Mueller v. Abdnor
| Decision Date | 29 May 1991 |
| Docket Number | No. 87-1965C(6).,87-1965C(6). |
| Citation | 765 F. Supp. 551 |
| Parties | Marvin MUELLER, Plaintiff, v. James ABDNOR, Administrator of the Small Business Administration, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
COPYRIGHT MATERIAL OMITTED
James C. Owen, Buechner, McCarthy, Leonard, Kaemmerer, Owen & Laderman, Chesterfield, Mo., for plaintiff.
Joseph B. Moore, Henry J. Fredericks, Asst. U.S. Atty., for Abdnor.
Jeremiah Phelan, Phelan & Potter, St. Louis, Mo., for Rissmann.
Claire Schenk, Chief Counsel for Claims & Inv. Co., U.S. Small Business Admin., St. Louis, Mo.
This is an action for breach of contract arising from a written agreement entered into by plaintiff Marvin Mueller (Mueller) and the Small Business Administration (SBA). Defendant James Abdnor is the current administrator of the United States Small Business Administration. Mueller alleges that the agreement was intended to convey two parcels of property located in Miller County, Missouri and known as the Manco property. Plaintiff seeks damages against the SBA for lost profits and incidental damages arising from the SBA's failure to convey the aforementioned real estate.
The SBA contends, in the alternative, (1) that Mueller failed to satisfy the terms of the contract and thus relieved the SBA of any obligation of performance, (2) that the contract was void due to mutual mistake, and (3) that there was no meeting of the minds concerning the identity of the property to be conveyed. The SBA has counterclaimed against Mueller for slander of title, alleging that Mueller's filing of an invalid contract with the Miller County Recorder of Deeds placed a cloud on the title and prevented the SBA from selling the property to a prospective buyer.
The SBA has also filed a third-party complaint against Jeffrey B. Rissman (Rissman). The SBA alleges that Rissman, in his capacity as a notary public, certified that Mueller signed a contract in his presence although the contract had been executed one year earlier and Rissman had not observed the execution. The SBA further alleges that as a result of Rissman's improper certification Mueller was able to record the contract with the Miller County Recorder of Deeds and thus prevent the SBA from selling the property.
Defendant James Abdnor contends that Mueller, by failing to tender the earnest deposit, failed to satisfy a material condition precedent to defendant's performance under the contract. In response plaintiff asserts that his failure to tender the earnest deposit is excused by defendant's extension of the contract "for possession." Alternatively, plaintiff asserts that the SBA's failure to inform him of the expiration of the contract and its acceptance of certain payments on the contract bars the SBA from rescinding its alleged agreement to sell him the properties.
This matter was tried to the Court sitting without a jury. The Court having duly considered the pleadings, memoranda, trial briefs, exhibits, and deposition testimony on file now makes the following findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).
1. Plaintiff Marvin Mueller is an individual and resident of St. Louis, Missouri.
2. Defendant James Abdnor is the current Administrator of the United States Small Business Administration (SBA), an agency of the United States Government.
3. Third-party defendant Jeffrey Rissman is an individual and resident of St. Louis who has served as a notary public in the course of his employment by a corporation engaged in liquidation activities.
4. The parties called the following witnesses.
5. On or about December 30, 1977, the SBA agreed to guarantee a loan to a corporation known as Manco, Inc. (Manco). The loan was secured by a First Deed of Trust on approximately 52 acres of real estate at the junction of U.S. Highway 54 and Missouri Highway 52, Miller County, Missouri (the large parcel). The loan also was secured by the personal guaranty of Max Allen Nickerson and Carolyn Nickerson which in turn was secured by a First Deed of Trust on approximately 22 acres of real estate commonly known as the Max Allen Zoo (the small parcel).
6. Manco defaulted on the loan and the SBA purchased the guaranteed portion of the loan. Manco's delinquency persisted and on or about April 24, 1984, the SBA transferred the loan to liquidation status so that it could proceed to recover against the Manco loan collateral. Tr. 318, Westbrook Exh. 3-1.
7. In order to evaluate the worth of the its interest in the large and small parcels of real estate, the SBA obtained several appraisals of the properties. On June 7, 1985, James A. Hendren (Hendren) determined that the large parcel possessed a fair market value of $293,250. Hendren also ascertained that the small parcel possessed a fair market value of $66,000. Joint Stipulation of Facts, ¶ 3.
