Court Opinion

ID: 4027399
Source: CourtListenerOpinion
Date Created: 2016-08-23 13:08:54.057422+00
Date Added: 2024-06-11T09:26:41.979277
License: Public Domain

In the
                           Missouri Court of Appeals
                                     Western District

                                                  
SHIRLEY JONES,                                    
                                                     WD78533
                  Appellant,                         OPINION FILED:
v.                                                
                                                     August 23, 2016
RANDY JONES and CASSANDRA A.                      
CORDES-PATTON,                                    
                                                  
                Respondents.                      
                                                  

                   Appeal from the Circuit Court of Pettis County, Missouri
                           The Honorable Robert M. Liston, Judge

Before Division Four: Alok Ahuja, P.J., Anthony Rex Gabbert, J. James F. Kanatzar, Sp. J.

       Shirley A. Jones (Shirley) appeals the circuit court’s judgment in favor of Randy E. Jones

(Randy) and Cassandra Cordes-Patton (Cassandra) on Shirley’s First Amended Motion to Set

Aside Conveyance of real property. Shirley asserts three points on appeal. First, she contends

that the circuit court erred in declaring that a one-year statute of limitation barred her Section

454.525, RSMo 2000, action to set aside a fraudulent conveyance, arguing that Section 454.525

does not time-bar a claim as long as the person who took without consideration still holds title to

the conveyed property. Second, she contends that the circuit court erred in finding that

Cassandra recorded the Indiana property deed after the decision in her Pike County dissolution,

in that there is no evidence supporting that finding and the weight of the evidence demonstrates

that the recordation took place more than two weeks prior to the dissolution judgment such that
the conveyance was not done to effectuate the judgment and did not convert it to one with

consideration. Third, she asserts that the circuit court erred in basing its judgment on a theory

that consideration attached to Randy’s transfer of the Indiana deed to Cassandra by subsequent

acts because this theory was not raised in Cassandra’s pleadings and was not tried by consent.

We reverse and remand.

        Evidence adduced at trial, viewed in the light most favorable to the judgment, was that

Shirley and Randy divorced in 1982. Two children were born of the marriage and Randy was

ordered to pay Shirley child support. Sometime prior to 2000, Randy suffered a work injury and

received a monetary settlement for that injury. Randy used proceeds from that settlement to pay

off a lakefront plot of land that he had purchased in Princeton, Indiana. Around that same time,

Randy was nearly $40,000 in arrears on his child support obligation to Shirley.

        In 1998, Randy and future wife, Cassandra, began living together. In 2001, Randy

prepared, executed, and delivered a deed for the Indiana property to Cassandra. He conveyed it

to Cassandra for no consideration. Cassandra did not record the deed to the property at the time

Randy conveyed it to her. Cassandra and Randy were married in October of 2004. They had no

children together. They divorced in October of 2009. Cassandra recorded the deed to the

Indiana property on October 21, 2009, the day following the close of Randy and Cassandra’s

dissolution trial.

        Randy testified at the trial on Shirley’s fraud claim that he conveyed the Indiana property

to Cassandra to put it beyond Shirley’s reach for collection of child support and that Cassandra

was aware of this purpose. He also testified that he transferred it to Cassandra to hold for his

children in the event something happened to him. Cassandra testified that she had two children

of her own, not fathered by Randy, but to whom Randy was a father figure. She testified that

                                                 2
Randy told her that the reason he was granting her the land in Indiana was to ensure that she and

her children were provided for upon his demise, and that her children had an inheritance upon

her demise.

       Prior to Randy and Cassandra’s divorce in October of 2009, Randy and Shirley rekindled

their relationship and Randy moved into Shirley’s home in the spring of 2008. Randy and

Shirley were still residing together in 2011 when Shirley moved to set aside Randy’s conveyance

of the Indiana property, and also in August of 2014 at the time of trial.

