Oak Bluff Partners, Inc., Respondent/Cross-Appellant, v. Robert E. Meyer, Appellant/Cross-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: Oak Bluff Partners, Inc., Respondent/Cross-Appellant, v. Robert E. Meyer, Appellant/Cross- Respondent. Case Number: 73448 and 73495 Handdown Date: 12/08/1998 Appeal From: Circuit Court of St. Louis County, Hon. Kenneth M. Weinstock Counsel for Appellant: Barry S. Ginsburg Counsel for Respondent: Richard A. Wunderlich and Jeana D. McFerron Opinion Summary: Oak Bluff Partners, Inc. and Robert E. Meyer each appeal a judgment entered after a jury trial. Judgment was entered in favor of Meyer on Count I for breach of contract and Count III for punitive damages. Judgment was entered in favor of Oak Bluff on Count II for conspiracy. Meyer appeals Count II and argues that the trial court erred in entering judgment for Oak Bluff because: (1) Instruction No. 7 incorrectly stated the law and erroneously instructed the jury; (2) Oak Bluff failed to pursue its statutory remedy under Section 443.130 RSMo 1994; and (3) as a matter of law, a claim for conspiracy does not lie. Oak Bluff appeals Count I and argues that the trial court erred in not granting a directed verdict or entering judgment notwithstanding the verdict on Count I because Meyer admitted he breached his contractual obligations. AFFIRMED IN PART; REVERSED IN PART. Division Two holds: Meyer had a right under the Deed of Trust to demand full satisfaction, including attorneys' fees, before giving Oak Bluff a Deed of Release. Therefore, Meyer did not commit an unlawful act to support a claim for civil conspiracy, and the trial court erred in entering judgment against Meyer in Count II. The trial court did not err in not granting a directed verdict or judgment notwithstanding the verdict for Oak Bluff in Count I because there is competent evidence to support the jury's verdict. Count I is affirmed. Count III is not appealed and, therefore, also affirmed. Citation:

Opinion Author: Richard B. Teitelman, Judge Opinion Vote: AFFIRMED IN PART; REVERSED IN PART. J. Dowd and Crahan, JJ., concur. Opinion: Oak Bluff Partners, Inc. ("Oak Bluff") and Robert E. Meyer ("Meyer") each appeal a judgment entered after a jury trial in the Circuit Court of St. Louis County by the Honorable Kenneth M. Weinstock. This appeal involves the question of whether Meyer can be held liable in money damages for his alleged denial of Oak Bluff's right to redeem under Section 443.400 RSMo 1994 as a result of Meyer's refusal to accept a tender of payment that did not include attorneys' fees. We reverse in part and affirm in part. Background On July 21, 1995, Oak Bluff, C.E. "Bud" Simmons, Jr. ("Simmons") and Meyer entered into a Settlement Agreement compromising numerous claims and lawsuits between Meyer and Simmons relating to the Oak Bluff condominium project and their relationship as shareholders of Oak Bluff (the "Settlement"). These disputes principally arose out of Oak Bluff's business of building and selling condominiums at the Lake of the Ozarks. Pursuant to the Settlement, Meyer transferred to Oak Bluff his ownership interest in Oak Bluff. In exchange, Oak Bluff delivered a cashier's check made payable to Meyer for $155,000 at closing. Oak Bluff and/or Simmons also agreed to pay Meyer an additional $100,000 either (a) at such time as the sale of a total of five (5) condominium units in Building #6 at Oak Bluff was closed, or (b) on August 1, 1996, whichever occurred first. The obligation to pay Meyer $100,000 was secured by a deed of trust dated July 29, 1995 (the "Deed of Trust"). Also, as required by the Settlement Agreement, Meyer and Oak Bluff entered into a Consulting Agreement dated July 28, 1995, providing that at the closing of the sale of each condominium unit, beginning with the eleventh condominium unit sold, Meyer would receive a $5,000 consulting fee and that these consulting fee payments would continue until a total of $200,000 had been paid to Meyer. Oak Bluff's payment obligations to Meyer under the Consulting Agreement were also secured by the Deed of Trust. The Deed of Trust provided that if Oak Bluff defaulted on its obligations to pay Meyer under the Settlement Agreement or Consulting Agreement, Meyer could accelerate the payments due under such agreements and/or foreclose on the property secured by the Deed of Trust. The Deed of Trust further provided in part: 4.Payment of Contract Debt. Grantor [Oak Bluff] shall promptly pay when due all amounts required under the Settlement Agreement and Consulting Agreement and this Deed of Trust, and shall perform all covenants in this Deed of Trust. . . . .

