Case Summaries for February 8, 2017

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The materials below are provided solely for the interest and convenience of the reader, are not official Court records, and should not be quoted or cited as such. Once cases are docketed, the briefs filed by the parties typically are posted within a day or so. Summaries of the cases are prepared by the Court’s communications counsel and typically are posted the week before arguments. Audio files and information about attorneys who argued typically are posted within a day or so after arguments.  Further information about the cases may be available through Case.net.


DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9:30 a.m. Wednesday, February 8, 2017
 


SC95944
Kohner Properties Inc. v. Latasha Johnson
St. Louis County
Whether a tenant must pay rent due or vacate the premises before alleging a breach of the implied warranty of habitability
Listen to the oral argument: SC95944.mp3
Johnson was represented during arguments by Lee R. Camp of Legal Services of Eastern Missouri Inc. in St. Louis; Kohner was represented by Randall J. Reinker of Reinker, Hamilton & Piper LLC in St. Louis.

Latasha Johnson entered into a lease agreement with Kohner Properties Inc. to rent an apartment in St. Louis County. She moved into the apartment at the end of October 2014 and made multiple requests for maintenance during her tenancy. Her first request regarded tiles that had fallen from the shower wall. She subsequently made a service request regarding mold that had begun to grow on the ceiling. Kohner alleges it made both repairs. In March 2015, Johnson failed to pay her monthly rent and then made a maintenance request after a portion of her bathroom ceiling collapsed due to a leak in the apartment above hers. Kohner alleges it fixed the leak and taped plastic over the hole in Johnson’s ceiling. Johnson alleges she repeatedly asked Kohner to make the necessary repairs to the ceiling but it did not do so; Kohner alleges it made numerous attempts to make the repairs but Johnson would not permit its maintenance workers access to the apartment. Kohner then sued Johnson, seeking more than $1,100 in unpaid rent and late fees as well as possession of the apartment. Johnson filed an affirmative defense and counterclaim alleging Kohner had breached the implied warranty of habitability and had violated the state’s merchandising practices act. She did not vacate the apartment and did not pay the amount she was alleged to owe into escrow with the circuit court. At trial, Johnson testified she withheld payment of her March and April rents because the apartment was uninhabitable, causing problems for her daughter, who has cerebral palsy. She testified they spent several nights in a hotel because of mold in the apartment but still lived there because they could not afford to move elsewhere. The circuit court entered its judgment in Kohner’s favor, finding Johnson was required to vacate the premises or pay her rent to the court’s custody before asserting an affirmative defense or counterclaim of implied warranty of habitability. The court ordered her to vacate the apartment and to pay approximately $2,100 (which included a credit for hotel expenses), plus costs. Johnson appeals.

This appeal presents one primary question for the Court – whether the circuit court should have permitted Johnson to assert her affirmative defense and counterclaim that Kohner breached its implied warranty of habitability. Related issues include whether she was required to vacate the premises or pay the rent into the court’s custody and, if she was, whether such a requirement violates the open courts provision of article I, section 14 of the state constitution.

A number of organizations filed briefs as friends of the Court. One group – including the American Civil Liberties Union of Missouri Foundation and a national poverty law center – argue that the implied warranty of habitability is an essential feature of housing law nationally, that most states do not require a tenant to escrow rent or vacate the premises before asserting the implied warranty was breached, and that any such requirement would cause particular hardship to low-income renters. Organizations that assist indigent tenants argue that permitting tenants to raise the defense of the implied warranty of habitability is essential in ensuring quality housing throughout the state and an adequate supply of habitable dwellings and that Missouri law does not require tenants raising such a defense to escrow rent money or vacate the premises. A group of legal services organizations argues that requiring tenants to escrow rent payments before they can raise the implied warranty of habitability violates their constitutional rights, precludes their access to safe housing, produces unequal access to justice and gives landlords incentive to ignore dangerous housing conditions.

SC95944_Johnson_brief
SC95944_Kohner_Properties_brief
SC95944_Johnson_reply_brief
 
SC95944_ACLU_et_al._amici_brief
SC95944_indigent_tenant_assistance_organizations_amici_brief
SC95944_legal_services_organizations_amici_brief


SC95791
In re: Circuit Court Budget of the 45th Judicial Circuit of the State of Missouri, Lincoln County Commission, Dan Colbert, Presiding Commissioner, Eugene Galloway, Commissioner, District 1, Matt Bass, Commissioner, District 2 v. Forty-Fifth Judicial Circuit, Presiding Judge
Lincoln County
Dispute over the reasonableness of attorney fees included in a circuit court budget estimate
Listen to the oral argument: SC95791.mp3
The 45th circuit was represented during arguments by Robert J. Guinness of Guiness & Buehler LLC in St. Charles; the county commission was represented by Neil J. Bruntrager of Bruntrager & Billings PC in St. Louis.

