In the Missouri Court of Appeals Western District
STACY HOLLIFIELD, ) Respondent, ) WD84857 v. ) ) FILED: November 8, 2022 LAS CUMBRES, LLC, ) Appellant. )
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY THE HONORABLE MARY F. WEIR, JUDGE
BEFORE DIVISION TWO: LISA WHITE HARDWICK, PRESIDING JUDGE, THOMAS N. CHAPMAN AND JANET SUTTON, JUDGES
Las Cumbres, LLC, appeals the judgment denying its motion to set aside the
default judgment entered against it on a petition for breach of warranty of
habitability filed by Stacy Hollifield. In the default judgment, the court ordered
Las Cumbres to pay Hollifield $9,616. Las Cumbres contends the circuit court
erred in finding it failed to set forth a meritorious defense to Hollifield’s claim.
Because Las Cumbres sufficiently alleged two meritorious defenses to Hollifield’s
claim, we reverse the circuit court’s judgment and remand for further proceedings
consistent with this opinion. FACTUAL AND PROCEDURAL HISTORY
Hollifield leased a residence in Kansas City from Las Cumbres for $795 per
month beginning in June 2020. On April 6, 2021, Hollifield filed a petition for
breach of warranty of habitability in the Jackson County Associate Circuit Division
against Las Cumbres alleging that the residence was uninhabitable due to several
unsafe and dangerous conditions, specifically, the furnace did not operate; water
leaked from the kitchen pipes and ceiling; two burners on the stove did not
operate; windows could not be opened; electrical wiring was exposed; the
electrical panel box was corroded and improperly wired; and the subfloor girder,
interior floors, attic rafters, and interior walls were sagging and could collapse.
Hollifield requested an award of previously made lease payments, additional
living expenses, attorney fees, and costs.
Las Cumbres was served with process on April 13, 2021. The summons
indicated a hearing was scheduled for May 19, 2021. Las Cumbres did not file an
answer and did not appear at the May 19, 2021 hearing. Following the hearing,
the court entered a default judgment in favor of Hollifield. Based on the pleadings
and evidence adduced at the hearing, the court found that Las Cumbres owed
Hollifield $8,250 in previously made lease payments, $500 in additional living
expenses, $750 in attorney fees, and $116 in costs, for a total of $9,616.
On May 22, 2021, counsel entered his appearance on behalf of Las Cumbres
and filed a motion to set aside the default judgment, which counsel later
amended. In the amended motion, Las Cumbres alleged it had three meritorious
2 defenses to Hollifield’s petition: (1) there was no justiciable controversy between
Las Cumbres and Hollifield because Las Cumbres was not the legal owner of the
property and had no legal interest in it, so the lease agreement was null and void
and Las Cumbres had no duties to Hollifield as a landlord; (2) Hollifield prevented
Las Cumbres from repairing the conditions listed in the petition by preventing Las
Cumbres’s representative from entering the premises and by calling the police,
who instructed the representative not to enter the property without Hollifield’s
consent; and (3) Hollifield withheld rent due, which Las Cumbres asserted should
be set off against the damages Hollifield claimed. Las Cumbres further alleged
that counsel’s failure to appear at the May 19, 2021 hearing was the result of an
“honest mistake” due to counsel’s misunderstanding and incorrectly calendaring
the appearance date. To support these allegations, Las Cumbres attached, inter
alia, an affidavit from its corporate representative, Guillermo Luna, Jr.
The court held a hearing on Las Cumbres’s amended motion to set aside
the default judgment. Following the hearing, the court entered its judgment
denying the motion. The court found that, on March 10, 2021, Las Cumbres had
filed an unlawful detainer action against Hollifield attesting in its verified petition
that it was the owner and/or landlord of the property, it had the legal right to
immediate possession of the property because the lease in question had been
violated, and it was entitled to back rent, double rent, attorney fees, and costs
from Hollifield. Therefore, the court found that Las Cumbres’s defense that it was
3 not the owner of the property and had no legal interest in the property was
without merit.
