Costello Family Trust Dated July 20, 2006 v. Dean Family Lotawana Trust Dated July 20, 2006

• Decision Date: 29 May 2018
• Docket Number: WD 81141
• Citation: 551 S.W.3d 561
• Parties: The COSTELLO FAMILY TRUST DATED JULY 20, 2006, et al., Respondent, v. The DEAN FAMILY LOTAWANA TRUST DATED JULY 20, 2006, et al., Respondent, Richard and Hallie Pals, Appellants.
• Court: Missouri Court of Appeals

551 S.W.3d 561

The COSTELLO FAMILY TRUST DATED JULY 20, 2006, et al., Respondent,

v.The DEAN FAMILY LOTAWANA TRUST DATED JULY 20, 2006, et al., Respondent,Richard and Hallie Pals, Appellants.

WD 81141

Missouri Court of Appeals, Western District.

Opinion filed: May 29, 2018

Jonathan Sternberg, Kansas City, for Respondent The Costello Family Trust.

Sherry D. DeJanes, Kansas City, for Appellants.

Before Division Two: Karen King Mitchell, Presiding Judge, Alok Ahuja, Judge and Edward R. Ardini, Jr., Judge

EDWARD R. ARDINI, JR., JUDGE

Richard and Hallie Pals appeal from the grant of summary judgment entered by the Circuit Court of Jackson County, Missouri, in favor of the Costello Family Trust and trustees of the Dean Family Lotawana Trust and the Lester M. Dean, Sr. Self-Declaration of Trust regarding the rights to a dock attached to certain real property. We reverse and remand.

Factual and Procedural Background¹

This case concerns the sale of two parcels of property located in Lake Lotawana, Missouri. The first piece of property, designated S21, is situated on the lakeside of Lake Shore Drive and has been developed as a private residence. The S21 property has four docks registered with the Lake Lotawana Home Association ("the Association") and title was held by the Dean Family Lotawana Trust ("DFL Trust"). The second property, designated SA3B, is located across the street from the S21 property and had not been developed at the time of sale. Title to the SA3B property was held by the Lester M. Dean, Sr. Self-Declaration of Trust ("LD Trust"). Both the DFL Trust and the LD Trust share two individuals as trustees: Lorelei M. Dean and Melanie A. Dean (collectively the "joint trustees").

On October 2, 2014, the joint trustees entered into a contract ("the October 2^nd contract") with the Costello Family Trust ("CF Trust") who agreed to purchase the S21 property for $875,000.00 with a closing date "on or before 10/31/2014." The October 2^nd contract included several additional provisions, two of which are of considerable importance to this case. First, the contract stated that "[u]pon any improvement to [SA3B], the far west dock on S21 (covered dock) would go to [SA3B]." Second, the contract noted that "[t]his offer is for the 1^st tier commonly known as S21, Buyer and Seller agree to complete sales agreement for 2^nd tier lot ( [SA3B] ) prior to closing of this contract for purchase within one year of closing of this contract for S21 in the amount of $100,000."

The October 2^nd contract was subject to the terms of the Association’s deed restrictions which include the following provision:

[n]o sale, contract to sell, or conveyance of the real estate herein described shall be made or consummated without first giving at least fifteen (15) days written notice to [the Association], and to the owners of the two side adjoining lots, of the proposed sale price and terms thereof; and thereupon the [Association] and/or either of the side adjoining lot owners shall have the first and prior right, option, and privilege during said period of fifteen (15) days to buy said real estate at the same price and upon the same terms.

In accordance with this provision, notice of sale property waivers were sent to the neighbors adjoining the S21 property on October 3, 2014. These were followed by a second set of notice of sale property waivers that were sent to the owners of the land adjoining SA3B on October 8, 2014. This second set of waivers provided notice for a proposed sale of lot SA3B to the CF Trust and stated the terms of the sale as follows: "Sale Price:100,000 ; Closing Date:prior to 10/31/15 ; Terms:as is, cash vacant lot. " (bold text computer generated, italicized text handwritten).