12.Costs of Enforcement. Grantor [Oak Bluff] agrees to the extent permitted by law, to pay all costs, expenditures and expenses which may be paid or incurred by or on behalf of Trustee for attorneys' fees, appraisers' fees, publication costs and costs of procuring all abstracts of title, title searches and examination, title insurance policies, tax and lien searches, and similar data and assurances with respect to title as Beneficiary or Trustee may deem to be reasonably necessary either to prosecute the foreclosure or to evidence to bidders at any sale. All such expenses shall become additional indebtedness secured hereby and shall be immediately due and payable. On July 21, 1996, Meyer sent a letter to Simmons and Oak Bluff reminding them that they were jointly obligated to pay Meyer $100,000 on August 1, 1996, and requesting that the payment be made to him at his office in Chesterfield, Missouri on that date. On August 1, 1996, Meyer received a letter from Barry A. Ginsburg ("Ginsburg"), the attorney for Oak Bluff and Simmons, via facsimile. The letter advised Meyer that there were potential problems with a building that had been completed with Meyer's involvement. Pursuant to the agreement between Meyer and Oak Bluff, Meyer had an obligation to indemnify Oak Bluff if such a problem occurred. The letter further advised that Oak Bluff could possibly raise a claim for indemnification against Meyer and that if this occurred, Oak Bluff could be required to escrow any monies due to Meyer to secure payment of such potential liabilities. In response to this letter, on the afternoon of August 1, 1996, Henry F. Luepke, Jr. ("Luepke"), Meyer's attorney and Trustee under the Deed of Trust, faxed a letter to Oak Bluff and Ginsburg advising them that Simmons and Oak Bluff were in default of their payment obligations under the Settlement Agreement, and that, pursuant to the Deed of Trust, Meyer was accelerating all obligations of Simmons and Oak Bluff under the Settlement Agreement and demanding the $100,000 payment due thereunder, plus interest and costs of collection. This letter also advised Simmons and Oak Bluff that, pursuant to the Deed of Trust, Meyer was accelerating all obligations of Simmons and Oak Bluff under the Consulting Agreement and demanding the $200,000 due thereunder, plus interest and costs of collection. On August 3, 1996, an envelope arrived at Meyer's legal residence in Jefferson City, Missouri containing a facsimile copy of a photo copy of a check (the "Facsimile-Copied Check") that had been completed so as to be drawn on Oak Bluff's account and to be made payable to Meyer in the amount of $100,000. The Facsimile-Copied Check was marked paid "under protest." The envelope was postmarked August 1, 1996, Rock Island County, Illinois. On August 9, 1996, Luepke sent a letter to Ginsburg, via messenger, returning the Facsimile-Copied Check and advising that unless the $300,000 accelerated payment was received by Meyer, he was going forward with the foreclosure of Oak Bluff Condominiums, as permitted by the Deed of Trust. On August 12, 1996, Luepke received in the mail an original check number 1084 drawn on Oak Bluff's account and payable to Meyer for $100,000. Meyer refused to accept

the payment and returned it to Oak Bluff. On August 23, 1996, Oak Bluff filed a Petition for Declaratory Judgment and Injunction against Meyer. Oak Bluff sought to prevent Meyer from advertising Oak Bluff Condominiums for sale or from taking any steps in furtherance of foreclosure. On August 26, 1996, Oak Bluff's Motion for Temporary Restraining Order was heard and denied by the Honorable Robert L. Campbell in the Circuit Court of St. Louis County. On September 4, 1996, Judge Campbell held a hearing on Oak Bluff's request for a preliminary injunction and, on the same day, denied the motion. In early September, 1996, Simmons advised Luepke that Oak Bluff wanted to redeem the property pursuant to Missouri law. In response, Luepke