Opinion ID: 1794638
Heading Depth: 1
Heading Rank: 3

Heading: constitutionality of amhtd

Text: When enacted, AMHTD was designed to address the problems that arise when a person abandons a manufactured home in a mobile home park without the landlord's consent. [2] Under AMHTD, when a manufactured home is abandoned in a mobile home park, the owner of the park, referred to as a landlord by AMHTD, can apply to the department of revenue for a certificate of title by submitting a report to the department, the required contents of which are outlined in section 700.527. The department then sends notice to the owner of the manufactured home and to any holder of a security interest in the home informing them of the home's alleged status as abandoned and of the right of the landlord to seek title to the home under AMHTD if the home remains abandoned. Sec. 700.531. The notice informs them that if the owner or the holder of any security interest wishes to claim title to the home under AMHTD, the owner or secured party must prove either ownership or that a valid security interest exists and pay all reasonable rents due and owing to the landlord. Sec. 700.533.
Conseco and the Wrens argued in the trial court that section 700.525 permits a homeowner to be found to have abandoned the home if the homeowner is even a small amount behind in rent, so long as the utilities have been turned off or the landlord claims that there are other indications of abandonment; [3] that the statute allows deprivation without a pre-deprivation hearing to contest what rents are owing or whether indications of abandonment exist; that the statute forfeits all of the owner's equity in the home merely because the owner owes a few hundred dollars or less in rent, unless the owner pays all rents within 30 days; and that these provisions result in deprivation of the owner's property rights in the manufactured home and in the proceeds of the home without due process. After considering the above arguments, the trial court declared AMHTD unconstitutional because it deprives homeowners of their property without adequate notice or opportunity to be heard and because it is unconstitutionally vague. This Court agrees that serious constitutional issues would be raised were this Court to construe AMHTD to permit a landlord to retain the proceeds of sale of a manufactured home, over and above the amounts due in rents and related expenses, and should it permit a finding of abandonment without constitutionally adequate notice and opportunity to be heard. [4] It is premature for this Court to finally resolve these issues, however, for, while the Wrens were added as parties in the second amended petition, the ruling permitting that filing occurred on the same day the court issued its permanent injunction. No order was first issued allowing the department to show cause why a permanent injunction should not issue, nor was it otherwise given the opportunity to answer, conduct discovery or present evidence on the issues raised by the petition. The department alleges that numerous issues need to be explored, such as whether the Wrens indeed owned the home in question, whether they abandoned it, whether their home was forfeited under AMHTD, what rents were owing, what notice the Wrens received, if any, and so forth. A defendant is entitled to file an answer before the court rules in favor of the plaintiff on the allegations of the petition, and a permanent injunction should not issue until the pleadings have been joined and the evidence necessary to the court's determination has been developed. See, e.g., Rule 55.01; State ex rel. Woytus v. Ryan, 776 S.W.2d 389, 391 (Mo. banc 1989) (purpose of discovery is to provide access to information needed to develop issues framed by pleadings); Simms v. Ford Motor Credit Co., 605 S.W.2d 212, 214 (Mo.App. E.D.1980) (pleadings must be made up and issues developed); Frimel v. Humphrey, 555 S.W.2d 350, 352 (Mo. App.1977) (same). While the department did have the opportunity to respond to the allegations in Conseco's petition as to the alleged unconstitutionality of AMHTD as to homeowners, Conseco is not the owner of the manufactured home and has not offered arguments showing it has standing to raise these issues on behalf of the Wrens or other owners, or in its own right because the alleged unconstitutionality of the provisions as to homeowners affected its rights as a secured party, or because it has an ownership interest in one or more homes it has repossessed which might be directly affected by the homeowner provisions. Standing is antecedent to the right to relief. State ex rel. Williams v. Marsh, 626 S.W.2d 223, 227, n. 6 (Mo. banc 1982). Persons seeking relief have no right to do so in the absence of standing. State ex rel. Twenty-Second Judicial Circuit v. Jones, 823 S.W.2d 471, 475 (Mo. banc 1992). For these reasons, this Court remands this cause to the trial court with directions that it permit the department an opportunity to answer and undertake discovery as to the allegations of unconstitutionality as to homeowners.
