Tongay v. Franklin County Mercantile Bank

Citation735 S.W.2d 766
Decision Date11 August 1987
Docket NumberNo. 52439,52439
PartiesHarry TONGAY and June Tongay, Plaintiffs-Appellants, v. FRANKLIN COUNTY MERCANTILE BANK, et al., Defendants-Respondents.
CourtCourt of Appeal of Missouri (US)

Kenneth B. Byrne, St. Louis, for plaintiffs-appellants.

James W. Erwin, St. Louis, John Robert O'Connor, Washington, for defendants-respondents.

KELLY, Judge.

Harry Tongay and his wife June appeal from the judgment of the trial court granting summary judgment in favor of respondents Franklin County Mercantile Bank and Mercantile Bancorporation, Inc. on count two of appellants' petition seeking actual and punitive damages in their action against respondents for slander of title. Count one of the petition which sought cancellation of a deed of trust was dismissed without prejudice by appellants. The judgment is reversed and remanded.

Summary judgments are authorized only when there is no issue of any material fact and the party requesting it is entitled to it as a matter of law. Schneeberger v. Hoette Concrete Const. Co., 680 S.W.2d 301, 303 (Mo.App.1984); Bishop v. United Missouri Bank of Carthage, 647 S.W.2d 625, 626 (Mo.App.1983). Our review of the record is made in the light most favorable to the nonprevailing party. Bishop, 647 S.W.2d at 626.

Appellants brought suit against respondents in a two count petition for slander of title arising from respondents' actions in recording and maintaining a deed of trust against appellants' property despite respondents' alleged full and complete knowledge that the note secured by the deed of trust was forged.

Count one of the petition made the following allegations. Respondent Franklin County Mercantile Bank ("Bank") is a wholly owned subsidiary of respondent Mercantile Bancorporation, Inc. ("MBI"), a national holding company. The Tongays own certain real estate in Franklin County, Missouri. They received a letter dated February 7, 1980, from Bruce A. Smith, a trust officer and general counsel for respondent Bank, informing the Tongays they owed the Bank $18,000.00 on a note secured by a deed of trust on their property. Mrs. Tongay met with Mr. Smith February 19 and informed him that the note and deed of trust were a fraud and a forgery, and demanded they be cancelled and removed of record from their property. She was told that [respondents] "knew and were aware that the note and deed of trust were fictituous, fraudulent and forged." A copy of the note, attached as an exhibit to the petition, was dated October 26, 1978, and was secured by a purported deed of trust of the same date on the Tongays' property. The note had been recorded on or about December 6, 1978.

The note was allegedly assigned on December 5, 1978, by Wilson Development Co., Inc., by Harry L. Wilson, its president, to Charles L. and Marilyn Hoffmann. On the same day, the Hoffmanns assigned the note to respondent Bank. The Tongays averred that the forged note and deed of trust were a "trespass, cloud and slander upon the title of the property of [appellants] and ... severely, permanently and irreparably damaged [appellants] in the use of their property as [appellants] were denied the right to borrow against their property or to sell their property."

The Tongays alleged that respondents agreed by letter of April 14, 1982, from respondents' attorney to release the encumbrance if the Tongays would execute an affidavit of the fraud. The Tongays complied. 1 About two months later, respondents acknowledged receipt of the affidavit and that the releases had been prepared.

Almost a year later on May 23, 1983, the Tongays' attorney directed a letter to respondents again requesting that the encumbrance shown on their property be released of record. On July 21, 1983, the Tongays' received a letter from another attorney for respondents stating that respondents would not release the encumbrance on the Tongays' property. The Tongays then alleged that the note and deed of trust were neither signed nor authorized by them and that they were totally unaware of the existence of the fraudulent instruments prior to respondents' initial communication in the letter of February 7, 1980. Count one of the petition also alleged respondents "did wrongfully and maliciously record such fraudulent and forged deed of trust with the intent that it be a lien and restriction upon the property of [appellants] and [respondents] knew or should have known at the time of recording that said note and deed of trust was fictitious, fraudulent and a forgery." They alleged further damage by respondents' "maliciously and wrongfully and intentionally refusing to release said forged deed of trust after being put on notice in February, 1980, that said document was a forgery."