advised Simmons that Oak Bluff must pay attorneys' fees owed to Lewis, Rice & Fingersh, L.C. ("Lewis, Rice") in order to redeem the property. On or about September 11, 1996, Oak Bluff tried to close on one of the Oak Bluff units. To clear the title on the unit and allow the closing to take place, Oak Bluff delivered two cashier's checks to the title company in Camdenton, Missouri totaling $237,217.99 in satisfaction of the Deed of Trust executed by Oak Bluff. One of the cashier's checks was in the amount of $20,002.50 and made payable to Lewis, Rice. Meyer then executed a full Deed of Release acknowledging satisfaction of the Deed of Trust executed by Oak Bluff and releasing the lien on Oak Bluff Condominiums. On September 13, 1996, this full Deed of Release was recorded in the Office of the Recorder of Deeds in Camden County, Missouri. On or about October 1, 1996, Oak Bluff filed its First Amended Petition seeking to recover against Meyer for breach of contract (Count I), conspiracy (Count II), and punitive damages (Count III). In Count I, Oak Bluff claimed that the declaration of default by Meyer on August 1, 1996 constituted a breach of contract because the default was declared prior to the end of the day on August 1 and the payment was not delinquent. In Count II, Oak Bluff claimed that on September 10, 1996 it tendered the amount necessary to redeem the property, but Meyer conspired with others to refuse the tender and, thus, deny Oak Bluff its right to redeem under Section 443.400 RSMo 1994. In Count III, Oak Bluff claimed that Meyer's actions warranted an award of punitive damages against him. The case was tried before a jury, which returned a verdict in favor of Meyer on Oak Bluff's claim for breach of contract on Count I. On Count II, the jury returned a verdict in favor of Oak Bluff on its conspiracy claim and awarded it $75,000 in damages. On Count III, the jury found in favor of Meyer on Oak Bluff's claim for punitive damages. Oak Bluff filed a motion for judgment notwithstanding the verdict on Count I. The trial court denied the motion. Both Meyer and Oak Bluff appeal. Meyer argues that the trial court erred in entering judgment in favor of Oak Bluff on Count II because: (1) Instruction No. 7 incorrectly stated the law and erroneously instructed the jury to award

money damages against Meyer for allegedly denying Oak Bluff its right to redeem under Section 443.440 as a result of Meyer refusing to accept a tender of payment from Oak Bluff that did not constitute full satisfaction of Oak Bluff's obligations under the Deed of Trust; (2) Oak Bluff failed to pursue its statutory remedy under Section 443.130; and (3) as a matter of law, a claim for conspiracy does not lie. Oak Bluff cross-appeals, arguing that the trial court erred in not granting a directed verdict at the close of the evidence and not entering judgment notwithstanding the verdict on Count I because Meyer admitted he breached his contractual obligations by declaring a default and accelerating Oak Bluff's obligations prior to the time the payment from Oak Bluff was due. Neither party appeals the judgment entered in Count III. Meyer's Appeal Meyer argues that the trial court erred in entering judgment in favor of Oak Bluff on Count II for civil conspiracy. We agree. "A civil conspiracy is an agreement between two or more persons to perform an unlawful act, or to use unlawful means to do an act which is lawful." Schott v. Beussink, 950 S.W.2d 621, 627 (Mo.App. E.D. 1997). Civil conspiracy is not itself actionable in the absence of an underlying wrongful act or tort. Hamilton v. Spencer, 929 S.W.2d 762, 767 (Mo.App. W.D. 1996). The conspirators must have "a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement." Id., citing Chmieleski v. City Products Corp., 660 S.W.2d 275, 290 (Mo.App. W.D. 1983). A plaintiff must plead facts that establish the following elements when bringing an action for civil