Property Law

Editor:
David F. Neiers, Esquire
Robert N. Faulkner, Esquire 

Notice of right of redemption after tax sale need not specify the time limits of the right of redemption or other specific procedures that must be followed.  United Asset Management Trust Company, Trustee for the Coast to Coast Holding Trust v. Clark, No. 71589 (Mo. App. W.D., November 30, 2010), Ellis, J.
Keith and Crystal Clark (the "Clarks") purchased a piece of property in Cass County at a tax sale.  Prior to the Clarks purchasing the property at the tax sale, the property was owned by Coast to Coast Holding Trust (the "Trust") with United Asset Management Trust Company as the trustee.  All tax bills and notices were sent to a post office box that was formerly listed as the address for the tax bills.  All notices were returned undeliverable with no forwarding address.  After two years of taxes were not paid, the Clarks purchased the property at tax sale.  At trial, the court found in favor of the Clarks and quieted title to them.  The Trust appealed arguing that the Clark's notice failed in that it incorrectly stated the amount of time the Trust had to redeem the property.  The Trust also argued that their due process right to notice under the 14th Amendment was denied because additional reasonable steps to notify the Trust were not made.  This court strictly construed the notice requirements and held that there is no requirement to inform those receiving notice of the specific time limits applicable for redemption, the specific procedures that must be followed, or any other details, nor are there any such requirements in the Missouri statute.  Therefore, even though the notice inaccurately stated that the Trust had 90 days to redeem, the notice was still statutorily sufficient.  In this case, the Clarks sent several notices to the Trust at the post office box and all notices were returned undeliverable.  The court found that because the property was undeveloped land, there was no occupant to personally notify and posting notices of tax sale is not customary in Missouri.  The court held that the notices sent by Clark were sufficient and did not deprive the Trust of its 14th amendment due process right to notice.
Held:  Affirmed. 

Sale contract involving real estate not unconscionable simply for a disparity in the value of the real estate and the contract price. Cowbell, LLC v. BORC Building and Leasing Corporation, Nos. 72052 and 72231 (Mo. App. W.D., November 9, 2010), Newton, P. J.
Cowbell, LLC ("Cowbell") BORC Building and Leasing Corporation and Knight Construction Company (the "Corporations") entered into a sale contract arising out of an auction of the Corporations' real estate.  The auction was without reserve and received a high bid of $30,250.  The Corporations refused to execute a deed to convey the property to Cowbell.  Cowbell sued for breach of contract and sought specific performance.  The Corporations raised defenses of lack of capacity and unconscionability.  After a bench trial, the trial court ordered specific performance.  The Corporations appealed the trial court decision on the grounds that the disparity between the winning bid at auction and their appraiser's testimony of the land's value was unjust.  The Corporations argued the following for grounds of unconscionability: the price was inadequate; Cowbell's managing partner was more experienced in real estate than the shareholders of the Corporations; and, the shareholders of the Corporations did not understand the auction contract.  The court affirmed the trial court's ruling stating that there was no imbalance of contracting power and a party's failure to read a contract is not a defense.
Held: Affirmed. The trial court's judgment is affirmed and the case remanded to determine the amount of attorney fees to be awarded to Cowbell. 

