Opinion
Nos. 26065 and 26142
January 28, 2005
Appeal from the Circuit Court of Taney County, Honorable James L. Eiffert, Circuit Judge.
Joseph A. Bohrer, Yates, Mauck, Bohrer, Elliff Croessmann, P.C., of Springfield, Mo, for Appellants.
Christopher J. Stark, of Springfield, Mo, for Respondent.
Missouri Mountain Properties, Inc., ("MMP") sought injunctive relief against Ross Williams, d/b/a Ross Williams Architects ("Williams") to prevent Williams from selling certain real estate in Taney County. After having entered a temporary restraining order, preliminary and permanent injunctions, the trial court dissolved the injunction and dismissed MMP's petition because the court determined that MMP no longer had a justiciable interest in the real estate or standing to continue the action because the real estate had been transferred to GDT CG1, L.L.C., ("GDT"). GDT, as successor in title to the real estate, was denied leave to intervene in the action. Subsequently, the trial court awarded Williams judgment on the injunction bond.
Two separate appeals were brought, which have been consolidated here. In the first, MMP appeals the trial court's order dissolving the preliminary injunction and dismissing MMP's petition. In the second, MMP and GDT appeal the trial court's judgment awarding Williams $30,000 on the injunction bond.
Facts
Some background on a prior case will be helpful. On May 14, 1999, Williams filed a mechanic's lien on real estate in Taney County against Ken Lowe, d/b/a Lowe's Dinner Theater, d/b/a Lowe's Entertainment Center, d/b/a Lowe's Fall Creek Theater, d/b/a Bransontown, Inc., d/b/a/ Branson Towne USA, d/b/a Bransontown, USA ("Lowe et al"). The lien listed the property owners as Butcher Holler, Inc. On May 21, 1999, Williams filed a petition to enforce the mechanic's lien. In addition to Lowe et al and Butcher Holler, several more defendants were named, including Bransontown, Inc.; Leland Gannaway, trustee; Citizens National Bank of Springfield ("CNB"), cestui que trust; Loyd's Electric Supply, Inc.; Theatrical Lighting Concepts, Inc; and Whelchel Hardware Company, Inc, d/b/a/ L J Plumbing Supply.
On April 21, 2000, Gannaway filed a motion to dismiss CNB and Gannaway, trustee, as parties to the mechanic's lien action because the property had been sold. On November 8, 2000, the trial court entered judgment; however, there is no record that the trial court ruled on Gannaway's motion to dismiss himself as trustee and CNB. Following a stipulation to amend the judgment to correct the legal description, the court entered an amended judgment on December 6, 2000.
The amended judgment lists the defendants noted above, with Gannaway, as trustee, and CNB absent, and Nevon Lowe (also listed as the registered agent for Bransontown, Inc.) added. Within the amended judgment, the trial court found in favor of Williams and against Lowe et al. and Butcher Holler, Inc. There was a total judgment in favor of Williams and against Lowe et al and Butcher Holler, Inc., for $156,209.87. The amended judgment also indicated that Williams, as well as Whelchel Hardware, Theatrical Lighting Concepts, and Loyd's Electrical, had "a valid perfected mechanic's lien upon the . . . described real estate located in Taney County, Missouri[.]" The trial court further found that the mechanic's lien of Williams, Whelchel Hardware, and Loyd's Electrical were `prior, superior, and paramount liens to the following deeds of trust against said real estate:"
A. Deed of [T]rust executed by Butcher Holler, Inc. to Leland Gannaway, Trustee for [CNB] dated April 28, 1997 and recorded May 2, 1997 in Book 344, Page 7442.
B. Deed of Trust executed by Butcher Holler, Inc. to Leland Gannaway, Trustee for [CNB] dated April 28, 1997 and recorded May 2, 1997 in Book 344, Page 7449.
C. Deed of Trust executed by Butcher Holler, Inc. to Leland Gannaway, Trustee for [CNB] dated August 3, 1998 and recorded August 10, 1998 in Book 353, Page 40133.
D. Deed of [T]rust executed by Butcher Holler, Inc. to Leland L. Gannaway, Trustee for [CNB] dated August 3, 1998 and recorded August 10, 1998 in Book 353, Page 40140.
E. Deed of Trust executed by Butcher Holler, Inc. to Leland Gannaway, Trustee for [CNB] dated October 15, 1998 and recorded October 20, 1998 in Book 354, Page 9865.
