In the Missout'i Com't of Appeals Eastern District DIVISION FOUR PULASKI BANK, ) No. EDl02563 ) Respondent, ) Appeal front the Circuit Court ) of St. Louis County vs. ) ) C.W. HOLDINGS, LLC, et al., ) Hon. Robert Cohen ) Appellalits. ) FILED: l\/Iay 3, 2016 Introdttction Appellants C.W. Holdillgs, LLC, Martin Warenburg, individually and as Trustee of the Martin Warenburg Trust, Octavio Chiriito, and Anne Chiririo, (<:ollectively referred to as " the C.W. defendants°’) appeal from the judgment of the trial court granting summaryjlldgineiit in favor of Respondent Piilasl<i Bank ("Pii|aski"). On appeal, the C.W. defendants contend the trial court erred in granting sunnnary judgment in favor of Pulasl<i because Ptllaski’s failure to answer the C.W. defendants’ counterclaini for lulling raised a genuine issue of lnaterial fact which needed to be addressed before sununary judgment could properly be entered.

Because Pulaski was entitled to judgment as a inatter of law on the basis of undisputed facts with respect to the C.W. defendants’ counterclaim for lulling, we affirm the judgment of the trial court.

Factual and Procedural History In 201 l, the C.W. defendants signed two promissory notes ("Note One" and "Note Two") and guaranties ("tlie Gllaranties") with Pulaski, C.W. Holdings, LLC ("C.W. Holdings") executed Note One and Note Two, while Martin Warenburg, individually and as 'I`rllstee of the Martili Warenburg Trust, Octavio Chiriiio, and Anne Chirino (“the Gtiarantors”) signed the Guaranties.

I. Pnlaslti’s Lawsuit against the C.W. Defendallts in 2012, Ptilasl<i filed a petition against the C.W. defendants alleging (l) breach of Note One and Note Tvvo for non~paynierit; and (2) breach of the Guaranties for iion-payineiit. ln Counts l and II, Pulaski alleged that it had performed all of its obligations under Notes One and Two, but that C.W. Holdings had defaulted on both notes by failing and refusing to pay Pulaski the ainounts due. Pulaski alleged that it sent C.W. Holdings notices of default for non- payment with respect to both Note One and Note T\vo on June 5 , 2012. Pulaski alleged that pursuant to the terms of Note One and Note Two, it was entitled to payment of all amounts outstanding on each note, all interest accrued and continuing to accrue, late fees, attorney’s fees, costs, and expenses ln Count Ill, Pulaski alleged that the Guarantors executed the Gl)aralities in favor of Pulasl<i, such that the Guarantors personally and linconditiolially guaranteed to repay all amounts due and owing to Pulaski by C.W. Holdings. Pulaski alleged that the Guaraiitors had each defaulted on the Guaranties by failing and refusing to make payinent to Pulaski of the amounts due. Pulaski alleged that pursuant to the terms of the Guarantees, it was entitled to paynient of all ainounts outstanding on the Guaratities, all interest accrued and continuing to accrue, late fees, attorney’s fees, costs and expenses court correctly concluded, the absence of such a writing was fatal to the C.W. defendants’ counterclaim under the clear language of Section 432.047. §§ Bancor;_)$otttli, 349 S.W.3d at ("Here, the trial court found that the absence of an agreement which complied with the provisions of Section 432.047 was ‘fatal’ to Paraxnoiit’s defense of equitable estoppel, as well as to their other defenses and counterclaims [T]his conclusion was correct.").

Accordingly, Pu|aski was entitled to judgment as a inatter of law with respect to the C.W. defendants’ counterclaim for lulling. The trial court did not err in gratiting summary judgment in favor of Piilaski. Point denied.

Conciusion The judgment of the trial court is aflirined.

Sherri B. Stlllivali, P.J., concurs.

Lisa P. Page, J., concurs. ll

Pulaski attached copies of Note One, Note Two, the Gtlaranties, and the June 5, 2012, notices of default to the Petition as exhibits. The C.W. defendants subsequently filed an Aiiswei' on September 24, 2(} }2.

II. The C.W. Defemlants’ Cotlilterclaiiil On Febrttary 14, 2014, the C.W. defendants filed a Cottnter-Petition asserting a counterclaim fo1' lulling against Pulaski. The C.W. defendants alleged that "on several occasions Pulaski Bank gave all counterclaim plaintiffs signs that they intended to ‘work with’ the counterclaiin plaintiffs instead of foreclosing on them." The C.W. defendants further alleged that "on two occasions, Pulaski Bank asked for significant sums of money to redo and extend the loans in question." The C.W. defendants alleged that "[t]llese representations lulled the [C.W. defendants} into believing that Pulaski Bank would continue to keep them in the loans and allow them time to dispose of the property in a rnuttlally agreeable inanner," and that they "relied on these actions by Pulaski Bank." Pulaski did not file an answer to the C.W. defendants’ counterclaim.

