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09/07/93 HARLEY C. MCDANIEL AND DELORES M. MCDANIEL

September 7, 1993

HARLEY C. MCDANIEL AND DELORES M. MCDANIEL, PLAINTIFFS/RESPONDENTS, AND STANDARD BANK & TRUST, INTERVENOR/APPELLANT
v.
PARK PLACE CARE CENTER, INC., WILLIAM W. MERRION TRUST, AND WILLIAM W. MERRION, DEFENDANTS/RESPONDENTS



APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY. The Honorable C. William Kramer, Judge

Before Turnage, C.j., P.j.; Lowenstein and Hanna, JJ.

The opinion of the court was delivered by: Turnage

Standard Bank & Trust appeals the order of the trial court denying it the right to intervene in an action between Harley and Delores McDaniel and William W. Merrion, individually and as trustee for the William W. Merrion Trust. Reversed and remanded.

The McDaniels and Trustee are the owners of the Park Place Meadows Nursing Home. The McDaniels previously were the sole owners of the Nursing Home, but sold 75% of their interest to the Trustee in October, 1984. The McDaniels filed suit alleging that the Trust and Merrion, individually, had taken over control of the Nursing Home, misappropriated funds, and withheld profits due the McDaniels. In their first petition, the McDaniels claimed they were in a partnership with the Trustee. However, in their Second Amended Petition, the McDaniels made no reference to a partnership and claimed they sold a part interest in the ownership and operation of the Nursing Home to Trustee. The McDaniels prayed for the following: a determination of the legal relationship of the parties; if found to be a partnership, the dissolution of that partnership; an accounting and remittance of profits due to the McDaniels; punitive damages. The Trustee denied the McDaniels allegation as to joint ownership and operation of the Nursing Home and made counterclaims against the McDaniels.

The Bank made a $700,000 loan to Harley McDaniel for his company, Inter-City Excavating. Both Harley and Delores individually guaranteed the loan. The loan was secured in part by a collateral assignment of Harley's share of the partnership income from the Nursing Home. The McDaniels also jointly executed a Collateral Assignment of Interest in the underlying litigation after its commencement which granted the Bank a 75% interest in the proceeds of the litigation up to a recovery of $200,000. The loan to Inter-City is currently in default.

The Bank argues that the McDaniels in the second amended petition abandoned their position that they had a partnership interest in the Nursing Home. The Bank only has an assignment of income which the McDaniels receives from a partnership. Thus, the Bank contends that the McDaniels have jeopardized its interest in the assignment by alleging a right to receive revenue from a source other than a partnership.

The applicable standard of review is found in Murphy v. Carron, 536 S.W.2d 30, 32[1-3] (Mo. banc 1976) . The trial court's judgment will be reversed if it erroneously declares or applies the law. The burden is on the intervenor, as pleader, to show all the elements required for intervention as of right. State ex rel. St. Joseph, Mo. Assoc. of Plumbing, Heating and Cooling Contractors, Inc. v. City of St. Joseph, 579 S.W.2d 804, 808[8] (Mo. App. 1979) .

A would be intervenor must meet three requirements in order to have the right to intervene under Rule 52.12(a). Those requirements are as follows:

(1) the applicant must show an "interest" in the subject of the action in which he seeks to intervene;

(2) he must show that his ability to protect his interest will be impaired or impeded as a practical matter; and

(3) he must show that his interest is not adequately represented by the existing parties.

State ex rel. Mercantile Bank v. Pinnell, 804 S.W.2d 63, 65[1-2] (Mo. App. 1991) . To warrant intervention as a matter of right all three requirements must be met. Id. at 65.

The first requirement is that the Bank have an interest in the subject of the action. The test for determining whether one has an interest is stated in Matter of Trapp, 593 S.W.2d 193 (Mo. banc 1980). The Court defined interest as it had in State ex rel. Farmers Mutual Automobile Ins. Co. v. Weber, 364 Mo. 1159, 273 S.W.2d 318 (Mo. banc 1954), as follows:

One interested in an action is one who is interested in the outcome ... because he has a legal right which will be directly affected thereby or a legal liability which will be directly enlarged or ...


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