Hellmann v. Sparks

Decision Date06 March 2015
Docket NumberSD32743,Nos. SD32740,SD32742,s. SD32740
Parties Robert J. Hellmann, and Debra S. Hellmann, Petitioner–Appellants/Respondents, v. Randy Sparks, Executive Vacation Get-a-ways, LLC, James C. Restelli, Karen A. Restelli, Mitch's Greenthumb Landscaping Corp., Jeffrey M. Lowe, Kathleen E. Lowe, James Restelli, Jeffrey M. Lowe, and Roger L. Fulton, as Putative Directors of the Grand Point Island Homeowners Association, Inc., Unknown Persons or Entities That Claim an Interest in the Boat Dock Known as the “Community Dock” Attached to the lot known as the “Park” in Grand Pointe Island Subdivision, a Subdivision in Camden County, Missouri, Grand Point Island Homeowners Association, Inc., Exclusive Lake Properties, LLC, Bayberry Development Co. II, Inc., Roger L. Fulton, Debra A. Fulton, Jeffrey A. Howell, Kim M. Howell, Respondents–Respondents, Health Care Resource, LLC, Respondent–Respondent/Cross–Appellant, and Robert A. Bull and Debra Bull, Respondents–Respondents/Cross–Appellants.
CourtMissouri Court of Appeals

Attorneys for AppellantsRandy J. Reichard, Springfield, MO

Attorneys for Respondents—W. Gary Drover, Camdenton, MO, Richard L. Rollings, Jr., Camdenton, MO, Anthony J. Soukenik, St. Louis, MO, Aaron D. French, St. Louis, MO, Casey F. Wong, St. Louis, MO, Michael L. Mcdorman, Lake Ozark, MO, John E. Curran, Osage Beach, MO, Lewis Z. Bridges, Osage Beach, MO, Mark B. Leadlove, St. Louis, MO, Christopher M. Blaesing, St. Louis, MO

Respondents Pro Se—Executive Lake Properties, New Baden, IL, Grand Resort Properties, Omaha, NE
MARY W. SHEFFIELD

, P.J.

This case involves certain waterfront real estate located on Lake of the Ozarks in Camden County, Missouri. The property is part of a planned, gated community called Grand Point Island (“the subdivision). The subdivision is located on an island connected to the mainland by a causeway. From the time the subdivision was created, the subdivision has had a park reserved by deed restrictions for the recreational use of all lot owners in the subdivision and a community dock which is attached to the park. In 2008, Robert Hellmann and his wife Debra Hellmann (collectively the Hellmanns) purchased some lots in the subdivision. They also acquired the causeway and the park. Thereafter, a dispute arose regarding the location of the community dock and control of the subdivision's homeowners' association, Grand Point Island Homeowners Association, Inc. (“GPI”). A lawsuit followed. In that lawsuit, the Hellmanns asked the trial court to find there was a valid agreement to move the community dock and to find that the current board of directors of GPI did not have authority to act on behalf of GPI. The trial court found against the Hellmanns on all counts, and they appeal. Two other parties, Health Care Resources, LLC (HCR), and Robert and Debra Bull (“the Bulls”), cross-appeal.

The Hellmanns raise 17 points on appeal which fall into four major groups: points regarding the authority of GPI, points regarding the interpretation of the subdivision's governing documents, points regarding an alleged agreement to move the community dock, and points regarding the appointment of an attorney for unknown parties during the litigation. HCR joins in many of those points and raises four additional points of its own. HCR's four additional points challenge the authority of GPI. The Bulls raise three points related to an easement associated with the agreement to move the dock. For ease of analysis, the points have been grouped together by topic, and we address each topic separately. We affirm the trial court's judgment in toto.

Standard of Review

“On review of a court-tried case, an appellate court will affirm the circuit court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.” Ivie v. Smith, 439 S.W.3d 189, 198–99 (Mo. banc 2014)

. “When reviewing whether the circuit court's judgment is supported by substantial evidence, appellate courts view the evidence in the light most favorable to the circuit court's judgment and defer to the circuit court's credibility determinations.” Id. at 200. Questions of law such as contract interpretation are reviewed de novo.

G.H.H. Invs., L.L.C. v. Chesterfield Mgmt. Assocs., L.P ., 262 S.W.3d 687, 691 (Mo.App.E.D.2008).

