Terre Du Lac Ass'n, Inc. v. Terre Du Lac, Inc.

• Decision Date: 28 July 1987
• Docket Number: No. 52223,52223
• Citation: 737 S.W.2d 206,74 A.L.R.4th 141
• Parties: TERRE DU LAC ASSOCIATION, INC., Plaintiff-Appellant, v. TERRE DU LAC, INC., Terre Du Lac Golf and Country Club, Inc., Terre Du Lac Country Club Associates, C.I.T. Corporation Sensibar Enterprises, Inc., Moill, Ltd., James O. Kwon, David Sensibar, Ezra Sensibar, George Sensibar and Jack Goldfarb, Respondents-Defendants.
• Court: Missouri Court of Appeals

Page 206

737 S.W.2d 206

74 A.L.R.4th 141

TERRE DU LAC ASSOCIATION, INC., Plaintiff-Appellant, v. TERRE DU LAC, INC., Terre Du Lac Golf and Country Club Inc., Terre Du Lac Country Club Associates, C.I.T Corporation Sensibar Enterprises, Inc., Moill, Ltd., James O. Kwon, David Sensibar, Ezra Sensibar, George Sensibar and Jack Goldfarb, Respondents-Defendants.

No. 52223.

Missouri Court of Appeals,

Eastern District,

Division Three.

July 28, 1987.

Motion for Rehearing and/or Transfer Denied Sept. 2, 1987.

Application to Transfer Denied Oct. 13, 1987.

Jeffrey Pratt, Registered Agent, Farmington, Kenton E. Knickmeyer, Robert H. Brownlee, Thompson & Mitchell, St. Louis, for plaintiff-appellant.

William J. Garmisa, Mitchell S. Goldgehm, Nathan H. Lichtenstein, Greenberg, Keele, Lunn & Arnonberg, Chicago, Ill., Donald L. James, Michael M. Flavin, Brown, James & Rabbitt, P.C., Maxine I. Lipeles, Joseph P. Conran, Husch, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, John W. Reid, II, Schnapp, Graham & Reid, Fredericktown, David S. Limbaugh, Limbaugh & Payne, Cape Girardeau, for respondents-defendants.

CRANDALL, Judge.

Plaintiff, Terre Du Lac Association, Inc., appeals the trial court's dismissal of its petition on motions of defendants. We affirm in part and reverse and remand in part.

Preliminarily, we note the named parties as described in plaintiff's petition. Plaintiff, Terre Du Lac Association (Association), is a Missouri not-for-profit corporation, whose members are owners of lots in "Terre Du Lac" (Development), a private recreational, lake-centered land development. The duties of Association are to own, operate, manage, and maintain certain facilities and common areas located within the Development. Pursuant to restrictive covenants in the deeds, every lot owner in the Development is required to become a member of the Association. Association presently has about 4,000 members.

Defendant, Terre Du Lac, Inc. (TDL), is the developer of the project. ¹ TDL owns the real property in the development which is not owned either by Association or by its members. Other defendants are: Sensibar Enterprises, Inc. (Sensibar), the corporation which acquired the stock of TDL in 1977, after TDL went through Chapter XI bankruptcy proceedings; Terre Du Lac Golf and Country Club, Inc. (Country Club, Inc.); Terre Du Lac Country Club Associates (Country Club Associates), which "claims to be a limited partnership, and in any event, is a partnership...."; Moill, Ltd., a corporation and general partner of Terre Du Lac Country Club Associates; and C.I.T., a corporation which financed the Terre Du Lac development. The individually named defendants are David Sensibar, Ezra Sensibar, George Sensibar, Jack Goldfarb, and James Kwon; all of whom are "partners, who claim to be limited partners...." in Country Club Associates. James Kwon is also president of TDL; an officer and director of TDL and of Moill, Ltd.; and an officer, director, and shareholder of Country Club, Inc.

Before we define and discuss the substantive issues raised in this appeal, we first determine our standard of review. Stix & Co., Inc. v. First Mo. Bank & Tr. Co. of Creve Coeur, 564 S.W.2d 67, 68 (Mo.App.1978). The pertinent facts are that Association filed a petition in the Circuit Court of St. Francois County, Missouri, "on its own behalf, and for the benefit of all of its members." Defendants, TDL and James Kwon, filed a joint motion to dismiss Association's petition for failure to state a claim for which relief can be granted. The motion alleged that Association did not have the majority approval of its membership to proceed with the action. It further claimed that the action was barred (1) by the res judicata effects of the dismissal by the United States Court of Appeals for the Eighth Circuit of another action between the same parties, (2) by TDL's 1976 reorganization in bankruptcy, and (3) by the applicable statute of limitations.

