Mo. Bond Co. v. Devore

Decision Date15 February 2022
Docket NumberED 109475
Citation641 S.W.3d 397
Parties MISSOURI BOND COMPANY, LLC, Appellant, v. Mark R. DEVORE, et al., Respondents.
CourtMissouri Court of Appeals

FOR APPELLANT: Phillip K. Gebhardt, 1720 North Main St., P.O. Box 340, Desoto, MO 63020.

FOR RESPONDENTS MARK R. DEVORE & ST. LOUIS COUNTY, MO: Laura M. Robb, 41 S. Central Ave., 9th Floor, Clayton, MO 63105.

FOR RESPONDENT WESTERN SURETY CO.: James S. Kreamer, 2400 Pershing Rd., Ste. 500, Kansas City, MO 64106, Noemi F. Donovan, 8202 W. 129th Terr., Overland Park, KS 66213.

FOR RESPONDENTS OLD REPUBLIC TITLE CO. OF ST. LOUIS, INC., JUANEKA GORE & EQUITY TRUST CO. CUSTODIAN FBO RICHARD FORONJYA, IRA: Blake D. Hill, 1049 N. Clay Avenue, Kirkwood, MO 63122.

ROBERT M. CLAYTON III, Presiding Judge

Missouri Bond Company, LLC ("Missouri Bond" or "the Tax Sale Purchaser") appeals the trial court's December 31, 2020 judgment granting motions to dismiss filed by St. Louis County (individually "the County") and its Collector of Revenue Mark R. Devore (individually "the Collector") (collectively "the County Defendants"), Western Surety Company ("Western Surety"), and Old Republic Title Company of St. Louis, Inc., Equity Trust Company Custodian FBO Richard Foronjy-IRA, and Juaneka Gore (collectively "the 1861 Atmore Property Owners") on Count VI of Missouri Bond's second amended petition. The trial court's judgment granted the County Defendantsmotion to dismiss, in part, with prejudice and, in part, without prejudice; granted Western Surety's motion to dismiss with prejudice; and granted the 1861 Atmore Property Owners’ motion to dismiss without prejudice. As explained in detail below, we reverse and remand in part with instructions, affirm as modified in part, and affirm in part.

Missouri Bond raises five points of error on appeal. In Missouri Bond's first, second, and third points on appeal, it alleges the trial court erred in granting the County Defendantsmotion to dismiss because, inter alia , the County Defendants failed to collect and reimburse Missouri Bond for the costs of postage, the title search, and attorney's fees as reasonable and customary costs of the tax sale of the 1861 Atmore Property ("the 1861 Atmore Property" or "the Property") in violation of section 140.340 RSMo 2016 (effective from August 28, 2015 to the present)1 and section 140.405 RSMo 2016 (effective from August 28, 2015 to the present).2 In point four, Missouri Bond alleges Western Surety is liable as the Collector's surety because the County Defendants failed to collect and reimburse Missouri Bond's reasonable and customary costs of sale. In point five, Missouri Bond argues the 1861 Atmore Property Owners are similarly liable as the redeeming property owner because the County Defendants failed to collect and reimburse Missouri Bond's reasonable and customary costs of sale.

We hold the trial court erred in granting the County Defendantsmotion to dismiss Count VI because costs for postage, a title search, and attorney's fees are potentially reimbursable as reasonable and customary costs of a tax sale under sections 140.340 and 140.405. Accordingly, this portion of the trial court's judgment is reversed, and the case is remanded for further proceedings consistent with this opinion and the following specific instructions on remand. First, the Tax Sale Purchaser is required to submit invoices clearly identifying each category of cost associated with the tax sale at issue in this case and is required to establish each cost as reasonable and customary. Second, the Collector is required to assess the reasonableness and customary nature of each category of cost under the circumstances, including attorney's fees. Third and finally, the trial court shall consider both parties’ actions; determine the reasonable and customary costs of postage, the title search, and any other potentially reimbursable costs associated with the tax sale, including attorney's fees; and order the Collector to pay the Tax Sale Purchaser the appropriate amount of reimbursement.

Additionally, we hold the Tax Sale Purchaser's claims against Western Surety and the 1861 Atmore Property Owners are premature until such time the trial court orders the appropriate amount of reimbursement and the Collector fails to pay it. Therefore, the portion of the trial court's judgment granting Western Surety's motion to dismiss Count VI is erroneous to the extent it reflects a dismissal with prejudice and is affirmed as modified to reflect a dismissal without prejudice. The portion of the trial court's judgment granting the 1861 Atmore Property Owners’ motion to dismiss Count VI without prejudice is not erroneous and is affirmed.

