McNabb v. Barrett

• Decision Date: 24 June 2008
• Docket Number: No. WD 68605.,WD 68605.
• Citation: McNabb v. Barrett, 257 S.W.3d 166 (Mo. App. 2008)
• Parties: Marsha Sue McNABB, Appellant, v. Robert BARRETT, et al., Respondent.
• Court: Missouri Court of Appeals

257 S.W.3d 166

Marsha Sue McNABB, Appellant, v.Robert BARRETT, et al., Respondent.

No. WD 68605.

Missouri Court of Appeals, Western District.

June 24, 2008.

Bradley A. Constance, Independence, MO, for Appellant.

John K. Allinder, Independence, MO, for Respondent.

Before JOSEPH M. ELLIS, Presiding Judge, LISA WHITE HARDWICK, Judge and JOSEPH P. DANDURAND, Judge.

JOSEPH M. ELLIS, Judge.

Marsha Sue McNabb appeals from a judgment in favor of RespondentsRobert L. Barrett, Evelyn E. Barrett, Wesley R. Barrett, Shelley K. Barrett and Jackie Barrett on her petition to quiet title.Appellant asserts that the trial court erred in finding that, although the sale of an adjoining lot was completed without providing her with written notice as required under a restrictive covenant, she waived her right of first refusal by her conduct.For the following reasons, we affirm.

Appellant and Respondents live in Lake Tapawingo, a residential development in Jackson County, Missouri.Appellant purchased Lot 50, Block C, in 1988 and began living there after building a house about a year later.Evelyn Halsey owned Lots 47, 48, and 49, Block C, and lived in a home on Lot 48 (together, "the Property"), from 1994 through her death in August 1999.Respondents Robert and Evelyn Barrett, husband and wife, owned and lived on Lot 19, Block C, about a block away from Appellant's lot, starting in 1974.Respondents Wesley and Shelley Barrett are the Barretts' son and daughter, and Jackie Barrett was Wesley's wife at the time the sale at issue took place.

In the late 1990s, Mrs. Halsey became unable to care for herself or manage her affairs, and one of her neighbors, G. Michael Putthoff, looked after her and the Property pursuant to a power of attorney.Mrs. Halsey was hospitalized then placed in a nursing home in October 1998, and Mr. Putthoff asked Wesley and Jackie to move into her home to care for her dog.Wesley and Jackie agreed and lived in the home until Mrs. Halsey died on August 15, 1999, and after her death.Appellant was aware of this arrangement and was aware that Mrs. Halsey had passed away.

Mrs. Halsey left a will that designated Mr. Putthoff as personal representative and left the Property to a niece out of state.Mr. Putthoff was subsequently appointed as personal representative, and Mrs. Halsey's niece asked him to sell the Property.He obtained an appraisal on October 18, 1999, and the realtor valued the three lots at $45,000.The house was in severe disrepair, including substantial termite damage, a leaky roof, and bad electrical wiring, so Mr. Putthoff subtracted $5,000 from the price for the approximate cost to demolish and remove the home.

Mr. Putthoff then approached Evelyn Barrett and asked if Wesley and Jackie would be interested in purchasing the Property.After a few months, Respondents agreed to purchase the Property for $40,000.They signed a sales contract on January 10, 2000, and closed on January 21, 2000.Immediately after closing the sale, Wesley and Jackie began making numerous structural and aesthetic repairs and improvements on the house.They continued to make improvements for several years, and the value of the Property increased substantially over those years.

All of the lots in Lake Tapawingo are subject to a restrictive covenant ("the Covenant"), which provides that the sale of any lot is subject to an adjoining lot owner's right of first refusal.In pertinent part, the Covenant states that "[n]o sale of said lot shall be consummated without giving at least fifteen days written notice to Grantor, and the owners of the two lots adjoining said lot on the sides, of the terms thereof; and any of them shall have the right to buy said lot on such terms."Although she was the sole owner of an adjoining lot, Appellant did not receive written notice of the sale of the Property or sign a written waiver of her right of first refusal.

On April 28, 2004, Appellant filed a petition to quiet title, asserting that she had an interest in the Property because she never received written notice and that, had she received written notice, she would have purchased the Property for $40,000 on the same terms as the sale to Respondents.Appellant prayed for the court to declare the deed transferring the Property to Respondents null and void, to declare that Appellant would own the Property in fee simple upon payment of $40,000 to Respondents, to give her possession of the Property, and to enjoin Respondents from committing waste or removing any of the improvements on the Property.

