Crowder v. Avelo Mortgage, LLC et al

Filing 53

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Motion and Memorandum in Support to Dismiss Defendants/Counter-Plaintiff's Counterclaim against Plaintiff/Counter-Defendant (ECF No. 21 ) is DENIED. IT IS FURTHER ORDERED that Avelo Mortgage, LLC's Motion for Summary Judgment (ECF No. 31) is GRANTED. Plaintiffs claim for equitable relief against Avelo Mortgage LLC is DISMISSED with prejudice. IT IS FINALLY ORDERED that Plaintiffs Motion for Leave of Court to File an Additional Supp lemental Memorandum in Opposition to the Defendants Motion for Summary Judgement and Motion for Additional Time in Which to File Said Memorandum (ECF No. 48 ) and Plaintiffs Amended Motion for Leave of Court to File a Draft of the Additional Supplemental Memorandum in Opposition to the Defendants Motion for Summary Judgment and Time to File a Final Version of the Motion (ECF No. 49 ) are DENIED. Signed by District Judge Ronnie L. White on September 14, 2015. (BRP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
)
)
)

KENNETH J. CROWDER,
Plaintiff,

)

V.

AVELO MORTGAGE, LLC d/b/a
SENDERRA FUNDING, LLC, et al.,
Defendants.

No. 4:14-CV-1351 RLW

)
)
)
)
)
)
)

MEMORANDUM AND ORDER

This matter is before the court on the Motion and Memorandum in Support to Dismiss
Defendants/Counter-Plaintiffs Counterclaim against Plaintiff/Counter-Defendant (ECF No. 21 ),
Avelo Mortgage, LLC 's Motion for Summary Judgment (ECF No. 31).
BACKGROUND

Plaintiff Kenneth J. Crowder ("Crowder") and his former spouse, Kyleen Crowder
("Kyleen"), were married on May 2, 1995. (Defendant Avelo Mortgage LLC d/b/a Senderra
Funding, LLC's Statement of Uncontroverted Material Facts ("DSUMF"), if2). In November
1997, Crowder and Kyleen purchased the property at 2640 Hackmann Road, St. Charles, MO
63303 (the "Property"). (DSUMF, if3). In September 2008, Crowder and Kyleen applied for a
loan to refinance the mortgage on the Property. (DSUMF, if4). On or about October 31 , 2008,
Crowder refinanced the mortgage on the Property and secured a loan in the amount of
$117,012.00. (DSUMF, if5). As security for the loan, on October 31 , 2008, Crowder signed a
deed of trust ("Avelo Deed of Trust") and Promissory Note ("Note") with Avelo encumbering
the Property. (DSUMF, ifif6-9). The Avelo Deed of Trust provides:

Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale,
the following described property ... [property description] .. . BORROWER
that Borrower is lawfully seised of the estate hereby
COVENANTS
conveyed and has the right to grant and convey the Property and that the property
is unencumbered, except for encumbrances of record. Borrower warrants and will
defend generally the title to the Property against all claims and, demands subject
to any encumbrances of record.
(ECF No. 1-2).
On October 31 , 2008, Kimberlie Preston notarized both signatures on the A velo Deed of Trust
and stamped the Avelo Deed of Trust with the Missouri Notary seal. (Complaint, ECF No. 8, i!9;
ECF No. 20, i!lO). After Crowder executed and delivered the Avelo Deed of Trust and Note to
Avelo, Avelo transferred the mortgage servicing to Litton, and Litton subsequently transferred
the mortgage servicing to Ocwen. (ECF No. 20, i!l 1).
On January 15, 2009, Crowder filed a petition for dissolution of marriage from Kyleen.
(DSUMF, i!lO). On March 28, 2009, Kyleen executed and delivered a quit claim deed releasing
the Property to Crowder and relinquishing any interest she had in the Property. (DSUMF, i!l 1).
On May 6, 2009, Crowder and Kyleen were divorced, with the divorce registered in St. Charles
County, Missouri. (DSUMF, i!13).
Crowder has since defaulted on his obligations under the Note and Avelo Deed of Trust
by, among other things, failing to make timely payments. (ECF No. 20, i!13). Crowder brought
this action to quiet title to the Property. (DSUMF, ill).

