Hines v. Smith
| Decision Date | 20 September 2005 |
| Docket Number | No. 26451.,26451. |
| Parties | Jody R. HINES and Vern U. Hines, Jr., Plaintiffs-Appellants, v. William E. SMITH and Jessie L. Smith, Defendants-Respondents, and Old Kinderhook Development Co., LLC., Plaintiff-Respondent, v. William E. Smith and Jessie L. Smith, Defendants-Respondents, and Jody R. Hines, Defendant-Appellant. |
| Court | Missouri Supreme Court |
Susan K. Roach, Clayton, MO, for Appellants.
James E. Baldwin, Lebanon, MO, for Respondents William & Jessie Smith.
C. Bradley Tuck, Springfield, MO, for Respondent Old Kinderhook Development Co., LLC.
This appeal is the result of litigation between Jody and Vern Hines ("the Hineses"), Ed and Jessie Smith ("the Smiths"), and Old Kinderhook Development Company, L.L.C. ("Old Kinderhook"), over a contract for deed entered between Jody and her father, Ed, on property now owned by Old Kinderhook.1 The litigation commenced with Jody and her husband, Vern, filing a petition against Ed and his wife, Jessie, asking for relief on four counts. Count I was an action for specific performance of the contract for deed. Count II requested damages for the denial of use and enjoyment of the property after Ed changed the locks on the property. Count III was a conversion action alleging that the Smiths converted a boat dock and lift when they moved the dock and lift to another property.2 Count IV requested that the court partition the property, order an accounting of the rents, issues, and profits the Smiths obtained from the property, and divide the rents, issues, and profits between the two couples according to their respective interests.
The Smiths filed a counterclaim against the Hineses, which included two counts. Count I was a breach of contract action, alleging that Jody never paid the utility bills for December 1996 and January 1997 and the tax statements for 1996, and that Jody did not make loan payments or insurance, tax, and utility reimbursements in a timely fashion as required by the contract. Count II was a declaratory judgment action in which the Smiths sought to clarify the rights, obligations, and liabilities of the parties under the Contract for Deed.
The Hineses answered the counterclaim by denying that Jody failed to make the required payments. They further asserted that Ed breached the contract himself in November 1996, prior to any alleged breach by Jody, when he executed a deed conveying the property to Ed Smith and Jessie Smith, husband and wife.3
All of the lawsuits were consolidated for trial. The trial court denied all four counts of the Hineses' petition; it granted the Smiths' counterclaim on the breach of contract action against the Hineses and denied the declaratory judgment action. The Hineses appeal the denial of all four of their counts; however, they do not appeal the grant of judgment in favor of the Smiths for a breach of contract. As such, it is unappealed and, therefore, a final judgment. Bishop v. Shelter Mut. Ins. Co., 129 S.W.3d 500, 502 n. 1 (Mo.App. S.D.2004). That failure is dispositive on the issues raised in the Hineses' point relied on.
The point relied on states:
THE TRIAL COURT ERRED IN [ITS] JUDGMENT DENYING COUNT I OF [APPELLANTS'] PETITION FOR SPECIFIC PERFORMANCE, COUNT II FOR LOSS OF ENJOYMENT, COUNT III FOR CONVERSION[,] COUNT IV FOR AN ACCOUNTING AND PARTITION AGAINST RESPONDENTS [SMITHS], [APPELLANTS'] COUNTERCLAIM AGAINST RESPONDENT OLD KINDERHOOK AND [APPELLANTS'] CROSSCLAIM AGAINST [RESPONDENTS] [SMITHS] FOR THE REASON THAT THE APPELLANTS WERE NOT IN DEFAULT OF THE CONTRACT FOR DEED SINCE APPELLANTS SUBSTANTIALLY PERFORMED THEIR OBLIGATIONS UNDER THE CONTRACT AND RESPONDENT WILLIAM SMITH CONVEYED THE PROPERTY TO RESPONDENT JESSIE SMITH IN VIOLATION AND BREACH OF THE CONTRACT FOR DEED.4
A brief review of the facts is necessary to our analysis. Ed and Joan Smith purchased a vacation home in the Lake of the Ozarks area on June 17, 1977. Their daughter, Jody, and her husband, Vern, also used the vacation home. In 1984, the Hineses entered into a verbal agreement with Ed to purchase a half-interest in the home. The agreement also included a provision specifying that fees for expenses, maintenance, taxes, and insurance would be shared equally. Jody began making payments on the home on April 15, 1984.
Joan became ill in 1994; she died in September 1995. Before Joan's death, Jody and Ed had agreed that they needed to execute a written contract for deed. The written contract, which was only between Jody and Ed, memorialized the original verbal agreement between the parties and recognized that Jody had been making payments on the property since April 15, 1984. Jody agreed, pursuant to the contract, to purchase her half-interest in the property. The contract also provided that the parties would equally share costs for expenses, maintenance, taxes, and insurance. Additionally, the contract included the following default clause:
If Purchaser shall fail for a period of thirty (30) days to 1) pay Seller any of the sums herein agreed to be paid after such sums are due or 2) comply with any of the covenants on Purchaser's part to be kept and performed, then Seller shall be released from his obligation to convey the property and Purchaser shall forfeit all right thereto and all payments theretofore made by Purchaser under this contract shall be considered as compensation for the use and occupancy of the property and shall be retained by Seller. The thirty (30) day period of Purchaser's failure to perform Purchaser's obligations hereunder shall be measured from the tenth (10th) day following receipt of notice of default by Purchaser from Seller.
....
The extension of time of payment of any one or more installments as provided herein or the permitting of same to remain due for a longer period than herein provided or the waiver of any rights of the Seller under this Contract shall not preclude or prevent Seller from treating this Contract at an end for any subsequent breach.
In another clause, the contract prohibited Ed from conveying the property:
Seller, for so long as this contract is executory and Purchaser is not in default hereunder, shall not convey the property described herein or encumber it in any way or otherwise affect record title to the property as it now appears in the records of the Camdenton [sic] County Recorder's Office in the State of Missouri.
After Jody's mother passed away, Jody's relationship with Ed deteriorated. The Smiths married on February 14, 1996. The parties could not agree about how and when the lake property should be used and Jody authorized Ed to sell the property to the Skol de Terre company.5 In 1996, Ed attempted to sell the property to Skol de Terre, but the sale did not materialize. Jody admitted that she had given Ed the authority to make the initial sale to Skol de Terre, but claimed she did not authorize a subsequent sale to Old Kinderhook. Additionally, she testified that although she never specifically revoked the authority she granted regarding the initial sale, she believed any authority she had given had been revoked when the sale to Skol de Terre did not materialize. Ed admitted that he executed a deed in November 1996 conveying the property to Ed Smith and Jessie Smith, husband and wife.
In 1997, a dispute arose regarding the timeliness of Jody's payments. Ed claimed he sent the utility bills for December 1996 and January 1997 and the tax statement for 1996 to Jody via her attorney in March 1997. On May 5, 1997, Ed's attorney sent a letter to Jody's attorney requesting a payment for Jody's share of the December 1996 and January 1997 utility bills. Jody admitted that she did not timely pay the utility bills for December 1996 and January 1997, but she claimed that she never received the bills from Ed. When confronted with the May 5, 1997 letter stating...
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