Lederle v. Lederle, 68141

• Decision Date: 20 February 1996
• Docket Number: No. 68141,68141
• Parties: Deborah LEDERLE, Plaintiff/Respondent, v. Robert J. LEDERLE, III and Christina Marie Lederle, Defendants/Appellants.
• Court: Missouri Court of Appeals

Page 423

916 S.W.2d 423

Deborah LEDERLE, Plaintiff/Respondent, v. Robert J. LEDERLE, III and Christina Marie Lederle,

Defendants/Appellants.

No. 68141.

Missouri Court of Appeals,

Eastern District,

Division Three.

Feb. 20, 1996.

Appeal from St. Louis County Circuit Court; Michael F. Godfrey, Judge.

B. Michelle Ward, Peper, Martin, Jensen, Hetlage & Maichel, St. Louis, for appellants.

John C. Garavaglia, Raskas, Ruthmeyer, Pomerantz & Wynne, St. Louis, for respondent.

GARY M. GAERTNER, Judge.

Defendants/appellants, Robert J. Lederle, III and Christina Marie Lederle ("children"), the children of Robert J. Lederle, Jr. ("decedent"), appeal from the judgment of the Circuit Court of St. Louis County entered after a two-day bench trial, finding plaintiff/respondent, Deborah Lederle ("wife"), decedent's surviving spouse, the sole owner of decedent's individual assets (collectively, "the disputed property"):

1. Fifty shares of Lederle Machine Company ("LMC") stock represented by Certificate No. 1, constituting one-half ownership of LMC.

2. 438 East Clinton, Kirkwood, Missouri ("the Clinton property"), where LMC is located and from which it conducts its business.

3. A promissory note from LMC to decedent in the original principle amount of $36,937.58.

4. Certain accounts receivable held by decedent pursuant to an agreement regarding the sale of another company.

5. A 1986 Chevrolet Silverado pick-up.

We affirm.

The following was adduced at trial: Decedent and wife married in 1983. This was decedent's second marriage. Children were born of decedent's first marriage. Decedent petitioned for and eventually obtained custody of children, who lived with him and wife for about five years prior to decedent's death in 1992. ¹

LMC was a business started by the parents of decedent and his sister, Mary Lou Brickey ("sister"). Decedent and sister each inherited one half of LMC upon their father's death. Decedent and sister incorporated LMC in 1989, issuing fifty shares of LMC to decedent via Certificate No. 1 and fifty shares to sister via Certificate No. 2. Also, decedent and sister each inherited one half of the Clinton property (the Clinton property was not owned by the corporation). Decedent and sister ran LMC as joint owners. Wife worked for LMC as a clerk, earning $500 per week.

In 1990, differences arose between decedent and sister concerning the operation and direction of LMC. Relations worsened in November of that year, when sister's husband, an employee of LMC, struck decedent and was fired. Wife testified at trial that subsequent to this incident, while she was off work due to surgery, she and decedent discussed a potential buyout of sister's share of LMC. According to wife, decedent proposed that wife take over sister's duties (i.e., bookkeeping) and run the company with him as a co-owner. Wife testified to her understanding she would not become a co-owner until decedent had completed the buyout of sister. Wife agreed to assume the expanded duties and responsibilities co-ownership and management entailed, for which she would be paid an additional $200 per week. This agreement was referred to by the parties and the trial court as "the first agreement." Wife also agreed to utilize marital funds and property to further the business; earlier that year--prior to this agreement--decedent and wife refinanced a lake home they jointly owned and put the money into LMC.

Wife returned to work in December 1990, but since no agreement between decedent and sister had been reached as to a possible buyout, wife resumed her old duties as clerk. However, on July 16, 1991, decedent relieved sister of her duties with LMC. That same day, according to wife, she and decedent agreed to implement the first agreement, pursuant to which wife assumed the duties of a co-equal owner and operator of LMC.

Wife testified she and decedent wanted to completely buy out sister's share of LMC and the Clinton property, but did not possess sufficient funds. LMC also needed a line of credit for operating capital. To accomplish these goals, decedent and wife determined bank financing was necessary. According to wife, she and decedent entered into another agreement--referred to by the parties and the trial court as "the second agreement"--wherein wife agreed to co-sign on bank loans for the financing they needed and decedent, in return, agreed to place all his property into joint names with wife as tenants by the entirety. Decedent and wife thereafter applied to Heritage Bank for a loan, but were unsuccessful.

