Preview:

In the Missouri Court of Appeals
Eastern District

DIVISION ONE

AMBER M. MCCLAIN, f/k/a   ) No. ED93184
AMBER M. BURKE, and   )
ROY A. DILLON,    )            )
Respondents,    ) Appeal from the Circuit Court
      ) of Lincoln County
vs.      )
      )
GARY MICHAEL HARTLEY,  ) Honorable Amy Johanna Kinker       )
Appellant.    ) FILED:  August 31, 2010
Gary Hartley ("Seller") appeals the trial court's decision to award damages to Amber McClain and Roy Dillon (collectively, "Buyers").  We reverse and remand.
I.  BACKGROUND
Seller owned real estate ("the Property") on which a permanently affixed mobile home was located.  People's Bank and Trust ("the Bank") held a deed of trust on the property.  In March 2005, Buyers executed a contract with Seller to purchase the Property via a contract for deed.  The contract noted the Bank's deed of trust.  The purchase price was fixed at $82,900; Buyers made a down payment of $22,900 and the remaining $60,000 was to bear 9% interest per annum with payments to Seller in equal monthly installments of $482.77 beginning April 12, 2005.  
The contract provided that upon Buyers' timely payment of all sums due and owing under the contract, Seller would supply a General Warranty Deed to Buyers.  The contract required Buyers to pay the real estate taxes on the Property and provide a receipt to Seller showing proof that the taxes had been paid.  Buyers were also required to maintain insurance naming the Bank as the principal loss payee.  Buyers agreed to exhibit to Seller proof of insurance when requested.  
Buyers were granted the right to prepay the debt without penalty.  The contract also provided that if Buyers failed to make any payments when due, whether for the purchase price, taxes or insurance for a period of 30 days after Buyers received Seller's written notice of default, the contract would be deemed null and void and all sums paid by Buyers prior to the default would be retained by Seller as liquidated damages.  The contract requires a refund of all monies paid upon Seller's failure to furnish a General Warranty Deed after all payments had been timely made.  
The record before us is murky, at best.  Apparently the Property was being used to secure multiple notes Seller owed to the Bank.  Buyers failed to make payments on a regular or timely basis, failed to obtain insurance and failed to pay the taxes.  Seller sent letters to Buyers advising them of these failures, but never declared a default on the contract.  At one point, Buyers were at least $3,800 behind on the various payments.  In 2007, the Bank began foreclosure proceedings against the Property, eventually foreclosing on November 30, 2007.  Seller's partner in a business venture later paid off all of Seller's notes at the Bank and acquired the Property.  Buyers vacated the premises after the foreclosure.
II. DISCUSSION
Buyers filed suit requesting recovery under multiple theories.  The First Amended Petition contained five counts.  Count I alleged Breach of Contract and sought recovery of all funds paid by Sellers to Buyer (an amount

Download 40855.pdf

Missouri Law