White v. Emmanuel Baptist Church

Citations: 519 S.W.3d 917; 92 U.C.C. Rep. Serv. 2d (West) 930; 2017 Mo. App. LEXIS 527; 2017 WL 2332752Docket: WD 79999

Court: Missouri Court of Appeals; May 30, 2017; Missouri; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Cynthia L. Martin, Judge Saundra White, affirmed in part and reversed in part the trial court’s grant of summary judgment in favor of Emmanuel Baptist Church and its directors (Frank Fields, Eddie Slaughter, Ebbie Lee Stanley, and Carlton Strickland) against Plaintiff, who is the widow of Reverend Willis H. White. Plaintiff's claims included conversion, unjust enrichment, breach of contract, failure to produce documents, and an ultra vires act related to disputes over property and contracts following Rev. White's death in December 2012.

The court found that the uncontroverted facts, viewed favorably to Plaintiff, indicated that she sought recovery for property owned by Rev. White, alleged employment contracts involving both Rev. White and herself with the Church, loans made to the Church, and investment certificates held by them. Additionally, Plaintiff claimed an ultra vires act in the Church’s hiring of a new pastor and alleged failure to produce necessary documents per section 355.826.1.

Defendants contended that Plaintiff lacked standing to pursue claims on behalf of Rev. White and that her claims regarding loans and investment certificates were barred by the statute of limitations. The trial court granted summary judgment on all claims, leading to this appeal. 

The appellate court applies a de novo standard of review, determining the propriety of summary judgment by assessing whether there are genuine issues of material fact and if the moving party is entitled to judgment as a matter of law. Summary judgment can be granted if the defending party negates any element of the non-movant’s claim, shows the non-movant cannot produce sufficient evidence for any claim element, or establishes there is no genuine dispute regarding necessary facts for affirmative defenses. The court reviews the record favorably toward the non-moving party, accepting supporting facts from the moving party as true unless contradicted.

The non-movant is required to substantiate any denials with specific evidence from discovery, exhibits, or affidavits to establish a genuine issue for trial. If evidence is not properly supported as per Rule 74.04(c)(2) or (c)(4), the facts are considered admitted. The analysis addresses the theories for recovery in the Plaintiff's petition and the trial court's rationale for granting summary judgment on each count.

Count I alleged conversion of Rev. White’s personal and intellectual property, which the trial court dismissed, citing the Plaintiff’s lack of standing as the sole heir of Rev. White’s estate and failure to prove essential elements of conversion. 

Count II claimed unjust enrichment related to Rev. White's employment services and loans owed by the Church. Summary judgment was granted because the Plaintiff lacked standing and the claims for loans and investment certificates were barred by the statute of limitations (sections 516.110 and 516.120).

Count III involved breach of contract claims based on alleged employment agreements and unpaid loans. The court granted summary judgment due to the Plaintiff’s lack of standing, inability to prove the existence of a written contract, repayment of all loans, and the statute of limitations barring recovery efforts.

Count IV claimed the Church failed to produce corporate documents per section 355.826. Summary judgment was again granted as the Plaintiff was not a member of the Church when the request was made, and the Plaintiff did not effectively refute the assertion that she had terminated her membership seven months prior to the request.

Count V of the petition claimed that the Church acted outside its authority by not adhering to its bylaws in selecting a new pastor. Defendants sought summary judgment, arguing that the Plaintiff lacked standing to contest the Church's actions under section 355.141.2 because she was not a Church member. The trial court granted this summary judgment, confirming no material factual dispute over the Plaintiff's membership status. 

On appeal, Plaintiff raises five points. In Point One, she contends the trial court incorrectly ruled her lacking standing in her unjust enrichment and breach of contract claims (Counts II and III), asserting she had legitimate interests in the property sought. Point Two argues that summary judgment on her claims regarding section 355.826 violations and ultra vires actions (Counts IV and V) was erroneous, as her membership status was a disputed fact. Point Three claims error in the summary judgment regarding her conversion claim (Count I), stating she established rightful possession of the converted property. In Point Four, Plaintiff challenges the ruling on her loan and investment certificate recovery claims (Counts II and III), arguing that Defendants' practices delayed her causes of action and the statute of limitations. Point Five asserts the trial court erred in concluding there were no material facts disputing her ability to prove the existence of employment contracts with the Church and Rev. White (Count III).