Defendants, Country Club, Inc., Country Club Associates, Moill, Ltd., Sensibar, Ezra Sensibar, George Sensibar, David Sensibar, and Jack Goldfarb, filed a motion to dismiss which adopted the allegations contained in TDL and Kwon's motion to dismiss. In addition, they alleged that Association had failed to state a claim against Sensibar because it did not allege sufficient facts to support its conclusion that Sensibar was the alter ego of any other named corporate defendant. C.I.T. corporation filed a motion to dismiss which raised res judicata, as well as the failure to join the individual purchasers of the lots as indispensable parties to the action and the failure to plead facts sufficient to support its conclusion that C.I.T. was engaged in a joint venture with developer. Defendants, TDL and James Kwon, then filed a motion for summary judgment supported by exhibits. After the parties filed a barrage of memoranda of law either in support of or in opposition to the pending motions, the motions to dismiss were argued and taken under advisement. The trial court then sustained what it styled as "Defendants' Motions to Dismiss."

On appeal, TDL and James Kwon urge this court to treat the motion before the trial court as one for summary judgment. Country Club, Inc., Country Club Associates, Sensibar, Moill, Ltd., David Sensibar, Ezra Sensibar, George Sensibar, and Jack Goldfarb, adopt the brief of TDL and Kwon, thereby concurring with the position that the motion was for summary judgment. Association and C.I.T., however, look only to the petition, thereby indicating that they view the trial court's ruling as one sustaining a motion to dismiss.

The characterization of the trial court's ruling by the parties is muddled. It is unclear from the voluminous documents before this court what precisely was before the trial court when it ruled on defendants' motions. We acknowledge that, if matters outside the pleadings were presented and not excluded by the trial court at the hearing on the motions to dismiss Association's petition and all parties had an ample opportunity to present materials on the issue of summary judgment, the trial court in effect entered summary judgment when it ruled on defendants' motions to dismiss. See Rule 55.27(b); see also Boyer v. Carondelet Sav. & Loan Ass'n, 633 S.W.2d 98, 100 n. 2 (Mo.App.1982).

Here, several factors combine to militate against treating the trial court's ruling as a ruling on a motion for summary judgment. It is not readily apparent from the record that either the parties or the trial judge treated defendants' motions as motions for summary judgment. There is no evidence of compliance with the notice requirement of Rule 55.27(a). Generally, some indication by the court to all parties that it is treating a motion to dismiss for failure to state a claim as a motion for summary judgment is required. Kipper v. Vokolek, 546 S.W.2d 521, 524 (Mo.App.1977). But see Johnson v. Raban, 702 S.W.2d 134, 136 (Mo.App.1985).

There is nothing in the record which suggests that the trial court considered anything other than the petition itself when it ruled on the motions to dismiss. The record merely discloses that defendants, TDL and Kwon, filed a motion for summary judgment which was never taken up. Further, on appeal, the parties are not even in agreement as to the nature of the trial court's ruling. Accordingly, we review the trial court's ruling as a grant of defendants' motions to dismiss.

Our scope of review for a motion to dismiss requires an examination of the pleadings, allowing them their broadest intendment, treating all facts alleged as true, construing allegations favorably to plaintiff, and determining whether the petition invokes principles of substantive law. Lipton Rlty. v. St. Louis Housing Authority, 705 S.W.2d 565, 568 (Mo.App.1986). A petition is not to be dismissed for failure to state a claim unless it appears that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. American Drilling Service Co. v. City of Springfield, 614 S.W.2d 266, 271 (Mo.App.1981) (citations omitted). If a pleading merely lacks sufficient particularity, it may be subject to a motion for a more definite statement. Rule 55.27(d).

Here, the trial court sustained defendants' motions to dismiss without specifying the reason for its ruling. On appeal, we presume the dismissal was on one or more of the grounds specified in defendants' motions. Lipton Realty, 705 S.W.2d at 568. We affirm the order of the trial court if any grounds asserted for dismissal are valid. Iverson v. Crow, 639 S.W.2d 118, 119 n. 2 (Mo.App.1982).

The facts alleged in plaintiff's petition which are common to all counts are that Developer represented to the purchasers of lots within the Development the following: that Country Club, Inc. and Country Club Associates were responsible for the maintenance and operation of the country club facilities until they were transferred to Association; that all roads would be permanently surfaced with asphalt over a stabilized base; and that all amenities would be transferred to Association free and clear of all encumbrances. These representations were made in advertisements and orally by salespersons who worked under the supervision of Kwon, who was "under the direct influence and control of Sensibar." Developer has not, however, completed construction of the asphalt roads as specified; many are only surfaced with gravel. Developer has conveyed only a portion of the roads to Association. Association has refused to accept the conveyance of those roads which are not paved with an asphalt surface over a stabilized base. In 1983, Developer notified Association that it would no longer maintain certain roads owned by it. As a result, the roads have deteriorated and the United States Postal Service has given notice that postal delivery may be interrupted. Developer has failed to transfer substantial portions of the common ground and amenities to Association,...