Hoag v. McBride & Son Inv. Co., Inc.

• Decision Date: 10 March 1998
• Docket Number: No. 71489,71489
• Citation: 967 S.W.2d 157
• Court: Missouri Court of Appeals
• Parties: J. Daniel HOAG, et al., Appellants/Cross-Respondents, v. McBRIDE & SON INVESTMENT CO., INC., et al., Respondents/Cross-Appellant.

Page 157

967 S.W.2d 157

J. Daniel HOAG, et al., Appellants/Cross-Respondents, v. McBRIDE & SON INVESTMENT CO., INC., et al Respondents/Cross-Appellant.

No. 71489.

Missouri Court of Appeals,

Eastern District,

Division Three.

March 10, 1998.

Application for Transfer Denied

June 16, 1998.

Thomas B. Weaver, Paul N. Venker, Armstrong, Teasdale, Schlafly & Davis, Timothy Phillips, Phillips & Phillips, St. Louis, for Appellants.

John W. Moticka, Lisa A. Nielsen, Greensfelder, Hemker & Gale, St. Louis, G. Carroll Stribling Jr., Mary W. Murphy, Ziercher & Hocker, Clayton, for Respondents.

AHRENS, Presiding Judge.

I. Introduction

Plaintiffs, landowners and trustees of the Riverwood Development Association, filed a seven count petition against the developers of Riverwood, Community Savings Service Corporation and McBride Investments. Plaintiffs' claims related primarily to the creation of a covenant in favor of plaintiffs regarding a 9.5 acre plot of land. Defendants filed motions with the trial court seeking either dismissal or summary judgment of plaintiffs' claims. Plaintiffs filed a motion for partial summary judgment on their claims. The trial court granted both defendants' and plaintiffs' motions in part and entered judgment accordingly. Both plaintiffs and McBride appeal from the trial court's judgment. We affirm.

II. Facts

Community Savings Service Corporation (CSSC) purchased the 9.5 acre tract in dispute as part of its acquisition in 1972 of 327 acres of property that now constitute the Riverwood Development in Northwest St. Louis County. In the Master Indenture for the Riverwood Development, CSSC divided the Riverwood Development into Riverwood Estates, Riverwood Trails and multi-family and elderly areas. The 9.5 acres in question lie at the southeast corner of the Riverwood Estates' portion of the development and is bordered by Howdershell Road to the east.

Sometime after it acquired the 327 acres, CSSC sought to rezone the 327 acres for real estate development. The Planning Commission recommended the rezoning and the St. Louis County Council adopted that recommendation and rezoned the property for real estate development.

In 1977, CSSC petitioned St. Louis County to establish a Planned Environmental Unit (PEU) known as the Riverwood Development. A PEU is an alternative zoning procedure giving the developer more flexibility by permitting it to put differing building types, including supporting community facilities, on the same development to promote diverse, sound, urban developments. See S.L.C.R.O. section 1003.187(2). Also, the general PEU zoning ordinance for St. Louis County, ordinance 1003.187, requires the County Council to determine density limitations for each development before it grants approval of the developer's final development plan.

St. Louis County granted CSSC initial permission to develop Riverwood as a PEU in 1978 when it adopted Ordinance 8674. As part of obtaining final approval for its proposed PEU, section 1003.187 required CSSC to submit a final development plan for the Riverwood Development and to record indentures for the development. S.L.C.R.O. section 1003.187.

CSSC submitted its final development plan for Riverwood to the St. Louis County Planning and Zoning Commission in October 1978. The relevant portion of the Final Development Plan shows R-2 and R-3 residential development only with no commercial development on the property. Also, the plan states that the 9.5 acre site in question was "reserved for school site" and "this area is part of the PEU legal description-reserved for school site, comply with St. Louis County Ordinance No. 8574 (the ordinance approving the Riverwood PEU) Condition 4-C." Condition 4-C recites:

"Provide for the dedication of the school site as indicated in the final development plan to the Hazelwood School District. If such dedication is not accepted, or if it is refused, within three years after 90% of the residential units are completed, the dedication instrument shall provide for an offer to the St. Louis County for use as a public park. If the property is not accepted by St. Louis County for the public park use, or is refused for such use, within three years after 90% of the residential units are developed, then the property shall either vest in the trustees as common ground, or if there is available unused density credits under this ordinance, the site may be developed for residential uses."

