Court of Appeals of Missouri, Southern District, Second Division
FROM THE CIRCUIT COURT OF GREENE COUNTY Honorable Michael J.
W. LYNCH, P.J. AUTHOR
Chalk Construction, LLC ("Blue Chalk"), Michael
Hailey, Nancy Hailey, and Hailey Real Estate and Development,
LLC ("HRE") (collectively, "Appellants"),
appeal from the summary judgment granted in favor of Great
Southern Bank ("Great Southern"). In six points,
Appellants contend the trial court erred in granting summary
judgment in favor of Great Southern because "there were
genuine issues of material fact on Appellants'
claims" of (1) breach of fiduciary duty, (2) fraud, (3)
breach of contract, and (4) violation of the Missouri
Merchandising Practices Act; and "there was a genuine
dispute regarding one or more material facts supporting
Appellants' affirmative defenses" of (5) fraud and
unclean hands, and (6) breach of the duty of good faith and
fair dealing. Finding no merit in Appellants' points, we
affirm the trial court's judgment.
of Review and Applicable Legal Principles Related to Summary
When considering appeals from summary judgments, the Court
will review the record in the light most favorable to the
party against whom judgment was entered. Facts set forth by
affidavit or otherwise in support of a party's motion are
taken as true unless contradicted by the non-moving
party's response to the summary judgment motion. We
accord the non-movant the benefit of all reasonable
inferences from the record.
Our review is essentially de novo. The criteria on
appeal for testing the propriety of summary judgment are no
different from those which should be employed by the trial
court to determine the propriety of sustaining the motion
initially. The propriety of summary judgment is purely an
issue of law. As the trial court's judgment is founded on
the record submitted and the law, an appellate court need not
defer to the trial court's order granting summary
ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply
Corp., 854 S.W.2d 371, 376 (Mo. banc 1993) (internal
citations omitted). Here, judgment was entered against
Appellants. Therefore, we view the record in the light most
favorable to them and, as the non-movants, accord them the
benefit of all reasonable inferences. Id.
language of Rule 74.04 establishes the boundaries of
Missouri's summary judgment practice."  Id. at 380. "'Because
the underlying purpose of Rule 74.04 is directed toward
helping the court expedite the disposition of [the] case,
compliance with the rule is mandatory.'" Pub.
Sch. Ret. Sys. of Missouri v. Taveau, 316 S.W.3d 338,
343 (Mo.App. 2010) (quoting State ex rel. Nixon v.
Hughes, 281 S.W.3d 902, 908 (Mo.App. 2009)).
that rule, the first inquiry is the identification of the
movant and whether the movant is a "claimant, "
see Rule 74.04(a), or a "defending party,
" see Rule 74.04(b). Here, Great Southern is
the movant, and it is both a "claimant, " as
related to the claims in its petition and the affirmative
defenses to those claims raised by Appellants in their answer
(Appellants' points 5 and 6), and a "defending
party, " as related to the claims raised by Appellants
in their counterclaims (Appellants' points 1 through 4).
second inquiry is whether the movant's motion for summary
judgment properly pleads all of the elements as detailed in
Rule 74.04(c)(1). See ITT Commercial Fin. Corp., 854
S.W.2d at 380. As claimant, Great Southern "must
establish that there is no genuine dispute as to those
material facts upon which [it] would have had the burden of
persuasion at trial." Id. at 381. Also as
claimant, Great Southern's "right to judgment
depends just as much on the non-viability of [all]
affirmative defense[s] as it does on the viability
of [Great Southern's] claim." Id.