DISCUSSION
I.

Motion for Summary Judgment
A. Motion for Summary Judgment Standard
The Court may grant a motion for summary judgment if "the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to judgment

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as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Citrate , 477 U.S . 317, 322 (1986);

Torgerson v. City of Rochester, 643 F.3d 1031 , 1042 (8th Cir. 2011). The substantive law
determines which facts are critical and which are irrelevant. Anderson v. Liberty Lobby, Inc.,
477 U.S . 242, 248 (1986). Only disputes over facts that might affect the outcome will properly
preclude summary judgment. Id. Summary judgment is not proper if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party. Id.
A moving party always bears the burden of informing the Court of the basis of its motion.

Celotex Corp., 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving
party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of
material fact, not the "mere existence of some alleged factual dispute." Fed. R. Civ. P. 56(e);

Anderson, 477 U.S . at 248. The nonmoving party may not rest upon mere allegations or denials
of his pleading. Id.
In passing on a motion for summary judgment, the Court must view the facts in the light

most favorable to the nonmoving party, and all justifiable inferences are to be drawn in his favor.

Celotex Corp., 4 77 U.S. at 331.

The Court's function is not to weigh the evidence but to

determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. '"Credibility
determinations, the weighing of the evidence, and the drawing of legitimate inferences from the
facts are jury functions, not those of a judge."' Torgerson, 643 F.3d at 1042 (quoting Reeves v.

Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).

B. Discussion
Crowder filed his petition to quiet title against Avelo. (ECF No. 8, hereinafter "Complaint").
"A suit to quiet title is a special statutory action to adjudge respective estates, titles and interests
of several claimants to land." Vanschoiack v. Adkins, 854 S.W.2d 432, 435 (Mo. Ct. App. 1993)

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(citing Moss v. Moss, 706 S.W.2d 884, 887 (Mo.App.1986); §527.150.1 , R.S.Mo.). Section
527.150.l provides:
Any person claiming any title, estate or interest in real property, whether the same
be legal or equitable, certain or contingent, present or in reversion, or remainder,
whether in possession or not, may institute an action against any person or
persons having or claiming to have any title, estate or interest in such property,
whether in possession or not, to ascertain and determine the estate, title and
interest of said parties, respectively, in such real estate, and to define and adjudge
by its judgment or decree the title, estate and interest of the parties severally in
and to such real property.

"A plaintiff in an action to quiet title has the burden to prove title superior to the other party, not
superior to the whole world, and must prevail on the strength of its own title and not on any
weakness in the title of the other party." Ollison v. Vil!. of Climax Springs, 916 S.W.2d 198, 203
(Mo. 1996) (citing Willy v. Lieurance, 619 S.W.2d 866, 869 (Mo. Ct. App. 1981)).
Crowder alleges that the Avelo Deed of Trust is invalid because Kyleen never signed the
document. (Complaint, ~~18-10). Crowder contends that because Kyleen did not sign the Avelo
Deed of Trust then the Property remains unencumbered as security for any mortgage debt to
Avelo. (Complaint,

~~19-20) .

Crowder believes that the Property was titled in the name of

Crower and Kyleen as tenants by the entireties. Crowder contends that, if his spouse (Kyleen)
did not join in the conveyance, then the Avelo Deed of Trust was void and ineffective to create a
security interest in the Property because Crowder alone could not convey a valid deed of trust on
a property held by tenancy in the entirety. See Ethridge v. TierOne Bank, 226 S.W.3d 127, 133
(Mo. 2007).

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In its Motion for Summary Judgment, Avelo contends that Crowder is precluded from
contesting the validity of the Avelo Deed of Trust based upon the statutory defense of afteracquired title, which provides:
Where a grantor, by the terms of his deed, undertakes to convey to the grantee an
indefeasible estate in fee simple absolute, and shall not, at the time of such
conveyance, have the legal title to the estate sought to be conveyed, but shall
afterward acquire it, the legal estate subsequently acquired by him shall
immediately pass to the grantee; and such conveyance shall be as effective as
though such legal estate had been in the grantor at the time of the conveyance.
Mo.Rev.Stat. §442.430.

