Case Summary for April 24, 2012

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Case Summary for April 24, 2012

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

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DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9:30 a.m. Tuesday, April 24, 2012

____________________________________________________________________________________________________

SC92268
State of Missouri ex rel. David M. Nothum and Glenette Nothum v. The Honorable Joseph L. Walsh III, Circuit Judge, St. Louis County Circuit Court
St. Louis County
Order of contempt in debtor examination

Listen to the oral argument:

The Nothums were represented during arguments by Norman W. Pressman of Goldstein & Pressman PC in St. Louis, and Arizona Bank was represented by Jeffrey T. McPherson of Armstrong Teasdale LLP in St. Louis. Judge David Miller, a circuit judge with the 8th judicial circuit (Carroll and Ray counties), sat in this case by special designation in place of Judge William Ray Price and Judge Justine Del Muro, a circuit judge with the 16th judicial circuit (Jackson County), sat in this case by special designation in place of Judge George W. Draper III.

David and Glenette Nothum are considered debtors because of a judgment entered against them in the state of Arizona that was registered in several Missouri counties. After judgment was entered, Arizona Bank and Trust requested several items of discovery from the Nothums and issued several garnishments, but each was denied or returned unsatisfied. The Nothums were ordered to appear on July 28, 2010 before a Missouri trial court for an examination, at which David Nothum asserted the right against self-incrimination in response to all questions except his address. The judge found the Nothums in contempt of court. The Nothums appealed, and the appeals court determined the trial court had exceeded its authority. At a second examination on October 4, 2011 before a Missouri trial court, both Nothums asserted their right against self-incrimination. Arizona Bank presented a grant of immunity under section 513.380, RSMo, from the prosecution to the court signed by an assistant prosecuting attorney. In that proceeding, the trial court determined that the grant of immunity provided the broadest amount of protection and that the Nothums would be shielded from prosecution for any statements made during the examination. Nevertheless, the Nothums continued to assert their rights. The Nothams seek relief from this Court.

The Nothums argue that no orders from the Oct. 4, 2011, proceeding should be enforced, nor should they be compelled to testify. They contend testifying would violate both their state and federal constitutional rights against self-incrimination. The Nothums assert the trial court was required to find that the answer to each question “could not possibly have the tendency to incriminate” but failed to do so. They argue that section 513.380 limits the right to coerce testimony despite the right to self-incrimination to instances of use immunity or immunity from prosecution based on statements made at a debtor examination. The Nothums contend this Court should find that an assistant prosecuting attorney is not authorized by statute to grant immunity for statements at a judgment debtor examination. They assert that section 513.380 only grants that right to prosecuting or circuit attorneys.

Arizona Bank argues that the assistant prosecuting attorney’s grant of immunity is sufficient to compel the Nothums’ testimony. It contends the immunity properly was granted as was intended by section 513.380. Arizona Bank asserts the statute gives the broadest possible immunity. It argues the bank provided the proper findings to the court to hold the Nothums in contempt. Finally, Arizona Bank contends an assistant prosecuting attorney is authorized to grant immunity for statements made at a debtor examination

SC92256
Hoops & Associates PC, A Missouri Corporation, Individually and as Class Representative v. Financial Solutions and Associates Inc. and Michael G. Grimes
St. Louis County
Summary judgment in a class action proceeding

Listen to the oral argument:

Financial Solutions and Michael Grimes were represented during arguments by Steven W. Koslovsky of Steven Koslovsky LLC in St. Louis, and Hoops & Associates was represented by John S. Steward of the Steward Law Firm LLC in St. Louis. Judge Justine Del Muro, a circuit judge with the 16th judicial circuit (Jackson County), sat in this case by special designation in place of Judge George W. Draper III.

In March 2005, Financial Solutions and Associates Inc. authorized 9,688 unsolicited advertising faxes to be sent, which violated the telephone consumer protection act, 47 U.S.C. section 227. Michael Grimes is the president and sole stockholder of Financial Solutions. Grimes sent the faxes using a company called ActiveCore. Hoops & Associates PC received one of the faxes and brought this class action lawsuit against Financial Solutions and Grimes jointly. The trial court approved the class and entered summary judgment (ruling solely on the briefs without any presentation of evidence) in favor of Hoops. The court awarded Hoops $4,841,500 in damages against Financial Solutions and Grimes jointly. Financial Solutions and Grimes appeal.

