Developer Services Corporation v. Triple J. Construction, Inc. Brazin Excavating, Inc.

440 S.W.3d 437, 2014 WL 1363670, 2014 Mo. App. LEXIS 393
CourtMissouri Court of Appeals
DecidedApril 8, 2014
DocketWD75051 with WD75081
StatusPublished

This text of 440 S.W.3d 437 (Developer Services Corporation v. Triple J. Construction, Inc. Brazin Excavating, Inc.) 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
Developer Services Corporation v. Triple J. Construction, Inc. Brazin Excavating, Inc., 440 S.W.3d 437, 2014 WL 1363670, 2014 Mo. App. LEXIS 393 (Mo. Ct. App. 2014).

Opinion

ALOK AHUJA, Judge.

- This appeal involves the priority of various liens against a large tract of property in Platte County. The circuit court granted summary judgment finding that a contractual lien for real-estate broker’s commissions claimed by Developer Services Corporation (“DSC”), and a mechanic’s lien Claimed by Bazin Excavating, Inc., were unenforceable. DSC and Bazin appeal. We affirm.

Factual Background

Triple J Construction, Inc., a Kansas corporation owned and operated by Douglas Bohi, purchased the Platte County-property at issue, comprising approximately 248 acres, in October 2004. Prior to Bohi’s purchase, the property was partially owned by William Johnson, a real-estate broker. Bohi was a real-estate developer who had developed a number of other subdivisions. Bohi’s company purchased the property with the intention of developing a residential subdivision.

On October 14, 2004, Triple J borrowed $1,755,000 from Union Bank to purchase the property. . Triple J granted Union Bank a first-priority Deed of Trust encumbering the property in exchange for the purchase-money loan. On the same day, Triple J transferred a portion of the property (“Phase 1”) to Greenhills Development, LLC. Greenhills Development granted Union Bank a Deed of Trust encumbering Phase 1 in exchange for a *440 $6,722,000 loan, which it used to purchase and develop the property. Bohi was an owner and managing member of Greenhills Development.

In the latter part of 2004, William Johnson and another real-estate agent, Cecilia Shalz, contacted Bohi about forming an in-house brokerage group to market and sell the subdivision property. Bohi agreed, and the three formed DSC, with each holding a one-third interest in the company.

In January 2005, DSC entered into an “Exclusive Subdivision Property Listing and Agreement,” (the “Listing Agreement”) with Triple J. With respect to DSC’s compensation for providing brokerage services, the Listing Agreement provides:

COMMISSIONS: Developer .shall assure that Master Broker and/or Brokerage Firm shall receive from Approved Builders in the subdivision a commission equal to 6% for each sale of improved Subdivision Property. Developer shall require all builders and lot purchasers to comply with the requirements of this agreement and shall require all Approved Builders in the subdivision to sign listing agreements approved by Master Broker and Brokerage Firms.

The Listing Agreement gave DSC exclusive rights to market the property from January 30, 2005 through January 30, 2014. The Listing Agreement was signed by Bohi (acting for Triple J as the property’s developer), and by Johnson for DSC.

The original plan called for the subdivision to be developed in three separate phases with approximately 1,000 homes to be built. In the early part of 2006, before any houses had been constructed, Bohi was approached by Signature Quality Homes, LLC about purchasing a portion of the property and becoming the exclusive builder for that portion of the property. Johnson spoke with both Bohi and Signature about DSC’s right to commissions on property sales within the land to be sold to Signature. Bohi and Signature agreed that the Purchase Agreements conveying two separate portions of the subdivision property to Signature would include provisions recognizing DSC’s right to commissions on the ultimate sale of subdivided property. The provision included in each Purchase Agreement reads:

Purchaser and Seller acknowledge existing Marketing Agreement between Seller and Developer Services Corporation a copy of which is attached hereto and incorporated herein for all intents and purposes as Exhibit C and which shall be recorded in the form of an affidavit of Equitable interest in the Office of the Recorder of Deeds for Platte County, Missouri. Purchaser and Seller agree that any amendments, mutual agreements, changes, cancellations or terminations of Exhibit C agreement for any reason between Triple J Construction and Developer Services Corporation shall not affect the agreement between Developer Services Corporation and Purchaser or Prudential-Carter-Duffy Realtors 1 as set out in this Purchase Agreement and its Exhibits. Further Purchaser acknowledges that Developer Services will retain (1) percent of the gross sales price of any improved property sold within [the affected property].

The Purchase Agreements were signed on March 15, 2006. Bohi signed on behalf of Greenhills Development and Triple J as sellers.

In July 2006, DSC recorded its “Affidavit of Equitable Interest” with the Platte County Recorder of Deeds. The Affidavit of Equitable Interest states that

*441 THE UNDERSIGNED GIVES NOTICE, that Developer Services Corporation ... entered into an agreement with Triple J Construction, Inc., a Kansas Corporation on January 17, 2005, regarding [the property]. The aformen-tioned tract of land has been platted under the names of Genesis Crossing Subdivision, Genesis Place Subdivision, Genesis Place Estates Subdivision, Genesis Trails Subdivision, and Genesis Village Subdivision.
THE PURPOSE OF THIS .AFFIDAVIT is to give notice to the world that Developer Services Corporation has an interest arising from said agreement with Triple J Construction, Inc. in the tract of land aforementioned. Further, the purpose of this affidavit is to specifically give notice to all Real Estate Agents, Brokers, Title Insurance Companies, Mortgage Companies and others of Developer Services Corporation’s interest.

The Affidavit of Equitable Interest does not describe in any .fashion the nature of DSC’s “agreement with Triple J Construction,” or of DSC’s rights under that agreement.

Triple J deeded the remainder of the subdivision property which it owned to Greenhills Development in August 2006. Greenhills Development borrowed $4,674,000 from Union Bank to finance the purchase, which permitted Triple J to pay off its debt to Union Bank. Greenhills modified the deed of trust it had given to Union Bank in October 2004, to cover the entire property.

Bazin’s mechanic’s lien claim stems from an oral contract it entered with Triple J in June 2005, to perform work and supply labor and materials for the construction and improvement of the subdivision. Ba-zin commenced work on the property immediately. Billing and payment for the work was to be done on a rolling account. Triple J stopped paying monthly invoices submitted by Bazin in April of 2006. Ba-zin, however, continued to perform work on the property through 2008. On August 20, 2008, Bazin filed a mechanic’s lien statement in the Circuit Court of Platte County, asserting a lien on the property.

Also in 2008, Union Bank declared a default on its deed of trust and initiated a trustee sale for two separate portions of the subdivision property. The trustee sale was scheduled for October 10, 2008. On October 3, 2008, DSC sued Union Bank and M & I Bank (which we refer to collectively as “Union Bank”) for breach of contract, quiet title, and judicial foreclosure of a claimed lien against the property; it also named as defendants a number of additional parties (including Bazin). with an interest or potential interest in the property.

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Bluebook (online)
440 S.W.3d 437, 2014 WL 1363670, 2014 Mo. App. LEXIS 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/developer-services-corporation-v-triple-j-construction-inc-brazin-moctapp-2014.