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Younker v. Investment Realty, Inc.

Court of Appeals of Missouri, Southern District, Second Division

February 20, 2015


APPEAL FROM THE CIRCUIT COURT OF PHELPS COUNTY. Honorable John B. Berkemeyer, Associate Circuit Judge.

For Appellants: Daniel J. McMichael and Robert E. Caldwell, Jr., McMICHAEL & LOGAN, Kirkwood, Missouri.

For Respondent: Joseph W. Rigler, WILLIAMS, ROBINSON, RIGLER & BUSCHJOST, Rolla, Missouri.

GARY W. LYNCH, J. - Opinion author, NANCY STEFFEN RAHMEYER, J. - concurs, DON E. BURRELL, J. - concurs.



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Michael Younker, Brad Neckermann, Adam Chadek, and Amanda Chadek (collectively referred to as " Tenants" ) appeal from the trial court's judgment denying class certification and granting summary judgment on all claims in their petition in favor of Investment Realty, Inc., Michael Woessner, Linda Woessner, Curtis Baxter, Sarah Baxter, and Williamsburg Apartments, Inc. (collectively referred to as " Property Owners" ).[1] Tenants alleged in their petition that Property Owners improperly retained a portion of their lease deposits in violation of section 535.300.[2] Property Owners moved for summary judgment asserting that the terms of Tenants' lease agreements, which varied from the security deposit requirements of section 535.300, were controlling and that all lease deposits were handled according to the contractual terms in the lease agreements. The trial court, relying upon the uncontroverted fact of Property Owners' compliance with such contractual terms, granted summary judgment in favor of Property Owners. Because compliance

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with the security deposit requirements imposed by section 535.300 is mandatory and cannot be contractually varied or altered and genuine issues of material fact exist as to whether Property Owners complied with such statutory requirements, the trial court's judgment is reversed.

Factual and Procedural Background

The facts, set forth in the light most favorable to Tenants, see Binkley v. Am. Equity Mortgage, Inc., 447 S.W.3d 194, 196 (Mo. banc 2014), are as follows:

Tenants each signed a " Lease and Agreement" to lease separate residences in Rolla, Missouri, from Investment Realty.[3] These agreements vary slightly in their exact language and the specific amounts of funds involved, but these differences are irrelevant to the issues involved in this appeal. Relevant to this appeal, Tenants agreed to " keep the premises in as good order, condition, and repair as when . . . first occupied." The agreements also required Tenants to make an initial deposit ranging from $275 to $400 (the " lease deposit" ).[4] The agreements provided that a portion of the lease deposit ranging from $75 to $95 would be a nonrefundable " common area maintenance fee." The agreements also authorized Investment Realty to expend the remaining lease deposit to repair damage done by Tenants or to fulfill any remaining rent obligations.

Tenants also signed an accompanying " Security Deposit Agreement" that further detailed how their lease deposits would be utilized. The Security Deposit Agreement stated that there was a $75 painting charge for each bedroom unit and a $75 initial carpet cleaning charge, with an additional charge of $25 per room and $10 per heavily stained area. Tenants separately initialed all of these provisions. The Security Deposit Agreement also specified that there should be no damage to the property beyond normal wear and tear, but " DIRT IN CARPETING OR ELSEWHERE, IS NOT NORMAL WEAR AND TEAR." After their tenancies ended, Property Owners deducted no more than the full common-area maintenance fee, painting fee, and carpet-cleaning fee from Tenants' lease deposits. Tenants were not charged any other fees, and the remaining funds from their lease deposits were refunded to them.

Tenants filed a petition against Property Owners alleging that the common-area maintenance fee, painting fee, and carpet-cleaning fee were amounts that would be " withheld in every instance" and were retained to remedy " ordinary wear and tear," which is not allowed by section 535.300. As such, Tenants alleged that Property Owners were in violation of that statute. Tenants' petition was brought as a class action on their own behalf and on behalf of all others similarly situated. By separate motion, Tenants sought court certification of that class.

Property Owners filed a motion seeking " Summary Judgment in Whole," asserting three legal reasons why summary judgment should be granted on all claims in

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the petition. The first two reasons are essentially the same and assert that Property Owners are entitled to summary judgment even if they did not comply with the terms of section 535.300 because they complied with the terms of the lease agreements and the contractual terms control regardless of any statutory requirements. The third and final reason asserted that Property Owners are entitled to summary judgment because they complied with the requirements of section 535.300 by expending in some manner or refunding all deposited funds.

In the alternative, Property Owners moved for partial summary judgment in two respects: (1) in favor of the individual property owners because they were not landlords as that term is used in section 535.300, and Investment Realty, Inc. was an independent contractor, and (2) on all claims outside the statute of limitations.

In its judgment, the trial court denied Tenants' " Motion for Class Certification," granted Property Owners' " Motion for Summary Judgment In Full," never reaching the issues related to the requested partial summary judgments, and made a determination that the applicable statute of limitations, if summary judgment were reversed, would be section 516.130.


Tenants raise three points on appeal. First, Tenants argue that the trial court erred in granting summary judgment because " there is no genuine dispute regarding the material fact that [Property Owners] withheld sums from [Tenants'] security deposits for reasons not allowed by [section] 535.300" . . . " and/or there are genuine issues of material fact as to whether the sums withheld were allowed by [section] 535.300." Second, Tenants argue that the trial court erred in denying class certification because all requirements of Rule 52.08 were met. Third, Tenants assert that the applicable statute of limitations is ten years, in accordance with section 516.110.

Genuine Issues of Material Fact of Property Owners' Compliance with Section 535.300 Precluded Summary Judgment in Full

In reviewing a trial court's grant of a motion for summary judgment, we employ a de novo standard of review. As such, we will not defer to the trial court's decision, but rather, we will use the same standards the trial court should have used in reaching its decision to grant the motion for summary judgment. We view the record in the light most favorable to the party against whom judgment was entered, and we accord that party the benefit of all inferences which may reasonably be drawn from the record. The propriety of summary judgment is purely an issue of law.

Baca Chiropractic v. Cobb, 317 S.W.3d 674, 677 (Mo.App. 2010) (internal citations and quotations omitted).

Summary judgment is appropriately granted when " there is no genuine issue as to any material fact" and " the moving party is entitled to judgment as a matter of law." Rule 74.04.[5] " 'A material fact in the context of summary judgment is one from which the right to judgment flows.'" Cent. Trust & Inv. Co. v. Signalpoint Asset Mgmt., LLC, 422 S.W.3d 312, 319 (Mo. banc 2014) (quoting Goerlitz v. City of Maryville, 333 S.W.3d 450, 453 (Mo. banc 2011)). A genuine issue exists as to one of the material ...

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