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Home , Interpleader, Quiet title, Statute of repose

JOHNSON COUNTY BAR ASSOCIATION JUNE 21, 2019

Recent Kansas and Missouri Developments and Decisions Concerning Real Issues ( Committee)

CREDITS: A. Kansas Cases from the Kansas Bar Journal – Appellate Digests.

B. Missouri Cases: from the Missouri Bar – Court Bulletins.

KANSAS

1. NOT BUT - The Kansas Supreme Court gets it right.

HILBURN V. ENERPIPE LTD., KANSAS SUPREME COURT, JUNE 14, 2019. FACTS: Hilburn was injured when her car was rear-ended by a semi owned by Enerpipe Ltd. Hilburn sued, claiming that the driver's negligence caused the accident, and that Enerpipe was vicariously liable for the driver's actions. Enerpipe admitted to both of these facts, and a was held only on the issue of . A awarded Hilburn $335,000 which included $33,490.86 for medical expenses and $301,509.14 for noneconomic losses. Defense counsel prepared a verdict form with a total award of $283,490.86 which represented the jury's total award with the amount adjusted to reflect the $250,000 cap of K.S.A. 60-19a02(d). Hilburn objected, claiming the statutory cap was unconstitutional under sections 1, 5, and 18 of the Kansas Constitution Bill of Rights. The district court affirmed the lesser award and Hilburn appealed. The court of affirmed, believed itself to be bound by prior Supreme Court decisions. Hilburn's petition for review was granted. The version of Supreme Court rule 8.03 in effect at the time Hilburn filed her petition for review allows the court to address a plain error not presented. The issue of whether the quid pro quo test applies to Hilburn's section 5 claim was properly preserved under the old rule because Hilburn preserved it in the district court and it was addressed by the court of appeals. Section 5 of the Kansas Constitution Bill of Rights preserves the jury trial right as it

Page 1 of 30 historically existed at . This protection extends to a determination of noneconomic damages. K.S.A. 60-19a02 infringes on this constitutional right. In the past, this infringement has been excused by the two-part quid pro quo test applied through a section 18 analysis. However, continued application of the prior decision in Miller, relying on stare decisis, cannot withstand scrutiny. The section 5 right to jury trial is completely distinct from the section 18 right to remedy. A statutory cap substitutes the legislature's nonspecific for a jury's specific judgment. This runs afoul of the constitution's grant of an "inviolate" right to a jury. The cap on damages imposed by K.S.A. 60-19a02 is facially unconstitutional because it violates section 5 of the Kansas Constitution Bill of Rights.

2. ADVERSE — OXY USA V. RED WING OIL HASKELL DISTRICT COURT—COURT OF APPEALS IS AFFIRMED DISTRICT COURT IS REVERSED—CASE REMANDED NO. 111,973—JUNE 7, 2019

FACTS: Oxy USA, Inc. developed a productive oil and gas well on a unitized production unit of land. The unitized area included a quarter section of land which is the subject of this dispute. The well is not located on the property in question, but the owner of the minerals under that property can receive royalties from the production under the unitization agreement. However, Oxy was unable to determine which party owned a disputed one-half interest in the minerals under the property. To resolve that question, Oxy filed this and quiet action to determine the rightful owner of the minerals under the property. Alice La Velle King owns the surface rights and an undisputed half interest in the minerals rights, and she claims the other half interest also belongs to her. Opposing her are 41 different people or groups all claiming . The district court granted to the other property owners, finding that King's claim to the royalties was barred by the of limitations. The court of appeals reversed on grounds. The petition for review was granted. ISSUE: (1) Can the surface owner of land enforce a reversionary interest in minerals at a later date, or is she barred by the or adverse possession HELD: The misappropriation of royalties, standing alone, does not establish adverse possession of a mineral interest. It doesn't matter whether King knew about royalty payments being made to the other landowners. The surface owner is the legal owner of the minerals located underground. Title to the mineral rights quiets in her favor. STATUTE: K.S.A. 60-503, -507

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3. NEGLIGENCE—

DETERS V. NEMAHA-MARSHALL ELECTRIC COOPERATIVE ASSOCIATION NEMAHA DISTRICT COURT—AFFIRMED NO. 119,200—MAY 24, 2019 FACTS: In 1994, the Deterses purchased from Nemaha-Marshall a GTS, a device which allowed them to safely connect a generator to household wiring. The GTS was installed by Nemaha-Marshall on the Deterses' electric pole. In 2000, the Deterses transferred all of their electricity—including the GTS—to a new house, shop, and implement shed on their property. Over the course of a year, the Deterses had to replace multiple appliances due to malfunctions. The Deterses claimed this was due to faulty wiring in the GTS. Alliance, their homeowners insurer, denied their claim, pointing to a lack of coverage for low voltage events. The Deterses sued both Nemaha-Marshall and Alliance for damages related to replacement appliances. Nemaha-Marshall moved for summary judgment on statute of repose grounds, since it had been at least 10 years since the GTS was connected to the Deterses' property. Alliance also moved for summary judgment, citing a lack of coverage in the Deterses' policy. Both motions were granted and the Deterses . ISSUES: (1) Statute of repose; (2) insurance coverage; (3) bad faith investigation HELD:The statute of repose clock begins running on the last act giving rise to the , not the last contact between the parties. Plaintiffs must bring their negligence action within 10 years of the original wrongful act. In this case, that act occurred in 2000 and the Deterses' claim is barred by the statute of repose. Much of the Deterses' argument is waived due to the failure to adequately brief the argument. To the extent that issues have been preserved, the district court correctly found that the homeowners' provided no coverage for low voltage events. Alliance investigated this claim appropriately, especially since the Deterses proposed two different causes for the damage. STATUTE: K.S.A. 60-513, -513(a)(4), -513(b)

4. ADVERSE POSSESSION—

CENTRAL KANSAS CONSERVANCY, INC. V. SIDES MCPHERSON DISTRICT COURT—AFFIRMED IN PART, REVERSED IN PART, REMANDED WITH DIRECTIONS NO. 119,605—MAY 17, 2019 FACTS: In 1997, Union Pacific Railroad and the Central Kansas Conservancy entered into a line donation where Union Pacific gave the Conservancy a quitclaim to its

Page 3 of 30 rights for over 12 miles of railroad corridor. With that deed, the Conservancy obtained the right to develop a recreational trail on the easement. Part of the trail runs through the Sideses' land. In 2015, the Conservancy petitioned the district court for quiet title and an concerning its trail use easement. It claimed that the Sideses attempted to block access to the easement with fencing and equipment in the roadway. The Sideses admitted that fact, but claimed that these actions constituted adverse possession of the Conservancy's ownership interest or, in the alternative, that they had a prescriptive easement on the land. The parties filed competing summary judgment motions and the district court granted the Conservancy's and denied the Sideses'. The district court eventually granted the Conservancy's request for an injunction which required the Sideses to allow the Conservancy to have access to the easement property. The order further discussed the erection of a fence that would keep the Sideses' cattle from straying. The Sideses appealed. ISSUES: (1) ; (2) adverse possession and prescriptive easement; (3) application of time limit; (4) fencing HELD: The Conservancy's original petition brought claims of quiet title, injunction, and damages. A decision on that petition could not be final until all three claims were addressed. There was a gap in time before the district court held a hearing and issued a decision on the injunction, and the decision was not final until that ruling was issued. Some cannot be adversely possessed or obtained by prescriptive easement, including property that is meant for public use. The Conservancy's trial use easement is meant for public use, which prevents the Sideses from obtaining rights through either adverse possession or prescriptive easement. The Conservancy's right to develop a trail arose before the KRTA went into effect, which means the district court properly ruled that the two-year time limit did not apply. And even if it did, the Sideses' only remedy would be to require the Conservancy to complete the trail—there is no remedy that would allow the property to revert to the Sideses. The district court violated the plain language of the statute when it ordered the Sideses to pay for half of the cost of fencing. The Conservancy must install barbed wire and electric fencing along the railroad corridor. The Conservancy may enter the Sideses' property when constructing a fence. : 16 U.S.C. § 1247(d); K.S.A. 2018 Supp. 58-3215; K.S.A. 58-3212, -3213, - 3213(a)(3), -3213(c), -3213(d), 60-503, -509

