Harris v. Smith

• Decision Date: 28 April 2008
• Docket Number: No. 28300.,28300.
• Citation: 250 S.W.3d 804
• Parties: Troy HARRIS and Libby Harris, Plaintiffs-Appellants, v. Jon E. SMITH and Teresa J. Smith, and Dennis Thompson, and H.J.C. Enterprises, L.C., d/b/a Murney Associates, Realtors, Defendants-Respondents.
• Court: Missouri Court of Appeals

250 S.W.3d 804

Troy HARRIS and Libby Harris, Plaintiffs-Appellants, v. Jon E. SMITH and Teresa J. Smith, and Dennis Thompson, and H.J.C. Enterprises, L.C., d/b/a Murney Associates, Realtors, Defendants-Respondents.

No. 28300.

Missouri Court of Appeals, Southern District, Division One.

April 28, 2008.

Timothy Davis Richardson of Springfield, MO, for Plaintiffs-Appellants.

Jack Hoke of Springfield, MO, for Respondent Smith.

Stephen Howard Snead of Springfield, MO, for Respondents Thompson and HJC Enterprises d/b/a Murney.

JEFFREY W. BATES, Judge.

Troy and Libby Harris (the Harrises) appeal from a summary judgment granted in favor of Jon and Teresa Smith (the Smiths), Dennis Thompson (Thompson), and HJC Enterprises, L.C., d/b/a Murney Associates Realtors (Murney). The Harrises' lawsuit alleged that they wanted to build a shop building on real estate they purchased from the Smiths and that all of the defendants had made misrepresentations concerning restrictive covenants that prohibited such construction. All of the defendants filed motions for summary judgment, which were granted by the trial court. The Harrises contend that there are genuine issues of material fact that require a trial. This Court affirms.

I. Standard of Review

If the summary judgment motion, response, reply and sur-reply show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, a trial court is required to enter summary judgment in favor of the moving party. Rule 74.04(c)(6).¹ On appeal, this Court employs a de novo standard of review that involves no deference to the ruling below. City of Springfield v. Gee, 149 S.W.3d 609, 612 (Mo.App.2004); Murphy v. Jackson Nat'l Life Ins. Co., 83 S.W.3d 663, 665 (Mo.App.2002). We use the same criteria the trial court should have employed in initially deciding whether to grant a party's motion. Stormer v. Richfield Hospitality Services, Inc., 60 S.W.3d 10, 12 (Mo. App.2001). The record is viewed in the light most favorable to the party against whom judgment was entered, and we accord that party the benefit of all inferences which may reasonably be drawn from the record. ITT Commercial Finance Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). "The propriety of summary judgment is purely an issue of law." Id.

As ITT explains, Rule 74.04 distinguishes between motions for summary judgment filed by a "claimant" and by a "defending party." Id. at 380. Here, the Smiths, Thompson and Murney were the defending parties. A defending party "may establish a right to summary judgment by showing: (1) facts negating any one of the claimant's elements; (2) that the party opposing the motion has presented insufficient evidence to allow the finding of the existence of any one of the claimant's elements; or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support a properly pleaded affirmative defense." Ameristar Jet Charter, Inc. v. Dodson Intern. Parts, Inc., 155 S.W.3d 50, 58-59 (Mo. banc 2005).

II. Factual and Procedural Background

In July 1959, E.F. and Katherine Corlett recorded a plat creating a subdivision in Greene County, Missouri, called Melville Acres. The subdivision consisted of 15 lots, all owned by the Corletts. They also recorded a document containing protective covenants for Melville Acres (the Covenants). Covenant No. 11 prohibited any outbuilding with an area greater than 600 square feet. Covenant No. 13 provided that the covenants were binding for 25 years after recording and would be automatically renewed for successive 10-year periods, "unless an instrument signed by a majority of the then owners of the lots has been recorded agreeing to change said covenants in whole or in part."

In September 1991, David and Joyce Pfister owned lots 1-5 and 11-15 of Melville Acres. They recorded a set of declarations (the Declarations) applicable to those lots only. Pursuant to Article I, § 3(a) of the Declarations, additional property could become subject thereto by filing a "Supplementary Declaration" if 60% of the owners of lots 1-5 and 11-15 approved. This provision further authorized a supplementary declaration to "contain additions, deletions, and modifications from those contained in this Declaration as may be necessary to reflect the different character, if any, of the added properties." A supplementary declaration, however, could not effect any changes in the original Declarations "except as may be specifically permitted herein." In Article II, § 1(e), the Declarations stated that "[a]ll outbuildings should blend with the exterior décor of the residence to which they serve." In Article IV, § 2, the Declarations stated that "[a]fter the recording of this Declaration, the provisions hereof may be amended or terminated at any time by at least sixty percent (60%) of the total Lot Owners with each Lot carrying one vote, regardless of the number of owners."