Points Regarding the Authority of GPI

The first group of conceptually related points involved the authority of GPI and the board of directors of GPI. These points include the Hellmanns' Point I, Point II, Point III, Point IV, and Point V, as well as HCR's Point I, Point II, and Point III. The following facts are relevant to the resolution of these points.

GPI was created in January 2001. In June of the same year, Bayberry Development Company II, Inc. (Bayberry) filed a declaration of restrictions (“the declaration”) for the subdivision. GPI was named the governing body for the subdivision. The declaration gave Bayberry the power to appoint the board of directors of GPI until October 1, 2016, or until Bayberry voluntarily relinquished that right. The declaration further empowered GPI to maintain the subdivision's facilities, i.e., items or things owned or leased by GPI, and levy assessments against the property owners for maintaining and improving the facilities.

Bayberry subsequently began to develop the subdivision and sell lots for residential purposes. Around this time, Bayberry attached the community dock to the park. In 2004, Bayberry sold all the lots in the subdivision which had not already been purchased to Care Investments, LLC (Care). On January 5, 2006, GPI was administratively dissolved for failing to file a correct and current annual report. On August 29, 2006, Bayberry was administratively dissolved for failing to file a correct and current annual report.

In early 2008, the Hellmanns began negotiating with Care to purchase a number of lots on the island. The Hellmanns purchased lots 1, 12, and 13, as well as the park and the causeway from Care on April 19, 2008. During this time frame, disagreements arose regarding a plan to relocate the community dock.

Also in April 2008, a second Missouri non profit corporation named Grand Point Island Homeowners Association, Inc. (“Second GPI”) was incorporated. After that time, Second GPI spent money on snow removal, storm sewer repair, and some attorneys' fees associated with starting Second GPI. Second GPI also opposed the plan to relocate the community dock.

On May 21, 2010, Robbie Marley, president and sole remaining member of Bayberry, signed a document ratifying the current board membership of the Grand Point Island Homeowner's Association, Inc., to include James Restelli (Restelli) as President, Jeffery Lowe (Lowe) as Vice–President, and Roger Fulton (Fulton) as Secretary/Treasurer. That document did not designate whether the association referred to was GPI or Second GPI.

At some point, Second GPI discovered the existence of GPI. To clarify the situation, the members voted to reinstate GPI and to merge GPI with Second GPI. On April 13, 2011, GPI was restored to good standing with the Office of the Missouri Secretary of State. On May 25, 2011, the board of directors recommended the homeowners merge GPI with Second GPI. On November 14, 2011, the Missouri Secretary of State issued a Certificate of Merger combining the two homeowners' associations leaving GPI as the surviving entity.

In their seventh amended petition, the Hellmanns requested a declaratory judgment stating, among other things, that: (1) Second GPI had no authority to govern the subdivision; (2) all actions taken by Second GPI were void; (3) Bayberry had voluntarily relinquished its rights to appoint directors so the Bayberry consent to the appointment of the board of directors had no force or effect; (4) all actions taken by the board of directors were void; and (5) the reinstatement of GPI was void because Restelli did not have the authority to act on behalf of GPI. In the judgment, the trial court found Bayberry had not relinquished its right to appoint directors, so Restelli, Fulton, and Lowe had been properly appointed directors of GPI. The trial court further found GPI's actions were authorized. In their first group of points on appeal, the Hellmanns challenge these rulings.

No Assignment or Ratification Was Necessary

In their first point, the Hellmanns argue the trial court erred in finding Second GPI “was a validly existing homeowners' association with authority to govern the Subdivision because Second GPI never received an assignment of rights from GPI. In their third point, the Hellmanns argue the trial court erred when it found the actions of Second GPI were valid. In support of this claim, the Hellmanns state there was no evidence GPI ratified the acts of Second GPI and reiterate their argument that Second GPI had no authority to act because it had never received an assignment. These arguments are incorrect because Second GPI merged into GPI.

Both GPI and Second GPI were corporations organized under the Missouri Nonprofit Corporation Law. They merged in 2011. Thus, the applicable rule is stated in Section 355.636,1 which governs the effect of mergers of corporations in Missouri. That section provides as follows:

When a merger takes effect:

(1) Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;
(2) The title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment subject to any and all conditions to which the property was subject prior to the merger;
(3) The surviving corporation has all liabilities and obligations of each corporation party to the
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