Opinion
No. ED 88183.
Opinion Filed March 6, 2007.
Appeal from the Circuit Court of St. Louis County, Cause No. 04AC-018522(N), Honorable Patrick Clifford.
Kevin L. Fritz, St. Louis, Missouri, FOR APPELLANT.
David T. Hamilton, St. Charles, Missouri; Charles F. Dufour, Jr., St. Louis, Missouri, FOR RESPONDENT.
BEFORE GEORGE W. DRAPER III, P.J., GARY M. GAERTNER, SR., J., AND ROBERT G. DOWD, JR., J.
OPINION
Scott Huber and Stephanie Huber (hereinafter, "Homeowners") brought suit against Wells Fargo Home Mortgage, Inc. (hereinafter, "Wells Fargo") and Franklin American Mortgage Company (hereinafter, "Franklin") seeking statutory damages pursuant to Section 443.130 RSMo (2000). Homeowners claim Wells Fargo and Franklin failed to deliver them a deed of release on their residence. The trial court disagreed, disallowing statutory damages. We affirm, in part, and reverse, in part.
All further statutory references herein are to RSMo (2000) unless otherwise indicated.
Homeowners are the owners of residential real estate located at 11805 Birmington Drive, Bridgeton, Missouri 63044 (hereinafter, "the Property"). On September 12, 2002, Homeowners executed a promissory note to Franklin in the amount of $110,500. The promissory note was secured by a deed of trust on the Property. In October 2002, Wells Fargo purchased the promissory note and deed of trust from Franklin.
Homeowners paid the balance of their loan, which was confirmed by Wells Fargo on February 6, 2004. On February 13, 2004, Wells Fargo prepared a deed of release on the Property which was recorded with the St. Louis County Recorder of Deeds on February 23, 2004.
On March 4, 2004, Homeowners sent a statutory demand letter to Wells Fargo. Homeowners demanded an immediate release of the deed of trust against the Property and for the deed of release to be delivered to them within fifteen business days. Homeowners included a check to cover the costs of filing the deed of release. Wells Fargo returned Homeowners' check to them because the loan was paid in full and the deed of trust had already been released.
Homeowners filed this suit, claiming Wells Fargo and Franklin violated Section 443.130. Homeowners seek statutory damages from Wells Fargo and Franklin for failing to issue them a copy of the deed of release after the deed of release had been recorded. Homeowners also seek prejudgment interest from the date of the demand letter. Wells Fargo filed its motion for summary judgment, including supporting documentation, on June 23, 2005. Franklin expressly joined Wells Fargo's motion for summary judgment. After taking judicial notice of the file and the arguments of all parties, the trial court granted summary judgment in favor of Wells Fargo and Franklin. Homeowners appeal.
In review of summary judgment, we review the record in the light most favorable to the party against whom the judgment was entered. ITT Commercial Finance v. Mid-America Marine, 854 S.W.2d 371, 376 (Mo. banc 1993). We accord the party against whom summary judgment was entered the benefit of every doubt. Green v. Washington University Medical Center, 761 S.W.2d 688, 689 (Mo.App.E.D. 1988). Summary judgment is intended to move the parties beyond the petition's allegations and determine if a material fact for trial exists. Martin v. City of Washington, 848 S.W.2d 487, 491 (Mo. banc 1993). Appellate review of the grant of summary judgment is purely a question of law and, hence, employs the same criteria as imposed by the trial court in its initial determination of the propriety of the motion.ITT Commercial Finance, 854 S.W.2d at 376.
Summary judgment will be granted as a matter of law to the moving party when there is no genuine issue as to any material fact. Rule 74.04(c)(3). The moving party bears the burden of establishing a right to judgment as a matter of law. ITT Commercial Finance, 854 S.W.2d at 378. Following the moving party's prima facie showing, summary judgment will be granted if the responding party fails to reply with specific facts showing a genuine issue of material fact exists for trial or with a demonstration that judgment as a matter of law is incorrect. Rule 74.04(e). A party may not avoid summary judgment by introducing inconsistent testimony in order to create a genuine issue of material fact. Kellog v. Kellog, 989 S.W.2d 681, 687 (Mo.App.E.D. 1999).
Homeowners raise three points on appeal. However, their first point is dispositive. They allege the trial court erred in granting summary judgment in favor of Wells Fargo and Franklin because there was a genuine issue of material fact requiring a jury trial. Homeowners believe Section 443.130 requires physical delivery of a deed of release to them following their demand and the mere act of recording a release with the recorder of deeds does not meet the statutory requirements.
"The purpose of [S]ection 443.130 is to enforce the duty of the mortgagee to clear the mortgagor's title, so that the record is no longer encumbered." Garr v. Countrywide Home Loans, Inc., 137 S.W.3d 457, 460 (Mo. banc 2004). The statute "was intentionally directed at financial institutions that fail to provide timely deeds of release, which explains the legislature's desire to create a penalty. . . ."Glass v. First Nat. Bank of St. Louis, 191 S.W.3d 662, 667 (Mo. banc 2006).
In this case, Homeowners' loan was executed originally in favor of Franklin, but all rights and obligations thereunder were subsequently assigned to Wells Fargo on October 2, 2002. Homeowner issued its statutory demand letter upon Wells Fargo on March 4, 2004; this letter was neither addressed nor delivered to Franklin. Hence, Franklin was not given notice that any action on its previously held loan needed to be taken. Accordingly, the trial court's grant of summary judgment in favor of Franklin is affirmed.
Further, once Homeowners paid the balance of their loan to Wells Fargo, Wells Fargo confirmed the loan was satisified on February 6, 2004. Wells Fargo then complied with its duty to clear Homeowners' title prior to Homeowners issuing their demand letter. Wells Fargo prepared the deed of release which discharged the mortgage, and it was recorded publicly, confirming Homeowners have full equity in the Property. Nearly one month after they paid the balance of their loan and received confirmation from Wells Fargo that the mortgage was paid in full, Homeowners issued their statutory demand letter dated March 4, 2004.
Section 443.130 is directed toward financial institutions who fail to release the mortgagee's property. (Emphasis added). In those instances, the statute provides a strict penalty for failing to remove an encumbrance on a title. Since Wells Fargo cleared Homeowners title prior to Homeowners' request to release the property, it complied with the purpose of Section 443.130, and it should not be subject to a statutory penalty for failing to timely clear the title. However, in Glass, the Missouri Supreme Court stated, "Even if [the mortgage company] had recorded the deed of release within the statutory deadline, which it failed to do, that would not have excused its obligation to provide the [homeowners] with the deed as required by [S]ection 443.130.1." Glass, 191 S.W.3d at 667. Hence, Homeowners are entitled to statutory damages as a matter of law because Wells Fargo failed to physically deliver a copy of the deed of release to Homeowner. Summary judgment in favor of Wells Fargo is reversed.
The judgment of the trial court is affirmed, in part, and reversed, in part.
Gary M. Gaertner, Sr., J., and Robert G. Dowd, Jr., J., concur