551 S.W.3d 561
Mo. Ct. App.2018Background
- Two adjacent Lake Lotawana parcels: S21 (with four registered docks) and SA3B (vacant). Joint trustees (same trustees for two trusts) negotiated sale of S21 to Costello Family Trust (CF Trust) and included a provision in the October 2, 2014 contract that upon improvement of SA3B the far west (covered) dock on S21 would transfer to SA3B; SA3B sale to CF Trust was to follow within a year for $100,000.
- Association deed restriction gave owners of two adjoining lots a 15‑day right of first refusal to buy at the same price and terms once a sale was proposed; notices were sent Oct 8, 2014 for SA3B.
- The Pals (adjoining owners) verbally indicated intent Oct 10 and formally exercised the option Oct 14, 2014. On Oct 12 joint trustees executed an amendment removing the dock transfer term (not communicated to Pals). On Oct 16 trustees contracted to sell SA3B to CF Trust with a stated term of no dock rights.
- On Oct 30, 2015 (closing date), the Pals were presented with documents substituting them as purchasers but containing the no‑dock term; after pressure and threats of CF Trust closing instead, Pals signed under protest and later claimed duress.
- CF Trust sued for declaratory relief that SA3B had no dock rights; Pals sued seeking declaration and specific performance that dock rights transfer upon improvement; cases consolidated. Trial court granted summary judgment for CF Trust; appellate court reversed and remanded.
Issues
| Issue | Plaintiff's Argument (Pals) | Defendant's Argument (CF Trust / Joint Trustees) | Held |
|---|---|---|---|
| Whether the Oct 2, 2014 contract created an enforceable sale agreement for SA3B (including dock term) | Oct 2 contract included offer, acceptance, and consideration for SA3B and its dock term; binding on trustees | Trustees argue sellers lacked authority because parcels were in separate trusts | Court: Oct 2 contract was enforceable as to SA3B; trustees had authority as acting trustees of both trusts |
| Effect of Oct 12, 2014 amendment removing dock term during 15‑day right‑of‑first‑refusal window | Amendment was ineffective because once notice issued the Pals’ right ripened into an irrevocable option that could not be modified for 15 days | CF Trust: Pals only had right of first refusal (not option) so amendment could modify terms | Court: Right of first refusal ripened into a full option when notice issued; Oct 12 amendment was invalid and ineffective |
| Whether the Oct 8 notice (stating "as is, vacant lot" and omitting dock term) limited the Pals to only terms actually disclosed | Pals: deed restriction required sale "upon the same terms" as the underlying contract; Pals exercised option on those terms even though they had not seen the full contract | Defendants: omission meant Pals lacked notice of dock term and cannot enforce an undisclosed term | Court: "as is" and "vacant lot" do not negate conditional dock term; the deed restriction required "same terms" and Pals who exercised the option acquired those terms |
| Validity of documents Pals signed Oct 30, 2015 and duress claim | Pals: signed under duress because CF Trust threatened to close and litigate if Pals refused; thus the October 30 documents are voidable | Defendants: Pals accepted the new documents at closing and waived claims | Court: Duress presents genuine disputed material facts; summary judgment inappropriate on that issue—remand required |
Key Cases Cited
- Doe Run Resources Corp. v. American Guarantee & Liability Insurance, 531 S.W.3d 508 (Mo. banc 2017) (summary judgment standard)
- ITT Commercial Finance Corp. v. Mid‑America Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (de novo review on summary judgment; view record favorably to non‑movant)
- Baker v. Bristol Care, Inc., 450 S.W.3d 770 (Mo. banc 2014) (contract elements: offer, acceptance, consideration)
- Anderson v. Parker, 351 S.W.3d 827 (Mo. App. W.D. 2011) (distinguishing option from right of first refusal)
- Hensley‑O'Neal v. Metro. Nat'l Bank, 297 S.W.3d 610 (Mo. App. S.D. 2009) (definition of option and preemptive rights)
- McNabb v. Barrett, 257 S.W.3d 166 (Mo. App. W.D. 2008) (right of first refusal ripens into option once owner decides to sell)
- Blue Ridge Bank & Trust Co. v. Trosen, 221 S.W.3d 451 (Mo. App. W.D. 2007) (preemption/option principles)
- Gilmore v. Letcher, 508 S.W.2d 257 (Mo. App. 1974) (acceptance within option period creates binding bilateral contract)
- HGS Homes, Inc. v. Kelly Residential Group, Inc., 948 S.W.2d 251 (Mo. App. E.D. 1997) (option is irrevocable offer for stated period)
- Riddle v. Elk Creek Salers, Ltd., 52 S.W.3d 644 (Mo. App. S.D. 2001) (exercise of option creates binding bilateral contract)
- LaRue v. Alcorn, 389 S.W.3d 215 (Mo. App. W.D. 2012) (contracts enforced unless induced by fraud, duress, undue influence)
- Aurora Bank v. Hamlin, 609 S.W.2d 486 (Mo. App. S.D. 1980) (threats to take legal action in bad faith can constitute duress)