5. BANKS—CONSUMER PROTECTION COMMUNITY FIRST NATIONAL BANK V. NICHOLS WABAUNSEE DISTRICT COURT—AFFIRMED NO. 118,981—MAY 10, 2019 FACTS: Sarah Grace and Kurtis Nichols obtained two home loans from Community First National Bank. When the Nicholses failed to make payments, the bank filed this action. The Nicholses filed several alleging violations of the Kansas Consumer Protection Act. The bank filed a motion for partial summary judgment arguing that it was not subject to the KCPA. The district court granted that motion, dismissed the rest of the

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Nicholses' counterclaims, and granted the Bank's motion for foreclosure. The Nicholses appealed. ISSUES: (1) Applicability of the KCPA; (2) application of payments; (3) fraud in applying credit; (4) ability to charge late fees; (5) accrual of interest during deferral period HELD: The plain text of the KCPA states that banks are not included in the definition of "supplier" if the bank is subject to state or federal regulation related to disposition of repossessed collateral. This holding is in line with Kansas federal and gives meaning to the plain language of the statute. The mortgage contract is clear about how interest is accrued but silent on how payments should be applied. The district court erred by finding that the contract was unambiguous. However, any error was harmless, as the amount owed by the Nicholses was ultimately correct. The Nicholses' claims about fraud are unsupported by the record on appeal. The supports the district court's findings that any errors in late fee calculation were unintentional and minimal. The deferral agreement clearly deferred payments but did not stop interest accrual. STATUTES: K.S.A. 2018 Supp. 50-624(1), -626, -627; K.S.A. 16a-2-103(2)(a), -502(l), -5- 201(3), -5-201(4), -5-201(7)

6. LANDLORD SELF HELP FAIRFAX PORTFOLIO V. CAROJOTO WYANDOTTE DISTRICT COURT- REVERSED NO. 118,712 – MEMORANDUM OPINION.

FACTS AND ISSUES: This case involves the question of the legal authority of a mortgage lender to take possession of real estate, lock all entrances and put “For ” sings on the property during the pre-sheriff’s sale stage of a foreclosure case without consideration of whether the owner has abandonment the real estate and in the face of the owner’s objection to the mortgage lender’s taking possession of the property and attempting to market the property prior to the Sheriff’s sale and confirmation of such sale.

HELD: Such self help is not a right the mortgage holder can exercise without clear evidence of consent of the owner or abandonment. A mortgage is merely an encumbrance on the property not a possessory right. Reversed and case remanded to the District Court on the owners claim for damages against the mortgage holder for tortious interference with the owner’s business expectations and opportunities to partner, joint venture, lease, sell or refinance the property prior to the Sheriff’s Sale.

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7. OPEN RECORDS—STATUTORY CONSTRUCTION BAKER V. HAYDEN JOHNSON DISTRICT COURT—REVERSED NO. 117,989 – APRIL 6, 2018 FACTS: The Johnson County Sheriff's Department served a PFA at Baker's residence for his adult daughter. After that occurred, Baker submitted an open records request to the Johnson County District Court asking to inspect and copy audio files from two open court hearings that occurred in the PFA case. Baker was neither a party to nor counsel to a party in the PFA. Baker was told on multiple occasions that he was entitled to request the transcripts from the hearings but that the actual audio files were exempt from disclosure under the Kansas Open Records Act. The district court granted the county's motion to dismiss on grounds that Baker was not entitled to the audio recordings, and Baker appealed. ISSUES: (1) Mootness; (2) validity of Baker's claim; (3) attorney fees HELD: Baker was ultimately given the audio recordings before this case was heard on appeal. But this case is one that is capable of repetition and which involves an issue of public importance. There is a public interest in answering the question of whether the audio recordings were exempt from KORA disclosure. The district court misinterpreted the meaning of Supreme Court Rule 362. There is nothing in the plain language of the rule which bars access to electronically recorded hearings of open court proceedings. And there is no provision of KORA which bars release of the requested audio files. Because there is no evidence of any bad faith action, Baker is not entitled to attorney fees. STATUTES: K.S.A. 2017 Supp. 45-219(a), -221(a), -221(a)(1), -221(a)(20), -222(d); K.S.A. 20-101, 45-218(a)

8. ATTORNEY FEES—EVIDENCE—FRAUD—WILLS IN RE ESTATE OF EARL O. FIELD ELLIS DISTRICT COURT—AFFIRMED IN PART, REVERSED IN PART NO. 116,456—FEBRUARY 16, 2018 FACTS: After the death of his spouse, Field prepared a will that left the bulk of his sizeable estate to Fort Hays State University. Field met Wanda Oborny and he eventually offered her a job as his bookkeeper. In that capacity, Oborny had access to Field's funds, and she received hundreds of thousands of dollars from him. After Field's death, Oborny claimed that she found a codicil to Field's will that left half of his estate to her. The codicil bore no witness signatures, but two of Oborny's friends claimed that they saw Field sign and codicil. They died prior to trial, but their testimony was admitted via videotaped . After a lengthy hearing, the district court denied Oborny's attempt to admit the codicil to probate. But upon her motion, the district court granted Oborny's motion for attorney fees in the amount of $1 million. Oborny appealed regarding the codicil, and FHSU appealed the attorney fees. ISSUES: (1) Admission of the codicil to probate; (2) attorney fees

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HELD: As the proponent of a testamentary instrument, Oborny had the burden to make a prima facie case that Field had the capacity to duly execute the codicil. Field's testamentary capacity was not at issue, he was clearly competent prior to his death. And on its face, the codicil appears to comply with statutory requirements. Because Oborny met her obligations, the burden shifted to FHSU to prove that the codicil was invalid. Fraud must be proven by clear and convincing evidence. And abundant evidence supports the conclusion that the codicil was not signed by Field. It was an error of fact to conclude that Oborny acted in good faith when attempting to admit the codicil to probate. The award of attorney fees to Oborny was an abuse of discretion and that decision was reversed. STATUTE: K.S.A. 59-606, -1504, -2224. 84-1-201(19)

9. IMPLIED EASEMENTS—ESTOPPEL DEBEY V. SCHLAEFLI OSBORNE DISTRICT COURT—AFFIRMED NO. 119,218—FEBRUARY 15, 2019 FACTS: DeBey and the Schlaefli own adjoining tracts of land. DeBey operates a seed business from his tract, and traffic is often heavy. At the time DeBey purchased the land, both parties believed the tracts were separated by a dirt path. A later survey showed that was an incorrect assumption. Schlaefli's tract stretches farther to the east than first believed, to include the driveway that customers use to reach DeBey's seed business. Schlaefli attempted to build a fence to stop traffic from using the driveway. The district court found there was an implied easement by reservation or grant allowing continued traffic to DeBey's seed business. Schlaefli appealed. ISSUES: (1) Implied easement by reservation or grant; (2) easement overburden; (3) easement by estoppel; (4) attorney fees HELD: An implied easement by reservation or grant is based on the intent of the parties and what expectations one party could reasonably foresee the other party had from the sale of land. In this case, a quasi-easement existed from the time the tracts were developed. DeBey gained that quasi-easement when he bought the property from Schlaefli. Schlaefli knew that DeBey intended to expand his business, making the increased traffic foreseeable at that time. There is substantial competent evidence to support a finding of equitable estoppel. Schlaefli knew DeBey's business was expanding and made no objections to the increased traffic, even though he unquestionably knew about it. Schlaefli is not entitled to attorney fees because the district court's decision was correct. STATUTE: K.S.A. 68-117

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10. LEGAL MALPRACTICE POWER CONTROL DEVICES, INC. V. LERNER JOHNSON DISTRICT COURT—AFFIRMED NO, 117,705 – JANUARY 25, 2019 FACTS: PCD hired Lerner to represent it in a federal breach of contract action. The case involved highly technical design and engineering work. PCD sued a contractor for allegedly stealing intellectual property. At the time he was retained, Lerner knew that the statute of limitations would be an issue since Kansas' five-year limitation had already expired. Lerner filed suit in Massachusetts—the 's home state—because it has a six-year limit for breach of contract claims. The defendant argued that the breach of contract occurred earlier than Lerner contended. The district court agreed and granted the defendant's motion for summary judgment. The parties eventually settled the matter. PCD then filed a legal malpractice action against Lerner. After a trial, a jury found that Lerner was negligent for failing to provide timely legal services to PCD and that PCD's negligence action would have been successful but for the malpractice. Lerner filed a post-verdict motion for judgment as a matter of law. The motion was granted and the jury's verdict set aside after the district court determined that PCD failed to prove that the defendant breached the underlying contract. In the alternative, the district court also found that the jury instructions were improper and that PCD was not entitled to recover attorney fees spent in the underlying case. PCD appealed. ISSUES: (1) Granting of judgment as a matter of law; (2) jury instruction on breach of contract HELD: In order to prevail on its legal malpractice claim, PCD was required to prove that it would have prevailed in the underlying breach of contract claim. An attorney's opinion of the underlying case, or statements made by the attorney in , are not evidence of any of the claims made in the underlying . PCD failed to present expert testimony in its malpractice case which left it without evidence to supports its claim. In the absence of that evidence, the judgment as a matter of law was appropriate. Lerner's work for PCD was, in effect, an employment contract. But there is no evidence that Lerner made an express promise to timely file suit. In the absence of an express contract, the district court properly refused to instruct the jury on PCD's breach of contract claims. STATUTE: K.S.A. 2017 Supp. 60-456(a)