Conseco also argues that AMHTD is unconstitutional as applied to secured parties because it deprives the secured party of its security interest in the manufactured home without adequate notice, requires the secured party to pay rent owed by the homeowner merely to retain what is already a perfected security interest, gives the secured party insufficient time in which to respond to the notice, and impairs its security interest by leaving the debt in the name of the debtor while transferring ownership of the home to the landlord, thereby depriving it of the collateral necessary to protect its security interest or, at best, leaving it with a security interest that is not reflected on the title issued by the department of revenue. The attorney general, on behalf of the department of revenue, disagrees. The attorney general suggests that the trial court erroneously based its holding that AMHTD deprives secured parties of their security interests without adequate notice or other process on what may be the department of revenue's flawed interpretation of AMHTD rather than on the provisions of AMHTD itself. The disagreement of the parties on this issue results in part from their differing interpretations of whether and how the provisions set out in section 700.527.1 can be harmonized with those of section 700.525. Section 700.527.1 provides: If a person abandons a manufactured home on any real property owned by another who is renting such real property to the owner of the manufactured home, and such abandonment is without the consent of the owner of the real property, the owner of the real property may seek possession of and title to the manufactured home in accordance with the provisions of sections 700.525 to 700.541 subject to the interest of any party with a security interest in the manufactured home. Sec. 700.527.1 (emphasis provided). Section 700.530 further provides: The provisions of sections 700.525 to 700.539 shall not affect the right of a secured party to take possession of, and title to, a manufactured home pursuant to section 400.9-503, RSMo, section 700.386 or otherwise as allowed by contract or law. Sec. 700.530. Conseco argues that, although these sections appear to protect the secured party's interest in the home, that protection is rendered ambiguous or non-existent by section 700.535, which Conseco suggests extinguishes the secured party's interest in the home unless the secured party files a response within 30 days of receiving notice that the landlord has requested title be issued in its name. Section 700.535 states: 700.535. Owner of manufactured home may voluntarily relinquish claim or relinquish by failure to respond to notice right to reclaim, requirement. If the manufactured home is titled in Missouri, the valid owner of the manufactured home or the holder of a valid security interest therein may voluntarily relinquish any claim to the manufactured home by affirmatively declaring such relinquishment or by failing to respond to the notice required by section 700.531 within thirty days of the mailing or delivery of such notice by the director of revenue. Sec. 700.535 (emphasis provided). Certainly, serious constitutional issues would be raised were AMHTD construed to destroy a secured party's ability to retain a perfected security interest without adequate notice and other necessary process. But, for at least two reasons, this Court need not reach the issue whether this language must be given the broad interpretation suggested by Conseco, or whether it can instead be read in the context of the entire statutory scheme, including sections 700.527.1 and 700.530, to protect the perfected security interest of a secured party. See Silcox v. Silcox, 6 S.W.3d 899, 903 (Mo. banc 1999) (statute will be construed constitutionally if possible); See also Hagan v. Dir. of Revenue, 968 S.W.2d 704, 706 (Mo. banc 1998). First, just as the record at this juncture does not show that the Wrens or Conseco have standing to raise the constitutionality of the homeowner provisions of the relevant statutes, it does not show that Conseco has standing to raise these issues as to the department's application of these provisions to secured parties, for the department has denied Conseco's allegations that it has a security interest in the listed homes or that it has received inadequate notice and opportunity to be heard or that its security interest is not adequately reflected in the titles issued by the department. The trial court never reached the issues regarding the propriety of the department's implementation of the statute, instead proceeding directly to the constitutional claims of Conseco and finding the statute unconstitutionally deprives Conseco of notice and an opportunity to be heard and is unconstitutionally vague. The court should have addressed the standing and other preliminary factual issues on which Conseco's constitutional and statutory interpretation claims are based before reaching these constitutional issues. See Rodriguez v. Suzuki Motor Corp., 996 S.W.2d 47, 53-54 (Mo. banc 1999); State ex rel. Dir. of Revenue, State of Mo. v. Gabbert, 925 S.W.2d 838, 839 (Mo. banc 1996); State ex rel. Williams v. Marsh, 626 S.W.2d 223, 227 (Mo. banc 1982). Second, any determination by this Court that the portions of AMHTD dealing with secured parties such as Conseco are constitutional when considered alone necessarily would be rendered moot if the statute is unconstitutional as applied to homeowners, for the provisions of these statutes governing the rights of secured parties and those governing the rights of homeowners are inextricably intertwined. Section 1.140 provides that, where some of the provisions of a statute are struck down, the remaining provisions will be found to be severable: unless the court finds the valid provisions of the statute are so essentially and inseparably connected with, and so dependent upon, the void provision that it cannot be presumed the legislature would have enacted the valid provisions without the void one; or unless the court finds that the valid provisions, standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent. Sec. 1.140. See Jefferson Sav. and Loan Ass'n v. Goldberg, 626 S.W.2d 640, 644 (Mo. banc 1982) (where portion of statute struck down, remainder cannot stand where it is too intertwined with stricken provision); Ryan v. Kirkpatrick, 669 S.W.2d 215, 219 (Mo. banc 1984) (applying section 1.140 to sever remaining portions of campaign finance act from provisions found to be unconstitutional). The provisions of AMHTD governing homeowners and secured parties are partially set out in the same and partially set out in different statutes, but the provisions of AMHTD concerning secured parties are so essentially and inseparably connected with, and so dependent on, the provisions regarding homeowners that it cannot be presumed the legislature would have enacted the former without the latter. And, the secured party provisions, standing alone, would be incomplete and incapable of being executed in accordance with legislative intent, in that, if the homeowner provisions are struck down, then there will be no transfer of title, and so the provisions of AMHTD as to secured parties will never come into play. For both of these reasons, the provisions as to secured parties cannot be given effect if those as to homeowners are struck down on remand. For the reasons set out above, this Court remands this case with directions to permit the director of revenue an opportunity to respond to and conduct discovery as to the allegations of the second amended petition made by the Wrens and for further proceedings in accordance with this opinion. WHITE, WOLFF, BENTON, and PRICE, JJ., concur. LIMBAUGH, C.J., concurs in separate opinion filed; TEITELMAN, J. concurs in opinion of LIMBAUGH, C.J.