Property Law

Paul F. Sherman, Esquire

Plain error committed when judicial admissions conceding the limits of the trial evidence to be presented are exceeded by the judgment entered. The Empire District Electric Company v. Coverdell, et al., Nos. 30560 & 30557(Mo. App. S.D., June 3, 2011)

Empire District and City of  Branson appeal the trial court’s judgment after jury trial of a quiet title action concerning certain properties located on a peninsula bounded by Roark Creek and Lake Taneycomo in Branson, Missouri.  This action was filed July 18, 2003 by Empire as successor in interest to Ozark Power and Water Company, alleging Empire was the fee owner of 3.36 acres first acquired in 1913.  Empire alleged other claims of interest were junior to its own and represented an invalid cloud on its title.  Respondents filed an answer and counterclaimed title priority by adverse possession.  Branson filed its own answer and third-party petition claiming legal title and title by adverse possession.  All properties at issue were apparently at one time part of the same tract of land beginning about July 14, 1917.  This area was further disrupted by dam construction and a “Flowage Deed” to Empire.  On November 2, 2004 Branson severed the western half of the peninsula and that portion was tried in court in November 2004, with the court determining Branson the owner in fee simple absolute of that portion described.  That decision regarding the west half was determined final for purpose of appeal. However, no appeal was taken.  Branson technically remained a party to the remainder but received no notices.

On December 31, 2009 Empire voluntarily dismissed its petition without prejudice.  A jury trial was held on the Respondents’ remaining claims January 11-13, 2010, in which only Respondents and Empire participated. The jury’s verdict was for Respondents and against Empire  for the entire peninsula, except that portion awarded to Branson in 2004.  Branson then filed a “Motion to Appeal Amicus Curiae” arguing Branson was aggrieved by the 2010 judgment, claiming the 2010 legal description conflicted with its 2004 judgment.  The trial court denied Branson’s motion.  After a writ on this issue, it was determined Branson was a party entitled to appeal the 2010 judgment. Both Branson and Empire commenced this appeal.

Branson alleges as plain error its lack of notice and involvement this lawsuit following the 2004 judgment.  Judicial admissions were conclusive that the matter to be tried was to be limited to the east side of peninsula, but was not.  As a result, Branson’s interest was never presented to the jury.  Branson also maintained the legal description used in the 2010 judgment affects 27 acres adjacent to the south of the peninsula – the court held it was plain error to proceed to jury trial the east side of the peninsula and allow a 2010 judgment affecting Branson.  Judgment 2010 is reversed in its entirety and the entire matter remanded with amendment of pleadings freely granted.

School district’s annuity purchase of its administrative building upheld as tax exempt pursuant to Section 137.100(5), RSMo. Rollings, et al. v. Shipman, et al., No. 95275 (Mo. App. E.D., May 24, 2011)

Prior to October 2004, Wentzville School District leased property from Edward L. and Mary Lou Harris where it housed its administrative offices.  That year the parties agreed the School District would buy the property for $1.2 million, but financing was a problem.  The parties then agreed to a 10-year lease @ $13,322/month, at the end of which title was to then transfer.  For this the Harris’ created Respondent Trust and assigned the Lease to the Trust with the Trust operating itself for ten years, then transferring said property to the School District after ten years of payments had been made.  The Trust is made irrevocable.

The Trustee then applied to St. Charles in 2007 for tax exemption, but was denied.  On appeal, the Commission’s hearing officer entered the property as exempt for 2007 and 2008.  The Assessor appealed to the Commission and the exemption was reversed.  The Trustee appealed to the Circuit Court who then reversed the Commission because the property met Section137.100(5).

Each tax exempt case is decided on its own facts, exemption being the exception.  Was the property being used “exclusively .. .for schools?”  The Harris’s do not own the property, the equitable owner is the School District for it has the legal right to have title transferred in time, the School District has sole possession and keeps the building insured.  The School District is not a for-profit owner and operator, but used the building for the public good.
Trial court’s reversal of Commission affirmed.