Avelo notes that Crowder warranted title to the trustee of the deed of

trust ("Trustee") in the Avelo Deed of Trust. Further, Kyleen conveyed all of her interest in the
Property to Crowder in connection with their divorce after the Avelo Deed of Trust had been
executed and recorded. Avelo contends that Crowder' s intent to convey an indefeasible estate in
fee simple is evident based upon the language of the Avelo Deed of Trust. (ECF No. 32 at 4).
Avelo maintains that the Deed of Trust conveyed to the Trustee an indefeasible estate in fee
simple absolute when Crowder covenanted that he was lawfully seised of the Property, that he
had the right to convey the Property, that the Property was unencumbered, and that he warranted
to defend the title to the Property. (ECF No. 32 at 4). Because deeds of trust are subject to the
after acquired title statute, Avelo states that Crowder cannot demonstrate that the absence of
Kyleen' s signature would invalidate the Avelo Deed of Trust. (ECF No. 32 at 5 (citing Seaman
v. Seaman, 181 S.W. 22 (Mo. 1915); Hume v. Hopkins, 41 S.W. 784 (Mo. 1897)).

Avelo further maintains that after acquired title is not an affirmative defense that had to
be pleaded under Rule 8(c), but rather a defect to Crowder's own pleadings. (ECF No. 39 at 12). Avelo contends that the after acquired title doctrine "simply undercuts Crowder's position by
giving effect to Crowder' s warranty of title to Avelo in the Avelo Deed of Trust now that
Crowder has sole title to the Property." (ECF No. 39 at 2). Further, Avelo contends that, even if

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"after acquired title" is an affirmative defense, Avelo may still raise it because Crowder cannot
claim unfair surprise or prejudice.

(ECF No. 39 at 2-3; Fin. Timing Publications, Inc. v.

Compugraphic Corp., 893 F.2d 936, 945 (8th Cir. 1990) (quoting Allied Chemical Corp. v.
Mackay, 695 F.2d 854, 855 (5th Cir. 1983) ("When an affirmative defense 'is raised in the trial
court in a manner that does not result in unfair surprise, ... technical failure to comply with Rule
8(c) is not fatal."'). Avelo states that Crowder cannot claim unfair surprise or prejudice because
application of the after acquired title doctrine merely attacks Crowder' s assertion that the Deed
of Trust was ineffective because Kyleen allegedly did not sign it and rests on facts pleaded in
Crowder's own Complaint and affidavit. Further, Avelo does not believe that Crowder can
establish any prejudice because Crowder could not have amended his any facts to counter the
after acquired title defense. Moreover, Crowder notes that sufficient time existed (and exists)
before the trial date in this case. (ECF No. 39 at 2).
Moreover, Avelo contends that the after acquired title doctrine applies when, as in the
Avelo Deed of Trust, the grantor "by the terms of his deed undertakes to convey to the grantee
an indefeasible estate in fee simple absolute." §442.430, R.S. Mo. Crowder's "intent to convey
an indefeasible estate in fee simple is effected by use of a covenant in the deed, by the grantor, in
which the grantor represents ownership at the time of the execution of the deed of an indefeasible
estate in fee simple." Webster Oil Co. v. McLean Hotels, Inc., 878 S.W.2d 892, 894 (Mo. Ct.
App. 1994). Avelo argues that, contrary to Crowder' s interpretation, Webster Oil does not
require the words "grant, bargain, and sell" to convey an indefeasible estate in fee simple
absolute.

