Appeals court reverses circuit court ruling in dispute over rights to Lake Lotawana dock

By Karen Kidd | Jun 12, 2018

KANSAS CITY – A dispute between a couple who own property along Lake Lotawana and multiple area property-owning trusts is on its way back to Jackson County Circuit Court following a recent opinion issued by a Missouri appeals court.

The Missouri Court of Appeals, Western District, reversed and remanded the circuit court's decision last year against Richard and Hallie Pals in their litigation over rights to a dock on Lake Lotawana. The Pals appealed the circuit court's decision to grant summary judgment in favor of the Costello Family Trust, trustees of the Dean Family Lotawana Trust and the Lester M. Dean Sr. Self-Declaration of Trust over rights to the dock. The case stems from sale of two parcels of property in Lake Lotawana, with on parcel containing the dock.

Appellate Judge Edward R. Ardini Jr wrote the appeals court's 15-page opinion filed May 29 in which Presiding Judge Karen King Mitchell and Judge Alok Ahuja concurred.

The two parcels, designated in the opinion as "S21" and "SA3B," are located on the lake side and across the street of Lake Shore Drive, according to the background portion of the opinion. S21 had already been developed into a private residence, with four docks registered with the Lake Lotawana Home Association, while SA3B had not been developed, in October 2014 when the joint trustees entered into a contract with Costello Family Trust.

Under the contract, Costello Family Trust agreed to purchase S21 for $875,000 but the Pals, who owned a lot adjoining SA3B, "provided verbal notice that they intended to exercise their option to purchase lot SA3B," the opinion said. Soon after, the joint trustees and Costello Family Trust amended the contract to eliminate reference to the transfer of the covered dock and declared that all four dock sites belonged exclusively to S21," the opinion said.

"The existence of this amendment was never communicated to the Pals or any other neighbors entitled to notice under the association's deed restrictions," the opinion continued. "On Oct. 14, 2014, the Pals formally reduced to writing the previously communicated decision to exercise their option to purchase the SA3B property by signing the appropriate section of the notice of sale property waiver sent to them on Oct. 8, which they then delivered to the joint trustees."

A couple of days later, of the Lester M. Dean trust entered into a new contract to sell SA3B to Costello Family Trust. "This new contract specifically stated the property came with no dock rights," the opinion said.

At month's end, the Pals were presented with an amendment that would sell them SA3B but would not include a dock. When they objected, the Pals allegedly were told that Costello Family Trust was ready to close on a sale if they "failed to sign the documents presented (and would file suit should the Pals seek to prevent them from closing)," the opinion said.

The couple signed but claimed "they were prevented from making any changes to the two documents and claim they signed under duress," the opinion said.

A couple of weeks prior, Costello Family Trust had filed a declaratory judgment action in Jackson County Circuit Court against the Dean Family Lotawana Trust, the joint trustees, Stephen W. Crider and the Estate of Lester Dean. Costello Family Trust asked the circuit court to declare that SA3B retained no rights to any of the four docks on S21 that they had already bought.

The following November, the Pals filed suit against the trustee of Costello Family Trust, the joint trustees and the homeowner's association asking that rights to a covered dock on S21 that had been referred to in a much earlier contract be transferred to them after their improvements to SA3B. The two legal actions were consolidated in February 2016 and amended petitions soon followed, including one by Costello Family Trust that added the Pals as defendants "and introduced a claim against them for abuse of process," the opinion said.

Soon after, Costello Family Trust and the joint trustees filed a motion for summary judgment, which the circuit court granted in August. The court later issued separate judgments in favor of Costello Family Trust and "certified the issue as ripe for appeal," which the Pals did, the opinion said.  

"The Pals’ sole point on appeal contends that the trial court misapplied the law in entering summary judgment in favor of the CF Trust (Costello Family Trust) and the joint trustees," the opinion said.

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