       In Randy and Cassandra’s dissolution judgment, the Pike County Circuit Court awarded

the Indiana land to Cassandra as non-marital property and ordered Randy to refinance any loans

he had against the property. Randy appealed the Pike County Court’s judgment on several

grounds, including alleging that the court had erred in awarding the Indiana property to

Cassandra as her non-marital property. The Eastern District of this court upheld the circuit

court’s dissolution judgment. Jones v. Jones, 320 S.W.3d 236 (2010). Based on the

memorandum issued by the Eastern District in that case, it appears that Randy argued at trial and

on appeal that, while he did sign the 2001 deed, he never intended for the Indiana property to

belong to Cassandra. He argued that his intent in creating the deed was so that his children

would receive the land if something should happen to him. He denied, however, that the transfer

was to avoid child support. At the dissolution trial he was asked directly: “Isn’t the truth Mr.

Jones, you owed a bunch of child support and you were afraid your ex-wife was going to come

after your assets?” Randy responded: “No, I wasn’t afraid my ex-wife would come after my

assets.”

       The Eastern District found that Randy intended for the property to be Cassandra’s upon

transfer of the deed and expressly rejected Randy’s assertion that he deeded the property to

                                                  3
Cassandra because he wanted to ensure that his children received the land if something should

happen to him. The court stated that “[h]is after-the fact assertions that he did not intend to

convey his property are not persuasive” and, with regard to the claim that the property was to be

saved for his children found that the “assertion is not supported by the face of the deed or by any

further evidence or documentation.” The Eastern District noted that, prior to his marriage to

Cassandra, Randy titled several items of personal property in Cassandra’s name, including a

boat, motorcycle, jet ski, truck, and trailer. However, Randy had “many other items” of personal

property purchased prior to the marriage that he titled in his own name. These included a 2002

Dutch mobile home located on the Indiana property, a 1987 Runabout speedboat, a 1988 Ford

RII truck, a 1993 DD 2-wheel trailer, and a 1999 New Holland skid loader.

       On February 17, 2011, Shirley filed an Application for Writ of Scire Facias to Revive

Judgment, Motion to Declare Support Arrearage and Statutory Interest, and Motion to Set Aside

Conveyance. The circuit court ultimately entered a Judgment Declaring Arrearage and Reviving

Judgment by Writ of Scire Facias, finding Randy to owe Shirley support arrearage in the amount

of $9,723.73 and statutory interest in the amount of $31,550.75.

       On May 16, 2014, Shirley filed a first amended motion to set aside conveyance. In

Shirley’s “First Amended Motion to Set Aside Conveyance to Defeat Judgment Creditor,”

Shirley alleged that, in 2001, at a time when Randy was nearly $40,000 in arrears in his payment

of support, Randy conveyed by warranty deed his sole interest in the Indiana property to

Cassandra “for the purpose of hindering, delaying, obstructing, defeating and or defrauding the

rights of the petitioner, as a judgment creditor.” Shirley alleged that Cassandra was aware of

Randy’s “purpose and intention at the time of the said conveyance, and participated in it.”

Shirley alleged that no adequate consideration was ever exchanged for the property and that

                                                  4
Randy retained possession of the real estate thereafter, continuing to pay real estate taxes

assessed against it. Shirley alleged that, at the time of the conveyance, it was a transfer of all or

nearly all of Randy’s property and rendered him virtually insolvent. Shirley further alleged that,

Cassandra did not record the warranty deed, but secreted it away and Shirley only learned of it in

December of 2010. Shirley alleged that, Randy admitted under oath that he made the

conveyance solely to defeat her rights under the judgment for support, and in anticipation of

further litigation or collection proceedings for payment thereof, and such sworn testimony should

estop his asserting a rebuttal of the badges of fraud therein alleged. Shirley prayed that the court

“set aside the conveyance of the said real estate from [Randy to Cassandra], and to declare it

subject to [Shirley’s] execution for support, in accordance with Sections 428.010 and 452.140

R.S.Mo. (2000), as well as other statutory and common law authority . . . .”

