First Nat'l Bank of Dieterich v. Pointe Royale Prop. Owners' Ass'n, Inc.

• Decision Date: 29 June 2016
• Docket Number: No. SD33797,SD33797
• Parties: FIRST NATIONAL BANK OF DIETERICH, f/k/a FIRST STATE BANK OF RED BUD, Plaintiff-Respondent, v. POINTE ROYALE PROPERTY OWNERS' ASSOCIATION, INC., and POINTE ROYALE CONDOMINIUM PROPERTY OWNERS' ASSOCIATION, INC., Defendants-Appellants.
• Court: Court of Appeal of Missouri (US)

FIRST NATIONAL BANK OF DIETERICH,f/k/a FIRST STATE BANK OF RED BUD, Plaintiff-Respondent, v. POINTE ROYALE PROPERTY OWNERS' ASSOCIATION, INC.,and POINTE ROYALE CONDOMINIUM PROPERTY OWNERS' ASSOCIATION, INC., Defendants-Appellants.

No. SD33797

Missouri Court of Appeals Southern District Division Two

June 29, 2016

APPEAL FROM THE CIRCUIT COURT OF TANEY COUNTY

Honorable Tony W. Williams

AFFIRMED

Pointe Royale Property Owners' Association, Inc. ("Pointe Royale") appeals a judgment in favor of First National Bank of Dieterich ("Bank")¹ that arose from Bank's acquisition, via foreclosure sales, of eight condominium units in Pointe Royale Subdivision ("the subdivision"). The judgment declared that Bank had overpaid subdivision assessments to Pointe Royale and that Bank was entitled to attorney fees. The judgment awarded Bank monetary damages in accordance with those findings, and it dismissed as moot Pointe Royale's amended counterclaim that sought additional subdivision assessments from Bank and an award of attorney fees incurred by Pointe Royale ("counterclaim").

Pointe Royale presents four points relied on. The first and fourth points contend the trial court misapplied the law in interpreting the applicable subdivision covenants ("the covenants") because: (1) the covenants provided that "successors in interest [sic]" were obligated "to pay past due assessments" owed by previous owners, and Bank had constructive notice of the covenants; and (2) Pointe Royale was expressly permitted "to collect reasonable attorney's fees, and late fees in connection with delinquent assessments." Points two and three contend the trial court misapplied section 448.3-116² as to Pointe Royale's: (1) "collection of Annual and Special Assessments, because [the statute] applies only to 'associations' that consist exclusively of condominium unit owners"³; and (2) collection of "[a]ssessments that accrued prior to the Bank's foreclosures" because the statute addresses only the priority of liens and "does not extinguish the underlying obligation to pay assessments."

Finding no merit in any of these claims, we affirm the judgment of the trial court.

Facts and Procedural Background⁴

The covenants were initially declared by the subdivision's developer and later amended in March 1986. "ARTICLE X COVENANT FOR MAINTENANCE ASSESSMENTS" of the covenants permitted Pointe Royale to collect annual and special assessments from those owning "a Lot, Condominium or Living Unit" in order to provide for the "'Common Elements'" of the subdivision. "Section 7. Non-Payment of Assessments" ("the non-payment provision") of the article states:

If any Assessments are not paid on the date when due, then such Assessments shall become delinquent. The Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the property and both actions shall be cumulative and neither shall preclude the other. No Owner may waive or otherwise escape liability for the Assessments by non-use of the Common Elements or abandonment.

If Assessments have become delinquent, such Assessments shall bind such property in the hands of the then Owner, his heirs, devisees, personal representatives and assigns [("the lien limitation clause")]. The personal obligation of the Owner to pay such Assessments shall remain his personal obligation and shall pass to successors in title [("the personal liability clause")]. Such delinquent Assessments shall bear interest from the date of delinquency at any lawful rate as determined from time to time by the Board of Directors of the Association or, if not so determined, the rate of 10% per annum. In the event a judgment is obtained, such judgment shall include interest on the Assessments as above provided and a reasonable attorney's fee to be fixed by the Court, together with the costs of the action [("the attorney's fee and interest clause")].

(Italics and bolding added for emphasis.) Additional relevant language from the covenants will be addressed in the context of our analysis of Pointe Royale's points on appeal.

After the covenants were recorded, Bank made loans to the owners of eight condominium units in the subdivision ("the original owners") and secured those loans by recording first deeds of trust. Pointe Royale subsequently levied various assessments against the original owners ("the prior assessments"). When the prior assessments were not paid, Pointe Royale filed liens against those condominium units. After the original owners defaulted on Bank's loans, Bank purchased the units at foreclosure sales in 2010. Pointe Royal refused to release any liens unless Bank paid both the prior assessments and all assessments levied after Bank became the new owner of the units ("the new assessments"). Bank was willing to pay the new assessments, but it disputed its liability for the prior assessments. Bank paid both the new and prior assessments and began reselling the units. Bank then sought to recover the prior assessments and its attorney fees in a declaratory judgment suit.

