Community Title Co. v. U.S. Title Guar. Co., Inc.
| Decision Date | 10 February 1998 |
| Docket Number | Nos. 71935,72007,s. 71935 |
| Parties | COMMUNITY TITLE COMPANY, Plaintiff/Counterclaim Defendant/ Appellant/Cross-Respondent, v. U.S. TITLE GUARANTY CO., INC., Defendant/Counterclaimant/ Third-Party Plaintiff/Cross-Appellant, v. James P. DAVIS, Third-Party Defendant. |
| Court | Missouri Court of Appeals |
Thomas A. Connelly, St. Louis, for appellant.
Charles A. Seigel III, St. Louis, for respondent.
RHODES RUSSELL, Judge.
This case involves two consolidated appeals. In Case No. 71935, Community Title Company ("CTC") appeals from the trial court's judgment against it holding that U.S. Title Guaranty Company ("U.S. Title") did not owe lease payments to CTC. The trial court found that a personal property lease, originally entered into between CTC and Community Title Company of St. Louis ("CTCSL"), had expired by its own terms and, therefore could not have been assumed by U.S. Title. We affirm the judgment in favor of U.S. Title in that the judgment was supported by substantial evidence, was not against the weight of the evidence, and did not erroneously declare the law. In Case No. 72007, U.S. Title cross appeals from the trial court's order sustaining CTC's and James P. Davis's, an officer of CTC, motion to dismiss U.S. Title's counterclaim and third party petition for fraud, breach of fiduciary duty, and breach of contract on the trial court's finding that the claims were barred by the applicable statute of limitations. We find that the trial court erred in dismissing the counterclaim and third party petition in that the face of the counterclaim and third party petition does not irrefutably show that U.S. Title's claims were barred by statute of limitations. We reverse the dismissal of U.S. Title's counterclaim and third party petition.
On May 23, 1983, CTC, CTCSL, Gordon Gundaker, and Donald Williams entered into a stock purchase agreement by which CTC sold to Gundaker and Williams 50% of the stock of CTCSL. Paragraph 9.2 of the agreement provided that:
[CTCSL], as tenant, shall enter into a lease with CTC, as Landlord, of personal property including office equipment, automobiles, furniture and furnishings owned by CTC and heretofore used by CTC in its title business. The lease shall be in form and substance as that attached as Exhibit B....
On June 1, 1983, CTC and CTCSL entered into the personal property lease. The lease was signed by John Barnes on behalf of both CTC and CTCSL. The personal property lease called for CTCSL to make monthly payments of $4,000 to CTC. The lease also provided that the term of the lease was five years, commencing on June 1, 1983, and ending on May 31, 1988, both dates inclusive. The lease contained no provision for automatic renewal of the term, and specifically stated that "the term of the this lease shall expire on the termination date herein mentioned without notice being required from either party."
On March 22, 1993, CTCSL entered into an asset purchase agreement with U.S. Title. Under the terms of the asset purchase agreement, U.S. Title agreed to purchase certain enumerated assets from CTCSL for $100 plus the assumption of certain liabilities. Among the specified liabilities, U.S. Title agreed to assume "all leases."
At the closing, U.S. Title presented to James Davis, president of CTC, a proposed agreement entitled "AGREEMENT REGARDING FURNITURE AND EQUIPMENT." Under the terms of the proposed agreement, CTC was to assign all its right, title, and interest in its phone equipment and assign all its interest in certain furniture and equipment which CTC had previously leased to CTCSL. The proposed agreement also provided that:
[CTC] hereby releases Lessee [CTCSL] of any and all obligations to make any further payments to [CTC] for the lease of the phone equipment described in Exhibits "A" and "B" attached hereto.
The proposed agreement was signed on behalf of U.S. Title by its president. However, Davis refused to sign the proposed agreement on behalf of CTC.
After CTCSL had sold its assets to U.S. Title, CTC made demand upon U.S. Title to pay the lease amounts under the personal property lease to CTC. U.S. Title refused to pay, and CTC filed suit in the Circuit Court of St. Louis County.
In its petition, CTC sought damages from U.S. Title for breach of the personal property lease. 1 CTC alleged that it had entered into a personal property lease with CTCSL and that U.S. Title had subsequently assumed CTCSL's obligations under the personal property lease when U.S. Title executed the asset purchase agreement with CTCSL as that document stated that U.S. Title agreed to assume "all leases." CTC further alleged that since the execution of the asset purchase agreement, U.S. Title failed to make the $4,000 monthly payments called for by the personal property lease.
