Melson v. Traxler
356 S.W.3d 264
Mo. Ct. App.2011Background
- Traxlers held a first deed of trust on a 94-acre tract; Knight was trustee on that first deed.
- Samuels purchased Phase I (38.25 acres) and granted a first deed of trust to Boone Bank; Traxlers held a second deed of trust on Phase I.
- Samuels obtained construction financing from Boone Bank; Traxlers agreed to partially release their first deed of trust on Phase I in exchange for a second deed of trust on Phase I.
- Boone Title issued title commitments showing both Phase I encumbrances and intended title insurance, and closings occurred with Knight as closing agent.
- Boone Title later failed to secure a partial release from the Traxlers on the Melsons’ Lot 14, despite requesting releases for other Phase I lots.
- Samuels defaulted on their promissory note; the Melsons and First National Bank sought to enforce their rights, challenging the Traxlers’ release obligations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Melsons/First National Bank have a vested right to a partial release of the Traxlers’ deed of trust. | Melsons/First National Bank contend course of conduct created an unwritten obligation. | Traxlers argue second deed of trust is unambiguous and imposes no obligation to issue partial releases. | No vested right; no written modification; summary judgment reversed. |
| Whether the second deed of trust was modified by conduct or by a written modification to require partial releases. | Course of performance modified the deed to require releases for Phase I. | Course of performance cannot modify a clear, unambiguous deed; no written modification exists. | Modification not proven; deed not modified. |
| Whether constructive/actual notice affected enforceability of the release requirement. | Purchasers are bound by recorded instruments and rely on implied releases. | Notice does not create a duty to release where the instrument imposes no obligation. | Constructive/actual notice binds Melsons/Bank to the deed’s terms; lack of obligation to release remains. |
| Whether statute of frauds required writing to modify the deed of trust. | Potential unwritten modification could be enforced. | Contracts (land interests) must be in writing; modification must be in writing. | Deed and any modification must be in writing; no valid modification found. |
| Should the trial court’s grant of summary judgment be affirmed? | Uncontroverted facts support vested right to release. | No vested right; no modification; issues disputed. | Reversed; remanded for further proceedings. |
Key Cases Cited
- Leisure Campground & Country Club L.P. v. Leisure Estates, 372 A.2d 595 (Md. 1977) (vested rights depend on written conditions in the deed of trust")
- Burroughs v. Garner, 405 A.2d 301 (Md.App. 1979) (applies Leisure Campground to partial releases)
- Eisenhart v. Schreimann, 889 S.W.2d 887 (Mo.App. S.D. 1994) (post-default release issues; pre-default payment does not create rights)
- Leggett v. Mo. State Life Ins. Co., 342 S.W.2d 833 (Mo. banc 1960) (parol evidence does not modify clear contract terms; writing required for modifications under statute of frauds)
- Hamrick v. Herrera, 744 S.W.2d 458 (Mo.App. W.D. 1987) (recorded instruments bind purchasers to notice of recitals)
- Oak Bluff Partners, Inc. v. Meyer, 3 S.W.3d 777 (Mo.banc 1999) (contract interpretation of deed of trust terms; reliance on instrument’s terms)
- Ringstreet Northcrest Inc. v. Bisanz, 890 S.W.2d 713 (Mo.App. W.D. 1995) (contract interpretation; termination provisions in deeds of trust)
- St. Louis Union Station Holdings, Inc. v. Discovery Channel Store, Inc., 301 S.W.3d 549 (Mo.App. E.D. 2009) (modification/waiver; written modification required for contracts within statute of frauds)
- Robson v. Diem, 317 S.W.3d 706 (Mo.App. W.D. 2010) (parol evidence rule and validity of seemingly unambiguous instruments)
- ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (summary judgment standard; de novo review)