Graff v. North Port Development Co.

Decision Date05 May 1987
Docket NumberNos. 50874,50877,s. 50874
Citation734 S.W.2d 221
Parties4 UCC Rep.Serv.2d 1327 George GRAFF, et al., Plaintiffs-Respondents, v. NORTH PORT DEVELOPMENT CO., et al., Defendants-Appellants.
CourtMissouri Court of Appeals

Daniel E. Wilke, Brinker, Doyen & Kovacs, Clayton, for plaintiffs-respondents.

Richard Boardman, St. Louis, for defendants-appellants.

SIMON, Judge.

Defendants, Lawrence J. and Jill Avis Goldstein, appeal from three separate rulings of the Circuit Court of St. Louis County. Defendants appeal an order granting a summary judgment against them and in favor of plaintiffs, George and Fred Graff and Louis Reichfelt and Clifford L. Goetz, trustees of the George Graff and Fred Graff revocable living trusts, on their action to recover on a promissory note signed by defendants Goldstein, defendant Thomas D. Maurer, Jr., and Valerie L. Maurer. Defendants also appeal an order denying their motion for directed verdict on Count I of their counterclaim for accounting and set-off. Finally, defendant Lawrence Goldstein appeals an order granting a summary judgment as to Count III of the counterclaim for specific performance of contract.

Defendant, Thomas D. Maurer, Jr., filed a notice of appeal in this court on November 18, 1985. However, he has not filed a brief. Therefore, his appeal is dismissed for failure to comply with Rule 84.05(a); Rule 84.08(b).

On appeal, defendants Goldstein maintain that the trial court erred: (1) in granting plaintiffs' motion in limine excluding evidence respecting plaintiffs' failure to pay fair market value for the real estate that served as collateral for the promissory note sued on; (2) in granting plaintiffs' motion for summary judgment on their claim on the promissory note; (3) in denying defendants' motion for directed verdict on their counterclaim for accounting and set-off (Count I); (4) in granting plaintiffs' motion for summary judgment on defendant Lawrence Goldstein's counterclaim for specific performance of contract (Count III).

This is the second appeal by defendants in this matter. Their first appeal was dismissed without prejudice as premature. See Graff v. North Port Development Co., 691 S.W.2d 477 (Mo.App.1985).

On or about August 29, 1980, North Port Development Company (North Port), a Missouri corporation, purchased a tract of real estate known as the North Shore Golf Course from plaintiffs, George and Fred Graff. As a part of the consideration North Port executed two promissory notes payable to plaintiffs, secured by deeds of trust on the real estate purchased, in the amounts of $1,000,000 and $75,000. On December 1, 1980, an additional promissory note payable to plaintiffs was executed in the amount of $125,000. This note bore the signatures of Lawrence J. and Jill Avis Goldstein, and Thomas D. Maurer, Jr. and Valerie L. Maurer, as individuals, and Thomas D. Maurer, Jr., as president of North Port. This note was also secured by deed of trust on the real estate. On June 1, 1981, a security agreement listing various items of personalty (golf course equipment) was entered into by North Port and the Graffs. This was to serve as additional collateral on the notes. All of the aforementioned notes contained acceleration clauses.

On October 5, 1981, North Port entered into an option contract with L & M Acquisitions, Inc. (L & M), a Missouri corporation. For consideration, North Port granted L & M an option to purchase a substantial portion of the real estate that it had acquired from the Graffs. The option expired on January 4, 1982. By affidavit, George Graff admitted that he knew that North Port had granted an option to L & M.

On December 1, 1981, payments were due on all promissory notes held by the Graffs. The payments were not made and the Graffs exercised their right to accelerate and demanded payment of the entire principal balance together with accrued interest. Foreclosure was also threatened. However, the time for payment was ultimately extended by the Graffs until January 10, 1982 in order to facilitate the exercise of the option by L & M. Apparently, all concerned expected a substantial return if the option was exercised. It appears that a conditional promissory note for $80,000 was given to the Graffs, to be considered as part of the purchase price paid by defendants if L & M exercised its option. L & M did not exercise its option because it was unable to obtain a landfill permit from the State of Missouri, and its planned project became economically unfeasible.

Defendants Goldstein allege that on December 29, 1981, the Graffs entered two additional agreements extending the time for principal and interest payments on the two notes for $1,000,000 and $75,000. Under the first agreement the Graffs allegedly withdrew notice of acceleration and agreed to defer payments of principal and interest through May 31, 1982, until the earliest of the following three dates: (a) the date of foreclosure on the deeds of trust; (b) the date of the sale of any part of the property acquired by North Port from the Graffs; or (c) August 1, 1985. All payments of principal and interest due on or after June 1, 1982, were again to be paid when due, and if they were not so paid, the Graffs retained the right to accelerate and foreclose. The second alleged agreement deferring the time for payments provided a method for distributing proceeds from the sale of the property between the Graffs and Lawrence Goldstein in the event it was sold. The Graffs maintain that they never executed either agreement, and although signatures purporting to be those of George and Fred Graff appear on the first alleged agreement, the Graffs contend that the signatures are not in fact theirs.

