Leonard v. Leonard

• Decision Date: 29 April 2003
• Docket Number: No. WD 61299.,No. WD 61298.,WD 61298.,WD 61299.
• Citation: 112 S.W.3d 30
• Parties: Tamara Dee LEONARD; Plaintiff, Alan and Donna Leonard, Appellants, v. Christopher and Christy LEONARD; Respondents, Firstar Bank, N.A., Appellant.
• Court: Missouri Court of Appeals

112 S.W.3d 30

Tamara Dee LEONARD; Plaintiff, Alan and Donna Leonard, Appellants, v. Christopher and Christy LEONARD; Respondents, Firstar Bank, N.A., Appellant.

No. WD 61298.

No. WD 61299.

Missouri Court of Appeals, Western District.

April 29, 2003.

Motion for Rehearing and/or Transfer to Supreme Court Denied July 1, 2003.

Application for Transfer Denied August 26, 2003.

Tamara Leonard, pro se.

Mark Abbott, Columbia, MO, for Appellants.

Thomas M. Schneider, Columbia, MO, for Respondents.

Before THOMAS H. NEWTON, P.J., ROBERT G. ULRICH and EDWIN H. SMITH, JJ.

ROBERT ULRICH, Judge.

Tamara Leonard ("Tamara"), sister of Christopher Leonard, filed suit against Christopher and Christy Leonard ("Christopher" and "Christy" respectively), husband and wife, for partition of real estate, and Alan and Donna Leonard ("Alan" and "Donna" respectively), parents of both Christopher and Tamara, intervened as plaintiffs. Firstar Bank, N.A. ("Firstar Bank") was interpleaded by Christopher and Christy as a third party defendant. The trial court's judgment granted fee simple to the real property at issue to Christopher and Christy and declared that Alan, Donna, Tamara, and Firstar Bank had no right, title or interest in the property. The judgment also declared that Firstar Bank had no interest in the real property and no lien on the property despite a deed of trust reciting the legal description of the property filed of record in Howard County, the situs of the real property. Alan, Donna, and Firstar Bank appeal the judgment. Tamara does not appeal. The issue presented in this judgetried case is whether a resulting trust in favor of Christopher and Christy resulted from the conduct of the parties and the applicable facts at the time of the closing of the bankruptcy sale of the property. The judgment of the trial court is reversed.

Standard of Review

Because this was a judge tried case, the judgment of the trial court will be affirmed unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). "Because the trial court is in the best position to weigh all the evidence and render a judgment based on the evidence, the judgment is to be affirmed under any reasonable theory supported by the evidence." Love v. Love, 75 S.W.3d 747, 754 (Mo.App. W.D. 2002) (quoting Guier v. Guier, 918 S.W.2d 940, 946 (Mo.App. W.D.1996), rev'd on other grounds by Harrison v. King, 7 S.W.3d 558 (Mo.App. E.D.1999)). On appeal, evidence is viewed in the light most favorable to the trial court's judgment. Jones v. Jones, 10 S.W.3d 528, 532 (Mo.App. W.D. 1999). "When there is conflicting evidence, the trial court has the discretion to determine the credibility of the witnesses, accepting or rejecting all, part, or none of the testimony it hears." Love, 75 S.W.3d at 754 (quoting Guier, 918 S.W.2d at 946).

Factual and Procedural Background

Alan, appellant, and Christopher, respondent, attended a bankruptcy sale of American Minerals, Inc., a company with which Alan had done business and against whom Alan had a claim in bankruptcy, on June 3, 1996. Alan successfully bid for a tract of real property for $46,500. Christopher was engaged to Christy at the time of the bankruptcy sale. They were subsequently married. Alan also purchased a doublewide trailer that was located on the property for $2,000. Both Alan and Christopher intended at the time of the bankruptcy sale that the trailer would be the marital home of Christopher and Christy. Certain other personal property was located on the land, and the trial court determined title to it, but ownership of the personal property is not the subject of this appeal. The parties stipulated that the trailer is a part of the land. The closing on the sale of the real property did not occur until August 27, 1998, over two years after the bankruptcy sale.

Following the sale, Christopher borrowed approximately $13,500 from Alan, his father, to make improvements to the trailer. Both Alan and Christopher contributed time and labor to improve the real property. At some point, Christopher and Christy occupied the trailer as their marital home and have continued to occupy it during the pendency of this action.