Financial Solutions and Grimes argue that the trial court should not have granted summary judgment to Hoops. They contend there were questions of fact as to whether Grimes’ conduct was tortious as defined by the tortious acts exception to the rule protecting corporate officers from liability for the corporation’s acts. Financial Solutions and Grimes assert that ActiveCore assured Grimes the faxes complied with applicable laws. They also argue the trial court should not have approved the class because, since the start of the case, only the named party has been identified as part of the class.

Hoops argues the trial court correctly granted it summary judgment. It contends there were no factual questions as to Grimes’ conduct. Hoops asserts that Grimes participated in and had actual or indirect knowledge of the wrongful conduct. It argues these facts prevent the tortious acts exception from shielding Grimes from liability. Hoops also contend the court correctly approved the class because, under Rule 52.08, each class member is not required to be listed.

SC92169
Catherine Ndegwa and Catherine Ndegwa and Anale Mrema, as Legal Co-Guardians for John Mrema v. KSSO LLC and Indymac Bank, Integrity Land Title Company Inc., John Friganza, Collector of Revenue for St. Louis County and St. Louis County
St. Louis County
Redemption period and requirements in tax sales

Listen to the oral argument:

KSSO LLC was represented during arguments by Phillip K. Gebhardt of Gebhardt Real Estate and Legal Services LLC in Desoto, and Mrema and Ndegwa were represented by Elizabeth K. Thompson, a private practitioner in St. Louis. Judge Justine Del Muro, a circuit judge with the 16th judicial circuit (Jackson County), sat in this case by special designation in place of Judge George W. Draper III.

John Mrema and Catherine Ndegwa purchased property in Bridgeton and used it to secure a loan from IndyMac Bank. IndyMac’s deed of trust mistakenly names the property as lot 252 instead of lot 253 but names the correct street address. After taxes were not paid on the property from 2004 to 2006, the St. Louis County collector of revenue placed the property up for a tax sale in August 2007. KSSO LLC purchased the property at the tax sale. About seven months later, Mrema and Ndegwa conveyed the property to themselves as trustees of the Mrema family revocable trust and shortly after changed the mailing address for bills. In letters dated in September 2008, KSSO notified Mrema and Ndegwa of their right to redeem (reclaim their interest in the property). The letters state that there is a right to redeem for at least 90 days from the date of the letter and that, after that period, the right to redeem is barred forever. In November 2008, a court found Mrema to be incapacitated due to dementia-Alzheimer’s disease and appointed co- guardians for him. In January 2009 – 116 days from the date of the letter – the collector conveyed the property to KSSO by collector’s deed. IndyMac never had been listed as having an interest in the title to the property due to the incorrect lot number on the deed of trust. In March 2009, IndyMac notified the St. Louis County collector of taxes that the incorrect lot number was listed on the tax payments for 2004 to 2006.

Mrema and Ndegwa subsequently sued,seeking to have section 140.170, RSMo, declared unconstitutional, to quiet the title to the property and to prevent KSSO from obtaining possession of the property due to alleged tortious interference with contracts. They also claimed IndyMac committed negligence and breached its fiduciary duty. KSSO filed a counterclaim to confirm the collector’s deed, to quiet title to the property, to have the court decide each party’s interest in the property, to eject Mrema and Ndegwa from the property, and to recover their expenses if the collector’s deed is invalidated. KSSO filed for partial summary judgment (ruling solely on the briefs without a trial), which the trial court granted as to Mrema and Ndegwa’s request to quiet title and denied as to KSSO’s request to quiet title. KSSO appeals.

