K.O. Real Estate, LLC. v. O'Toole

• Decision Date: 23 June 2009
• Docket Number: No. ED 91989.,ED 91989.
• Parties: K.O. REAL ESTATE, LLC., Respondent, v. Gregory O'TOOLE, et al., Appellant.
• Court: Missouri Court of Appeals

291 S.W.3d 780

K.O. REAL ESTATE, LLC., Respondent, v. Gregory O'TOOLE, et al., Appellant.

No. ED 91989.

Missouri Court of Appeals, Eastern District, Division One.

June 23, 2009.

Motion for Rehearing and/or Transfer to Supreme Court Denied August 3, 2009.

Application for Transfer Denied October 6, 2009.

Joseph A. Fenlon, St. Louis, MO, for Appellant.

Nicole S. Zellweger, Stinson Morrison Hecker LLP, St. Louis, MO, for Respondent.

KURT S. ODENWALD, Presiding Judge.

Introduction

Gregory O'Toole (Defendant) appeals from the trial court's judgment, following a bench trial, on a rent and possession case filed by Plaintiff K.O. Real Estate, L.L.C. (K.O.) against Defendant. We affirm.

Factual and Procedural Background

Defendant executed a five-year lease for the property at 6011 North Lindbergh in Hazelwood (Subject Property) from K.O. as lessor in March 2006. On February 7, 2008, K.O. filed a petition against Defendant before an associate circuit judge. Defendant filed a counterclaim petition on March 12, 2008, against K.O. On May 12, 2008, K.O. filed a motion for leave to file an amended petition and to join Danny Donovan (Donovan) as a defendant, which was granted on May 20, 2008, at which time K.O. filed its verified amended petition for rent and possession (Amended Petition).

K.O.'s Amended Petition alleged three counts: count one for rent and possession against Defendant alleged that pursuant to his lease, Defendant was obligated to pay $44,880 per year for 2007 and 2008, and was in breach of his rental obligations and in arrears in the amount of $24,800.54 for rent, late charges, real estate taxes, insurance payments, and other costs through May 2008, with additional rent, late charges, and other costs continuing to accrue during the pendency of this action. In count two for rent and possession against Defendant, K.O. alleged that K.O. entered into a parking lot lease with Defendant for property contiguous to the Subject Property for an additional $200 per month, of which Defendant was in breach and in arrears in the amount of $3,984.25 for rent, late charges, and other costs through May 2008, with additional rent, late charges, and other costs continuing to accrue during the pendency of this action. In count three for rent and possession against both Defendant and Donovan, K.O. alleged in the alternative, that to the extent Donovan had any interest or claim in the Subject Property or the parking lot, K.O. sought the same relief against him as it did against Defendant. K.O. requested that the trial court rule against Defendant on all three counts and against Donovan on count three. K.O. sought past-due rent, late charges, real estate taxes insurance payments, and other costs through May 2008, immediate possession of the Subject Property, monthly rent, late charges, and other costs associated with the parking lot and those that accrued during this action, interest in the statutory rate from judgment date, reasonable attorney's fees, costs K.O. had incurred, and such further relief as the court deemed proper.

Attached to the Amended Petition as Exhibit A was a copy of the five-year lease, signed by James K. O'Brien, President of K.O. (President), as the lessor, and Defendant as the lessee. Under the terms of the lease, the lessee was to pay a monthly base rental, which increased annually; real estate taxes; insurance charges; all utility costs; and attorney's fees under certain circumstances. Additionally, upon a default by the lessee, or Defendant's failure "to make any payment of rent or additional rent or any other payment required to be made by Lessee" under the lease, the remedies available to the lessor included termination of the lease and immediate repossession of the Subject Property and for the lessee to immediately surrender possession and vacate the Subject Property.

On March 12, 2008, Defendant filed a counterclaim against K.O. alleging three counts of intentional interference with three separate contracts or "business expectancy." The trial court severed the counterclaim from the rent and possession Amended Petition by order on September 3, 2008.

The case was assigned to an associate circuit judge, Division 41, on July 8, 2008. Donovan requested a change of judge, which was granted by Assignment Order on July 11, 2008. The Assignment Order stated, "Pursuant to Local Rule 6.1, case assigned/reassigned to Division 33W for hearing and determination on the record under practices and procedures applicable before Circuit Judges; record to be made by electronic recording device."