The parties stipulated that Bank had "paid all sums demanded by Pointe Royale except for the attorney's fees which Pointe Royale has expended in defending this declaratory judgment action." Pointe Royale maintained that the covenants obligated Bank, as a "'successor] in title,'" to pay the prior assessments and Pointe Royale's attorney fees. Pointe Royale's counterclaim sought to: (1) retain Bank's payment of both types of assessments; and (2) recoup the attorney fees Pointe Royale incurred in collecting the assessments and defending the declaratory judgment suit.

The trial court found that section 448.3-116.2(2) and .7 "extinguished by foreclosure" the prior assessments and that Pointe Royale owed Bank $15,035.92, the amount of the prior assessments. The resulting judgment ordered Pointe Royale to pay Bank this amount, plus $3,150.00 to cover one-half of what it cost Bank to litigate the declaratory judgment action. The trial court also found that because Bank had willingly paid the new assessments, and Pointe Royale was not entitled to keep the prior assessments Bank had paid under protest, Pointe Royale was also "not entitled to payment of attorney's fees, late fees, interest, and lien filing fees accruing prior to the foreclosure of the Deeds of Trust."

Preliminary Issue Regarding Finality of the Judgment

Bank's petition for declaratory judgment contained a second count that claimed Bank was entitled to damages for slander of title based upon the associations' filing of liens to enforce the prior assessments. The judgment found that the associations' "claims for past due assessments themselves constituted a cloud on [Bank's] title and, thus, are sufficient to support a claim for slander of title." However, the trial court "reserve[d] Count II of [Bank's p]etition for separate trial depending upon the outcome of this case on appeal, if appealed." Counsel for the parties agreed to this procedure, and the judgment explicitly declared that it was "final for the purposes of appeal in that there is no just reason for delay."

Rule 74.01(b)⁵ permits a judgment on "fewer than all of the claims . . . only upon an express determination that there is no just reason for delay." Although such a declaration by the trial court is necessary, it is not determinative; this court must also consider, sua sponte, whether such a judgment is final for purposes of appeal. See Ndegwa v. KSSO, LLC, 371 S.W.3d 798, 801 (Mo. banc 2012). The determinative issue is whether "the subject of the judgment . . . constitutes one single, yet complete, claim." Fischer v. City of Washington, 55 S.W.3d 372, 377 (Mo. App. E.D. 2001).

The "one claim" required for Rule 74.01(b) certification means one legal right, regardless of whether multiple remedies are sought. Columbia [Mut. Ins. v. Epstein], 200 S.W.3d [547,] 550 [(Mo. App. E.D. 2006)]. It means the aggregate of operative facts that give rise to a legally enforceable right. Id. In other words, claims are separate if they require proof of different facts and application of distinguishable law[.]

State ex rel. Bannister v. Goldman, 265 S.W.3d 280, 285 (Mo. App. E.D. 2008).

For instance, in Robertson v. Police & Firemen's Pension Plan of City of Joplin, 442 S.W.3d 60, 63-64 (Mo. App. S.D. 2014), the plaintiffs brought a five-count petition with the first count seeking a declaration that one of them, a firefighter, was entitled to certain disability retirement benefits. The second count alternatively sought a recalculation of benefits based upon a different term of service and the third count sought a declaration that the defendants' interpretation of the plan violated the city's charter. Id. at 63. The trial court entered judgment in favor of the firefighter on count 1, found counts 2 and 3 moot, and did not decide the remaining two counts based upon the judgment entered on Count 1. Id. at 64. The remaining two counts presented claims for damages resulting from violations of the firefighter's contract rights concerning the retirement plan under the Missouri Constitution and Title 42 U.S.C. section 1983. Id. at 63-64. In addressing whether the judgment was final for purposes of appeal, we found counts 4 and 5 to be "separate and distinct from the claim decided in the judgment." Id. at 65. The first count was decided based solely on the language of the benefit plan, and even though the calculation of the firefighter's retirement benefit was at the heart of the entire dispute, we found that the resolution of the remaining two counts "w[ould] require proof of facts wholly irrelevant to the claim decided in the instant judgment." Id. Additionally, the applicable law for the constitutional contract rights claim differed from the law regarding an interpretation of a particular contract. Id.

Here, we again find that different legal rights are at issue in the two counts. "To support an action for slander of title, there...