R & J Rhodes, LLC v. Finney

• Decision Date: 29 May 2007
• Docket Number: No. WD 66588.,WD 66588.
• Citation: 231 S.W.3d 183
• Court: Missouri Court of Appeals
• Parties: R & J RHODES, LLC, Appellant, v. Jerry FINNEY, Rick Fields, Darrell Wattenbarger, William Rhodes, City of Brookfield, and John Wayne Hoyt, Respondents.

231 S.W.3d 183

R & J RHODES, LLC, Appellant, v. Jerry FINNEY, Rick Fields, Darrell Wattenbarger, William Rhodes, City of Brookfield, and John Wayne Hoyt, Respondents.

No. WD 66588.

Missouri Court of Appeals, Western District.

May 29, 2007.

Motion for Rehearing and/or Transfer to Supreme Court Denied July 31, 2007.

Application for Transfer Denied September 25, 2007.

David M. Duree, St. Louis, MO for appellant.

Danette Rardon, Chillicothe, MO, Scot T. Othic, Co-Counsel, Marceline, MO, for respondents Finney and Rhodes.

Jack A. Lewis, North Kansas City, MO, for respondent Fields.

Jeff S. Elson, Brookfield, MO, for respondent City of Brookfield.

Darrell Wattenbarger, Columbia, MO, pro se.

John Wayne Hoyt, Brookfield, MO, pro se.

Before THOMAS H. NEWTON, Presiding Judge, PATRICIA BRECKENRIDGE, Judge and JOSEPH M. ELLIS, Judge.

JOSEPH M. ELLIS, Judge.

R & J Rhodes, LLC, appeals from a judgment denying its claims of trespass or, in the alternative, breach of contract, and assessing damages against it for counterclaims of breach of contract and constructive eviction.

In 1985, the City of Brookfield ("the City") entered into a lease with six aircraft owners concerning a small portion of a tract of land in Linn County, Missouri. The lessees included Respondents Jerry Finney, William Rhodes, and Rick Fields, along with three other individuals who transferred their interests in the lease before Appellant's involvement.¹

The City demised to the lessees approximately one acre of land ("the leased premises") in the northwest corner of an approximately 135-acre tract that was being operated by the City as the General John J. Pershing Memorial Airport ("the airport land"). The term of the lease was 40 years. Together with the use and occupation of the land for an airport hangar building and "associated activities," the City granted the lessees the "right of reasonable ingress and egress to and from the demised premises."

The lease provide that "in consideration of Lessor making available its property, Lessee² may erect or cause to be erected on the demised premises a hangar building of an approximate size of 6400 square feet." The plans had to be approved by the City before construction commenced. The lessees submitted plans, which the City approved, and the lessees erected a hangar building.

The lease does not provide for any payment of rent but imposes numerous obligations on the lessees, all of which were to be undertaken at the lessees' expense.³ It provides that the hangar buildings and any improvements, etc. are considered the lessees' personal property, and they would be permitted to remove the personal property "upon expiration of the lease."

In the event of default by the lessees, §§ 5 and 10 provide that the lessor must notify the lessees of the nature of the default and allow 60 days to remedy or cure the breach. If the lessees failed to cure within 60 days, the lessor could re-enter the leased premises. If the default was for failure to maintain or repair the buildings and surrounding property, the lessor could restore the buildings and premises to good condition and had discretion to declare forfeiture of the lease (§ 5). If the default concerned any of the other covenants, the lessor could "re-enter the hangar building by summary or other proceedings and remove all persons and things therefrom" without liability therefor (§ 10). Under § 8, if the hangar building was destroyed in whole or in part, the lessees were required to either (1) rebuild or restore or (2) remove all damaged buildings and restore the land to its original condition within 120 days. If the lessees chose to remove the buildings instead of repairing or rebuilding, then the lease would terminate. There are no other provisions regarding termination of the lease. The lease is binding on all parties, their heirs, personal representatives, assigns and successors in interest.⁴

As noted above, the 135-acre tract on which the leased premises was located was being operated as a municipal airport facility at the time the lease was executed. There are two runways on the airport land adjacent to the leased premises, one paved and the other grass. There is also a public road providing vehicle access approximately fifteen feet from the leased premises.

In 2000, the City decided to close the municipal airport in exchange for funding to construct a regional airport approximately five miles away. In November 2001, the City conveyed the airport land to John Wayne Hoyt by general warranty deed, "subject to any and all easements of record and further subject to the rights of all lessees with leasehold interests to portions of the property." Hoyt was to receive possession of the airport land when the City ceased to use the property as a municipal airport facility and runway, but no later than July 1, 2002.

