Pacific Carlton Development Corp. v. Barber

• Decision Date: 28 January 2003
• Docket Number: No. WD 61006.,WD 61006.
• Citation: 95 S.W.3d 159
• Parties: PACIFIC CARLTON DEVELOPMENT CORPORATION, Woodside Housing Resource Foundation, Inc., Respondents, v. Brent M. and Lisa M. BARBER, Appellants.
• Court: Missouri Court of Appeals

95 S.W.3d 159

PACIFIC CARLTON DEVELOPMENT CORPORATION, Woodside Housing Resource Foundation, Inc., Respondents, v. Brent M. and Lisa M. BARBER, Appellants.

No. WD 61006.

Missouri Court of Appeals, Western District.

January 28, 2003.

Steven C. Effertz, Independence, MO, for appellants.

Christian J. Kelly, Brett D. Anders, Co-Counsel, Kansas City, MO, for respondents.

Before JOSEPH M. ELLIS, Chief Judge, HAROLD L. LOWENSTEIN, Judge and VICTOR C. HOWARD, Judge.

JOSEPH M. ELLIS, Chief Judge.

Brent Barber and Lisa Barber ("Appellants") appeal from the trial court's grant of summary judgment awarding Pacific Carlton Development Corporation ("Pacific Carlton") and Woodside Housing Resource Foundation ("Woodside Housing") (jointly "Respondents") unpaid balances due on two promissory notes, as well as interest, attorney's fees and costs.

On September 19, 2000, Appellants signed and delivered one promissory note to Woodside Housing and one promissory note to Pacific Carlton. The terms of each note were identical: each was for the principal amount of $155,500, with interest set at $77,750. The notes provided that in the event of default, interest would accrue on all unpaid balances at twelve percent per month. The notes stated that the proceeds were for business purposes and that the loan was a business loan pursuant to §§ 408.015(2)¹ and 408.035 RSMo.² Principal and interest on each note was due on October 19, 2000. The parties later agreed, however, to extend the due dates of each note to March 19, 2001. The notes were secured by a deed of trust and mortgage encumbering real estate in Jackson County, Missouri, and Wyandotte County, Kansas. The notes provided that Appellants would pay the expense of enforcing the notes or any security documents.

Appellants failed to pay any of the principal or interest due on the notes. On May 24, 2001, Respondents filed separate petitions to collect the amounts due on their respective notes. On June 22, 2001, Appellants filed their answers. On July 18, 2001, Respondents filed first-amended petitions. On August 16, 2001, Appellants filed answers to the first-amended petitions. Appellants claimed that the notes were part of a larger business plan between the parties and, as part of the plan, Appellants had transferred property to Respondents that satisfied the amounts due on the notes. Accordingly, Appellants claimed that Respondents' claims were barred by the affirmative defenses of accord and satisfaction, set-off and estoppel.

On September 5, 2001, Respondents filed their motions for summary judgment. Respondents asserted that Appellants executed and signed the notes and failed to pay any of the principal or interest due. Henry Weinstein, president of Pacific Carlton, and Jay Schippers, president of Woodside Housing, filed affidavits to support their motions for summary judgment. Mr. Weinstein and Mr. Schippers both acknowledged that their companies had conducted prior business with Appellants and that Brent Barber purchased properties in the name of each company at tax foreclosure sales. As part of those transactions, transfers of property had occurred between Appellants and Respondents. However, Mr. Weinstein and Mr. Schippers stated that the business transaction Appellants referred to in their answer was independent of the loan agreement and that Respondents had not agreed to accept property in lieu of full payment of the amounts due on the notes.

Shortly thereafter, Respondents filed a motion to consolidate, and the court entered its order of consolidation on October 1, 2001.

On November 5, 2001, Appellants filed their suggestions in opposition to the motions for summary judgment. They asserted that prior to executing the notes, they engaged in lengthy discussions with Respondents involving a business plan. Pursuant to that plan, Respondents were to sign deeds to the properties secured by the mortgage so that the properties could be sold and the proceeds used to repay the balances due on the notes. In addition, Respondents were to release the deeds of trust so that those properties could be sold. Appellants averred that they were unable to repay the balances due on the notes because Respondents refused to comply with the "business plan." Appellants admitted that March 19, 2001, was a "projected maturity date" for the notes but contended that the date was discussed with the understanding that the Court Administrator's Office of Jackson County, Missouri, would issue deeds to the properties purchased with the proceeds of the note in two to three months rather than six to eight months as actually occurred.

