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U.S. Bank, N.A. v. Coverdell

Court of Appeals of Missouri, Southern District, Second Division

October 30, 2015

U.S. BANK, N.A., f/k/a BANK OF AMERICA, N.A., and ARVEST BANK, Plaintiffs/Lienholders-Respondents,
v.
DOUGLAS L. COVERDELL, and COVERDELL ENTERPRISES, INC., Defendants-Appellants, and COMMUNITY BANK OF THE OZARKS, INC., Defendant, and HCW DEVELOPMENT COMPANY, LLC, HCW PRIVATE DEVELOPMENT, LLC, and HCW NORTH, LLC, Defendants-Respondents, and CITY OF BRANSON, MISSOURI, and THE EMPIRE DISTRICT ELECTRIC COMPANY, Intervenors-Respondents

          APPEAL FROM THE CIRCUIT COURT OF TANEY COUNTY. Honorable Timothy W. Perigo, Circuit Judge.

         ROBERT W. COCKERHAM, St. Louis, MO, and EDWARD D. ROBERTSON JR, Jefferson, City, MO, for Appellant Douglas Coverdell.

         CHARLES S. GENISIO, Joplin, MO, for Appellant Coverdell, Enterprises, Inc.

         SARAH ELIZABETH HOLDENER, St. Louis, MO, for Respondents U.S. Bank and City of Branson.

         WILLIAM L. SAUERWEIN, Clayton, MO, for Respondent U.S. Bank.

         LYNN C. RODGERS, Springfield, MO, for Respondent Arvest Bank.

         DANIEL J. WELSH, St. Louis, MO, for Respondents HCW Development, HCW Private, and HCW North.

         JOHN C. HOLSTEIN, and JAMES E. MEADOWS, Springfield, MO, for Respondent City of Branson.

         JOSHUA B. CHRISTENSEN, Springfield, MO, for Respondent Empire District.

         MARY W. SHEFFIELD, P.J., GARY W. LYNCH, J. - CONCURS.

          OPINION

Page 391

         DON E. BURRELL, J.

         REVERSED AND REMANDED WITH DIRECTIONS

         This consolidated opinion addresses four separate appeals stemming from summary judgments granted in a lawsuit filed in 2011 to quiet title to real estate located in the Branson Landing subdivision (" the 2011 case" ).[1] The appeals are brought by

Page 392

Defendants Douglas L. Coverdell (" Coverdell" ) and Coverdell Enterprises, Inc. (" CEI" ) (collectively, " Appellants" ), and these appeals are related to two other appeals brought by Appellants arising out of another lawsuit filed in 2003 (" the 2003 case" ). That case also involved land located in the Branson Landing subdivision, and our opinion deciding those consolidated appeals is being issued this same date. See Empire District Electric Company v. Coverdell, __ S.W.3d __, Nos. SD32806 and SD32807 slip op., 484 S.W.3d 1, (Mo. App. S.D. Oct. 30, 2015) (" Empire II" ).[2] We hold in Empire II that the trial court committed prejudicial error when it dismissed with prejudice Coverdell's adverse possession claim in the 2003 case. As a result, that opinion reverses three summary judgments and remands the case for further proceedings consistent with the opinion. Id. at 4.

         We also reverse three summary judgments entered in this case, but we do so for a different reason. The reason the summary judgments entered in the instant case must be reversed is that this case should not have proceeded while the 2003 case remained unresolved. We therefore remand the matter with a direction that the trial court stay these proceedings pending a final resolution of the 2003 case.

         Overview of Claims and Challenged Judgments

         Plaintiffs Arvest Bank (" Arvest" ) and U.S. Bank (collectively, " Lienholders" ); Defendants HCW Development Company, LLC (" HCW Development" ), HCW Private Development, LLC (" HCW Private" ), and HCW North, LLC (" HCW North" and these defendants, collectively, " HCW Entities" ); and two intervenors, the City of Branson (" Branson" ) and the Empire District Electric Company (" Empire" ), have all filed briefs and will be referred to collectively as " Respondents." [3]

Page 393

          Lienholders filed this case after the 2010 judgment was entered in the 2003 case and while the appeal of that judgment was pending before this court. See Empire I, 344 S.W.3d at 844. After multiple amendments had been made to the petition in the instant case, U.S. Bank ultimately sought to quiet title, based upon deeds or, alternatively, adverse possession, in Branson as to Lots 1 and 4 and in Empire as to Lots 3 and 6.[4] U.S. Bank also sought declarations, inter alia, that: (1) the lease by Branson as to Lot 6 and the sublease by HCW Private as to land we will refer to as " Retail Tract" were valid; [5] (2) U.S. Bank possessed " a valid leasehold deed of trust" with " a first lien position" encumbering Retail Tract; and (3) Appellants had no rights to " any part of Lots 1, 3, 4 or 6[.]" [6] U.S. Bank alleged that its deed of trust (" U.S. Bank deed of trust" ) encumbering Retail Tract was used to secure a $90,000,000 indebtedness.

