KAREN KING MITCHELL, Presiding Judge.
C-H Building Associates, LLC ("C-H"), appeals the Circuit Court of Clay County's ("trial court") entry of summary judgment in favor of Joe and Mary Jane Duffey ("the Duffeys"). On appeal, C-H claims that the grant of summary judgment was in error because the trial court incorrectly interpreted this court's previous opinion as holding that C-H could not prove that the Duffeys had breached a real estate contract, when, in fact, the opinion merely held that C-H did not allege a breach sufficiently to support C-H's own motion for summary judgment. We agree with C-H in this respect, reverse the trial court's entry of summary judgment in favor of the Duffeys, and remand this matter to the trial court for further proceedings consistent with this opinion.
Appellant C-H entered into a commercial real estate contract with Joe and Mary
The contract provides as follows:
After the closing, Liberty Homes stopped paying rent to the Duffeys and started paying rent to C-H. Liberty Homes paid C-H $3,000 per month, but not "triple net," which means that Liberty Homes was not paying a pro-rata share of the taxes, insurance, and maintenance. C-H attempted to negotiate a lease with Liberty Homes, but evidently negotiations deteriorated, and Liberty Homes vacated the property.
C-H and its owners
On appeal, we reversed and remanded, holding as follows:
C-H Bldg. Assocs., LLC v. Duffey ("Duffey I"), 309 S.W.3d 897, 900 (Mo.App. W.D. 2010) (internal citation omitted).
On remand, C-H re-filed its motion for summary judgment, adding the following allegations: (1) the existence of the lease was the decisive factor in C-H's decision to buy the subject property; (2) it did not learn that the lease did not exist until after the contract had been executed; and (3) the contract created an obligation for the Duffeys to ensure that the lease existed.
The Duffeys also filed a motion for summary judgment, arguing that, under the law of the case doctrine, it was entitled to judgment as a matter of law on C-H's breach of contract claim in that this court had held that relevant contract language did not create an obligation for the Duffeys
We review the circuit court's action with respect to summary judgment motions de novo, which means we apply the same criteria that applied to the circuit court's review of the motions. ITT Commercial Fin. Corp. v. Mid-Amer. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment should be granted to the defending party when there is no dispute of material fact with respect to at least one of the essential elements of the claimant's cause of action or all of the essential elements of the defending party's properly pled affirmative defense, and the facts show that the defending party is entitled to judgment as a matter of law. Id. at 381. Summary judgment should be granted to the claimant when there is no dispute of material fact with respect to each of the elements of its cause of action and at least one element of the defending party's properly pled affirmative defense, and the facts show that the claimant is entitled to judgment as a matter of law. Id.
C-H argues that the circuit court erred in granting the Duffeys' motion for summary judgment
To prevail on its breach of contract claim, C-H must show "(1) the existence of a valid contract; (2) the defendants' obligation under the contract; (3) a breach by the defendants of that obligation; and (4) resulting damages." Duffey I, 309 S.W.3d at 899.
The Duffeys argue that the law of the case doctrine negates the "obligation" element of C-H's contract claim.
In re Adoption of C.M.B.R., 332 S.W.3d 793, 823 (Mo. banc 2011) (quoting Walton v. City of Berkeley, 223 S.W.3d 126, 129 (Mo. banc 2007)). Here, we previously noted that C-H's motion for summary judgment alleged that a lease with Liberty Homes existed when, in fact, it did not. Duffey I, 309 S.W.3d at 899. We then held that "[t]he quoted contractual language did not constitute an allegation of an obligation the Duffeys had to C-H concerning Liberty Homes' performance under the purported lease." Id. at 900.
If C-H had continued to maintain that a lease existed and that the Duffeys had an obligation to C-H pursuant to that lease, then the Duffeys would be correct that the law of the case would preclude C-H's pursuit
The Duffeys also claim that the trial court's grant of summary judgment in their favor is supportable by the doctrine of merger and its effect on the real estate agreement. Again, we disagree.
The doctrine of merger instructs that "when parties have performed their respective obligations of delivery and acceptance of a deed, and title to the property passes, the contractual obligations of the parties are discharged and merged into the deed." Taylor v. Seaman, 932 S.W.2d 912, 914 (Mo.App. W.D.1996). The Duffeys claim, therefore, that even if they had had an obligation under the real estate contract to effect a lease between C-H and Liberty Homes, C-H's acceptance of the deed extinguished this obligation. There are noted exceptions to the doctrine of merger, however, including fraud, accident, and mistake. Emerald Pointe, L.L.C. v. Jonak, 202 S.W.3d 652, 661 (Mo. App. S.D.2006). "Furthermore, `contractual provisions as to consideration to be paid by the purchaser are ordinarily not merged into the deed.'" Id. (quoting Don King Equip. Co. v. Double D Tractor Parts, 115 S.W.3d 363, 374 (Mo.App. S.D. 2003)). Although the consideration at issue here is on the part of the seller and not the purchaser, C-H has consistently maintained that the Duffeys' duty to effect a lease between C-H and Liberty Homes was part of the consideration, in addition to the property itself, for the purchase price that C-H paid to the Duffeys. Also, C-H alleged that the Duffeys represented to C-H that a lease with Liberty Homes existed and that it was only after the purchase of the property that C-H learned that there was not, in fact, a lease in operation. Accordingly, C-H's claims are in the nature of mistake or perhaps fraud. This is precisely the type of case where merger does not apply, and the trial court's grant of summary judgment to the Duffeys cannot be sustained on this basis.
Because neither the law of the case nor the doctrine of merger is a valid basis for the trial court's grant of summary judgment in favor of the Duffeys, we consider whether it is otherwise justified. The parties continue to disagree about the meaning of the quoted contractual language. Again, the contract provides:
While C-H claims that this provision clearly requires the Duffeys to procure a lease on the property with the quoted terms between C-H and Liberty Homes, the Duffeys claim that the provision clearly affirms only that C-H had the right to negotiate a lease with Liberty Homes or, in other words, that the provision had no legal effect whatsoever. We now hold that the intent of the parties cannot be sufficiently determined based solely upon the quoted language from the real estate contract. Thus, on remand, the trial court should determine the Duffeys' obligations under the contract, if any, taking such additional evidence, including parol evidence, as is necessary.
Because neither the law of the case nor the doctrine of merger support the trial court's grant of summary judgment in favor of the Duffeys, and because the intent of the parties with respect to any obligation on the part of the Duffeys to procure a three-year, $3,000-per-month, triple-net lease between C-H and Liberty Homes cannot fairly be determined solely by considering the four corners of the real estate contract, we reverse the trial court's grant of summary judgment and remand this case for further proceedings consistent with this opinion.
JAMES M. SMART, JR., and VICTOR C. HOWARD, Judges, concur.