Property Law

Paul F. Sherman, Esquire

Once adverse possession has been established for ten years as required by statute, title vests and it is irrelevant what the possessor does thereafter. Humphreys, et al. v. Wooldridge, et al., No. 30798 (Mo. App. S.D., September 3, 2013), Bates, J.

Reciprocal easements were exchanged in September 1983 between Humphreys, Sellers and the Middletons. In 1984 the Middletons sold a parcel to Clark, who in 2004 sold to the Willisons. The Humphreys’ property lies south of Wooldridge, Jones and the Willisons. These perpetual reciprocal easements (“Easement A”) are for roadway purposes. Easement A burdens Wooldridge. Jones took on a portion of Easement A when he bought some land from Wooldridge. Another easement (“Easement B”) joins the east end of Easement A and burdens the Willisons. The Humphreys’ property connects to both Easement A and Easement B.

Plaintiffs Humphreys and Sellers sought declaratory relief of the boundaries of Easements A and B, ejectment and injunction. The plaintiffs appeal the trial court’s denial of plaintiffs’ request that a business sign located within the boundaries of Easement A be removed and that one portion of Easement B be extinguished by adverse possession.

Regarding the sign issue, it was an advertising sign set in concrete in a grassy portion of Easement A 8-10 feet west of the gravel roadway, not on the traveled portion, and did not substantially limit travel on the Easement A as found by the trial court.

Regarding Easement B, the Willisons bought from Case who had built a fence within the boundaries of Easement B in 1988 or 1989. Case sold to Clark in 2000, mowed to the road and used and possessed all up to the fence, as did the Willisons. This the trial court found sufficient for adverse possession.

The sign did not violate the Easement A. Easement A is non-exclusive and the sign did not substantially interfere with use of the Easement A for road purposes.

The Willisons proved all elements of adverse possession sufficient to have extinguished Easement B. Once the ten-year period has run the possessor is vested with title and the record owner in divested as the trial court found substantial credible evidence to support the decision, changing the boundaries of a recorded easement.

Removing a portion of the fence did not destroy the adverse possession claim. The fence was shown in existence for 11 or 12 years before removal occurred, hence title had vested.

Held: Affirmed

In Missouri, a deed of trust securing a negotiable note passes with it and the possessor of a negotiable note endorsed in blank is entitled to enforce the note. U.S. Bank National Association v. Burns, et al., No. 99551 (Mo. App. E.D., August 27, 2013), Gaertner, Jr., J.

On August 24, 1999, Jeana Burns acquired title to 1536 Honey Locust Court (“Property”) in Chesterfield, Missouri by warranty deed duly recorded. On April 1, 2005, Jeana Burns signed a promissory note for $496,300, granting Aegis a deed of trust in the property, listing MERS as the beneficiary (incorrect legal description). On January 31, 2008 the deed of trust was assigned to U.S. Bank with the incorrect legal description. On August 18, 2010, U.S. Bank sued Burns to reform the deed of trust to correct the legal description and declare the Deed of Trust first priority. The subdivision cross-claimed for its lien for outstanding assessments.  U.S. Bank moved for summary judgment on all counts and the subdivision moved for judgment on the pleadings for its cross-claim, both motions were granted by the trial court. On appeal the issue was whether U.S. Bank had an interest in the property given MERS assigned the deed of trust and the note, but MERS was not a party to the note.

In affirming the trial court, Missouri recognizes that a deed of trust securing a negotiable note passes with it. Section 400.3-301 enables the holder of a negotiable instrument to enforce it and the evidence was that U.S. Bank possessed the note endorsed blank and that the allonge was endorsed specially to U.S. Bank. Therefore, U.S. Bank possessed the note, there is no genuine factual dispute that U.S. Bank was entitled to enforce the note.

Held: Summary judgment affirmed.

Ambiguity as to when rent is due supports the trial court considering extrinsic evidence and deciding the issue, recognizing that at common law if no agreement then rent is due at end of year. Central Stone Company v. Warning, No. 99480 (Mo. App. E.D., November 5, 2013), Ahrens, J.