Points One and Three are addressed together, focusing on the standing issue related to claims for property or amounts owed to Rev. White, who died intestate in December 2012, leaving multiple surviving children, including the Plaintiff. It is uncontested that at the time of the petition and summary judgment, no probate estate had been opened for Rev. White, and no heirship determination had been made, meaning Plaintiff was neither the executor nor a recognized heir. Consequently, the trial court's summary judgment on Counts I, II, and III regarding claims for Rev. White's property or debts was upheld, as the burden of proving standing lies with the parties seeking relief. Under section 473.270, only executors or administrators can claim debts owed to a decedent, and actions regarding wrongs to property survive only if brought by a fiduciary appointed for the deceased's estate.

The right to recover for wrongful conversion is granted to the administrator of an estate by statute. In the absence of estate administration, a 'judicially determined heir' may claim debts owed to a deceased individual. Under section 473.663, any interested person can initiate an action to determine the heirs of a decedent who left property, provided no estate administration or will probate has occurred within a year of the decedent's death. Heirs can seek formal recognition of property ownership, including litigation claims (choses in action) belonging to the deceased. If an individual is declared an heir under section 473.663, they are entitled to pursue recovery of the chose in action.

In this case, since no estate administration for Rev. White has begun and the Plaintiff has not been judicially recognized as an heir for any specific property or chose in action, the Plaintiff lacks standing to pursue claims in Counts I, II, and III related to property or debts owed to Rev. White. Although the Plaintiff filed a petition for heirship determination, this had not been resolved by the time of the summary judgment. The trial court correctly granted summary judgment on Count I (conversion) concerning personal and intellectual property belonging to Rev. White, as well as on Counts II and III (unjust enrichment and breach of contract) regarding loans and investments linked to Rev. White’s accounts and contracts with the Church.

Additionally, Points One and Three regarding the conversion and related claims are denied. Point Two contests the summary judgment on Counts IV and V, as the Plaintiff's status as a Church member presents a genuine factual dispute. Count IV claims the Church failed to provide requested records per section 355.826, which allows members to inspect and copy certain corporate records with appropriate notice.

Count V of the petition claimed the Church engaged in an ultra vires act by improperly hiring a pastor, contradicting its bylaws. Such claims against a nonprofit corporation can only be made per section 355.141, which generally prohibits challenges to corporate actions based on a lack of power, except in specific circumstances involving third parties who haven't acquired rights. The ability of the Plaintiff to assert claims under sections 355.826.1 or 355.141.2 hinges on her status as a 'member' of the Church, defined in section 355.066(21) as someone entitled to vote for directors based on the corporation’s bylaws. The Church acknowledged that the Plaintiff was a member from 1968 until January 2013, supported by an affidavit from Defendant Carlton Strickland. However, the Plaintiff disputed this assertion, claiming she remained a member and provided an affidavit and deposition testimony indicating her membership persisted at least until October 2015. The trial court found no genuine dispute regarding her membership status, but this conclusion was flawed as it did not consider the Plaintiff's evidence adequately. The Church’s bylaws require notice and a hearing for membership termination, and the Church failed to specify how the Plaintiff's membership was terminated. As a result, a genuine issue of material fact exists regarding the Plaintiff's membership status at the relevant times, making the grant of summary judgment on Counts IV and V erroneous. Additionally, Point Four asserts that it was incorrect to grant summary judgment on claims for loans and investment certificates based on the statute of limitations, as Defendants had a practice of repaying such obligations regardless of due dates. Counts II and III claimed unjust enrichment and breach of contract for these outstanding payments.

Plaintiff claims payments totaling $362,054.04 for investment certificates issued from February 1963 to July 2000 to Rev. White and/or jointly with Plaintiff, with interest rates between 4% and 12%. Additionally, Plaintiff seeks $69,090 for loans made to the Church for an educational building program from November 1981 to July 1982, and $15,000 for loans related to gymnasium construction in August and November 2000. Plaintiff also demands $70 for two shareholder certificates issued in 1971 and 1972. Defendants counter that all loans and certificates have been paid and argue that Plaintiff's claims are barred by the statute of limitations under sections 516.110(1) and 516.120(1). 

