Cowbell, LLC v. BORC Building & Leasing Corp.
2010 Mo. App. LEXIS 1498
| Mo. Ct. App. | 2010Background
- BORC Building and Leasing Corp. and Knight Construction Co. owned ~12 acres of undeveloped land in Independence, MO and executed an Auction Contract and a Sales Contract in February 2007 with Land Source broker.
- Auction March 2007 was no-reserve; Cowbell bid $30,250 and wired funds, but the Corporations refused to deed or accept payment.
- Cowbell sued for breach and sought specific performance; the Corporations raised capacity and unconscionability defenses.
- Bench trial in 2008: appraiser valued the land higher than assessed; the trial court found all owners signed and bound by contracts and rejected unconscionability as a valid defense.
- Judgment ordered specific performance, divestment of title to Cowbell, and awarded Cowbell partial attorney fees; on appeal, Cowbell sought additional fees.
- Court affirmed trial court, awarded Cowbell appellate fees, and remanded for a precise determination of on-appeal fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of contract execution under corporate procedure | Corporations lacked authority and failed formalities under §351.400. | All ownership interests signed; formalities complied in substance; contract valid. | Execution valid; noncompliance with formalities not fatal when all owners signed. |
| Effect of unconscionability on specific performance | No-reserve sale with price inadequacy shows unconscionability. | Circumstances do not show unfair surprise or oppression; no unconscionability. | No unconscionability; specific performance affirmed. |
| Attorney fees under contract on appeal | Contract allows fees to prevailing party; fees on appeal should be limited. | American Rule applies; exceptions require statute or contract. | Contractual fees allowed; remand for amount of appellate fees. |
| Attorney fees on trial and related costs | Prevailing party entitled to fees incurred in enforcing contract. | Fees should be limited by contract; trial costs proper. | Fees for enforcement awarded consistent with contract; trial court to determine precise amount. |
Key Cases Cited
- Beaufort Transfer Co. v. Fischer Trucking Co., 451 S.W.2d 40 (Mo. banc. 1970) (compliance with formalities not fatal where all owners signed)
- Union National Bank v. Shoemaker, 68 Mo.App. 592 (Mo. App. 1897) (the act of all shareholders is the act of the corporation)
- Beaufort, supra, 451 S.W.2d 40 (Mo. banc. 1970) (protects stockholders; nonfatal noncompliance with procedure)
- Murphy v. Carron, 536 S.W.2d 30 (Mo. banc. 1976) (standard of review for bench-tried cases)
- Landers v. Sgouros, 224 S.W.3d 651 (Mo. App. S.D. 2007) (equity and contract principles guide denial or grant of specific performance)
- Rx Recalls, Inc. v. Devos Ltd., 317 S.W.3d 95 (Mo. App. E.D. 2010) (court may award appellate attorney fees when contract provides)
- Rosehill Gardens, Inc. v. Luttrell, 67 S.W.3d 641 (Mo. App. W.D. 2002) (American Rule exceptions for contractually provided fees)
- Vaughn v. Willard, 37 S.W.3d 413 (Mo. App. S.D. 2001) (contractual attorney fees in specific performance cases)