GARY TURNER, Plaintiff-Respondent v. JANET L. WESSLAK and ROBERT WESSLAK , 453 S.W.3d 855 ( 2014 )

GARY TURNER, )
)
Plaintiff-Respondent, )
)
v. ) No. SD32879
) Filed: 12-11-14
JANET L. WESSLAK and ROBERT )
WESSLAK, )
)
Defendants-Appellants. )
APPEAL FROM THE CIRCUIT COURT OF DENT COUNTY
Honorable Kelly W. Parker, Circuit Judge
AFFIRMED IN PART, REVERSED IN PART AND REMANDED WITH
DIRECTIONS
This case involves a “Pasture Lease” (the lease) signed by Jan Wesslak
(Jan) as landlord and Gary Turner (Turner) as tenant.1 The land subject to the
lease was purchased by Jan with money she inherited from her mother, and title to
the land was in Jan’s name alone. After a dispute arose concerning the lease,
Turner filed a two-count petition against Jan and her husband, Bob Wesslak
1
Because the defendants share the same surname, we refer to them
collectively as the Wesslaks and individually by their given names for purposes of
clarity.
(Bob). The two pleaded theories of recovery were breach of the written lease and
quantum meruit. Following a bench trial, the trial court entered judgment in favor
of Turner and against the Wesslaks on both counts of Turner’s petition.2
Jan did not appeal the entry of judgment against her. Bob has appealed
the entry of judgment against him. He contends the trial court misapplied the law
in entering judgment against him on either count of the petition because Bob is
neither a party to the lease nor an owner of the land subject to the lease. We
agree. Therefore, we affirm the judgment as to Jan, reverse the judgment as to
Bob and remand with directions that the trial court enter a judgment in Turner’s
favor against Jan only.
Factual and Procedural Background
In 2008, Jan purchased 280 acres of land in Dent County. Jan used money
she inherited from her mother to buy the property. The two deeds conveying the
property identified the grantee as “Janet L. Wesslak, a married person[.]” Bob’s
name does not appear on either deed. The deeds were duly recorded.
In April 2010, Turner was looking for additional pasture land to raise
cattle. He learned that 280 acres were available for lease four miles from his
farm. Turner met with the Wesslaks and was instructed to negotiate with Jan.
Bob found a contract on the internet and put together the lease. Jan signed the
lease as landlord, and Turner signed as tenant. Bob did not sign the lease. In the
lease, Jan agreed to lease the 280 acres to Turner for five years “to occupy and
use for pasture purposes[.]” Both parties agreed to “[p]rovide loading and
2
Jan also filed a counterclaim, which the court denied. The counterclaim
is not at issue in this appeal.
2
unloading facilities” by building a corral. Turner was to provide labor, and Jan
was to provide the materials. At the time Turner signed the lease, he wrote a
check for $2,500 payable only to Jan. Turner then built the corral on Jan’s
property.
A few months later, a dispute arose concerning the lease. According to
Turner, the Wesslaks cut hay on the property and bushhogged certain fields,
reducing the pasture available to feed his cattle. Turner terminated the lease and
removed his cattle.
In December 2010, Turner filed a two-count petition naming the Wesslaks
as defendants. The theory pleaded in Count I was breach of the written lease by
both Jan and Bob. The theory pleaded in Count II was quantum meruit for
“construction of improvements” on Jan’s property, and damages on that count
were sought from both Jan and Bob. In the first amended petition, Turner alleged
in Count I that Bob was bound by the terms of the lease because he: (1) “ratified
[Jan’s] act of entering into the lease”; and (2) “adopted the acts of his spouse with
knowledge of the contents of the agreement.” With respect to Count II, Turner
alleged that the work he performed in constructing the corral “was for [the
Wesslaks’] use and benefit.”
The case was tried to the court on the pleaded theories of breach of
contract and quantum meruit. Before ruling on the case, however, the court
allowed the parties additional time to prepare briefs on certain issues. In a post-
trial brief, Turner argued that Bob should be held responsible for breach of the
written lease because: (1) Bob “has a legal right in the land, as husband of [Jan]”;
and (2) Jan “signed the lease as his agent.”
3
The trial court found in Turner’s favor and entered judgment against both
Jan and Bob for $59,854.98 on Count I and $3,151.48 on Count II. This appeal
followed.
Standard of Review
Appellate review in this court-tried case is governed by Rule 84.13(d).3
“This Court must affirm the trial court’s judgment unless it is not supported by
substantial evidence, it is against the weight of the evidence, or it erroneously
declares or applies the law.” Grider v. Tingle, 325 S.W.3d 437, 440 (Mo. App.
