Schwartz v. Lawson, WD

• Decision Date: 25 September 1990
• Docket Number: No. WD,WD
• Parties: Donald H. SCHWARTZ and Lucille Schwartz, Husband and Wife, Appellants, v. Harold H. LAWSON and Donna J. Armstrong, and RE/MAX Relators of Mid-Missouri, Inc., Respondents. 42758.
• Court: Missouri Court of Appeals

Page 828

797 S.W.2d 828

Donald H. SCHWARTZ and Lucille Schwartz, Husband and Wife, Appellants, v. Harold H. LAWSON and Donna J. Armstrong, and RE/MAX Relators

of Mid-Missouri, Inc., Respondents.

No. WD 42758.

Missouri Court of Appeals,

Western District.

Sept. 25, 1990.

As Modified Oct. 25, 1990.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Oct. 30, 1990.

Robert C. Smith and William Jay Powell, Columbia, for appellants.

Robert J. Dierkes, Columbia, for Lawson & Armstrong.

Thomas M. Schneider, Columbia, for RE/MAX Realtors.

Before SHANGLER, P.J., and CLARK and BERREY, JJ.

SHANGLER, Presiding Judge.

The plaintiffs Schwartz appeal from the summary judgment entered against their petition and in favor of the defendants. The ground of judgment was that their action was barred by the limitations of §§ 516.100 and 516.120, RSMo 1986. The adjudication was determined on the pleadings and appended exhibits of the parties and the joint affidavit of the plaintiffs Schwartz.

The petition pleads that the plaintiffs Schwartz informed one Meyer, a salesman for RE/MAX Realtors, of their interest in the acquisition of a parcel owned by Lawson and Armstrong, provided the land consisted of 10 acres, more or less. The plaintiffs submitted a written proposal on a RE/MAX form for the purchase from Lawson and Armstrong of a 10 acre tract. The prospective sellers supplied the plaintiffs with a recorded survey that described tracts 3 and 4, the subject of the transaction, to consist of .676 and 9.52 acres respectively. On September 19, 1979, Lawson and Armstrong executed a contract for the sale of the east 50 feet of tract 3 [approximately .225 acres according to the survey] and all of tract 4. Thus, reference to the survey provided by Lawson and Armstrong indicates a combined tract of roughly 9.75 acres. On October 29, 1979, Lawson and Armstrong [and the Lawson spouse] executed a warranty deed that conveyed the east 50 feet of tract 3 and the entirety of tract 4 of the survey to the plaintiffs Schwartz.

The petition pleads, and the Schwartz affidavit affirms, that the realtor and the sellers all represented to them that the tracts consisted of approximately 10 acres of land, and that they relied on the representations of acreage in the decision to purchase the land. They had no occasion to doubt the representations until September of 1986, when in the course of an application for rezoning--incidental to the plan to develop the property--they learned that the tract contained only seven and a fraction acres, rather than the 10 acres or so they believed they purchased. A survey done for them in February of 1987 confirmed that they had received only 7.14 acres. As a consequence, the affidavit concludes, a contract by them to sell an undivided one-half interest in the property, transacted on the assumption of 10 acres, was abandoned since the business contemplated for the site could not be conducted on a tract much smaller than 10 acres.

The Schwartz petition joined Lawson, Armstrong and RE/MAX as defendants. Lawson and Armstrong counterclaimed against the plaintiffs for the balance still due on their purchase money promissory note to them. The separate answer of each, Lawson and Armstrong, and RE/MAX, asserts the limitations period of § 516.120 in bar of the action for misrepresentation. RE/MAX, as agent, cross-claimed for indemnity from Lawson and Armstrong, as principals, for any amount adjudged due from them as agent to the plaintiffs Schwartz. The separate motions for summary judgment by each defendant followed, and then entry of summary judgment against the plaintiffs. Thereafter, the defendants Lawson and Armstrong dismissed their counterclaim against the plaintiffs Schwartz, so that the summary judgment became final for appeal. While appeal pended, the plaintiffs Schwartz stipulated with the defendant RE/MAX to dismiss with prejudice the petition and appeal as to the other. Our order of dismissal issued. The claim of the plaintiffs against the defendants Lawson and Armstrong on this appeal remains.

The precise ground articulated for the grant of summary judgment was the determination that any damages suffered by the plaintiffs Schwartz were capable of ascertainment at the time the real estate transaction was closed [on October 29, 1979] so that their action, commenced on August 24, 1988, was not within the 5 year period of §§ 516.100 and 516.120 and thus barred by limitations.

