Schneider v. Forsythe Group, Inc.

Decision Date29 December 1989
Docket NumberNo. 56052,56052
Citation782 S.W.2d 139
PartiesCalvin A. SCHNEIDER, Appellant, v. The FORSYTHE GROUP, INC., Respondents.
CourtMissouri Court of Appeals

Richard D. Sabbert, St. Peters, for appellant.

G. Carroll Stribling, Jr., Ziercher & Hocker, P.C., St. Louis, for respondents.

HAMILTON, Presiding Judge.

Appellant Calvin A. Schneider (hereinafter Schneider) appeals a summary judgment granted in favor of the Respondents Forsythe Group, Inc. (hereinafter Forsythe) and its employee Richard Wilhelm (hereinafter Wilhelm) on December 30, 1988. The trial court held that the restrictions in Section A in the Declaration of Restrictions, Easement Grant, and Roadway Maintenance Agreement (hereinafter Declaration) of the servient estate were not extended to the dominant estate by a grant of easement. We affirm.

Schneider's underlying suit is for fraudulent misrepresentation and negligent misrepresentation in connection with a real estate sale. Both Schneider and Forsythe are real estate brokers. Schneider planned to buy two parcels of land from two of Forsythe's clients as part of a larger development plan Schneider called "the Crossings." He planned to assemble the property for "the Crossings" and immediately sell it to Kaplan Lumber Company (hereinafter Kaplan), a real estate developer. A summary of the relevant history of the properties is necessary to understand the nature of Schneider's claim.

Forsythe filed the documentation on the three plats involved in this action. Forsythe immediately conveyed all three tracts in separate transactions in June, 1978: Plat I to Dardenne Farms Partnership; Plat II to Dardenne Forest Venture; and Plat III to Ronald Henges. Dardenne Farms Plat I and the Declaration of Restrictions, Easement Grant, and Roadway Maintenance Agreement for Plat I were recorded August 17, 1978. The sole access to Plats II and III was through Plat I along Dardenne Farms Drive. On October 13, 1978, contracts for easements were recorded. Plats for II and III were prepared and recorded on August 22, 1979. All three plats were originally zoned for three-acre homesites to take advantage of septic tank ordinances.

Schneider planned to purchase Plat II and part of Plat III in order to resell immediately to Kaplan. Forsythe represented the owners of both plats. Schneider asked Richard Wilhelm, Forsythe's agent, if restrictive covenants applied to Plats II and III. Wilhelm indicated that no restrictive covenants applied and, in particular, that no lot size restrictions applied. Schneider had the property zoned for Planned Unit Development, PUD, or for lots less than one acre and for multi-family housing. Both Schneider and Wilhelm were present for the rezoning hearing.

On the day of the closings, after Schneider had already closed on other properties making up "the Crossings," Kaplan's attorney Claude Knight said that certain restrictions in the Plat I Declaration were incorporated by reference and encumbered Plats II and III. Consequently, Emmons Title Company refused to insure over and Kaplan refused to close. Eventually Kaplan closed at a price lower than the original contract price. As a result of this reduction, Schneider claimed he lost approximately two-thirds of his expected profit of $350,000. He thereafter filed this action against Forsythe and Wilhelm for fraudulent misrepresentation and for negligent misrepresentation.

Count I of Schneider's petition alleges all the elements of fraudulent misrepresentation: that Forsythe and Wilhelm intended for Schneider to rely on the representations that the restrictions and covenants relating to lot size in Plat I did not apply to Plats II and II; that the foregoing representations were false at the time they were made; that Wilhelm knew or should have known that the representations were false at the time he made them to Schneider; that the representations were material to the purchase negotiations; that Schneider did not know the truth or falsity of the representations when made; that Schneider relied on the representations; and that, as a result of the representations, Schneider was damaged in that he received $383,000 less when he resold the land. See MAI 23.05. Count I avers the misrepresentation to be "that the restrictions and covenants limiting the size of the lots in Plat One of Dardenne Farms did not apply to Plats Two and Three of Dardenne Farms." Count II, which is for negligent misrepresentation, incorporates the paragraph concerning the allegedly false representation about lot size and also complains of representations "that the restrictions on Plat One of the Dardenne Farms tract did not apply to Plats Two and Three of the Dardenne Farms tract." The lot size restriction was set forth in one paragraph within a series of separately paragraphed restrictions applicable to Plat I in Section A of the Declaration. Thus, Count II refers to restrictions in addition to the lot size restriction referred to in Count I.

