Manor Square, Inc. v. Heartthrob of Kansas City, Inc.

• Decision Date: 18 May 1993
• Docket Number: No. WD,WD
• Parties: MANOR SQUARE, INC., Respondent, v. HEARTTHROB OF KANSAS CITY, INC., et al., Appellants. 46184.
• Court: Missouri Court of Appeals

Page 38

854 S.W.2d 38

MANOR SQUARE, INC., Respondent, v. HEARTTHROB OF KANSAS CITY, INC., et al., Appellants.

No. WD 46184.

Missouri Court of Appeals,

Western District.

May 18, 1993.

Laurence R. Tucker, Watson, Ess, Marshall & Enggas, Kansas City, for appellants.

Gregory S. Gerstner, Seigfreid, Bingham, Levy, Selzer & Gee, Kansas City, for respondent.

Before BRECKENRIDGE, P.J., and SHANGLER and SPINDEN, JJ.

BRECKENRIDGE, Judge.

Heartthrob of Kansas City, Inc. and Larry S. Spatz appeal from the trial court's April 21, 1992 order granting Manor Square, Inc. summary judgment. Appellants raise four points on appeal claiming that the trial court erred in: 1) granting summary judgment in its April 21, 1992 order because a genuine issue of material fact existed; 2) granting summary judgment in its April 21, 1992 order because amendments to the underlying lease obtained without the guarantor's consent released him from his obligation; 3) refusing to grant appellants leave to file an answer out of time; and 4) granting Manor Square summary judgment on appellants' counterclaim in its September 9, 1991 order. The judgment is affirmed.

Heartthrob leased space in the Westport area of Kansas City, Missouri, from Manor Square for the operation of a nightclub. Larry Spatz, President of Heartthrob, was the guarantor on the lease entered into between Manor Square and Heartthrob. In November of 1989, Manor Square brought suit against Heartthrob and Spatz in the associate circuit division of the circuit court for possession of the premises occupied by Heartthrob and for the balance due under the lease. The trial court, upon the consent of Heartthrob, awarded Manor Square possession of the premises as of December 31, 1989. Heartthrob vacated the premises on or about December 31, 1989.

Trial on Manor Square's damage claims was set for January 3, 1990 and then continued to March 5, 1990. On March 5, 1990, appellants requested leave to file a counterclaim out of time. Appellants' counterclaim exceeded the jurisdictional monetary limit of the associate circuit division and the case was certified to the presiding judge for assignment. The case was then assigned as a circuit judge case "with further proceedings to be in accordance with the practice and procedure applicable before circuit judges, there being no right of trial de novo."

Due to appellants' failure to comply with discovery requests, Manor Square filed a motion to enforce discovery on August 31, 1990. A hearing on the motion was held on September 26, 1990 and an order entered compelling discovery. The case was set for trial on March 28, 1991. Appellants failed to comply with the court's order compelling discovery and Manor Square filed a motion for sanctions on December 11, 1990. On January 8, 1991, the court granted the motion and again ordered appellants to comply. Appellants did not comply and Manor Square filed a renewed motion for sanctions on February 20, 1991 after which appellants complied. The trial court entered an order imposing sanctions and set the case for trial on June 27, 1991. The case was continued for trial to September 12, 1991.

On August 23, 1991, Manor Square filed a motion for summary judgment on appellants' counterclaim. Appellants did not file a response and the summary judgment in favor of Manor Square was granted on the counterclaim on September 9, 1991.

A few days before the September 12, 1991 trial setting, appellants filed a request for a jury trial on Manor Square's remaining claims. The case was transferred to a different judge for a jury trial and set for trial on November 12, 1991. On October 16, 1991, appellants applied for and were granted a change of judge. The case was again reassigned.

Manor Square filed on October 22, 1991, a motion for partial summary judgment on its claim for back rent and other charges. Appellants filed suggestions in opposition of the motion and a hearing was held on November 15, 1991. On November 19, 1991, prior to the court's decision on Manor Square's motion for partial summary judgment, new counsel for appellants filed a motion seeking leave to file an answer out of time. Manor Square objected to appellants' motion. On February 5, 1992, the trial court granted Manor Square's motion for partial summary judgment and denied appellants' motion for leave to file an answer out of time. A hearing was held on March 12, 1992 to determine Manor Square's damages after which Manor Square was awarded $207,112.42. Manor Square dismissed all its remaining claims without prejudice and Heartthrob and Spatz filed this appeal.