The trial court found that Butcher Holler was the owner of the said real estate at the time the mechanic's lien rights accrued. The amended judgment also called for a "special execution [to] issue against said ground, buildings and improvements above described to satisfy said judgments, interests and costs and that a sale be had of said property and the proceeds thereof be marshall[ed] and distributed according to the respective legal and equitable rights of Plaintiff Ross Williams, Whelchel Hardware Company, Inc. and Loyd's Electrical Company, Inc." Regarding the appeals before us here, on July 26, 2001, MMP filed a verified petition for injunctive relief, along with a motion for temporary restraining order and motion for preliminary injunction, against Williams, Loyd's Electrical, Theatrical Lighting Concepts, and Whelchel Hardware. In the petition, MMP alleged that it had purchased the said real estate at a foreclosure sale on December 8, 1999, which was recorded on December 15, 1999. According to MMP, its predecessor in interest to the property was "[CNB], Trustee Leland L. Gannaway[.]" MMP's petition also alleged that on or about July 17, 2001, its property "was levied upon to be sold pursuant to said [December 6, 2000] Amended Judgment with Special Execution on the Taney County Courthouse steps by the Sheriff on Monday, July 30, 2001 at 1:00 p.m." MMP asked the court to enter "judgment enjoining Defendants . . . from reliance on the Amended Judgment, or any execution thereof, against [MMP's] real property . . ., quashing the Special Execution and Sheriff's Sale, declaring Defendant's liens and the levy thereof pursuant to said Amended Judgment void and of no effect[.]" MMP further asked the court to declare that MMP was not bound by the amended judgment because MMP was not a party to the previous case.
The trial court issued a temporary restraining order ("TRO") on July 27, 2001, and heard evidence on MMP's motion for preliminary injunction on August 22, 2001. On September 4, 2001, the trial court ordered that the TRO "be converted to a Preliminary Injunction." On May 17, 2002, MMP filed a motion for summary judgment asking that the preliminary injunction be made permanent.
On October 22, 2002, the trial court entered an order finding that MMP was not a party in the previous case, but "[c]learly . . . was interested in the property charged with the lien and should have been made a party." The trial court declared that MMP was not bound by the amended judgment and that "the real property in question is not subject to the mechanic's lien." The order also indicated that the court sustained MMP's motion for summary judgment.
On November 12, 2002, the trial court entered judgment granting a permanent injunction in favor of MMP. That judgment incorporated the particulars of the order referenced above. Williams and the other defendants were ordered to "cease any efforts to lien, encumber, sell, attach or execute any judgment entered in [the previous case] against [MMP's] real property . . . so that the special execution and Sheriff's Sale attempted previously by Defendants is hereby declared null and void and Defendant's liens and levy thereof against such property are void and of no effect so that all traces thereof are hereby ordered removed and withdrawn by Defendants from the title record so that no cloud appears on [MMP's] title due to such liens[.]" The trial court also ordered that the $30,000 injunction bond posted by MMP be canceled and released. Williams filed a motion for new trial on November 21, 2002. Among the issues raised in the motion was that the grant of summary judgment in favor of MMP was against the weight of the evidence and contrary to case law. In addition, Williams stated in the motion that the issues raised by MMP were res judicata and that the trial court "had no jurisdiction to set aside or release a mechanic's lien properly adjudicated upon the motion of a nonparty to said adjudication in a collateral action."
On December 27, 2002, MMP conveyed the said real estate to GDT via a warranty deed. On January 31, 2003, the trial court sustained Williams" motion for new trial and set aside the court's judgment entered November 12, 2002. Williams filed a "Motion to Dissolve Temporary Injunction and Restraining Order in Forfeiture of Bond" on March 7, 2003. Williams alleged that MMP no longer had a justiciable interest in the real estate because of the conveyance to GDT. Williams asked the court to dissolve the temporary injunction and restraining order and order a forfeiture of the injunction bond.
Williams filed a motion to dismiss MMP's cause of action and on March 31, 2003, the trial court entered an order sustaining that motion, noting that while the case was pending, MMP had transferred title to the real estate and that therefore, MMP no longer had any interest in the real estate, except perhaps "contingent liability as a result of the warranties contained in the Deed[.]" According to the trial court's order, since MMP "has no interest in the real estate, there is no existing dispute." The trial court dissolved the preliminary injunction, but stated that "[o]ther claims, including any claims against the Injunction Bond are still pending."