2010). “We independently evaluate whether the trial court properly declared or
applied the law to the facts presented.” Mortenson v. Leatherwood Constr., Inc.,
137 S.W.3d 529, 531 (Mo. App. 2004).
Discussion and Decision
Bob presents five points for decision. In his first four points, he contends
the trial court erred by holding Bob liable for breach of the written lease pursuant
to Count I. Bob argues that the trial court’s ruling resulted from a misapplication
of the law because: (1) Bob is not a party to the lease; (2) Bob does not own the
land subject to the lease; (3) Bob’s marital interest in the land pursuant to
§ 474.150 as Jan’s husband was an inchoate expectancy that did not constitute an
estate or interest in him; and (4) Jan could not have been Bob’s agent for the
purpose of leasing the land. In Bob’s fifth point, he contends the trial court erred
by holding Bob liable in quantum meruit pursuant to Count II because he did not
3
All references to rules are to Missouri Court Rules (2014). All
references to statutes are to RSMo (2000).
4
benefit from the construction of the corral on land owned by Jan. For the reasons
set forth below, we conclude that each of Bob’s points has merit.
Point I and II
In Bob’s first and second points, he argues that the trial court misapplied
the law by entering judgment against Bob on Count I for breach of the written
lease because he is neither a party to the lease nor an owner of the land subject to
the lease. We agree. It has long been a basic tenet of contract law that “one not a
party to a contract is not bound thereby and is not liable for breach of a contract to
which he is not a party.” Kahn v. Prahl, 414 S.W.2d 269, 278 (Mo. 1967).4 In
addition, Bob “did not own the property and hence could not lease it.”
Drzewiecki v. Stock-Daniel Hardware Co., 293 S.W. 441, 444 (Mo. App. 1927).5
Bob also could not be held liable for breach of the lease on the principle
that he ratified or adopted Jan’s act of entering into the lease. Ratification is the
adoption or confirmation by a principal of an unauthorized act performed by an
agent on the principal’s behalf. Egnatic v. Nguyen, 113 S.W.3d 659, 676 (Mo.
4
See also Landstar Investments II, Inc. v. Spears, 257 S.W.3d 630, 632
(Mo. App. 2008) (holding that “a contract generally binds no one but the parties
thereto, and it cannot impose any contractual obligation or liability on one not a
party to it”); Continental Cas. Co. v. Campbell Design Group, Inc., 914 S.W.2d
43, 44 (Mo. App. 1996) (same holding); Kansas City Downtown Minority
Development Corp. v. Corrigan Associates Ltd. Partnership, 868 S.W.2d 210,
223 (Mo. App. 1994) (holding that “only parties to a contract are bound by the
terms of that contract”).
5
See also Letsinger v. Drury College, 68 S.W.3d 408, 411 (Mo. banc
2002) (the first essential element of a landlord-tenant relationship is a reversion in
the landlord); Robertson v. North Inter-River Drainage Dist., 842 S.W.2d 544,
546 (Mo. App. 1992) (defining a “reversion” as “the residue of an estate left in a
grantor when he has transferred a lesser estate than he owned”); Marden v.
Radford, 84 S.W.2d 947, 954 (Mo. App. 1935) (also holding that an essential
element of the landlord-tenant relationship is that “there must be a reversion in the
landlord”).
5
Ohio App. 2003). In contract law, ratification is an act which converts an otherwise
voidable contract into one which is valid and enforceable. Murphy v. Jackson
Nat’l Life Ins. Co., 83 S.W.3d 663, 668 (Mo. App. 2002). These principles have
no application here because Jan was a disclosed principal acting on her own
behalf in signing a lease of real property owned solely by her. See Unlimited
Equipment Lines, Inc. v. Graphic Arts Centre, Inc., 889 S.W.2d 926, 936 (Mo.
App. 1994) (holding that defendants did not prove ratification because there was
no evidence of an unauthorized agent acting for the principal). Accordingly,
Points I and II are granted.
Points III and IV
Points III and IV of Bob’s brief address the two theories raised by Turner
in his post-trial suggestions for holding Bob liable for breach of contract as
alleged in Count I, even though he was not a party to the lease, because he: (1)
“has a legal right in the land, as husband of [Jan]”; and (2) Jan “signed the lease
as his agent.”
Point III contends the trial court misapplied the law by relying on
§ 474.150.2 to hold Bob liable for breach of the lease. We agree. The lease
signed by Jan was both a conveyance and a contract. See, e.g., Fuller v. TLC
Prop. Mgmt., LLC, 402 S.W.3d 101, 104 (Mo. App. 2013). Section 474.150,
which is part of the probate code, states in relevant part:
Any conveyance of real estate made by a married person at any
time without the joinder or other written express assent of his
spouse, made at any time, duly acknowledged, is deemed to be in
fraud of the marital rights of his spouse, if the spouse becomes a
surviving spouse, unless the contrary is shown.