11. PARTNERSHIP—PROPERTY STEPHENS V. AINSWORTH ELK DISTRICT COURT—AFFIRMED NO. 117,736—JANUARY 18, 2019 FACTS: Stephens and Lewis were long-time close friends who had several joint business ventures. One of those ventures was a partnership, although it was an oral arrangement with no partnership agreement. In 1995, they built a cabin together that was used for hunting and recreation. Both the cabin and the land around it were owned in both names as joint tenants

Page 8 of 30 with rights of survivorship. By the early 2000s the duo's partnership was dissolved and the friendship was severely strained. Stephens died in 2013, and the hunting cabin was soon the subject of litigation as both Stephens' and Lewis' families claimed exclusive ownership. Lewis claimed ownership under the joint tenancy. Stephens claimed the cabin was partnership property that had previously been distributed solely to Stephens. A suit was brought, and the district court found that the cabin was never partnership property, meaning that ownership was governed by the deed. Because the cabin was owned jointly with a right of survivorship, it awarded sole ownership to Lewis. Lewis died in 2017, and Stephens' estate appealed. ISSUE: (1) Whether property was an asset of the partnership HELD: Because there was no written partnership agreement between Stephens and Lewis, the Kansas Revised Uniform Partnership Act applies. There was conflicting evidence presented to the district court and sufficient evidence to support both sides of this debate. There was substantial competent evidence to support the district court's finding that the cabin and all of the land were purchased with personal funds, triggering the statutory presumption that the property was separate from the partnership. This presumption was not sufficiently rebutted, which means the district court must be affirmed. STATUTE: K.S.A. 56a-101(f), -204, -204(c), -204(d)

12. CONDEMNATION—STATUTORY INTERPRETATION NAUHEIM V. CITY OF TOPEKA SHAWNEE DISTRICT COURT – REVERSED AND REMANDED COURT OF APPEALS – AFFIRMED NO. 114,271 – JANUARY 11, 2019 FACTS: The City of Topeka negotiated with business owners to purchase land in order to build a drainage system for city property. The negotiations resulted in the City's purchase of the property and the businesses' relocation without the use of eminent domain power. After the move, the business owners sued the City for relocation costs under K.S.A. 26-518, which allows for costs when real property is acquired by a condemning authority through negotiation in advance of a condemnation action. The City countered that it never intended to condemn the property and also noted that the business owners were not "displaced persons" under the statute because the property was actually owned by a landlord. The district court granted the City's motion for summary judgment, holding that the business owners were not displaced persons and that the property acquisition was not made in advance of a condemnation. On appeal, the Court of Appeals reversed, finding that the business owners were displaced persons. The panel remanded for further factual findings on the question of whether the purchase negotiations were conducted in advance of a condemnation. The business owners appealed the question of whether a displaced person must prove that a condemning authority threatened condemnation or took affirmative action towards condemnation prior to acquisition. That petition for review was granted. The City did not cross-petition on the Court of Appeals' other findings.

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ISSUES: (1) Must a displaced person prove that a condemning authority had an intent to condemn in order to receive statutory relocation assistance HELD: K.S.A. 26-518 requires a condemning authority to pay relocation costs when an acquisition occurs through negotiation before a condemnation action or when an acquisition actually occurs through condemnation. Nothing in the statute requires the City to pay relocation benefits as part of any public project. Whether a negotiation occurs "in advance of" a condemnation action is a question of fact that must be proven by a preponderance of the evidence. STATUTES: K.S.A. 2017 Supp. 26-201, -501(a), -518, -518(a); K.S.A. 12-101, Second, -101, Fourth

13. MUNICIPALITIES—PROPERTY JAYHAWK RACING V. CITY OF TOPEKA SHAWNEE DISTRICT COURT—REVERSED AND REMANDED NO. 118,035—NOVEMBER 2, 2018 FACTS: In 2006, the City issued $10 million in Sales Tax and Revenue Bonds to finance improvements to Heartland Park racetrack. At the time the bonds were issued, the City owned Heartland Park in for a term of years, subject to Jayhawk Racing's reversionary interest. When the bonds failed to produce adequate revenue, the City indicated a desire to purchase Jayhawk Racing's reversionary interest in the property so that the City owned the facility outright. It was anticipating that this purchase would also be financed by the issuance of STAR bonds. But after an election changed the composition of the Topeka City Council, the City decided not to pursue the STAR bond sale. Without STAR bonds, there was no funding for the purchase of Jayhawk Racing's reversionary interest. Jayhawk Racing sued the City for breach of contract. The district court granted the City's motion for summary judgment, finding that the City could not bind its successors to issue STAR bonds. Jayhawk Racing appealed. ISSUES: (1) Nature of the contract; (2) enforceability of the contract; (3) cash-basis HELD: Municipal corporations have both governmental and proprietary capacities. The contract to purchase Jayhawk Racing's reversionary interest was a proprietary contract akin to a purchase agreement. Because the contract is proprietary, future City Councils were bound by the agreement. The district court erred when it focused only on the method of funding. The contractual provision which provided for the issuance of bonds is an exception to the Cash-Basis and Budget Laws. STATUTES: K.S.A. 2017 Supp. 10-1116(a); K.S.A. 10-1112, -1119, 12-3013(e)(1), 79-2935

14. BREACH OF TRUST—DAMAGES ELLIS LIVING TRUST V. ELLIS LIVING TRUST SEDGWICK DISTRICT COURT—REVERSED AND CASE REMANDED

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COURT OF APPEALS—REVERSED NO. 113,097—SEPTEMBER 21, 2018 FACTS: Alain Ellis and her husband, Dr. Harvey Ellis, both executed living trusts. After Alain died, Harvey served as trustee of Alain's trust. The terms of Alain's trust provided that all income went to Harvey during his life. Upon his death, the trust was to be divided equally between the Ellises' two sons, with each receiving income from the principal. While acting as trustee, Harvey improperly converted a substantial amount from Alain's trust and placed the converted assets into his own trust. After Harvey died, the improper transfers were discovered and over $1 million was returned to Alain's trust. Alain's trust and the trust beneficiaries sought additional damages and filed suit against Harvey's trust, Harvey's estate, and individuals who advised Harvey while he was still living. Before trial, the district court ruled that Alain's trust could not seek punitive damages from Harvey's estate because Harvey was deceased. It also concluded that Alain's trust was not entitled to recover double damages. Alain's trust appealed these rulings to the court of appeals, which affirmed the district court's rulings. Alain's petition for review was granted on these two issues. ISSUES: (1) Punitive damages from a deceased trustee; (2) double damages HELD: The question of whether a can recover punitive damages from the estate of a deceased tortfeaser is an issue of first impression. The Kansas statutes are silent on this issue. But the statutes do provide that an estate can stand in the shoes of a deceased tortfeaser, especially because an estate exists to pay the financial obligations of the deceased. And a threat of punitive damages may serve to discourage wrongdoing by trustees. For these reasons, a trust may seek punitive damages from the estate of a deceased trustee. Since that issue was not put to a jury in this case, the case must be remanded. This rationale also allows for a plaintiff to seek statutory double damages against a trustee's estate because those damages are penal in nature and serve the same purpose as punitive damages. STATUTE: K.S.A. 58a-1002, -1002(a), -1002(a)(3), -1002(c), 60-1801, -3702, -3702(a), - 3702(c), -3702(d), -3703

15. STATUTE OF FRAUDS DEWITTE INSURANCE AGENCY V. FINANCIAL ASSOCIATES MIDWEST JOHNSON DISTRICT COURT—CASE REMANDED COURT OF APPEALS — REVERSED NO. 115,126—SEPTEMBER 21, 2018 FACTS: Three individuals worked for Financial Associates as area managers. These individuals trained new insurance agents and provided administrative support. As part of their compensation, the area managers received one percent of the premium paid on all policies from Blue Cross/Blue Shield of Kansas City. This compensation was due to them not only during their employment but after their employment ended, until the policies they had signed were no longer renewed. The payments were made for more than 20 years. After Financial Associates sold its agency to Blue Cross, Blue Cross stopped paying the area