Las Cumbres filed a motion asking the court to reconsider the denial of the
motion to set aside on the basis that the court did not rule on whether its other
two asserted defenses, that Hollifield prevented its representative from entering
the premises to make repairs and that Hollifield withheld rent due, were
meritorious. The court denied the motion to reconsider, explaining that, by
claiming in this case that Las Cumbres had absolutely no title or interest in the
property after claiming in the unlawful detainer case that Las Cumbres was the
owner and/or landlord of the property, Las Cumbres’s affiant, Luna, “attempted to
perpetrate a fraud on the [c]ourt.” Thus, the court found that Luna “is not credible
nor are his claims of a meritorious defense on behalf of” Las Cumbres. For clarity
purposes, the court amended its original judgment denying the motion to set
aside the default judgment to state that Las Cumbres’s “claimed meritorious
defenses are neither credible nor with merit.” Las Cumbres appeals.
STANDARD OF REVIEW
We review the circuit court’s denial of a Rule 74.05(d) motion to set aside a
default judgment for an abuse of discretion. Vogel v. Schoenberg, 620 S.W.3d 106,
111 (Mo. App. 2021). An abuse of discretion occurs when the “ruling is clearly
against the logic of the circumstances then before the trial court and is so
unreasonable and arbitrary that the ruling shocks the sense of justice and
indicates a lack of careful consideration.” Id. (citation omitted). Because public
4 policy favors resolving cases on the merits, we accord more deference to the
circuit court’s decision to set aside a default judgment and “are more likely to
reverse a judgment denying a motion to set aside a default judgment than one
granting relief.” Id.
ANALYSIS
In Point I, Las Cumbres contends the court erred in denying its motion to set
aside the default judgment on the ground that it failed to set forth a meritorious
defense. Las Cumbres argues that it set forth two defenses that would have
defeated or “adversely affected” Hollifield’s breach of warranty of habitability
claim, namely, that Hollifield prevented it from entering the residence to make
repairs and Hollifield withheld rent due, which Las Cumbres asserts would have
defeated or substantially reduced Hollifield’s claim for a refund of the previously
made rent payments.1
Rule 74.05(d) provides that a default judgment may be set aside “[u]pon
motion stating facts constituting a meritorious defense and for good cause
shown,” as long as the motion to set aside is filed “within a reasonable time not
to exceed one year after the entry of the default judgment.” As the party seeking
to set aside the default judgment, Las Cumbres had the burden to show both a
meritorious defense and good cause. Vogel, 620 S.W.3d at 111. The failure to
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In the Missouri Court of Appeals Western District
STACY HOLLIFIELD, ) Respondent, ) WD84857 v. ) ) FILED: November 8, 2022 LAS CUMBRES, LLC, ) Appellant. )
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY THE HONORABLE MARY F. WEIR, JUDGE
BEFORE DIVISION TWO: LISA WHITE HARDWICK, PRESIDING JUDGE, THOMAS N. CHAPMAN AND JANET SUTTON, JUDGES
Las Cumbres, LLC, appeals the judgment denying its motion to set aside the
default judgment entered against it on a petition for breach of warranty of
habitability filed by Stacy Hollifield. In the default judgment, the court ordered
Las Cumbres to pay Hollifield $9,616. Las Cumbres contends the circuit court
erred in finding it failed to set forth a meritorious defense to Hollifield’s claim.
Because Las Cumbres sufficiently alleged two meritorious defenses to Hollifield’s
claim, we reverse the circuit court’s judgment and remand for further proceedings
consistent with this opinion. FACTUAL AND PROCEDURAL HISTORY
Hollifield leased a residence in Kansas City from Las Cumbres for $795 per
month beginning in June 2020. On April 6, 2021, Hollifield filed a petition for
breach of warranty of habitability in the Jackson County Associate Circuit Division
against Las Cumbres alleging that the residence was uninhabitable due to several
unsafe and dangerous conditions, specifically, the furnace did not operate; water
leaked from the kitchen pipes and ceiling; two burners on the stove did not
operate; windows could not be opened; electrical wiring was exposed; the
electrical panel box was corroded and improperly wired; and the subfloor girder,
interior floors, attic rafters, and interior walls were sagging and could collapse.
Hollifield requested an award of previously made lease payments, additional
living expenses, attorney fees, and costs.
Las Cumbres was served with process on April 13, 2021. The summons
indicated a hearing was scheduled for May 19, 2021. Las Cumbres did not file an
answer and did not appear at the May 19, 2021 hearing. Following the hearing,
the court entered a default judgment in favor of Hollifield. Based on the pleadings
and evidence adduced at the hearing, the court found that Las Cumbres owed
Hollifield $8,250 in previously made lease payments, $500 in additional living
expenses, $750 in attorney fees, and $116 in costs, for a total of $9,616.
