Pecos I, LLC v. Meyer

• Decision Date: 08 November 2022
• Docket Number: ED 110302
• Citation: 655 S.W.3d 579
• Parties: PECOS I, LLC, Respondent, v. Jason S. MEYER, Appellant.
• Court: Missouri Court of Appeals

655 S.W.3d 579

PECOS I, LLC, Respondent,

v.Jason S. MEYER, Appellant.

No. ED 110302

Missouri Court of Appeals, Eastern District, DIVISION FOUR.

Filed: November 8, 2022

FOR APPELLANT: John S. Sandberg, Zachary S. Merkle, Sandberg, Phoenix, & Von Gontard, 600 Washington Avenue, 15^th Floor, St. Louis, Missouri 63101, Timothy C. Sansone, Sandberg, Phoenix, & Von Gontard, 120 South Central Avenue, Suite 1600, St. Louis, Missouri 63105.

FOR RESPONDENT: John C. Grellner, Berger, Cohen & Brandt, 8000 Maryland Avenue, Suite 1550, Clayton, Missouri 63105.

Philip M. Hess, Judge

Introduction

Jason S. Meyer("Appellant") executed and later restated two promissory notes ("Notes") in favor of Pecos I, LLC("Pecos" or "Respondent") secured by titles to a 1970Ford Mustang and a 1969Ford Mustang("Vehicles").Respondent sued Appellant to collect payments on the Notes ("Suit on Notes").In Counts I and II, Respondent demands payment on the Notes.In Count III, Respondent seeks judicial foreclosure of the Vehicles held as collateral.In Count IV, Respondent seeks injunctive relief preventing the damage, sale, or other encumbrance of the Vehicles.Appellant also filed a counterclaim against Respondent for abuse of process in the Suit on Notes.

Appellant later filed a third-party petition ("Third-Party Petition") for fraudulent misrepresentation against Kolb Meyer Bioenergy NMI("KBNMI") and Stephen R. Krause("Third-Party Defendants").Count I alleges fraudulent misrepresentation by KBNMI.Count II alleges fraudulent misrepresentation by Krause.

Respondent moved for summary judgment on the Suit on Notes, and Third-Party Defendants moved for summary judgment on the Third-Party Petition.The trial court granted summary judgment for Respondent on the Suit on Notes, including Appellant's counterclaim.The trial court also granted summary judgment for Third-Party Defendants on the Third-Party Petition.

Appellant appeals the trial court's judgment on both the Suit on Notes and the Third-Party Petition and raises three Points.In Point I, Appellant argues the trial court erred in granting summary judgment to Respondent in the Suit on Notes on the payment on the Notes because a dispute of material fact existed as to whether a balance remained due on the underlying Notes, an element of Respondent's claim.In Point II, Appellant argues the trial court erred in granting summary judgment to Respondent in the Suit on Notes on the judicial foreclosure of the Vehicles because a dispute of material fact existed on Respondent's claim of default.In Point III, Appellant argues the trial court erred in granting summary judgment in the Third-Party Petition on the fraudulent misrepresentation claims against KBNMI and Krause because the Third-Party Defendants did not negate the element of reliance in Appellant's claim.

Because evidence cited by Appellant to show the Notes were always intended to be treated as advances violates the parol evidence rule and because evidence cited by Appellant to show Respondent accepted Meyer Engineering services as payment for the outstanding principal owed on the Notes violates the statute of frauds, the trial court did not err in granting summary judgment on the payment on the Notes in the Suit on Notes.We deny Point I. Because Appellant defaulted on the Notes, the trial court did not err in granting summary judgment on the judicial foreclosure of the vehicles held as collateral in the Suit on Notes.We deny Point II.Because Appellant has standing to sue in his individual capacity and a genuine issue of material fact still remains regarding Appellant's reliance on alleged misrepresentations made by KBNMI in not making payments due on the Notes, the trial court erred in granting summary judgment on the fraudulent misrepresentation claim against KBNMI.We grant in part Point III.Because Appellant could not rely on Krause's alleged misrepresentations due to Appellant's knowledge of Respondent demanding payment on the Notes in cash before the alleged misrepresentations occurred, the trial court did not err in granting summary judgment on the fraudulent misrepresentation claim against Krause.We deny in part Point III.

We affirm in part and reverse in part.

Factual and Procedural Background

Appellant was at all relevant times the president of non-partyJ.S. Meyer Engineering, P.C.("Meyer Engineering").Respondent is a Missouri limited liability company with its principal place of business in St. Charles County, Missouri.KBNMI is a Missouri limited liability company with its principal place of business in St. Charles County.KBNMI is an affiliate of Respondent.Krause, at all relevant times, served as an agent of Pecos and KBNMI.Non-partyJeff Kolb, at all relevant times, also served as an agent of Pecos and KBNMI.In 2015, KBNMI was formed to develop, own and operate a bioenergy plant in Dexter, New Mexico, converting cow manure into methane gas ("Project").Meyer Engineering contracted with KBNMI to provide engineering services for the Project ("Master Services Agreement" or "MSA").The Master Services Agreement was effective as of October 19, 2015.