I. BACKGROUND

Because this appeal involves a dismissal by the trial court for failure to state a claim upon which relief can be granted, we begin by setting out the relevant allegations of Missouri Bond's second amended petition.3

A. The Relevant Allegations in Missouri Bond's Petition

Missouri Bond alleges in August 2016, it acquired a tax sale certificate of purchase for the 1861 Atmore Property at a tax foreclosure sale in the County. On March 13, 2017, Missouri Bond hired Gebhardt Real Estate and Legal Services, LLC ("Gebhardt, LLC") to perform a limited title examination of the Property, draft and mail notices of tax sale redemption rights, draft a notice of tax sale and possible rights of redemption, and draft and file an affidavit with the Collector in application for a collector's deed. Gebhardt, LLC generated an invoice in the amount of $544.25 for the services.

Subsequently, the 1861 Atmore Property Owners redeemed the Property pursuant to section 140.340.1 and the County reimbursed Missouri Bond $7,035.07 for the taxes and interest it paid for the Property. Missouri Bond submitted an invoice from Gebhardt, LLC, seeking reimbursement of $544.25 for services rendered pursuant to sections 140.340 and 140.405, requesting $500 for attorney's fees and $44.25 in various postage costs. Missouri Bond argued the attorney's fees represented the costs of the title report for the 1861 Atmore Property and attorney's fees, generally.

On June 19, 2017, the County responded to Missouri Bond's submission of Gebhardt, LLC's invoices:

This letter is directed to the invoices you provided for the expenses of various properties you purchased in the 2016 tax sale. Your invoice included the cost of a title report wherein it is labeled ‘Attorney's Fees for Title Report for notice letter with right of redemption for ‘address of property’[’], at a cost of $500 each ....
Section 140.340.2 ... allows the purchaser of property to recover reasonable and customary costs of a tax sale, which include the cost of a title search and postage but not attorney fees.
In examining the cost of the title search ... $500 is not only not recoverable but also not reasonable ....
Please provide this office with an invoice for the title search that does not include attorney's fees and within the same invoice do not include any other attorney's fees. When a new invoice is submitted by you, [the Collector's] Office will review the invoice and accept the invoice if the reported costs for collection are reasonable and customary costs.
[ ] Pursuant to [section] 140.340.5 ..., [‘] the reasonable and customary costs of the sale needed to redeem any land or lot sold for taxes under this section shall be determined by the [C]ollector.’

No amended invoice was submitted and Missouri Bond was denied recovery of $544.25.

B. Procedural Posture

On January 18, 2018, Missouri Bond filed its petition against the County Defendants, Western Surety, and the 1861 Atmore Property Owners alleging the County Defendants failed to collect and reimburse Missouri Bond for the reasonable and customary costs of the sale of the 1861 Atmore Property. Because the County Defendants failed to reimburse Missouri Bond, it asserted Western Surety and the 1861 Atmore Property Owners were liable to Missouri Bond for those costs.

Subsequently, the County Defendants, Western Surety, and the 1861 Atmore Property Owners each filed separate motions to dismiss. The trial court granted each motion on August 8, 2018, and found attorney's fees are not reasonable and customary costs associated with the purchase of a tax sale property under sections 140.340 and 140.405. As a result, the trial court dismissed, in part, with prejudice, and, in part, without prejudice all of Missouri Bond's claims against the County Defendants; dismissed with prejudice the claims against Western Surety; and dismissed without prejudice the claim against the 1861 Atmore Property Owners. Missouri Bond appealed.

Because there remained unresolved claims and parties, see footnote 3 of this opinion, this Court dismissed Missouri Bond's first appeal for lack of a final, appealable judgment. Missouri Bond Company, LLC v. Devore , 580 S.W.3d 653, 653-57 (Mo. App. E.D. 2019). Missouri Bond voluntarily dismissed without prejudice all other claims and parties and requested the trial court certify the court's August 2018 judgment as final and appealable. The trial court certified the judgment on December 31, 2020, under Missouri Supreme Court Rule 74.01(b) (2020). Missouri Bond again appeals.

II. DISCUSSION

Missouri Bond raises five points on appeal which allege the trial court erred in granting the motions to dismiss filed by the County Defendants, Western Surety, and the 1861 Atmore Property Owners.

A. Standard of Review for All Points on Appeal

This Court reviews de novo the trial court's grant of a motion to dismiss. Amalaco, LLC v. Butero , 593 S.W.3d 647, 650 (Mo. App. E.D. 2019). We review a motion to dismiss for failure to state a claim upon which relief can be granted solely to determine the adequacy of the plaintiff's petition. Id. at 650-51. The petition must allege facts that, if true, meet the elements of a recognized cause of action. Id. at 651. We assume all of the plaintiff's allegations in the petition...

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