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Gacki v. Jeff Kelly Homes, Inc.

Court of Appeals of Missouri, Eastern District, Fourth Division

October 17, 2017


         Appeal from St. Charles County Circuit Court Cause No. 1311-CC01015, Honorable Jon A. Cunningham.


          COLLEEN DOLAN, P.J.

         Michelle Gacki ("Gacki") appeals the trial court's grant of summary judgment in favor of Jeff Kelly Homes, Inc., John Jeffrey Kelly, Timely Disbursements, Inc. ("TDI"), John W. Kelly, and Timely Disbursements Pension & Profit Sharing Trust Fund (the "Fund") (collectively, "Respondents"). Gacki sued Respondents after contracting to purchase a home located in Wentzville, Missouri ("the home") in June 2010 from Jeff Kelly Homes, Inc. After Gacki signed a promissory note and deed of trust (collectively, the "Loan Agreement") and executed a quitclaim deed, which was to be filed only if Gacki fell 30 days or more behind on the loan, she took possession of the home. Shortly thereafter, disputes over payments began and the Fund filed the quitclaim deed and took possession of the home in February 2012. Gacki then filed various counts against Respondents; the Fund was the only respondent to file counterclaims against Gacki. The trial court granted Respondents' and the Fund's motions for summary judgment in their favor on all counts. This appeal follows.

         I. Factual and Procedural Background

         Gacki entered into a contract with Jeff Kelly Homes, Inc. on April 28, 2010, to purchase a home located in Wentzville, Missouri for the price of $188, 900. Pursuant to that contract, Gacki was directed to seek financing for the home from the Fund, with John W. Kelly acting as the Fund's trustee; however, she was denied a loan for the amount sought due to her poor credit history. Gacki and Jeff Kelly Homes, Inc. then amended the purchase contract to change the price to $176, 900 with Gacki paying a $10, 000 down payment. After Gacki disclosed to John W. Kelly that she was getting a divorce and was expecting to be awarded around $40, 000 from the divorce proceedings, the Fund agreed to issue a loan to Gacki upon certain specific conditions.

         First, in addition to monthly payments of $1, 254.80 to the fund, Gacki was to pay an additional $40, 000 toward the principal balance of the loan ($166, 900 after the down payment) upon her divorce being finalized; once this happened, Gacki's monthly payments would be reduced.[1] Additionally, Gacki was to execute a quitclaim deed conveying the home to the Fund, which would only be filed if she fell 30 days or more behind on her loan payments; the alleged purpose of this quitclaim deed was that Gacki would be allowed to avoid a foreclosure judgment and spare her further damage to her credit score if she defaulted on the loan. Gacki was also subject to paying a number of charges and fees if she was late on her monthly loan payments to the Fund. Further, under an acceleration clause, the Fund could declare payment of the full loan balance due if Gacki fell 30 days or more behind on her loan payments.

         These conditions were set forth within the Loan Agreement signed by Gacki on June 17, 2010. Those documents also established proceedings similar to a foreclosure that governed the sale of the home if Gacki were to default. The Loan Agreement granted the Fund the "power of sale" as an option if Gacki defaulted, but it did not require the Fund to actually sell the home if Gacki defaulted and the quitclaim deed was filed. The Loan Agreement did require that, if the home was sold by the Fund, the proceeds of the sale must be applied first to the expenses of the sale and then to the remaining balance of the loan. John W. Kelly, acting as trustee of the Fund, claims that he explained the aforementioned terms imposed on Gacki by the Loan Agreement, but she denies this explanation ever took place. Despite these contentions, Gacki signed the Loan Agreement and executed the quitclaim deed on June 17, 2010, and said quitclaim deed was delivered to John W. Kelly, who placed the deed in a safety deposit box. Gacki resided in the home until February 2011, when she and her husband attempted to reconcile. At that point, Gacki began renting the home out to a business associate, Robert Cooley.

         In September 2011, disputes regarding Gacki's monthly payments began arising. Up to that point, automatic ACH payments were successfully withdrawn from Gacki's bank account four times a month (on the first, eighth, fifteenth, and twenty-second of each month) in the amount of $313.70 (equaling $1, 254.80 per month). Automatic withdrawals were returned to Gacki's bank account due to insufficient funds once in both September and October of 2011- putting her approximately 15 days behind on her loan payments. In November, Gacki had multiple payments returned to her bank account due to insufficient funds, but these withdrawals were seemingly made by the Fund a day early in each instance (on November 7th instead of the 8th, November 14th instead of the 15th, and November 21st instead of the 22nd), violating the payment terms set by the Fund itself. The Loan Agreement was silent as to this scenario, and it is unclear whether any of these payments should have been deemed "late." Gacki's bank statement from November 2011 indicates that only three payments were actually withdrawn from her account that month-apparently putting her three weeks behind on her loan payments.

