Melson v. Traxler
| Decision Date | 01 November 2011 |
| Docket Number | No. WD 72795.,WD 72795. |
| Citation | 356 S.W.3d 264 |
| Parties | Darrel W. MELSON, et al., Respondents, v. Carl T. TRAXLER, et al., Appellants. |
| Court | Missouri Court of Appeals |
OPINION TEXT STARTS HERE
Supreme Court Denied Dec. 20, 2011.
Application for Transfer
Denied Jan. 31, 2012.
David L. Knight, Columbia, MO and Susan Ford Robertson, Kansas City, MO, for appellants.
John Hein, St. Louis, MO, for respondents.
Before Division Two: MARK D. PFEIFFER, Presiding Judge, VICTOR C. HOWARD, Judge and CYNTHIA L. MARTIN, Judge.
Carl and Martha Traxler (collectively “the Traxlers”) and David Knight (“Knight”) appeal from the trial court's grant of summary judgment in favor of Darrel and Mellony Melson (collectively “the Melsons”) and First National Bank and Trust Company (“First National Bank”). The Traxlers and Knight argue on appeal that the trial court improperly granted summary judgment because the Melsons and First National Bank failed to establish that no material factual disputes existed or that judgment was appropriate as a matter of law. We reverse the trial court's judgment and remand with instructions.
On May 5, 2000, the Traxlers transferred approximately 94 acres of unimproved land to Keith and Chastity Samuel (collectively “the Samuels”). The Samuels put down $35,000, and the Traxlers provided seller financing for the remaining $388,180 of the purchase price. The terms of the seller-financing agreement were memorialized in a demand promissory note that required the Samuels to make monthly payments of interest. The promissory note was secured by a first deed of trust in favor of the Traxlers on the 94–acre tract. Knight was the Trustee named in the first deed of trust.
The Samuels intended to develop the land into residential lots to be sold to individual homeowners. Toward this end, approximately 38.25 acres of the 94–acre tract was platted as Brookfield Estates, Phase I (hereinafter, “Phase I”). To finance the cost of installing sewer lines, streets, sidewalks, and other infrastructure in Phase I, the Samuels obtained a construction loan from Boone County National Bank (“Boone Bank”). To secure the construction loan, the Samuels were required to grant Boone Bank a first deed of trust on Phase I. The Traxlers agreed to partially release their first deed of trust on Phase I in exchange for a second deed of trust on Phase I.1 Knight was the Trustee named in the second deed of trust. The Traxlers' second deed of trust was duly recorded in the Boone County Recorder of Deeds office on January 29, 2001. Following this transaction, the Traxlers remained the holders of a first deed of trust on the 94–acre tract (excluding Phase I) and were the holders of a second deed of trust on Phase I. Both deeds of trust secured the Samuels' promissory note.
After obtaining construction financing, the Samuels began to sell residential lots to individual homeowners in Phase I. From December 2001 to September 2004, at least 14 residential lots were sold. In each case, Boone Bank and the Traxlers agreed, upon contemporaneous request, to issue partial releases of their respective deeds of trust so that the buyers of each lot took title to their lot free and clear. In connection with two such lot sales in March 2004, however, the Traxlers advised Boone Central Title Company (“Boone Title”), the title company which handled the closings for lots in Phase I, that:
We want to handle the matter of lot releases on a “per lot” basis. In other words this agreement is only for the release of these two lots. We will make a further decision on releasing additional lots when a request is made for the same.
(Emphasis added.)
Sometime in early 2003, the Melsons entered into a contract to purchase a lot in Phase I from the Samuels.2 First National Bank provided the financing for the Melsons' purchase of the lot and for their anticipated construction of a home on the lot. Prior to closing, Boone Title issued title commitments to the Melsons and to First National Bank. The title commitments showed both Boone Bank's and the Traxlers' Phase I deeds of trust as encumbrances to title. The title commitments reflected Boone Title's agreement to issue the Melsons and First National Bank title insurance policies at closing.
Boone Title also served as the closing agent for the Melsons' lot purchase. Boone Title requested and secured from Boone Bank a partial deed of release of Boone Bank's deed of trust on the Melsons' lot. Inexplicably, Boone Title failed to request or secure a release of the lot from the second deed of trust in favor of the Traxlers. There is no allegation that the Traxlers were aware that the Melsons were acquiring a lot from the Samuels.
