Lines v. Mercantile Bank

• Court: Missouri Court of Appeals
• Writing for the Court: PER CURIAM
• Citation: Lines v. Mercantile Bank, 70 S.W.3d 676 (Mo. App. 2002)
• Decision Date: 29 March 2002
• Docket Number: SD23886
• Parties: Beverly Lines, Plaintiff-Appellant, v. Mercantile Bank, N.A., f/k/a Mercantile Bank of South Central Missouri, Defendant-Respondent. SD23886 Missouri Court of Appeals Southern District 0

Beverly Lines, Plaintiff-Appellant v Mercantile Bank, N.A., f/k/a Mercantile Bank of South Central Missouri, Defendant-Respondent

SD23886

Missouri Court of Appeals Southern District

03/29/2002

Appeal From: Circuit Court of Greene County, Hon. Calvin R. Holden

Counsel for Appellant: Thomas W. Millington

Counsel for Respondent: John L. Mullen

Opinion Summary: None

Garrison, J., concurs; Shrum, P.J., dissents in separate opinion; Montgomery, J., recuses.

John E. Parrish, Judge

On September 26, 2001, this court issued an opinion in this cause. On November 26, 2001, by order of the Supreme Court of Missouri, this cause was transferred to that court. On March 19, 2002, the Supreme Court entered an order retransferring the cause to this court. The original opinion of this court, which follows, is now readopted and reissued.

Beverly Lines and Laurence E. Lines brought an action against Mercantile Bank, N.A., (Mercantile) for statutory damages pursuant to section 443.130.¹ Summary judgment was entered for Mercantile. Mrs. Lines appeals.² This court affirms.³

A summary judgment is reviewed in the same manner as a court-tried or equity case and must be affirmed if, as a matter of law, the judgment is sustainable on any theory. State ex rel. Boshers v. Dotson, 879 S.W.2d [730] at 731 [Mo.App.1994]. We review the record in the light most favorable to the party against whom the judgment was entered and accord that party the benefit of all reasonable inferences. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d [371] at 376 [Mo. banc 1993]. In making our review, which is essentially de novo, we employ the same criteria in testing the summary judgment as those which the trial court is to employ. Id. The question of whether a summary judgment is proper is purely an issue of law founded on the record submitted. Id.

Boshers v. Humane Soc. of Missouri, Inc., 929 S.W.2d 250, 253 (Mo.App. 1996).

Mr. and Mrs. Lines were parties to an earlier action against Mercantile for declaratory judgment regarding various notes and security instruments. The earlier suit was settled by means of a written "Settlement and Mutual Release Agreement" executed by Mr. and Mrs. Lines and others, their attorney, and Mercantile and its attorneys. The agreement recites that the parties desired to settle the earlier suit "and all other disputes and claims related thereto." The parties to the agreement agreed "to dismiss with prejudice all claims and counterclaims pending in the Lawsuit." Mercantile released the other parties from all claims of indebtedness. It agreed "upon request" to "execute appropriate releases of any security instruments to the extent that such security instruments secure any of the Obligations."

The settlement agreement recites that it was "made and entered into" on the 30th day of November 1999. The designation "30th" is handwritten in a lined space provided for that purpose. A stipulation to dismiss the lawsuit that was the subject of the settlement agreement was filed in the court in which it was pending December 13, 1999. The record on appeal includes a letter from the trial judge that states a "dismissal was signed" December 14, 1999.

Laurence E. Lines sent a letter dated December 2, 1999, to Mercantile demanding release of a deed of trust on certain real estate.⁴ A check in the amount of $27 was enclosed with the letter "representing tender of costs associated with recording of the appropriate deed of release." The letter was as follows:LAURENCE E. LINES

BEVERLY J. LINES

1667 Cobblestone Court Springfield, Missouri 65809 (417) 883-3148 December 2, 1999

VIA CERTIFIED MAIL. RETURN RECEIPT REQUESTED

Mercantile Bank, N. A.

f/k/a Mercantile Bank of South Central Missouri

417 St. Louis Street P. O. Box 50660 Springfield, MO 65805

Re: Release of Deed of Trust

Dear Sir or Madam:

Mercantile Bank was previously owed a sum of money evidenced by one or more promissory notes and which was secured by a deed of trust recorded at Book 2308, Page 1367 in the office of the Recorder of Deeds of Greene County, Missouri, encumbering the following described real property, to wit:

ALL OF LOT ELEVEN (11), CHAPEL HILL SUBDIVISION, A SUBDIVISION IN GREENE COUNTY, MISSOURI, ACCORDING TO THE RECORDED PLAT THEREOF.

This property is commonly referred to as 1667 Cobblestone, Springfield, Missouri.

