Thompson v. Chase Manhattan Mortg. Corp.

• Citation: 90 S.W.3d 194
• Decision Date: 30 October 2002
• Docket Number: No. 24521.,24521.
• Parties: Cindy Marie THOMPSON, Plaintiff-Respondent, v. CHASE MANHATTAN MORTGAGE CORPORATION, and Citibank, N.A., Defendants-Appellants, Advanta Mortgage Corp. USA, and Kozeny & McCubbin Trustee Co., L.C., Defendants-Defendants.
• Court: Missouri Court of Appeals

90 S.W.3d 194

Cindy Marie THOMPSON, Plaintiff-Respondent, v. CHASE MANHATTAN MORTGAGE CORPORATION, and Citibank, N.A., Defendants-Appellants, Advanta Mortgage Corp. USA, and Kozeny & McCubbin Trustee Co., L.C., Defendants-Defendants.

No. 24521.

Missouri Court of Appeals, Southern District, Division. Two.

October 30, 2002.

Motion for Rehearing and Transfer Denied November 20, 2002.

Application for Transfer Denied December 24, 2002.

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William L. Sauerwein, Shawn T. Briner, William L. Sauerwein & Associates, St. Louis, for appellants.

R. Scott Reid, Fredericktown, for respondent.

KENNETH W. SHRUM, Judge.

The trial court ruled that Plaintiffs judgment lien against her ex-husband's real estate was superior to the lien of a deed of trust held by Chase Manhattan Mortgage Corporation ("Chase Manhattan"). Further, the court ruled that when the sheriff levied execution on and publicly sold the real estate to Plaintiff to satisfy her judgment lien, the sale "extinguished" Chase Manhattan's deed of trust lien. Accordingly, the court enjoined Defendants from foreclosing or enforcing any rights under the subject deed of trust.¹ Moreover, the trial court quieted title to the real estate in Plaintiff. Two Defendants, Chase Manhattan and Citibank, appeal, and present multiple claims of trial court error. We affirm.

FACTS

Plaintiffs marriage to Gary Lee Thompson ("ex-husband") was dissolved by a decree dated June 28, 1999.² Marital property (real and personal) valued at $232,912.79 was awarded to ex-husband. The real estate, a ten-acre tract, was subject to three deed of trust liens which ex-husband was ordered to pay. As further property division, the divorce court entered judgment for Plaintiff and against ex-husband for $102,000.

While the divorce decree was on appeal, ex-husband applied to First Choice Mortgage ("First Choice") for a loan. He intended to use a portion of the loan proceeds for partial payment on Plaintiffs judgment. In connection with the loan, First Choice required ex-husband to acquire "from Plaintiff a quitclaim deed of her interest in the Property so that he alone could borrow money with which to pay off the Judgment while using the Property as collateral."³ When Plaintiff received the deed form, she would not sign it without consulting her attorney, Kenneth Seufert. Attorney Seufert altered the quitclaim deed by, inter alia, inserting the phrase [s]ubject to judgments and liens of record[ ]" immediately beneath the legal description⁴ With the quit-claim deed thus altered, Plaintiff signed it, and Plaintiffs daughter delivered it to ex-husband. The parties stipulated that Plaintiffs intent in signing and delivering the quit-claim deed, as altered, "was to convey her ownership interest in the Property to Mr. Thompson and to preserve her lien interest in the Property."

Relying upon Plaintiffs quit-claim deed, First Choice loaned ex-husband $89,120 on February 26, 2000, and received a deed of trust on the subject real estate (the "First Choice deed of trust"). First Choice promptly recorded its deed of trust. The parties stipulated that First Choice intended to obtain a first lien priority against the ten-acre tract via this transaction, and First Choice "would not have completed the First Choice Mortgage Loan had Plaintiff not executed Plaintiffs Quit-claim Deed." Moreover, ex-husband intended to give First Choice a first lien deed of trust on the land.

The First Choice loan proceeds were used, inter alia, to (1) pay $42,000 to Plaintiff on her judgment lien, (2) satisfy the three deed of trust liens mentioned in the divorce decree (totalling $25,882), and (3) pay certain other marital debts assigned to ex-husband. When Plaintiff received the $42,000 payment, she "did not know: (1) who loaned [ex-husband] funds to make partial payment on Plaintiffs judgment, (2) the terms of [ex-husband's] loan; (3) the amount of [ex-husband's] loan; or (4) whether [ex-husband's] loan was secured by property other than the [ten-acre real estate tract]."

On May 15, 2000, Plaintiff instituted an effort to collect the $60,000 due on her judgment. She requested that the Iron County sheriff levy execution on ex-husband's real estate. Notice of the sheriffs sale was given to ex-husband and First Choice. Notice thereof, however, was not given to "any of the Defendants since none of the assignments of the Deed of Trust had been recorded with the Iron County Recorder of Deeds." "Neither First Choice ... nor any of the Defendants attended the Sheriff's Sale or contacted [Plaintiff] or her attorney prior to the sale." At the sheriff's sale on June 28, 2000, Plaintiff bought the property for $55,000.

