Court of Appeals of Missouri, Western District, First Division
from the Circuit Court of Jackson County, Missouri The
Honorable Jennifer M. Phillips, Judge
Before: Gary D. Witt, Presiding Judge, Alok Ahuja, Judge and
Edward R. Ardini, Jr., Judge
D. Witt, Judge
Wallace Vaughn ("Vaughn") appeals the judgment of
the Circuit Court of Jackson County, Missouri finding for
Deutsche Bank National Trust Company ("Deutsche
Bank") on its petition to reform a Deed of Trust held by
Deutsche Bank, to reflect that it is secured by a property
owned by Vaughn located at 933 East 77th Terrace, and
entering declaratory judgment that Deutsche Bank held a
superior interest in the property over the named defendants
in the petition. Vaughn raises six points on appeal. We
and Jennifer Vaughn ("Jennifer") acquired title by
Special Warranty Deed to two pieces of real property located
in Jackson County, Missouri. One property is commonly
described as 933 East 77th Terrace ("77th Terrace
Property") and one property is commonly described as
6232 College ("College Property"). On October 19,
2005, Vaughn and Jennifer refinanced the properties and
entered into a Deed of Trust ("Deed of Trust"). The
Deed of Trust secures a Promissory Note dated October 19,
2005, in the amount of $87, 300.00 (the "Note").
The Deed of Trust describes the real estate it encumbers
inconsistently, referring to the common address and tax
identification number for the 77th Terrace Property but
containing the legal description for the College Property.
Bank filed a petition seeking reformation of the Deed of
Trust to substitute the legal description for the 77th
Terrace Property for the legal description of the College
Property ("Petition"). The Petition also sought a
declaratory judgment that the Deed of Trust encumbered the
77th Terrace Property and had priority, despite intervening
conveyances to Wallace Vaughn Investments, LLC, KC Quality
Investments, LLC, and then back to Vaughn individually. Since
the execution of the Note and Deed of Trust, the property was
conveyed to Wallace Vaughn Investments, LLC for $1, then to
KC Quality Investments, LLC for $10, and then back to Vaughn
individually for $10. At the time of trial, Vaughn,
individually, owned the 77th Terrace Property. Wallace Vaughn
Investments, LLC, KC Quality Investments, LLC, Vaughn, and
Jennifer were all named as defendants in the Petition.
Wallace Vaughn Investments, LLC and KC Quality
LLC did not appeal from the judgment and are not parties to
a trial held on December 15, 2015, the court entered judgment
on February 1, 2016, in favor of Deutsche Bank, allowing it
to reform the Deed of Trust to properly reflect the legal
description of the 77th Terrace Property and declaring that
the 77th Terrace Property was subject to the Deed of Trust
and took priority despite the intervening transfers
is the sole defendant to appeal the court's
raises six points on appeal. His first Point Relied On
alleges that the trial court erred in finding that Deutsche
Bank had standing to proceed on its Petition.
standing is a question of law, review of the issue on appeal
is de novo." CACH, LLC v. Askew, 358
S.W.3d 58, 61 (Mo. banc 2012). We, however, "defer to
the factual findings of the trial court and apply those facts
to the law." Mannering Condo. Ass'n v.
Schulte, 462 S.W.3d 830, 834 (Mo. App. E.D. 2015).
standing exists when a plaintiff has "a legally
cognizable interest in the subject matter" and a
"threatened or actual injury." U.S. Bank, N.A.
v. Smith, 470 S.W.3d 17, 23 (Mo. App. W.D. 2015). In the
case of a Deed of Trust, standing can be established by
demonstrating that the party has the right to enforce the
promissory note that the deed of trust secures. U.S. Bank
Nat'l Ass'n v. Burns, 406 S.W.3d 495, 497 (Mo.
App. E.D. 2013). Missouri has adopted the Uniform Commercial
Code (UCC), which governs commercial transactions.
See Section 400, et seq. "Application of
the UCC is straightforward regarding [the] question of who
may enforce the Note." Burns, 406 S.W.3d at
497. Under Section 400.3-301, the holder of a negotiable
instrument is entitled to enforce it. Id. "A
holder is one (1) who possesses the instrument, and (2) to
whom the instrument is made payable." Id.;
Section 400.1-201(20). An instrument may be endorsed in blank
and such instrument then becomes payable to its bearer.
Sections 400.3-205(a) and (b). A party that possesses a
negotiable instrument containing a blank endorsement that
does not identify the person to whom it is payable has
standing to enforce the note and, therefore, to bring an
action to reform the deed of trust securing that instrument.
Smith, 470 S.W.3d at 23-24. In this case, the trial
court made factual findings that (1) Vaughn and Jennifer
signed the Note and Deed of Trust, (2) the Note is
assignable, (3) the Note has been endorsed in blank and is
payable to the bearer, (4) possession of the Note was
delivered to an agent of Deutsche Bank, and (5) Deutsche Bank
is entitled to enforce the Note. These factual findings are
supported by the record and are sufficient to establish that
Deutsche Bank had legal standing to bring an action to reform
the Deed of Trust.
arguments on appeal are based upon his belief that the trial
court relied on its own mistaken belief that Vaughn failed to
raise standing in his answer to the Petition as well as the
procedure by which the court ruled on the issue of standing.
First, all parties are in agreement that the Judgment
incorrectly states that Vaughn failed to raise the issue of
standing in his answer. Any error was, however, cured by the
court itself when the court chose to address the issue of
standing in its judgment despite believing it was not
properly raised by the pleadings. This error leaves nothing
for this court to address or correct because the trial court
fully considered and addressed the issue of standing based on
the facts adduced at trial.
contends that he was prejudiced because he was given no
opportunity to present testimony, witnesses, and evidence as
to standing. First, Vaughn fails to identify any additional
evidence that he would have presented to the trial court
regarding standing. See, generally, City of Riverside v.
Progressive Inv. Club of Kansas City, Inc., 45 S.W.3d
905, 910 (Mo. App. W.D. 2001) (noting trial court did not err
in denying a request to reconsider its judgment because
appellant failed to identify the additional evidence it
wished to introduce but was prohibited from presenting). But,
more importantly, Vaughn did have an opportunity to
fully present his evidence and argue his position regarding
standing to the trial court. Vaughn filed a motion to dismiss
the Petition on October 25, 2013, arguing that Deutsche Bank
lacked standing to enforce the Deed of Trust. An evidentiary
hearing was held on the motion on December 20, 2013, and
denied the same day. To the extent that Vaughn had evidence
that Deutsche Bank lacked standing, the December 20th hearing
gave him full opportunity to present such evidence and make
any relevant arguments.
also seems to raise a procedural challenge to the speed with
which the trial court ruled on the question of standing at
the hearing because the court announced its decision
immediately after the close of the evidence. Vaughn argues
that the lack of delay shows that the ruling was inaccurate
and prejudicial. We disagree. Vaughn presents no authority to
support his proposition and the Court knows of ...