Property Law

Paul F. Sherman, Esquire

One seeking equitable relief who does not itself do equity is not entitled to equitable relief. Bank of New York, as Trustee for the Certificateholders of CWABS, Inc. Asset-Backed Certificates Series 2005-17 v. Yonts, et al. No. 31947 (Mo. App. S.D., December 6, 2012), Lynch, G.

Bank of New York (hereinafter Plaintiff Bank) sought equitable relief with three-count amended petition to (1) reform a deed of trust, (2) rescind a foreclosure conducted via that same deed of trust and (3) declare as to the effect of a tax sale conducted after the foreclosure sale, all attributed to an alleged incorrect legal description in the deed of trust due to an alleged mutual mistake. Plaintiff Bank appealed the trial court’s judgment on the pleadings that the Plaintiff Bank’s amended petition was fatally flawed – basically because rescission was being sought too late to restore the status quo even if rescission was granted.

In affirming the trial court’s judgment, the appellate court concluded Plaintiff Bank could not prevail. The deed of trust secured a note for $82,650.00 with 3.2 acres of unimproved land. Foreclosure sale occurred October 16, 2007. However, on May 11, 2011, LaKeS, LLC notified Plaintiff Bank that LaKeS, LLC had purchased the 3.2 acres at a tax sale on August 23, 2010, and that Plaintiff Bank had one year to redeem. Plaintiff Bank had not paid the taxes. Plaintiff Bank did not redeem so LaKeS, LLC filed its collector’s deed August 25, 2011.

Apparently Plaintiff Bank’s deed of trust allegedly had meant to include a 21.84 acre tract with a home in the description, but did not. In sum, Plaintiff Bank lost the 3.2 acres of unimproved land for failure to redeem, and with Plaintiff Bank’s foreclosure the underlying note was shown paid in full on October 16, 2007, so the deed of trust secured nothing and the 3.2 acres were disposed of. Moreover, in losing the 3.2 acres it was Plaintiff Bank who failed to do equity by not paying taxes on the 3.2 acres it had foreclosed on. 

Held: Affirmed.

Title may not be considered by the trial court in an unlawful detainer action, the issue is immediate possession rights. US Bank, N.A. v. Watson, No. 97784 (Mo. App. E.D., November 6, 2012), Odenwald, K.

Plaintiff US Bank filed this unlawful detainer action. Earlier Defendant Watson had defaulted on his note secured by deed of trust on property that was foreclosed with US Bank acquiring same by Successor Trustee Deed on September 1, 2010. Defendant Watson refused to surrender possession so that US Bank filed unlawful detainer and for summary judgment, which was granted. Defendant Watson took trial de novo and US Bank again was granted summary judgment, so Defendant Watson appeals the grant of summary judgment claiming an issue of fact remains as to title obtained with foreclosure.

The issue of title is prohibited in the summary proceeding of unlawful detainer in Missouri, § 534.210, RSMo 2011. Unlawful detainer is a limited statutory action the sole issue of which is the immediate right of possession to the subject property. Injunction prior to foreclosure is the redress, not challenging title subsequent in an unlawful detainer action. Title may not be considered by the trial court in the unlawful detainer action. Judgment for US Bank affirmed. 

Held: Affirmed.

Damages for loss of possession must be proven by preponderance of the evidence, not by clear and convincing. Fullerton, et al. v. Fullerton, No. 31754 (Mo. App. S.D., October 24, 2012), Bates, J.

The dispute began concerning right to possess a 330-acre New Madrid County farm owned by Dewain and Rosa Fullerton, (the Fullertons), parents of Defendant Chad Fullerton. In 2005, Chad Fullerton began raising cotton on the farm pursuant to an oral agreement with his parents, reduced to writing on July 22, 2009 (Farm Lease) for a five-year term ending December 31, 2014, dividing profits 70% to Defendant, 30% to the Fullertons. The farm Lease as written ran with the land by its terms and was duly recorded. On February 3, 2010, the Fullertons sold their farm for $1.374 million to the William J. Penrod Revocable Living Trust (Penrod). The Fullertons and Penrod then sued Defendant Chad Fullerton for possession, cancellation of the Farm Lease (alleged forgery) and damages for fraud. In March 2010, Penrod orally leased the farm to Ryan Riley and denied Defendant Chad Fullerton access. The trial court denied Defendant Chad Fullerton injunctive relief as Riley planted crops expected to mature June 2011. Defendant Chad Fullerton testified damages for loss of his 2010 cotton crop were $261,359.00. Judgment entered November 2011 found the Farm Lease valid, granted Defendant Chad Fullerton possession but denied him damages finding same unsupported by clear and convincing evidence. The matter was tried to the court in January 2011.

On appeal Defendant Chad Fullerton challenged as to proof necessary for damages, claiming by preponderance was his burden, not clear and convincing. The trial court was reversed as Defendant Chad Fullerton was only required to prove by preponderance of the evidence.

Held: Reversed and remanded as to damages only.

Latent ambiguity exists where the writing is clear and unambiguous on its face, but the meaning is uncertain due to collateral matters. McLallen v. Tillman, et al., No. 31659 (Mo. App. S.D., October 16, 2012), Bates, J.

Quiet title action concerning land conveyed “lying North and West of Elk River” by deeds in 1984, 1998 and 2002, ultimately to Defendants Geigle. The Elk River had two distinct channels in 1984, water flows in each varied between 1984 and the 1990s. The trial court determined the legal descriptions in these deeds to not be ambiguous and granted summary judgment to the Defendants Geigle. On appeal, the Plaintiffs McLallen argue the legal descriptions contain a latent ambiguity that presents a genuine issue of fact. Viewed in the light most favorable to the McLallens, latent ambiguity existed from the failure of the legal descriptions to specify which channel of the Elk River was the intended boundary line. To resolve the latent ambiguity requires intent of the parties be determined by fact finder based on parole evidence. In other words, because there are two channels there are two competent and plausible, but contradicting, boundary lines. Facts remain so summary judgment is reversed and the case remanded.

Held: Reversed and remanded.