In response to CTC's petition, U.S. Title filed a counterclaim against CTC and a third party petition against James Davis on August 16, 1995. In its counterclaim and third party petition, U.S. Title asserted claims for fraud, breach of fiduciary duty, and breach of contract against CTC and Davis. U.S. Title alleged that, pursuant to the asset purchase agreement, these choses-in-action against CTC and Davis were assigned to it from CTCSL.
On August 12, 1996, CTC and Davis moved to dismiss the counterclaim and third party petition on the grounds that all counts were barred by the applicable statute of limitations and that U.S. Title was not the assignee of CTCSL's claims against CTC and Davis. The trial court dismissed the counterclaim and the third party petition on the grounds that the claims were barred by the statute of limitations in that the alleged damages raised in the three counts were capable of ascertainment on June 1, 1983, the date the lease began.
On November 25, 1996, Count I of CTC's petition was tried by the trial court without a jury. At trial, CTC produced only one witness, James Davis. Davis testified that from June 1, 1983, until May 1993, $4,000 per month in lease payments were made by CTCSL to CTC. Davis contended that U.S. Title was responsible for making the lease payments after May 1993, since U.S. Title had agreed to assume "all leases" under the March 1993 asset purchase agreement. Davis testified that U.S. Title had not made any payments under the personal property lease since U.S. Title had entered the asset purchase agreement with CTCSL. Davis, on behalf of CTC, asked for judgment against U.S. Title for 3-1/2 years of rent payments at the rate of $48,000 per year.
At the close of CTC's case, U.S. Title moved for judgment as a matter of law. The trial court entered judgment against CTC on its petition, finding that the personal property lease had terminated by its own terms on May 31,1988. The trial court further found that since the lease had expired, it was neither assigned to or assumed by U.S. Title as a result of the asset purchase agreement. CTC appeals from the judgment entered against it.
In its sole point on appeal, CTC asserts that the judgment of the trial court was against the weight of the evidence, erroneously declared the law, and erroneously applied the law in that although the original lease term had expired, the law implies that a lessee, holding over after the expiration of a lease, holds over subject to the terms of the written lease. Therefore, CTC argues it was entitled to judgment against U.S. Title pursuant to the lease term of $4,000 per month. We disagree.
Our review of this point is governed by Rule 73.01(c). As that rule is interpreted, this court is to affirm the trial court's determination unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or it erroneously applies the law. City of Beverly Hills v. Village of Velda Village Hills, 925 S.W.2d 474, 475 (Mo.App.1996)(citing Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)). We give due regard to the trial court's opportunity to have judged the credibility of the witnesses. Rule 73.01(c)(2). The trial court is free to believe or disbelieve all, part, or none of any witness's testimony. Schuster v. Shelter Mutual Insurance Co., 857 S.W.2d 381, 386 (Mo.App.1993). The trial court may disbelieve testimony even when uncontradicted. Id.
The crux of CTC's argument is that the evidence adduced at trial conclusively showed that the parties to the personal property lease (CTC and CTCSL) continued to operate as a month-to-month lessor-lessee under the 1983 lease, after its expiration in 1988, up to and including May 1993, within which the assets of CTCSL were sold to U.S. Title. As part of the asset purchase agreement between CTCSL and U.S. Title, CTC contends that the evidence shows that U.S. Title assumed CTCSL's obligations under the expired personal property lease. In support of its argument, CTC asserts that it has long been the view in Missouri that when a tenant holds over after the expiration of a written lease, the tenant is thereafter a month-to-month tenant subject to same terms under the written lease. 2 All the authority cited by CTC regarding month-to-month tenancies involves real property law. CTC, however, has not referred us to any authority which states that a lessee under a personal property lease becomes a month-to-month lessee after the lease expires. Nor has CTC cited any authority for the proposition that a party may assume a personal property lease after its expiration. Even if we were to accept CTC's novel legal theory, CTC has failed to meet its burden that the judgment was against the weight of the evidence or that the trial court erroneously declared the law. Schuster, 857 S.W.2d at 384.
CTC did not prove that the personal property lease continued to operate beyond its expiration date. The only evidence that CTCSL continued to make...
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