         After the early withdrawals in November, John W. Kelly, as trustee for the Fund, sent a letter (dated November 30, 2011) to Gacki notifying her that the Fund would no longer be withdrawing the monthly payments by ACH from her bank account and that she would be required to provide the full monthly payment to the Fund by money order or cashier's check by the first of every month beginning December 1, 2011.[2] This letter did not state how much Gacki was behind on her payments, which Gacki claims confused her even more as to the amount that she currently owed. Gacki did not timely make the payment on December 1, 2011 as required by the Fund's letter, but paid $627.40 on December 16, 2011.[3] Again, it is unclear whether this payment should have been considered late, as both the payment terms set by the Fund and the Loan Agreement were silent on the issue of late payments after the Fund had unilaterally changed the payment methods. Assuming the $627.40 payment made to the Fund covered the first two weeks of December, Gacki was still only three weeks behind at that point. There are no records to indicate whether Gacki made any other payments in December 2011. Gacki then made a full month's payment of $1, 254.30 on January 3, 2012.

         In a letter to Gacki dated January 5, 2012, John W. Kelly stated that Gacki still owed $313.70 from 2011-an amount that was below what she seemingly owed, given that she had missed payments of $313.70 in September, October, and November. After Gacki made no further payments in January 2012, she received another letter from John W. Kelly on January 24, 2012, this time stating that she was a full month behind on her payments and that she now owed $1, 254.80 plus late fees. After receiving this letter, Gacki did not make her required payment on February 1st, but allegedly tendered two checks totaling $1, 300 (one for $500 and the other for $800) in February that were never negotiated by the Fund. Gacki also sent a letter to John W. Kelly and the Fund stating her displeasure with the late charges and her intent to catch up on the payments.

         John W. Kelly went to the home on February 9, 2012, looking for Gacki. He was told by Robert Cooley that Gacki was not there. John W. Kelly then called Gacki multiple times on February 9th and February 12th; Gacki claims that she answered one of his calls, but alleges that she hung up on him because he was rude. Gacki further claims that after the first call, John W. Kelly began leaving harassing messages. John W. Kelly visited the home again on February 17, 2012 and saw people moving items out. On that same day, John W. Kelly was informed that the home's electricity and gas were scheduled to be shut off. Gacki argues that, at this point, she was in the process of transferring utility service from Robert Cooley's name to hers and that she was about to begin moving back into the home. Gacki further claims that she had informed John W. Kelly and the Fund that she was renting out the home when she began doing so, but John W. Kelly and the Fund deny knowing that Gacki was renting the home to Robert Cooley.

         John W. Kelly alleges that, due to his inability to contact Gacki regarding the utilities and seeing Cooley moving out, he believed Gacki had effectively abandoned the property. Under the contract, if Gacki abandoned the property, the Fund could enter and take possession of the home and collect rent payments, including those past due. Believing Gacki had abandoned the home, John W. Kelly and the Fund took possession of the home sometime prior to February 23, 2012, and changed the locks, despite finding possessions worth thousands of dollars still inside. The Fund also filed the quitclaim deed on February 23, 2012. Gacki went to the home with a locksmith on February 23, 2012, to change the locks, but was met by a Wentzville Police officer who had been informed that the property had been foreclosed upon and prohibited Gacki from entering and changing the locks.

         In a February 27, 2012, letter to the Fund, Gacki demanded she be restored possession of the home by February 29, 2012, and that the quitclaim deed be withdrawn. John W. Kelly and the Fund refused to comply and Gacki sued, filing a petition with claims against all Respondents. Specifically, Gacki sued for quiet title against Respondents; for forcible entry and detainer against Jeff Kelly Homes, Inc., TDI, John W. Kelly, and John Jeffrey Kelly; for trespass against Jeff Kelly Homes, Inc., TDI, John W. Kelly, and John Jeffrey Kelly; for slander of title against Respondents; for tortious interference of contract against Jeff Kelly Homes, Inc., TDI, John W. Kelly, and John Jeffrey Kelly; for conspiracy against Respondents; and for violations of the Missouri Merchandising Practices Act against Respondents. In response, the Fund filed its counterclaim petition for judicial foreclosure and liability on the promissory note and for fraud against Gacki and her husband.

         After Respondents filed a Statement of Uncontroverted Facts, the trial court granted both Respondents' motion for summary judgment as defendants and the Fund's motion for summary judgment as a counterclaim plaintiff. In its judgments, the trial court specifically ruled that Respondents were authorized to be on the property due to the quitclaim deed that was properly filed because Gacki was more than 30 days behind on her loan payments and had abandoned the home. The court further ruled that Gacki owed the remaining balance of the loan of $157, 893.00, interest in the amount of $64, 798.53, and attorney's fees in the amount of $47, 173.00. This appeal follows.

         II. Standard of Review

         The standard of review for a trial court's decision granting a motion for summary judgment is essentially de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp.,854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is appropriate where the moving party has shown there is no genuine issue of material fact and is therefore entitled to judgment as a matter of law. Wilson v. Union Pac. R.R. Co.,509 S.W.3d 862, 869 (Mo. App. E.D. 2017); Rule 74.06(c)(6). "A 'genuine issue' that will prevent summary judgment exists where the record shows two plausible, but contradictory, accounts of the essential facts and the 'genuine issue' is real, not merely argumentative, imaginary, or frivolous." Doug ...

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