J & M Securities, LLC v. Nikki M. Kennedy

CourtMissouri Court of Appeals
DecidedDecember 28, 2021
DocketED109593
StatusPublished

This text of J & M Securities, LLC v. Nikki M. Kennedy (J & M Securities, LLC v. Nikki M. Kennedy) 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
J & M Securities, LLC v. Nikki M. Kennedy, (Mo. Ct. App. 2021).

Opinion

In the Missouri Court of Appeals Eastern District DIVISION ONE

J&M SECURITIES, LLC, ) No. ED109593 ) Appellant, ) Appeal from the Circuit Court of ) St. Louis County vs. ) ) Honorable John R. Lasater NIKKI M. KENNEDY, ) ) Respondent. ) Filed: December 28, 2021

I. Introduction

J&M Securities (“Appellant” or “J&M”), as assignee of The Century Group, Inc.

(“Century”), filed suit against Nikki Kennedy (“Kennedy”) in the Circuit Court of St. Louis

County to recover certain amounts allegedly owed to it pursuant to the residential lease

agreement entered into by and between Century and Kennedy, which agreement Century had

assigned to J&M for collection purposes only. In her answer to the Petition, Kennedy generally

denied any liability to Century, and asserted a counterclaim for breach of the warranty of

habitability, failure to return her security deposit, and set-off; Kennedy also asserted a similar

affirmative defense of set-off. Although the circuit court found that Kennedy owed certain

amounts to J&M for terminating the lease early, the circuit court also found that J&M owed a

slightly greater amount to Kennedy pursuant to her set-off affirmative defense and counterclaim,

and thus entered a money judgment in favor of Kennedy. J&M appeals the portion of the money judgment entered against it and in favor of Kennedy, but does not appeal the other parts of the

circuit court’s judgment.

J&M raises three points on appeal relating to the money judgment entered against it. In

its first point, J&M argues that the circuit court erroneously declared the law in entering a money

judgment against it in that Missouri law does not allow recovery against the assignee of a lease

agreement for a claim of overpayment to the assignor of the lease agreement. In its second point,

J&M argues that the circuit court erroneously applied the law in entering the money judgment

against it for the same reason asserted in its first point. In its third point, J&M argues that the

circuit court’s money judgment against it was not supported by substantial evidence of any

overpayment by Kennedy to J&M or any other transaction with J&M, which J&M maintains is

necessary in order for a money judgment to be entered against an assignee in this situation.

We reverse and remand.

II. Factual and Procedural Background

As Kennedy did not file a brief in connection with this appeal, we only have J&M’s

version of the relevant factual background. Regardless, it appears that the factual background

would be largely undisputed. The following is a summary of the relevant factual and procedural

history in this case based on our review of the record before us:

On or about October 19, 2018, Century, as landlord, and Kennedy, as tenant, entered into

an ordinary residential lease agreement (the “Lease”) for an apartment located in St. Louis

County (the “Leased Premises”). The Lease commenced on October 19, 2018, and was

scheduled to terminate on October 31, 2019 (the “Termination Date”). The base monthly rent

under the Lease was $605.00 per month, and the Lease called for a security deposit of $400.00,

which Kennedy paid to Century at the commencement of the Lease.

2 The Lease also had a provision whereby it would automatically renew at the then-current

market rental rate if Kennedy did not notify Century, in writing, of her intent not to renew the

Lease at least two full calendar months before the Termination Date. This provision also

provided that Century may “withhold all or any portion of the security deposit as compensation

to Lessor for actual damages sustained as result [sic] of Tenant’s failure to give adequate written

notice to terminate tenancy.”

According to Century, it sent two letters to Kennedy (dated August 1, 2019, and August

22, 2019), which reminded her that the Lease was coming up for renewal, and both letters

specifically requested that she notify them whether she intended to renew her lease no later than

August 31, 2019. The second notice also reminded Kennedy that if she did not notify Century of

her intent to renew or vacate on or before August 31, 2019, the Lease would automatically renew

“for a like term at the current market rate.” However, Kennedy failed to notify Century of her

intent not to renew the Lease by August 31, 2019, and so the Lease automatically renewed,

effective November 1, 2019, at the then-current market rental rate of $620.00 per month.

Century also sent Kennedy a letter, dated September 15, 2019, informing her that the Lease

automatically renewed for another 1-year term on November 1, 2019.

Despite the Lease automatically renewing for another 1-year term on November 1, 2019,

Kennedy vacated the Leased Premises on or before October 31, 2019. Century withdrew

$605.00 from Kennedy’s account on November 4, 2019, pursuant to an ACH agreement it had

with Kennedy. However, Century did not become aware that Kennedy had vacated the Lease

Premises until shortly thereafter, and conducted a routine inspection on November 7, 2019.

Century then sent a letter to Kennedy, dated November 11, 2019, summarizing the total

amount due upon her termination of the Lease on October 31, 2019 (the “Inspection Summary”),

3 which included several components. First, the Inspection Summary included the various charges

Century assessed for damage to the Lease Premises, which totaled $193.00. Next, the Inspection

Summary reflected the following two charges: (a) $620.00 as one month’s rent for “No Notice

Given” to terminate the lease; and (b) $2,170.00 as a contractual charge under Section 28(B)(2)

of the Lease called “Contract Part Performance settlement,” which was 3.5 times the monthly

rental amount (the “CPPS Provision”), and was assessed for terminating the Lease early.

Finally, the Inspection Summary reflected the following two credits to Kennedy: (a) $400.00 for

the security deposit; and (b) $605.00 for the amount it had automatically deducted from

Kennedy’s account on November 4, 2019. Thus, Century claimed a total amount due from

Kennedy of $1,978.00.

On June 23, 2020, J&M filed suit against Kennedy for breach of the Lease, seeking the

amounts set forth in the Inspection Summary (i.e., $1,978.00), plus pre-judgment interest from

November 12, 2019, plus post-judgment interest at the lesser of 18% or the maximum annual

rate allowed by law, as well as Century’s attorney’s fees and costs (the “Petition”). J&M

specifically alleged that the “present claim” had been assigned to it by Century pursuant to §

425.300 RSMo. (1994) (the “Assignment”), and further alleged that it was “the real party in

interest for purposes of collection.” J&M attached a copy of the Assignment to the Petition as an

exhibit thereto.1

In her answer to the Petition, Kennedy generally denied any liability to J&M, and

asserted a counterclaim for breach of the warranty of habitability, failure to return her Security

Deposit, and set-off. Specifically, in her set-off claim, Kennedy asked the circuit court to

1 Although the Assignment specifically references the 1994 version of § 425.300, we note that this statute has not changed since it was first enacted in 1992, and provides, in pertinent part, as follows: “Collection agencies may take assignments of claims in their own name as real parties in interest for the purpose of billing and collection and bringing suit in their own and the claimant’s names thereon….”

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J & M Securities, LLC v. Nikki M. Kennedy, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-m-securities-llc-v-nikki-m-kennedy-moctapp-2021.