First American v. Grissum

• Decision Date: 16 November 2000
• Docket Number: No. 23228,23228
• Parties: (Mo.App. S.D. 2000) First American Title Ins. Co., a corporation, and Hogan Land Title Co., Inc., a corporation, Plaintiffs-Respondents, v. Roy Birdsong and Collyer Kelling, Defendants-Appellants, v. Harold W. Grissum, Mary Alice Grissum, Bobbi Bydalek, HCH Ozark Investors, Inc., Daniel E. Ruda, Santo M. Cantanese, Vacation World, Inc., Dwight Sprague, and Branson Commercial Property Investors Joint Venture, Defendants-Respondents
• Court: Missouri Court of Appeals

31 S.W.3d 531 (Mo.App. S.D. 2000)

First American Title Ins. Co., a corporation, and Hogan Land Title Co., Inc., a corporation, Plaintiffs-Respondents, v. Roy Birdsong and Collyer Kelling, Defendants-Appellants, v. Harold W. Grissum, Mary Alice Grissum, Bobbi Bydalek, HCH Ozark Investors, Inc., Daniel E. Ruda, Santo M. Cantanese, Vacation World, Inc., Dwight Sprague, and Branson Commercial Property Investors Joint Venture, Defendants-Respondents.

No. 23228

Missouri Court of Appeals Southern District

11/16/2000

Appeal From: Circuit Court of Stone County, Hon. William T. Kirsch

Counsel for Appellant: Richard E. Dorr and J. Michael Bridges

Counsel for Respondent: Mark C. Fels, Gregory J. Smith, Joseph A. Bohrer, Charles Cowherd and Michael Lawson

Opinion Summary: None

Crow and Parrish, J.J., concur.

Robert S. Barney, Chief Judge

Defendants, Roy Birdsong and Collyer Kelling, (jointly, "Appellants") appeal from a judgment entered in an interpleader action, involving the disposition of the principal amount of $200,000.00, plus interest, held in an escrow account by Respondents First American Title Company and Hogan Land Title Company, Inc. (jointly, "First American Title"). In its judgment, described more fully below, the interpleader court gave no portion of the escrow account to either of the Appellants who now raise three major points of trial court error, discussed infra.

We glean from the record that First American Title was asked to provide title insurance in conjunction with the sale of three tracts of land in Taney County (variously "the land" or "the three tracts of land") by Interpleader Defendant Bobbi Bydalek ("Bydalek") to William and Betty Gehrs and James P. and Joyce L. Brines ("the Gehrs and Brines"). At the time First American Title was asked to provide the title insurance, the land was the subject of litigation and appeals relating to a previous sale of the same three tracts of land and involving Appellants and almost all other interpleaded parties.¹ See detailed discussion in Birdsong v. Bydalek, 953 S.W.2d 103 (Mo.App. 1997)("Birdsong III"); see also Birdsong v. Bydalek, 931 S.W.2d 217 (Mo.App. 1996)("Birdsong II"); and Birdsong v. Bydalek, 905 S.W.2d 896 (Mo.App. 1995)("Birdsong I").²

In order to obtain First American Title's agreement to provide title insurance, Bydalek entered into an indemnity agreement with First American Title and Bydalek and BCPI entered into a related escrow disbursement agreement with each other. By the terms of these two agreements, Bydalek and BCPI were to deposit $150,000.00 and $50,000.00 respectively into an escrow account held by First American Title. Under the terms of these agreements, First American Title was obligated to return any unused portion of the tendered amount of $200,000.00 to Bydalek and BCPI when title to the land was free of the effects of the pending lawsuit and when First American Title had no present or contingent liability arising out of the lawsuit. After Bydalek and BCPI duly tendered their respective amounts into the escrow account, First American Title provided the required title insurance. Thereafter, Bydalek seasonably conveyed her interest in the three tracts of land to the Gehrs and Brines on September 12, 1994.

On November 22, 1994--during the pendency of Birdsong I and later Birdsong II, and prior to the filing of the instant interpleader action--in the course of a separate litigation, Interpleader Defendants Harold and Mary Grissum ("the Grissums") obtained a writ of attachment against Bydalek's interest in the escrow account. This was followed by a garnishment in aid of the writ of attachment. Later, on December 2,

1994, Bydalek signed a security agreement, duly filed, in which she granted the Grissums a security interest in the $150,000.00 which Bydalek had paid into the escrow account.³ On November 22, 1994, the Grissums filed suit against Bydalek, eventually obtaining a money judgment on April 5, 1996, against Bydalek in the principal amount of $177,718.89.