On this appeal, the plaintiffs Schwartz argue that an action in fraud does not accrue until the fraud is or can be discovered. They assert that even if the petition can be understood as such a pleading, the fraud was discoverable and discovered at the earliest in September of 1987, when in the course of an application for rezoning of the land they were informed that the parcel contained only seven and a fraction acres. Thus the action commenced on August 24, 1988--within 2 years of the discovery--was not barred by the limitations period of § 516.120. They argue also that the petition may be understood as a claim not merely in fraud, but also for breach of the covenants for title in the deed, and so subject to the 10 year limitation of § 516.110, rather than to the 5 year bar of § 516.120. The plaintiffs say that, in any event, the proof tendered by Lawson and Armstrong on the motion was not sufficient to adjudicate summary judgment against them.

The mild and halting disclaimer of the plaintiffs notwithstanding, the pleading of their undifferentiated petition alleges a cause of action in fraud against Lawson and Armstrong. See Sofka v. Thal, 662 S.W.2d 502, 506 (Mo. banc 1983). We defer discussion as to whether, as plaintiffs insist, the necessary implications of that single pleading also describe an action for breach of covenant of title, and hence are governed by the 10 year statute of limitations of § 516.110.

As a rule a cause of action accrues and the period of limitations begins to run when the right to sue on the action arises. Chemical Workers Basic Union v. Arnold Sav. Bank, 411 S.W.2d 159, 164 (Mo. banc 1966). That is to say, the period of limitations does not commence until an injury is complete as a legal injury. When an injury is not a legal injury until the consequences manifest, then under § 516.100 limitations begin to run "when the damage resulting therefrom is sustained and capable of ascertainment." Rippe v. Sutter, 292 S.W.2d 86, 90[10-13] (Mo.1956). An action for relief on the ground of fraud, however, accrues--not when the resulting damage is capable of ascertainment--but when the facts constituting the fraud are discovered. It is governed not by the limitations provisions of § 516.100, but by the limitations provisions of § 516.120(5):

Within five years:

....

(5) An action for relief on the ground of fraud, the cause of action in such case to be deemed not to have accrued until the discovery by the aggrieved party, at any time within ten years, of the facts constituting the fraud.

That special statute of limitations grants 10 years for the discovery of the fraud, and requires that an action commence within 5 years of discovery, but if the fraud is not discovered within 10 years, then the cause of action is deemed to have accrued at the end of that period and limitations commence to run from that time, so that the action is barred in any event after fifteen years of the commission of the fraud. Berry v. Dagley, 484 S.W.2d 182, 184 (Mo.1972). In the assessment of when an action for fraud accrues--and hence when limitations commence--the courts construe § 516.120(5) to expect a plaintiff to act with due diligence to discover "the facts constituting the fraud." Gilliam v. Gohn, 303 S.W.2d 101, 107[6-10] (Mo.1957). Where the means for discovery exist, a plaintiff is deemed to know of the fraud, so that the period of limitations commences to run then. Burr v. National Life & Accident Ins. Co., 667 S.W.2d 5, 7[2-5] (Mo.App.1984).

Accordingly, the summary judgment by the associate circuit court, which determines that the Schwartz pleading--as an action in fraud--accrues when the damages are capable of ascertainment and so is governed by the limitations period of § 516.100, rests on an erroneous conclusion of law. The order of the associate circuit court, which construes the limitations period of § 516.120 to apply to an action in fraud not from the discovery of the fraud, but from when the damages are ascertainable, also rests on an erroneous conclusion of law.

Summary judgment properly issues when there remains no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Landoll by Landoll v. Dovell, 778 S.W.2d 846, 848 (Mo.App.1989). It is a suitable device for the summary adjudication of statute of limitations and other affirmative defenses. Kennon v. Citizens Mut. Ins. Co., 666 S.W.2d 782, 784-85[3,4] (Mo.App.1983); Herron v. Whiteside, 782 S.W.2d 414, 416[2, 3] (Mo.App.1989). The party who moves for summary judgment bears the burden to show that no issue of material fact remains. And although [contrary to assertion] the quantum is no longer by proof that is unassailable, the right to summary judgment must clearly appear as a matter of law. Hayes v. Hatfield, 758 S.W.2d 470, 472 (Mo.App.1988). On review of a summary judgment, we examine the record in the light most favorable to the party against whom judgment was rendered. We nevertheless will sustain the summary judgment if it is supportable on any theory advanced by the movant. Zafft v. Eli Lilly & Co., 676 S.W.2d 241, 243-44[2-5] (Mo. banc 1984).

The motion for summary judgment by the defendants Lawson and Armstrong rested on the petition of the plaintiffs Schwartz as enhanced by the appended exhibits and their answer to the petition. The theory of the motion for summary judgment, as well as of the answer, was that the pleading for fraud accrued by October of 1979 at the closing of the real estate...