Court of Appeals of Missouri, Eastern District, Second Division
HENRY M. ORDOWER, ET AL., Appellants,
NRT MISSOURI, LLC, Defendant,
KONO ENTERPRISES LLC, Respondent.
from the Circuit Court of the City of St. Louis Cause No.
1522-AC06493 Honorable Paula P. Bryant
COLLEEN DOLAN, JUDGE.
and Ilene Ordower ("Appellants"), plaintiffs in the
trial court, appeal certain aspects of the trial court's
order and judgment against Kono Enterprises, LLC
("Seller"). Appellants argue the trial court erred
by (1) failing to assess NRT Missouri, LLC's (the
"Escrow Agent") attorney's fees against Seller
per the Residential Sale Contract (the "Contract");
(2) failing to categorize the Escrow Agent's
attorney's fees as damages incurred by Appellants per the
terms of the Contract; and (3) assessing Appellants'
attorney's fees to be $2, 500 as this amount undervalues
the time and value of Mr. Ordower's labor.
Factual and Procedural History
April 11, 2015, Appellants and Seller entered into the
Contract for the Appellants' purchase of real property
owned by Seller. In accordance with the Contract, Appellants
tendered $15, 000 earnest money to the Escrow Agent. On April
21, 2015, Seller's agent sent Appellants' agent an
e-mail with documents including a "Condominium Resale
Certificate, " which stated that Seller intended the
documents to comply with the Contract and disclosure
requirements under Missouri law §
448.4-109. Appellants sent notice to Seller that they
were terminating the Contract because there was no
accompanying balance sheet with the Condominium Resale
Certificate as required by § 448.4-109. Appellants also
provided the necessary termination documents and requested
that the Escrow Agent return the earnest money to them.
Seller notified Appellants that it disputed Appellants'
right to terminate the Contract.
Contract provided that, in the event of a dispute over the
earnest money, Escrow Agent was to hold the money until it
obtained a written release from all parties consenting to its
disposition, or until the matter was decided by the courts.
Escrow Agent sought Seller's release, but Seller refused.
Escrow Agent informed Appellants that under the terms of the
Contract, it was unable to return the money to them. On May
27, 2015, Appellants filed a three-count petition against the
Escrow Agent claiming: (1) it had retained the funds
unlawfully because the Contract was void; (2) the court
should award Appellants $15, 000 in damages and $10, 000 in
punitive damages for the tort of conversion because the
Escrow Agent willfully and maliciously retained the funds
unlawfully after the Contract became void; and (3) the court
should award attorney's fees and punitive damages of $10,
000 as provided in the Uniform Condominium Act under §
448.4-117. Appellants did not bring any claims against Seller
at that time.
response, the Escrow Agent filed a counterclaim/third party
petition in interpleader against Appellants and Seller. In
its petition, the Escrow Agent pleaded that it had requested
Seller to execute a mutual release to allow the Escrow Agent
to return the earnest money to Appellants, but Seller had
refused. The Escrow Agent further pleaded it had no interest
in the earnest money and was ready, willing, and able to pay
it, but it "has received conflicting claims…from
[Appellants] and [Seller]…and is uncertain as to which
party is entitled to payment." The Escrow Agent offered
to pay the earnest money into the court and requested the
court deduct its fees, costs, and expenses from the earnest
money directly, then discharge it from any further liability.
The record does not reflect a court order granting any of the
requested relief and it appears the money was never deposited
into the registry of the court as Escrow Agent had sought to
do. Appellants, however, did not dismiss their claims against
the Escrow Agent.
filed a third-party crossclaim against Appellants for breach
of contract, claiming Appellants wrongfully terminated the
Contract and Seller was therefore entitled to the earnest
money. Appellants filed a counterclaim against Seller for
abuse of process and an additional claim against the Escrow
Agent for indemnity on the breach of contract claim filed
against them by Seller. The case proceeded to trial and the
parties submitted their claims to the court for disposition.
trial court found that the "Condominium Resale
Certificate" was incomplete, Appellants had the right to
terminate the Contract, and entered judgment in favor of
Appellants on Seller's breach of contract claim against
them. Appellants were awarded $2, 500 in reasonable
attorney's fees from Seller for successfully defending
against Seller's claim for breach of contract and the
court dismissed as moot Appellants' request for
indemnification from the Escrow Agent for the breach of
contract claim because Appellants prevailed on that claim.
The court found against Appellants on their claims against
the Escrow Agent for unlawfully withholding the earnest
money, conversion, and attorney's fees/punitive damages
pursuant to § 448.4-117, and their claim against Seller
for abuse of process. The court ordered the $15, 000 earnest
money be returned to Appellants less $13, 650.65 for the
Escrow Agent's attorney's fees and cost of litigation
incurred in its defense against Appellants' claims.
appealed the trial court's judgment and while the appeal
was pending reached a settlement with the Escrow Agent. Prior
to oral argument, Appellants filed a motion to dismiss with
prejudice any claims on appeal against the Escrow Agent. Our
Court dismissed the appeal of the judgment as to the Escrow
their brief, Appellants raised three points on appeal. First,
they argue the clear and unambiguous language of Section 13
of the Contract provides for reasonable attorney's fees
to be assessed against the losing party, Seller, and not the
prevailing party, Appellants. Second, and in the alternative,
Appellants contend the court erred in failing to assess the
Escrow Agent's attorney's fees as damages incurred by
Appellants which are recoverable under Section 13 by the
prevailing party from the losing party. Third, Appellants
assert the court erred in determining Appellants'
reasonable attorney's fees were $2, 500 because this
amount is inadequate and undervalues Mr. Ordower's labor.
Standard of Review
affirm the trial court's decision if it is supported by
substantial evidence, it is not against the weight of the
evidence, and it does not erroneously declare or apply the
law. Miken Techs., Inc. v. Traffic Law Headquarters,
P.C., 494 S.W.3d 609, 611 (Mo. App. E.D. 2016) (citing
Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc
1976)). "This Court defers to the trial court for
factual findings, but reviews its legal conclusions de
novo." Id. "Interpretation of a
contract is a question of law reviewed de novo by
this Court." City of Univ. City v. AT&T Wireless
Servs., 371 S.W.3d 14, 17 (Mo. App. E.D. 2012).
Regarding Appellants Points I and II, the trial court did not
err in assessing the Escrow Agent's attorney's fees
and expenses against the earnest money, as they were not
governed by the terms of the Contract.
Points I and II hinge on the applicability of Section 13.
Appellants argue in Points I and II that the trial court
erred (1) in failing to assess the Escrow Agent's
reasonable attorney's fees as a "cost of
litigation" against Seller (Point I), or alternatively,
(2) in failing to assess the fees as Appellants'
"damages" (Point II), because Appellants were the
"prevailing party" and Seller was the "losing
party" on Seller's breach of contract claim. Section
13 provides, "[i]n the event of litigation between
the parties, the prevailing party shall recover, in