State Resources v. Lawyers Title Ins.

Decision Date27 February 2007
Docket NumberNo. 27595.,27595.
Citation224 S.W.3d 39
PartiesSTATE RESOURCES CORP., Appellant, v. LAWYERS TITLE INSURANCE CORP., et al, Respondents.
CourtMissouri Court of Appeals

Thomas J. Fritzlen, Jr., Kansas City, for appellant.

Ronald N. Sweet, Columbia, for respondents Chalfant & Tompkins.

Gail L. Fredrick, Springfield, for respondent Evans.


Appellant State Resources Corporation ("SRC") appeals the trial court's judgment in favor of Respondents Evans Financial Services d/b/a Evans Land Title ("Evans") and Chalfant and Tompkins Title Insurance Corporation ("Chalfant") arising out of Evans's and Chalfant's purported failure to file a deed of trust in Camden County.1 In this connection, SRC asserts three points of trial court error, discussed below. We affirm.

The standard of review in a court-tried civil case is set out in Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). We affirm the trial court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. at 32. "`Substantial evidence is that which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case.'" Jerry Bennett Masonry, Inc. v. Crossland Const. Co., Inc., 171 S.W.3d 81, 88 (Mo.App.2005) (quoting Kenney v. Wal-Mart Stores, Inc., 100 S.W.3d 809, 814 (Mo. banc 2003)). "The weight of the evidence is determined by its effect in inducing belief." Jerry Bennett Masonry, Inc., 171 S.W.3d at 88. "A judgment should be set aside as being against the weight of the evidence only with caution and with a firm belief that the judgment is wrong." Id.

"`Trial judges are better able than appellate courts to assess the credibility of the parties and other intangibles that are not completely revealed by the record on appeal.'" Bowles v. All Counties Inv. Corp., 46 S.W.3d 636, 638-39 (Mo.App. 2001) (quoting Kerr v. Louderback, 35 S.W.3d 511, 513 (Mo.App.2001)). Accordingly, this Court accepts "`as true the evidence and inferences therefrom that support the trial court's judgment and disregard contrary evidence.'" Vaughn v. Willard, 37 S.W.3d 413, 415 (Mo.App.2001) (quoting Rone v. Reeves, 20 S.W.3d 526, 527 (Mo.App.2000)). "`We keep in mind that a trial court is free to believe or disbelieve all, part, or none of the testimony of any witness.'" Vaughn, 37 S.W.3d at 415 (quoting Crawford v. Detring, 965 S.W.2d 188, 189 (Mo.App.1998)). "`The trial court's judgment is presumed valid and the burden is on the appellant to demonstrate its incorrectness.'" Bowles, 46 S.W.3d at 638 (quoting Schaefer v. Rivers, 965 S.W.2d 954, 956 (Mo.App.1998)). Although this Court defers to the trial court's findings of fact, the Court does not defer to the trial court's determinations of law. City of Kansas City v. Hon, 972 S.W.2d 407, 409 (Mo.App.1998).

Viewing the evidence in a light most favorable to the judgment, Barrows v. Firstar Bank, 103 S.W.3d 386, 390 (Mo. App.2003), the record reveals that on or about April 12, 1999, Joseph Shaheen ("Dr.Shaheen") and his company, Riverbend Behavioral Medicine PC ("Riverbend"), entered into "a commitment for a loan" ("the Loan") in the amount of $250,000.00 with NationsBank ("the Bank").2 The Loan was secured by a second deed of trust ("the Deed of Trust") on two separate parcels of real property owned by Dr. Shaheen and Riverbend. The collateral property is described as being located at 3759 South Pickwick in Springfield, Missouri ("the Greene County property")3 and "Lake Road, Sunrise Beach MO" ("the Camden County property").

On April 22, 1999, Jeff Payne ("Mr. Payne"), a loan officer at the Bank, contacted Evans and requested that Evans perform a title search for the Greene County property; prepare a title insurance commitment for the Greene County property; and act as the closing agent for the Loan.4 Subsequently, Evans issued its "Commitment for Title Insurance" for the Greene County property.

