Community Title Co., Plaintiff/Appellant, v. Stewart Title Guaranty Co., Defendant/Respondent.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Eastern District Case Style: Community Title Co., Plaintiff/Appellant, v. Stewart Title Guaranty Co., Defendant/Respondent. Case Number: 72816 Handdown Date: 04/07/1998 Appeal From: Circuit Court of St. Louis County, Hon. James R. Hartenbach Counsel for Appellant: Thomas A. Connelly Counsel for Respondent: Thomas Cummings Opinion Summary: Appellant Community Title Co.'s original claim for breach of contract against respondent Stewart Title Guaranty Co. alleging failure to pay money due was dismissed without prejudice over four years after the cause of action accrued. Appellant refiled the claim in this action approximately fifteen months later. The trial court found the five-year statute of limitations barred this action and awarded respondent summary judgment. REVERSED AND REMANDED. Division Two holds: The trial court erred in granting respondent's motion for summary judgment because appellant's claim was not time barred in that the ten-year statute of limitations, rather than the five-year statute, applies to appellant's cause of action. Citation: Opinion Author: Mary Rhodes Russell, Judge Opinion Vote: REVERSED AND REMANDED. Knaup Crane, P.J., and J. Dowd, J., concur. Opinion: Community Title Company ("appellant") appeals from an order of the Circuit Court of St. Louis County granting summary judgment to Stewart Title Guaranty Company ("respondent"). Appellant's original claim against

respondent for breach of contract in failing to pay money due was dismissed without prejudice over four years after the cause of action accrued. Appellant refiled the claim approximately fifteen months later, which was beyond the five-year breach of contract statute of limitations. The trial court held that appellant's claim was time barred by the five-year statute of limitations. We find, however, that the ten-year statute of limitations for money due under a writing is applicable. We reverse and remand for further proceedings. In 1981 appellant and respondent entered into a title insurance underwriting agreement. The agreement generally provided that appellant would serve as respondent's agent for the issuance of title insurance policies. Under the agreement, appellant pledged to assist respondent in establishing other title insurance agencies ("agents"). In return, respondent pledged to pay appellant a percentage of its receipts from those agents. On June 30, 1992, respondent filed suit against appellant for breach of contract seeking underwriter's fees allegedly due to it pursuant to the underwriting agreement. Appellant asserted a counterclaim seeking (1) an accounting, and (2) payment of money due under the agreement. On May 10, 1995, the trial court dismissed appellant's counterclaim without prejudice. Appellant filed the current petition on August 30, 1996, reasserting its cause of action against respondent. Respondent filed a motion for summary judgment claiming that appellant's cause of action was barred by the five-year statute of limitations. Appellant, along with a reply to respondent's motion, filed its own motion for partial summary judgment, arguing that the ten-year statute of limitations was applicable. The trial court entered an order granting respondent's motion for summary judgment and denying appellant's motion for partial summary judgment. This appeal follows.(FN1) Appellate review of the propriety of summary judgment is essentially de novo. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The record is viewed in the light most favorable to the party against whom summary judgment was entered, and that party is afforded all reasonable inferences that may be drawn from the evidence. Id. Summary judgment will be affirmed on appeal if the reviewing court determines that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. General Motors Corp. v. City of Kansas City, 895 S.W.2d 59, 61 (Mo.App. 1995), cert. denied, 116 S.Ct. 277 (1995). Section 516.110(1) RSMo 1994(FN2) states that a ten-year statute of limitations applies to "[a]n action upon any writing, whether sealed or unsealed, for the payment of money or property." Section 516.120(1) provides a five-year statute of limitations for "[a]ll actions upon contracts, obligations or liabilities, express or implied, except those mentioned in section 516.110. . . ."

