HFC Invs., LLC v. Valley View State Bank

• Decision Date: 21 February 2012
• Docket Number: Nos. WD 72962,WD 73071.,s. WD 72962
• Citation: 361 S.W.3d 450
• Parties: HFC INVESTMENTS, LLC, et al., Appellants, v. VALLEY VIEW STATE BANK d/b/a Valley View Bank, et al., Respondents.
• Court: Missouri Court of Appeals

361 S.W.3d 450

HFC INVESTMENTS, LLC, et al., Appellants,

v.VALLEY VIEW STATE BANK d/b/a Valley View Bank, et al., Respondents.

Nos. WD 72962

WD 73071.

Missouri Court of Appeals, Western District.

Feb. 21, 2012.Motion for Rehearing and/or Transfer to

Supreme Court Denied March 27, 2012.

John M. Duggan and Deron A. Anliker, Overland Park, KS, for appellant.

Thomas M. Martin, Kansas City, MO, for respondent.

Before VICTOR C. HOWARD, P.J., and ALOK AHUJA and KAREN KING MITCHELL, JJ.

ALOK AHUJA, Judge.

HFC Investments, LLC, and BEO5 Investments, LLC (collectively “HFC”) sued Valley View State Bank and 95th Street Service Corporation (collectively “Valley View”) in the Circuit Court of Jackson County, seeking declaratory relief and money damages arising out of a transaction involving real estate located in Johnson County, Kansas. Valley View moved to dismiss on the basis of forum non conveniens, and in reliance on § 508.030,¹ which requires that actions affecting title to real estate be brought in the county in which the property is located. The circuit court granted the motion to dismiss based solely on § 508.030. HFC appeals. We affirm.

Factual Background

HFC entered into an agreement with Valley View in May 2009. The agreement provided for the transfer of title to real estate in Johnson County, Kansas from HFC to Valley View State Bank and its wholly owned subsidiary, 95th Street Service Corporation. The agreement also provided HFC with an option to repurchase the property under specified circumstances. HFC alleges that Valley View wrongfully denied it the right to exercise its option. On April 14, 2010, HFC, along with BEO5 Investments, LLC (alleged to be the successor-in-interest and assignee of certain of HFC's rights under the May 2009 agreement), filed a fourteen-count petition in the Circuit Court of Jackson County naming Valley View State Bank and 95th Street Corporation as defendants. HFC's petition alleges claims for breach of contract, promissory estoppel, fraudulent inducement, negligent misrepresentation, breach of the duty of good faith and fair dealing, breach of fiduciary duty, tortious interference with contract and business expectancy, unjust enrichment, and negligent supervision. All fourteen counts center on Valley View's grant of the repurchase option to HFC, and its failure to honor the option. The petition seeks money damages, but also in two counts seeks a declaratory judgment “that the May 2009 Agreement and deeds executed as a part thereof are not binding on [HFC] and are null and void.”

Valley View filed a motion to dismiss, arguing that the trial court lacked jurisdiction under § 508.030. Valley View argued in the alternative that the trial court should dismiss on the ground of forum non conveniens, because the property and most of the witnesses and parties were located in Kansas, and the relevant transactions occurred in Kansas.

During oral argument on Valley View's motion, HFC's counsel contended that his clients were seeking only monetary relief; counsel stated that “we're prepared to amend, if necessary,” to withdraw the counts seeking declaratory relief invalidating the deeds, and to eliminate any suggestion that HFC was seeking specific performance of the repurchase option.

The trial court granted the motion to dismiss, relying exclusively on § 508.030. HFC appeals.

Analysis

Section 508.030 provides:

Suits for the possession of real estate, or whereby the title thereto may be affected, or for the enforcement of the lien of any special tax bill thereon, shall be brought in the county where such real estate, or some part thereof, is situated.²

Section 508.030 applies to actions which seek to directly affect title to property; the statute does not apply where any effect on title would be only incidental or collateral to the relief a plaintiff seeks.

[T]he phrase “whereby the title may be affected” in § 508.030 has been held to mean the judgment must operate directly upon the title to the real estate. In order for “title to be affected” so as to predicate venue in the county where the land is located, title to the land must be the subject of the controversy. It is not enough for the judgment to affect the title incidentally or collaterally.

Sabatino v. LaSalle Bank, N.A., 96 S.W.3d 113, 116 (Mo.App. W.D.2003) (citation omitted; action claiming that debt had been satisfied did not affect title to real property, even though debt was secured by lien on real estate); see also Mission Med. Grp., P.A. v. Filley, 879 S.W.2d 743, 746 (Mo.App. W.D.1994).

