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Jones v. Jones

Court of Appeals of Missouri, Western District, Fourth Division

August 23, 2016


         Appeal from the Circuit Court of Pettis County, Missouri The Honorable Robert M. Liston, Judge.

          Before: Alok Ahuja, P.J., Anthony Rex Gabbert, J. James F. Kanatzar, Sp. J.


         Shirley A. Jones (Shirley) appeals the circuit court's judgment in favor of Randy E. Jones (Randy) and Cassandra Cordes-Patton (Cassandra) on Shirley's First Amended Motion to Set Aside Conveyance of real property. Shirley asserts three points on appeal. First, she contends that the circuit court erred in declaring that a one-year statute of limitation barred her Section 454.525, RSMo 2000, action to set aside a fraudulent conveyance, arguing that Section 454.525 does not time-bar a claim as long as the person who took without consideration still holds title to the conveyed property. Second, she contends that the circuit court erred in finding that Cassandra recorded the Indiana property deed after the decision in her Pike County dissolution, in that there is no evidence supporting that finding and the weight of the evidence demonstrates that the recordation took place more than two weeks prior to the dissolution judgment such that the conveyance was not done to effectuate the judgment and did not convert it to one with consideration. Third, she asserts that the circuit court erred in basing its judgment on a theory that consideration attached to Randy's transfer of the Indiana deed to Cassandra by subsequent acts because this theory was not raised in Cassandra's pleadings and was not tried by consent. We reverse and remand.

         Evidence adduced at trial, viewed in the light most favorable to the judgment, was that Shirley and Randy divorced in 1982. Two children were born of the marriage and Randy was ordered to pay Shirley child support. Sometime prior to 2000, Randy suffered a work injury and received a monetary settlement for that injury. Randy used proceeds from that settlement to pay off a lakefront plot of land that he had purchased in Princeton, Indiana. Around that same time, Randy was nearly $40, 000 in arrears on his child support obligation to Shirley.

         In 1998, Randy and future wife, Cassandra, began living together. In 2001, Randy prepared, executed, and delivered a deed for the Indiana property to Cassandra. He conveyed it to Cassandra for no consideration. Cassandra did not record the deed to the property at the time Randy conveyed it to her. Cassandra and Randy were married in October of 2004. They had no children together. They divorced in October of 2009. Cassandra recorded the deed to the Indiana property on October 21, 2009, the day following the close of Randy and Cassandra's dissolution trial.

         Randy testified at the trial on Shirley's fraud claim that he conveyed the Indiana property to Cassandra to put it beyond Shirley's reach for collection of child support and that Cassandra was aware of this purpose. He also testified that he transferred it to Cassandra to hold for his children in the event something happened to him. Cassandra testified that she had two children of her own, not fathered by Randy, but to whom Randy was a father figure. She testified that Randy told her that the reason he was granting her the land in Indiana was to ensure that she and her children were provided for upon his demise, and that her children had an inheritance upon her demise.

         Prior to Randy and Cassandra's divorce in October of 2009, Randy and Shirley rekindled their relationship and Randy moved into Shirley's home in the spring of 2008. Randy and Shirley were still residing together in 2011 when Shirley moved to set aside Randy's conveyance of the Indiana property, and also in August of 2014 at the time of trial.

         In Randy and Cassandra's dissolution judgment, the Pike County Circuit Court awarded the Indiana land to Cassandra as non-marital property and ordered Randy to refinance any loans he had against the property. Randy appealed the Pike County Court's judgment on several grounds, including alleging that the court had erred in awarding the Indiana property to Cassandra as her non-marital property. The Eastern District of this court upheld the circuit court's dissolution judgment. Jones v. Jones, 320 S.W.3d 236 (2010). Based on the memorandum issued by the Eastern District in that case, it appears that Randy argued at trial and on appeal that, while he did sign the 2001 deed, he never intended for the Indiana property to belong to Cassandra. He argued that his intent in creating the deed was so that his children would receive the land if something should happen to him. He denied, however, that the transfer was to avoid child support. At the dissolution trial he was asked directly: "Isn't the truth Mr. Jones, you owed a bunch of child support and you were afraid your ex-wife was going to come after your assets?" Randy responded: "No, I wasn't afraid my ex-wife would come after my assets."

         The Eastern District found that Randy intended for the property to be Cassandra's upon transfer of the deed and expressly rejected Randy's assertion that he deeded the property to Cassandra because he wanted to ensure that his children received the land if something should happen to him. The court stated that "[h]is after-the fact assertions that he did not intend to convey his property are not persuasive" and, with regard to the claim that the property was to be saved for his children found that the "assertion is not supported by the face of the deed or by any further evidence or documentation." The Eastern District noted that, prior to his marriage to Cassandra, Randy titled several items of personal property in Cassandra's name, including a boat, motorcycle, jet ski, truck, and trailer. However, Randy had "many other items" of personal property purchased prior to the marriage that he titled in his own name. These included a 2002 Dutch mobile home located on the Indiana property, a 1987 Runabout speedboat, a 1988 Ford RII truck, a 1993 DD 2-wheel trailer, and a 1999 New Holland skid loader.