Tenant Daniel Warning leased Oyster Farm from Landlord Central Stone Co. since 1993 for row crop purposes. Trial to the court concerned construing the “May 2010 Lease”, a three-year lease which began January 1, 2010 and was executed May 3, 2010. This May 2010 Lease raised annual rent to $51,100 due April 1 of each year. Tenant had possession of Oyster Farm in all of 2010, and raised no crops due to excessive water, but did have crop insurance and USDA program involvement. Still, no rent was paid Landlord in 2010. Landlord filed suit May 2011 seeking $51,100 in unpaid rent and Tenant counterclaimed for quantum meruit his improvements. Tenant claimed oral agreement that if too wet to farm, no rent due.

The trial court found for the Landlord rent due in the amount of $51,100, offset by Tenant services of $14,135, for final judgment of $36,965.

Looking at the lease de novo on appeal to interpret intent of parties, the lease term is expressed to be January 1, 2010 to December 31, 2012, but the lease itself was entered into on May 3, 2010. Rent due on April 1 of each year of the May 2010 lease is thus ambiguous, allowing the trial court to consider extrinsic evidence presented on this issue. If no due date expressed, then common law in Missouri sets rent payable at the end of the year, 2010. Factored in was that the trial court’s finding rent was due for 2010 was supported by the evidence and was also consistent when rent being due each year since 1993 between the parties.  

Held: Affirmed.

An owner’s refusing an opportunity to settle for dismissal of the lien claim limits his statutory right to recover for attorney fees thereafter incurred in defense of the mechanic’s lien pursuant to § 429.140, RSMo. APAC-Missouri, Inc. v. Boyer, et al., Nos. 32290, 32321, 32322 (consolidated) (Mo. App. S.D. October 30, 2013), Burrell, J.

APAC claimed a subcontractor lien for asphalt used by Mainstreet to build a residential driveway for lake property. The lot owners, Boyers, and the owner of Mainstreet, Mark Haas, brought the appeal after trial to a jury (for APAC on Boyers’ slander of title claim, and for Boyers on their claim against Mainstreet for statutory indemnification) and to the court.

Bruce Boyer contracted with Mainstreet to build the asphalt driveway for $4,303, which Bruce paid Mainstreet when done. The drive crossed lots owned by one or more of the Boyers. Mainstreet bought the asphalt from APAC on credit. No lien waiver was obtained by Bruce from Mainstreet. APAC liened all lots involved with the drive, then sued the Boyers and Mainstreet. The Boyers counterclaimed against APAC for slander of title. APAC dismissed its lien and amended its petition to reduce the amount claimed due to $2,387.17. In the process, APAC removed Bruce’s Lot 9 from the suit. The Boyers received judgment after bench trial against both Mainstreet and Mr. Haas for $1,800 indemnification and for $5,271 in attorney fees incurred up to January 21, 2008, but apparently more was incurred after which was denied.          

For the most part, the Boyers failed to preserve for appeal their issues (A, B & C), but on Issue D – Attorney Fees – requested a new trial. Finding no abuse of discretion, the appellate court deferred to the trial court’s determination the amount, $5,271, as the contractor had a duty to defend pursuant to § 429.140, RSMo. up to January 21, 2008. However, since the Boyers had refused an opportunity to dismiss their slander claim for APAC’s dismissing its lien on January 21, 2008, then the Boyers cannot recover for their attorney fees the Boyers incurred thereafter. This it would appear no longer amounted to attorney fees incurred in defense of a mechanic’s lien thereafter so there was no contract or statute which would allow the Boyers to recover further.

Lastly, Mr. Haas’ appeal issue was whether there was evidence sufficient to pierce the corporate veil and reach him personally. He was Mainstreet’s only officer and shareholder. Noted was that Mainstreet had funds to defend itself but failed to defend the Boyers as per the statute. Control was present sufficient by Mr. Haas so that judgment was affirmed.

Held: Both jury and bench trial judgments affirmed.