A trial was held before the associate circuit judge in Division 33W on September 3, 2008. President testified to entering a lease with Defendant for the Subject Property and the adjacent parking space. He testified that K.O. was seeking possession of the Subject Property as well as the additional parking space. Additionally, although Defendant still occupied the Subject Property and parking lot, President testified that Defendant failed to pay rent for the past six months before trial, and before that, he was consistently late in paying rent. K.O. submitted copies of several demand letters for payment made to Defendant, over the objection that the demand letters were not made by the owner of the property. K.O. also submitted its Exhibit B, outlining all monthly fees and payments. Exhibit B separated the amount owed as rent from late fees, bills, and interest.

Also during trial, evidence was presented showing that MBZ Investments deeded the Subject Property to Kathleen O'Brien, trustee of the Kathleen A. O'Brien Living Trust, before the lease was signed by K.O. and Defendant. President testified that Kathleen O'Brien was his wife. On cross examination, President was asked whether there was "some kind of an agreement that [he] brought with [him] today between [K.O.] and the living trust," and President responded, "That I brought with me today? No." When asked if he knew whether an agreement even existed, President responded, "Yes."

Defendant testified that he executed a lease with K.O. for the Subject Property, and admitted that at some point in 2007 he stopped making the rent payments due under the lease. Defendant testified that he made two rent payments in 2008, and made no rent additional payments.

Donovan testified at trial that he never signed the lease regarding the Subject Property. Donovan worked for Defendant and "just mainly managed the place," and testified that he was not claiming any interest in any way to the Subject Property. Donovan viewed a copy of the signed lease and testified that his signature was not on the document.

Following the presentation of all of K.O.'s evidence, K.O. moved for judgment in its favor. Defendant also moved for a directed verdict in its favor on the grounds that K.O. was not the owner of the Subject Property, and the lease was binding only on the owner. K.O. argued that it was the lawful lessor and landlord under the lease, and that it executed the lease as a manager on behalf of the owner who had retained K.O. to manage the property. The trial court denied both motions. Defendant again moved for directed verdict in its favor on the grounds that K.O. failed to specify exactly the amount of rent due. The trial court denied Defendant's motion.

The court dismissed Donovan as to counts II and III because Donovan testified that he did not have any interest in the Subject Property. Donovan's counterclaim was then dismissed without prejudice. The trial court gave the parties a trial date of November 4, 2008, for the counterclaim, which was severed from the petition.

On September 8, 2008, the trial court issued its Judgment. Regarding K.O.'s action for rent and possession based on the signed lease, the trial court entered judgment in favor of K.O. and against Defendant in the amount of $52,280.39 plus interest of $2,534.39, plus attorney's fees in the amount of $10,813.40, which the trial court erroneously totaled to $55,046.89. Additionally, the trial court dismissed count III against Donovan and dismissed count II against Defendant.

On September 10, 2008, the trial court issued another Order and Judgment in which it amended the September 8, 2008 Judgment. The September 8 Judgment incorrectly totaled the judgment amount, and the September 10 Order and Judgment amended the amount to $65,860.29.

Also on September 10, 2008, K.O. filed an Emergency Motion for Post-Judgment Relief, alleging that although the trial court awarded K.O. immediate possession of the Subject Property, K.O. observed Defendant constructing interior walls on the property, and then observed Defendant tearing down interior walls and continuing its waste at the property. K.O. asked that the court order Defendant to vacate the property and cease any construction, demolition or other actions constituting waste or vandalism and authorize K.O. to immediately change the locks on the premises.

On September 12, 2008, Defendant filed a Motion to Amend the Judgment pursuant to Rule 78.04,¹ alleging that K.O. is not the owner of the Subject Property and therefore is not the landlord. Defendant claimed that K.O. is not the real party in interest and judgment should be entered in favor of Defendant. Defendant also dismissed his counterclaims without prejudice on the same day.

Finally, on September 12, 2008, the trial court issued a Final Order and Judgment in which it found that K.O. was the manager of the Subject Property, was the agent for the owner of the Subject Property, and filed the action against Defendant in that capacity. The Final Order and Judgment denied Defendant's Motion to Amend the Judgment, and granted K.O.'s Emergency Motion for Post-Judgment Relief and to Amend. The trial court ordered Defendant to vacate the property and cease any construction, demolition, or other actions constituting waste or vandalism to the property, including removing permanent fixtures. The trial court further...