         On February 17, 2011, Shirley filed an Application for Writ of Scire Facias to Revive Judgment, Motion to Declare Support Arrearage and Statutory Interest, and Motion to Set Aside Conveyance. The circuit court ultimately entered a Judgment Declaring Arrearage and Reviving Judgment by Writ of Scire Facias, finding Randy to owe Shirley support arrearage in the amount of $9, 723.73 and statutory interest in the amount of $31, 550.75.

         On May 16, 2014, Shirley filed a first amended motion to set aside conveyance. In Shirley's "First Amended Motion to Set Aside Conveyance to Defeat Judgment Creditor, " Shirley alleged that, in 2001, at a time when Randy was nearly $40, 000 in arrears in his payment of support, Randy conveyed by warranty deed his sole interest in the Indiana property to Cassandra "for the purpose of hindering, delaying, obstructing, defeating and or defrauding the rights of the petitioner, as a judgment creditor." Shirley alleged that Cassandra was aware of Randy's "purpose and intention at the time of the said conveyance, and participated in it." Shirley alleged that no adequate consideration was ever exchanged for the property and that Randy retained possession of the real estate thereafter, continuing to pay real estate taxes assessed against it. Shirley alleged that, at the time of the conveyance, it was a transfer of all or nearly all of Randy's property and rendered him virtually insolvent. Shirley further alleged that, Cassandra did not record the warranty deed, but secreted it away and Shirley only learned of it in December of 2010. Shirley alleged that, Randy admitted under oath that he made the conveyance solely to defeat her rights under the judgment for support, and in anticipation of further litigation or collection proceedings for payment thereof, and such sworn testimony should estop his asserting a rebuttal of the badges of fraud therein alleged. Shirley prayed that the court "set aside the conveyance of the said real estate from [Randy to Cassandra], and to declare it subject to [Shirley's] execution for support, in accordance with Sections 428.010 and 452.140 R.S.Mo. (2000), as well as other statutory and common law authority . . . ."

         In answer to Shirley's allegations, Cassandra, among other things, denied that the conveyance was made for the purpose of defrauding Shirley and set forth affirmative defenses to Shirley's claim. Specifically, Cassandra pled that Shirley's motion to set aside the conveyance was brought pursuant to Chapter 428 and, that, pursuant to Chapter 428, Shirley's claims were barred by the statute of limitations. Further, that Shirley's claims were barred by laches due to an unreasonable and prejudicial delay in bringing her motion.

         On August 18, 2014, and December 3, 2014, trial was held regarding Shirley's motion to set aside Randy's conveyance of the Indiana property. Shirley alleged at trial that Section 454.525 was also applicable to her claim, and there is no contention on appeal that the applicability of Section 454.525 was not tried by consent.[1] On February 2, 2015, the court issued a judgment denying Shirley's motion to set aside the conveyance. The court found Section 454.525 inapplicable to Shirley's claim, reasoning that the conveyance was only voidable as long as a tenancy by the entireties existed, and because Randy and Cassandra were not married at the time of the deed transfer, no tenancy by the entireties existed. The court found Shirley's claim time barred by the portion of Section 428.049 that provides that a claim pursuant to Section 428.024 1(1) is extinguished unless the action is brought within four years after the transfer was made or, if later, within one year after the transfer was or could reasonably have been discovered by the claimant. The court found that, pursuant to Section 442.390, RSMo 2000, Shirley was put on notice of the transfer when Cassandra recorded the deed to the property on October 21, 2009.[2]The court, noting that Shirley and Randy had resumed a relationship prior to Cassandra and Randy's dissolution and that Shirley was managing Randy's finances, expressly disbelieved Shirley's testimony that she only learned of the deed transfer when the Eastern District rendered its decision in Randy's Pike County appeal. The court further found that, due to Shirley's involvement in Randy's finances, Shirley "absolutely could have obtained this knowledge prior to the date she testified she became aware of it." The court concluded that Shirley's claim was time barred by not being filed within one year of when Shirley knew or should have known of the transfer. The court also concluded that Cassandra filed the deed after and to effectuate the Pike County dissolution judgment and that no badges of fraud existed at the time she recorded the deed. Shirley appeals.

         Our standard of review is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Schollmeyer v. Schollmeyer, 393 S.W.3d 120, 122 (Mo.App. 2013). We will affirm the circuit court's judgment unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. at 122-123. We view the evidence and all reasonable inferences in the light most favorable to the court's judgment. Id. at 123. We review questions of statutory interpretation de novo. Ivie v. Smith, 439 S.W.3d 189, 202 (Mo. banc 2014). ...

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