RGB2, Inc. v. Chestnut Plaza, Inc.

• Decision Date: 16 July 2009
• Docket Number: No. SD 29212.,SD 29212.
• Citation: 292 S.W.3d 409
• Parties: RGB2, INC., Plaintiff-Appellant v. CHESTNUT PLAZA, INC., Defendant-Respondent.
• Court: Missouri Court of Appeals

292 S.W.3d 409

RGB2, INC., Plaintiff-Appellant v. CHESTNUT PLAZA, INC., Defendant-Respondent.

No. SD 29212.

Missouri Court of Appeals, Southern District, Division Two.

July 16, 2009.

Motion for Rehearing or Transfer to Supreme Court Denied August 6, 2009.

Application for Transfer Denied October 6, 2009.

Thomas W. Millington, Millington, Glass & Love, Springfield, MO, for Appellant.

John D. Compton, Richard K. Wilson, Whiteaker & Wilson, Springfield, MO, for Respondent.

JOHN E. PARRISH, Judge.

RGB2, Inc., (plaintiff) appeals a judgment for Chestnut Plaza, Inc., (defendant) in an action plaintiff brought for "[b]reach of [c]ontract" (Count I) and "[b]reach of [g]ood [f]aith and [f]air [d]ealing" (Count II).¹ This court affirms.

This case arose from a real estate transaction between defendant and Cherokee Investments, Inc. (Cherokee). Cherokee and defendant entered into a contract apparently in July 1991, for the sale and purchase of certain real estate owned by defendant in Springfield, Greene County, Missouri.² The contract originally specified the property that was being sold as "Lot # 2, Chestnut Plaza, Inc.," and in a "Special Agreements Addendum" as "Lot 2, Chestnut Plaza, Phase I, Spfd, Mo." A subsequent addendum states, "The lot being purchases [sic] is to be changed from lot # 2 to lot # 3."

Ron Ward owned a franchise for a Hardee's restaurant. He also owned all the stock in Cherokee prior to its entering into the contract that is now before this court. Paragraph 4.4 of the contract states:

SELLER covenants to deliver to BUYER on the Closing Date, a restrictive covenant, in recordable form, restricting SELLER'S property and, if SELLER is a corporation, the property of SELLER'S officers, directors, subsidiaries and affiliates, within a two thousand (2000) foot radius of the Premises from use by any type of restaurant primarily engaged in the sale of primarily[³] hamburgers.[⁴] Said restrictive covenant shall run for a period of twenty (20) years from the Closing Date. (See EXHIBIT A)[⁵]

Exhibit A to the contract includes various changes and explanations. Two of the statements on Exhibit A relate to the restriction which paragraph 4.4 provides. They state:

As pertaining to 4.4 on page 2, the restrictions shall be for restaurants of a fast food nature. This is not meant to preclude any full service, sit down type of restaurant.

. . .

Food restrictions are to exclude any fast food restaurant selling hamburgers, breakfast buscuits [sic], tacos, hot dogs or anything directly in competition to Hardee's. This does not exclude any major sit-down type of full service restaurant.

Defendant conveyed Lot 3 of Chestnut Plaza Phase I to Cherokee by warranty deed dated February 28, 1992. The deed was recorded in the deed records of Greene County, Missouri, March 2, 1992. No restrictive covenant directed to the remaining property within Chestnut Plaza Phase I was delivered to Cherokee. Cherokee conveyed Lot 3 of Chestnut Plaza Phase I to plaintiff by warranty deed dated May 4, 1992.⁶ The deed was recorded May 6, 1992, and re-recorded June 3, 1992.⁷

Mr. Ward explained that he had been the sole shareholder of Cherokee. He stated that Cherokee did not have sufficient funds to "complete the deal" of constructing a Hardee's restaurant as was his wish; that plaintiff was formed in order to obtain money from other investors who became shareholders in plaintiff.⁸ The Hardee's restaurant opened for business in 1992.

In September 1997, a McDonald's restaurant located on Lot 2 of Chestnut Plaza Phase I opened for business.⁹ It was within 2000 feet of Lot 3 on which the Hardee's restaurant is situated.

Plaintiff brought this action in November 1997. A First Amended Petition, the petition on which the case was tried, was filed August 8, 2003. It sought money damages for breach of contract contending that "Defendant breached and continues to breach its agreement with Plaintiff in that it did not deliver to Plaintiff on the Closing Date, a restrictive covenant, in recordable form restricting Defendant's property as stated in paragraph 4.4 of the Real Estate Purchase Contract, the Special Agreements Addendum and the Change Addendum." The trial court entered Findings of Fact and Conclusions of Law and Judgment for defendant and against plaintiff.

The trial court's conclusions of law include:

. . .

4. The statute of limitations began to run on February 28, 1992, at the time of closing, when [Cherokee] did not receive delivery of a restrictive covenant since [Cherokee] had, at that time, a right to prosecute its claim for breach of contract for failure to deliver a restrictive covenant at closing and for specific performance thereof to a successful conclusion.