Section 516.110(1) mandates a ten-year limit for actions based on written agreements for money, while section 516.120(1) sets a five-year limit for other contracts and obligations. A cause of action arises when the right to sue is established, which occurs on the payment due date for obligations with specific due dates. The investment certificates had due dates of two to three years after issuance, with the last one maturing on July 3, 2003. The shareholder certificates were redeemable one year post-issuance, with the last maturing in June 1973. The ledger entries for loans do not specify a repayment promise or due date, classifying them as demand obligations due upon contribution, with the last entry dated September 1982. Similarly, the checks issued do not provide repayment terms, rendering them demand obligations due when written, with the last check dated November 2000. The trial court concluded that all of Plaintiff's claims were barred by the statute of limitations, as more than ten years had passed since the investment certificates' due dates, over thirty-one years since the last demand for the ledger entries, and at least twelve years since any demand related to the checks.

Plaintiff contends that her cause of action regarding the loans and investment certificates did not arise until she demanded payment after Rev. White's death, arguing that under section 516.100, a cause of action accrues when damages are sustained and ascertainable, not at the time of the breach. She cites the Church's practice of repaying loans and investment certificates upon demand, irrespective of their age, to support her position that her damages were not ascertainable until her demand. However, she fails to provide legal authority to substantiate her claim that a repayment cause of action does not accrue until demand is made, nor does she explain the absence of such authority, leading to the possibility of her argument being considered abandoned per Rule 84.04(d). The court rejects her argument, affirming that a cause of action for a payment instrument typically accrues on its due date or upon execution if undated, as established by sections 516.110(1) and 516.120(1). 

Plaintiff references section 400.3-304(a) of the Uniform Commercial Code, claiming it requires consideration of the Church's customary practices to determine when the loans and investment certificates became due. The court disagrees, stating that section 400.3-304 applies only to negotiable instruments, which the loans do not qualify as due to the lack of signature and unconditional promise by the Church. Although the investment certificates may be negotiable instruments, they expressly state a due date, making section 400.3-304(a) irrelevant. Instead, section 400.3-304(b) applies, indicating that for instruments payable at a definite time, they become overdue the day after the due date if not paid.

No modification to the due date of instruments payable on a definite date is permitted based on custom. The Uniform Commercial Code does not affect the timing of the plaintiffs' claims for payment on loans or investment certificates, nor does it impact the application of statutes of limitations that bar these claims. The trial court's summary judgment on Counts II and III was upheld because the claims were time-barred.

In Point Five, the plaintiff contends that granting summary judgment on Count III for breach of contract was erroneous due to disputed facts. However, this assertion is legally insufficient, lacking clarity on which contract is referenced and what specific facts are in dispute. Consequently, the point does not preserve any issues for appellate review.

The plaintiff claimed there were material disputes regarding the Church's obligations to Rev. White concerning a car title transfer and reimbursement of expenses, but the court noted that the plaintiff lacks standing to assert claims related to Rev. White. Additionally, the plaintiff argued she was an intended beneficiary of a life insurance policy the Church was supposed to acquire for Rev. White, yet she admitted there was no written employment agreement or specific provisions for such benefits. Her assertion regarding beneficiary status was not adequately supported to create a genuine dispute of material fact.

Finally, the plaintiff claimed unpaid wages for clerical work from December 2012 to March 2013, but also alleged that the Church locked her out shortly after Rev. White's death, indicating a potential employer-employee relationship issue that may not have been sufficiently established in her petition.

Defendants argued that there was no written employment agreement between Plaintiff and the Church, which Plaintiff admitted. They also asserted that Plaintiff failed to return to work after receiving her paycheck on January 6, 2013; Plaintiff denied this but only referenced her affidavit, which lacked information about her employment status post-Rev. White's death and her work after January 6, 2013. Her failure to adequately dispute the assertion led to an admission under Rule 74.04(c)(2). Plaintiff claimed she worked for at least a month after Rev. White's death, citing deposition testimony that was not inconsistent with Defendants' assertion of her absence after January 6, 2013. Consequently, she did not meet her burden to show a genuine dispute regarding her employment claims, leading to the trial court's summary judgment in favor of Defendants on Counts I, II, and III of her petition. The court's judgment was affirmed in part and reversed in part, particularly regarding Counts IV and V, which were remanded for further proceedings. The trial court found that Plaintiff lacked standing to pursue certain claims related to loans and investment certificates owed solely to Rev. White, and the ten-year statute of limitations applied. The appellate court may affirm a summary judgment on any applicable theory, regardless of whether it was argued at trial.