Page 11 of 30 managers this one percent premium portion. After the area managers asked for the payment to be resumed and Blue Cross refused, the area managers filed suit claiming breach of contract. The district court decided in favor of Financial Associates, concluding that the area managers' did not govern the one percent premium payment and that any oral agreement to make that payment was unenforceable under the statute of frauds. The Court of Appeals affirmed, and the area managers' petition for review was granted on the statute of frauds issue. ISSUE: (1) Statute of frauds full-performance exception HELD: The plain language of K.S.A. 33-106 does not include any exceptions to the statute of frauds. But the full-performance exception to the statute of frauds was developed in common law and recognized in Kansas shortly after statehood. The legislature's failure to change the statute shows that the legislature has acquiesced to the full-performance exception. In Kansas, the full-performance exception requires the full performance of only one party to an agreement. Because the area managers performed their part of the contract for over 20 years, the full-performance exception applies, and the alleged oral agreement is removed from the statute of frauds. STATUTE: K.S.A. 33-106

16. REAL PROPERTY—STATUTE OF LIMITATIONS LCL V. FALEN RICE DISTRICT COURT—COURT OF APPEALS IS AFFIRMED DISTRICT COURT IS REVERSED, CASE REMANDED NO. 115,434—JULY 27, 2018 FACTS: The Mary Louise Falen-Olsen Trust entered a contract to sell 200 acres of real property to Sammy Dean. The Trust owned all of the surface rights plus an undivided one- half mineral interest. It is undisputed that the Trust intended to sell the surface rights and retain the mineral interest. RCAT was the closing agent and title insurer. The deed prepared by RCAT did not include any reference to the mineral reservation. Neither of the co-trustees noticed this omission before they signed and filed the deed. LCL purchased the property in April 2014. At the time, LCL acknowledged that the mineral rights would not come with the property. RCAT again acted as the closing agent, and the deed again did not note the Trust's mineral rights reservation. After the sale closed, LCL inquired about the difference between the deed's language and its understanding of what it purchased. RCAT conducted a title search and discovered that none of the included the reservation of the Trust's mineral interest. LCL refused to sign a corrected deed. The Trust first learned of this in August 2014, when royalty payments were suspended. LCL filed a petition to quiet title to the mineral interests. The Falens both filed an denying LCL's ownership and filed a third-party petition against RCAT for negligence and breach of contract. RCAT moved for summary judgment, claiming that the statute of limitations began to run in January 2008, when the original deed was prepared. The district court granted that motion, but that decision was reversed by the court of appeals, which found that the Falens did not sustain any damage

Page 12 of 30 until August 2014, when the royalty payments stopped. RCAT's petition for review was granted. ISSUES: (1) Negligence cause of action; (2) breach of fiduciary duty cause of action HELD: In the context of a statute of limitations, "substantial injury" means "actionable injury". There are two inquiries relevant to determining when the statute of limitations began to run – when did the Falens suffer actionable injury, and when did the existence of that injury become reasonably ascertainable? They were injured when the 2008 deed was filed because their mineral interest title became clouded. This injury was compounded in 2013, when their ability to reform the title became much more limited. But there remains a genuine issue of material fact about whether the Falens reviewed or understood the deed before signing and filing it. And factual questions remain about the Falens' continued receipt of royalty payments. Because of these factual disputes, summary judgment was inappropriate and the case must be remanded for further factfinding. The Falens' breach of fiduciary duty claims extended to the 2014 deed, meaning that the petition was filed well within the statute of limitations. STATUTE: K.S.A. 58-2222, 60-511(5), -513(a)(4), -513(b)

17. FORECLOSURE REVERSE MORTGAGE SOLUTIONS V. GOLDWYN RILEY DISTRICT COURT—AFFIRMED NO. 118,370—JULY 6, 2018 FACTS: Goldwyn's mother took out a reverse mortgage in 2007. The reverse mortgage allowed Goldwyn's mother to use her home as collateral and take out loans up to the value of the home. After the mother's death, Goldwyn became the homeowner. But the reverse mortgage lender opted to make the balance due. Goldwyn did not pay that balance, and the lender initiated a foreclosure judgment. The suit was an in rem action against the property, and Goldwyn had no liability to cover an arrearage with her other assets. A prior appeal confirmed the propriety of the foreclosure judgment. Goldwyn now appeals the district court's approval of the sheriff's sale. ISSUES: (1) Amount of the sheriff's sale; (2) timing of the sheriff's sale; (3) length of redemption period; (4) process of approval HELD: The bid made at the sheriff's sale was not substantially inadequate, as it came at 86% of the total judgment. Due to the in rem nature of the proceedings, there was no deficiency judgment; because of this, district courts may have more leeway to approve the sheriff's sale in a reverse mortgage action. The district court should have waited to allow a response to the motion to confirm the sheriff's sale. But the error was harmless, especially because the district court eventually held a hearing on Goldwyn's motion to reconsider. The redemption period was properly set at three months by statute. The foreclosure notice was properly published in the correct newspaper.

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STATUTES: K.S.A. 2017 Supp. 60-205(a)(1)(D), -261, -2414(a), -2414(m); K.S.A. 60- 2410(a), -2415, -2415(a), -2415(b)

18. ARBITRATION—CONTRACTS—JURISDICTION—MEDIATION WASINGER V. ROMAN CATHOLIC DIOCESE OF SALINA RUSSELL DISTRICT COURT—REVERSED AND REMANDED NO. 116,764—NOVEMBER 17, 2017 FACTS: Wasinger was hired to design and construct a parish rectory for a church in Russell. The contract included a requirement that the parties submit to "binding mediation" if disputes arose during the construction process. A dispute arose early during the process. Under the terms of the contract, the parties went to mediation and received a decision. Wasinger did not agree with that decision, and as a result he filed a mechanic's on the property. Wasinger followed up by filing a motion to foreclose on the lien. The Diocese filed a motion for summary judgment in which it claimed that the clause requiring "binding mediation" was actually an arbitration provision, meaning that the mediator's decision was binding. The district court granted the motion and this appeal followed. ISSUES: (1) Whether mediator's decision was binding; (2) lack of cross-appeal HELD: Kansas case law does not recognize "binding mediation." The mediation set out in the contract was a voluntary, out-of-court alternate dispute resolution procedure. By statute, a mediator in Kansas has no decision-making authority. It was a mistake to use the terms "mediation" and "arbitration" interchangeably. Under the plain language of the contract, Wasinger was free to seek judicial resolution of issues not resolved by mediation. The Diocese did not cross-appeal the district court's ruling on arbitration which means this issue cannot be considered on appeal. And the argument fails on the merits because the district court erred when finding that interstate commerce was implicated. STATUTE: K.S.A. 5-405(a), -405(b), -405(c), -502(e), -502(f), -502(g), -502(h), -502(m)

19. DEBTOR AND CREDITOR——TRUSTS CHANEY V. ARMITAGE MONTGOMERY DISTRICT COURT—AFFIRMED NO. 115,977—SEPTEMBER 15, 2017 PREVIOUSLY FILED AS AN UNPUBLISHED OPINION FACTS: Armitage created a trust that would hold certain assets, including real estate that he designated as a homestead. After that time, the district court entered judgment in Chaney's favor against Armitage. Armitage's health failed, and he moved to a care facility, which prompted Chaney to file an application for writ of special execution against Armitage's homestead. The district court issued the writ and directed the sheriff to levy execution. Armitage later died with no family living at the homestead. His heirs moved to set aside the writ of special execution claiming that no judgment lien could ever attach to Armitage's

Page 14 of 30 homestead. The district court denied the motion, finding that because there was no spouse or children living at the property after Armitage's death, the assets were subject to summary execution. The heirs appealed. ISSUE: Whether a writ of special execution can ever attach to homestead property, even after the death of the homestead owner HELD: The homestead designation on Armitage's property expired at his death because it was not occupied by his children or spouse. Because it no longer had a homestead exemption, the residence became trust property and, under the terms of the trust, was to be used to pay the estate's debts and expenses. STATUTES: K.S.A. 2016 Supp. 60-2301; K.S.A. 58a-505(a)(1), -505(a)(3), 59-401, 60- 2202(a)