Around the same time, Mr. Payne contacted Chalfant and requested that it prepare a title insurance commitment on the Camden County property.5 Chalfant complied with this request. On April 27, 1999, Chalfant provided a copy of the title insurance commitment to both the Bank and Evans. Chalfant then sent the Bank and Evans an invoice for $515.00 for its work relating to the Camden County title insurance commitment.6

Evans closed the loan on April 30, 1999. At the closing, Dr. Shaheen executed the Deed of Trust prepared by Mr. Payne in favor of the Bank which listed legal descriptions for both the Greene County property and the Camden County property. The Deed of Trust, as prepared by the Bank, contained the following language typed in the upper left hand corner of the first page of the document:


                   [the Bank]
                   Loan Administration
                   P.O. Box 790177
                   St. Louis, MO 63179-0177


                   [the Bank]
                   Loan Administration
                   P.O. Box 790177
                   St. Louis, MO 63179-0177

Evans recorded the Deed of Trust in Greene County on May 6, 1999, and the original document was forwarded to the Bank at the aforementioned address. Neither Evans nor Chalfant recorded the Deed of Trust in Camden County

On September 14, 1999, Chalfant notified Evans that it had not issued the title insurance policy on the Camden County property because, among other things, it had not received a copy of the recorded Deed of Trust. On January 4, 2000, Chalfant again notified Evans that it had not received a copy of the recorded Deed of Trust. Chalfant made no attempt to notify the Bank.

Meanwhile, on January 29, 2001, Dr. Shaheen granted an additional deed of trust on the Camden County property to First NLC Financial Services, LLC ("First NLC") securing a loan in the amount of $285,000.00. The First NLC deed of trust was recorded in Camden County on January 29, 2001.

Dr. Shaheen passed away on February 13, 2001, and subsequently the Loan with the Bank went into default.

On July 24, 2001, NAMC released its first deed of trust on the Camden County property.

On August 10, 2001, an employee at the Bank completed an internal form entitled "Credit Approval Request" in which it requested "approval to demand and litigate to collect the [Loan]. . . ."7

Having discovered the Deed of Trust had never been filed in Camden County, the Bank recorded its Deed of Trust in Camden County on August 23, 2001.

On September 25, 2001, First NLC's successor, Household Finance Service, foreclosed on the First NLC deed of trust on the Camden County property and the property was sold at public sale.

On September 28, 2001, the Bank's successor assigned all of its right, title and interest in and to the Loan and the Deed of Trust and all documents evidencing and securing the transaction to SRC.8 On December 28, 2001, NAMC foreclosed on its first deed of trust on the Greene County property and SRC purchased the Greene County property at the public sale for $145,000.00.

The record further reveals that on April 1, 2002, Chalfant sent Evans a check for $405.00 "for the loan policy in the amount of $202,500.00 for [the Bank]" and a letter informing it that Chalfant was "unable to issue the loan policy since the requirements were not met within the time frame of the commitment issued on April 15, 1999." Chalfant requested that Evans forward the premium refund "to the appropriate party."

In November of 2004, SRC filed suit against LTIC, Evans, and Chalfant for breach of contract, negligence, and breach of fiduciary duty. In its petition, SRC alleged that "Evans, Chalfant, and LTIC failed to promptly record the Deed of Trust in Camden County, Missouri. . . ." and that "[a]s a direct and proximate result of [this] delay in recording, SRC's Deed of Trust is now in the second position on the Camden County property. . . ." As a result, SRC asserted it "has been deprived of its security for the Loan, and has been damaged."

At trial on January 26, 2006, LTIC, Evans, and Chalfant each made motions for a directed verdict. The trial court granted LTIC's motion for a directed verdict and denied the motions of Evans and Chalfant.

At the close of all the evidence, the trial court found the Bank "sent written instructions to [Evans] to close the transaction" but "sent no written instructions to [Chalfant];" neither Evans nor Chalfant "received written or oral instructions from [the Bank] to record the [D]eed of [T]rust in Camden County, Missouri;" Evans "closed the transaction, recorded the [D]eed of [T]rust in Greene County, Missouri, and in accordance with the instructions printed on the [D]eed of [T]rust, returned the instrument to [the Bank];" and "[t]he [D]eed of [T]rust was not recorded in Camden County, Missouri until after an intervening deed of trust was of record." The trial court concluded that "under the facts of this case, neither [Evans nor Chalfant] owed [the Bank] or any successor a duty to record the [D]eed of [T]rust in Camden County, Missouri." As a result, the trial court ruled in favor of Evans and Chalfant, ruled against SRC, and taxed all costs of litigation against SRC. This appeal by SRC followed.

In its first point on appeal SRC asserts the trial court erred in granting judgment in favor of Chalfant and Evans because its ruling was against the weight of the evidence and not supported by substantial evidence in that SRC established Evans and Chalfant breached their contract by failing to record the Deed of Trust in Camden County.9

To prevail on a breach of contract claim, "a plaintiff must allege and prove (1) mutual agreement between parties capable of contracting; (2) mutual obligations arising out of the agreement; (3) valid consideration; (4) part performance by one party; and (5) damages resulting from the breach of contract." Fidelity Nat. Title...

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