       In answer to Shirley’s allegations, Cassandra, among other things, denied that the

conveyance was made for the purpose of defrauding Shirley and set forth affirmative defenses to

Shirley’s claim. Specifically, Cassandra pled that Shirley’s motion to set aside the conveyance

was brought pursuant to Chapter 428 and, that, pursuant to Chapter 428, Shirley’s claims were

barred by the statute of limitations. Further, that Shirley’s claims were barred by laches due to an

unreasonable and prejudicial delay in bringing her motion.

       On August 18, 2014, and December 3, 2014, trial was held regarding Shirley’s motion to

set aside Randy’s conveyance of the Indiana property. Shirley alleged at trial that Section

454.525 was also applicable to her claim, and there is no contention on appeal that the

applicability of Section 454.525 was not tried by consent.1 On February 2, 2015, the court issued

       1
           Neither Cassandra nor Randy filed a Respondent’s brief in this matter.

                                                          5
a judgment denying Shirley’s motion to set aside the conveyance. The court found Section

454.525 inapplicable to Shirley’s claim, reasoning that the conveyance was only voidable as long

as a tenancy by the entireties existed, and because Randy and Cassandra were not married at the

time of the deed transfer, no tenancy by the entireties existed. The court found Shirley’s claim

time barred by the portion of Section 428.049 that provides that a claim pursuant to Section

428.024 1(1) is extinguished unless the action is brought within four years after the transfer was

made or, if later, within one year after the transfer was or could reasonably have been discovered

by the claimant. The court found that, pursuant to Section 442.390, RSMo 2000, Shirley was put

on notice of the transfer when Cassandra recorded the deed to the property on October 21, 2009.2

The court, noting that Shirley and Randy had resumed a relationship prior to Cassandra and

Randy’s dissolution and that Shirley was managing Randy’s finances, expressly disbelieved

Shirley’s testimony that she only learned of the deed transfer when the Eastern District rendered

its decision in Randy’s Pike County appeal. The court further found that, due to Shirley’s

involvement in Randy’s finances, Shirley “absolutely could have obtained this knowledge prior

to the date she testified she became aware of it.” The court concluded that Shirley’s claim was

time barred by not being filed within one year of when Shirley knew or should have known of

the transfer. The court also concluded that Cassandra filed the deed after and to effectuate the

Pike County dissolution judgment and that no badges of fraud existed at the time she recorded

the deed. Shirley appeals.

        2
          Section 442.390 states: “Every such instrument in writing, certified and recorded in the manner herein
prescribed shall, from time of filing the same with the recorder for record, impart notice to all persons of the
contents thereof and all subsequent purchasers and mortgagees shall be deemed, in law and equity, to purchase with
notice.”

                                                        6
         Our standard of review is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc

1976). Schollmeyer v. Schollmeyer, 393 S.W.3d 120, 122 (Mo.App. 2013). We will affirm the

circuit court’s judgment unless it is unsupported by substantial evidence, it is against the weight

of the evidence, or it erroneously declares or applies the law. Id. at 122-123. We view the

evidence and all reasonable inferences in the light most favorable to the court’s judgment. Id. at

123. We review questions of statutory interpretation de novo. Ivie v. Smith, 439 S.W.3d 189, 202

(Mo. banc 2014). Our “primary rule of statutory interpretation is to give effect to legislative

intent as reflected in the plain language of the statute at issue.” Id.

         In Shirley’s first point on appeal, she contends that the circuit court erred in declaring that

a one-year statute of limitation barred her Section 454.525 action to set aside a fraudulent

conveyance, arguing that Section 454.525 does not time-bar a claim as long as the person who

took without consideration still holds title to the conveyed property. We agree. 3

         The circuit court found Section 454.525 inapplicable to Shirley’s claim, reasoning that

the statute makes the conveyance voidable only so long as an entireties interest exists, and

because Randy and Cassandra were not married when the deed was transferred, there was no

tenancy by the entireties. We find that a plain reading of the statute refutes this interpretation.