20. STATUTORY INTERPRETATION—ZONING LAYLE V. CITY OF MISSION HILLS JOHNSON DISTRICT COURT—REVERSED NO. 116,095—AUGUST 18, 2017 FACTS: The Layles' fence at their residence did not meet zoning regulations in Mission Hills. But over 20 years, the Layles were given two variances to either repair or replace the fence, even though it would not meet regulations. In 2012, the Layles sought to remove and replace the pickets and rails of the fence without changing the fence posts. The city denied the request, finding that the work could not be authorized without approval from the Architectural Review Board and the Board of Zoning Appeals. After a number of appeals, the ultimate decision was that the proposed work was a replacement of the fence requiring new variances. The Layles appealed. ISSUES: (1) Application of correct standard of review; (2) was the proposed work a repair or a replacement HELD: An issue that requires a court to interpret regulatory or statutory criteria uses a de novo standard of review and not a review for reasonableness. Whether the proposed fence project constituted a repair or a replacement was actually a question of law. Repair of fence sections did not constitute a full replacement. Repairs do not require a variance and the city could have granted the building permit that was requested by the Layles. STATUTES: K.S.A. 12-759(e)(1), -759(f)

21. ATTORNEY FEES—CONTRACTS—DAMAGES HARDER V. FOSTER LEAVENWORTH DISTRICT COURT—AFFIRMED IN PART— REVERSED IN PART—REMANDED NO. 116,117—JULY 28, 2017

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FACTS: Harder purchased a house from Foster. The house sat on land and had a lake and a dam. After the purchase concluded, Harder learned that the dam was illegal because it was constructed without a permit, and that obtaining a permit would require extensive repairs. Harder filed suit against Foster in 2013 alleging negligent misrepresentation and other claims related to the house purchase. A jury eventually found in Harder's favor. Citing language in the real estate purchase contract, the district court granted Harder's motion for attorney fees. There was a protracted process after that decision while the district court decided Foster's motion to alter or amend. Because of the delay, Harder filed a second motion for attorney fees to recoup funds spent litigating the attorney fee issue. That motion was denied, as the court found that the second set of attorney fees were not related to the real estate purchase contract. Harder filed a second suit against Foster in 2015, claiming that he fraudulently conveyed the proceeds of the purchase to his children so that he was insolvent after the judgment was issued. Foster passed away, but his estate paid to the district court funds sufficient to satisfy the judgment and attorney fees awarded to Harder. The district court believed that Harder had been satisfied and dismissed the 2015 action as moot. ISSUES: (1) Error in denying the second motion for attorney fees from the 2013 case; (2) error to dismiss the 2015 case HELD: Harder's first motion for attorney fees compensated her for expenses incurred through December 16, 2014. But Harder incurred costs far beyond that as the parties worked through the post-trial motions filed by Foster. All of those fees were related to Foster's default under the contract; as such, Harder should have been compensated. The merger doctrine does not deny Harder's second request for attorney fees, and she did not waive any of those fees. The 2015 action was not moot because Harder potentially had a cause of action under the Uniform Fraudulent Transfer Act and, under that Act, potentially had a right to attorney fees to any act related to the third-party claim. Harder was not entitled to punitive damages because punitive damages can only be collected from a wrong- doer, and Foster is now deceased. STATUTE: K.S.A. 33-102, -201(c), -201(d), -201(g), -204, -204(a), -204(b), -207, -210

22. CONDEMNATION OF DECLARATIONS OF RESTRICTIVE COVENANTS. CREEGAN V. STATE, 305 KAN. 1156 (2017). DISTRICT COURT: REVERSED COURT OF APPEALS AFFIRMED. 305 KAN. 1156 (2017). MAY 2017. The Kansas Department of Transportation (KDOT) acquired several parcels of real property in the Grande Oaks subdivision in Overland Park in 1999. The plots were made subject to a Declaration of Restrictions that stated the property within the subdivision should be occupied and used for single family residence purposes only. Beginning in 2005, KDOT placed trailers on the lots and, in subsequent years, used the lots for construction-

Page 16 of 30 related activities before eventually building permanent bridges and roads on the lots to carry highway traffic. Plaintiffs, who owned other real property within the subdivision, filed an lawsuit against KDOT. In its motion for summary judgment, KDOT argued a violation of a restrictive was not a compensable taking under Kansas law. The district court granted the motion, ruling that a “violation of the restrictive covenants is not a physical taking. Some physical taking or substantial inevitable damage resulting in a taking must be alleged and produced in evidence to support a claim for inverse condemnation. The ‘taking’ alleged in this case is not a compensable taking at all.” The Kansas Court of Appeals reversed. A majority of the panel ruled that restrictive covenants are real property interests and that KDOT’s violation of the covenants damaged the interests sufficiently to require just compensation. Judge Atcheson concurred in the result, but would have treated restrictive covenants as a hybrid of real property interests and contract interests, whereby “[a] government entity takes the property interests embodied in a restrictive covenant to the extent the nonconforming use to which it puts restricted land creates or causes conditions that intrude upon privately owned land subject to that same restriction.” On appeal, the Kansas Supreme Court clarified the question before it not as whether “the right held by plaintiffs under the restrictive covenant is further identified as a real property interest or a contract right,” since each right is property requiring just compensation if taken by the state, rejecting both an under- and an over-reading of the Court’s treatment of the Eminent Domain Procedure Act (EDPA), K.S.A. 26-501 et seq., in Estate of Kirkpatrick v. City of Olathe, 289 Kan. 554 (2009). The Court noted that “plaintiffs’ interests in real property were destroyed” because “KDOT’s nonconforming use of its subdivision parcels extinguished plaintiffs’ restrictive covenant as to those parcels,” highlighting the typical requirement for a taking that real property interests have been transferred to an entity having the power of eminent domain.

MISSOURI

23. Jurisdiction. Ability to access out-of-state corporation’s website in Missouri does not confer over the corporation. State of Missouri ex rel. PPG Industries, Inc. v. McShane, No. 97006 (Mo banc, November 20, 2018), Russell,

24. Condemnation – Heritage Value. Court must consider the entire property when determining whether a heritage property owner could utilize the property in substantially the same manner as it was being utilized on the day of the taking, and the judge is authorized to hold a second hearing to determine heritage value. City of Cape Girardeau v. Elmwood Farms, L.P., No. 106181 (Mo. App. E.D., March 5, 2019).

Elmwood owned 70.1 acres, including the 1.95 acres condemned by the City of Cape Girardeau for a trail-widening easement and to widen Bloomfield Road (however, the parties agreed to only use 17.2 acres of the 70.1 for the appraisal). This is a case of first impression interpreting market value under Missouri’s condemnation law revised

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in 2006, specifically § 523.039(3), which provides the amount of compensation that must be paid for condemned property as the sum of “fair market and heritage value” in cases in which the taking “prevents the owner from utilizing property in substantially the same manner as it was currently being utilized on the day of the taking and involving property owned within the same family for fifty or more years.” Elwood and the city entered into a agreement on damages and asked the trial judge to decide the legal questions presented. Sufficiency of evidence was not the issue. The trial court then awarded Elwood $45,000 in heritage value and this appeal followed. The issue was whether the court must consider the entire property when determining whether the property owner could utilize the property in substantially the same manner as it was being utilized on the day of the taking, or just the condemned property. Another issue was whether the judge could hold a second hearing to determine heritage value.

Held: Affirmed. The entire 17.2 acres is to be evaluated, not just the 1.95 acre portion taken, when determining whether the property could be utilized in substantially the same manner after the taking. In this case the parties agreed that the fair market value due Elmwood was $90,000. The trial court’s award of $45,000 heritage value to Elmwood was found consistent with the plain language of the statute. Also, the statute creates a second process for a circuit judge to determine heritage value.

25. Adverse Possession. One who recognizes paramount title in another cannot show hostile intent sufficient to ripen into title by adverse possession. Scott v. Hicks, Nos. 35181 and 35184 (Mo. App. S.D., January 8, 2019).

Lynn Scott and his wife filed suit claiming title to 314 acres by adverse possession from the Hicks. Lynn Scott is the son of Margaret and David Scott, prior record owners of title. Lynn grew up on the land and farmed it, but except for a brief of a portion to Lynn then back again from Lynn to his parents in 1981, title was maintained throughout in his parents. Title vested in his mother Margaret solely in 1983 after his father’s passing. In 1999, Margaret signed a beneficiary deed conveying the property to Lynn upon Margaret’s death. However, on February 8, 2013, respondents Hicks acquired the 314 acres by general from Margaret for $385,000. The jury found for Lynn and his wife after trial on the adverse possession claim, but the trial court granted respondents Hicks a judgment notwithstanding the verdict, finding that the Scotts failed to make a submissible case because they lacked proof of hostile possession.