Richard and Hallie Pals (collectively the "Pals") owned one of the lots adjoining the SA3B property. On October 10, 2014, (two days after receiving notice of the proposed sale) the Pals, through their representative, provided verbal notice that they intended to exercise their option to purchase lot SA3B. On October 12, 2014, the joint trustees and the CF Trust executed an amendment to the October 2^nd contract that eliminated the term relating to the transfer of the covered dock and declared that all four dock sites belonged exclusively to S21.² The existence of this amendment was never communicated to the Pals or any other neighbors entitled to notice under the Association’s deed restrictions. On October 14, 2014, the Pals formally reduced to writing the previously communicated decision to exercise their option to purchase the SA3B property by signing the appropriate section of the notice of sale property waiver sent to them on October 8^th, which they then delivered to the joint trustees.³

On October 16, 2014, (two days after the Pals formally exercised their option to purchase the SA3B property on the terms of the October 2^nd contract) two trustees of the LD Trust entered into a new contract ("the October 16^th contract") to sell lot SA3B to the CF Trust for $100,000.00 with closing to occur on or before October 30, 2015.⁴ This new contract specifically stated the property came with no dock rights.

On October 30, 2015, the day the sale of lot SA3B was scheduled to close, the Pals were presented with an amendment that the joint trustees purported to relate back to the October 16^th contract. The joint trustees intended to use this amendment, in combination with the October 16^th contract itself, as the terms for closing on the sale. Among other things, this amendment proposed to replace the CF Trust with the Pals as the purchasers of lot SA3B and introduced a new term that stated "[a]ll parties understand the same terms of the original contract apply including no dock as stated in the contract and sold as is." In addition, the Pals were also presented with a new notice of sale property waiver for the SA3B property, which was identical to the one sent to them on October 8, 2014, except for the Pals being listed as the purchasers instead of the CF Trust. The Pals protested both of these documents claiming that they intended to close on the terms of the October 2^nd contract. However, after being told that representatives of the CF Trust were present and prepared to close on the terms of the October 16^th contract if the Pals failed to sign the documents presented (and would file suit should the Pals seek to prevent them from closing), the Pals signed both the amendment and the new notice of sale property waiver. The Pals maintain that they were prevented from making any changes to the two documents and claim they signed under duress.

On October 15, 2015, a little over two weeks before the sale of SA3B closed, the CF Trust filed a declaratory judgment action in the Circuit Court of Jackson County, Missouri, against the DFL Trust, the joint trustees, Stephen W. Crider, and the Estate of Lester Dean, who was by then deceased, seeking a declaration that lot SA3B retained no rights to any of the four docks associated with the S21 property that by then had been purchased by the CF Trust.⁵ A month later, on November 12, the Pals filed an action against the trustee of the CF Trust, the joint trustees, and the Association seeking a judgment declaring that the rights to the covered dock referenced in the October 2^nd Contract be transferred to them upon improvements being made to lot SA3B and an order for specific performance of the same.⁶ These two cases were consolidated in February of 2016. The CF trust subsequently filed an amended petition naming as defendants the DFL Trust, the LD Trust, the joint trustees, and Stephen W. Crider. This was followed by a third amended petition in which they added the Pals as a defendant and introduced a claim against them for abuse of process. The CF Trust and the joint trustees thereafter moved for summary judgment.

The trial court entered summary judgment in favor of the CF Trust on August 31, 2017. After the Pals noted that two judgments were necessary based on the cases having been consolidated, the trial court entered separate judgments in favor of the CF Trust and the joint trustees. In both cases, the trial court certified the issue as ripe for appeal under Rule 74.01.⁷ The Pals now appeal.

Standard of Review

"Summary judgment is appropriate when there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law." Doe Run Resources Corp. v. American Guarantee & Liability Insurance , 531 S.W.3d 508, 511 (Mo.banc 2017). "The propriety of summary judgment is purely an issue of law" and "our review is essentially de novo. " ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp. , 854 S.W.2d 371, 376 (Mo.banc 1993). We evaluate the record, and all reasonable inferences, in the light most favorable to the party against whom judgment was entered. Id. "Facts set forth by affidavit or otherwise in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment motion." Id.

Analysis

The Pals’s sole point on appeal contends that the trial court misapplied the law in entering summary judgment in favor of the CF Trust and the joint trustees. Specifically, the Pals maintain that the October 2^nd contract established an enforceable agreement for the sale of the SA3B property, which included a provision regarding the transfer of dock rights upon improvements being made to the property. They further assert that, because the Association’s deed restrictions provided adjacent neighbors of a parcel being sold an option to purchase "upon the same terms " as the proposed buyer, their exercise of that option entitled them to enforce the dock transfer provision of the October 2^nd contract regardless of whether the sellers included that provision in the notice of sale property waiver sent on October 8^th. Finally, the Pals argue that neither the purported amendment of October 12, 2014, nor the documents they signed on October 30, 2015, invalidated their claim as...