On May 22, 2021, counsel entered his appearance on behalf of Las Cumbres
and filed a motion to set aside the default judgment, which counsel later
amended. In the amended motion, Las Cumbres alleged it had three meritorious
2 defenses to Hollifield’s petition: (1) there was no justiciable controversy between
Las Cumbres and Hollifield because Las Cumbres was not the legal owner of the
property and had no legal interest in it, so the lease agreement was null and void
and Las Cumbres had no duties to Hollifield as a landlord; (2) Hollifield prevented
Las Cumbres from repairing the conditions listed in the petition by preventing Las
Cumbres’s representative from entering the premises and by calling the police,
who instructed the representative not to enter the property without Hollifield’s
consent; and (3) Hollifield withheld rent due, which Las Cumbres asserted should
be set off against the damages Hollifield claimed. Las Cumbres further alleged
that counsel’s failure to appear at the May 19, 2021 hearing was the result of an
“honest mistake” due to counsel’s misunderstanding and incorrectly calendaring
the appearance date. To support these allegations, Las Cumbres attached, inter
alia, an affidavit from its corporate representative, Guillermo Luna, Jr.
The court held a hearing on Las Cumbres’s amended motion to set aside
the default judgment. Following the hearing, the court entered its judgment
denying the motion. The court found that, on March 10, 2021, Las Cumbres had
filed an unlawful detainer action against Hollifield attesting in its verified petition
that it was the owner and/or landlord of the property, it had the legal right to
immediate possession of the property because the lease in question had been
violated, and it was entitled to back rent, double rent, attorney fees, and costs
from Hollifield. Therefore, the court found that Las Cumbres’s defense that it was
3 not the owner of the property and had no legal interest in the property was
without merit.
Las Cumbres filed a motion asking the court to reconsider the denial of the
motion to set aside on the basis that the court did not rule on whether its other
two asserted defenses, that Hollifield prevented its representative from entering
the premises to make repairs and that Hollifield withheld rent due, were
meritorious. The court denied the motion to reconsider, explaining that, by
claiming in this case that Las Cumbres had absolutely no title or interest in the
property after claiming in the unlawful detainer case that Las Cumbres was the
owner and/or landlord of the property, Las Cumbres’s affiant, Luna, “attempted to
perpetrate a fraud on the [c]ourt.” Thus, the court found that Luna “is not credible
nor are his claims of a meritorious defense on behalf of” Las Cumbres. For clarity
purposes, the court amended its original judgment denying the motion to set
aside the default judgment to state that Las Cumbres’s “claimed meritorious
defenses are neither credible nor with merit.” Las Cumbres appeals.
STANDARD OF REVIEW
We review the circuit court’s denial of a Rule 74.05(d) motion to set aside a
default judgment for an abuse of discretion. Vogel v. Schoenberg, 620 S.W.3d 106,
111 (Mo. App. 2021). An abuse of discretion occurs when the “ruling is clearly
against the logic of the circumstances then before the trial court and is so
unreasonable and arbitrary that the ruling shocks the sense of justice and
indicates a lack of careful consideration.” Id. (citation omitted). Because public
4 policy favors resolving cases on the merits, we accord more deference to the
circuit court’s decision to set aside a default judgment and “are more likely to
reverse a judgment denying a motion to set aside a default judgment than one
granting relief.” Id.
ANALYSIS
In Point I, Las Cumbres contends the court erred in denying its motion to set
aside the default judgment on the ground that it failed to set forth a meritorious
defense. Las Cumbres argues that it set forth two defenses that would have
defeated or “adversely affected” Hollifield’s breach of warranty of habitability
claim, namely, that Hollifield prevented it from entering the residence to make
repairs and Hollifield withheld rent due, which Las Cumbres asserts would have
defeated or substantially reduced Hollifield’s claim for a refund of the previously
made rent payments.1
Rule 74.05(d) provides that a default judgment may be set aside “[u]pon
motion stating facts constituting a meritorious defense and for good cause
shown,” as long as the motion to set aside is filed “within a reasonable time not
to exceed one year after the entry of the default judgment.” As the party seeking
to set aside the default judgment, Las Cumbres had the burden to show both a
meritorious defense and good cause. Vogel, 620 S.W.3d at 111. The failure to
1 Las Cumbres does not appeal the circuit court’s determination that its asserted defense that it was not the owner of the property and had no interest in the property was not credible and was without merit; therefore, we will not review it.