Held: Affirmed. On appeal, the evidence showed that although Lynn possessed the land, he deferred to his mother Margaret’s titled ownership of the 314 acres. Lynn’s

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recognition of superior title in another could not ripen into title by adverse possession.

26. Lease Construction. Exculpatory clause in a lease must be clear, unambiguous, unmistakable and conspicuous to be enforceable to waive a landlord’s negligence or fault. Tolliver v. 5 G Homes, LLC, No. 106391 (Mo. App. E.D., November 27, 2018).

Plaintiff Tolliver (“Tenant”) signed a one year lease for a basement apartment in May 2016. Spring of 2017 Defendant 5G Homes (“Landlord”) bought the subject property. On March 25, Tenant renewed for another year to begin June 1, 2017 with Landlord. However, on April 10, 2017, Tenant started experiencing water leaks and mold. After an inspection by the city, Tenant moved out so repairs could be made. On May 9, 2017, Tenant informed Landlord that she would not renew and would vacate by June 15, 2017. Landlord refused to return her deposit. After a small claims trial, Tenant was awarded $2,141 and Landlord sought . In circuit court, Landlord answered Tenant’s claim of breach of implied warranty of habitability and counterclaimed for breach of contract. The court awarded Tenant $2,240 and entered a judgment against Landlord’s . Landlord appealed.

Held: Affirmed. Landlord’s defense based on an exculpatory clause contained in the lease entered into on June 1, 2017 didn’t apply because the water/mold commenced in April 2017. Even if the exculpatory clause was in the original lease, it was unenforceable because the language had failed to conspicuously express in clear and unambiguous language that negligence or fault by the Landlord was unmistakably waived. Breach of implied warranty of habitability is itself a defense to Landlord’s claim for rent due. Moreover, the trial court believed Tenant’s testimony that Landlord waived any right to any holdover rent. That fact determination was reserved for the fact finder.

27. Arbitration clause. Provisions in an arbitration agreement requiring a specified arbitration provider are integral to the agreement; and nothing within 9 U.S.C. § 5 permits a court to name a substitute arbitrator, even in the event of the specified provider’s unavailability A-1 Premium Acceptance, Inc. v. Hunter, No. 96672 (Mo. App. S.D., October 16, 2018),

A-l Premium Acceptance, Inc. (“A-1”) moved the trial court to compel arbitration of Hunter’s claims. The parties’ arbitration agreement showed an agreement to arbitrate only before the National Arbitration Forum (“NAF”). Prior to the parties’ dispute, NAF entered a consent decree requiring NAF to stop providing arbitration services for consumer claims. Acknowledging NAF’s unavailability, A-1 moved the court to

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designate a new arbitrator under 9 U.S.C. § 5 and to compel arbitration. The trial court declined to name a substitute arbitrator and declined to compel arbitration. A-1 appealed.

Held: Affirmed. The trial court did not err in declining to compel arbitration. Provisions in an arbitration agreement wherein the parties agree to arbitrate before a specified arbitration provider are integral to the arbitration agreement. Where an agreed upon arbitration provider is designated in the agreement and becomes unavailable, a trial court is without authority under 9 U.S.C. § 5 to name a substitute arbitrator. The Supreme Court did distinguish between provisions which merely identify an arbitrator from those which limit the agreement to arbitrate to a specified arbitration provider, finding that this precedent is only applicable to the latter.

28. Collectors deed trumps. A collector’s deed is prima facie evidence of fee simple title, and the party challenging the same has the burden. York v. Horner et. al., No. 106097 (Mo. App. E.D., August 21, 2018), Gaertner, J.

Defendants Horner have owned Lot 14 of Lake Forest estates since 1999. The disputed property sits adjacent on unimproved Lot 15, which includes the 20-by-163- foot strip that provides access to Wilbert Road. Lot 14 sits alongside Wilbert Road. Plaintiff York bought Lot 15 at a tax sale in August 2013, and received a collector’s deed in February 2014. In February 2016, Plaintiff York brought quiet title action for Lot 15, including an ejectment action to remove Horner’s encroaching (7.1 feet) retaining wall. Defendants Horner claimed title to the 20-by-163-foot strip via adverse possession and also sought to quiet title. Both parties filed motions for summary judgment. The trial court granting Defendants Horner title by adverse possession, but only as to an eight-foot-wide strip containing the retaining wall, with the to Plaintiff York.

Held: Reversed and remanded with instructions. The appellate court directed the trial court to enter judgment for Plaintiff York on his quiet title claim and against the Defendants Horner on their claim of adverse possession. Under de novo review, the appellate court determined that Plaintiff York’s collector’s deed extinguished Defendants Horner’s claim of adverse possession. Defendants Horner had not paid taxes on or redeemed the land. A collector’s deed is prima facie evidence of fee simple title in the Plaintiff York, and it was Defendants Horner’s burden to prove otherwise, which Defendants did not do.

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29. Statute of Frauds. Statute of Frauds requires a legal description or means sufficient to specify the land being leased greater than one (1) year to satisfy Statute of Frauds, or else treat lease as year-to-year. Franklin Farms, LLC v. North American Auction Company, et al., No. 106131 (Mo. App. E.D., June 29, 2018).

Franklin Farms, LLC (“Franklin”) leased in writing 293 acres, at $50.00 per acre annually, from Respondents North American Auction Company and Witness in the Wilderness, both owned by Curtis Rodgers (“Respondents”) for years 2009, 2010, and 2011. Respondents own 6,000 acres. This writing did not describe the particular 293 acres involved but did allow for periodic three (3) year extensions. Franklin did request to extend in December 2009, but for 214 acres. Respondents sent termination notice in October 2013. Franklin filed suit on January 31, 2014, and Respondents counter claimed. On October 11, 2017, the trial court found against Franklin for lack of a legal description and denied Respondents’ counterclaim of breach of contract.

Did Respondents’ counterclaim waive their Statute of Frauds defense? No, parties disagreed as to what their agreement was. Breach of Contract claim was not inconsistent with the Statute of Frauds defense, they are not the same.

Does partial performance satisfy exception to the Statute of Frauds here? No. No reliance shown that would create injustice to impose the Statute of Frauds. No showing made that Franklin was out any expenses incurred in reliance of farming Respondents’ land in 2014. Judgment for Respondents is affirmed.

30. Adverse Possession. Lack of use of a road by the public is not part of the exclusivity required be proven adverse possession to apply but is the burden of a public road’s proponent to prove when alleged to defeat adverse possession. Ben Brower Property Co., LLC v. Evella, LLC No. 35056 (Mo. App. S.D., July 2, 2018).

Plaintiff Brower and Defendant Evella own adjoining properties with a common boundary that runs for one-half mile with a fence. This fence has been in place since 1963. Along Brower’s side of the fence is a road Brower uses for access, nobody else. A survey in October of 2015 revealed that this fence is actually 22-25 feet west of the true line so the road Brower uses is on the Evella side of the true line. Brower filed to quiet title by adverse possession to the fence and acquire this road. In September 2016, Evella filed for summary judgment claiming that the road was “public”, or an “abandoned public road.” The motion was denied, and the matter

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later tried with the Court who found and quieted title in favor of Brower and enjoined Evella from any rights to same.

Did Brower’s claim by adverse possession require Brower to prove the road was not a public road? No, Brower’s burden was to prove its possession was (1) hostile and under claim of right, (2) actual, (3) open and notorious, and (4) exclusive and continuous for a period of ten (10) years and did. It was Evella’s burden to prove the road was public, but it did not.

Was it error to not allow Evella to amend its answer and plead public road as an at trial? No, but such amendment was not timely and was within the Court’s discretion to deny. Judgment for Brower affirmed.

31. . Tenant’s notice of renewal must be definitive and unqualifiedly consistent with the terms of the Lease Agreement to be effective. Shocklee, et. al., v. Albers Chiropractic Health Centre, P.C. No. 105795 (Mo. App. E.D., July 10, 2018).

Parties entered into a commercial lease in April of 2012, which expired March 31, 2017. That lease contained a renewal provision which, absent default, allowed for two (2) additional five (5) year terms by giving written notice 90 days prior to expiration by registered mail. Tenant Albers wrote Landlords Shocklee a certified letter, dated November 15, 2016, exercising that Tenant would renew for an additional three (3) years. Landlords treated the lease as not renewed, terminating March 31, 2017. Tenant refused to vacate so that Plaintiff Landlords filed suit for breach of contract and unlawful detainer. The trial court found a five (5) year extension was entered into because any renewal had to be for five (5) years.