Section 454.525.2 states:

                 Any conveyance of real or personal property made by the obligor,
         including conveyances made by the obligor to himself and his spouse as tenants
         by the entirety, for the purpose and with the intent to delay, hinder or defraud the
         person to whom the support obligation is owed shall be voidable, as long as the

         3
          Shirley argues in the argument portion of her first point relied on that, even if Section 454.525 is
inapplicable, Section 428.034 defines “transfer” pursuant to Chapter 428 and, therefore, the application of this
definition to Section 428.049 and the court’s findings require that a four-year statute of limitations be applied, not a
one-year statute of limitations as the court found. As we find that the court erred in finding Section 454.525 and the
time constraints therein inapplicable to Shirley’s claim, we need not address this contention.

                                                           7
         tenancy by the entirety exists and until a good faith purchaser for value gains title
         to the property.

A plain reading of the statute is that any conveyance made by an obligor with the intent to avoid

collection of support is voidable. The language in the statute including tenancy by the entireties

does not modify or limit “any conveyance” from being voidable under the statute but, rather,

expresses that one cannot avoid the reach of the statute by, in essence, retaining some title to the

property while simultaneously attempting to put the property beyond reach of personal creditors

by creating a tenancy by the entirety with one’s spouse.

         Under Missouri law, ‘[t]he distinctive characteristic of an estate by the entirety is
         that it is deemed to be owned by a single entity, the marital community.’ In re
         Estate of Blair, 317 S.W.3d 84, 89 (Mo.App.2010) (citing Stewart v. Shelton, 356
Mo. 258, 201 S.W.2d 395, 398 (1947)). ‘Where land is held by the entirety, the
         husband and wife hold it not as separate individuals but as one person[.]’ Johnson
         v. Cook, 167 S.W.3d 258, 263 n. 4 (Mo.App.2005). Because the estate is deemed
         to be “owned by a single entity, ‘neither spouse has any ... interest which may be
         conveyed, encumbered or devised by his or her sole act.’” Bakewell, 396 S.W.3d
         at 412 (citations omitted). ‘[A] tenancy by the entirety may be terminated or
         severed only by joint and mutual action on the part of husband and wife.’ Id.

Jennings v. Atkinson, 456 S.W.3d 461, 465-466 (Mo. App. 2014).

         The statute is clear that any conveyance, including one creating a tenancy by the entirety,

is voidable under the statute. Therefore, the circuit court erred in concluding that Shirley’s claim

was not applicable to Section 454.525 and subject to the time constraints set forth therein.

Section 454.525 provides that a fraudulent conveyance is voidable up until a good faith

purchaser for value retains title to the property. As Cassandra, the original grantee of the

property, continued to hold title when Shirley filed her petition to set the transfer aside, Shirley’s

claim was not time barred. Point one on appeal is granted.4

         4
           Because Shirley disputes additional findings by the circuit court in her second point which may prove
relevant on remand, we review Shirley’s second point on appeal.

                                                          8
       In Shirley’s second point on appeal she contends that the circuit court erred in finding

that Cassandra recorded the Indiana property deed after the decision in her Pike County

dissolution, in that there is no evidence supporting that finding, the weight of the evidence

demonstrates that the recordation took place more than two weeks prior to the dissolution

judgment, such that the conveyance was not done to effectuate the judgment and did not convert

it to one with consideration.

       We agree that the record reflects that the deed to the Indiana property was recorded prior

to, and not after, Randy and Cassandra’s dissolution judgment and find that additional material

factual findings were also against the weight of the evidence.