In September 1996, the owners of lots 1-12 and 14 in Melville Acres voted to terminate the Covenants in conformity with the requirements contained therein. They recorded an instrument entitled "Agreement to Terminate Protective Covenants for Melville Acres." This document, bearing the signatures of the owners of 13 lots, stated that the Covenants were of "no further force and effect" and were "terminated for all purposes."

After the termination document was recorded, another document entitled "Supplementary Declaration to the Declaration of Covenants of Melville Acres, Greene County, Missouri" (the Supplement) was recorded. The Supplement recited that: (1) Fred and Marjorie Leader owned lots 6-10 of Melville Acres; (2) the Leaders wanted their property to be subject to the Declarations; and (3) the owners of lots 1-5, 11-12 and 14 in Melville Acres had voted to approve the addition of lots 6-10 to the property that was subject to the Declarations. Next, the Supplement purported to amend the Declarations in the following respect:

Subparagraph (e) of Article II of Section 1 of said declarations which reads: "(e) All outbuildings shall blend with the exterior décor of the residence to which they serve" is hereby amended so that the said subparagraph (e) shall read as follows: (e) After there is a single family residence on a lot, an outbuilding which shall blend with the exterior décor of the residence may be placed on the lot, but no lot shall have more than one such outbuilding, and no outbuilding shall have gross interior floor area of more than 200 square feet, and the outbuilding shall be located behind and within 100 feet of the single family residence on the lot.

The owners of lots 13 and 15 did not approve of this amendment.

In June 2004, the Smiths owned the south 50 feet of Lot 3 and the north 75 feet of Lot 4 in Melville Acres. They listed the property for sale through Carol Jones Realtors. The Harrises were in the market to purchase real estate, and they hired Thompson to represent them. He was an agent for Murney at the time. The Harrises told Thompson that they were looking for a property where they could build a garage for Troy Harris' cars. The Harrises intended to construct a shop building on the property with dimensions of 30 x 40 feet. They looked at the Smiths' property and signed a contract to purchase it in September 2004. After the closing, the Harrises were told by a neighbor in Melville Acres that they could not build a shop building on their property.

In May 2005, the Harrises sued the Smiths, Thompson and Murney. The petition alleged, inter alia, that: (1) the Harrises' ability to "build a shop building on the property" was one of their purchase requirements; (2) Thompson and the Smiths assured the Harrises that there would be no problems with building a shop building on the property; but (3) such construction was prohibited by the Supplement. The Harrises sought actual and punitive damages or, alternatively, rescission and restitution.

The Smiths initially filed a motion for summary judgment, in which Thompson and Murney joined, seeking dismissal of the Harrises' case on the legal ground that they had constructive notice of the Covenants, the Declarations and the Supplement because these documents had been recorded. Thereafter, Thompson and Murney filed a second motion for summary judgment. The legal basis for this motion was that the Harrises could construct the shop building they wanted because: (1) the new or additional burdens imposed on such construction by the Supplement were invalid because it was not adopted by unanimous consent; and (2) the Declarations did not restrict or prevent the Harrises from constructing a shop building on their property. In the Harrises' response to the statement of undisputed facts, they admitted that the Declarations did not "restrict or prevent Plaintiffs Harris from constructing a shop building on their property" because the building only had to blend with the exterior décor of the residence. It also was undisputed that the owners of Melville Acres lots 13 and 15 did not vote in favor of the amendment in the Supplement restricting the number, size and location of outbuildings on an owners' property. The court granted the first and second motions for summary judgment, and this appeal followed.

III. Discussion and Decision

In the Harrises' second point on appeal, they argue that the trial court erred in granting the second motion for summary judgment filed by Thompson and Murney because there were genuine issues of material fact regarding these defendants' misrepresentations, the applicability of the various covenants and restrictions to the property and their knowledge of the covenants and restrictions.²

The Harrises' lawsuit appears to have alleged theories of fraudulent and negligent misrepresentation against Thompson and Murney. The elements of fraudulent misrepresentation are: "(1) a false, material representation; (2) the speaker's...