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Kyle Estate v. 21St Mortgage Corp.

Court of Appeals of Missouri, Southern District, Second Division

April 5, 2017

LINNIE J. KYLE ESTATE, and JOAN KYLE-HENNINGSEN [1] and WALTER C. HENNINGSEN, Plaintiffs-Appellants,
v.
21ST MORTGAGE CORPORATION, SMF REGISTERED SERVICES, INC., and MICHELE M. O'MALLEY, Defendants-Respondents.

         APPEAL FROM THE CIRCUIT COURT OF OZARK COUNTY Honorable Lynette Veenstra, Associate Circuit Judge

          WILLIAM W. FRANCIS, JR., J. - OPINION AUTHOR

         Joan Kyle-Henningsen ("Joan") and Walter C. Henningsen ("Walter")[2] (collectively "the Henningsens"), as "Personal Representatives (Beneficiaries)"[3] of the Estate of Linnie J. Kyle, appeal the trial court's judgment sustaining the motion to dismiss filed by 21st Mortgage Corporation, SMF egistered Services, Inc., and Michele M. O'Malley (collectively the "Respondents"), dismissing the Henningsens' pending lawsuit because it was identical to claims presented in a prior lawsuit in which judgment was rendered thereby barring the lawsuit per res judicata. Because of Rule 84.04[4]violations in the Henningsens' brief, we dismiss their appeal.

         Facts and Procedural History

         On July 27, 1998, Linnie J. Kyle ("Kyle") executed a Home Equity Line of Credit Agreement, a promissory note (the "note"), and a deed of trust on 2.35 acres ("the property") she owned in Ozark County in favor of Lancorp Mortgage Services.[5] The Henningsens were present at the signing and Walter had assisted Kyle with some of the paperwork necessary to secure the loan. The Henningsens had extensive real estate experience with Joan having 15 years as a real estate broker, and Walter having 14 years' experience.

         On November 15, 1999, Kyle executed a warranty deed to the property in favor of Heritage Land and Development, "in c/o Peggy Joan Kyle Henningsen." On May 7, 2006, Heritage Land and Development executed a quitclaim deed on the property to Heritage L&D, LLC, with "Peggy Joan Kyle Henningsen" signing the quitclaim deed on behalf of Heritage Land and Development. The note and deed of trust had been re-assigned a number of times with 21st Mortgage determined to be the last lienholder.

         In December 2001, Kyle passed away. The Henningsens made payments under the note until approximately 2013, after which time the note went into default. In 2014, 21st Mortgage began foreclosure proceedings on the property using the trustee services of SMF Registered Services, Inc., and the legal services of attorney Michele M. O'Malley.

         On June 6, 2014, the Henningsens filed a pro se "Complaint for Injunctive and Other Equitable Relief Petition and Application for Temporary Restraining Order" against Respondents in the Circuit Court of Ozark County in Case No. 14OZ-CC00075 (the "First Action") challenging the foreclosure. The Henningsens asserted the deed of trust had an errant legal description for the property, and 21st Mortgage was not the valid holder of the note and deed of trust. The parties filed cross motions for summary judgment.

         On June 11, 2015, the trial court granted 21st Mortgage's motion for summary judgment and denied the Henningsens' motion for summary judgment, stating there was only one issue before the court and that was whether 21st Mortgage was the valid holder in due course of the promissory note and deed of trust. The court found that 21st Mortgage was the valid holder and was "entitled to foreclose on the collateral which is agreed between the parties . . . to be a 2.35 acre tract of land[.]"

         The Henningsens filed an appeal of the June 11, 2015 judgment, but on November 23, 2015, this Court dismissed the appeal for failure "to take further steps to secure appellate review" and that "good cause has not been shown why this appeal should not be dismissed."

         On October 20, 2015, the Henningsens filed a second action in the United States District Court for the Western District of Missouri, in Case No. CV-3455-SRB (the "Federal Action"). In the Federal Action, the Henningsens asserted that "[t]his case arises out of an attempt by 21st Mortgage Corporation, (21st) to foreclose on a home equity line of credit." The Henningsens challenged the foreclosure claiming there had been no accounting presented and that the legal description of the property was incorrect in the deed of trust. They requested the federal court to overturn the June 11, 2015 judgment in the First Action. Respondents filed a "Motion to Dismiss Plaintiffs' Complaint for Lack of Subject Matter Jurisdiction, Lack of Standing, and as Precluded, " which was granted. The federal court then dismissed the Federal Action with prejudice.

         On December 16, 2015, 21st Mortgage foreclosed and sold the property. The Henningsens attended the sale and filed a lis pendens in Case No. 14OZ-CC00075, the case in which the July 11, 2015 judgment had already been entered.

         On May 2, 2016, the Henningsens filed a third action against Respondents in the Circuit Court of Ozark County in Case. No. 16OZ-CC00063, entitled "Complaint and Petition Unlawful Foreclosure, Unlawful Trustee Sale, Fraud, Lack of Jurisdiction Motion to Stay Possession, Motion to Set Aside Sale, Motion to Overturn Null and Void Judgment and Demand for Damages" (the "Current Action").

         The Henningsens asserted four counts against Respondents: Count One - "Wrong Legal Description - Defective and Void Note, " Count Two - "No Chain of Title - Standing Not Established, " Count III - "Failure to Present the Note, " and Count IV - "Failure to Present the Records of Accounting." The Henningsens sought an "order overturning summary judgment, with prejudice, in case No. 14OZ-CC00075 [the First Action] and for order to set aside the unlawful sale resulting from that summary judgment."

         Respondents filed a "Motion to Dismiss Plaintiffs' Petition Pursuant to Rule 55.27." Respondents argued that the Henningsens' claims in the Current Action were barred under collateral estoppel and res judicata and that the Henningsens lacked standing because they were not the title owners of the property.

         On July 7, 2016, the trial court, in the Current Action, granted Respondents' motion to dismiss finding that the claims presented in the First Action were identical to the claims presented in the Current Action, a valid final judgment on these issues was entered on June 11, 2015, and "the claims now presented in the present litigation must be dismissed as res judicata." The trial court dismissed the Current Action with ...


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