Item in title commitment requiring spouse's signature on sale of property owned by other spouse was a requirement to issue the title policy and not an exception to title which required purchaser's objection.   JAS Apartments, Inc. v. Naji, No. 71403 (Mo. App. W.D., November 9, 2010), Smart, J.
Mohamad Ali Naji ("Naji"), a married person, owned an apartment complex in his own individual name.  Naji contracted to sell the property to JAS Apartments, Inc. ("JAS").  The contract required Naji to obtain a title commitment for JAS.  Naji obtained the title commitment from Chicago Title.  The title commitment contained one schedule that provided the requirements to issue the title insurance policy and the exceptions to title. One of the items listed on that schedule stated, "the spouse, if any, of Mohamad Ali Naji must join in the proposed agreement."  The contract between JAS and Naji provided JAS the opportunity to object to any matters on the title commitment, and its failure to object to a matter would deem that matter to be a permitted exception.  The day before closing was scheduled to take place, Naji informed JAS that he would not be securing his wife's signature.  JAS did not appear at closing, but Naji did.  JAS sued for specific performance and Naji countered for damages resulting from JAS's failure to close.  The result in this case hinges on whether the item in the title commitment was an exception or a requirement.  The court stated that if it is an exception to title, then JAS's refusal to object to it and then close as scheduled puts JAS in a position of liability to Naji.  However, if the item was a requirement that Naji failed to satisfy, preventing him from delivering marketable title as required under the contract, then Naji is liable for breach of contract.  The court relied on testimony to the effect that the title company would not issue a title policy without the joinder of the spouse, therefore, that item in the commitment was a requirement as opposed to an exception.
Held:  The court held that because Naji did not perform the requirement, the title company would not agree to issue a title policy insuring marketable title, as Naji was contractually obligated to do.  The court remanded the case for the trial court to determine the appropriate remedy for Naji's breach of contract.

Presumption of equal ownership between co-tenants on deed which does not specify ownership interest is rebuttable, contrary to line of cases suggesting otherwise.  Hoit v. Rankin, No. 71159, (Mo. App. W.D., September 28, 2010), Martin, J.
Evan Lee Hoit and Evelyn Jeanne Hoit (the "Hoits") and Brent Warren Rankin and Kimberly Webb (the "Rankins") decided to live together in a house the Hoits were interested in purchasing, regardless of the Rankins' plan to live with them.  Mr. Rankin is the son of Mrs. Hoit.  The plan was for the Hoits to buy the house and then gift it to the Rankins upon the Hoits' deaths.  At the time of closing, the Hoits had not yet sold their previous house.  Therefore, the Rankins decided to obtain the loan for the purchase.  The house was titled in all four names with rights of survivorship.  This was done presumably as a requirement of the lender to finance the purchase.  After the Hoits sold their house, they paid off the loan thus contributing 100% of the purchase price for the house.  After some time, the living arrangements became intolerable for the Hoits, resulting in their departure from the house and purchase of a new house.  The Rankins refused to leave, and the Hoits filed a petition seeking partition of the house. 
Following a trial, the court ordered the house outright to the Hoits, but provided the Rankins a judgment lien on the house for $2,757.48 for expenses incurred by the Rankins.  The Rankins claim that because the vesting deed was silent as to the  respective ownership interest of the parties, there was a presumption that the Hoits and Rankins each held a 50% interest in the house.  The Rankins claim that this presumption was irrebuttable due to the fact that there was a family relationship between the Hoits and Rankins, and because there was a donative intent between the parties.  The Rankins rely on Montgomery v. Roberts, 714 S.W.2d 234, 236 (Mo. App. E.D. 1986) to support their claims.  Montgomery held that "if a deed does not specify the shares of each co-tenant, it will be presumed that they take equal undivided interests, but this presumption may be rebutted by proof, e.g., that the co-tenants contributed unequal amounts toward the purchase of the property and there is neither family relationship among the co-tenants nor any evidence of donative intent on the part of those who contributed more than their pro rata amounts toward the purchase price."  The line of cases following Montgomery modify the proposition to the extent that the presence of a familial relationship or a donative intent transforms the otherwise rebuttable presumption into an irrebuttable presumption.  This court explored the basis for the proposition stated in Montgomery and the cases following it, and concluded that evidence of a familial relationship among cotenants suggestive of a donative intent amounts to nothing more than relevant evidence which may be considered by a trial court as it determines whether the presumption of equal ownership has been rebutted.  Here, there was evidence at trial that the Hoits did not intend to make a present gift to the Rankins, but merely a future gift, which is modifiable at any time.  There was enough evidence presented at the trial to rebut the presumption of equal ownership.
Held:  Affirmed.  Evidence of one party contributing the entire purchase price of the property and lack of a donative intent suggested by a familial relationship was enough to rebut the presumption of equal ownership on a deed with unspecified ownership interests.

The Missouri Bar Courts Bulletin, 11-Mar