. . .

7. The statute of limitations on Plaintiff's cause of action had expired at the time Plaintiff first filed suit in this matter on November 12, 1997. Plaintiff's cause of action is barred by the applicable five (5) year statute of limitations, i.e., Section 516.120, Mo.Rev.Stat. (1939).[¹⁰]

8. The conveyance under the Warranty Deed by [Cherokee] to [plaintiff] was insufficient and did not transfer [Cherokee's] alleged cause of action to [plaintiff], which cause of action has been attempted to be asserted herein by [plaintiff]. The law in Missouri is undisputed that a Warranty Deed in standard form without any specific words of assignment is insufficient to assign a Grantor's chose in action to the Grantee. Scott v. Ranch Roy-L, Inc., 182 S.W.3d 627, 632-633 (Mo.App. E.D., 2005).

9. Without an assignment from [Cherokee] of its cause of action or causes of action under the Real Estate Purchase Contract, Plaintiff is not in privity of contract with [defendant] under the Real Estate Purchase Contract. City of Kansas City v. Milrey Development Co., 600 S.W.2d 660, 664 (Mo.App. W.D., 1980).

10. Plaintiff does not have the necessary standing required to bring the instant lawsuit to enforce any alleged breach of such contract committed by [defendant] since Missouri law requires that in order for a party to bring a lawsuit on a contract, that party must either be a party to the contract or in privity to the contract. Owens v. Unified Investigations & Sciences, Inc., 166 S.W.3d 89, 92-93 (Mo.App. E.D., 2005); City of Kansas City v. Milrey Development Co., supra.; Haase v. Business Men's Assurance Co. of America, 275 S.W.2d 381, 383 (Mo.App. W.D., 1955); Historic Hermann, Inc. v. Thuli, 790 S.W.2d 931, 935-936 (Mo.App. E.D., 1990); Brattin Ins. Agency, Inc., v. Triple S. Properties, Inc., 77 S.W.3d 687, 688 (Mo.App. S.D., 2002); and, Hardcore Concrete, LLC v. Fortner Insurance Services, Inc., 220 S.W.3d 350, 358 (Mo. App. S.D., 2007).

Thus, the trial court found two bases for denying plaintiff's claim; first, that the statute of limitations had run at the time plaintiff's action was brought, and second that plaintiff, not having been a party to the contract which it asserted was breached, lacked standing to bring the action that is the subject of this appeal. Plaintiff asserts that the trial court erred in both determinations.

This case, having been tried before the trial judge without a jury, is reviewed by this court pursuant to Rule 84.13(d). The judgment will be affirmed "unless there is no substantial evidence to support it, unless it is against the weight of the evidence, or unless it erroneously declares or applies the law." Stewart v. Jones, 58 S.W.3d 926, 930 (Mo.App.2001).

Mindful that Rule 84.04(d)(1)(B) and (C) impose the requirement of brevity on aspects of points relied on, neither Point I nor Point II are models of compliance with that requirement. Rule 84.04(d)(1)(B) requires an appellant to "state concisely the legal reasons for the appellant's claim of reversible error." (Emphasis added.) Rule 84.04(d)(1)(C) requires that an appellant "explain in summary fashion why, in the context of the case, those legal reasons support the claim of reversible error." (Emphasis added.) Point I covers three pages in plaintiff's brief. It is interspersed with factual assertions. Point II is a two-page narration that makes various assertions, including what the contract in question "intended," as well as claims that defendant waived legal rights to contest the validity of an assignment. (Arguably this constitutes assertions of multifarious claims that violate Rule 84.04(d).) The rambling nature of the points on appeal make it difficult to understand the bases for the claims of error plaintiff asserts. The legal reasons given in support of the claims of error are unclear and the assertions that, in the context of the case, support plaintiff's legal rationale are imprecise.

Point I is directed to the trial court's determination that plaintiff's action is barred by the statute of limitations. As this court perceives Point I, plaintiff's claim is that the cause of action for the alleged breach of contract did not accrue until the competing fast food restaurant, McDonald's, had commenced operation; that this, rather than the failure to deliver a restriction in recordable form, was what occasioned damage to plaintiff as a "successor in interest" to Cherokee. Plaintiff makes a further claim that the breach of contract was for not protecting it, as Cherokee's successor in interest, for a twenty-year period in that this was an obligation imposed by the contract. On those premises, plaintiff contends the statute of limitations did not begin to run in 1992 at the closing of the real estate sale; that it had not run at the time plaintiff brought this action.

Point II contends the trial court erred in ruling that plaintiff lacked standing to assert the cause of action pleaded because plaintiff lacked privity of contract with defendant. Plaintiff claims that the contractual obligation to restrict the land defendant owned, in addition to that sold to Cherokee, was a contract right that plaintiff acquired from Cherokee. This court finds that Point II is determinative of plainti...