Franklin Farms, LLC v. N. Am. Auction Co.
554 S.W.3d 497
| Mo. Ct. App. | 2018Background
- In 2008 Franklin Farms and entities owned by Curtis Rodgers entered a written 3‑year farm lease (2009–2011) for about 293 acres; the writing omitted any legal description or county identification of the land.
- The lease provided $50/acre annual rent with specified installment dates and included a possible 3‑year extension if Franklin Farms requested it; Franklin Farms asked to extend and reduce acreage to 214 acres in Dec. 2009, which Respondents accepted.
- Franklin Farms farmed portions of the land and paid rent for five years (2009–2013) including the initial term and two years of the extension.
- In Oct. 2013 Respondents gave notice to evict so they could sell part of the land; Franklin Farms sued in Jan. 2014 for breach and Respondents counterclaimed for breach and asserted the Statute of Frauds defense.
- Trial court found the writing failed the Statute of Frauds (no adequate land description), converted the arrangement to a year‑to‑year tenancy, held Respondents’ Oct. 2013 notice valid to terminate, and denied Respondents’ counterclaim for insufficient evidence. Appellants (Franklin Farms) appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Respondents waived the Statute of Frauds by filing a breach counterclaim | Franklin Farms: filing the counterclaim amounted to admission of the lease terms and waived the defense (or election of remedies required waiver) | Respondents: pleadings did not admit plaintiff’s version; counterclaim alleged materially different terms; no waiver | Court: No waiver; pleadings were not admissions and asserting both defenses/claims was proper under Rule 55.10; election of remedies inapplicable |
| Whether partial performance avoids the Statute of Frauds | Franklin Farms: performed and made expenditures preparing for 2014, so enforcement should be allowed | Respondents: expenditures were preparatory/ancillary and not shown to have been known by Respondents or to create gross injustice | Court: Partial performance exception not met; plaintiff failed to prove a ‘‘virtual fraud’’ or sufficiently definite, relied‑upon acts |
| Whether the written lease satisfied the Statute of Frauds (adequate land description) | Franklin Farms: did not contest trial court’s finding on appeal (but argued exceptions) | Respondents: writing lacked any means to identify the land or county, so it fails the Statute of Frauds | Court: Writing failed Statute of Frauds—no legal description or key to identify the land |
| Effect of Statute failure on tenancy and termination notice | Franklin Farms: contended protections/expectations should apply | Respondents: failure converts agreement to year‑to‑year tenancy and Oct. 2013 written notice (60 days) valid to terminate before 2014 | Court: Failure created a year‑to‑year tenancy; Respondents’ written notice valid to terminate the tenancy before 2014; judgment affirmed |
Key Cases Cited
- Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976) (standard of review for bench trial judgments)
- Jones v. Linder, 247 S.W.2d 817 (Mo. banc 1952) (partial performance must avoid only preparatory/ancillary acts and show virtual fraud)
- Johnson v. Cook, 167 S.W.3d 258 (Mo. App. E.D. 2005) (partial performance exception elements and burden)
- Lundstrom v. Flavan, 965 S.W.2d 861 (Mo. App. E.D. 1998) (Statute of Frauds is an affirmative defense and may be waived)
- Norden v. Friedman, 756 S.W.2d 158 (Mo. banc 1988) (same—affirmative defense waiver principles)
- Doss & Harper Stone v. Hoover Bros. Farms, 191 S.W.3d 59 (Mo. App. S.D. 2006) (writing must describe land or provide means to identify it to satisfy Statute of Frauds)
- Jansen v. Pobst, 922 S.W.2d 43 (Mo. App. S.D. 1996) (oral or defective lease plus rent creates tenancy at will and then year‑to‑year tenancy by operation of law)
- Mika v. Central Bank of Kansas City, 112 S.W.3d 82 (Mo. App. W.D. 2003) (reiterating strict scrutiny of partial performance exception)
- Whittom v. Alexander‑Richardson P’ship, 851 S.W.2d 504 (Mo. banc 1993) (election of remedies doctrine; when inconsistent theories must be elected)
- In re Estate of Daly, 907 S.W.2d 200 (Mo. App. W.D. 1995) (clarifying in which situations election of remedies applies)