Cohn v. Century Venture Development Partnership

938 S.W.2d 647, 1997 Mo. App. LEXIS 176, 1997 WL 52302
CourtMissouri Court of Appeals
DecidedFebruary 11, 1997
DocketNo. 70303
StatusPublished

This text of 938 S.W.2d 647 (Cohn v. Century Venture Development Partnership) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cohn v. Century Venture Development Partnership, 938 S.W.2d 647, 1997 Mo. App. LEXIS 176, 1997 WL 52302 (Mo. Ct. App. 1997).

Opinion

SIMON, Judge.

James J. Dwyer (defendant) appeals from the entry of summary judgment in an action for an accounting in the Circuit Court of the City of St. Louis, in favor Kimble and Sher-rye Cohn (plaintiffs) for $34,347.75, an amount presently in the registry of the court, plus interest earned thereon.

On appeal, defendant alleges that the equity court erred in: (1) ignoring defendant’s affirmative defenses, in holding that defen- • dant’s evidence in support of his affirmative defenses was “irrelevant,” and in refusing to exercise its equitable discretion, in sustaining plaintiffs’ motion for summary judgment; said error was prejudicial in that defendant properly pled affirmative defenses of breach of fiduciary duty and unclean hands, said defenses were proper defenses to plaintiffs’ claims for an accounting and to their claim that plaintiffs’ “loan” to the partnership be given preference over defendant’s claim that services in winding up the affairs of the partnership and creating the funds which were awarded to plaintiffs entitled defendant to compensation, plaintiffs failed to negate these affirmative defenses, and defendant produced evidence in support of his affirmative defenses; (2) denying defendant’s motion to dismiss and counterclaim to compel arbitration; and (3) failing to notify creditors to make claims upon the partnership funds then in the registry of the court.

When considering an appeal from a summary judgment, we review the record in a light most favorable to the party against whom summary judgment was entered. ITT Commercial Finance v. Mid-Am. Marine, 854 S.W.2d 371, 376[1] (Mo. banc 1993). Our review is essentially de novo. Id. at 379[9]. The criteria on appeal for testing the propriety of summary judgment are no different from those used by the trial court. Id. at 376[5]. The burden on a summary judgment movant is to show a right to judgment flowing from facts about which there is no genuine dispute. Id. at 378[9]. The non-movant must show — by affidavit, depositions, answers to interrogatories, or admissions on file — that one or more material facts shown by movant to be above any genuine dispute is, in fact, genuinely disputed. Id. at 381[17].

The undisputed evidence indicates that Kimble Cohn and defendant formed a limited partnership, Century Venture Redevelopment Partnership, in November of 1985. Defendant and Cohn were the general partners. The purpose of the partnership was to acquire and redevelop the building located at 555 Washington Avenue in the City of St. Louis. The partnership contracted with HBD Contracting, Inc. (HBD) to perform construction on the property. Mercantile Bank (Mercantile) provided a construction loan secured by a, deed of trust on the property. In 1986 and 1987 HBD claimed it was entitled to cost overruns. In April of 1987, Mercantile demanded additional security for its loan. Plaintiffs pledged assets worth $620,000.00 as collateral pursuant to a written agreement between plaintiffs, defendant, Mercantile, and the partnership. In 1988, HBD filed a mechanic’s lien and lawsuit against the partnership for approximately $1 million, and the partnership responded with a counterclaim.

In April of 1991, Mercantile foreclosed on the property at 555 Washington. Mercantile also took the collateral pledged by plaintiffs and demanded payment of the deficiency from the partners. In July of 1991, the plaintiffs moved to Texas. After negotiations, Mercantile agreed to settle the deficiency claim for $75,000.00, and Cohn agreed to pay that amount. Before a settlement was reached, Mercantile sold the building to the Forsythe Group. The Forsythe Group then sold the building to the United States Postal Service for approximately triple the price it [649]*649paid. The Forsythe Group settled HBD’s claim for $900,000.00, and the partnership’s counterclaim was the only remaining claim in the original mechanic’s lien litigation.

Defendant wished to renegotiate the settlement with Mercantile. Mercantile agreed to drop its claim without the payment of any money, but required the plaintiffs to sign an agreement which would allow it to sell the remaining assets pledged by them. Defendant agreed to those terms as long as Cohn would turn over the $75,000.00 that he had intended to pay to Mercantile, for partnership purposes. Cohn turned over the $75,-000.00 to the partnership.

The counterclaim against HBD was settled with HBD agreeing to pay $150,000.00 to the partnership. Because the partners could not agree on the disposition of the funds, the settlement money was paid into the court’s registry and certain creditors were paid. The remaining balance after payment of certain claims is $34,347.75, which is the subject of this dispute. Defendant filed a motion seeking the remaining amount in the court’s registry claiming that he was entitled to the funds because Kimble Cohn abandoned the partnership when he moved to Texas, that he refused to cooperate in the litigation, and that defendant devoted 800 hours to partnership business. The plaintiffs filed for an accounting. Their claim is based on the assets pledged and sold and the loan.

The plaintiffs filed a motion for summary judgment on the grounds that defendant is entitled to no priority claim against the partnership funds for his service to the partnership and that partnership funds must be paid first to partnership creditors including partners. In support of their motion, they presented the affidavit of Kimble Cohn, numerous exhibits, and a memorandum of law. Cohn stated in his affidavit that as of December 31,1992, the partnership books accurately show that the partnership owed him $677,-277.54. He also stated that the indebtedness is really an indebtedness to him and his wife, arising from collateral pledges and loans made by them to partnership.

In his response to the motion for summary judgment, defendant admitted the formation of the partnership, denied that the partnership was not engaged in any business, admitted that the partnership books show the indebtedness to Cohn, denied that the collateral pledges were made to the partnership, and admitted that the partnership books show that -he owes the partnership $23,359.57, but does not admit the accuracy of the books.

Defendant also submitted his affidavit. In his affidavit, defendant states that the $75,-000.00 that Kimble Cohn turned over to the partnership was treated as a loan to the partnership by the partnership’s accountants. Defendant made further assertions in his response to which the trial court found that they were not relevant to the issues in the suit and particularly the summary judgment motion. Defendant did not, however, produce any affidavits, depositions, answers to interrogatories, or admissions refuting the plaintiffs’ showing that they are creditors of the partnership. Defendant did, however, present evidence of breach of fiduciary duty and unclean hands on the part of his partner, but he failed to rebut the proposition that the plaintiffs are creditors of the partnership and that the loans did not arise out of any misconduct. Defendant contended that he was entitled to the funds remaining in the court registry because he performed a substantial amount of work on behalf of the partnership and because Kimble Cohn abandoned his duties as a partner. The trial court granted summary judgment in favor of plaintiffs and awarded them the funds remaining in the court’s registry plus interest.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Green v. Lutheran Charities Ass'n
746 S.W.2d 154 (Missouri Court of Appeals, 1988)
Mahaffy v. City of Woodson Terrace
609 S.W.2d 233 (Missouri Court of Appeals, 1980)
Warren v. Warren
784 S.W.2d 247 (Missouri Court of Appeals, 1990)
ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp.
854 S.W.2d 371 (Supreme Court of Missouri, 1993)
Blankenship v. Better Business Bureau
782 S.W.2d 131 (Missouri Court of Appeals, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
938 S.W.2d 647, 1997 Mo. App. LEXIS 176, 1997 WL 52302, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cohn-v-century-venture-development-partnership-moctapp-1997.