KSSO argues the trial court incorrectly granted partial summary judgment to Mrema and Ndegwa. It contends the letters sent pursuant to section 140.405, RSMo, were not mailed at least 90 days before the one-year period from the tax sale and only can be viewed as defective because precedent (prior case law) does not require these things. It argues that, under section 140.340, RSMo, taxpayers have an absolute right to redeem their rights to the property after a tax sale against the purchaser of the property for an unascertained period of time. KSSO contends that, under Hobson v. Elmer, 349 Mo. 1131, 163 S.W.2d 1020 (Mo. 1942), the taxpayer retains interest in the property until the purchaser obtains a collector’s deed, and if the purchaser fails to get the deed within two years from the sale, the tax sale purchaser loses all interest in the property. It asserts the letters did fail to inform the recipient that the one-year period ended on Aug. 27, 2008, despite the letters being dated Sept. 15, 2008. KSSO argues this is because section 140.405 does not fix a one-year redemption period and allows variation to the redemption period based on facts and circumstances unique to the case. It contends it is impossible to know the exact time at which a tax sale purchaser will be authorized to obtain a collector’s deed. KSSO also asserts that neither section 140.405 nor due process requires advance notice of the time limits for redemption, only that redemption is available. Finally, it argues there was no requirement to notify IndyMac of its right to redeem because IndyMac had no publicly recorded interest in the property due to the incorrect lot number on its deed of trust.

Mrema and Ndegwa argue the trial court correctly granted them partial summary judgment. They contend that, under section 140.405, KSSO was required to send the notice letters before the redemption period had ended and to notify the parties of the correct redemption period. They assert the trial court correctly found that section 140.405 does not include the Hobson decision, that the redemption period is not changeable from the one-year requirement and that the time at which a collector’s deed may be obtained can be determined. They further argue section 140.405 and due process require a tax sale purchaser to give advance notice of the redemption period, specific procedures required to redeem and other details relating to redemption in the notice letters. Mrema and Ndegwa contend KSSO was required to notify IndyMac of the right to redeem as IndyMac was a named beneficiary on a publicly recorded deed. They assert that the failure to notify IndyMac of its rights results in KSSO losing all interest in the property. Finally, Mrema and Ndegwa argue that, even if a redemption period longer than one year is applicable in this case, they are still entitled to summary judgment because Mrema has been declared incapacitated. They contend the redemption period does not expire under law when circumstances such as incapacity are present.

SC92074
Harpagon MO LLC v. Edward L. Bosch and Nancy Z. Bosch, et al.
Clay County
Propriety of tax sale

Listen to the oral argument:

Harpagon MO LLC was represented during arguments by Scott F. Walterbach of Larry Enkelmann LLC in Kansas City, and the Bosches were represented by Jerome E. Brant of Withers, Brant, Igoe & Mullennix PC in Liberty.

Edward and Nancy Bosch owned and resided on property in Kansas City. After they became delinquent in paying the taxes on the property, Clay county held a tax sale at which Sunrise Atlantic won the bidding. Sunrise allegedly is predecessor to Harpagon MO LLC. Vesta Holdings, as agent for Sunrise, sent notice of the right to redeem (reclaim interest in the property) to the Bosches in July 2008. The property was conveyed to Harpagon in November 2008 by collector’s deed, and the Bosches did not redeem the property. Harpagon brought this legal action to quiet title to the property, and the trial court found in favor of the Bosches. The trial court found neither Harpagon nor Sunrise complied with section 140.405, RSMo. Harpagon appeals.

Harpagon argues the trial court incorrectly granted summary judgment to the Bosches. It concedes there are no questions as to the material facts. However, Harpagon contends that it notified the Bosches of their right to redeem and that they failed to do so. It asserts the trial court should have granted its motion for summary judgment because there are no questions as to the facts and Harpagon fulfilled its requirements under the law.

The Bosches argue the trial court correctly granted them summary judgment. They contend the notice of their right to redeem sent by Vesta on behalf of Sunrise was insufficient. The Bosches assert the notice failed to meet the requirements of section 140.405 because it was not sent at the appropriate time and did not include all of the information or correct information regarding their right to redeem. They argue Harpagon failed to show that it had received a valid transfer of interest in the property. The Bosches contend this dispute in interest was an issue of fact that prevented Harpagon from obtaining summary judgment.