The record is reviewed in the light most favorable to the non-moving party and that party is granted all reasonable inferences which may be drawn from the evidence. Maryland Cas. Co. v. Martinez, 812 S.W.2d 876, 879 (Mo.App.1991). The reviewing court must determine that the movant has a right to judgment as a matter of law and that no genuine dispute of material fact exists. Roberts Fertilizer, Inc. v. Steinmeier, 748 S.W.2d 883, 886 (Mo.App.1988). The moving party bears the burden of proving that it is entitled to judgment as a matter of law and that a genuine issue of material fact does not exist. Martinez, 812 S.W.2d at 879. The moving party, however, is not required to prove by unassailable proof that it was entitled to summary judgment. Herron v. Whiteside, 782 S.W.2d 414, 416 (Mo.App.1989).

Appellants raise four points on appeal. Point I claims the trial court erred in ordering summary judgment because a factual dispute exists as to whether the guarantor, Spatz, consented to amending the underlying lease. In Point II, appellants argue the trial court erred because the amendments to the underlying lease were made without Spatz's consent and, therefore, released Spatz from his guaranty obligation. In response to Points I and II, Manor Square raises a procedural point. Manor Square argues that appellants' Points I and II raise the affirmative defense that Spatz was released from the guaranty agreement by modifications to the lease. Manor Square asserts that appellants cannot raise an affirmative defense on appeal because they waived all affirmative defenses by failing to file an answer. The court will first consider Manor Square's contention that Spatz was required to plead affirmative defenses in writing, and that his failure to do so waived any affirmative defenses.

Manor Square's petition for rent and possession was originally filed before an associate circuit judge pursuant to § 517.011.1(3), RSMo Cum.Supp.1992. ¹ The rules of civil procedure apply to civil actions originating before an associate circuit judge under Chapter 517, except where otherwise provided by law. Rule 41.01(f); § 517.021. "Rule 41.01(f) expresses a judicial deference to the legislative enactments establishing specialized procedures for actions before associate circuit divisions." Exchange Nat. Bank v. Wolken, 819 S.W.2d 45, 48 (Mo. banc 1991). There is no conflict between the rules and the statutes. Id. The pleading requirements of Rule 55 apply to this action "except where otherwise provided by law." Chapter 517 includes a specific pleading requirement for affirmative defenses in § 517.031.2, which states that "[a]ffirmative defenses, counterclaims and cross claims shall be filed in writing not later than the return date and time of the summons unless leave to file the same at a later date is granted by the court. No other responsive pleading need be filed." Under the clear language of § 517.031.2, appellants were required to plead any affirmative defenses within the time allowed while the case was pending in the associate division. ² They did not do so. Nor did they request leave to file affirmative defenses out of time while the matter was pending in the associate division.

Thereafter, when appellants filed a counterclaim in an amount which exceeded the jurisdictional limits of cases triable under Chapter 517, the case was certified under § 478.240 to proceed in accordance with the practice and procedures applicable before circuit judges. The case was then reassigned to be heard by an associate circuit judge sitting as a circuit judge. The effect of certification pursuant to § 517.081, when the amount in controversy exceeds the jurisdictional limit, is that the case becomes a circuit division case for the balance of the proceedings and does not retain its character as a case which originated before an associate circuit judge. After the associate circuit division loses jurisdiction to act, it is not logical to employ the practices and procedures of Chapter 517 because they are applicable to cases where the expedited procedures of the associate circuit division are beneficial due to the nature of the case or the fact that the amount in dispute is less than $15,000. ³

On August 24, 1990, when Manor Square filed its Second Amended Petition, the case was pending in the circuit division and was governed by Rules 41 through 101, including the pleading requirements of Rule 55. Rule 41.01(a)(2). Spatz was required to file his affirmative defenses in an answer to the amended petition. Rule 55.09. By his failure to file an answer pleading the affirmative defense of release in response to the amended petition, Spatz waived his right to assert such affirmative defense. Detling v. Edelbrock, 671 S.W.2d 265, 271 (Mo. banc 1984); Leo's Enterprises, Inc. v. Hollrah, 805 S.W.2d 739, 740 (Mo.App.1991).

If appellants had been granted leave to file an answer out of time, Spatz would have pleaded the affirmative defense of release. Appellants argue in Point III that the trial court abused its discretion by denying appellants' request to file an answer out of time because Manor Square would not have been prejudiced if the court had allowed it to do so. On appeal the trial court will only be found to have abused its discretion if its ruling is clearly against the logic of the circumstances before the court. State ex rel....