Hess v. Chase Manhattan Bank USA, N.A., No. WD 64370 (MO 3/28/2006)
| Decision Date | 28 March 2006 |
| Docket Number | No. WD 64370,Consolidated with WD 64407.,WD 64370 |
| Parties | DENNIS E. HESS, Appellant-Respondent, v. CHASE MANHATTAN BANK USA, N.A., Respondent-Appellant. |
| Court | Missouri Supreme Court |
Appeal from the Circuit Court of Platte County, Missouri, The Honorable Abe Shafer, IV, Judge.
Before Howard, P.J., Smith, C.J., and Newton, J.
Dennis E. Hess (Hess) appeals the circuit court's dismissal on the pleadings, pursuant to Rule 55.27(a)(6),1 for failure to state a claim upon which relief can be granted, of Count III of his second amended petition, for actual and punitive damages, attorney's fees, and costs, against the respondent and cross-appellant, Chase Manhattan Bank (Chase), alleging a violation of the Missouri Merchandising Practices Act (MPA), Chapter 407, specifically a violation of § 407.020.1.2 Hess alleged in Count III that Chase, in violation of § 407.020.1, failed to disclose the involvement of the United States Environmental Protection Agency (EPA) with the real property Chase sold to him in 1999. Chase cross-appeals the trial court's judgment for Hess, awarding him $52,000 in actual damages on Count II of his second amended petition, alleging common law fraud with respect to the same failure to disclose alleged in Count III.
In his sole point on appeal, Hess claims that the trial court erred in dismissing his MPA count, Count III, pursuant to Rule 55.27(a)(6), for failure to state a claim upon which relief could be granted, on the basis that the version of § 407.025.1 of the MPA in effect at the time of the parties' real estate transaction, providing for a private cause of action for a violation of § 407.020.1, did not apply to real estate transactions to allow a private cause of action by Hess against Chase, as alleged in Count III. Hess claims that the trial court's dismissal on that basis was error because, inasmuch as § 407.025.1 is procedural and remedial, rather than substantive, the court, rather than applying the version of § 407.025.1 in effect at the time of the transaction, should have applied retrospectively the 2000 amended version of § 407.025.1, which extended its application to the parties' 1999 real estate transaction, authorizing a private cause of action by Hess against Chase for an alleged violation of § 407.020.1. In its sole point on cross-appeal, Chase claims that the trial court erred in overruling its motion for a directed verdict, at the close of the plaintiff's and all the evidence, and its motion for judgment not withstanding the verdict (JNOV), with respect to the judgment for Hess on his fraud count, Count II, because Hess did not make a submissible case on Count III with respect to the requisite proof elements of that claim that Chase owed a duty to Hess to disclose the EPA's involvement with the property it sold to him and that Hess relied on Chase's silence with respect to the EPA's involvement in purchasing the property.
As to Hess's appeal, we reverse and remand for a trial on Count III. With respect to Chase's cross-appeal, as to Count II, we affirm.
In 1999, Hess was living and working in the Kansas City area. On April 23, 1999, he purchased from Chase property located at 19015 Humphrey Access Road in Platte County, Missouri, for $52,000. At the time, there was located on the property a three-bedroom home that was in need of extensive repairs, which Hess planned to rehabilitate.
At the time the property was sold to Hess, the EPA was investigating paint and solvent dumping on the property, which had been occurring since 1988. Chase had foreclosed on the property and had purchased it at the foreclosure sale on January 22, 1999. The property's previous owner, Billy Stevens, was convicted of several federal criminal charges on December 21, 1998, for various acts of dumping hazardous waste on the property. Prior to the sale of the property to Hess, the EPA had numerous contacts with Chase and its representatives regarding its investigation of the property. However, Chase never disclosed this fact to Hess prior to the sale.
Prior to purchasing the property, Hess had visited the property on several occasions and did observe some debris. However, he never observed any paint cans or any other signs of hazardous waste dumping. The paint cans that were on the property were not easily accessible or visible. They were located in the foundation of an old barn that no longer existed, which was located about 300 feet southwest of the house and was overgrown with weeds. When the paint cans were ultimately discovered, Hess learned that they came from the Mizzou Paint Company, a Kansas City painting firm that was owned by Stevens.