(ECF No. 39 at 6 (citing §442.420)). Rather than being the exclusive means of

conveying property in fee simple, Avelo argues that "[i]t is sufficient that the deed purport[s] to
convey the property in fee simple absolute by making positive averments that the grantor is

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seized and possessed of an estate in the property which the deed undertakes to convey and
confirm to the grantee." (ECF No. 39 at 6 (citing Gibson v. Chouteau, 39 Mo. 536, 567-68
(1866) (" It must contain such positive and certain averments of an absolute title in fee simple as
would amount to an express warranty, if contained in a covenant of warranty, that the grantor
was seized and possessed of such title and estate, which he undertook to convey, assure and
confirm to the grantee against all the world, and would therefore create an estoppel by virtue of
which the subsequently acquired title might enure to the grantee.")). Avelo maintains that the
Missouri HUD form Avelo Deed of Trust "makes the necessary positive averments to convey an
indefeasible estate in fee simple absolute." (ECF No. 39 at 6).
Finally, Avelo asserts that Crowder cannot rely on the defense of unclean hands because
the alleged wrong here was to Kyleen, not Crowder. (ECF No. 39 at 7 (citing Price v. Ridler,
373 S.W.2d 59, 62 (Mo. 1963)). "The wrong must have been done to the defendant himself and
not to some third party." Price , 373 S.W.2d at 62. Here, Crowder does not allege that he was
defrauded, rather the only victim of the alleged fraud was Kyleen. (ECF No. 39 at 7). Further,
Avelo asserts that application of the unclean hands doctrine in this case would work injustice
because clearly Crowder would be unjustly enriched in that he has received the loan and loan
proceeds at Avelo' s expense.
In response, Crowder raises several issues that he claims preclude summary judgment. First,
he maintains that the after acquired title statute is an affirmative defense that should have been
raised in Avelo ' s answer. (ECF No. 37 at 1-3). Crowder argues that because Avelo did not raise
the after acquired title statute in its answer then that defense is waived. (ECF No. 37 at 2) (citing
Mo. S. Ct. R. 55.08). Crowder further argues that the Court should not allow Avelo to amend its
answer under Mo. S. Ct. R. 55.33(a) and add this affirmative defense because it would be

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prejudicial to Crowder. (ECF No. 37 at 2-3). Crowder claims that Avelo is asserting this
defense too late in the litigation process and that Avelo' s assertion of this defense stifled the
mediation process.
Even if Avelo is allowed to assert the after acquired title defense, Crowder still maintains that
summary judgment is not permissible based upon the merits. First, Crowder contends that, in
order to take advantage of the after acquired mortgage defense, the grantee must believe that he
is acquiring full legal title to the property at the time of the initial conveyance. (ECF No. 37 at
5). Crowder claims that Avelo knew Crowder, without Kyleen, could not convey full legal title
to the Property at the time of the closing on October 31, 2008. (ECF No. 37 at 5-7 (citing
Ronollo v. Jacobs, 1988 Mo. App. LEXIS 1712 (Mo. Ct. App. 1989); Ethridge v. TierOne Bank,

226 S.W.3d 127 (Mo. 2007); Fed Nat. Mortgage Ass'n v. Pace, 415 S.W.3d 697 (Mo. Ct. App.
2013); US Bank Nat. Ass'n v. Cox, 341 S.W.3d 846 (Mo. Ct. App. 2011)). Crowder further
contends that Avelo knew or should have known that Crowder could not convey a full fee and,
therefore, Avelo is not entitled to the after acquired title defense. (ECF No. 37 at 8).
In addition, Crowder states that the Avelo Deed of Trust does not contain the correct
language to convey the Property. Crowder relies on Webster Oil Co. v. McLean Hotels, Inc., 878
S.W.2d 892, 894 (Mo. Ct. App. 1994) for the proposition that the Avelo deed of trust did not
convey fee simple interest because it did not use the language "grant, bargain and sell" pursuant
to section 442.420. (ECF No. 37 at 8-9). Crowder claims that lesser language was used because
the parties realized that Crowder could not convey full title.
Finally, Crowder contends that Avelo cannot take advantage of the after acquired title
defense because it is an equitable doctrine and Avelo has "unclean hands." (ECF No. 37 at 910). Crowder asserts that Avelo ' s hands are unclean because Kyleen' s signature and signature of