conspiracy: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful acts; and (5) damages. Schott v. Beaussink, 950 S.W.2d at 628. In the case at bar, Oak Bluff alleged that Meyer and Luepke acted together and agreed to deny Oak Bluff's right to redeem unless and until Oak Bluff paid Meyer's attorneys' fees to Lewis, Rice. Oak Bluff further alleged that Oak Bluff's tender of payment to redeem without payment of the attorneys' fees was refused and that Meyer continued to threaten to conduct a foreclosure sale. Oak Bluff also alleged damages. However, Oak Bluff has not proven, nor can Oak Bluff prove, that Meyer committed an unlawful act by refusing to allow Oak Bluff to redeem without paying Meyer's attorneys' fees. Under the Deed of Trust, Oak Bluff conveyed real property in trust as security for an obligation owed to Meyer. Subject to the terms of the Deed of Trust, Meyer would release the lien on Oak Bluff's real property upon Oak Bluff's full satisfaction of the obligation owed to Meyer. However, if Oak Bluff defaulted on its obligation, at Meyer's discretion the

trustee could foreclose on the property and sell it absolutely, using the sale proceeds to satisfy Oak Bluff's obligation to Meyer and to pay the costs associated with the foreclosure. Under Section 443.400, once Oak Bluff defaulted and the trustee began to foreclose, Oak Bluff could stop the foreclosure proceedings by making a payment to Meyer that fully satisfied the obligation owed. Section 443.400 RSMo. When Meyer received full satisfaction, he was required to deliver to Oak Bluff a Deed of Release releasing the lien and clearing Oak Bluff's title to the property. Section 443.060. However, Meyer's duty to provide the Deed of Release did not arise until Oak Bluff had paid "full satisfaction" to Meyer. The threshold issue, then, is whether the payment of "full satisfaction" included payment of attorneys' fees. We find that it does. The terms of the Deed of Trust, which determine the amount necessary for redemption in this case, required the payment of the contract debt and the costs of enforcement, including attorneys' fees. The Deed of Trust provided, in pertinent part: 4.Payment of Contract Debt. Grantor [Oak Bluff] shall promptly pay when due all amounts required under the Settlement Agreement and Consulting Agreement and this Deed of Trust, and shall perform all covenants in this Deed of Trust. . . . 12.Costs of Enforcement. Grantor [Oak Bluff] agrees to the extent permitted by law, to pay all costs, expenditures and expenses which may be paid or incurred by or on behalf of Trustee for attorneys' fees, appraisers' fees, publication costs and costs of procuring all abstracts of title, title searches and examination, title insurance policies, tax and lien searches, and similar data and assurances with respect to title as Beneficiary or Trustee may deem to be reasonably necessary either to prosecute the foreclosure or to evidence to bidders at any sale. All such expenses shall become additional indebtedness secured hereby and shall be immediately due and payable. Pursuant to the Deed of Trust, Oak Bluff's tender of payment to Meyer was required to include payment of the attorneys' fees along with the other amounts due under the Deed of Trust in order to pay "full satisfaction" to Meyer. Meyer was under no obligation to execute a Deed of Release until he received satisfaction under the Deed of Trust freely entered into between the parties. See, e.g. Roberts v. Rider, 924 S.W.2d 555 (Mo.App. S.D. 1996). Oak Bluff argues that the Deed of Trust did not provide for the payment of Meyer's attorney fees, but only for the payment of the trustee's attorneys' fees, and further that the clause in the Deed of Trust upon which Meyer based his claim for attorneys' fees was legally deficient. We find these arguments to be without merit. Though Oak Bluff argues the Deed of Trust only provides for the payment of the trustee's attorneys' fees, the Deed of Trust provides that if Oak Bluff defaulted on its obligation to pay Meyer, Oak Bluff would pay not only the trustee's attorneys' fees, but also the attorneys' fees paid "on behalf of" the trustee. There is nothing in the record before us, nor