On May 1, 2003, MMP filed a motion for reconsideration, asking the trial court to reconsider its order dismissing the petition and dissolving the preliminary injunction, and to reinstate the November 2002 judgment granting the permanent injunction in MMP's favor. On June 16, 2003, GDT filed a motion to intervene as plaintiff. GDT asked the court for leave to join as a plaintiff by interlineation to MMP's verified petition and motion for reconsideration. According to GDT, it had recently been provided notice of a Sheriff's sale of the property on July 15, 2003, and that the disposition of the action may impair and impede its interest in the property. GDT noted that its interests were not adequately represented by the existing parties. On June 19, 2003, the trial court entered an order denying both GDT's motion to intervene and MMP's motion to reconsider.
During July 2003, there were communications between counsel for MMP and Williams regarding a settlement to be paid by MMP to cancel the Sheriff's sale, show the judgment released, and show all liens released if the costs of the sale were satisfied. Even if a settlement was reached, however, Williams would still reserve the right to litigate on the injunction bond. A letter dated July 15, 2003, from counsel for Williams to counsel for MMP indicates that upon receipt of $241,436.72, Williams would release the mechanic's lien and show the judgment as satisfied. A check for that amount, dated July 17, 2003, was written from Stewart Title Guaranty Company payable to Williams and his attorney. On July 25, 2003, Williams filed a release of the mechanic's lien with the court.
On September 5, 2003, Williams filed a motion to make the trial court's order dismissing MMP's petition a final judgment. On October 15, 2003, MMP, Loyd's Electrical Company, Theatrical Lighting Concepts, and Whelchel Hardware Company entered into a stipulation dismissing with prejudice all claims and counter-claims against each other.
On January 21, 2004, Williams filed a motion for assessment of damages on injunction bond. The trial court heard evidence on the motion the same day. On January 30, 2004, MMP filed an appeal of the trial court's order dissolving the preliminary injunction and dismissing MMP's verified petition.
On February 2, 2004, the trial court entered findings of fact and conclusions of law and judgment. Among the findings was that "the injunction was improperly entered and maintained" and "[t]hat the dissolution of the injunction was not through the connivance of [Williams]." The trial court also found that Williams' reasonable attorney fees were in excess of $30,000, the amount of the bond deposited by MMP. The trial court entered judgment on the bond for $30,000 in favor of Williams and against MMP. MMP and GDT filed appeals of the judgment on the injunction bond on March 5, 2004.
As noted above, the two appeals have been consolidated here.
Discussion
Three points are raised in the consolidated appeals by MMP and GDT. We will address them in order.
Point I — Trial court erred in dissolving preliminary injunction and dismissing MMP's petition
In the first point, MMP contends that the trial court erred in dissolving the preliminary injunction that had been entered against Williams and in dismissing MMP's verified petition. According to MMP, the December 6, 2000, amended judgment was void as to MMP, and the covenants of warranty contained in the deed by which the real estate was conveyed to GDT gave MMP a protectable interest that was directly and adversely affected by the mechanic's lien judgment. Further, according to MMP, it was compelled to spend substantial sums of money to satisfy the judgment and forestall the execution and sheriff's sale of the property.
MMP points to § 429.190, RSMo 2000, which states:
In all suits under sections 429.010 to 429.340 the parties to the contract shall, and all other persons interested in the matter in controversy or in the property charged with the lien may be made parties, but such as are not made parties shall not be bound by any such proceedings.
The parties necessary to an action to adjudicate a lien are the parties to the contract in contention. Structo Corp. v. Leverage Inv. Enter., Ltd. , 613 S.W.2d 197, 200 (Mo.App. 1981). The procedure under § 429.190 contemplates that no lien can be declared against the property unless either the owner at the time of the contract or the successor owner at the time of the adjudication was joined as a party. Id. Under § 429.050, a mechanic's lien may have preference over existing encumbrances. See Leonard v. Bennett , 674 S.W.2d 123, 131 (Mo.App. 1984). Sections 429.190 should be considered in light of § 429.050. Id. In the case before us, Butcher Holler, Inc., was the owner at the time of the contract, and CNB and Gannaway, as Trustee, were owners at the time the mechanic's lien was filed, and MMP was the owner by the time the amended judgment was entered.
