Murray v. Fleet Mortgage Corp., 70064

• Citation: 936 S.W.2d 212
• Decision Date: 17 December 1996
• Docket Number: No. 70064,70064
• Parties: Louise MURRAY, individually and as a representative of a class, Plaintiff/Appellant, v. FLEET MORTGAGE CORP., a corporation, Defendant/Respondent.
• Court: Court of Appeal of Missouri (US)

Page 212

936 S.W.2d 212

Louise MURRAY, individually and as a representative of a class, Plaintiff/Appellant, v. FLEET MORTGAGE CORP., a corporation, Defendant/Respondent.

No. 70064.

Missouri Court of Appeals,

Eastern District,

Division Two.

Dec. 17, 1996.

James P. Holloran, St. Louis, for appellant.

James W. Erwin, Roman P. Wuller, Thompson Corburn, St. Louis, for respondent.

CRANE, Presiding Judge.

Plaintiff, Louise Murray, individually and as a representative of a class, brought an action against defendant Fleet Mortgage Corp. (Fleet) to recover a statutory penalty under § 443.130 on the grounds that Fleet failed to deliver a release of a deed of trust within thirty days after a request and tender of costs. The trial court granted summary judgment in Fleet's favor for the reason that Murray did not tender to Fleet the required costs for release of the deed of trust. It dismissed the class action without prejudice because there was no class representative to represent the putative class. We affirm.

The following facts are not in dispute. Fleet was the holder of a deed of trust securing a promissory note dated August 8, 1989 in the amount of $106,050.00 on residential real estate located in Richmond Heights, Missouri. In May, 1993 plaintiff and her son, Richard Murray, assumed the note and deed of trust. Later in 1993 plaintiff decided to refinance the property through First National Bank of St. Louis (First National). Fleet sent a payoff statement dated October 25, 1993 to First National, showing a payoff amount of $104,982.52. The payoff statement recited: "[Fleet] is not responsible for collecting release fees and/or recording documents, unless indicated in this statement." Nothing to the contrary is indicated in the statement. Another paragraph of the payoff statement provided: "Please indicate address where satisfied documents should be sent." A blank space was designated for the address.

Closing occurred on November 17, 1993. First National, as settlement agent, prepared the settlement statement required by the Real Estate Settlement Procedures Act (RESPA). 12 U.S.C. § 2601 et seq. Included in the settlement charges to be paid by borrowers, plaintiff and Richard Murray, was a $15.00 fee on line 1201 to record the deed of release. The revised payoff amount to Fleet was $104,643.04, which covered the principal, interest and late charges, if any, due on the loan. The settlement charges were withheld from the new loan.

On November 17, 1993 First National sent Fleet, which was located in Milwaukee, Wisconsin, a cashier's check dated November 15, 1993 in the amount of $104,643.04 along with a letter requesting Fleet to forward the paid note, deed of trust, and deed of release as soon as possible to First National. First National issued a check to Commonwealth Title for the recording fee. Fleet executed a deed of release on February 9, 1994 and transmitted it to First National on February 18, 1994, with a cover letter requesting the release document be forwarded to St. Louis County for recording. The release was recorded in St. Louis County on March 31, 1994 for a fee of $15.00. Neither plaintiff nor First National tendered the recording fee to Fleet.

On July 27, 1994 plaintiff filed this action. ¹ In Count I of her First Amended Petition, plaintiff sought to recover the ten per cent penalty under § 443.130 for Fleet's failure to record the deed of release within thirty days of First National's November 17, 1993 request. In Count II she sought to represent

a class of similarly situated persons. Fleet filed a Motion for Summary Judgment on the grounds that plaintiff admitted that she did not tender the statutory costs to release the deed of trust to Fleet as required by § 433.130. Plaintiff also filed a motion for summary judgment. The trial court entered judgment pursuant to Rule 74.04 against plaintiff on Count I and dismissed Count II without prejudice.

DISCUSSION

For her sole point on appeal, plaintiff asserts that the trial court erred in granting summary judgment since disputed issues of fact remained concerning whether First National acted as Fleet's agent in accepting plaintiff's tender of release costs or whether Fleet waived tender by stating in its payoff statement that it was not responsible for collecting release costs.

Section 443.060 RSMo Supp.1993 sets out a mortgagee's duty to provide a deed of release upon full payment of the underlying debt. It provides in part:

If any mortgagee ... receive[s] full satisfaction of any security instrument, he shall, at the request and cost of the person making the same, deliver to such person a sufficient deed of release of the security instrument....

