Attorney Kerry Douglas Wins in Missouri Supreme Court
Kerry Douglas, the senior attorney for Douglas, Haun & Heidemann, P.C., recently was successful in a case decided by the Missouri Supreme Court involving the validity of a Deed of Trust. The firm’s client was a widow whose husband had borrowed money from an out of state bank secured by the parties’ principal residence. In preparing the Deed of Trust to secure the loan, the bank recited that it was made by the firm’s client’s husband, “a married man as his sole and separate property.” In fact, the real estate was owned by both husband and wife. Wife was at the loan closing and at the last minute was told to and did sign the Deed of Trust. After husband was killed in a car accident, wife was unable to make the mortgage payments and hired the law firm to assist her. Mr. Douglas determined that, in his opinion, the mortgage had been improperly prepared and was not binding on the surviving wife.
Mr. Douglas then filed suit in the Circuit Court of Dallas County, Missouri seeking a Declaratory Judgment that the Deed of Trust was invalid as to surviving wife. The Bank defended claiming that her signature on the deed of trust was sufficient to render the instrument valid even though she was not listed as a party to it, and also raised four “equitable” defenses.
After discovery was complete, Mr. Douglas filed for and was granted Summary Judgment by the trial court who held that the Deed of Trust was not effective to convey the surviving wife’s interest. The Bank appealed that decision to the Missouri Court of Appeals, Southern District. The case was submitted on briefs prepared by Mr. Douglas with the able assistance of the firm’s associate attorney, Donald Brown. The Court of Appeals agreed with the trial court that the Deed of Trust was not valid to convey the surviving wife’s interest in the property, but reversed the Judgment on one of the equitable defenses raised by the Bank – a doctrine called “equitable subordination”.
Mr. Douglas, again assisted by Mr. Brown, believed strongly that the Court of Appeals had improperly applied the doctrine of equitable subordination and requested that the case be transferred to the Missouri Supreme Court. After Suggestions were filed by both parties, the Supreme Court agreed to take transfer of the case.
After briefs were filed in the Supreme Court, the case was set for oral argument and was argued by Mr. Douglas in April of 2007. After argument, the Court handed down a 5-2 decision on June 26, 2007 which upheld the position that Mr. Douglas had urged on the Court. The effect of the decision was that the property owned by the firm’s client was found not to be subject to the Deed of Trust, thereby saving her the loss of her property to foreclosure. The Supreme Court’s decision can be found at 226 S.W.3d 127 (Mo. en banc 2007).