The St. Louis County Council approved CSSC's final development plan in October, 1978 and CSSC recorded the plan with the St. Louis County Recorder of Deeds. ¹

In December 1978 CSSC prepared and recorded the Riverwood Development Master Indenture. The Master Indenture recites that the Riverwood Development would be divided into three areas: (1) Riverwood Estates; (2) Riverwood Trials; and (3) multifamily and elderly areas. The indenture also states that each record owner automatically becomes a member of the Riverwood Development Association. Paragraph 10(c) of the indenture states that the trustees of the Riverwood Development Association or any lot owner have the right to enforce all covenants, conditions, restrictions and provisions of the Master Indenture. CSSC amended paragraph 10(c) in 1981 so that the trustees had the right to collect their legal fees against any owner in enforcing any covenant, restriction, rule or regulation.

A joint venture between CSSC and several subsidiaries of McBride and Sons began to develop Riverwood in early 1979. CSSC and McBride sold all lots in Riverwood by warranty deed subject to all restrictions and ordinances of record and by reference to the lot number on the development plan.

CSSC and McBride offered the 9.5 acres in question to the St. Louis County Parks Department on January 7, 1985, pursuant to Condition 4-C and the Riverwood Final Development Plan. The Parks Department refused the 9.5 acres, citing its belief that the maintenance of such a small tract of land resulted in an extremely high cost to benefit ratio. CSSC and McBride then offered the 9.5 acres to the Hazelwood School District in April 1985. The Hazelwood School District refused the 9.5 acres because the development of the land as a school would not be cost effective.

In August 1985, McBride requested the St. Louis County Planning Commission to delete Condition 4-C because McBride wanted to develop the 9.5 acres residentially. In this request, McBride claimed that the Parks Department and the Hazelwood School District had refused the 9.5 acres and that general density credits were available for further residential development.

The Planning Commission recommended the deletion of Condition 4-C to the St. Louis County Council because it found that density credits were available for additional residential development under the Riverwood PEU. The Council approved the amendment of the Riverwood PEU by deleting Condition 4-C in September 1985.

In December 1985, CSSC conveyed title to the 9.5 acres of land to the Riverwood Estates Development Company, a joint venture between CSSC and McBride. Riverwood Estates Development then conveyed title to the disputed tract of land in February, 1986 to Riverwood Place Development, another joint venture between CSSC and McBride. Next, Riverwood Place Development conveyed title to the 9.5 acres in September 1989 to McBride Investment, a subsidiary of McBride & Sons Investment, Co. In 1990, the Resolution Trust Company (RTC) placed CSSC's parent corporation, Community Federal Savings and Loan, into receivership.

In late 1989, McBride informed the homeowners in Riverwood Development that it intended to petition the St. Louis County Council to rezone the 9.5 acres so that it could develop the property commercially. At that time, McBride had sold all 364 homes in Riverwood Trials and had sold 400 of the 436 homes in Riverwood Estates. The St. Louis County Council granted McBride's request and rezoned the 9.5 acres for commercial use in 1990.

Plaintiffs, as individual landowners and trustees of the Riverwood Development Association, filed a four count petition against McBride and CSSC in June 1990. Plaintiffs filed their third amended petition in December 1993.

Plaintiffs' third amended petition contained seven counts. In Count I, Plaintiffs sought a declaration from the trial court that McBride and CSSC entered into a binding agreement with the Riverwood landowners that title to the 9.5 acres would vest in the trustees if the Parks Department and the School District refused the land. Plaintiffs also requested the trial court to force McBride to comply with this promise by granting plaintiffs' request for specific performance of the agreement.

Counts II and III were negligent and intentional misrepresentation claims based on certain representations McBride and CSSC made to prospective home buyers. Plaintiffs claimed in Count IV that CSSC and McBride dedicated the disputed land to the public when it designated the land as "reserved for school" and "developed according to Condition 4-C" in its 1978 final development plan.

In Count V of their petition, plaintiffs requested the trial court to declare that CSSC and McBride had created an easement in favor of the landowners so that title to the 9.5 acres would vest in the trustees to be used as common ground. Plaintiffs' Count VI was an action for breach of fiduciary duty against certain former trustees of the Riverwood Development Association. In their final count, plaintiffs asserted an ejectment action against McBride. Plaintiffs also petitioned the trial court to order McBride and CSSC to pay their attorney's fees pursuant to paragraph 10(c) of the master indenture.

CSSC, McBride and the former trustees filed motions to dismiss or in the alternative for summary judgment as to all of plaintiffs' counts. Plaintiffs filed a motion for partial summary judgment as to Counts I and V of their petition. The trial court granted CSSC's motion to dismiss as to...