If the mortgagee fails to satisfy this duty within thirty days, § 443.130 provides for a ten per cent penalty to be forfeited to the mortgagor:

If any such person, thus receiving satisfaction, does not, within thirty days after request and tender of costs, deliver to the person making satisfaction a sufficient deed of release, such person shall forfeit to the party aggrieved ten percent upon the amount of the security instrument, absolutely, and any other damages such person may be able to prove such person has sustained, to be recovered in any court of competent jurisdiction.

This statute provides for an absolute penalty of ten percent of the mortgage if a mortgagee fails to deliver a deed of release after satisfaction of a mortgage, a demand to the mortgagee for the release, and tender of costs. Trovillion v. Countrywide Funding Corp., 910 S.W.2d 822, 824 (Mo.App.1995) (Trovillion I ). Mortgagors who have paid a mortgage debt are not entitled to the ten per cent penalty unless they show that, thirty days or more prior to the institution of suit, they requested the mortgagee to satisfy the record and accompanied the demand with a tender of the necessary cost. Dunkin v. Mutual Benefit Life Ins. Co., 63 Mo.App. 257, 260-61 (1895). The term "costs" as used in these statutes means the recorder of deeds' fee for releasing the deed of trust. Trovillion I, 910 S.W.2d at 824. Statutes imposing penalties of this nature must be strictly construed. Snow v. Bass, 174 Mo. 149, 73 S.W. 630, 636 (1903); Trovillion I, 910 S.W.2d at 823; Trovillion v. Chemical Bank, 916 S.W.2d 863, 865 (Mo.App.1996) (Trovillion II ); Martin v. STM Mortg. Co., 903 S.W.2d 548, 550 (Mo.App.1995).

1. The Trovillion Cases

For the statutory penalty to apply, the mortgagor must tender the recording costs to the mortgagee. Trovillion I, 910 S.W.2d at 824; Trovillion II, 916 S.W.2d at 865. In Trovillion I, the plaintiffs executed a note and deed of trust which was later assigned to Countrywide Funding Corporation. The plaintiffs subsequently refinanced the loan through Commerce Mortgage Corporation. Countrywide informed Commerce of the payoff amount by letter dated April 19, 1993 which advised Commerce that Countrywide "does not collect trustee or recording fees." On the settlement statement, Commerce charged the plaintiffs $18.00 as a recording fee for the deed of release. Commerce sent the payoff amount to Countrywide on April 23, 1993. In its transmittal letter, Commerce asked Countrywide to send the "documents necessary for the release of your lien" to a title company. The plaintiffs requested the release several times. Countrywide executed the release on September 9, 1993. There was no dispute that neither the plaintiffs nor anyone on their behalf tendered the fee to Countrywide. The trial court granted summary judgment in favor of Countrywide.

On appeal, the plaintiffs argued that the statute simply requires a tender of costs, and does not require tender to the mortgagee. Trovillion I, 910 S.W.2d at 824. They maintained they intended to pay and had the means to do so but that the fee was withheld either by a title company or the previous lender. Id. We affirmed, holding that a strict construction of the statute requires that the costs must be tendered to the holder of the note and deed of trust. Id. (citing Perrin v. Johnson, 124 S.W.2d 551, 555 (Mo.App.1939)); Dunkin, 63 Mo.App. at 260-61.

In Trovillion II, Chemical Bank held a mortgage on the plaintiffs' property. The plaintiffs contacted Farm and Home Savings Association about refinancing their mortgage. On October 12, 1993, Chemical received a request for payoff information from Farm and Home Savings. Chemical forwarded the payoff figure to Farm and Home. Chemical received a check from Investors Title Company on October 19, 1993 for the payoff amount which did not include the recording fee. The same day Chemical also received a letter from the plaintiffs requesting a recorded deed of release and informing Chemical that the recording fees were paid at the closing. At no time did the plaintiffs, or any other party, tender the fee to Chemical. Without reimbursement Chemical paid the recording fee and recorded the deed of release in February, 1994. On appeal we held the statute requires tender of the costs to the party receiving satisfaction and that the withholding of the recording fees at closing without submission to the mortgagee does not entitle the borrower to collect the penalty. Trovillion II, 916 S.W.2d at 865.

2. Agency

Plaintiff asserts the Trovillion cases should not apply because in this case issues of fact remained as to whether First National was Fleet's agent or whether Fleet waived tender. Plaintiff further argues that she was deprived the right to factually contest Fleet's assertion that it would have accepted her tender.

Plaintiff relies on Tedesco v. Bekker, 741 S.W.2d 896 (Mo.App.1987) to support her claim that payment of the recording fee to First National was sufficient to satisfy the tender requirement. In Tedesco defendants were individual lenders who had lent money to plaintiffs. Defendants had entered into a management agreement with Creative Funding, Inc. [CFI] which appointed CFI as their exclusive agent to manage the loan and collect all...