By the terms of the "Settlement and Mutual Release Agreement" under date of November 30, 1999, the indebtedness for which the aforementioned deed of trust was given to secure has been satisfied. A copy of the Settlement and Mutual Release Agreement whereby all obligations of your mortgagors were released is enclosed herein for your reference.

Also enclosed is our personal check in the amount of $27.00 representing tender of costs associated with recording of the appropriate deed of release.

Demand is hereby made for Mercantile to proceed appropriately to effect release of the aforementioned deed of trust.

Sincerely,

/s/ Laurence E. LinesLaurence E. Lines

The lawsuit that is the subject of this appeal was filed December 28, 1999. The petition alleges that "[o]n or prior to the 30th day of November, 1999, [Laurence E. Lines and Beverly Lines] and [Mercantile] . . . effected a settlement of pending litigation . . . whereby [Mercantile] released [Laurence E. Lines and Beverly Lines] of any and all obligations of outstanding indebtedness including indebtedness theretofore claimed by [Mercantile] as being secured by a deed of trust recorded in Book 2308, Page 1367, in the office of the Recorder of Deeds of Greene County, Missouri, affecting title to real estate owned by [Laurence E. Lines and Beverly Lines]." It alleges that Laurence E. Lines and Beverly Lines "[u]pon failure of [Mercantile] to effect release of the deed of trust, . . . made demand, in writing, for release of the deed of trust, pursuant to Section 443.130 R.S.Mo. and submitted such demand by certified mail, return receipt requested." The petition claims Mercantile failed and refused to effect recording of an appropriate deed of release and refused to deliver to Mr. and Mrs. Lines a sufficient deed of release within 15 days following delivery of their demand. It asserts the deed of trust had been given to secure indebtedness of $327,181. It sought damages of 10% of that amount, together with interest and attorney fees.

Mrs. Lines presents one point on appeal. She contends the trial court erred in granting Mercantile's motion for summary judgment because Mercantile's obligation to release the deed of trust was enforceable after November 30, 1999; that Mercantile failed to provide a deed of release within the time prescribed by section 443.130.

Section 443.130 states:

1. If any such person, thus receiving satisfaction, does not, within fifteen business days after request and tender of costs, deliver to the person making satisfaction a sufficient deed of release, such person shall forfeit to the party aggrieved ten percent upon the amount of the security instrument, absolutely, and any other damages such person may be able to prove such person has sustained, to be recovered in any court of competent jurisdiction. A business day is any day except Saturday, Sunday and legal holidays.2. To qualify under this section, the mortgagor shall provide the request in the form of a demand letter to the mortgagee, cestui qui trust, or assignee by certified mail, return receipt requested. The letter shall include good and sufficient evidence that the debt secured by the deed of trust was satisfied with good funds, and the expense of filing and recording the release was advanced.3. In any action against such person who fails to release the lien as provided in subsection 1 of this section, the plaintiff, or his attorney, shall prove at trial that plaintiff notified the holder of the note by certified mail, return receipt requested.

Mrs. Lines contends that Mercantile failed to perform its "concomitant obligation" to release the deed of trust after it received the "demand letter which was accompanied with proof of satisfaction, and advancement of recording costs, thereby satisfying all elements of a claim for statutory damages provided by section 443.130, R.S.Mo." Mercantile responds by arguing that the trial court did not err in granting its motion for summary judgment for numerous reasons, one of which was that the "demand letter" on which Mrs. Lines relies was not sufficient to invoke the statutory forfeiture imposed by section 443.130.1.

Mercantile argues that nothing in the December 2, 1999, letter referenced section 443.130; that the letter did not "put Mercantile on proper notice that a statutory demand for a deed of release [was] being made." Mercantile contends, "The letter does not request a deed of release within '15 business days,' as the statute states. On the contrary, Laurence Lines only [made] demand 'for Mercantile to proceed appropriately to effect release of the aforementioned deed of trust.'" This court agrees.

The December 2, 1999, letter states the debt the deed of trust secured had been satisfied "[b]y the terms of the 'Settlement and Mutual Release Agreement.'" A copy of the settlement agreement was enclosed for Mercantile's "reference." It required Mercantile, upon request, to "execute appropriate releases of any security instruments to the extent that such security instruments secure any of the Obligations."⁵ This court holds, under these facts, the terms of the settlement agreement were infused and made part of the request that Mercantile "effect release of the . . . deed of trust."

The December 2, 1999, letter's request "for Mercantile to proceed appropriately to effect release of the . . . deed of trust" did not invoke the penalty permitted by section 443.130.1. The settlement agreement required execution of appropriate releases of security instruments for debts the terms of the agreement deemed to have been satisfied. The ...