On October 19, 2015, Appellant individually executed a promissory note for $420,000.On November 19, 2015, Appellant executed a second promissory note for $300,000.Note 1 and Note 2 became due on demand, or, if no demand was made, on May 1, 2016.Note 1 and Note 2 were secured by titles to the Vehicles.Appellant provided the note proceeds to Meyer Engineering "to pay salaries and health insurance premiums of employees working on the project and other general operating expenses."

On May 1, 2016, Appellant executed two restated promissory notes extending the Notes’ due dates to December 1, 2016.In 2016, the principal balance on Note 1 was reduced from $420,000 to $300,000, reducing the total collective principal balance owed under the terms of the Notes to $600,000.¹

Each Note stated payment of the principal sum due on the notes, plus accrued interest, was to be made "in lawful money of the United States of America in immediately available funds...."The Notes specify a failure to make payments when due under the terms and a failure to comply with or perform under the terms constitutes default.The Notes also include a merger clause, which states:

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING THE PAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.TO PROTECT BORROWER AND LENDER FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS BETWEEN BORROWER AND LENDER COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, EXCEPT AS BORROWER AND LENDER MAY LATER AGREE IN WRITING TO MODIFY IT.

At the beginning of the Project Meyer Engineering submitted invoices for its services which were paid by KBNMI.In April 2016, KBNMI stopped paying Meyer Engineering on the Project.Meyer Engineering continued to provide engineering services on the Project.Appellant contends this was an arrangement where the engineering services paid off the Notes.

On July 12, 2017, Respondent sued Appellant seeking payment on the Notes, judicial foreclosure, and injunctive relief on the Vehicles.Appellant filed his Answer, affirmative defenses, and asserted a counterclaim against Respondent for abuse of process.On September 15, 2017, Appellant filed his initial Third-Party Petition for fraudulent misrepresentation against KBNMI and Krause.²

On May 15, 2019, Respondent moved for summary judgment on the Suit on Notes.On September 13, 2019, the trial court granted Respondent's motion for summary judgment on the payment on the Notes and on the judicial foreclosure of the Vehicles.The request for injunctive relief on the Vehicles was resolved through a stipulation between the parties whereby the Vehicles’ titles were placed in the care of Appellant's law firm.The trial court also granted summary judgment in Respondent's favor as to Appellant's counterclaim.On July 23, 2021, Third-Party Defendants jointly moved for summary judgment on the Third-Party Petition, as amended.On November 29, 2021, the trial court granted summary judgment for the Third-Party Defendants with respect to the fraudulent misrepresentation claims against KBNMI and Krause in the Third-Party Petition.

This appeal follows.

Standard of Review

"The standard of review on appeal regarding summary judgment is essentially de novo. "Kroner Invs., LLC v. Dann , 583 S.W.3d 126, 128(Mo. App. E.D.2019)(citingFoster v. St. Louis Cnty. , 239 S.W.3d 599, 601(Mo. banc 2007) ).On appeal, summary judgment will be upheld if there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.Id.(citingFoster , 239 S.W.3d at 601 )."Because the role of this Court is to determine whether or not the trial court reached a proper result, we will uphold an order granting summary judgment if it is sustainable on any theory."Wiley v. Daly , 472 S.W.3d 257, 261(Mo. App. E.D.2015)(citingMcMullin v. Borgers , 761 S.W.2d 718, 719(Mo. App. E.D.1988) ).

We review the record "in the light most favorable to the party against whom summary judgment was entered, and that party is entitled to the benefit of all reasonable inferences from the record."Green v. Fotoohighiam , 606 S.W.3d 113, 116(Mo. banc 2020)(quotingGoerlitz v. City of Maryville , 333 S.W.3d 450, 453(Mo. banc 2011) ).But, "facts contained in affidavits or otherwise in support of the party's motion are accepted as true unless contradicted by the non-moving party's response to the summary judgment motion."Id.(quotingGoerlitz , 333 S.W.3d at 453 ).Only genuine disputes of material facts preclude summary judgment.Id. at 115(quotingGoerlitz , 333 S.W.3d at 453 )."A material fact in the context of summary judgment is one from which the right to judgment flows."Id.(quotingGoerlitz , 333 S.W.3d at 453 ).

"Facts come into a summary judgment record only via Rule 74.04(c)’s...