Magna Bank of Madison County v. W.P. Foods, Inc., s. 68800

• Decision Date: 04 June 1996
• Docket Number: Nos. 68800,68847,s. 68800
• Citation: 926 S.W.2d 157
• Parties: MAGNA BANK OF MADISON COUNTY, Plaintiff/Respondent/Cross-Appellant, v. W.P. FOODS, INC., d/b/a Edray Foods, Charles Evans and Patricia Evans, Defendants/Appellants/Cross-Respondents.
• Court: Missouri Court of Appeals

Page 157

926 S.W.2d 157

MAGNA BANK OF MADISON COUNTY, Plaintiff/Respondent/Cross-Appellant, v. W.P. FOODS, INC., d/b/a Edray Foods, Charles Evans and Patricia Evans, Defendants/Appellants/Cross-Respondents.

Nos. 68800, 68847.

Missouri Court of Appeals,

Eastern District,

Division Two.

June 4, 1996.

Motion for Rehearing and/or Transfer to

Supreme Court Denied July 10, 1996.

Application to Transfer Denied

Aug. 20, 1996.

Donald S. Hilleary, Alan J. Agathen, St. Louis, for Appellant.

William R. Bay, James W. Erwin & Mike W. Bartolacci, Thompson & Mitchell, St. Louis, for Respondents.

CRANDALL, Judge.

Defendants, W.P. Foods, Inc., d/b/a Edray Foods, Charles and Patricia Evans, appeal from that portion of the trial court's judgment which granted summary judgment in favor of plaintiff, Magna Bank of Madison County (Magna Bank), in an action to collect the principal and interest due on two promissory notes. Magna Bank also appeals, challenging that portion of the trial court's judgment which denied its request for attorney's fees and costs incurred in collecting on the notes. Affirmed in part and reversed and remanded in part.

The record establishes that defendants, Charles and Patricia Evans, agreed to purchase a wholesale food business, W.P. Foods, Inc. (business), from Wesley and Audrey Williams. ¹ Prior to reaching an agreement regarding the purchase, Evans independently examined the records, books, and inventory of the business as well as the real estate. Magna Bank informed him that the business owed it a total of approximately $430,000.00. This figure differed from the $207,000.00 listed on the business' balance sheet as the amount of bank loans. Evans did not question Magna Bank about the discrepancy between the two figures; but closed on the purchase of the business, despite Williams' inability to adequately explain the discrepancy. With the exception of furnishing information to Evans about the aggregate amount of the loans owed to it by the business, Magna Bank did not participate in the negotiations between Evans and Williams. Magna Bank did, however, agree to provide financing to Evans after Evans and Williams reached an agreement.

On August 10, 1990, Evans and Williams signed a written purchase agreement setting forth the terms of their agreement. Evans agreed to purchase both the stock and the real estate of the business from Williams, for a total price of $450,000.00. Williams agreed to pay off loans which he owed to Magna Bank. Magna Bank furnished a closing statement, dated August 10, 1990, to Evans indicating how Williams' loans with Magna Bank were to be repaid.

Evans borrowed money from Magna Bank to finance the purchase of the business, executing two promissory notes, dated August 9, 1990: ² one in the principal amount of $125,000.00, signed by Evans, individually and in behalf of the business; and another in the principal amount of $350,000.00, signed by Evans, secured by a mortgage on the real property. Evans ceased paying on the notes in 1992. Magna Bank demanded payment on February 1, 1993. On April 15, 1993, Magna Bank brought the present action against the business and Evans, seeking to recover the unpaid principal and interest due on the two notes.

Evans filed a counterclaim and a third-party petition. Count I was against both Magna Bank and Williams and sought rescission of the purchase agreement with Williams and of the notes with Magna Bank, alleging that misrepresentations on the closing statement induced Evans to purchase the business and to execute the promissory notes. In the alternative, Count II was solely against Williams and sought actual and punitive damages for fraudulent misrepresentations by Williams.

Magna Bank moved for summary judgment against Evans on the promissory notes. In support of its motion, it submitted copies of both promissory notes, depositions, affidavits, answers to interrogatories, and other exhibits. It sought the principal and interest due on the notes as well as attorney's fees and costs incurred in collecting on the notes.

The trial court granted summary judgment in favor of Magna Bank on Magna Bank's claims on the notes against Evans and on Evans' counterclaim against Magna Bank. The trial court, however, denied Magna Bank's request for attorney's fees and costs. The court found there was no just reason for delay and certified its order final and appealable pursuant to Rule 74.01(b).

In his first point, Evans claims the trial court erred in designating its judgment final for purposes of appeal under Rule 74.01(b). He argues that Count I of his counterclaim and third-party petition was an action for fraud against both Magna Bank and Williams and that there was considerable factual overlap in these claims.

A fundamental prohibition exists against piecemeal appeals. Saganis-Noonan v. Koenig, 857 S.W.2d 499, 501 (Mo.App. E.D.1993). Rule 74.01(b) is an exception to this rule, allowing the court to certify for appeal a judgment on fewer than all the claims or parties only upon a finding that there is "no just reason for delay." Id. The rule provides as follows:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may enter a judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay.

The decision about whether and when to sustain a Rule 74.01(b) motion is a matter of discretion with the trial court. A & M Bldg., Inc. v. Wiles, 859 S.W.2d 183, 185-186 (Mo.App. S.D.1993). Four factors are considered important in determining whether there is no just reason for delay: (1) whether the action remains pending at the trial court as to all parties; (2) whether similar relief can be awarded in each separate count; (3) whether determination of the trial court claims would moot the appellate claim; and (4) whether the factual underpinnings of all the claims are intertwined. Saganis-Noonan, 857 S.W.2d at 501. In ruling on such a motion, the court's discretion is to be exercised in the interest of sound judicial administration. A & M Bldg., 859 S.W.2d at 186. The appellate court should disturb the trial court's determination only if it can be said that the trial court's conclusion was clearly unreasonable. Id.

Here, the record before us does not support a finding that the court's ruling was clearly unreasonable. Evans' petition involved two distinct actions against two different parties: the counterclaim against Magna Bank sought rescission of the promissory notes executed by Evans to obtain financing to purchase the business; the third party claim against Williams sought rescission of a totally separate agreement between Evans and Williams to purchase the business. The factual underpinnings of the claims were not intertwined. There was no allegation that the parties acted in concert or conspired to perpetrate a fraud on Evans to induce him to enter into the different agreements. The trial court's grant of summary judgment in favor of Magna Bank disposed of all of Magna Bank's claims against Evans and all Evans' claims against Magna Bank. Evans' remaining claims against Williams and the attendant issues were separable from the claims between Magna Bank and Evans. In addition, it does not appear likely that a later appeal regarding the remaining issues would require the appellate court to determine the same issues twice. Evans' first point is denied.

In his second point, Evans contends the trial court erred in granting summary judgment in favor of Magna Bank on its action against Evans and on Evans' counterclaim against Magna Bank.

When considering an appeal from a summary judgment, the court will review the record in the light most favorable to the party against whom judgment was entered and will accord the nonmovant the benefit of all reasonable inferences from the record. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.banc 1993). Facts set forth by affidavit or otherwise in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment. Id. Review by the appellate court is essentially de novo. Id. Because the trial court's judgment is founded on the record submitted...