However, discussion of necessary parties and the effect of not joining permissive parties is not essential to the disposition of this point. When an event occurs that makes a decision on appeal unnecessary or that makes it impossible for this Court to grant effective relief, the appeal is moot. Promotional Consultants, Inc. v. Logsdon , 25 S.W.3d 501, 506 (Mo.App. 2000). MMP and Williams entered into a valid settlement agreement under which payment of the sum of $241,436.72 would release the mechanic's lien on the said real estate. Such payment was made, and Williams filed a release of the mechanic's lien with the court.
The only reservation that was made was that, even if MMP paid the amount, Williams would not be precluded from pursuing litigation on the injunction bond. There was no reservation made for the right to appeal the trial court's ruling dissolving the preliminary injunction that had been entered against Williams and dismissing MMP's verified petition. Such a reservation is necessary to ensure that the case is not moot. See Brock v. Brock , 142 S.W.3d 204, 206-07 (Mo.App. 2004).
There is no effective relief that we can provide MMP under this point. The mechanic's lien on the property has been released, and, contrary to MMP's assertions, there is no evidence that it entered into the settlement with Williams involuntarily. Therefore, this portion of the appeal must be denied.
Point II — Trial court erred in denying GDT's motion to intervene
In Point II, MMP and GDT argue that the trial court erred in denying GDT's motion to intervene as a plaintiff pursuant to Rule 52.12. The parties contend that since MMP was dismissed from the case, no party remained that could protect GDT's interest in the real estate.
There is no question that the denial of a motion to intervene under Rule 52.12 is a final judgment and is appealable. Coon ex rel. Coon v. American Compressed Steel , 133 S.W.3d 75, 79 (Mo.App. 2004). However, our analysis of Point I is dispositive to Point II as well. Due to the settlement and the release of the mechanic's lien, there is no effective relief for GDT under this point. Point II is denied.
Point III — Trial court erred in granting judgment in favor of Williams on injunction bond
In Point III, MMP contends that the trial court erred in granting judgment in favor of Williams and against MMP on the injunction bond. According to MMP, the trial court properly entered the order enjoining Williams, and the injunction obtained was neither improvidently granted nor wrongful in its inception. MMP argues that it had standing to pursue injunctive relief because of the potential liability it faced on the covenants of warranty contained in the deed under which it conveyed the real estate to GDT.
We will affirm a trial court's award of damages on an injunction bond unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Buttress v. Taylor , 62 S.W.3d 672, 678 (Mo.App. 2001).
"A [trial] court's authority to award damages for an improperly granted temporary restraining order or preliminary injunction is purely statutory." Lipp v. Lipp , 75 S.W.3d 736, 739 (Mo.App. 2002). The purpose of requiring an injunction bond is to protect parties who sustain damages directly related to the compliance with an injunction that is later determined to have been either illegally or improperly issued. Buttress , 62 S.W.3d at 681. The measure of damages recoverable on an injunction bond is the amount necessary to compensate a defendant based on losses directly attributable to the injunction, during the time period it is in force. Ours v. City of Rolla , 14 S.W.3d 627, 628 (Mo.App. 2000).
The right to pursue action on the injunction bond does not accrue unless the trial court determines that the temporary injunction was improperly or improvidently issued, and there is support in the record for such a determination. See Burney v. McLaughlin , 63 S.W.3d 223, 234 (Mo.App. 2001). Damages are allowed when the injunction was improvidently granted, was wrongful in its inception, or was continued due to some wrong on the part of the plaintiff. Id. Recovery is limited to the amount of the injunction bond. Ours , 14 S.W.3d at 629.
"It is well settled in Missouri that the dismissal of an injunction without the defendant's connivance amounts to a determination that the injunction was wrongfully obtained." Newcourt Fin. USA, Inc. v. Lafayette Inv., Inc. , 983 S.W.2d 214, 216 (Mo.App. 1999). At common law, a plaintiff incurred no liability for a wrongfully-filed injunction, as long as it was filed in good faith. Id. However, for bonds posted pursuant to statute, no such exception exists. Id.
Based on Newcourt Fin. USA, Inc. , and that the record supports a finding that the dismissal of the injunction here was without Williams' connivance, there is support for the trial court's determination that the injunction was wrongfully obtained. Therefore, we must affirm the trial court's award of damages. Point III is denied.
Conclusion
The judgments are affirmed.
GARRISON, P.J., and RAHMEYER, J., Concur.