         Arvest's claim, based upon a chain of deeds, sought to have title quieted in Branson as to Lot 1 and in Empire as to Lot 6. It also sought declarations, inter alia, that: (1) Branson had a valid lease of Lot 6; (2) HCW Private had a valid sublease as to Retail Tract, (3) HCW North had valid leases as to two tracts in Lot 1 that we will refer to as " Northwest Tracts" ; (4) Arvest had a valid first lien as to Northwest Tracts; and (5) Appellants had no right to " any part of Lots 1 and 6[.]" [7] Arvest asserted in its statement of uncontroverted facts that Arvest's deed of trust (" Arvest deed of trust" ) encumbering Northwest Tracts was executed to secure a debt " in the maximum amount of $3,956,250.00[.]"

         Branson's cross-claim sought to quiet title in itself as to all of Lots 1 and 4, and in Empire as to all of Lots 2, 3, and 6 based upon deeds, or alternatively, adverse possession. Branson also sought a decree, inter alia, that Appellants " have no right, title or interest in and to or right of possession to any of the Branson Landing[.]" HCW Entities and Empire answered Lienholders' claims, but they made no additional, specific claims for relief.

         Appellants asserted " CLAIMS AGAINST PLAINTIFF AND OTHER DEFENDANTS" as a part of their response to U.S. Bank's amended petition. These claims sought to quiet title in Appellants as to " Property A and Property B" based upon a chain of deeds, and, in the alternative, to quiet title to these same properties in Coverdell based upon adverse

Page 394

possession (the alternative claim will hereinafter be referred to as " Appellants' claim" ). Appellants also sought a declaration, inter alia, that Empire, Branson, and Lienholders had no rights in Property A and Property B. We observe -- without so holding - - that Property A may overlap part of the peninsula and an area south of the peninsula in Branson Landing, and Property B appears to be a smaller portion of Property A, which Coverdell allegedly conveyed to CEI.[8]

         The instant appeals challenge the following three judgments, which we will collectively refer to as " the summary judgments" : (1) a June 2013 judgment (" U.S. Bank's judgment" ) certifies as final a September 2012 summary judgment entered in favor of U.S. Bank (" U.S. Bank's interlocutory judgment" ) declaring, inter alia, that: (a) title is quieted in Branson as to the parts of Lots 1 and 4, and in Empire as to the parts of Lots 3 and 6, each of which are described in Retail Tract; (b) HCW Private has a valid lease in Retail Tract; (c) U.S. Bank deed of trust is valid and is the first lien; and (d) Appellants have no " right, title or interest, in and to, or right of possession of" Retail Tract[9]; (2) an August 2, 2013 summary judgment on Branson's motion (" Branson's judgment" ) that, inter alia : (a) quieted title in favor of Branson as to specific portions of Lot 1 described as " The Western Peninsula" (" Western Peninsula" ) and " Park Addition[,]" and in favor of Empire as to specific portions of Lots 2 and 6 described as the " Branson Town Company Tract" (" Branson Town" ); (b) denied any right of Appellants in Lots 1, 2, and 6, or of " Western Peninsula, Park Addition, [Branson Town and] Eastern Peninsula [sic]" ; (c) dismissed with prejudice Appellants' " Amended Claim" for " fail[ure] to state a claim upon which relief can be granted" ; and (d) denied dismissal of the 2011 case.[10]; and (3) an August 5, 2013 summary judgment in favor of Arvest (" Arvest's judgment" ) that, inter alia : (a) quieted title in favor of Branson as to Northwest Tracts, and denied any right by Appellants to these parts of Lot 1; and (b) dissolved pertinent notices of lis pendens.