In their answer, Respondents denied that Appellant had any interest in the Property.They asserted the affirmative defenses of estoppel, laches, lack of consideration, waiver, actual and constructive notice, unclean hands, and violation of the statute of frauds.Respondents also filed a counterclaim to recover the cost of improvements, maintenance, property taxes, and the increase in value on the Property due to their improvements in the event that the court granted any relief to Appellant.

The case was tried to the court on April 9-10, 2007, and the court subsequently entered its judgment and findings of fact and conclusions of law denying any relief to Appellant, decreeing that the title to the Property remain in Respondents' names, and denying Respondents' counterclaim as moot.The court concluded that the sale of the Property was in violation of the Covenant but that Appellant was not entitled to any relief because she waived her right of first refusal by her conduct.This appeal follows.

In an action to quiet title we review the trial court's judgment under the standard of review established in Murphy v. Carron,536 S.W.2d 30, 32(Mo. banc 1976).O'Dell v. Mefford,211 S.W.3d 136, 138(Mo.App. W.D.2007)."Accordingly, 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."Id."We view the evidence, and permissible inferences therefrom, in the light most favorable to the trial court's judgment, and we disregard all contrary evidence and inferences."Brown v. Mickelson,220 S.W.3d 442, 447(Mo.App. W.D.2007)(internal quotation omitted)."We defer to the trial court's factual findings, giving due regard to the trial court's opportunity to judge the credibility of the witnesses."Id.(internal quotation omitted)."Our primary concern is the correctness of the trial court's judgment, not the route it took to get that result, and therefore, we will affirm the judgment if it is supported by any reasonable theory, even if different from that expressed by the trial court."O'Dell,211 S.W.3d at 138(internal quotations omitted).

Appellant asserts three points of error, but they are essentially alternate arguments concerning her contention that the trial court erroneously concluded that she was not entitled to any relief because she waived her right of first refusal by her conduct.In her first point, Appellant contends that the trial court erroneously applied the law by considering her conduct prior to the date the sales contract was signed because her preemptive right had not yet become a full option.Appellant asserts in Point II that, even if the court properly considered evidence of her conduct prior to the date the sales contract was signed, its ruling was against the weight of the evidence because there was insufficient evidence to establish a waiver.She argues in her third point that the evidence of her conduct after the sales contract was signed was insufficient to establish a waiver or laches.We will address all three points together.

A right of preemption is "`a conditional option under which the pre-emptioner has the right to purchase subject to some condition, the condition being generally (despite variation in phraseology) that the owner must first arrive at a decision to sell.'"Blue Ridge Bank & Trust Co. v. Trosen,221 S.W.3d 451, 460-61(Mo.App. W.D.2007)(quotingGilmore v. Letcher,508 S.W.2d 257, 262(Mo.App.1974)).The preemptive right is "`merely contingent'" until the owner "`arrive[s] at a decision to sell the property,'" at which point the preemptive right "`ripens into a full option.'"Id. at 461(quotingGilmore,508 S.W.2d at 262).

"Parties can waive rights of first refusal."Id. at 462."Waiver is the intentional relinquishment of a known right.While a party's conduct can result in waiver of a contractual right, the conduct must be so manifestly consistent with and indicative of an intention to renounce a particular right or benefit that no other reasonable explanation of the conduct is possible."Horne v. Ebert,108 S.W.3d 142, 147(Mo.App. W.D.2003)(internal citation, quotations, and brackets omitted)."A party asserting waiver of restrictive covenants in a subdivision indentures has the burden of proving waiver."Wallace v. Grasso,119 S.W.3d 567, 576 n. 6(Mo. App. E.D.2003).

Where an owner sells property in breach of a contractual right of first refusal, the individual with the right has "a cause of action for damages against the [seller] or in the alternative a right of specific performance against the [purchaser]" who had notice of the right of first refusal.C & J Delivery, Inc. v. Vinyard & Lee & Partners, Inc.,647 S.W.2d 564, 569(Mo.App. E.D.1983).However, where the individual with a preemptive right "fail[s] to invoke [her] right of specific performance within a reasonable time after the breach, [she] must be deemed to have waived that right."Id.Nonetheless, the individual "retains [her] cause of action against the [seller] for breach of the covenant of first refusal, provided only that [she] brings [her] suit within the period of time fixed by the statute of limitations."Id.

In the case at bar, the trial court found that Appellant's right of first refusal arose "once G. Michael Putthoff decided to sell the property at issue and in fact...