Kopp v. Home Furnishing Center, LLC

Decision Date31 October 2006
Docket NumberNo. WD 65277.,WD 65277.
Citation210 S.W.3d 319
PartiesJessie L. KOPP, et al., Respondent, v. HOME FURNISHING CENTER, LLC, et al., Appellants.
CourtMissouri Court of Appeals

Michael Scott Dodig, Lee's Summit, MO, for appellant.

Dennis Edward Egan, Kansas City, MO, for respondent.

Before EDWIN H. SMITH, P.J., VICTOR C. HOWARD, and JAMES M. SMART, JR., JJ.

PER CURIAM.

Home Furnishing Center, L.L.C. ("HFC") appeals the trial court's entry of judgment in favor of Don Kopp and the Kopp Family Trust following a jury trial. The jury returned a verdict in favor of Don Kopp on his breach of contract claim against HFC. The court denied HFC's counterclaim against the Family Trust for attorneys' fees. The judgment is affirmed.

Statement of Facts

This appeal arises from a lawsuit brought by Don Kopp and his mother, Jessie L. Kopp. Mrs. Kopp was trustee of the Kopp Family Trust. They brought suit against HFC and its principals, Kevin Fitzpatrick, Paul Goehausen, and John Power, alleging breach of contract, fraudulent misrepresentation, and conspiracy to defraud. The allegations arose from contracts that were associated with HFC's purchase of property originally owned by Earl C. "Skip" Kopp, who is Don Kopp's brother and Jessie Kopp's son.

Kopexa Realty Venture was a partnership operated by Skip Kopp and his wife, Carolyn. Kopexa owned a shopping center known as the Home Furnishing Center in Lenexa, Kansas. United States Life Insurance Co. and All American Life Insurance Co. (collectively, "USLife") were mortgage holders on the shopping center. In 1995, Kopexa filed for protection from creditors under federal bankruptcy law. USLife initiated a foreclosure on the shopping center and, with the approval of the bankruptcy trustee, gained ownership via a credit sale. Litigation then ensued between Skip Kopp and USLife, including, among other things, a conversion claim that Skip Kopp brought when USLife removed his possessions from the shopping center.

USLife offered the shopping center for sale. Fitzpatrick, Goehausen, and Power — who later formed Home Furnishing Center, L.L.C. ("HFC") — sought to buy the shopping center. Goehausen had built a house for Skip Kopp and then repossessed it when Mr. Kopp defaulted in payments.

Both Don Kopp and the Kopp Family Trust held claims against Kopexa in the bankruptcy proceedings. Don Kopp's claim was for $350,000, and the Trust's was for $250,000. As a condition of the sale of the shopping center to HFC, USLife required HFC to resolve those claims. To that end, in August 1999, the parties entered into two separate contracts or settlement agreements that are central to this case. A Settlement Agreement and Mutual Release of All Claims, referred to as the "Global Settlement Agreement," was drawn up between USLife, HFC, Skip Kopp, the Kopp Family Trust, and other parties not relevant to this appeal. Don Kopp was not a party to that contract. A separate agreement was drawn up between HFC and Don Kopp. USLife's sale of the shopping center to HFC was dependent upon Don Kopp and the Trust agreeing to effectively eliminate their bankruptcy claims against Kopexa. Separately, Skip and Carolyn Kopp entered into an agreement with HFC under which they would regain the title to their home.

The agreement between HFC and Don Kopp provided, in short, that in return for HFC's $260,000 payment to Don Kopp upon closing the sale on the shopping center, Don would assign all his rights in the Kopexa bankruptcy action to HFC. Don Kopp agreed that during the pendency of HFC's due diligence on the shopping center he would not execute or prosecute any of his claims against Kopexa "until [HFC] closes on the Home Furnishing Center on or before October 14, 1999, whichever comes first [sic]." Don also agreed to seek continuances on his pending proceedings in the bankruptcy action. The agreement further provided that "[s]ale or assignment [of Don Kopp's bankruptcy claim] shall not be final until Don Kopp receives $260,000 from [HFC]." The agreement required Don to release any and all claims he may have held against various signatories of the Global Settlement Agreement. This list did not include Skip Kopp in his individual capacity. HFC agreed to pay Don Kopp $200,000 "upon [HFC's] successful closing on the Home Furnishing Center" and $60,000 from the proceeds of the bankruptcy action, "or otherwise." The final sentence of the agreement stated: "If the LLC does not close on the Home Furnishing Center, or if it does not close on it before October 14, 1999,1 then Don Kopp shall retain his assigns and rights and shall receive nothing from the LLC."