In an order entered October 25, 1988, the trial court specified that the "Defendant shall file a motion for summary judgment upon the issue of whether lot size restrictions ... applied to Dardenne Farms Plats II and III." (emphasis added) The final paragraph of that order stated that "[p]ending the Courts [sic] ruling upon such motion, the parties will request a trial setting of remaining issues...."

On November 4, 1988, Forsythe filed a motion for summary judgment solely on the issue of whether the lot size restrictions applied to Plats II and III. The trial court had before it the plats, the Declaration, the easement contracts, and the depositions of Wilhelm and Schneider as well as the depositions of two attorneys and the president of the title company. The trial court's order of October 25 and Forsythe's motion for summary judgment were both limited to the issue of the lot size restriction.

In contrast, Schneider's suggestions in opposition set forth arguments not only concerning the lot size restriction (Count I and the lot size issue in Count II), but also concerning additional restrictions on Plat I (Count II), as well as building lines on Plats II and III. Forsythe replied to Schneider's suggestions in opposition.

In its summary judgment order, the trial court, consistent with its order of October 25, stated that "the sole issue now before the Court is whether the restrictions set forth in Section A of the Declaration of Restrictions, Easement Grant and Roadway Maintenance Agreement concerning the three acre lot size restrictions are applicable to Plats II and III by virtue of the Contract for Easement Right of Way...." The trial court then, however, entered a more expansive order which stated that the restrictive covenants found in Section A of the Declaration of Restrictions, Easement Grant and Roadway Maintenance Agreement does not apply to Plats II and III, the land purchased by Plaintiffs, and that the Defendant Rick Wilhelm's statement that the three acre restrictions of Plat I did not apply to Plats II and III was in fact true and that no misrepresentation could have occurred. The Court therefore hereby orders that Plaintiff's petition in all counts be dismissed at Plaintiff's cost.

Although the parties make numerous references to a stipulation as to the issue involved, no such stipulation appears in the record; and, although the trial court purports to limit itself to the sole issue of the lot size restriction, its order encompasses the broader legal issue of whether any of the restrictions contained in Section A of the Declaration apply to Plats II and III. 1 Furthermore, the trial court adopts and incorporates into its order Forsythe's Suggestions in Support of Motion for Summary Judgment which address not only the lot size restrictions, but also other possible restrictions on Plat I and which conclude as a matter of law that none of these restrictions applies.

Schneider asserts the trial court erred in granting summary judgment because (1) the specific language of the Contract for Easement and the recitations and legends of the plats make the restrictions applicable; (2) all three plats were part of a single plan of development; and (3) a genuine issue of material fact exists in that there was no determination that the building lines and easements on the plats would allow development in accordance with PUD zoning.

A summary judgment is appropriate when the documents before the court show no genuine issue of material fact and the moving party is entitled to the judgment as a matter of law. Rule 74.04(c); Triggs v. Risinger, 772 S.W.2d 381, 382 (Mo.App.1989). Material facts are facts that have such legal probative value as would control or determine the litigation. Dunbar v. Allstate Ins. Co., 584 S.W.2d 123, 124 (Mo.App.1979). This court must scrutinize the record in the light most favorable to the party against whom the judgment was entered, according that party the benefit of every doubt. Triggs, 772 S.W.2d at 382.

As framed by Schneider in Points I and II, the issue of whether restrictions in Plat I applied to Plats II and III is a legal, not factual, issue. Two of the primary documents before the trial court for its interpretation were the Declaration for Dardenne Farms Plat I and the Contract for Easement Right of Way (hereinafter Contract). 2

The Declaration consists of five sections: A. Covenants; B. Roadway Maintenance; C. Trustees; D. Assessments by Trustees; and E. Miscellaneous. The parties do not dispute that Sections B, C, D, and E apply to Plats II and III. The Contract specifically incorporates these sections. Schneider contends that the existence of Dardenne Farms Drive throughout all three plats made any Restrictions in Sections B, C, D, and E applicable to Plats II and III. However, Forsythe's Suggestions in Support of the Motion for Summary Judgment, incorporated into the trial court's order state that,

[o]nly Section A of the Subdivision Declaration...

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