On April 29, 2004, Hoyt transferred the airport land to Appellant by general warranty deed, "subject to any and all easements of record and further subject to the rights of all lessees with leasehold interests to portions of the property."

On May 4, 2004, Richard Rhodes sent a "notice" to each of the lessees on Appellant's behalf. The notice stated that the airport had been closed for more than 22 months, that the leased premises had not been used solely for the purpose of an airport hangar and associated activities since that time, and that it could not be used as such because the airport was closed. The notice further set forth several alleged actions by the lessees in default of the lease agreement, referring to specific provisions in the lease. Finally, the notice demanded, among other things, that the lessees vacate the premises and relinquish all rights in the lease and the hangar buildings within six days.

One month later, on June 4, 2004, Richard Rhodes sent another "notice" to the lessees. In addition to summarizing the contents of the first notice, the second notice stated that the lessees had been trespassing since May 4, 2004, and cited additional actions allegedly in breach of the lease. It indicated that the lessor had employed an attorney, that the lessees were responsible for attorney fees under the lease, and that any future trespassing by the lessees would be prosecuted civilly and criminally, representing that a copy had been sent to the sheriff and prosecuting attorney.

Appellant subsequently posted "no trespassing" signs on the airport land near the leased premises. The lessees initially ignored the notices and signs, but Jerry Finney eventually contacted an attorney to initiate legal proceedings against Appellant. The attorney advised Finney to "accept" Appellant's alleged breach of the lease, so he removed his hangar building from the leased premises on July 29 and 30, 2004, by tearing down the building and hauling away the associated debris. Rick Fields, the other lessee with a hangar building on the leased premise, also began removing his building on July 30, 2004, and finished in early August 2004.

On August 4, 2004, Appellant's attorney sent a letter to the lessees advising that he had been retained and again accusing the lessees of trespass and breach. He "declare[d] a forfeiture" of the lease but proposed a "settlement" in which the lessees were required to sign an affidavit "acknowledging termination of the lease." In conclusion, he indicated that Appellant intended to "institute swift legal action" and gave the lessees fifteen days to return the attached affidavit. The letter cites several specific provisions of the lease as the basis for Appellant's actions.

The day after that letter was sent, Appellant filed suit against Finney, Fields, and William Rhodes for trespass or, in the alternative, breach of contract. Finney and William Rhodes filed counterclaims for breach of contract and constructive eviction. The case was tried to the court on November 23, 2005, in the Circuit Court of Linn County. The court subsequently entered its Findings of Fact, Conclusions of Law, and Judgments, ruling against Appellant on its petition and in favor of Finney and Rhodes on their counterclaims. The court awarded damages to Finney and Rhodes for the value of the hangar building and lost opportunity damages under the lease.

Appellant brings four points on appeal, the first three of which generally assert that the trial erred in entering judgment in favor of, and awarding damages to, Respondents Jerry Finney and William Rhodes on their counterclaim against Appellant. Points I and II posit error in entering judgment on the counterclaim and awarding damages for breach of the lease, asserting that the lease had been terminated. Point III claims that the award of damages was erroneous because there were no damages sustained from any breach of the lease by Appellant. Finally, in Point IV, Appellant contends that the trial court erred in entering judgment in favor of Respondents Jerry Finney, William Rhodes and Rick Fields on its petition for trespass⁵ because said Respondents entered upon Appellant's property without authority.

"In reviewing a court-tried case, we must affirm the judgment of the trial court unless it is unsupported by substantial evidence, against the weight of the evidence, or erroneously declares or applies the law." Cameron Mut. Ins. Co. v. Woods, 88 S.W.3d 896, 899 (Mo.App. W.D. 2002). "The interpretation of a contract is a question of law" and is subject to de novo review. Dean Mach. Co. v. Union Bank, 106 S.W.3d 510, 520 (Mo.App. W.D.2003). However, "[w]e defer to the trial court on factual issues because it is in a better position not only to judge the credibility of witnesses and the persons directly, but also their sincerity and character and other trial intangibles which may not be completely revealed by the record." SD Invs., Inc. v. Michael-Paul, L.L.C., 90 S.W.3d 75, 85 (Mo.App. W.D.2002) (internal quotation omitted). "In Missouri, a lease . . . is both a conveyance and a contract." Wetherbee,...