Missouri Highway & Transportation Commission v. Commerce Bank of Kansas City, N.A.

763 S.W.2d 172, 1988 Mo. App. LEXIS 1526, 1988 WL 117675
CourtMissouri Court of Appeals
DecidedNovember 8, 1988
DocketNo. WD 40326
StatusPublished
Cited by11 cases

This text of 763 S.W.2d 172 (Missouri Highway & Transportation Commission v. Commerce Bank of Kansas City, N.A.) 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
Missouri Highway & Transportation Commission v. Commerce Bank of Kansas City, N.A., 763 S.W.2d 172, 1988 Mo. App. LEXIS 1526, 1988 WL 117675 (Mo. Ct. App. 1988).

Opinion

COVINGTON, Judge.

The Missouri Highway and Transportation Commission appeals from the entry of summary judgment against it by the trial court.

The tortuous and lengthy procedural history of this case may be found in three prior appellate opinions. State ex rel. State Highway Comm’n v. Morganstein, 588 S.W.2d 472 (Mo. banc 1979); State ex rel. State Highway Comm’n v. Morganstein, 649 S.W.2d 485 (Mo.App.1983); and State ex rel. Missouri Highway & Transp. Comm’n v. Morganstein, 703 S.W.2d 894 (Mo. banc 1986). (Morganstein III) See also Commerce Bank of Kansas City, N.A. v. Randall, 675 S.W.2d 687 (Mo.App.1984).

The case which is presently before this court involves an eight-count petition filed by the Missouri Highway and Transportation Commission (“Commission”) against Commerce Bank of Kansas City, N.A., (Bank), Patrick A. Lawler (Lawler), and A.H. Myers, Jr. (Myers). The allegations contained in the Commission’s petition arise from the Commission’s dealings with the defendants in connection with a condemnation case which began over seventeen years ago.

Because the facts set forth in the Mor-ganstein III opinion, although lengthy, provide the most concise summary of events which have transpired in this litigation, and since the facts presented there are relevant because the Commission has requested that this court interpret the holding of Morgan-stein III, this court adopts the facts set forth therein:

In July, 1970, the State Highway Commission petitioned to condemn certain land owned by Ardeis Myers and Flora Myers as tenants by the entirety. In February, 1971, the condemnation commissioners assessed damages for the appropriation at $387,000, and issued the Myers a check in that amount. Both the Myers and the Highway Commission filed exceptions to the award and in May, 1976, the case went to trial.1 The jury assessed the Myers’ damages at $150,-000, $237,000 less than the condemnation commissioners’ award. As a result, the trial court ordered the Myers to repay the Commission the $237,000 difference, plus interest. The Myers’ filed a notice of appeal from this adverse judgment, but failed to file a supersedeas bond.
In December, 1977, the Commission sought execution on the Myers’ house. The Myers unsuccessfully moved to quash the execution, and also failed in their efforts to gain a writ of prohibition against the proposed action. On January 5, 1978, a member of the Myers’ family, the family’s attorneys, the Commission’s attorney, and a Bank official met to consider the use of a letter of credit rather than a supersedeas bond to stay execution on the house.
As a result of this meeting, the Bank issued a document which stated, inter alia, that it was a letter of credit, effective for one year, (January 5, 1978 to January 5,1979), and that upon presentation to the Bank of certain documents, the Bank would pay up to $350,000 to the Highway Commission. [Terms of letter of credit are omitted.]
The Bank charged the Myers a fee for the issuance of the letter of credit, and obtained a promissory note from them in the amount of $350,000. The promissory note was to be activated in the event that the Highway Commission drew upon the letter of credit and was secured by various properties, including a first deed of trust on the property which had been subject to the execution. For its part, the Commission agreed to accept the letter of credit in lieu of a supersedeas bond, and also agreed to dissolve its pending execution on the house. Beyond these facts, the parties disagree as to the [174]*174full scope and effect of the “agreement” reached at this meeting. Upon joint application of the Myers and the Commission, the Western District approved the security pursuant to Rule 81.10.
In June, 1978, the Western District affirmed the trial court’s judgment. However, this Court granted the Myers’ application for transfer. While the matter was pending before this Court, counsel for the Commission contacted counsel for the Myers and expressed concern that, by its own terms, the letter of credit was due to expire before the appellate process had run its course. The Myers therefore requested that the Bank renew the letter of credit for another year, (until January 5, 1980), and also asked that the stated limit be increased to $362,760 to cover the additional interest that would accumulate. After receiving additional security, the Bank renewed the letter of credit for another year and increased its stated limit to $362,760.
In September, 1979, this Court affirmed the amount of damages awarded for the taking, but remanded the matter for a determination of the liability of each individual defendant with regard to the excess award. Morganstein, supra, 588 S.W.2d at 481. With the end of the year approaching, and no final resolution imminent, the Highway Commission again asked that the Myers obtain a one-year extension of the letter of credit. Upon request by the Myers, the Bank renewed the letter of credit in the same face value, with a new expiration date of January 5, 1981.
No significant litigation activity occurred during 1980. In early January, 1981, the Bank extended the letter of credit until January 5, 1982, at the request of the Myers. The face value of the document as renewed remained at $362,760.
In July, 1981, the trial court on remand found that Mrs. Myers had the use and enjoyment of only one-half of the condemnation proceeds, and entered judgment against her estate in the amount of $119,500. Both the Commission and Mrs. Myers appealed.
In October, 1981, the Myers’ attorneys informed the Commission that when the existing letter of credit expired on January 5, 1982, the renewed letter of credit would be modified to reflect a reduced face value, since the judgment had been cut in half. In early January, 1982, the Myers communicated their desire to renew the letter of credit at a reduced amount to Commerce Bank. On January 4, 1982, the Bank mailed the Commission a copy of the renewed letter of credit, modified to show a face value of $204,-950. Counsel for the Commission received word of the reduction sometime in the second week of January, 1982. In correspondence with the Myers’ attorneys, counsel for the Commission protested the reduction in face value of the letter of credit. Counsel did not, however, notify the Court of Appeals of its objections to the modified letter of credit.
In January, 1983, the Myers requested and received from the Bank another one-year extension of the letter of credit to January 5,1984. The face amount of the letter of credit remained at $204,950.
The Western District reversed the trial court’s determination and remanded the case with directions that the Circuit Court enter judgment against the estate of Flora Myers for the entire amount of the condemnation overpayment, with interest from February, 1971. Morgan-stein, supra, 649 S.W.2d at 490.

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Bluebook (online)
763 S.W.2d 172, 1988 Mo. App. LEXIS 1526, 1988 WL 117675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/missouri-highway-transportation-commission-v-commerce-bank-of-kansas-moctapp-1988.