was there evidence presented before the trial court, that the attorneys' fees in question were not charged to Meyer as a result of the foreclosure proceedings and the defense of the foreclosure against Oak Bluff's declaratory judgment action and motion for temporary restraining order. Moreover, had Oak Bluff desired to contest the amount of attorneys' fees alleged, or contest whether the Deed of Trust provided that Oak Bluff pay such fees, Oak Bluff could have sought judicial determination as to the amount necessary to redeem the property. Instead, Oak Bluff filed a Petition for Declaratory Judgment and Injunction against Meyer in August, 1996, in an effort to prevent the foreclosure, and failed to argue the alleged impropriety of the demanded attorneys' fees. After Oak Bluff's motion for temporary restraining order and petition for preliminary injunction were denied, Oak Bluff paid Meyer the entire amount he claimed entitlement to, then brought an action against him alleging civil conspiracy. "Civil conspiracy must be supported by clear and convincing proof that the alleged conspirators 'knowingly performed any act or took any action to further or carry out the unlawful purposes of the conspiracy.'" Hamilton v. Spencer, 929 S.W.2d at 767, citing Chmieleski v. City Products Corp., 660 S.W.2d 275, 290 (Mo.App. W.D. 1983) (emphasis ours). Without a showing that Oak Bluff tendered an amount that fully satisfied the debt owed under the Deed of Trust and that Meyer then conspired to refuse the tender and not release the property, Oak Bluff has not presented clear and convincing proof of a necessary element of civil conspiracy, that the actions taken in furtherance of the alleged conspiracy were unlawful. Meyer had a right under the Deed of Trust to demand full satisfaction including attorneys' fees before giving Oak Bluff a Deed of Release. We reverse the trial court's judgment in favor of Oak Bluff on Count II. Oak Bluff's Cross-Appeal On cross-appeal, Oak Bluff argues the trial court erred in not granting a directed verdict at the close of all of the evidence or entering judgment notwithstanding the verdict on Oak Bluff's claim for breach of contract in Count I. We affirm. "A directed verdict or a judgment notwithstanding the verdict is a drastic action, and it should only be granted when reasonable persons could not differ on a correct disposition of the case." Gesellschaft Fur Geratebau v. GFG America Gas Detection, Ltd., 967 S.W.2d 144, 146 Mo.App. E.D. 1998), citing Seidel v. Gordon A. Gundaker Real Estate Co., 904 S.W.2d 357, 361 (Mo.App. E.D.1995). On review, we view the evidence in the light most favorable to the verdict and disregard all contrary evidence. Seward v. Terminal R.R. Ass'n, 854 S.W.2d 426, 428 (Mo. banc 1993); Pace v. Pacific Fire Protection Dist., 945 S.W.2d 7, 8-9, (Mo.App. E.D. 1997). Unless there is a complete lack of evidence to

support it, a jury verdict will not be overturned. Miller v. Gillespie, 853 S.W.2d 342, 344 (Mo.App. E.D.1993). In the case at bar, Oak Bluff failed to make payment on or before August 1, 1996. Though Simmons testified that he mailed a check to Meyer on July 31, 1996, the postmark on the envelope mailed to Meyer was August 1, 1996. The check Meyer received on August 3, 1996, was a facsimile copy of a photocopy of a check drawn on Oak Bluff's account. It was within the jury's discretion to determine whether Oak Bluff defaulted on its obligation to pay Meyer and to determine whether or not Meyer breached the contract. There is competent evidence to support the jury's verdict. We affirm pursuant to Rule 84.16(b). We reverse the judgment entered in Count II. We affirm the judgment entered in Counts I and III. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.