5 establish either element requires that the motion to set aside the default judgment
be denied. Id.
This court has described the showing necessary to satisfy the meritorious
defense requirement:
In order to show a meritorious defense, a party need not present extensive and airtight evidence. He or she need only make some showing of at least an arguable theory of defense. “Meritorious defense” has been interpreted liberally to mean any factor likely to materially affect the substantive result of the case. This concept is not intended to impose a high hurdle, but is meant to allow the case to be decided on its merits where there are legitimate issues to be considered. A party satisfies the requirement if he or she sets forth allegations which, if supported by evidence, would defeat or adversely affect the plaintiff’s claim. Whether the evidence is credible is to be determined after the default judgment is set aside at a subsequent trial on the merits.
State ex rel. Koster v. Johnson, 367 S.W.3d 636, 640 (Mo. App. 2012) (internal
quotation marks and citations omitted).
To make a claim for breach of the implied warranty of habitability, a tenant
has to prove: “(1) entry into a lease for residential property; (2) the subsequent
development of dangerous or unsanitary conditions on the premises materially
affecting the life, health and safety of the tenant; (3) reasonable notice of the
defects to the landlord; and (4) subsequent failure to restore the premises to
habitability.” Moser v. Cline, 214 S.W.3d 390, 395 (Mo. App. 2007) (citation
omitted).
In its amended motion, Las Cumbres alleged that Hollifield prevented it
from repairing the conditions listed in her petition by preventing its representative
6 from entering the residence and by calling the police, who advised Las Cumbres’s
representative that he would need Hollifield’s permission to enter the residence.
These allegations were material to the fourth element of Hollifield’s claim – Las
Cumbres’s failure to restore the premises to habitability. If Las Cumbres could
support these allegations with evidence, they would provide a meritorious
defense. Similarly, if Las Cumbres had evidence to support its allegation that
Hollifield withheld rent due, that would affect the damages to which she was
entitled, specifically, the amount of her previously made rent payments.
Although the circuit court found the allegations in Las Cumbres’s motion
regarding these two asserted meritorious defenses were not credible because Las
Cumbres’s affiant, Luna, was not credible, the court’s credibility finding was
premature. Credibility “is to be determined after the default judgment is set aside
at a subsequent trial on the merits.” Johnson, 367 S.W.3d at 640 (internal
quotation marks and citations omitted). Las Cumbres set forth two arguable
theories of defense that would, if supported by evidence, materially affect the
substantive result of the case. The court abused its discretion in finding that Las
Cumbres failed to allege meritorious defenses in its motion to set aside the
default judgment. Point I is granted.
In Point II, Las Cumbres contends the circuit court erred in denying its
motion to set aside the default judgment because it established good cause. Las
Cumbres asserts that, during the hearing on the motion to set aside the default
judgment, the court “accepted” counsel’s explanation for his failure to appear at
7 the May 19, 2021 hearing and “did not take exception” with counsel’s contention
that his failure to appear was the result of “an honest mistake and unintentional
misunderstanding.”
Because the circuit court found that Las Cumbres failed to allege a
meritorious defense, it did not make any finding as to whether Las Cumbres
showed good cause to set aside the default judgment. We cannot determine if the
record supports Las Cumbres’s assertions about what occurred during the hearing
on the motion to set aside the default judgment because Las Cumbres did not file
a transcript of the hearing as part of the record on appeal.2 Therefore, we remand
the case to the circuit court to determine whether Las Cumbres showed good
cause to set aside the default judgment. If the court determines that Las Cumbres
showed good cause, then it shall set aside the default judgment. Point II is
granted, in part, and denied, in part.
CONCLUSION
The judgment is reversed, and the cause is remanded for further
proceedings in accordance with this opinion.
____________________________________ LISA WHITE HARDWICK, JUDGE ALL CONCUR.
2 Las Cumbres asserts that it properly requested a transcript and includes the written request it filed seeking the transcript. We cannot discern from the record before us why Las Cumbres did not receive the transcript.