"Unlike the burden of establishing all of the
facts necessary to [its] claim, however, the claimant may
defeat an affirmative defense by establishing that any
one of the facts necessary to support the defense is
absent." Id. As defending party to
Appellants' counterclaims, summary judgment is
established where Great Southern shows:
(1) facts that negate any one of the claimant's
elements facts, (2) that the non-movant, after an adequate
period of discovery, has not been able to produce, and will
not be able to produce, evidence sufficient to allow the
trier of fact to find the existence of any one of
the claimant's elements, or (3) that there is no genuine
dispute as to the existence of each of the facts
necessary to support the movant's properly-pleaded
Rule 74.04(c)(1) inquiry focuses only upon the movant's
summary judgment motion and its required elements. See
ITT Commercial Fin. Corp., 854 S.W.2d at 381 (what the
non-movant has said or done is irrelevant at this stage in
the proceedings). If the movant's motion fully complies
with the requirements of Rule 74.01(c)(1) and the
movant's stated material facts, to which movant claims
there is no genuine issue, support the movant's right to
judgment as a matter of law, then the movant has made what
our supreme court has described as a "prima facie
showing" of a right to summary judgment. ITT
Commercial Fin. Corp., 854 S.W.2d at 380-81. Here, none
of Appellants' points challenge Great Southern's
prima facie showing of a right to summary judgment as a
claimant on its petition or as a defending party on
third and final inquiry occurs only when the movant has made
"a prima facie showing that there are no genuine issues
of material fact and that the movant is entitled to judgment
as a matter of law[.]" Id. at 381. At that
point, the burden shifts to the non-movant to show that
"one or more of the material facts shown by the movant
to be above any genuine dispute is, in fact, genuinely
disputed." Id. "To put a fact in
'genuine dispute, ' the non-movant may not rely on a
general denial, but, instead, must support that denial with
'specific references to the discovery, exhibits or
affidavits that demonstrate the specific facts showing that
there is a genuine issue for trial.'" Reverse
Mortgage Sols., Inc. v. Estate of Hunter, 479 S.W.3d
662, 666 (Mo.App. 2015) (citing and quoting Pub. Sch.
Ret. Sys. of Mo., 316 S.W.3d at 346) (citing Rule
74.04(c)(2))). "A 'genuine issue' that will
prevent summary judgment exists where the record shows two
plausible but contradictory accounts of the essential
facts." Wallingsford v. City of Maplewood, 287
S.W.3d 682, 685 (Mo. banc 2009).
and Procedural Background
Southern filed a petition against Appellants alleging that
Appellants had failed to pay the balance due on five
promissory notes and five guaranties tied to loans that Great
Southern had previously extended to Appellants. Appellants answered with a general denial
and fifteen affirmative defenses. Appellants also filed
essentially mirror-image counterclaims alleging claims for
fraud, violation of the Missouri Merchandising Practices Act,
breach of fiduciary duty, punitive damages, and breach of
Southern filed a motion for summary judgment concerning all
claims in its petition and in Appellants' counterclaims.
In addition to Suggestions in Support, Great Southern's
motion was accompanied by a Statement of Uncontroverted
Material Facts that included 130 numbered paragraphs of what
it contends are material facts with specific references to
supporting documents. Appellants filed
a response to Great Southern's motion for summary
judgment, and it is from this response that we determine the
facts on appeal. As pertinent here, Appellants
3. Michael Hailey has been the sole member of Blue Chalk
since its formation.
. . .
5. Michael Hailey and Nancy Hailey have been the only members
of HRE since its formation, each owning a 50% interest.
. . .
7. On August 31, 1999, in consideration for a loan from Great
Southern, HRE executed and delivered a Promissory Note
payable to Great Southern in the original principal amount of
$395, 000.00 which was thereafter modified by Change in Terms
Agreements . . . .
. . .
9. Payment of the HRE Loan was secured by a Deed of Trust
granted by HRE in favor of Great Southern covering certain
real property in Jasper County, Missouri . . . .
. . .
11. Payment of the HRE Loan was personally and
unconditionally guaranteed by Michael Hailey, Nancy Hailey,
and Blue Chalk.
. . .
13. HRE admits that it defaulted on the HRE Loan by not
paying the balance thereof when it matured on June 28, 2013.
. . .
17. On June 20, 2013, Great Southern exercised its right to
appoint a successor trustee under the HRE Deed of Trust, and
appointed GRE, LLC ("GRE") as the successor
. . .
22. On January 30, 2007, in consideration for a loan from
Great Southern, Blue Chalk executed and delivered a
Promissory Note payable to Great Southern in the original
principal amount of $306, 795.00 which was thereafter
modified by Change in Terms Agreements . . . .
. . .
25. Payment of Note 1877 was secured by a Deed of Trust
covering property located at 1817 Cattails Drive, Joplin,
Missouri . . . .
. . .
26. Payment of Note 1877 was guaranteed by HRE and Michael
. . .
30. Blue Chalk admits that it defaulted by not paying the
balance of Note 1877 when it ...