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the notary for Kyleen' s signature are both forgeries. In addition, Defendants refused to give
Crowder a copy of the October 31 , 2008 closing documents.
The Court will grant Avelo' s Motion for Summary Judgment. First, the Court holds that
Avelo properly raised the after acquired title defense in its summary judgment motion. The
Court believes that the after acquired title defense is not an affirmative defense but rather
identifies a pleading defect which is properly raised in a motion for summary judgment. See

Masuen v. E.L. Lien & Sons, Inc., 714 F.2d 55, 57 (8th Cir. 1983) (quoting Sanden v. Mayo
Clinic, 495 F.2d 221 , 224 (8th Cir. 1974) ("'If the defense involved is one that merely negates an
element of the plaintiffs prima facie case ... it is not truly an affirmative defense and need not be
pleaded despite rule 8(c). '"). Further, even if Avelo had been required to raise such an issue in an
affirmative defense, Crowder has not demonstrated prejudice or unfair surprise. Avelo filed its
Motion for Summary Judgment on February 2, 2015. Crowder has had more than seven (7)
months to amend his pleading or to file a Rule 56(d) motion to request time to take discovery in
order to respond to the motion. Crowder has done neither. The Court does not believes that
Crowder has been prejudiced by any failure to raise the after acquired title defense as an
affirmative defense.
Further, the Court does not believe that the cases cited by Crowder preclude this Court from
applying the after acquired title doctrine in this case. Here, viewing all disputed facts in favor of
Crowder, the Court applies the after acquired title doctrine to find in favor of Avelo on
Crowder' s claim for quiet title. 1 The case law cited by Crowder is inapposite to the instant case.
The Ronollo v. Jacobs opinion cited by Crowder was superseded by Ronollo v. Jacobs , 775

1

Crowder argues that by bringing this Motion for Summary Judgment Avelo has admitted that
Kyleen' s signature is a forgery. (ECF No. 37 at 5). Crowder misapprehends the summary
judgment standard.
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S.W.2d 121 (Mo. 1989), which declined to adopt the reasoning cited by Crowder. Likewise,
Ethridge v. TierOne Bank, 226 S.W.3d 127 (Mo. 2007), Fed. Nat. Mortgage Ass'n v. Pace, 415

S.W.3d 697 (Mo. Ct. App. 2013), and US Bank Nat. Ass 'n v. Cox, 341 S.W.3d 846 (Mo. Ct. App.
2011) are distinguishable because the parties who did not sign the deeds of trust were the parties
challenging the deeds of trust- not the parties who admitted that they signed the note and deeds
of trust. Here, Crowder signed the Avelo Deed of Trust, but is challenging it even though he is
now the sole owner of the Property. See ECF No. 37 at 5. Thus, Crowder is not in the same
position as in the cases cited by him.
The Court also holds that Crowder properly conveyed an indefeasible estate in fee simple.
(ECF No. 37 at 5-6). The Avelo Deed of Trust is a Missouri HUD form deed of trust which
provides:
Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale,
the following described property . .. [property description] ... BORROWER
COVENANTS
that Borrower is lawfully seised of the estate hereby
conveyed and has the right to grant and convey the Property and that the property
is unencumbered, except for encumbrances of record. Borrower warrants and will
defend generally the title to the Property against all claims and, demands subject
to any encumbrances of record.
(ECF No. 1-2).
The Court agrees that the words "grant, bargain, and sell" invoke statutory covenants of
conveying an indefeasible estate in fee simple absolute. See §442.420, R.S. Mo. Nevertheless,
the Court finds that the language in the Avelo Deed of Trust sufficiently conveyed the Property
in fee simple by making positive statements that the grantor was seized of the estate and that he
would defend title to the Property against all claims. The statute does not require that the deed of
trust use the words "grant, bargain and sell" so as to invoke the statutory covenants of §442.430,
RS.Mo. (ECF No. 47 at 8). Under Missouri law, parties can use whatever express covenants of
title they choose to convey an indefeasible estate in fee simple in conveyance documents.