As a direct and proximate result of respondents' wrongful conduct, appellants claimed they suffered damages. Appellants' damages were set out as follows: 1) their property was burdened with the fraudulent debt and deed of trust; 2) their property was not saleable due to the fraudulent debt and deed of trust; 3) their ability to borrow against their own property was restricted by the fraudulent debt and deed of trust; 4) they each suffered nervousness, loss of sleep and humiliation; 5) and each of them has been caused to incur substantial attorney's fees, expenses and loss of their own time to remove the fraudulent debt and deed of trust from their property. They alleged these damages amounted to $15,000.00.

They also sought punitive and exemplary damages because respondents' actions "constitute willful, malicious, intentional, wrongful and oppressive action." Their prayer in count one sought cancellation and release of the deed of trust previously recorded and that the note and deed of trust be declared null and void.

Incorporating by reference, count two realleged and restated the twenty-three paragraphs contained in count one. Count two added that respondents were aware that "they were holding a fictitious, fraudulent and forged document that was a trespass on the real property, home and residence" of appellants and that these actions would cause appellants "great mental and physical suffering" and "would deprive them of their lawful right to the use and enjoyment of their home and property." They also alleged the note and deed of trust on their property denied them the right to use their property, and that respondents' "willful, malicious, reckless and indifferent conduct toward [appellants'] property and home" denied them "the right of the free and unobstructed use of their property and home."

They claimed that respondents' "willful, malicious, reckless and indifferent attitude towards [appellants] in holding said bogus note and deed of trust over their heads caused [appellants] great anguish and fear that their sudden death would leave a great burden on their children and a burden which they could not disprove." They further stated that respondents' refusal to release the note and deed of trust was "nothing but outright blackmail and an attempt to force [appellants] to pay an obligation that was not bonafide in order to clear the property and home."

Appellants averred that because of respondents', "willful, malicious, reckless, unwarranted and indifferent conduct toward [appellants] and the trespass of their title and property, [appellants] have suffered anxiety, unrest, upset, nervousness and have suffered loss of sleep and have been denied peace of mind", amounting to fifteen thousand dollars in damages. Appellants concluded, as in count one, that respondents' actions constituted "willful, malicious, intentional wrongful and oppressive action and require the imposition of punitive and exemplary damages." They prayed for fifty thousand dollars actual damages and one million dollars punitive damages.

Respondents each filed separate motions for summary judgment. Each motion was accompanied by a supporting memorandum. Franklin Bank also attached an affidavit of its chief officer John H. Lohan. Appellants filed a four page response to the motions for summary judgment asserting that respondents misconstrued appellants' slander of title action as one for outrageous conduct or emotional or mental distress and that the affidavit was insufficient because it stated conclusions, not facts, and because it stated that Franklin Bank had no knowledge of the forgery. 2 Appellants also noted in their response that Franklin Bank's "offer of judgment" previously filed with the court patently contradicted the Bank's assertion of its lack of knowledge of the forgery. Appellants filed no affidavits in opposition to the motions for summary judgment. Respondent Mercantile reiterated in a reply memorandum its earlier arguments in favor of the motions for summary judgment. The trial court determined "on the basis of the pleadings; depositions; responses to interrogatories; and affidavit in support of summary judgment" that no genuine issue of material fact existed and it granted summary judgment for respondents on count two but not count one. 3 Appellants themselves subsequently dismissed count one of their petition without prejudice and then filed this appeal.

Appellants challenge the propriety of the trial court's action in granting summary judgment. Their first point relied on asserts numerous issues of fact remained in dispute; further, proof that respondents were entitled to judgment as a matter of law was not "unassailable" within Rule 74.04(h).

Respondents answer that summary judgment was proper because they view count two of appellants' action not as a slander of title action but as one for outrageous conduct or emotional or mental distress. Respondents focus on the allegations in the Tongays' petition that respondents were aware that the recording of the purportedly forged deed of trust would cause...

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21 cases
  • Mueller v. Abdnor
    • United States
    • U.S. Court of Appeals — Eighth Circuit
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    ...not only was without legal justification or excuse, but was not innocently or ignorantly made." Tongay v. Franklin Co. Mercantile Bank, 735 S.W.2d 766, 770 (Mo.App.1987) (citing Long v. Rucker, 166 Mo.App. 572, 149 S.W. 1051, 1054 (1912)). "Such inference may rest on a foundation of circums......
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