, and before this court on appeal, is the evidence of the plaintiffs. The trial court issued no findings of fact or law as none were requested by the parties. Because a relatively poor record was made at trial, some of the facts have been difficult to ascertain. However, those facts discernable from the record are viewed in the light most favorable to the judgment. Rule 73.01(a)(3).

Cedar Creek is a residential single-family housing development situated in the City of Lee's Summit consisting of two plats of land. In November of 1983, after Watts had filed the first plat of land with Jackson County, Watts prepared to sell individual lots in Cedar Creek. Buyers would purchase the vacant lots, generally for around $35,000 to $45,000, and then build their own homes at their leisure. Watts was to provide streets, storm drainage, and common areas.

Beginning in 1984, the Watts marketed Cedar Creek as a unique, upscale, single family development. In marketing the development, the Watts took full advantage of Cedar Creek's natural setting, stating that, "Cedar Creek is its land ....its stream and brooks, its rocks, its maples, oaks and evergreens, its rolling hills, its waterfalls." The evidence suggests that the Watts intended to combine Cedar Creek's natural beauty with the promise of quality amenities and the "unique designs" of Watts and Frank Brown to induce individuals to buy lots in Cedar Creek.

To further facilitate the sale of lots in Cedar Creek, the Watts prepared a sales brochure for potential buyers which explained the plans for the Cedar Creek development. Plaintiffs Edward Chesus, Janice Cantrell, and Larry Rohovit each testified that they received this brochure during an open house in May, 1984. The open house was held in a newly-constructed home located on lot number three in Cedar Creek. The sales brochure indicated, among other things, that Cedar Creek "has been preserved with utilities (water and electricity) underground, split rail fencing, a private country lane, nature trails, and stream-side picnic areas." (emphasis added) The brochure implied that these amenities were going to be provided as part of the development.

In addition to promising certain amenities, the brochure implied that the amenities would be first-class. The Association's Declaration of Covenants and Restrictions states that Cedar Creek is to be maintained as an "attractive, prestigious development." From the language of the brochure, one is led to believe that Watts and landscape designer Frank Brown were uniquely-qualified developers planning a first-class community. The brochure portrayed Dennis Watts as an individual "widely known for his craft," citing feature articles of Watts in The Kansas City Star newspaper and Workbench magazine as evidence of "his unique designs and eclectic style." Frank Brown was enlisted to design and engineer the storm drainage along the road ["Cedar Creek Lane"] at Cedar Creek. Continuing the theme of first-class craftsmanship, the sales brochure stated that "[t]he Watts did not call an engineering firm picked at random from the phone book; instead, they chose Frank Brown (whose offices are in Philadelphia) because his work is unique in its approach to design." The Watts claimed that Frank Brown designed and constructed grass swales and rip-rap along Cedar Creek Lane.

The facts indicate that at the time the individual plaintiffs, sans the Raups, attended the open house, Cedar Creek was largely undeveloped. Although a "preliminary" road did exist so that prospective purchasers could see the individual lots, the road and storm drainage were not completed and the common areas were not developed at all. Testimony at the trial, in 1995, revealed that the Frank Brown landscaping had only been completed from the entrance of the development to the house on lot number three, where the open house was presented. This was the only part of the development that prospective purchasers saw as they drove up to the open house. Based on the appearance of Cedar Creek at the time of the open house, and the language in the brochure, potential buyers were led to believe the landscaping would continue down the entire length of Cedar Creek Lane once the subdivision was further developed. Plaintiffs testified that the storm drainage, rip-rap, and other landscaping have never been constructed for any other portion of Cedar Creek.

The Watts also orally promised many unique amenities to prospective buyers as part of the various common areas. The Rohovitts visited Cedar Creek several times before they purchased their lot. On one such visit in April of 1984, Watts told the Rohovitts that Tract A, the common area located in the first plat, was going to contain hiking trails, jogging trails and picnic areas. Watts also told the Rohovitts that there was going to be a millpond, covered bridge, and waterfall constructed. In addition, Dennis Watts told Mr. Chesus that Tract B, the common area located in the second plat, would be another accessible common area that would consist of nature trails and jogging or walking areas. Testimony by the plaintiffs established that the Watts represented that Tract C would be yet another common area, located just off of Cedar Creek Lane, with picnic tables, barbeque pits, a shelter, and a playground. At the time of the trial, Tract C still had not been transferred to the Association, remained undeveloped, and contained a slime pond in the middle of it. 2 The Watts created the Association to maintain these common areas and protect against depreciation in value of the lots. There is no question that these statements were made, and trial testimony indicates that the Watts couched their representations in terms of "we will" rather than in terms of "we might." For reasons not on the record and unknown to this court, and in spite of repeated requests by the lot owners and later the Association, the Watts have never constructed any of the promised amenities.

Not only did the Watts not develop the common areas as represented, but the Watts did not provide reasonable access to the common areas. Again, the lot owners and the Association made repeated requests to the developer to provide accessibility to these common areas and the Watts have done nothing. Chesus testified that Tract A was not, and still is not, readily accessible from the access easement created by the Watts. Chesus stated that the easement contained "some large stones and rocks and drainage areas, and it's extremely rough, very rough." According to Chesus' testimony, an individual would have to cross a creek with eight or nine foot vertical embankments on both sides in order to get to Tract A. Chesus further testified that Tract B was inaccessible from the access easement created by the Watts because a person would have to climb down "a rock cliff that is probably 15, 16 feet in the air" in order to reach Tract B.

The Watts also informed prospective buyers that the buyers would be able to install septic tanks, rather than hooking up to sewer lines. Before a septic tank can be installed in Lee's Summit, the property must pass a ground percolation test. Mr. Chesus and Mrs. Cantrell both testified that prior to purchasing their lots, the Watts represented to them that their properties had passed the ground percolation tests. However, evidence at trial established that 18 months prior to the sale of lots to any of the plaintiffs, Ron Eilers, the Superintendent of Inspections for Lee's Summit, stated at the Planning Commission's meeting on October 24, 1983 that septic tanks were not acceptable in Cedar Creek because of poor results during the percolation test. Mr. Watts attended this meeting to obtain final approval of Cedar Creek's first plat, and was aware of Eiler's finding that septic systems were not acceptable. Yet the Watts still represented to Plaintiffs, more than six months later, that septic tanks could be installed at Cedar Creek. Although the record does not unequivocally state that Watts had knowledge of the Superintendent's findings, when viewed in the light most favorable to the judgment the facts indicate the Watts knew septic tanks were unacceptable at Cedar Creek and that the Watts still represented to Plaintiffs that such a system could be...

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