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Webster Oil Co. v. McLean Hotels, Inc., 878 S.W.2d 892, 894 (Mo. Ct. App. 1994) ("A
conveyance of real estate passes the entire ownership interest held by the conveying instrument's
granter unless the instrument shows, expressly or by necessary implication, the grantor's intent to
pass a lesser interest."). Further, unlike in Webster, the Avelo Deed of Trust contains no
language that would demonstrate Crowder' s intent to convey anything less than an indefeasible
estate in fee simple. The Court holds that the Avelo Deed of Trust operates to convey Crowder's
after acquired title in the Property to Avelo. Likewise, under the statute, Avelo is not required to
prove any knowledge regarding the ownership of the Property at the time of transfer. Crowder' s
covenants are all that are required. See §442.430, R.S. Mo. The statute does not require that
Avelo establish all of the elements of estoppel for it to apply.
Finally, the Court holds that Crowder fails to create an issue of material fact with respect
to his claim that Avelo has unclean hands. The Court agrees that Crowder cannot assert the
defense of unclean hands because the fraud alleged is personal to Kyleen, not Crowder.
Therefore, Crowder cannot assert unclean hands as a defense in this action. See Price, 373
S.W.2d at 62.
II.

Motion to Dismiss

A. Standard of Review

In ruling on a motion to dismiss, the Court must view the allegations in the Complaint
liberally in the light most favorable to Plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806
(8th Cir. 2008) (citing Luney v. SGS Auto Servs., 432 F.3d 866, 867 (8th Cir. 2005)).
Additionally, the Court "must accept the allegations contained in the complaint as true and draw
all reasonable inferences in favor of the nonmoving party." Coons v. Mineta, 410 F.3d 1036,
1039 (8th Cir. 2005) (citation omitted). To survive a motion to dismiss, a complaint must

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contain "enough facts to state a claim to relief that is plausible on its face." Bell At!. Corp. v.
Twombly, 550 U.S. 544, 570 (2007) (abrogating the "no set of facts" standard for Fed. R. Civ. P.

12(b)(6) found in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While a complaint attacked by
a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs
obligation to provide the grounds of his entitlement to relief "requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do."
Twombly, 550 U.S. at 555; Huang v. Gateway Hotel Holdings, 520 F. Supp. 2d 1137, 1140 (E.D.

Mo. 2007).
B. Discussion
On January 2, 2015, Ocwen Loan Services, LLC, Litton Loan Servicing, L.P., and Avelo
(collectively, "Mortgage Companies"), filed a Counterclaim requesting that this Court impose an
equitable lien against Crowder in the event that this Court finds the relevant deed of trust void.
(ECF No. 20). Crowder filed a motion to dismiss Defendants' counterclaim for failure to state a
claim. (ECF No. 21 ).

Crowder argues that the Mortgage Companies failed to state a claim

because Kyleen never signed the Deed of Trust and, therefore, the Deed of Trust is "legally null
and void." (ECF No. 21, iflO). Citing Ethridge v. TierOne Bank, 226 S.W.3d 127, 129 (Mo.
2007), Crowder argues that a deed by only one of the two tenants in the entirety conveys
nothing. (ECF No. 21 at 3-4). Crowder contends that, in Ethridge, the Missouri Supreme Court
denied recovery under equitable relief, equitable reformation, equitable estoppel, and equitable
lien theories and that the same reasoning applies here.
In response, Defendants argue that the case law cited by Plaintiff is inapposite. The cases
cited by Plaintiff involved a lender who sought an equitable lien against a person that never

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signed a promissory note. Here, Mortgage Companies seek an equitable lien against Crowder,
who indisputably signed both the promissory note and the deed of trust. (ECF No. 24 at 2).
The Court denies the Motion to Dismiss because the Mortgage Companies state a claim for
equitable relief.

"The requirements to establish an equitable lien include: 1) a duty or an

obligation owing by one person to another; 2) a res to which that obligation fastens, which can be
identified or described with reasonable certainty; and [3)] an intent, express or implied, that the
property serve as security for the payment of the debt or obligation." Iota Mgmt. Corp. v.
Boulevard Inv. Co., 731S.W.2d399, 420 (Mo. Ct. App. 1987).

