Lee v. Peters
| Decision Date | 22 April 2008 |
| Docket Number | No. WD 67998.,WD 67998. |
| Citation | 250 S.W.3d 783 |
| Parties | Deborah LEE, Appellant, v. Donald S. PETERS, Respondent. |
| Court | Missouri Court of Appeals |
William C. Hopkins, II, Kansas City, MO, for Appellant.
Timothy R. Brownlee, Kansas City, MO, for Respondent.
Before HOWARD, C.J., DANDURAND, and AHUJA, JJ.
Deborah Lee appeals the judgment of the Ray County Circuit Court denying her action against Donald Peters for fees and penalties pursuant to Section 443.130. She claims in her two points on appeal that (1) the trial court erred in assessing attorney fees and other charges against her tender and (2) the trial court erred in not finding Mr. Peters waived any insufficiency of tender. The second point is granted, and the judgment is reversed and remanded.
Gladys H. Lee was the owner in fee simple of certain real property ("Property"). On December 15, 1999, Gladys Lee obtained a loan in the amount of $11,500 from Commerce Bank of Excelsior Springs ("Bank"). The loan was evidenced by a note ("Note") and secured by a deed of trust ("Deed of Trust") on the Property. The Note was made in the amount of $11,500, bearing simple interest at 9%, with monthly installment payments of $145.68, and a maturity date of January 1, 2010. It allowed the borrower to make prepayments without penalty. On November 22, 2002, Gladys Lee executed a beneficiary deed conveying the Property to Deborah Lee and Tamara Rutledge.1 Gladys Lee died on November 25, 2002.
On June 3, 2003, the Bank sent a notice of default to Gladys Lee. On August 14, 2003, the Bank transferred the Note and Deed of Trust for Property to Donald Peters for the sum of $11,448.28. Mr. Peters purchased the Note to protect Ms. Rutledge, a friend, from Bank foreclosure.
On December 19, 2003, Mr. Peters' attorney wrote Gladys Lee, advising her that the Note was in default and demanding payment in the amount of $13,250.39 plus interest and attorneys' fees. Copies of the letter were sent via certified mail to Deborah Lee2 and Tamara Rutledge. On December 23, 2003, Ms. Lee's attorney replied to the letter and requested information about the debt. On December 30, 2003, Mr. Peters' attorney mailed copies of the Note, Deed of Trust, and payment history to Ms. Lee's attorney.
Ms. Rutledge had previously filed for Chapter 7 bankruptcy, with David Seitter serving as the trustee. On January 5, 2004, an attorney for Mr. Seitter advised Mr. Peters' attorney of Ms. Rutledge's bankruptcy and notified him that the Property might be part of her bankruptcy estate. The letter indicated collection proceedings against the Property should not move forward.
On August 19, 2004, Ms. Lee's attorney sent a letter to Mr. Peters inquiring as to the pay-off balance of the Note. The letter stated: "[u]pon receipt of [the pay-off] amount, our client will promptly tender to you sufficient funds to satisfy such balance" as well as "a satisfaction and deed of release that must be signed by you and notarized and returned to us." On September 13, 2004, Mr. Peters' attorney replied via letter, stating "[t]o my knowledge there are no living individuals who are signors on the note and so I am advising you that you must be making contact with the wrong party."
On September 16, 2004, Ms. Lee's attorney again requested Mr. Peters' attorney to provide a pay-off amount for the Note, informing Mr. Peters that she received title to the Property upon Gladys Lee's death. The letter stated: The letter requested "the total balance currently owed on the note ... includ[ing] a breakdown of that amount noting specific amounts charged as principal, interest and other fees that may apply." On October 6, 2004, Mr. Peters' attorney responded via letter, stating: "As I wrote earlier I do not see your client on the note."
On November 1, 2004, Ms. Lee's attorney sent to Mr. Peters' attorney a certified letter and a cashier's check in the amount of $14,223.00 to cover payment of the Note. The letter demanded release of the Deed of Trust within 15 days pursuant to Section 443.130. The letter requested "that Mr. Peters accept payment for the total amount due under the note ... [a]s we have been unable to verify the total amount owed, if any funds are due Ms. Lee, payment should be remitted in the form of a certified bank draft." On November 5, 2004, Mr. Peters' attorney returned the cashier's check to Ms. Lee's attorney, stating via letter: "The cover letter accompanying the certified check is inaccurate and the note is not for sale at this point."
On November 10, 2004, Ms. Lee's attorney sent another letter to Mr. Peters' attorney, presenting the cashier's check and demanding release of the Deed of Trust. Also included were copies of Gladys Lee's death certificate and the beneficiary deed identifying Ms. Lee as co-grantee. Mr. Peters' attorney responded via letter on November 22, 2004. The letter declared that Ms. Lee was neither a signatory nor a party to the Note. It also stated: "Again, your tendered check is rejected."