Counts III and IV of HFC's petition seek relief which would operate directly upon the title to real estate, and therefore fall within § 508.030. Both counts allege that Valley View fraudulently induced HFC to enter into the May 2009 Agreement and execute the deeds transferring property to Valley View, and each count seeks a declaration “that the May 2009 Agreement and deeds executed as a part thereof are not binding on [HFC] and are null and void,” or are “void and voidable.” The actions subject to § 508.030 “include[ ] suits to declare trusts in realty, to cancel deeds to realty, to contest wills devising realty, to impose easements on realty, and to enforce specific performance of contracts to convey realty.” Sisk v. Molinaro, 376 S.W.2d 175, 180 (Mo.1964) (emphasis added). The fact that Counts III and IV seek a declaration as to the invalidity of the May 2009 Agreement, not merely of the deeds executed in connection therewith, does not alter this conclusion. See Mercantile Trust Co. v. Anderson, 611 S.W.2d 548, 553 (Mo.App. E.D.1981) ( “Even if the suit is characterized as a suit upon a contract, which as an incident thereto, requires the delivering of a deed as a muniment of title, the result would be no different.”). Moreover, the characterization of Counts III and IV is unaffected by the fact that, in the same petition, HFC asserted additional counts seeking money damages arising out of the same set of operative facts. Skatoff v. Alfend, 411 S.W.2d 169, 172 (Mo.1967) (“The joining of the action to set aside the fraudulent conveyance [of real estate] with the [non-real estate related] action for accounting and partnership dissolution does not permit the plaintiff to avoid the mandatory effect of § 508.030, RSMo 1959, V.A.M.S., as to the place of bringing an action affecting title to real estate.”).³

HFC argues that the natures of its causes of action should be determined by the factual allegations of its petition, not by its prayers for relief. As HFC points out, “[g]enerally, the prayer for relief is not considered part of the petition.” City of Greenwood v. Martin Marietta Materials, Inc., 311 S.W.3d 258, 264 (Mo.App. W.D.2010); see also Bowles v. All Counties Inv. Corp., 46 S.W.3d 636, 640 (Mo.App. S.D.2001). ⁴ There are exceptions to this general rule, however. For example, when it is unclear from the body of the petition what cause of action the plaintiff seeks to assert, courts have resolved the ambiguity by looking to the plaintiff's prayer for relief. See, e.g., Metts v. Clark Oil & Refining Corp., 618 S.W.2d 698, 705 (Mo.App. E.D.1981) (“The prayer may be considered in ascertaining the type of action attempted to be set forth by the pleader.”); Sears v. Norman, 543 S.W.2d 300, 303 (Mo.App.1976) (same); Duvall v. Stokes, 270 S.W.2d 419, 424 (Mo.App.1954) (“[i]f the allegations of fact are ambiguous or susceptible of two constructions, the prayer may be looked to for the purpose of ascertaining the intention of the pleader”).

More significantly, this Court has in prior cases looked to the relief prayed for in order to determine the applicability of § 508.030. See, e.g., Mission Med. Grp., 879 S.W.2d at 746 (“Mission is pursuing a tort claim for negligent supervision of the minor children, and is seeking only money damages. A suit for money damages alone does not involve any issue directly affecting title to real estate and will not be considered ‘local’ under § 508.030.”); Mercantile Trust Co., 611 S.W.2d at 554 (distinguishing between two counts containing similar allegations (concerning a contract to make a will) based on the relief prayed for in each count). Given that the operation of § 508.030 depends upon the nature of the relief which may ultimately be awarded in the action, we fail to see how the applicability of the statute in a specific case could be determined without reference to the relief for which the plaintiff prays. See, e.g., Bladdick v. Ozark Ore Co., 381 S.W.2d 760, 768 (Mo.1964) (§ 508.030 inapplicable because “ [t]he object of this petition is to recover actual and punitive damages for an alleged wrongful, unlawful and malicious destruction, removal and extinguishment of a roadway [on defendant's property] over which plaintiff claims a right of way [by virtue of an easement].... It is a personal action for damages asking for no relief other than an ordinary money judgment.” (emphasis added)); cf. State ex rel. Leonardi v. Sherry, 137 S.W.3d 462, 471 (Mo. banc 2004) (“[L]abeling an action as equitable or legal in the modern sense typically bespeaks the type of relief being sought.” (emphasis added)).

We recognize that, in State ex rel. Hammerstein v. Hess, 472 S.W.2d 362 (Mo. banc 1971), which involved the application of § 508.030, the Supreme Court stated broadly that “[i]t is well established that the form of an action is determined by the substance of the petition, and that the demand for relief, or the prayer, is no part of the cause of action.” Id. at 364. In Hammerstein, the plaintiffs' original petitions sought equitable relief to prevent a trustee from terminating a trust. Id. at 363. The plaintiffs in one of two consolidated actions later filed a “Memorandum of Amendment of Prayer of Plaintiffs' Petition,” which explicitly prayed that the title to real estate held by the trust be quieted in the plaintiffs' names. Id. at 363–64. The Court's statements concerning the status of a ...