Sometime prior to the closing, Alan assigned his right to purchase the property to Christopher and Christy. Accordingly, at the closing, the bankruptcy trustee conveyed legal title to the land to Christopher and Christy. The funds exchanged at closing consisted of a down payment of $2,000, and a new loan from Commerce Bank, N.A. to Christopher and Christy in the sum of $60,000. Christopher and Christy executed a purchase money deed of trust in favor of Commerce Bank to secure the payment of the promissory note in the sum of $60,000. They also signed a warranty deed conveying an undivided one-half interest in the real property to Tamara at the time of closing.

The property at dispute in this case has been used for strip mining. Between the time of the sale of the property and the closing, the State of Missouri reclaimed the property. After reclamation, the property was significantly improved. Alan testified that the fair market value of the property increased after reclamation to approximately $150,000. He also claimed that he and Christopher agreed that Christopher would pay $60,000 to receive title to the doublewide trailer, one-half of the land, and a smaller shed located on the property. This sum included payment of the previously made $13,500 loan from Alan to Christopher to improve the doublewide trailer. The other one-half interest was to be transferred to Tamara to secure Alan's interest in the larger shed located on the property, the equipment purchased at the sale and located on the property, and his apparent equity in the real property. After closing, Alan claimed he was the rightful owner of the undivided one-half interest that was deeded by Christopher and Christy to Tamara, that Tamara held title to the interest in the real property in his behalf, and that this undivided one-half interest should not be charged with any of the indebtedness constituting the $60,000 new loan made by Commerce Bank, N.A. He also claimed that he and Tamara had agreed that their interest in the undivided one-half interest in the property would be vested in Christopher.

The events surrounding the purchase of the property were in dispute at trial. Christopher testified that Alan experienced financial problems prior to the closing and that he did not want a thirty-year lien against the real property. Another 150 acres of real property, titled in Christopher's name and located north of the property at issue in this suit, was affected by Alan's financial difficulties and also affected the relationship of the parties. Alan and Christopher agreed that Christopher would assume the purchase of the real property subject to this suit and that Tamara would receive title to the 150-acre tract of land. Alan was to receive the use of the large shed on the subject property for payment of the taxes and insurance on the subject property. Christopher testified that his father informed him that the transfer of the undivided one-half interest in the subject property was like an insurance policy that would protect him against creditors. He also testified that Alan told him that he would receive title to this one-half interest when he requested it. Although Christopher and Christy transferred title to the 150 acres to Tamara, she testified that she was holding title in the 150 acres for Alan. Alan testified that he held the 150 acres in Tamara's name. The trial court concluded that Alan was the legal owner of that property.

Both Donna and Christy testified that the purpose of granting Tamara the undivided one-half interest of the real property at dispute in this case was to secure Alan's interest in equipment located in the large shed.

After the closing on the property, the relationship between Alan and Christopher deteriorated. Eventually, an order of protection was obtained that excluded Alan from the real property. Tamara filed suit on June 7, 2000, to partition the property. She testified at trial that she claimed a one-half interest in the property free of any encumbrances, including the deed of trust securing the $60,000 loan used in part to acquire the property. She also asserted a claim for breach of warranty against Christopher and Christy because the warranty deed that she received at closing did not refer to the deed of trust in favor of Commerce Bank, N.A. Present at the closing were Christopher, Christy, Alan, and a representative of Commerce Bank, N.A., Tim Ferguson.

After commencing the partition suit, Tamara conveyed her undivided one-half interest in the subject property by warranty deed to Alan and Donna. Alan and Donna were then permitted to intervene in the partition suit. They claimed ownership of the property without encumbrances. Before Tamara conveyed her interest in the property to Alan and Donna, they claimed equitable title, and post conveyance, they asserted legal title to the property. Upon receipt of the title from Tamara, they executed a deed of trust encumbering the claimed undivided one-half interest in favor of Firstar Bank, to secure a note in the amount of $90,000. The loan proceeds were deposited into Tamara's account. The money was then transferred as payment of an existing debt on the 150 acres to the north of the property subject to this suit. The trial court determined that Alan effectively transferred the $90,000 preexisting debt on the 150 acres to the property subject to this suit. The court concluded that the practical effect was to place Alan and Donna in a superior position and to chill any prospective sale.

Christopher and Christy filed a third party petition against Firstar Bank to quiet title to the subject property. They wanted to extinguish any lien in favor...