Did Defendant Albers’ letter effectively exercise her right to renew under the lease? No. Tenant Albers requested a three (3) year renewal which was different from the five (5) year renewal term, thus the trial court erred. Three (3) years is not five (5) years. Tenant Albers could have properly renewed for five (5) years which would have then obligated Landlords, but her failure to do so was no renewal and the lease expired by its terms.

32. Residential tenant claims. For Tenant to defend with claim of Landlord’s breach of implied warranty of habitability. Tenant must vacate or pay over rent into Court with appropriate hearing and exercise of judicial discretion. Jamerson, et. al. v. Antwon

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Boone No. 104405 (Mo. App. E.D., July 17, 2018).

Oral lease of a house by Tenant Boone from Landlords Jamerson and Cunningham for $600.00 month-to-month, starting September of 2015. Landlords filed for rent and possession on March 10, 2016, asking for March rent of $600.00. Tenant denied claiming rent was withheld due to repairs necessary, counterclaiming for breach of habitability due to a sewer problem. At trial on April 8, 2016, Landlords sought rent for February, March, and April of 2016. Tenant claimed, and Landlords admitted health code violations existed, but was without access because Tenant remained in possession. Tenant presented no proof of having escrowed the rent. The trial court found for Landlords $1,800.00 and for possession, denying Tenant’s counterclaim.

On appeal, Kohner Properties, Inc. v. Johnson, 2018/ WL 3235686 (Mo. banc July 3,2018) is controlling. Kohner required Tenant vacate or pay rent into the court for the breach of implied warranty of habitability to apply, ultimately allowing trial court the discretion on a case-by-case basis with proper notice, finding Tenant’s claim of habitability breach untenable without such proof.

Did Tenant plead and prove the unsanitary conditions resulting in denial of an occupancy permit sufficient to show enforcement illegal? No. Tenant had the burden on such an affirmative defense and did not.

Similarly, to the extent Landlords’ Petition did not seek February rent, Landlords’ judgment was modified to reduce it $600.00, but in all other reports affirmed.

33. Contract. Mutual mistake tried by acquiescence, if not pleaded, is legally sufficient where no timely objection was raised. Strange, et. al. v. Robinson, et. al. No. 35095 (Mo. App. S.D., June 5, 2018).

Suit around a mutual mistake of fact, originally pleaded as fraud or rescission, that condo garage could be sold separate from its unit. The trial court found mutual mistake and awarded Strange (“Buyers”) their money back ($14,000), plus their attorney fees incurred ($8,366).

Held: Judgment affirmed. Rescission is an that may be granted if there is a mutual mistake. Sellers’ condo came with a garage, but Buyers’ condo in another building adjacent did not. Neither Buyers nor Sellers read the Condo

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Declaration; they just exchanged $14,000 for the garage with a bill of sale. When Buyers subsequently sold their condo and the garage (assigned) to a third party, the discrepancy was made apparent. Mutual mistake was informally submitted without objection as the evidence was presented. The Sellers cannot be heard on appeal to complain mutual mistake was not pleaded. Rule 78.09 requires that it be raised at the time presented so the trial court had an opportunity to address, but did not; hence, Sellers acquiesced.

34. Riparian Rights. Generally, riparian rights do not attach on an artificial body of water. Incline Village Board of Trustees v. Edler, et. al. No. 105494 (Mo. App. E.D., June 19, 2018).

The Edlers sought riparian rights to an artificial lake owned by Incline Village. Incline Village, a subdivision developed in 1974, created its Main Lake (man-made) by damming Indian Camp Creek, dedicating all common area for the use of its lot owners. Lake-abutting lots in Incline Village can build docks. Assessment fees originally maintained the lake. After Main Lake began to silt up, in 1996, a court ordered an increase in the assessments in Incline Village for five years to pay for dredging, plus a preventative maintenance assessment fee over the life of Main Lake. In 2009, the Edlers acquired lots, one of which abutted the Main Lake but was situated in Sumac Ridge, rather than Incline Village. Then, the Edlers built a dock on Main Lake without Incline Village permission, so suit was commenced to declare the Edlers trespassers and remove the dock. The trial court ordered the Edlers to remove their dock and pay attorney’s fees of $75,199.77, pursuant to §527.100, RSMo.

Riparian or littoral rights do not attach to an abutting owner on an artificial body of water. Missouri does not generally recognize the “artificial becomes natural” rule, but if it did, it would require some proof of reliance. No reliance was present here. Incline Village—not Sumac Ridge—was assessed and did the upkeep of the Main Lake.

Held: Judgment affirmed, except as to attorney’s fees, which reversed. For “costs” under §527.100 to include attorney’s fees, special circumstances are required, and this special circumstances exception should be interpreted narrowly and construed strictly. Judgment for attorney fees were reversed because it was an abuse of discretion to award attorney fees, since no special circumstances were presented.

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35. Interest. Statutory prejudgment interest rate applied to contract dispute where parties struck out 18% rate, leaving contract silent as to interest. G&G Mechanical Constructors, Inv. v. Jeff City Industry, Inc., et. al., No. 80840 (Mo. App. W.D., March 20, 2018).

Jeff City Industry, Inc. (“JCI”) entered into a construction contract with the City of Columbia, Missouri, to serve as general contractor on the Hominy Trail Water and Sewer Project. JCI subcontracted certain boring work for to the project to G&G Mechanical Constructors, Inc. (“G&G”). A dispute arose over JCI’s failure to pay G&G for its work. G&G then sued JCI for breach of contract, unjust enrichment, and violation of Missouri’s Prompt Pay Act (which carries an 18% interest provision). G&G also sued JCI and its , Liberty Mutual, on a payment bond claim.

The jury returned a verdict against JCI and Liberty Mutual in the amount of $445,408.94. The trial court entered judgment in favor of G&G and included prejudgment interest at the statutory rate of nine percent pursuant to § ,408.020RSMo.

JCI and Liberty Mutual appealed, contending that the trial court mistakenly awarded prejudgment interest. They maintained that G&G and JCI had an agreement that no interest would be charged on amounts due.

During contract negotiations, Attachment A was signed by G&G, and then transmitted to JCI. The contract contained an interest provision that stated, “Any pay estimate overdue by 60 days shall bear interest the annual rate of 18% or the higher rate allowed by law, if lower. Retainage shall not be held out of payment.” JCI’s representative struck through the entire provision, initialed it, and wrote, “5% Retiange [sic]” in the margin. G&G’s representative then counter- initialed the modification and dated it. JCI contended that by striking through the interest provision, the parties agreed that the interest rate would be zero, so no prejudgment interest should be awarded. G&G maintained that by striking the interest provision, the parties did not agree on a rate of zero, but rather rendered the agreement silent on the interest rate, whereupon the statutory rate of 9% would become the applicable rate.

Held: Affirmed. The court of appeals agreed with G&G, and held that the striking of the interest rate did not create an agreement of zero interest, but merely made the

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contract silent on the applicable rate. Thus, the court of appeals held that, “Setting aside the stricken language, the contract that remains is silent on the issue of prejudgment interest and susceptible to only a single interpretation – the parties did not enter into an agreement on the issue of prejudgment interest.” The court of appeals thereby affirmed the trial court’s assertion of 9% of prejudgment interest pursuant to §408.020, RSMo.

36. Lender’s right to jury. Right to jury trial is inviolate unless waived as provided for by § 510.190.2, RSMo. Holm, et. al. v. Wells Fargo Home Mortgage, Inc. et. al., No. 95755 (Mo. banc, February 28, 2017).

Plaintiffs Holm filed a quiet title action against Freddie Mac and Wells Fargo arising out of Wells Fargo’s foreclosure of their home in 2008, including also wrongful foreclosure. Wells Fargo was servicer of the loan on behalf of Freddie Mac. The dispute began when the Holmes suffered storm damage paid by an insurance check that Wells Fargo failed to endorse and return or apply. Instead, Wells Fargo declared default and accelerated the debt. Freddie Mac purchased at the foreclosure sale. The trial court found numerous abuses committed by both Wells Fargo and Freddie Mac so that their pleadings were stricken and they were not allowed to participate at trial. The mortgage companies demanded a jury trial which was denied. After bench trial the trial court found compensatory damages, emotional distress, and punitive damage applied on Plaintiffs’ wrongful foreclosure claim and quieted title in Plaintiffs. This appeal followed.