The Court holds that mere fact that Crowder owes a debt to the Mortgage Companies is
sufficient to establish the first element for an equitable lien on the Property against Borrower.
See ECF No. 24 at 4.

The Court notes that Crowder signed the deed of trust, giving the

Mortgage Companies an interest.

Although Plaintiff relies heavily on Ethridge, the Missouri

Supreme Court in that case refused to impose an equitable lien on the wife because the wife did
not sign the promissory note and, therefore, the court held that she did not owe a debt to the
lender. Here, the Court finds that because Crowder himself signed the Deed of Trust and Note
giving the Mortgage Companies interests in the Property the reasoning of Ethridge is
inapplicable here because it is undisputed that Crowder refinanced and signed the loan that is the
subject of this lawsuit. (ECF No. 24 at 3).
Further, the Court finds that the Mortgage Companies have alleged the other two
requirements for an equitable lien. The Mortgage Companies have identified that "[a]s security
for the Loan, Borrower executed and delivered a Deed of Trust and Promissory Note to Avelo
encumbering his residence located at 2640 Hackmann Road, St. Charles, Missouri 63303 ."

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(Counterclaim, if8). Indeed, Crowder also alleged in his Complaint that he signed a Deed of
Trust encumbering the Property in order to secure the Loan. (Complaint, ifif5-7).
Finally, the Court holds that the Mortgage Companies have alleged that "all parties" to the
lawsuit intended that the Property serve as security for the payment of Crowder' s debt.
(Counterclaim, ififl 9-20). In addition, the Promissory Note and Deed of Trust, both of which are
signed by Crowder, provide an express intent that the Property would serve as security for the
Loan. (Counterclaim, if20; Complaint, if7). The Court holds that this language is more than
sufficient to demonstrate an intent to encumber the Property as security for the payment of
Crowder' s debt. See Iota Mgmt. Corp. v. Boulevard Inv. Co., 731 S.W.2d 399, 421 (Mo. Ct.
App. 1987) ("All that is required is an implied intent that the property or its proceeds serve as
security for an obligation.")
Thus, the Court finds that the Mortgage Companies have alleged all of the elements of a
claim for an equitable lien. The Court denies Plaintiffs Motion to Dismiss the Counterclaim.

III.

Supplemental Memoranda

On at least two occasions, Plaintiff asked for leave to file an "Additional Supplemental
Memorandum" or a sur-sur reply in opposition to Avelo ' s Motion for Summary Judgment. These
motions were filed several months ago, but Plaintiff has never filed a proposed supplemental
memorandum. Instead, Plaintiff has asked for leave to file such a memorandum at a later date or
filed a "draft" memorandum. The Court denies Plaintiffs request to file additional memoranda
in opposition to Avelo ' s motion for summary judgment because Plaintiff has not demonstrated

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•

that additional briefing is necessary, particularly since Plaintiff has never filed a final proposed
supplemental memorandum. 2
CONCLUSION

According! y,
IT IS HEREBY ORDERED that Motion and Memorandum in Support to Dismiss

Defendants/Counter-Plaintiffs Counterclaim against Plaintiff/Counter-Defendant (ECF No. 21) is
DENIED.
IT IS FURTHER ORDERED that Avelo Mortgage, LLC's Motion for Summary

Judgment (ECF No. 31) is GRANTED. Plaintiffs claim for equitable relief against Avelo
Mortgage LLC is DISMISSED with prejudice.
IT IS FINALLY ORDERED that Plaintiffs Motion for Leave of Court to File an

Additional Supplemental Memorandum in Opposition to the Defendants Motion for Summary
Judgement and Motion for Additional Time in Which to File Said Memorandum (ECF No. 48)
and Plaintiffs Amended Motion for Leave of Court to File a Draft of the Additional
Supplemental Memorandum in Opposition to the Defendants Motion for Summary Judgment
and Time to File a Final Version of the Motion (ECF No. 49) are DENIED.
Dated this 14th day of September, 2015.

RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

2

The Court notes that it struck Plaintiffs proposed preliminary supplemental memorandum
because the Court does not accept drafts or issue advisory opinions. (ECF No. 52).
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