Jun v. Murphy, 53972

• Decision Date: 29 November 1988
• Docket Number: No. 53972,53972
• Citation: 763 S.W.2d 290
• Parties: Steven JUN and Susan Jun, Plaintiffs-Respondents, v. James MURPHY, d/b/a Metro Business Brokers, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 290

763 S.W.2d 290

Steven JUN and Susan Jun, Plaintiffs-Respondents, v. James MURPHY, d/b/a Metro Business Brokers, Defendant-Appellant.

No. 53972.

Missouri Court of Appeals,

Eastern District,

Division Three.

Nov. 29, 1988.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Jan. 4, 1989.

Application to Transfer Denied

Feb. 14, 1989.

Harry F. Swanger, St. Louis, for defendant-appellant.

Jeffress B. Hailand, Clayton, for plaintiffs-respondents.

SIMEONE, Senior Judge.

This is an appeal by the defendant-appellant, James M. Murphy, d/b/a, Metro Business Brokers from a judgment of the circuit court of St. Louis County entered on September 25, 1987 awarding plaintiffs, Mr. and Mrs. Steven Jun, $10,000 for the return of earnest money they deposited for the purchase of a business, and denying Murphy's counterclaims for damages and attorney fees.

In December, 1984, Steven Hong Jun and his wife, Susan, entered into an "Offer To Purchase" with Nildey Corporation through its vice president, Harriet Yedlin, to purchase Christy Fabric Care Center, a dry cleaning laundry business located in the City of St. Louis. The purchase price was $105,000 and closing was to take place on January 25, 1985. A number of conditions or "addendum" were made part of the contract to purchase. ¹

On January 10, 1985, the plaintiffs notified Harriet Yedlin concerning the sale of the laundromat of their intent "not to consumate [sic] the purchase of Christy Fabric Center at on Jan. 24, 1985 as heretofore agreed...."

The earnest money was not returned after demand and after notice to defendant of the Juns' election not to close. On February 20, 1985, plaintiffs filed their petition in one count in the circuit court of St. Louis County alleging the contract, the deposit of $10,000 earnest money on December 20, 1984, the contingencies and that said "contingencies were not met by the closing date," and prayed recovery for the $10,000 earnest money.

On May 1, 1985, appellant answered the petition denying the allegations and asserting that the Suns notified Murphy in writing that they refused to "consummate the purchase" and thereby "forfeited" the earnest money funds. ² This answer was filed by appellant's attorney, at the time, Morris K. Ebeling, Esq.

The cause was set on the docket but removed therefrom. On August 14, 1987, plaintiffs filed a first amended petition in three counts. Count I sought recovery of the earnest money because certain contingencies were not met, and prayed return of the earnest money; Count II alleged that a document showing that certain contingencies were met was fraudulent and prayed damages; Count III alleged that the contingencies were so uncertain that the buyers' obligations must fail for indefiniteness.

On September 8, 1987, Murphy answered the first amended petition. He denied the allegations in the three counts and then (1) sought an order of interpleader; (2) asserted certain affirmative defenses in that plaintiffs-Sun forfeited the earnest money and had purchased another laundromat while the contract was in existence; (3) asserted a counterclaim for damages in the amount of $1,500 and a counterclaim for attorney's fees in the amount of $7,500; and (4)(a) asserted that Morris K. Ebeling, the former attorney for Murphy who now resides outside Missouri is an "indispensable party" to the action because he holds the $10,000 in escrow and has possession of all original files, records and documents and (b) asserted that one Ronald Valicoff is a partner with Murphy. Murphy asserted that both Ebeling and Valicoff are "indispensable" parties to the proceeding and must be joined.

This answer was followed by two motions filed by Murphy--one filed on September 9, 1987 and one filed on September 22, 1987. The first motion sought an order "Joining Persons Needed For Just Adjudication" pursuant to Rule 52.04. He moved for an order joining Ebeling and Valicoff, both of whom resided outside Missouri. He alleged that without Ebeling, complete relief cannot be accorded among the parties and no final judgment can be entered which will do justice. He contended that Ebeling has the $10,000, and has possession of files and records and is the party who defended the initial lawsuit and prepared the original pleadings, and is privy to the reasons and circumstances surrounding the plaintiffs' repudiation of the contract. Murphy further alleged in this motion that (1) Valicoff should be made a party because he is a partner of Murphy, and (2) Harriet Yedlin also claims an interest in the earnest money held by Ebeling. Hence Murphy prayed that all three of these persons be made parties.