At some point, Hess hired Stinnett Construction to pull up two trees and bury or burn all the trash and debris located on the property, including the paint cans. Following the required inspections by local government agencies, Hess obtained a permit from the City of Platte City to burn and dispose of the trash and debris. At Hess's direction, Stinnett dug three large holes on the property, one of which was used to bury the paint cans.
After the paint cans had been buried, Hess was contacted by the EPA, advising him that it had received a report that he had disposed of hazardous waste on the property. He later learned that the hazardous waste to which the EPA was referring was the paint cans. The EPA ultimately issued a "Unilateral Administrative Order," dated January 18, 2000, ordering Hess to remove the buried paint cans within ten days. Hess hired Kingston Environmental Services to perform the clean-up, which was done with oversight by the EPA's contractor, Ecology & Environment. In February of 2002, at Hess's request, the EPA issued him a clean-bill-of-health letter, confirming that he had fully complied with its administrative order.
On April 20, 2000, Hess filed suit in the Circuit Court of Platte County, Missouri, against Chase, Americana Real Estate, Inc., and Kenneth Karns. Americana had handled the sale of the property to Hess for Chase. Karns, a licensed real estate agent, who was employed by Americana, handled the sale for Americana. On August 23, 2002, Hess, with leave of the court, filed a second amended petition for damages and equitable relief, alleging six counts, including Counts II and III against Chase alleging fraudulent non-disclosure, and a violation of § 407.020 of the MPA, respectively, both of which were based on Chase's alleged failure to disclose to him at the time of sale that the EPA was involved with the property.
On September 23, 2003, Chase filed a motion to dismiss Count III of Hess's second amended petition for failure to state a cause of action on which relief could be granted. In its motion, Chase alleged that Hess, in accordance with the version of § 407.025.1 in effect at the time of the sale of the property, could not maintain a private cause of action against it for a violation of § 407.020.1. The motion was taken up and heard on October 6, 2003. Hess, in opposition to the motion, argued that the amended version of § 407.025.1, allowing a private cause of action with respect to real estate transactions for a violation of § 407.020.1, should be applied retrospectively to the parties' real estate transaction in that the amendment was procedural and remedial, not substantive. On October 16, 2003, the trial court dismissed Count III.
On January 9, 2004, Hess dismissed his claims against Americana and Karns, pursuant to a settlement agreement he had reached with them. On April 29, 2004, Chase filed a motion for summary judgment on Hess's claim in Count II for fraudulent non-disclosure, alleging that it had no duty to disclose the EPA's involvement with the property because the parties had contractually agreed that Hess could not construe its silence as an implied representation of any fact. The motion was overruled on April 29, 2004.
On May 3, 2004, Hess's claim against Chase on Count II, for fraudulent non-disclosure, proceeded to a jury trial. At the close of Hess's evidence, Chase moved, inter alia, for a directed verdict on Count II for fraudulent non-disclosure, alleging that Hess failed to make a submissible case because Chase had no duty to disclose the EPA's involvement with the property, which motion was overruled. At the conclusion of all the evidence, Chase renewed its motion, which was again overruled. Count II was submitted to the jury, on which it found for Hess, assessing actual damages of $52,000, but denying punitive damages.
On June 8, 2004, Chase filed a motion for JNOV, alleging that Hess failed to make a submissible case as to Count III because Chase had no legal duty to disclose that the EPA was involved with the property, and because Hess did not present substantial evidence that Chase had a duty to disclose or that Hess had a right to rely on Chase to disclose, which motion was denied. On June 9, 2004, Hess filed a post-trial motion requesting that the trial court reinstate his MPA claim, enter a judgment in favor of Hess on that claim based upon the facts presented at trial, grant him a new trial to determine actual and punitive damages, and award Hess his attorney's fees and costs, and injunctive relief. On July 9, 2004, the trial court denied Hess's post-trial motion, accepted the jury's verdict, and entered its final judgment in favor of Hess on his claim of common law fraud.
This appeal and cross-appeal followed.
In his sole point on appeal, Hess claims that the trial court erred in dismissing his MPA count, Count III, pursuant to Rule 55.27(a)(6), for failure to state a claim upon which relief could be granted, on the basis that the version of § 407.025.1 of the MPA in effect at the time of the parties' real estate transaction, providing for a private cause of action for a violation of § 407.020.1, did not apply to such transactions to allow a private cause of action by Hess against Chase for...
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