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Amalaco, LLC v. Butero

Court of Appeals of Missouri, Eastern District, Third Division

December 17, 2019

AMALACO, LLC, D/B/A MJM RENOVATION, Appellant,
v.
CHRISTY BUTERO and BRIAN HOUSELY, Respondents.

          Appeal from the Circuit Court of St. Louis County 17SL-CC04137 Honorable Stanley J. Wallach

          OPINION

          James M. Dowd, Judge

         This landlord-tenant dispute between Appellant Amalaco, LLC (Landlord) and Respondents Christy Butero and Brian Housely (Tenants) arose when Tenants, in violation of their leases and of a local ordinance, sublet the two rental properties at issue through the online short-term rental service Airbnb.[1] After Tenants' subletting activity triggered a municipal citation for the ordinance violation, Landlord terminated the leases, Tenants vacated both premises, and Landlord filed the present suit for breach of contract and unjust enrichment in which Landlord sought as damages the money Tenants received through the illegal subletting as well as nominal damages and for civil conspiracy in which Landlord sought actual and punitive damages.

         In granting Tenants' joint motion to dismiss, the trial court held that since the money had been acquired through illegal conduct, Landlord could not recover those funds under Missouri law and therefore failed to state any claim for relief. While we affirm the dismissal of the unjust enrichment claims, we do so for reasons different than the trial court. However, we reverse the dismissal of Landlord's claims for breach of contract because although we agree that Landlord is not entitled to the Airbnb-generated money under the terms of the leases or Missouri law, we must reverse to allow Landlord to pursue nominal damages. Moreover, with respect to Landlord's civil conspiracy claim, we reverse that dismissal because Landlord has adequately stated a claim on that basis.

         Background

         In April 2014, Tenants entered into separate leases with Landlord for two apartments in a building located in University City, Missouri. Butero leased a first-floor apartment and Housely a second-floor apartment. Both leases specified that Tenants "[s]hall not assign this lease or sublease or rent any portion of the property to anyone else[.]" The leases also stated that "Tenant[s] shall comply with all applicable laws regulating the use of the property" and that "Landlord may terminate [these leases] if Tenant[s]. . .engage in any illegal activity on or in the properties]."

         Finally, the leases provided:

In the event of default by Tenant[s] of any rent payment or in the performance of or compliance with any agreements contained herein, Landlord shall, without demand, be entitled to possession of the property. The remedies provided for in this paragraph shall be in addition to the other remedies provided for herein or as provided by law.

         Sometime after they entered into the leases and without Landlord's knowledge, Tenants subleased the apartments for short-term occupancies through Airbnb in violation of the above-quoted terms of the lease. Landlord discovered this activity when University City cited Landlord because Tenants' Airbnb activity violated a municipal ordinance. Upon receipt of this citation, Landlord terminated both leases without incident and Tenants vacated the apartments.

         Landlord then brought this action seeking the money Tenants generated through their Airbnb activity as well as actual, punitive, and nominal damages. After the trial court granted Tenants' motion to dismiss all claims, this appeal follows.

         Standard of Review

         This Court reviews the giant of a motion to dismiss de novo. Mosley v. English, 501 S.W.3d 497, 503 (Mo.App.E.D. 2016). Appellate review of the trial court's dismissal for failing to state a cause of action is solely a test of the adequacy of plaintiff s petition. State ex rel. Henley v. Bickel, 285 S.W.3d 327, 329 (Mo.banc 2009) (quoting Bosch v. St. Louis Healthcare Network, 41 S.W.3d 462, 464 (Mo.banc 2001)). It assumes all of plaintiff s averments are true, and liberally grants to plaintiff all reasonable inferences therefrom. Id. The petition is reviewed in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case. Id.

         Discussion

         /.Tenants 'failure to plead contractual illegality as required by Rule 55.08 is inappositebecause the doctrine of ...


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