The Melsons closed on their lot on May 9, 2003. The Melsons then built a home on their lot.
The Samuels became irregular in the interest payments due on their promissory note to the Traxlers in February 2004 and stopped making any payments in January 2005. In August 2006, Knight, as Trustee, foreclosed the Traxlers' first deed of trust on the land remaining from the original 94–acre tract, which excluded Phase I.3 The Traxlers' second deed of trust on Phase I was not foreclosed.
In December 2007, Boone Title conducted a routine audit of its files. Boone Title discovered that it had failed to obtain the Traxlers' partial release of their second deed of trust on the Melsons' lot. Boone Title asked the Traxlers to execute a partial deed of release for the Melsons' lot. The Traxlers were unwilling to do so.4 Instead, they directed Knight to record a notice of deed of trust lien on the Melsons' lot and threatened foreclosure. 5
The Melsons and First National Bank filed suit against the Traxlers and Knight in an effort to prevent foreclosure.6 Though the Melsons and First National Bank asserted six theories for recovery, each count relies on the same factual allegations and seeks essentially the same relief.7 The Melsons and First National Bank contend that the Traxlers, the Samuels, and Boone Bank had a “development plan” reflected not in writing, but by the parties' course of conduct, and that the “development plan” included an agreement by the Traxlers that they would partially release their second deed of trust upon the sale of a lot in Phase 1 so long as the Samuels were not in default on their promissory note. The Melsons and First National Bank thus contend that they have an absolute vested right to the release of the Traxlers' deed of trust from the Melsons' lot because the Samuels' promissory note was not in default at the time of the Melsons' purchase of the lot and because all conditions precedent for the partial release of the Traxlers' deed of trust were thus satisfied at the time of the Melsons' purchase of the lot.
Following the completion of discovery, the Melsons and First National Bank filed a motion for summary judgment as to all counts asserted in their petition against the Traxlers and Knight.8 The motion for summary judgment asserted that the uncontroverted facts supported the entry of judgment as a matter of law because the Melsons and First National Bank had a vested right to release of the Traxlers' deed of trust as of the time the Melsons closed on their lot. The trial court granted the motion for summary judgment. The trial court declared that its judgment was final for purposes of appeal and that there was no just reason for delay.
The Traxlers and Knight appeal.9
“The standard of review when considering an appeal from the grant of summary judgment is essentially de novo.” Renaissance Leasing, LLC v. Vermeer Mfg. Co., 322 S.W.3d 112, 119 (Mo. banc 2010) (citing ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993)). “Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Id. at 119–20 (citing Larabee v. Eichler, 271 S.W.3d 542, 545 (Mo. banc 2008); Rule 74.04(c)(6)). “The court accords the non-moving party the benefit of all reasonable inferences in the record.” Id. at 120 (citing ITT, 854 S.W.2d at 376). “[The entry] of summary judgment may be affirmed under any theory that is supported by the record.” Id. (citing Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010)).
The Traxlers and Knight argue that the trial court erred in granting summary judgment in favor of the Melsons and First National Bank because material facts were still in dispute, namely those relating to whether the Traxlers' course of conduct indicated a binding intent to grant partial releases for every lot sold by the Samuels in Phase I. Alternatively, the Traxlers and Knight argue that, as a matter of law, the Melsons and First National Bank did not have a vested right to a partial release of the Traxlers' deed of trust. Because the uncontroverted facts asserted by the Melsons and First National Bank do not establish that they have a vested right to a partial release of the Traxlers' deed of trust, we conclude that the trial court erred as a matter of law in entering judgment in favor of the Melsons and First National Bank.
Section 442.390 10 provides that:
Every ... instrument in writing, certified and recorded in the manner herein prescribed, shall, from time of filing of same with the recorder for record, impart notice to all persons of the contents thereof and all subsequent purchasers and mortgagees shall be deemed, in law and equity, to purchase with notice.The Traxlers' second deed of trust on Phase I was duly recorded of record with the Boone County Recorder of Deeds office in January 2001, several years before the Melsons bought their lot and before First National Bank extended financing for that purpose. The Melsons thus purchased their lot, and First National Bank agreed to extend financing secured by a deed of trust on the lot, subject to constructive...
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