In September 1999, when it became apparent that HFC's due diligence would not be completed by October 14, HFC contacted Don Kopp's attorney, Don Loudon, and suggested an extension of the deadline. The parties agreed to an extension for "a reasonable time." Don Kopp wrote a letter to HFC on September 9, 1999, acknowledging the agreement to extend the deadline. That letter stated:

[W]e regard the deadline of October 14, 1999, for closing . . . as extended to allow reasonable completion of the due diligence. As long as you hold the right to buy said real property, your referenced Purchase Agreement . . . with our client, Don A. Kopp, remains in place.

The letter also listed actions undertaken by Don Kopp in reliance on that agreement, including obtaining a continuance of his appeal before the Bankruptcy Appellate Panel ["BAP"] and seeking a continuance from the bankruptcy court on his other claims.

At some point, the parties discussed a possible closing date of November 30, 1999. On November 1, 1999, Don Kopp's attorney sent a letter to HFC informing HFC that "unless you no longer have a right to purchase the Home Furnishing Center, we will expect [payment] on or before November 30, 1999[.]" Don Kopp's attorney also informed the bankruptcy court that closing was expected to be complete by November 30. The real estate transaction did not close by November 30, 1999. Although the parties did not discuss any further extensions, they continued to act as though the agreement was still in effect.

Sometime in December, an amendment was made to Skip and Carolyn Kopp's separate agreement with HFC. The Kopps agreed, in that amendment, to deliver the Global Agreement fully executed by the Kopp Family Trust within twenty-four hours prior to closing in exchange for HFC dropping its requirement of $60,000 in rental payments from them. As of the first part of February, Jessie Kopp, trustee of the Kopp Family Trust, still had not signed the Global Agreement. Obtaining her signature was a condition of USLife's agreement to sell. According to HFC, failure to obtain that signature would make closing on the real estate transaction "unlikely."2

On February 11, 2000, the Bankruptcy Appellate Panel (BAP) handed down a decision affirming the lower court's denial of Don Kopp's "Motion to Clarify" in the Kopexa bankruptcy action. The purpose of that Motion was to determine what leases or subleases were transferred to USLife when it obtained the shopping center in the credit sale. Kevin Fitzpatrick, one of the HFC principals, testified that he mistakenly believed that this ruling effectively eliminated all of Don Kopp's claims in the bankruptcy court. John Power, also an HFC principal, indicated at trial that, at one point, he believed the same.

On February 18, Don Kopp's attorney received a phone call from John Power in behalf of HFC inquiring whether Don and Skip had agreed as to whether the $260,000 payment would fully satisfy Skip's obligations to Don. At some point, the brothers met and agreed that the issue would be resolved between them and had no effect on Don Kopp's right to receive payment under his agreement with HFC.

Shortly thereafter, on February 22, John Power sent Don Kopp's attorney a letter, stating that the deal between HFC and Don Kopp was "null and void and no longer of any force and effect." The reason cited was "an ancillary dispute [between the brothers] not related to the underlying transaction, thereby frustrating the completion of this transaction." According to testimony at trial, HFC's reference to the unspecified "ancillary dispute" was referring to a disagreement between Skip and Don as to whether the $260,000 in the agreement would fully satisfy a federal judgment Don held against Skip.3 HFC purportedly had surmised that somehow this "ancillary dispute" was causing Skip to avoid getting Jessie Kopp's signature on the Global Agreement. Don Kopp's reply to the February 22 letter, through his attorney, rejected HFC's claim that Don's agreement had become null and void, though it acknowledged that Skip and Don had not fully resolved their disagreement.

On February 25, Skip Kopp received an eviction notice from HFC. Because the agreement for Skip Kopp to regain ownership of his house was dependent upon full execution of the Global Settlement Agreement, and because Jessie Kopp had not signed that agreement, HFC gave Skip thirty days' notice to vacate his house in accordance with the terms of their separate agreement. Two days later, Jessie Kopp signed the Global Agreement on behalf of the Family Trust. The next day thereafter, Skip finally signed the amendment agreeing to obtain the "Trust's" signature.

In the meantime, the sale of the shopping center to HFC was proceeding toward closing. On March 31, 2000, USLife and HFC executed an amendment to the Global Agreement that specifically deleted any reference to the claims of Don Kopp. None of the individual Kopps or Kopp entities were asked to sign this amendment although they were signatories on the original Global Agreement. The real estate transaction between USLife and HFC closed on April 5, 2000. No payment was issued to Don Kopp.

Don Kopp continued to pursue and hold...

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