Sally Bacon v. Jeffrey Friedman

Missouri Court of Appeals·Decided March 30, 2021·No. ED109141·Published

Opinion

In the Missouri Court of Appeals Eastern District

DIVISION ONE

SALLY BACON, ) No. ED109141 )

Appellant, ) Appeal from the Circuit Court of ) Franklin County

vs. )

) Honorable Isidore I. Lamke JEFFREY FRIEDMAN, ET AL., )

)

Respondent. ) Filed: March 30, 2021

Sally Bacon (“Bacon”) appeals from the judgment of the Circuit Court of Franklin County, which granted the motion for summary judgment filed by Jeffrey Friedman (“Friedman”), Monica Friedman, Steven Kuess, and Theresa L. Keuss (collectively “Respondents”). Specifically, the circuit court held that Bacon’s claims for breach of contract, quantum meruit, and unjust enrichment arising from the sale of her privately-held archery business to Respondents were barred by the five-year statute of limitations under § 516.120(1).1 In her sole point on appeal, Bacon argues that the circuit court erred in granting Respondents’ motion for summary judgment because there is a genuine dispute regarding: (1) the existence of the alleged oral agreement to sell the archery business to Respondents; and (2) the amount of the monthly payments allegedly required thereunder. Bacon further argues that her claims are not

1 All statutory references are to Mo. Rev. Stat. Cum. Supp. 2014.

barred by the five-year statute of limitations because the parties’ underlying oral agreement was an “installment contract,” and thus, Respondents’ alleged breach thereof is ongoing. We affirm.

I. Factual and Procedural Background2 Viewed in the light most favorable to Bacon, and giving Bacon the benefit of all reasonable inferences therefrom, the record on appeal reveals the following facts:

In the fall of 2004, Friedman approached Bacon about purchasing Summit Archery, the retail archery business she and her husband, Dallas Bacon, 3 owned in Labadie, Missouri. Bacon subsequently offered to sell Summit Archery to Friedman for a total of $350,000, which included $150,000 for the land and building, and $200,000 for the store inventory and “everything else” (the “Inventory”). According to Bacon, Friedman accepted the offer and thereafter sought financing for the $350,000 total purchase price.4 Although Friedman was able to obtain a bank loan for the $150,000 required to purchase the land and building, he was unable to obtain financing for the $200,000 required to purchase the Inventory. Thus, Friedman asked Bacon if she would be willing to “carry” the $200,000. Bacon admitted that, “like a dummy,” she agreed to do so.

Although the record is unclear exactly how the parties reached this understanding, Friedman took over Summit Archery on January 1, 2005, and started making $1,000 monthly payments to Bacon later that same month, which, other than the purchase price, appears to be the only specific agreed-upon term with respect to the parties’ “informal agreement” for the sale and

2 In their brief, Respondents also argued that Bacon’s appeal should be dismissed for numerous violations of Rule 84.04(c) and 74.04(c)(2). To the extent there were rule violations by Bacon, they do not substantially hinder our review of the merits of this case, and thus, we deny Respondents’ motion. 3 Dallas Bacon subsequently died, and thus, he was never a party to this action.

4 In contrast, Friedman testified at his deposition that he understood the total purchase price to be $280,000 for Summit Archery, but the record does not indicate whether he provided any further breakdown of the purchase price. Regardless, as further explained in our analysis, see infra, III. Discussion (B), the resolution of the total purchase price for Summit Archery is not necessary for our disposition of this case.

purchase of Summit Archery. At this time, however, the parties had not fully consummated the sale, and they never executed any type of formal asset purchase agreement with respect thereto.

In March of 2005, Bacon had an attorney draft a promissory note with a principal amount of $130,717, at 4.5% annual interest, payable in 180 payments of $1,000 per month, commencing April 1, 2005, for a total amount due at maturity of $180,000 (the “March 2005 Note”). In March of 2005, each Respondent executed the March 2005 Note. However, Bacon admitted that she only spoke with Friedman about the sale of Summit Archery, and that he was the “point man” on behalf of Respondents for this transaction. Respondents thereafter continued making the $1,000 monthly payments to Bacon as required under the March 2005 Note, which has never been in default.

At her deposition, Bacon was asked why the principal amount of the March 2005 Note was only $130,717, when she alleges that the total purchase price for the Inventory was $200,000, which left $69,283 unaccounted for by any writing. In response, Bacon testified that this was simply how her lawyer “wanted to write it up” if the payments were to be $1,000 per month.5 At another point during her deposition, however, Bacon testified that she asked her lawyer to draft it up “for a thousand dollars a month,” and when he asked Bacon what she would do about the “rest,” she said that she contemplated Friedman would start paying on that amount “after hunting season,” and would continue paying until she got “paid off.” Bacon further testified that her lawyer said, “I don’t think that’s a good idea,” but Bacon said that she believed she could trust Friedman.

5 We observe that this would be correct if the note was also required to be no more than 180 months. However, the note could have been written with a principal amount of $200,000 for a period of 370 months at 4.5% annual interest, and still achieved the desired monthly payment of $1,000. Furthermore, the record is unclear whether the parties expressly discussed the required duration of the March 2005 Note and how the number of 180 monthly payments was established. Regardless, the resolution of this issue is not necessary for our disposition of the case.

Bacon also testified that when she had Respondents execute the March 2005 Note, she stated to Friedman, “you know what[,] it leaves $68,283,”6 but she further told him that he could “pay at the end of the year as you get it, you know, until you get it paid off,” to which Friedman allegedly agreed. However, Bacon admitted that there was no set time period in which Friedman was to fully repay this amount, nor a set monthly amount he was required to pay. Rather, Bacon simply testified that she just “wanted her money.” Bacon further admitted that there is no “writing” confirming this understanding, including e-mails or any other memorializing documents. Thus, Bacon admitted that the March 2005 Note was the only written document executed by any Respondent that in any way memorialized the agreement to sell Summit Archery to Respondents.

Although Respondents consistently made the $1,000 monthly payments required under the March 2005 Note, Bacon testified that she eventually became concerned that Respondents were not going to repay the remaining $69,283 balance of the Inventory purchase price. Thus, in October of 2006, Bacon testified that she approached Friedman about the fact that he still had not made any payments on this amount, and she proposed that they “redo” the March 2005 Note.

Although the record does not indicate how Friedman initially responded to this proposition, Bacon had her attorney draw up a second promissory note to specify the terms for the repayment of the full $200,000 purchase price for the Inventory, less the $1,000 monthly payments that Friedman had already made to that point. Specifically, this second promissory note had a principal amount of $180,000, at 4.5% interest, payable in 180 payments of $1,376.99 per month, commencing November 20, 2006, for a total amount due at maturity of $247,858.20 (the “October 2006 Note”). The October 2006 Note also released Respondents from the March 2005 Note. Bacon hand-delivered the October 2006 Note to Summit Archery sometime in

6 It appears that Bacon misspoke, and meant to say $69,283.

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