On December 21, 2000, K & M was appointed successor trustee under the deed of trust given to First Choice by exhusband. K & M then scheduled a trustee's foreclosure sale for February 7, 2001. When Plaintiff read the published notice of foreclosure, she brought this lawsuit seeking (a) to enjoin the foreclosure, (b) to quiet title to the real estate, and (c) damages for wrongful foreclosure. After learning First Choice had sold the subject deed of trust, Plaintiff amended her petition and named Defendants as parties. The trial court enjoined Defendants as Plaintiff requested and quieted title in the real estate in Plaintiff. It denied Plaintiff's damage count and all relief sought by Defendants. This appeal followed.

STANDARD OF REVIEW

In a court-tried case of this nature, our review is governed by Rule 84.13(d) (2002), and Murphy v. Carron, 536 S.W.2d 30 (Mo.banc 1976).⁵ U.S. v. Brooks, 40 S.W.3d 411, 412 (Mo.App.2001). Thus, we will affirm the judgment of the trial court unless there is no evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy, 536 S.W.2d at 32[1].

As this case was tried upon stipulated facts, we will not give deference to a trial judge's determination regarding credibility of witnesses. Jarrell v. Director of Revenue, 41 S.W.3d 42, 45[5] (Mo.App. 2001). Even so, the Murphy v. Carron standard of review still attends. In such cases, i.e., non-live witness trials, an appellate court must defer to the facts — not witness credibility — as found by the trial court in deciding if substantial evidence exists to support a judgment and in analyzing whether the judgment is against the weight of the evidence. Jarrell, 41 S.W.3d at 46[7]. "Stated otherwise, where facts essential to an element of a case are derived from non-live sources and are in conflict, appellate courts give deference to the trial court conclusions about those facts." Id. at 46[9].

DISCUSSION AND DECISION

POINT I: Did Quitclaim Deed Release Judgment Lien?

[4] Appellants' first point makes several arguments regarding why Plaintiffs quitclaim deed allegedly released her exhusband's real estate from her judgment lien despite the language she inserted therein, i.e., [s]ubject to judgments and liens of record." Based on these arguments, Appellants insist that the First Choice deed of trust was a first priority lien; the sheriffs deed conveyed the real estate subject to the First Choice deed of trust lien; and the trial court committed reversible error when it ruled otherwise.

First, Appellants rely on DeWitt v. Am. Family Mut. Ins. Co., 667 S.W.2d 700, 704 (Mo.banc 1984) and Stamatiou v. El Greco Studios, Inc., 898 S.W.2d 571, 576-77 (Mo. App.1995) (citing § 452.360.2), to argue that the dissolution decree operated to fully vest title to the subject real estate in exhusband. Thus, according to Appellants, when Plaintiff signed and delivered the quitclaim deed her only interest in the property was the judgment lien, and a quitclaim from her could only serve to release the real estate from her judgment lien.

Second, Appellants quote Reasor v. Marshall, 359 Mo. 130, 221 S.W.2d 111, 115 (1949) for the proposition that "[g]enerally a quit claim deed operates as a conveyance of any right, at law or equity, the grantor has[]" in the subject real estate. They also cite Williams v. Reid, 37 S.W.2d 537, 541 (1931), for the notion that "[t]o remise, release, and quitclaim designated land is generally understood to mean that the grantor releases any interest he may have in the land at the time." (Emphasis supplied.) They further rely on Reben v. Wilson, 861 S.W.2d 171, 176 (Mo.App.1993), where the court noted that one who "conveys property via a deed ... no longer has any interest in the property." Relying on these principles, Appellants argue that a quitclaim deed operates more as an instrument of release than an instrument of conveyance and urges us to rule that the trial court erred when it found that Plaintiffs quitclaim deed did not release the ten-acre tract from her judgment lien. Continuing, Appellants insist that "the trial court erroneously declared and applied Missouri law in holding that [Plaintiff], by executing and delivering the Quit-Claim Deed — an instrument of release — preserved the only interest she held and advanced its priority to a status superior to that of the First Choice Deed of Trust."

Preliminarily, we note that Appellants have mischaracterized the trial court's finding. The trial court found "[t]hat Plaintiff, in executing a Quit-Claim Deed with reservation of judgments and liens of record, effectively conveyed any marital interest she may have remaining in the subject property, but specifically reserved any ... interest she possessed pursuant to the Judgment entered July 1, 1999." (Emphasis supplied.) This finding implicitly recognizes what Appellants choose to ignore, namely, that ex-husband's loan with First Choice was closed while his divorce case was on appeal to this court. Although Plaintiff's appeal did not challenge the trial court's division of marital property, that was not something First Choice or anyone else could have learned by searching records at the Iron County cou...