By letter dated April 29, 1982, the Graffs again gave notice of acceleration of the $1,000,000 and $75,000 notes, and made demand for immediate payment of the entire principal balance together with accrued interest. Defendants Goldstein maintain that this was in violation of the two aforementioned deferral agreements. Thereafter, notice of foreclosure on the trust deeds securing the notes was published from November 30, 1982 through December 29, 1982, for a period of twenty-one days. The trustee's sale was held on December 29, 1982. The Graffs were the successful bidders and the trustee's deeds conveyed the real estate to them.

The instant action began on April 20, 1982 to collect on the $125,000 promissory note. The petition named North Port, the Goldsteins (Lawrence and Jill), and the Maurers (Thomas, Jr. and Valerie) as defendants. North Port was subsequently dismissed as a party defendant and apparently Valerie Maurer was never served. The petition alleged that payment was due under the note and that demand had been made therefor. The petition further alleged that defendants had refused to make payment and prayed for judgment in the amount of $125,000, plus interest and attorney's fees.

Defendants Goldstein filed an amended joint answer, together with three counterclaims. In their answer, they admitted that they had duly executed the December 1, 1980 promissory note for $125,000. They denied, however, that the note was due and owing and that they had refused to pay the note. By Count I of their counterclaim, defendants Goldstein sought an equitable accounting of the value of personal property, in plaintiffs' possession, serving as collateral for the note under the security agreement. In Count II, Lawrence Goldstein sought damages for tortious interference of contract and in Count III Lawrence Goldstein sought specific performance of the alleged agreements to defer payments of principal and interest on the $1,000,000 and $75,000 notes and requested the trial court to set aside the trustee's deed conveying the "North Shore Golf Course" to the Graffs.

On July 9, 1984, during discovery, defendants Goldstein filed a request for the production of documents. The documents requested included the alleged December 29, 1981 deferral agreements with respect to payments of principal and interest that formed the basis of Count III of defendants' counter claim. When there was no response to the request by plaintiffs, defendants Goldstein filed a motion to compel discovery on July 31, 1984. On August 20, 1984, plaintiffs filed an unverified response to the motion to compel stating that plaintiffs had appeared for deposition on July 10, 1984 and at that time "had all of the documents in their possession that were not privileged and were discoverable pursuant to the defendants' motion to produce documents." By having a set of said documents available for review at that time, plaintiffs contended that they had complied with the motion to produce. A hearing on defendants' Goldstein motion to compel was set for October 18, 1984.

On August 3, 1984, plaintiffs filed a motion for summary judgment as to Counts II and III of defendants' counterclaim. Before the motion was ruled on, Count II of the counterclaim was dismissed without prejudice by Goldstein. Plaintiffs' motion for summary judgment on Count III of defendant Lawrence Goldstein's counterclaim was sustained on August 29, 1984, prior to the hearing on Goldstein's motion to compel discovery.

Defendant Lawrence Goldstein's Count III alleged the following:

On or about December 28, 1981, Plaintiffs' Graffs and Defendant Lawrence J. Goldstein entered into a Contract providing for the deferral of principal and interest payment upon a Deed of Trust for the purchase of certain property commonly known as the "North Shore Golf Course."

On or about December 28, 1981, Plaintiffs' Graffs entered into a Contract with Defendant Lawrence J. Goldstein, in which Plaintiffs' Graffs further agreed to the deferral of payment on certain promissory notes owed by Lawrence J. Goldstein and others to Plaintiffs Graffs.

Defendant Lawrence J. Goldstein has performed all of his obligations under...

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5 cases
  • Cain v. Hershewe, 15767
    • United States
    • Missouri Court of Appeals
    • September 25, 1989
    ...could have asked for a continuance in the manner prescribed by paragraph (f) of Rule 74.04. See also Graff v. North Port Development Co., 734 S.W.2d 221, 229 (Mo.App.1987). The plaintiff made no request for a continuance, and he is in no position to complain in this The substance of the pla......
  • In re Nicsinger
    • United States
    • U.S. District Court — Western District of Missouri
    • January 27, 1992
    ...obligation. Seemingly, this intent cannot be inferred from the unreasonable retention of the collateral alone. Graff v. North Port Dev. Co., 734 S.W.2d 221, 228 (Mo.Ct.App.1987) (citations The court in Graff determined that under the circumstances of that case it was not required to decide ......
  • Shourd v. Case Power & Equipment Co.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • May 28, 1992
    ...may imply election of strict foreclosure. Courts that have decided this question fall into three groups. See Graff v. North Port Dev. Co., 734 S.W.2d 221, 228-29 (Mo. Ct. App. 1987) (explaining three approaches). According to some courts, a secured party may impliedly elect strict foreclosu......
  • North Port Development Co. v. Graff
    • United States
    • Missouri Court of Appeals
    • December 20, 1988
    ...Port Development Company's purchase of land from George and Fred Graff. The facts of the case are set out in Graff v. North Port Development Co., 734 S.W.2d 221 (Mo.App.1987). We In December 1982, the Graffs held a foreclosure sale pursuant to the deed of trust for failure to pay on two of ......
  • Request a trial to view additional results

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