Then on September 22, 1987, appellant Murphy renewed this motion--before the trial court--"Motion For Order Joining Persons For Just Adjudication (Indispensable Parties) and/or For Interpleader Cross-Claims Pursuant to Rule 52.04, Rule 52.07 and Rule 55.27(g)(2)(3)." In this motion appellant moved for an order to require Ebeling, Valicoff and Yedlin to appear in the cause. The reasons therefor were that (1) on September 10, a pretrial conference was held with the presiding judge who rejected defendant's request to add parties, (2) Harriet Yedlin has demanded one-half of the earnest money, (3) Ebeling, who holds the earnest money, has controlled its distribution and he has the original file, (4) Valicoff, a partner, is the party who handled the sale and as a partner, should be joined, and (5) the two new counts in the amended petition (fraud and uncertainty) have opened up a "pandora's box" which "absolutely" necessitates these parties, and because counsel has been unable to adequately defend his client without a file, records and notes, these additional parties should be joined in the interests of justice, or that he should be allowed to "interplead" ³ them for "cross-claims."

Trial was held on September 23 and 24, 1987 before the court without a jury.

At the beginning of the hearing, the court referred to the motion adding additional defendants. The court stated that the motion had been heard by the presiding judge and denied twice. Counsel renewed the motion believing it to be jurisdictional. The court stated its position that the Presiding Judge had denied the request and "I feel as though I'm bound by that. So we will proceed...." In effect, therefore, the trial court also denied this motion.

Mrs. Susan Hea Jun testified at the hearing. She testified that she and her husband negotiated to purchase the Christy Fabric Care Center, a dry cleaning and laundromat business. She and her husband dealt with "Murphy and Ron Valicoff, but mainly with Mr. Jim Murphy." Murphy did business under the name of Metro Business Brokers. Mrs. Jun identified the contract to purchase and acknowledged the signatures. Mrs. Jun read the contingencies in the contract including the "list of equipment and furniture to be approved by buyer and seller and marked Exhibit 'A'." She acknowledged that she and her husband "put down" $10,000 by personal check. Mrs. Jun testified that certain contingencies were fulfilled but others were not. The Juns did obtain a loan on their home; they negotiated a lease with the owner of the building to their satisfaction. Mrs. Jun admitted that during the time while the contingencies were being worked on, she and her husband "entered into negotiations with [other] prospective sellers of laundromats" and placed earnest money on two. As to the Christy contract, the Juns, although they requested it several times, never received the "list of equipment," showing the age and date of purchase of the equipment. The contract of purchase referred to a list of equipment as Exhibit A, but there was none attached and the Juns never saw one.

On cross-examination Mrs. Jun admitted looking at other businesses but made no offer "to Duba's," [a prospective seller] in December, 1984, but did so in January, 1985, to close in March, 1985. She admitted writing to Yedlin at Murphy's request indicating that the Juns would not close in January. This was done because the Juns never got a list of the equipment. She also testified that the Juns did not see the books of the business.

During the hearing, counsel for Murphy stated that he had requested a copy of the contract that the Juns made with Duba and indicated that he would request leave to supplement the record with a subpoena to obtain a copy. The court replied that the Juns agreed that they closed with the Dubas for close to $125,000 so "I don't understand the need to supplement the record with evidence that's been admitted ... I'm not going to continue this case from time to time." The court continued--"what possible relevance would there be for a copy of the contract for a totally completely separate business. What relevance would there be under this agreement?" The court, therefore, denied counsel's request.

Harriet Yedlin testified that she and her son owned Christy Fabric Care Center, that she listed the business for sale with Metro and Mr. Murphy and that he brought to Yedlin's attention the Juns as potential buyers. It was her testimony that a contract to purchase was finally entered into "predicated" upon "certain things being satisfied." Her testimony differed from Mrs. Jun's. Mrs. Yedlin testified that the Juns examined and approved the list of equipment. A handwritten exhibit was introduced to show that certain of the disputed contingencies were "released" and removed by the signatures of the Juns. Mrs. Yedlin did not know whose handwriting it was in. But, this exhibit, according to the Juns was not a correct copy and may have been forged. Mrs. Jun denied ever seeing such a list and she and her husband denied it was their signature on the exhibit. Mrs. Yedlin, however, testified that the document was signed on January 4, 1985 "after they saw the books."

Mr. Murphy testified. He indicated that the Juns came into the office and discussed certain types of business they had for...