       At trial, Shirley asked the court to take judicial notice of the decision rendered by our

Eastern District in Randy’s appeal of the Pike County dissolution judgment. In that decision, the

Eastern District affirmed the Pike County Circuit Court’s determination that the Indiana property

was Cassandra’s non-marital property. The Eastern District found that Randy intended for the

property to be Cassandra’s upon transfer of the deed and expressly rejected Randy’s assertion

that he deeded the property to Cassandra because he wanted to ensure that his children received

the land if something happened to him. The court stated that “[h]is after-the fact assertions that

he did not intend to convey his property are not persuasive.” With regard to Randy’s claim that

the purpose of the transfer was for Cassandra to save the property for his children, the Eastern

District found the assertion “not supported by the face of the deed or by any further evidence or

documentation.” At his dissolution trial, Randy denied transferring the property to avoid

attachment for child support collection.

                                                 9
       Here, the trial court found that the Pike County Circuit Court deemed the Indiana

property marital and divided it accordingly. This conclusion is inaccurate and against the weight

of the evidence. Pike County’s conclusion that the property was non-marital was one reason for

Randy’s appeal of the Pike County dissolution judgment.

       The trial court also found, after discussing that both Randy and Shirley “would have the

Court believe that the deed was executed and delivered for the purpose of avoiding the child

support” and noting Cassandra’s testimony “that the deed was given to her in order to insure that

her children were provided for in the event of [Randy’s] untimely demise,” that “[t]his may be an

indirect way of saying the same thing [- Randy] may have believed the deed property would

make the property available to the children rather than to execution of the child support award by

Petitioner.” This extrapolation is contrary to the Eastern District’s express conclusion that Randy

did not deed the land to Cassandra to be held for his children, and is against the weight of the

evidence at this trial because it erroneously intertwines Cassandra’s trial testimony that the

transfer was to benefit her children with Randy’s trial testimony that the transfer was to benefit

his children.

       Because Shirley was not a party to Randy and Cassandra’s dissolution proceeding, the

findings made by the Pike County dissolution court, and by the Eastern District on appeal, do not

bind Shirley in this proceeding. Nevertheless, without further explanation reconciling the trial

court’s own factual determinations with conflicting findings by our Eastern District that Shirley

requested the trial court to take judicial notice of, we are not confident that the trial court took

the Eastern District’s findings into consideration prior to issuing its judgment in this case.

       We also find an overall lack of specificity in the judgment regarding the material issue of

fraudulent intent. Although the court stated in an April 4, 2015, docket entry denying Shirley’s

                                                  10
motion to amend the judgment and motion for new trial that “[t]he court has previously found

and does believe that an instrument of transfer was delivered by Respondent to co-Respondent

with the intent to defraud the Petitioner of the capacity to collect her child support obligation and

the delivery was made without consideration,” the court’s written judgment makes no clear

finding of fraudulent intent when the deed was transferred. The judgment states that the

“Petitioner and Respondent would have the Court believe that the deed was executed and

delivered for the purpose of avoiding the child support and maintenance awards in favor of the

Petitioner,” but never expressly comes to that conclusion itself.5 The judgment indicates that

some badges of fraud existed when the deed was delivered, including there being a substantial

debt owed by Randy, no consideration given for the property, and that Cassandra was a paramour

of Randy at the time of the transfer. However, the judgment goes on to state that “[t]he Court is

not convinced that Respondent lacked sufficient means to pay the amount of the judgment or that

he was otherwise rendered indigent.”

                  In Missouri, the badges of fraud include: (1) a conveyance to a spouse or
         near relative; (2) inadequacy of consideration; (3) transactions different from the
         usual method of transacting business; (4) transfers in anticipation of suit or
         execution; (5) retention of possession by the debtor; (6) the transfer of all or
         nearly all of the debtor’s property; (7) insolvency caused by the transfer; and (8)
         failure to produce rebutting evidence when circumstances surrounding the transfer
         are suspicious.