         Background Regarding the Claims and Judgments Entered in the 2003 Case After the Remand Ordered in Empire I

         Lienholders successfully intervened in the 2003 case after our remand in Empire I, claiming that they held separate deeds of trust that secured financing for lessees -- $90,000,000 as to U.S. Bank's interest, and $3,956,250 as to Arvest's interest. Empire II at 3. U.S. Bank's cross-claim sought to quiet title in Branson as " to all of Lots 1 and 4" and in Empire as " to all of Lots 3 and 6[.]" Id. at 10. It further sought a declaration that Appellants had no right or interest as to " Lots 1, 3, 4 or 6[.]" Id. Arvest's cross-claim against Appellants sought to quiet title in Branson as " to all

Page 395

of Lot 1" and in Empire as to " all of Lot 6[,]" id. at 9, as well as a declaration that Appellants had no interest in this land. Id. Branson claimed " that Empire owned Lots 2, 3, and 6; that Branson owned Lots 1 and 4; and Branson leased the lots owned by Empire." Id. at 3. Empire claimed ownership of what we refer to as " Eastern Peninsula" and " Branson Town[.]" Id. at 2-3. Appellants' answers and separate cross-claims sought decrees that Coverdell owned " Property A" by either deed or adverse possession and that he had conveyed a portion of that land, identified as " Property B[,]" to CEI. The legal descriptions used for Properties A and B in the 2003 case and in the instant case appear to be identical. See id. at 13 n.12, and 54.

         U.S. Bank then received a judgment in the 2003 case that did not expressly decree quiet title in Branson or Empire, but it did conclude that Branson owned a part of Lot 1 and that Empire owned a part of Lot 6, both being in Retail Tract. Id. at 24-25. We refer to this smaller portion of Retail Tract as " Retail North." [11] Id. at 25. U.S. Bank's 2003 case judgment declared U.S. Bank's deed of trust to be a valid, " first priority" encumbrance on Retail North, and it denied Appellants any interest in Retail North. Id. at 25-26.

         Branson received a judgment in the 2003 case that quieted title in Empire as to the parts of Lot 2 known as Eastern Peninsula and Branson Town, and it quieted title in Branson as to the parts of Lot 1 known as Western Peninsula and Park Addition.[12] Id. at 26. Branson's 2003 case judgment denied Appellants any right or interest in " 'Western Peninsula, Eastern Peninsula, Park Addition[, and Branson Town] now known as Lots 1, 2 and 6[.]'" Id. at 26.

         Arvest received a judgment in the 2003 case that quieted title in Branson as to Northwest Tracts in Lot 1, declared leases and subleases for HCW Entities valid, and declared Arvest's deed of trust to be the lien of first priority. Id. at 23-24. Arvest's 2003 case judgment also declared that Appellants had no right or interest in Northwest Tracts. Id. at 24.

         Additional Procedural History in the Instant Case

         As in our related Empire II opinion, we again focus on the procedural history of this case relevant to Appellants' points on appeal, including various claims asserted by the parties.[13]

         After the original petition was served, Appellants moved to dismiss the case in August 2011, based on an assertion that Lienholders lacked standing or, alternatively, that the case be stayed based on litigation involving " the property" being addressed in the 2003 case (" Appellants' first dismissal motion" ). Appellants' motion asserted, inter alia, that Lienholders'

Page 396

filed the instant case " seeking to quiet title to property that [they] admit is already the subject of another quiet title suit that has been in litigation in this [c]ourt for more than eight years," and then relied on the principle that a second action may be stayed where a prior pending action would adequately determine the parties' rights, citing Brink v. Kansas City, 358 Mo. 845, 217 S.W.2d 507, 510 (Mo. banc 1949). It does not appear from the docket that Arvest responded to Appellants' first dismissal motion. U.S. Bank's position was that it had standing and that the 2003 case would " not determine [U.S. Bank's] rights to its property because that case concerns only property against which Coverdell has asserted a claim, and it is a different property." Appellants' motion was denied in March 2012.

         Later that same month, Appellants filed another motion to dismiss or stay the case (" Appellants' second dismissal motion" ). This motion also cited Brink and added that Lienholders had intervened in the 2003 case. U.S. Bank's response suggested that in the 2003 case, Appellants claimed " part of the land encumbered by" the U.S. Bank deed of trust and, in the instant case, U.S. Bank made " claims concerning parcels in which [Appellants] have no claim."

         Arvest adopted U.S. Bank's response, and it also filed its own suggestions, adding that the pleadings in the 2003 case only dealt with " the eastern half of the peninsula" and that the land in the 2011 case " lies entirely in the west half of the peninsula" and south of it. HCW Entities moved to strike Appellants' second motion to dismiss on the ground that Appellants had not been granted leave to file a second motion.

         On June 6, 2012, U.S. Bank filed its motion for summary judgment based on Count I of its amended petition addressing Lots 1, 3, 4, and 6; a statement of uncontroverted facts; and a memorandum of law. At a June 8, 2012 hearing, the trial court informed the parties that the instant case was to be " litigated first" before the 2003 case, and Appellants' second dismissal motion was treated as having been denied.