Appellant claims that the trial court erred because the agreement which the parties entered into was a promise to pay money and, therefore, the agreement should be governed by the ten-year statute of limitations. Both parties agree that appellant's cause of action accrued, if at all, no later than February 1991. Appellant's original filing in 1992 was timely under either the five or ten-year statute of limitations. When the trial court dismissed appellant's claim, in May 1995, less than a year remained before expiration of the five-year statute of limitations. While the savings statute provides another year for refiling following the dismissal of a timely filed claim, appellant's refiling, in August 1996, was outside that window. Thus, if the five-year statute of limitations applies to appellant's claim, it is time barred. But if the ten-year statute of limitations applies, appellant's August 1996 filing is timely. After the trial court's decision, our state Supreme Court clarified in Hughes Dev. Co. v. Omega Realty Co., 951 S.W.2d 615 (Mo. banc 1997), what constitutes a "writing . . . for the payment of money or property" for the purposes of section 516.110(1). Observing the plain meaning of the statute, the Court explained that the ten-year statute of limitations applies to every claim for breach of contract in which the plaintiff seeks a judgment from the defendant for payment of money the defendant agreed to pay in a written contract. Hughes, 951 S.W.2d at 617. Respondent maintains that Hughes does not disturb the rule that to fall within the ten-year statute of limitations, the promise to pay must be unconditional.(FN3) Respondent asserts that the underwriting agreement at issue here does not contain an unconditional promise to pay money. Rather, respondent insists, the agreement involves a contingent promise, and thus, the five-year statute of limitations applies. The agreement states, in pertinent part: "[Respondent] shall . . . compensate [Appellant] as follows: Pay [Appellant] annually . . . twenty percent (20%) of the cash amount received by [Respondent] from such Agents." Respondent contends that whether it ever became obligated to pay money to appellant under this provision can only be proved by facts extrinsic to the agreement, including the agents' performance of services for customers, the customers' payment to the agents, and respondent's receipt of cash from the agents. The Supreme Court explained in Hughes that "[s]ection 516.110(1) imposes no requirement that the amount the defendant owes as a result of the written contract be determinable without resort to extrinsic evidence and neither shall we." Hughes, 951 S.W.2d at 617. Hughes involved a suit on a contract under which the defendant agreed to pay plaintiff a percentage of the management fees that it collected from third parties. Likewise, in this case, appellant sought a judgment against respondent for a percentage of what respondent received from its agents, pursuant to the agreement. Such a cause of action, according to Hughes'

interpretation of section 516.110(1), falls within that ten-year statute of limitations as it is a claim seeking payments due under a writing. Respondent next asserts that new rules of procedural law are applied prospectively only. Jorgensen v. City of Kansas City, 725 S.W.2d 98, 105 (Mo.App. 1987). Respondent argues that Hughes constitutes a change in procedural law which, therefore, operates prospectively and cannot be applied retroactively to this case. But the Supreme Court in Hughes did not change the law. Hughes merely clarified the meaning of the statute. To the extent that Hughes differs from prior decisions of the Courts of Appeals, it nevertheless applies retroactively. "When 'former decisions are found to have approved an incorrect rule of general or substantive law, we have, in overruling such former cases, applied the correct rule in the case in which it is announced, and in doing so made it retroactive in effect, and have thereafter applied the correct rule in all cases coming before us, though in doing so it operates retroactively.' This, because the ruling in the earlier cases 'never was the law and the case in hand is decided the same as if such overruled case[s] had never been written.' Hawkins v. Missouri State Employees' Retire. Sys., 487 S.W.2d 580, 584 (Mo.App. 1972) (quoting Koebel v. Tieman Coal & Material Co., 85 S.W.2d 519, 524-525 (1935)). The trial court erred in applying the five-year statute of limitations contained in section 516.120(1) and in entering summary judgment for respondent. The judgment of the trial court is reversed and the cause is remanded for further proceedings. Footnotes: FN1. Respondent filed a motion to dismiss the appeal or in the alternative to strike the appendix to appellant's brief. We deny the motion to dismiss, but grant the motion to strike the appendix. FN2. All statutory references hereinafter are to RSMo 1994. FN3. See, Superintendent of Ins. v. Livestock Market Ins. Agency, 709 S.W.2d 897 (Mo.App. 1986). Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.