On December 8, 2004, Ms. Lee filed this action against Mr. Peters. Count I sought an order of specific performance requiring Mr. Peters to accept tender and release the Deed of Trust. Count I also sought the damages authorized pursuant to Section 443.130. Count II alleged slander of title and sought punitive damages.3
After Mr. Peters filed his answer, Ms. Lee moved for partial summary judgment. In its Partial Summary Judgment, dated March 22, 2006, the trial court made the following unchallenged findings:
Ms. Lee was the owner of an undivided one-half interest in the Property.
As an owner, Ms. Lee had the right to pay off the balance of the Note without prepayment charges or penalties as provided in the Note.
The fact that Ms. Rutledge had recently been in bankruptcy and may own the other one-half interest in the Property would not have prevented Mr. Peters from accepting payment in full for the Note.
On November 1, 2004, Ms. Lee tendered to Mr. Peters a certified check in the amount of $14,223.00 in payment of the Note and demanded the release of the Deed of Trust within 15 days as provided by Section 443.130.
There was no evidence submitted by either party as to what exact amount was due and owing on the Note as of November 1, 2004. Therefore, there was no evidence demonstrating that the cashier's check was of a sufficient amount to pay for the recording of the Deed of Release as required by Section 443.130.
The $14,223.00 tendered to Mr. Peters on November 1, 2004, was sufficient to pay in full all amounts due and owing under the Note. Therefore, Mr. Peters had no legal basis to reject the payment for the Note. Further, Mr. Peters had a legal obligation to provide Ms. Lee with a Deed of Release which she could record.
Ms. Lee is entitled to her request for specific performance of having Mr. Peters satisfy the Note and provide a Deed of Release.
The Partial Summary Judgment disposed of all issues except whether Ms. Lee could recover for damages and attorneys' fees pursuant to Section 443.130. Ms. Lee's claim for damages and statutory penalty were tried to the court on August 28, 2006. Judgment was entered on December 29, 2006. In its judgment, the court found as follows:
In order to recover, Ms. Lee must have paid Mr. Peters the unpaid principle, interest, attorneys' fees, penalties, and funds sufficient to pay the recording fee for the release.
On November 3, 2005, Ms. Lee tendered to Mr. Peters $14,223.00 to cover the foregoing expenses. $13,250.39 was owed for the balance of the principle of the Note and penalties and interest thereon. This leaves $972.61 to be applied for attorneys' fees and recording costs.
To recover pursuant to Section 443.130, Ms. Lee must have paid a sufficient amount to cover attorneys' fees. This is pursuant to Section 443.060(1), which provides: ". . . if any . . . assignee . . . receives full satisfaction of any security instrument, he shall. . . ."
The Deed of Trust provided for the recovery of attorneys' fees. Mr. Peters is entitled to recover attorneys' fees incurred while protecting his rights in the Note since the borrower failed to make payments as required in the Note.
Of all attorneys' fees incurred prior to November 3, 2005, at least a minimum of $972.61 was incurred pursuant to the security instrument. Therefore, an insufficient amount was tendered to include payment of the recording costs.
The court entered judgment in favor of Mr. Peters and against Ms. Lee on the issue of damages and attorneys' fees pursuant to Section 443.130. This appeal followed.
When reviewing a court-tried case, the trial court's judgment will be affirmed unless it is not supported by substantial evidence, is against the weight of the evidence, or erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).
In her first point on appeal, Ms. Lee contends the trial court erred in denying her claim for damages and penalties pursuant to Section 443.130 on the basis that her tender was insufficient to pay the recording fee. She maintains that the court improperly assessed Mr. Peters' attorneys' fees and other charges not incurred in enforcing the Deed of Trust. Given the disposition of Point II, this point is not addressed.
In her second point on appeal, Ms. Lee contends the trial court erred in denying her claim for damages and penalties pursuant to Section 443.130 on the basis that her tender was insufficient to pay the recording fee. She maintains that Mr. Peters waived any insufficiency when he twice refused tender and refused to disclose the sum due after repeated demands. The point is granted.4
"An objection to a tender, to be available to a creditor, must be timely made, and the grounds of the objection...
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Bank of Am. v. Twilight Homeowners Ass'n
... ... adopted the rule that "[a] person to whom a tender is ... made must, at the time, specify the objections to it, or they ... are waived." First Sec. Bank of Utah, N.A. v ... Maxwell, 659 P.2d 1078, 1081 (Utah 1983); accord Lee ... v. Peters, 250 S.W.3d 783, 787 (Mo.Ct.App. 2008); ... Hohn v. Morrison, 870 P.2d 513, 516-17 (Colo.App ... 1993); Hossom v. City of Long Beach, 189 P.2d 787, ... 791 (Cal.Ct.App. 1948). Additional authority supports the ... slightly more specific proposition that a party waives its ... ...