Court Opinion

ID: 5287845
Source: CourtListenerOpinion
Date Created: 2022-01-07 11:00:09.282859+00
Date Added: 2024-06-11T08:28:48.376836
License: Public Domain

SHERRI B. SULLIVAN, P.J.,
dissenting.
I respectfully dissent.
Henry and llene Ordower (Appellants) brought a three-point appeal. In their first point, they allege the trial court erred in failing to assess NRT Missouri, LLC’s (the Escrow Agent) attorney’s fees and expenses against Kono Enterprises, LLC (the Seller) because the clear and unambiguous language of Paragraph 13 of the Residential Sales Contract provides for reasonable attorney’s fees to be assessed against the losing party and not the prevailing party. Appellants were the prevailing party in their petition because the court awarded them what they sought— the return of their $15,000 earnest money from escrow—and they prevailed in Seller’s breach of contract claim against them. However, by then subtracting the Escrow Agent’s $13,650.65 attorney’s fees and expenses in defending the action from the prevailing Appellants’ $15,000 earnest money, Appellants were left with a net recovery of $1,349.35.
I find this result legally and equitably flawed. Appellants were placed in a position of having to bring suit against the Escrow Agent when Seller refused to agree to allow the Escrow Agent to release Appellants’ earnest money to them after the sale legitimately fell through. As the majority states, “Escrow Agent informed Appellants that under the terms of the contract, it was unable to return the money to them.” The Escrow Agent, pursuant to Paragraph 12 “Earnest Money” of the Residential Sales Contract, is only allowed to disburse the money in these conditions:
In the event of a dispute over any earnest money held by the escrow agent, the escrow agent shall continue to hold said deposit in its escrow account until: 1) escrow agent has a written release from all parties consenting to its disposition; or 2) until a civil action is filed to determine its disposition (at which time payment may be made into court, and in such event, court costs and escrow agent’s attorney fees will be paid from earnest money); or 3) until a final court judgment mandates its disposition; or 4) as may be required by applicable law.
Here, Seller refused to consent to the earnest money’s disposition via option one. In fact, when Escrow Agent interpleaded Seller into the action, Seller filed a cross-claim against Appellants for breach of contract, which was quickly dispatched by the trial court.
Meanwhile, Escrow Agent requested the trial court in its Counterclaim/Third Party Petition to deposit the money into a repository of the court because it had no interest in the $15,000; it held the funds merely as a neutral escrow agent; it had no interest in converting the money for any use; and the sale clearly was not going to proceed because Appellants timely elected to void the sale on April 27, 2015, for Seller’s failure to provide Appellants the condominium resale certificate within five days *470of April 22, 2015. See Section 448.4-109(8) RSMo 2000.
The trial court allowed the Escrow Agent’s third-party interpleader of Seller, but did not accept Escrow Agent’s request for payment of the earnest money into court and request to be discharged from the proceedings, which was unfortunate because a simple reading of the residential sales contract would have shown such a course of action to be the intent of all involved. See Residential Sales Contract p. 5, paragraph 12, “Earnest Money,” option 2. The court could then have dismissed Appellants’ claims against the Escrow Agent, who no longer had possession of Appellants’ earnest money and thus would be of no interest to Appellants. Such an action also would have prevented the needless accrual of over $13,000 in legal fees by an unnecessary party in a very simple contract case.
The proceedings began with Appellants’ petition filed May 27, 2015, seeking the return of their earnest money because Seller would not agree to the release despite the contract’s complete failure. Escrow Agent’s Counterclaim/Third Party Petition was filed on July 7, 2015;, and the case proceeded for almost a year until final judgment on June 2, 2016, with the Escrow Agent incurring over $13,000 in attorney’s fees alone.
This is not the fault of the Escrow Agent, who asked to be released early in the litigation but was refused by the trial court. This is not the fault of Appellants, who pursuant to certain case law must sue the keeper of the coin in escrow to retrieve their earnest money when the other party is being obstinate or unreasonable as to its release despite the failure of the deal. Although Appellants did include a claim of conversion against Escrow Agent, it was in the alternative to its first claim of a basic “failure to return funds.”
Seller concedes in its brief on appeal Escrow Agent refused to disburse the earnest money to Appellants due to Seller’s notifying Escrow Agent that it disputed Appellants’ right to terminate the contract. Furthermore, Seller’s lack of cooperation caused the Escrow Agent’s attorney’s fees to escalate beyond necessity to resolve this relatively simple case. Paragraph 13 “Remedies” of the Residential Sales Contract provides, in pertinent part:
If either party defaults in the performance of any obligation of this contract, the party claiming a default shall notify the other party in writing of the nature of the default and his election of remedy.... If the default is by Seller, Buyer may either release Seller from liability upon Seller’s release of the earnest money and reimbursement to Buyer for all direct costs and expenses.... In the event of litigation between the parties, the prevailing party shall recover, in addition to damages or equitable relief, the cost of litigation including reasonable attorney’s fees.
(Emphasis added.)1
Here, Seller defaulted on the contract and Appellants were the prevailing parties. A prevailing party is the party prevailing on the main issue in dispute, ¿a, return of *471the earnest mqney held in escrow, even though not necessarily to the extent of its original contention. Desu v. Lewis, 427 S.W.3d 843, 845 (Mo. App. E.D. 2014); First State Bank of St. Charles, Mo. v. Frankel, 86 S.W.3d 161, 176 (Mo. App. E.D. 2002); Ken Cucchi Constr., Inc. v. O’Keefe, 973 S.W.2d 520, 528 (Mo. App. E.D. 1998). As prevailing parties, Appellants were entitled to “Seller’s release of the earnest money,” which the trial court found, and also to “reimbursement to Buyer for all direct costs and expenses.... ” In addition, there was litigation between the parties, an event for which the contract specifically provided: “In the event of litigation between the parties, the prevailing party shall recover, in addition to damages or equitable relief, the cost of litigation including reasonable attorney’s fees.” Pursuant to the Remedies paragraph of the contract, Appellants incurred not only their own attorney’s fees of $2,500, but also damages, costs and expenses in retrieving their earnest money due to Seller’s recalcitrance, in the amount of $13,650.65. Pursuant to the terms of the contract and in the interests of equity, this amount should be charged against Seller.

. The majority emphasizes the fact that Appellants and Seller were the only parties to ' the contract, thus the remedies paragraph only applies to litigation between Appellants and Seller. However, the Escrow Agent’s hands were tied by the terms of the contract as well, as the majority points out in its recitation of the facts of this case, to-wit: “Escrow Agent informed Appellants that under the terms of the contract, it was unable to return the money to them.” In reality, the Escrow Agent was a mere puppet being controlled by the actions of Seller in refusing to allow Escrow Agent, under the terms of the contract, to return Appellants’ money which was rightfully theirs from the outset.