In early February 1992, decedent and wife met with Doug Dischinger, an agent for LMC's insurer, Rea Insurance Agency, to review LMC's coverage. Decedent told Dischinger he and wife were to be joint owners of LMC and the Clinton property upon completion of the impending buyout of sister. Dischinger noted LMC's policy would require an endorsement showing decedent and wife as additional named insureds. Decedent told Dischinger to wait until after the buyout to issue the endorsement. Dischinger's notes of the meeting state in part, "Show [wife] + [decedent] as Building owners, additional insured after Buyout...." LMC's insurer later issued an endorsement showing decedent and wife as the owners of the Clinton property.

On February 11, 1992, decedent entered into a non-financed buyout agreement with sister. No bank financing had been obtained as of this date. Pursuant to this agreement, LMC purchased sister's shares in LMC and executed a promissory note to sister, guaranteed by decedent. Also, decedent purchased sister's undivided one-half interest in the Clinton property in exchange for certain real estate and a promissory note executed by decedent, secured by a first deed of trust on the Clinton property, which wife co-signed.

Decedent and wife continued to seek financing in order to completely pay off sister. In late February 1992, the couple applied to Commerce Bank for a loan. Decedent completed a personal financial statement in connection with the joint loan application, in which he listed the ownership of LMC as "joint" and listed the Clinton property as titled in both his and wife's names. This application was unsuccessful.

Decedent and wife then applied to Southwest Bank for a loan. In April of 1992, decedent and wife met with Donna Kirtian (f/k/a Donna Bernhard), a loan officer for the bank, to discuss a possible loan. Kirtian testified to her understanding that LMC was run by the couple as a joint effort and that decedent and wife jointly owned LMC and the Clinton property; otherwise, according to Kirtian, she would have discussed a possible marital waiver with the couple.

Decedent and wife submitted to Southwest Bank the same personal financial statement they had submitted to Commerce Bank. This time they were successful: Southwest Bank approved a personal loan of $110,000 to decedent and wife as joint borrowers, and a credit line of $50,000 to LMC with decedent and wife as co-guarantors. In a file memorandum dated July 1, 1992, Donna Kirtian stated she

agreed to extend a $110,000 real estate loan to [decedent] & [wife] and a $50,000 line of credit to [LMC].... The proceeds from the real estate loan will be used to buy out [decedent]'s sister who is a half owner of the company.... This is a growing company and its owners are very knowledgeable about the business....

(emphasis added.) According to Kirtian, the memorandum's use of the term "owners" in the plural was intentional, and referred to decedent and wife.

On July 14, 1992, decedent and wife co-signed the following loan documents with respect to the $50,000 credit line:

--A continuing unlimited guaranty agreement making decedent and wife jointly and severally liable on the credit line and granting Southwest Bank the right to proceed against either spouse irrespective of the death of the other.

--A subordination agreement postponing repayment of loans made to LMC until after repayment of Southwest Bank's loans.

On July 22, 1992, decedent and wife co-signed the following loan documents with respect to the $110,000 loan:

--A deed of trust note making decedent and wife jointly and severally liable on the loan and listing the Clinton property as security for the loan.

--A recorded deed of trust upon the Clinton property referring to decedent and wife as grantors.

--A conditional assignment of rentals referring to decedent and wife as owners of the Clinton property.

--A financing statement referring to decedent and wife as debtors.

--A security agreement referring to decedent and wife as debtors.

--A statement sheet authorizing the disbursement of the loan proceeds to sister.

Wife testified she and decedent owned LMC when they were completing the above loan documents. However, in deposition testimony entered into evidence, wife stated decedent and sister were the owners of LMC while these documents were being signed and remained owners until the financing was obtained and the buyout of sister was completed.

Sister was finally and completely bought out by means of a July 25, 1992, cashier's check issued by Southwest Bank. Thereafter, decedent and wife were listed as joint owners of LMC on the titles to two motor vehicles acquired for the company, and were listed as creditors of LMC on a subordination agreement entered into as part of an equipment lease.

The following additional testimony was heard at trial:

--Charles Rossi, wife's brother, testified he told wife in the summer of 1992 that if her name was on the loan papers, she and decedent should draw up an agreement in which she would be part owner of the company; in response, wife told Rossi she and decedent "were talking about that."

--Greg Sims, a sales representative for LMC, testified decedent told him all ownership of LMC was to go to decedent and wife after sister was bought out.

--William Reichard, general manager for LMC, testified decedent told him he and wife jointly owned LMC; Reichard also noted wife became...