Were sanctions imposed an abuse by the trial court’s discretion? No, clear and repeated violations were purposefully obstructive and continued despite numerous warnings.

Was there a clear right to foreclose? No, Plaintiffs were not in default on their loan at the time of foreclosure, a fact question decided and not one of law for review.

Was there a right to jury trial that was violated? Yes, the mortgage companies never waived this right which is inviolate. Mo. Const. Art. I § 22(a). Damages remain for a jury to determine against the mortgage companies on the tortious wrongful foreclosure claim.

Held: Judgment finding the mortgage companies liable for wrongful foreclosure is affirmed, but the

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remainder reversed and remanded for the limited purpose of a jury determining what actual and punitive damages the Plaintiffs are entitled to recover.

37. Landlord and tenant entitled to jury. Parties to a rent and possession action are entitled to a trial by jury in associate circuit court. Brainchild Holdings, LLC v. Cameron, No. 96376 (Mo. banc, December 5, 2017), Russell, J.

Brainchild (Landlord) sued Cameron (Tenant) on a written lease for rent and possession (Chapter 535). Tenant affirmatively averred violation of implied warranty of habitability for defects requesting jury trial. The trial court denied Tenant’s request for jury trial and entered judgment after bench trial in favor of Landlord. On appeal of denial of jury trial, the Missouri Apartment Association filed an amicus brief in support of Landlord.

In amending § 535.110 in 2014 to remove trial de novo to the circuit court, was the right to jury trial also removed? No. The right to jury trial in Missouri “shall remain inviolate.” Mo. Cont. Art. XIII, Section 8 (1820). Nothing in § 535.040.1 specifically precludes a jury trial. Held: Judgment reversed, and case remanded.

38. Restrictions. Lack of mechanism to enforce covenant to proportionately impose road maintenance responsibilities on lot owners renders covenant void for vagueness. Wagner, et al. v. Nolan, No. 80244 (Mo. App. W.D. March 13, 2018).

The Wagners and Nolan reside in a single family residential subdivision in Kingsville, Missouri. The Wagners purchased in 2000, Nolan purchased his lot in 2003. Restrictive covenants of record prohibit (1) commercial use of property in the subdivision and (2) that the 17 lot owners proportionately maintain the roads. Nolan operated a commercial tow service out of his home for years and refused to pay his share of road maintenance, $148.04. On 9/30/16 the trial court found Nolan’s tow operation a violation and enjoined his further tow operation, but denied the request for his share of road maintenance. Each appealed.

Does Nolan owe his proportionate share of road maintenance? No. The covenant was written without an express mechanism to enforce. Who may request repairs was not expressly provided for so the general maintenance covenant was too vague to enforce.

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Did allowing Nolan to operate a tow service for 14 years out of his home constitute a waiver of the commercial use restriction? No, His violation became more pronounced over time. Restriction enforceable.

39. TOD. Dissolution of marriage terminates Transfer on Death (TOD) on certificates of ownership or titles as of the date the marriage dissolved or annulled. In Re Estate of Matthew McWilliams, Deceased, et. al. v. Mayer, et. al., No. 35007 (Mo. App. S.D., April 23, 2018), Bernstein, J.

In 2004-05 Matthew McWilliams bought a bass boat, motor and two (2) trailers, all titled in his name transfer-on-death (TOD) to his then wife, Appellant Lisa. Matthew later was awarded these titled assets when they divorced, but he failed to re-title or change the TOD designations. Matthew died intestate and his ex-wife Lisa claimed these items based on TOD. At a discovery-of-assets trial on stipulated facts the TOD’s were ruled revoked as of the date of their divorce by operation § 461.051.1, RSMo.

Were the TOD provisions effective after marriage dissolution? No. The 1995 rewrite of Missouri’s Nonprobate Transfers Law (MNTL) dealt with marriage dissolutions and specifically termination of TOD by the Missouri Director of Revenue on Titles.

40. Construction of documents. Latent ambiguity in written lease enables intent to be determined from extrinsic evidence, justifying the limits of a written lease and supporting the existence of an oral lease of the remainder. Dunn v. Baker, No. 105336 (Mo. App. E.D., November 21, 2017).

Baker (“Tenant”) leased commercial space from Dunn (“Landlord”) for a salon business on March 2, 2016, described as “3000 Wyoming Ave.” Landlord filed for rent and possession of “3000A Wyoming”, an upstairs unit, on November 16, 2016 seeking past due rent of $2,000. Tenant defended that payments were current, claiming the entire building one and the same.

At trial, Landlord’s evidence was that street level was 3000 Wyoming Ave., a commercial space, and upstairs was separately residential, orally leased as such with repairs to be made by Tenant at a favorable rate. Tenant testified she had used the upstairs all along and that once improved she would have to pay more but no

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agreement was reached. The trial court found Tenant’s version not credible and believed Landlord’s version that the parties had verbally agreed to separate terms for the upstairs. This appeal followed with Tenant claiming the lease ambiguous, to be construed against the drafter, Landlord.

Held: Affirmed. Was the contract ambiguous in describing two units as “3000 Wyoming”? Yes, and this allowed the trial court to consider extrinsic evidence to interpret the parties’ intent to be the commercial space leased in writing was only as to the downstairs and is supported by substantial evidence. The upstairs agreement was separate, and oral, on a month-to-month basis, again with damages supported. Judgment for Landlord affirmed.

41. Owner opinion of value. An owner’s testimony as to value at trial for condemnation purposes necessarily includes as relevant inquiry that owner’s background for qualification purposes. Northeast Public Sewer District of Jefferson County, et. al. v. Feucht, No. 104862 (Mo. App. E.D., December 19, 2017).

NE Public Sewer District (“District”) took an easement from Feucht by condemnation for $570. Feucht filed exception and after trial the jury awarded him $11,500, the value amount he testified to as owner at trial. On appeal, the District argued that it was error to allow Feucht to have testified at trial regarding his military service. No objection was made to that testimony at the time, although even if objected to at trial, such background was relevant as to Feucht’s qualifications to testify to the value of his own property before and after condemnation. Pro se on appeal, Feucht was awarded his costs of $350 to be paid by opposing counsel for the frivolous appeal.

42. Property rights. Visibility is not a valuable property right in Missouri. Scott Family Properties, LP v. Missouri Highways and Transportation Commission, No. 108336 (Mo. App. E.D., February 13, 2018).

Plaintiff Scott filed suit for inverse condemnation based on nuisance for MODOT’s install of a sound wall separating Interstate 64 from Plaintiff’s office building adjacent, claiming the wall blocked Plaintiff’s ability to attract tenants. The trial court dismissed the petition holding landowner has no legal right to visibility and this appeal followed.

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Held: Affirmed. On de novo review, accepting Plaintiff’s facts as true, did Plaintiff state a cause of action? No. While inverse condemnation is the exclusive remedy when private property is taken or damaged by an entity with power of eminent domain, does MODOT’s failure to conduct public comment as required by its own policy before building same constitute an unlawful act (unreasonable)? No. Even if unreasonable to have not provided notice before building same, there was no injury. Why? Because visibility is not a valuable property right in Missouri. 44 Plaza, Inc. v. Gray-Pac Land Co., 845 S.W.2d 576 (Mo. App. E.D., 1992); Forty Mill Realty Venture v. State ex rel. Missouri Highways & Transportation Dept., 872 S.W.2d 528 (Mo. App. E.D. 1994). Judgment of Dismissal affirmed.

43. Vague land description. Contract to sell “land belonging to me” by handwritten memo was sufficient with reference to partitioned land to enforce and satisfied statute of frauds. Spencer v. Sanchez, et al., No. 34846 (Mo. App. S.D., March 12, 2018).

Siblings Mary Sue, Paul and other siblings inherited their mother’s land jointly in 2002. In 2004 all siblings staked out a of the land with the help of a surveyor. On December 22, 2004, in a handwritten document, Mary Sue offered to sell her land to Paul, with Paul accepting having paid or tendered the sale price to close. When Mary Sue refused to close Paul filed for specific performance. Adopting the partition legal description, the trial court entered judgment for specific performance and this appeal followed.

Held: Affirmed. Did the handwritten document contain sufficient land description to satisfy the statute of frauds for enforcement? Yes, both parties’ actions evidenced a contract of her partitioned land by Mary Sue to Paul of her “land belonging to me.” Judgment affirmed.

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