Higgins v. Ferrari, 474 S.W.3d 630, 636 (Mo. App. 2015). Thus, the court did not find all

badges of fraud present at the time of the deed transfer and, because the court issued its judgment

in favor of Cassandra on other grounds, it is unclear from the written judgment whether the court

         5
          When discussing the status of fraudulent intent at the time Cassandra recorded the deed the court stated,
“[t]he badges of fraud, said to have existed at the time of the transfer, no longer existed on the date of the Pike
County decree except for the remaining debt.”

                                                         11
deemed the existing badges of fraud at the deed transfer to outweigh the nonexistent badges

thereby proving fraudulent intent, or if the court considered the nonexistent badges to preclude a

finding of fraudulent intent. Given that the Eastern District’s decision expressed that Randy “had

many other items of personal property purchased before the [2004] marriage” that were titled

solely in his name, either conclusion by the trial court was plausible and the lack of specificity in

the judgment cannot be reconciled by this court.6 The lack of specificity in the circuit court’s

judgment is exacerbated by the fact that the court had concluded that Shirley was not entitled to

proceed under Section 454.525 – a legal conclusion which we have reversed. Section 454.525.3

addresses the burden of proof in a fraudulent conveyance action brought under Section 454.525,

and will be relevant to the disposition of this case on remand. Section 454.525.3 provides in

relevant part:

        Where the party seeking to set aside the conveyance presents evidence that the
        conveyance was made voluntarily and without adequate consideration or in
        anticipation of entry or enforcement of a judicial or administrative support order,
        a presumption shall arise that the conveyance was made with fraudulent intent.
        Upon such a showing, the burden of proving that the conveyance was made in
        good faith shall rest with the obligor.

        The trial court expressly concluded that no badges of fraud existed at the time the deed

was recorded because the deed was recorded after Randy and Cassandra’s dissolution judgment

and was recorded so as to effectuate that judgment. As stated, the record is clear that the deed

was recorded prior to, and not after, the dissolution judgment; moreover, the property was set

aside to Cassandra as her non-marital property, not as part of an equitable division of the parties’

marital property (as the trial court believed). We have no way of knowing if the court would

        6
           The court specifically listed a 1987 speedboat, 1988 truck, 1993 trailer, and 1999 skid loader as items
titled solely in Randy’s name prior to 2004. The record is unclear as to when Randy acquired the property, but the
age of these properties predate the 2001 deed transfer.

                                                        12
have reached the same conclusions if premised on accurate factual determinations. Therefore, as

we agree that material findings by the court were against the weight of the evidence, Shirley’s

second point on appeal is granted.7

         We conclude that the circuit court erred in declaring that a one-year statute of limitation

barred Shirley’s Section 454.525 action to set aside a fraudulent conveyance as Section 454.525

provides that a fraudulent conveyance pursuant to the statute is voidable until a good faith

purchaser for value retains title to the property. Further, material findings by the circuit court

related to the primary issue of fraudulent intent were against the weight of the evidence,

eliminating any confidence in the court’s conclusions related to those findings. We reverse the

circuit court’s judgment and remand for a determination of the issues consistent with this

opinion.8

                                                                 Anthony Rex Gabbert, Judge

All concur.

         7
          Shirley’s third point on appeal contends that the circuit court erred in basing its judgment on a theory that
consideration attached to Randy’s transfer of the Indiana deed to Cassandra by subsequent acts because this theory
was not raised in Cassandra’s pleadings and was not tried by consent. As we have found the court’s findings
regarding the time frame of the filing of the Indiana deed to be against the weight of the evidence, we need not
address this contention.
         8
          We note that, because the circuit court disposed of this matter on other grounds, the court did not address
Cassandra’s affirmative defense of laches. Depending on the court’s disposition on remand, it may be necessary to
address this affirmative defense; we take no position concerning the applicability of a laches defense in the
circumstances of this case.

                                                          13