Respondents filed additional suggestions to support their motions for summary judgment, in which they denied the existence of a business plan between the parties. Respondents also alleged that Appellants' claims regarding the business plan involved the transfer of real property and was therefore barred by the Statute of Frauds. The trial court entered summary judgment in favor of Respondents on December 19, 2001. The judgment awarded each company the following amounts:

[P]rincipal in the amount of $155,500; interest through May 19, 2001 in the amount of $77,750; interest thereafter and through May 23, 2001 in the amount of $39,808; interest thereafter, including after the date of entry of this Judgment, at the per diem rate of $622; and for reasonable fees and costs incurred ... in connection with its efforts to collect the amounts due under the promissory note, including attorneys fees and costs, in the amount of $6581.01.

Appellants' motion for reconsideration was denied. This appeal follows.

Appellants argue in their only point on appeal that the trial court erred in granting summary judgment in favor Woodside Housing and Pacific Carlton. Appellants claim that Respondents failed to negate Appellants' affirmative defenses of set off and estoppel, which would have reduced or defeated Respondents' entitlement to payment of the notes.

Our review of the trial court's grant of summary judgment is de novo,and we apply the same criteria as the trial court in determining the propriety of summary judgment. Langley v. Curators of Univ. of Mo., 73 S.W.3d 808, 810 (Mo.App. W.D. 2002). "Summary judgment will be upheld on appeal if: (1) there is no genuine dispute of material fact, and (2) the movant is entitled to judgment as a matter of law." Mobley v. Baker, 72 S.W.3d 251, 256 (Mo. App. W.D.2002) (citing ITT Commercial Fin. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 380 (Mo. banc 1993)). "The court will review the record in the light most favorable to the party against whom judgment was entered, and will accord the non-movant the benefit of all reasonable inferences." Calvert v. Mehlville R-IX Sch. Dist., 44 S.W.3d 455, 457 (Mo. App. E.D.2001). "Where the movant is a claimant, as in our case, to make a prima facie case for summary judgment, he is required to state with particularity in his motion all the undisputed material facts necessary to establish each and every element of his claim, referencing the pleadings, discovery or affidavits that demonstrate the lack of a genuine issues as to those facts." Mobley, 72 S.W.3d at 256. When a defendant properly pleads an affirmative defense, the movant also has the burden of showing that the defendant will be unable to prove one or more elements of the defense. Welhoff v. Farm Bureau Town & Country Ins. Co., 54 S.W.3d 589, 594 (Mo.App. W.D.2001).

Respondents were required to plead facts establishing the elements of a suit on note, the three elements being: "(1) there exists a valid promissory note signed by the maker; (2) there remains a balance due on the note; and (3) demand on the maker for payment has been made and refused, leaving the maker in default." Mobley, 72 S.W.3d at 257. Appellants admit that they executed and signed the notes, that the balances remain unpaid, and that they are in default. They contend that the trial court erred because they properly pleaded the defenses of set off and estoppel.

Appellant Brent Barber filed an affidavit to support his suggestions in opposition to summary judgment. Mr. Barber claimed that, prior to executing the notes, he discussed a business plan with Respondents which involved buying homes in Jackson County, Missouri, to renovate and sell for a profit. He asserted that Respondents provided funds to him so that he could purchase properties at a tax foreclosure sale in eastern Jackson County for rehabilitation. The properties were titled to Woodside Housing and Pacific Carlton. Mr. Barber averred that proceeds from the notes were to be used to rehabilitate purchased houses. Respondents were to sign deeds when the work was completed so that property could be transferred to purchasers. The proceeds from the sale were to be used to reimburse Respondents for the money spent at the tax sale and then to pay interest and finally principal on the notes. Mr. Barber further insisted, however, that Respondents told him that they would not sign any deeds for the properties purchased at the tax sale until the notes were fully paid.

As further security, Mr. Barber stated that he signed second deeds of trust to numerous properties that he already owned. The deeds provided security for the notes, as well as the money used to purchase the property at the tax sale. He claimed that Respondents were expected to sign releases on the second deeds of trust so that those properties could be sold. The proceeds from those sales were to go to pay the amounts due on the notes after the first deed of trust on each property was retired and the costs of sale paid. Mr. Barber averred that Respondents signed releases to the second deeds of trust and left them with a local title company. But when Mr. Barber sold one of the properties, Respondents refused to allow the company to file the release. As a consequence, he could not complete the sale, and the purchaser filed a claim against him, which he was...