6
§ 474.150.2. The purpose of this subsection is to protect the interests of the non-
conveying spouse. In re Clark, 384 B.R. 563, 565 (Bankr. W.D. Mo. 2008). The
legislature has done so by giving the non-conveying spouse a statutory cause of
action to set aside a conveyance in fraud of that spouse’s marital rights. See JAS
Apartments, Inc. v. Naji, 230 S.W.3d 354, 360-61 (Mo. App. 2007); McDonald
v. McDonald, 814 S.W.2d 939, 946 (Mo. App. 1991). Turner has not cited any
cases, nor have we found any in our independent research, in which § 474.150.2
has been used as a sword to impose liability upon the non-conveying spouse,
rather than as a shield to undo the fraudulent conveyance. Turner’s construction
of § 474.150.2 is neither supported by the language of the statute nor the purpose
it was intended to serve. Point III is granted.
Point IV addresses Turner’s argument that Bob could be held liable for
breach of the lease because he was an undisclosed principal, and Jan signed the
lease as Bob’s agent. Bob contends the trial court misapplied the law by relying
on this agency theory. He argues that Jan was a disclosed principal who could not
bind Bob to the terms of a lease concerning property he did not own. We agree.
Since Jan was the sole owner of the leased land and signed the lease on her own
behalf, Bob could not have been the undisclosed principal on that contract.
Moreover, Turner cannot use this principle of agency law to hold both Jan and
Bob liable for breach of the same agreement:
An agent who enters into a contract without disclosing his agent
status or who discloses his agent status but not the identity of the
principal is considered an agent for an undisclosed principal and
can be personally liable on the contract. However, where an agent
acting with actual authority makes a contract on behalf of an
undisclosed principal, the principal is also a party to and liable
under the contract. Under those circumstances, either the agent of
the undisclosed principal or the undisclosed principal – but not
7
both – may be held liable, depending upon the plaintiff’s
preference.
Lorimont Place, Inc. v. Jerry Lipps, Inc., 403 S.W.3d 104, 107 (Mo. App. 2013)
(citations omitted and emphasis added). By alleging and proving that Jan was
liable for breach of the written lease agreement she signed, Turner is precluded
from also seeking to hold Bob liable for breach of the same contract as an
undisclosed principal. Point IV is granted.
Point V contends the trial court erred as a matter of law in finding Bob
liable in quantum meruit for improvements to Jan’s land under Count II because
Bob did not own the land. We agree. “Quantum meruit is a remedy to enforce
quasi-contractual obligations and is generally justified on the theory of unjust
enrichment.” Cotner Productions, Inc. v. Snadon, 990 S.W.2d 92, 98 (Mo. App.
1999). Unjust enrichment can occur only when a person retains a benefit without
paying its reasonable value. Miller v. Horn, 254 S.W.3d 920, 924-25 (Mo. App.
2008). To recover under quantum meruit, it is the plaintiff’s burden to show that
his services “benefited” the defendant. Id. Here, Turner argued Bob generally
benefited as Jan’s husband from “the lease, the addition of the corral, and from
the sale of the produce of the land, all of which arose out of the lease
relationship.” It is clear Turner’s claim for reimbursement of his materials and
labor in building the corral arose out of both: (1) the lease, of which only Jan was
a party; and (2) improvements to the land, which only Jan owned. Turner has
shown Jan benefited from the corral as the property owner, but not Bob. See, e.g.,
JB Contracting, Inc. v. Bierman, 147 S.W.3d 814, 820 (Mo. App. 2004) (holding
that, for the purposes of plaintiff’s unjust enrichment claim, the benefit of
improvements to property was attributed to the limited liability company that
8
owned the property and did not flow to the defendant, who owned the company).
Accordingly, the trial court erred in finding Bob liable in quantum meruit under
Count II. Point V is granted.6
Thus, Bob is not liable under either Count I or Count II of Turner’s
amended petition. Accordingly, we affirm the judgment as to Jan, reverse the
judgment as to Bob and remand with directions for the trial court to enter a
judgment in Turner’s favor against Jan only.
JEFFREY W. BATES, J. – OPINION AUTHOR
DANIEL E. SCOTT, J. – CONCUR
WILLIAM W. FRANCIS, JR., C.J./P.J. – CONCUR
6
In Turner’s brief, he argues that we should affirm the judgment against
Bob on the grounds of joint venture, fraud, conspiracy and tortious interference
with contract. As none of these theories were raised below, we cannot do so.
“While it is true that we may affirm a trial court’s judgment if cognizable under
any theory – even one different than the theory on which the judgment was based,
the alternative theory must have been pled and supported by the evidence.” Lowe
v. Hill, 430 S.W.3d 346, 350 (Mo. App. 2014). “It is an elementary rule of
appellate review that a case is reviewed only upon the theory on which it was
tried.” Cottonhill Inv. Co. v. Boatmen’s Nat’l Bank, 887 S.W.2d 742, 744 (Mo.
App. 1994). When an issue “was not recognized by the parties as an issue during
the trial, the judgment should not be upheld on that basis.” Id.; see also
Heffernan v. Reinhold, 73 S.W.3d 659, 663 (Mo. App. 2002) (“we may not
consider any theories advanced by the Plaintiffs for the first time on appeal, but
only consider those properly before the trial court”).
9