On August 22, 1997, this Court rendered its opinion in Birdsong III, 953 S.W.2d at 103. As more fully set out below, the opinion affirmed that part of a second amended judgment of the Circuit Court of Taney County, entered November 21, 1996, which, inter alia, granted Appellants a judgment against Bydalek in the principal amount of $133,332.00, together with interest at the rate of 20 percent. Based on this monetary judgment, Appellants asserted in the interpleader action and again on appeal that they had a claim to Bydalek's share of the funds in the escrow account. Because of the competing claims to the escrow account, First American Title filed the instant interpleader action from which judgment Appellants are the sole appealing parties.

The record shows that the interpleader court, inter alia, granted judgment to the Grissums for 75 percent of the escrowed funds contributed by Bydalek, "pursuant to their lien of attachment which was perfected by the entry of the April 5, 1996, judgment . . . against defendant Bydalek in the sum of $177,718.99." Additionally, the trial court also gave a judgment for 25 percent of the escrowed funds to BCPI, based on the indemnity agreement entered into between Bydalek and First American Title and the escrow disbursement agreement between BCPI and Bydalek.

In their three Points Relied On, Appellants generally assert that the trial court erred in its judgment by: (1) determining that Appellants had "no lien, claim, or encumbrance that would constitute a cloud on the title" to the land; (2) finding in favor of the Grissums for 75 percent of the escrowed funds on the basis of a lien of attachment; and (3) finding in favor of BCPI for 25 percent of the escrowed funds on the basis of the "escrow disbursement agreement." They maintain the judgment of the trial court was against the weight of the evidence, was not based on substantial evidence and was based on erroneous application of law to the facts.

"We will sustain the judgment of the trial court unless the judgment is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law." Amwest Sur. Ins. Co. v. Stamatiou, 996 S.W.2d 708, 711 (Mo.App. 1999).

I.

In their brief, Appellants maintain that before the instant interpleader action, the Taney County Circuit Court's second amended judgment--detailed in Birdsong III--not only awarded them a money judgment against Bydalek in the amount of $133,332.00 plus interest, but also entitled them to assert a "contractual security interest," a judgment lien and/or an equitable lien against the land. They further maintain that the escrowed funds should have been used to settle their claimed interest and/or liens. Appellants also maintain that the trial court's findings went beyond the scope of the pleadings.

Appellants' first point of error has no merit. This is because the trial court in its second amended judgment, as affirmed with modifications by this Court in Birdsong III, infra, had already considered and settled the matter Appellants now wish to litigate anew in the course of the instant interpleader action. "The doctrine of res judicata, commonly referred to as 'claim preclusion,' operates as a bar to the reassertion of a cause of action that has been previously adjudicated in a proceeding between the same parties or those in privity with them." Jordan v. Kansas City, 929 S.W.2d 882, 885 (Mo.App. 1996).

In Birdsong III, this Court set aside the second amended judgment's award of monetary damages in favor of Bydalek and against Appellants arising from Appellants' purported tortious interference with Bydalek in her contract with HCH-BCPI.⁴ Birdsong III, 953 S.W.2d at 125.⁵ In doing so, this Court held that after July 1, 1993, Appellants were accorded the "status," of a "potential secured creditor," and therefore did not tortiously interfere with the contract between Bydalek and HCH-BCPI, when they filed their three notices of lis pendens in connection with their suit against Bydalek and others.⁶ See Birdsong III, 953 S.W.2d at 113-15. Based primarily on this Court's foregoing recitals, supra, coupled with Appellants' proposed interpretation of the contract language found in an "Assignment of Real Estate Purchase Agreement and Agreement of Joint Venture" ("Assignment Memo"),⁷ Appellants now pose the rather ingenious argument that this Court gave recognition to their "security interest" or "equitable lien" in the three tracts of land.

These asseverations by Appellants have no merit. This is because the second amended judgment, as affirmed in pertinent part by this Court in Birdsong III, 953 S.W.2d at 125, declared that Appellants: (a) "had no interest [in the land] since July 1, 1993" under the Assignment Memo, Id. at 111; (b) ordered that the Assignment Memo with the abbreviated version of the Bydalek/Appellants contract be "released and declared to be null, void and of no force or effect," Id.; (c) ordered that all notices of lis pendens be "released and discharged," Id.; (d) declared that the Bydalek/HCH-BCPI contract for the sale of the three tracts of land was "in force 'through and including September 12, 1994,' and that it was 'specifically performed' on that date." Id.

Additionally, while this Court recognized a reasonable relationship between the first three counts of Appellants' suit, sounding in equity, and Appellants' exercise of their legal right to file notices of lis pendens, as set out in section 527.260, RSMo 1986, see Birdsong III, 953 S.W.2d at 114, this Court neither gave nor recognized Appellants' claimed "security interest" in the three tracts of land.⁸ Nor did the trial court or this Court give any recognition to Appellants' claimed "equitable lien."⁹ Also, while this Court determined that Bydalek could not demonstrate a causal connection between the filing of the Assignment Memo by Appellants and her failure to close her sale in ...