8. On June 28, 1986, Joyce Hilton (Hilton) performed a second appraisal on the properties. Hilton determined that the fair market value of the large parcel was $140,297. Hilton appraised the small parcel at a fair market value of $19,400. Exh. N, Joint Stipulation of Facts, ¶ 4. Prior to preparing her report, Hilton orally advised Weaver of her opinion concerning the value of the property. Tr. 123-25 (Weaver). Subsequently, on April 22, 1987, Hilton appraised the small parcel at a fair market value of $19,400. Exhibit N; Joint Stipulation of Facts, ¶ 4.
9. On or about January 22, 1986, the SBA decided to foreclose against the large parcel. This decision was documented in an SBA Form 327, a form which is utilized to document agency actions and to gain the necessary approval signatures. Exhibit 3-7. The Form 327 authorizing foreclosure referred to a 52-acre lot which corresponds to the large parcel but listed an appraisal value of $66,000.00 which corresponds to the Hendren appraisal of the small parcel.
10. Early in the summer of 1986 Cornelius Weaver visited Mueller and asked him whether he would be interested in purchasing certain properties which the SBA had for sale. The Manco property was included among those listed for sale. Shortly thereafter Mueller visited the property. Mueller testified that during this visit, he noted that the property was still functioning as a zoo and that animals remained on the premises. Mueller also observed that the property consisted of two non-adjacent parcels of land. Mueller testified that upon visiting the property and examining the smaller of the parcels, he had determined that the small parcel was without value. Tr. 274 (Mueller).
11. On July 7, 1986, the SBA foreclosed on the large parcel of land and purchased it for $275,000. Exhs. I & J; Tr. 322-23 (Westbrook); Joint Stipulation of Facts, ¶ 5. Prior to the sale, Weaver telephoned the trustee and instructed him to place a protective bid of $275,000. Tr. 48 (Weaver). Weaver failed to follow the normal practice of the SBA, which is to obtain authorization for a protective bid of a certain dollar amount and to record that authorization in a Form 327. Weaver testified that the $275,000 protective bid was based upon the Hendren appraisal rather than the Hilton appraisal. He further testified that he believed Hendren's valuations to be customarily high. Tr. 117 (Weaver). Weaver did not visit the property, personally review the Manco loan collateral to determine its value or attend the sale. Tr. 117-20 (Weaver).
12. At some point after the July 7, 1986 foreclosure sale, Weaver reviewed the affidavit of publication relating to the sale and realized that the SBA did not own the small parcel of the Manco property because it had not been listed in the affidavit.
13. The SBA's standard policies and procedures require public sale of collateral upon which the SBA has foreclosed. Tr. 324 (Westbrook). Pursuant to this policy, a public sale of the Manco property was held on August 7, 1986. Prior to the public sale, Weaver prepared an advertisement concerning the sale and placed it in the St. Louis Post-Dispatch. Exh. ZZ. Westbrook did not review the advertisement prior to its publication. Tr. 327-28 (Westbrook); Tr. 127 (Weaver).
14. No prospective buyers attended the August 7, 1986 public sale of the Manco properties. Thereafter, Weaver informed Westbrook that he had located one interested purchaser, Mueller. Weaver recommended to Westbrook that the SBA sell the property to Mueller for $115,000. Tr. 48, 129-30 (Weaver). In response to Westbrook's request for an appraisal justifying the sale price of $115,000, Weaver produced the Hilton appraisal which valued the large parcel at $140,000. Exh. 8, Tr. 332 (Westbrook).
15. On or about August 7, 1986 Westbrook signed a contract for the sale of certain real property to Mueller for $115,000. The contract called for the "legal description to govern" the subject of the sale. In the area designated for the description of the property, the contract contained the notation "AKA Max Allen's Zoo." The Court finds that there were no attachments to the contract relating to the legal description of the property to be conveyed.
16. Westbrook testified and the Court finds that he signed the contract with the understanding that it related only...
To continue reading
Request your trial
-
Mueller v. Abdnor
...was submitted, Judge ARNOLD was appointed to the Eighth Circuit Court of Appeals.1 The district court's decision was published at 765 F.Supp. 551 (E.D.Mo.1991).2 The elements of slander of title are: "(1) the words must be false; (2) they must be maliciously published; (3) they must result ......
- St. Paul Fire and Marine Ins. Co. v. F.D.I.C.