Midland Property Partners, LLC v. Watkins
416 S.W.3d 805
Mo. Ct. App.2013Background
- Appellant Richard C. Watkins challenges a judgment in favor of Midland Property Partners, Jenkins, and the Horstmann Trusts arising from breach-of-note claims.
- Watkins executed four promissory notes totaling $79,500 on January 19, 2009 to Respondents to fund his 30% MCI Partners ownership.
- Four corresponding guaranties were signed contemporaneously, each guaranteeing the Notes and containing jury-waiver provisions.
- Trial focused on whether Respondents could enforce the Notes despite not having the original instruments; a jury trial was waived.
- Circuit court allowed amended pleadings to reflect lost-note evidence and found Respondents could enforce under loss-of-possession doctrine; set-off was arbitration-bound.
- Court reversed the attorneys’ fees portion, holding the contract did not expressly authorize fee-shifting, while affirming the rest of the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jury waiver validity | Watkins argues guaranties don’t bind him to jury waiver for Note claims. | Respondents contend contemporaneous signing and explicit waiver in guaranties bind Watkins. | Waiver valid; circuit court did not err in striking jury trial demand. |
| Enforcement of lost notes | Respondents failed to prove they held the Notes and could enforce without original instruments. | Lost-note enforcement allowed if possession was at one time, not transferred, and current whereabouts unknown. | Evidence supports enforcement under §400.3-309; Respondents entitled to enforce lost notes. |
| Rule 55.33 amendments | Amendment post-trial was prejudicial to Watkins. | Amendments conformed pleadings to trial evidence and were proper. | No reversible error; amendments proper and lack of prejudice shown. |
| Set-off/arbitration scope | Set-off claim should be adjudicated outside arbitration. | Disputes fall within broad arbitration provision of Operating Agreement. | Arbitration bound; circuit court without authority to decide set-off. |
| Attorneys’ fees recoverability | Fees were contractually permitted as costs under the Notes. | Costs do not include attorneys’ fees unless expressly authorized by contract. | Fees not recoverable; contract did not expressly authorize attorneys’ fees; reverse that portion. |
Key Cases Cited
- Bydalek v. Brines, 29 S.W.3d 848 (Mo.App. S.D. 2000) (right to jury trial; waiver must be explicit)
- Savannah Place, Ltd. v. Heidelberg, 122 S.W.3d 74 (Mo.App.S.D. 2003) (contractual waiver admissible if knowingly and voluntarily executed)
- Malan Realty Investors, Inc. v. Harris, 953 S.W.2d 624 (Mo. banc 1997) (contractual waiver requires clear language)
- Dunn Indus. Grp., Inc. v. City of Sugar Creek, 112 S.W.3d 421 (Mo. banc 2003) (contemporaneous instruments construed together to ascertain intent)
- Hulsey v. West, 966 F.2d 579 (10th Cir. 1992) (cited for note that waivers may affect multiple instruments when contemporaneous)
- Popular Leasing USA, Inc. v. Terra Excavating, Inc., No. 4:04CV1625 CAS, 2005 WL 2468069 (E.D. Mo. 2005) (WL; treat as non-official reporter; discuss contemporaneous instruments)
- Goldsmith, 239 S.W.3d 1 (Mo. banc 2009) (attorneys’ fees generally not recoverable absent express contractual authorisation)
- Mason, 203 S.W.2d 750 (Mo.App. K.C. 1947) (collection expenses typically do not include attorneys’ fees unless expressly provided)
- Champion Sports Center, Inc. v. Peters, 763 S.W.2d 367 (Mo.App. E.D. 1989) (contractual costs/expenses may include fees when contract so provides, but Goldsmith controls)