         On June 15, 2012, Appellants filed an answer to Arvest's amended petition that presented no separate counter-claim. On July 26, 2012, Appellants filed a response to U.S. Bank's summary judgment motion asserting that there was " a genuine issue of material fact[,]" requesting additional time to complete discovery, and including an affidavit of counsel representing Appellants. None of these filings included a response by Appellants to the specifically numbered paragraphs of uncontroverted facts asserted in U.S. Bank's summary judgment motion.

         In August 2012, Appellants filed a response to U.S. Bank's amended petition that included, inter alia, Appellants' claim. At a hearing on September 14, 2012, the trial court sustained Branson's motion to require Appellants to make their claims more definite and certain, granted Appellants " 20 days . . . to file sufficient facts[,]" and took U.S. Bank's summary judgment motion under advisement.

         On September 19, 2012, the trial court entered U.S. Bank's interlocutory judgment that, in addition to making the decrees already summarized, found that " Coverdell's claims to property south of the base of the Peninsula, as that phrase has been used by the parties, is derived from a quit claim deed from W.F. Hoke and Vera Hoke to [Tori]" that set " out a legal description for more property than the Hokes received from [their predecessors in title]; approximately twenty seven acres more." The subsequent deed from Tori to Coverdell was found to " also [describe] more property than [Tori] could

Page 397

have held title to." The trial court also found that Appellants failed to file a response to U.S. Bank's summary judgment motion that complied with Rule 74.04. U.S. Bank's interlocutory judgment did not dispose of all claims in the case, and it was not designated as final even in regard to the claims it did address.

         On October 3, 2012, Appellants filed an " AMENDED CLAIM AGAINST PLAINTIFF AND OTHER DEFENDANTS TO QUIET TITLE AND ADVERSE POSSESSION" that added new factual allegations to Appellants' claim, but retained Properties A and B as the disputed properties. At the end of October 2012, Branson moved for summary judgment on its cross-claim, specifically seeking to quiet title in itself as to Lot 1 and in Empire as to Lots 2 and 6, along with a judgment in Branson's favor on Appellants' claim. Branson also filed a statement of specifically numbered uncontroverted facts, along with suggestions supporting its motion.

         On November 21, 2012, Arvest filed its motion for summary judgment on Count I of its amended petition concerning Lots 1 and 6, a statement of uncontroverted facts, and supporting suggestions. HCW Entities joined in this motion.

         On January 17, 2013, Coverdell filed motions to strike, or, alternatively, that he be granted additional time to respond to the motions for summary judgment. On this same date, Coverdell moved to set aside U.S. Bank's interlocutory judgment, or, alternatively, to be granted additional time for conducting discovery and preparing a response to U.S. Bank's summary judgment motion. On June 14, 2013, Coverdell filed a similar motion that sought yet more time to respond to the summary judgment motions. That same day, Coverdell also moved to dismiss " the 2011 Case in its entirety, including all parties and claims," based upon " the doctrine of mootness[.]" Coverdell argued that " the parties, issues and subject matter are identical in the 2003 and 2011 Cases and the 2003 Case has already been fully resolved by virtue of the May 29, 2013 hearing and the Orders subsequently entered, making any subsequent ruling by this Court unnecessary, ineffectual and duplicative[.]"

         On June 21, 2013, Coverdell filed responses to the summary judgment motions that included responses to the uncontroverted facts set forth in those motions. During a hearing that took place that same day, the trial court heard argument from the parties concerning U.S. Bank's motion to certify its interlocutory judgment as final, the motions for summary judgment filed by Branson and Arvest, and Coverdell's assertion that " [p]art of" the property he claimed had been acquired by the Hokes through adverse possession. U.S. Bank's judgment certifying its interlocutory judgment as final was entered by the trial court later that day, and Appellants timely filed separate notices of appeal.

         Thereafter, Branson's and Arvest's judgments were also entered, and they contained the decrees as described above. Appellants timely filed separate notices of appeal as to these additional judgments.

         Analysis

         CEI's Point on Appeal

         CEI's sole point contends that " any judgment" in the 2011 case favoring Respondents was " void" because " the trial court lacked authority and jurisdiction to decide this matter in that Empire, Branson, HCW, U.S. Bank and Arvest lacked standing as parties in this case[.]" The point is nearly identical to the one it presented in its appeal of the 2003 case. Except for record citations, CEI's ...


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