When the 45th Judicial Circuit submitted, pursuant to state statute, its 2016 budget estimate to Lincoln County, it included a line item for an estimated payment of $35,000 in attorney fees, including fees for attorneys who would be appointed to represent parents or to serve as guardians ad litem in juvenile proceedings. The county indicated it would require any court-appointed attorneys to sign a contract with the county commission before the county commission would pay the attorney, even were the court to order such payment. The circuit court responded the law does not require such contracts with court-appointed attorneys. In at least one prior year, there had been other disputes between the circuit court and the county commission over payment of certain attorney fees, and litigation is pending involving at least one such dispute. The circuit court further advised that it would be required to hire its own counsel to represent the court in budget disputes with the county and that other circuit courts included an attorney fee line item in their budget estimates. The circuit court and county commission were unable to resolve the attorney fee issue, and so the county commission filed a petition for review with the state judicial finance commission. Specifically, the county commission challenged the reasonableness of the attorney fee budget estimate. It also challenged the circuit court’s inclusion of costs for attorneys appointed to represent parents or to serve as guardians ad litem in juvenile proceedings, which it alleged should be in the county commission’s budget rather than the circuit court’s budget. Ultimately, the judicial finance commission issued its opinion reducing the circuit court’s 2016 budget for attorney fees from $35,000 to $8,475. The circuit court seeks this Court’s review.

This case presents one primary question for the Court involving the reasonableness of the attorney fee request in the circuit court’s 2016 budget estimate. One related issue involves whether it a circuit court may include such fees in its budget estimate, even if they are prospective or non-recurring, as necessary to support the administration of justice or whether such fees should be part of a county commission’s budget, even if the circuit court lacks the mechanism to enforce payments. Additional issues involve whether the finance commission properly considered the reasonableness of the attorney fees under the statutory factors or should have ordered the county commission to pay the circuit court’s attorney fees incurred in the budget review process. Further issues include whether the finance commission should have considered the county commission’s petition for review as well as whether any factual controversy still exists over the fees.

SC95791_45th_circuit_brief
SC95791_Lincoln_County_commission_brief
SC95791_45th_circuit_reply_brief


SC95865
First National Bank of Dieterich, f/k/a First State Bank of Red Bud v. Pointe Royale Property Owners' Association Inc. and Pointe Royale Condominium Property Owners' Association Inc.
Taney County
Bank’s liability for fees assessed by property owners’ association against condominiums before foreclosure
Listen to the oral argument: SC95865.mp3
The property owners’ association was represented during arguments by Karl Finkenbinder of Schenewerk & Finkenbinder, Attorneys at Law, LLC in Branson; the bank was represented by Richard L. Schnake of Neale & Newman LLP in Springfield.

Pointe Royale, a subdivision in Taney County, includes both residential lots and condominium units. The subdivision is subject to a declaration of restrictive covenants. The covenants establish a property owners’ association, to which both lot owners and condominium owners may belong. The covenants also permit the association to collect assessments for the benefit of the subdivision’s property owners. The covenants state that an owner’s personal obligation to pay assessments shall pass to successors in title. A second declaration of covenants, which further governs condominium owners, establishes a condominium property owners’ association and permits this association to collect assessments for the benefit of the condominium owners. After both declarations were recorded, a bank made loans to owners of eight condominium units in Pointe Royale. The two owners’ associations levied assessments against these properties pursuant to the respective covenants. When the eight owners became delinquent in paying the assessments, the two owners’ associations filed liens against the eight properties for the past due assessments. The eight owners then defaulted on their bank loans, and in 2010, the bank foreclosed on all eight properties, becoming the record owner of those properties. The two owners’ associations demanded payment of the amounts still outstanding from the assessments made between the time the deeds of trust were recorded and the time they were foreclosed. In September 2011, the bank filed a lawsuit seeking a judgment declaring that it was not liable for the past due assessments, and the two owners’ associations filed a counterclaim seeking past due assessments and attorney fees. Following a trial, the circuit court entered its judgment in favor of the bank, which it found was not liable for either the property owners’ association’s assessments that accrued before the bank foreclosed on the properties or the associated attorney fees, late fees and interest. The property owners’ association appeals.

This appeal presents several questions for the Court. One involves whether the property owners’ association was entitled to assessments from the bank that occurred before the bank foreclosed on the properties. A related issue is whether covenants creating an obligation to pay assessments are binding on the bank. Another question involves whether a portion of the state’s uniform condominium act applies to the Pointe Royale property owners’ association, which includes both condominium unit owners and residential lot owners, or permits the bank’s foreclosure to extinguish the association’s lien for assessments or the underlying personal obligation to pay such assessments. An additional question involves whether the Pointe Royale property owners’ association is entitled to attorney fees, late fees and interest in connection with its efforts to collect assessments that accrued before the bank foreclosed on the properties.

SC95865_Pointe_Royale_Property_Owners'_Ass'n_brief
SC95865_First_Nat'l_Bank_of_Dieterich_corrected_brief
SC95865_Pointe_Royale_Property_Owners'_Ass'n_reply_brief
 
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