III. Pulaski’s Motion for Suminary Jucignient On May 2, 2014, Pulaski filed a motion for sunnnary judgment seeking summary judgment on each of the three counts asserted in its Petition as well as sunnnaryjttdgliietit in its favor on the C.W. defendants’ counterclaim for lulling. With respect to the C.W. defendants’ counterclaim,l Pulaski alleged that there were no genuine issues of rnaterial fact and that Pulaski was entitled tojudginent as a matter of iaw. Specitically, Pulaski argued that the C.W. defendants’ cottnterclaiin for lulling was barred as a inatter of law by l\/lissotlri’s commerciai l On appeal, the only issue for our resolution concerns whether Pulaski’s failure to answer the C.W. defendants’ _ cottnterclailt\ for lulling prevented the trial court from properly entering summalyjudglltent in Pulaski’s favor. Our decision does not require us to review, nor do the C.\V. defendants ask us to review, the propriety of the trial court‘s entry of summary judgment with respect to the three counts assened by Pulaski. Thus, an extended recitation of the facts regarding those claims and the trial court`s findings regarding those claims is not iiecessary.

credit agreement statute of frauds provision, Section 432.047. Pulaski noted that the C.W. defendants’ counterclaim contained no reference to any written agreement between the parties 45 affirming Puiaski’s alleged “signs, actions," or "represeiitatioiis." Pulaski contended that under the terms of the Notes and under Missotlri law, the absence of such a writing was "fatal" to the C.W. defendants’ counterclaims Tlte C.W. defendants subsequently filed a response to Pulasl<i’s motion for summary judgment and statement of trncontroverted inaterial facts. ln their response, the C.W. defendants asserted a single additional material fact which read as follows: “Plaintiff ‘lulled’ Defendaiits into paying and then failed to continue to extend credit as promised. (See counter petition and Exhibits A, B, and C.)" in each of the referenced exhibits, Anne Chiririo, Warenberg, and Octavio Chirino executed affidavits stating: "l was lulled into continuing to inal<e payineiits by being given a false promise that credit would be continued and extended to me," and, "[t]his lulling was intentional and outrageous." Pulaski filed a reply rnemoraiidttiii in support of its motion for summary judgment, asserting that the C.W. defendants’ response and statement of additional lnatei'ial facts "raise no issue prohibiting the court’s entry of summary judgment in favor of Pulaski." With respect to the additional material fact stated by the C.W. defendants, Pulaski denied the fact and alleged that it was "coinpletely tinsupported by additional evidence" beyond the affidavits Pulaski further stated that it had "already established" in its inemoraiidtlm in support of its surnmary judgment motion that the claim for lulling is “barred as a inatter of law pursuant to the l\/Iissotlri Colnmercial Credit Agreement Statute of Fratrds." IV. Trial Court’s Order a11d Judgliient On Septeinber l6, 2014, the trial court entered its Order and judgment granting summary judgment in favor of Pulaski. The trial court found that there was "no genuine issue of inaterial fact in dispute," and that Pulaski was entitled tojudgnient as a lnatter of law "on each of its claims and in its favor on these defendants’ counterclaim." The trial court ruled in favor of Pulaski with respect to the C.W. defendants’ counterclaim. The trial court agreed with Ptilaski’s argument that the C.W. defendants’ lulling claim was barred by Missotiri’s comrnercial credit agreement statute of frauds provision, Section 432.047, concluding that "the absence of a writing evidencing such a [false promise to continue

to extend credit] is fatal to Defendants’ counterclaini. More specifically, the trial court held that under Section 432.047 and existing case law, "the oral representations or other actions which the Defendants claim lulled them provide no basis fora counterclaim against Pulaski.” The trial court reasoned that "the law is very clear" that there are "no claims or defenses to a credit agreement which is not in \vriting." This appeal follows.

Point on Appeal In its sole point on appeal, C.W. contends the trial court erred in granting sumrnary judgment in favor of Pulaski because Pulaski was in default on C.W.’s counterclaims Specitically, C,W, argues that Pulaski’s failure to answer C.W.’s counterclaim for lulling raised a genuine issue of tnaterial fact which needed to be addressed before surnmary judgment could properly be entered.

Staiidarc| of Review When considering an appeal from a grant of summary judgment, our review is essentially de novo. ITT Commercial Fin. Corp. v. Mid-Am. Maritie Stippiy Corp., 854 S.W.Zd 371, 376 (Mo. banc l993). The propriety of summary judgment is purely an issue of law. I_d. As the trial court’s judgment is founded on the record submitted and the law, an appellate court need not defer to the trial court’s order granting summaryjtldgiiieiit. § Accordingly, this Court reviews the record in the light most favorable to the party against whomjtidgineiit was entered. ]_d_; Facts set forth by affidavit or otherwise in support of a party’s motion are taken as true unless contradicted by the iion-nioving party’s response to the summaryjtidgtnettt inotion, and we accord the iion-inovaiit the benefit of all reasonable inferences from the record. I_d.

Stlmiiiary judgment is designed to permit the trial court to enter judgment, without delay, where the moving party has demonstrated, on the basis of facts as to vviiich there is no genuine dispute, a right to judgment as a matter of law. l_ci_;; Rule 74.04. Sunmiary judgment proceeds from an anaiytical predicate that, where the facts are not in dispute, a prevailing party can be determined as a matter of law. ITT Cominercial Fin. Corp., 854 S.W.Zd at 376. I-Iowever, because summaryjtidgineiit "borders on denial of due process in that it denies the opposing party his day in court," the procedure has long been regarded as "an extreme and drastic ren'iedy" \vhicii should be utilized with "great care." _Imc_L at 37'/`.

Discussion The purpose of stimmaryjtidgineiit under Missotiri’s fact~pleadiiig regime is to identify cases in which (l) there is no genuine dispute as to the facts and (2) the facts as admitted show a iegal right to judgment for the inovatit. L<_L at 380. The burden on the summary judgment movant is to show a right to judgment tiowiiig from facts about vvhicli there is no genuine dispute. I_<L at 378. The non-movant never needs to establish a right to judgment as a inatter of law; instead, "the non-inovarit need only show that there is a genuine dispute as to the facts tmderlyiiig the inovaiit’s right to judgineiit.” @ at 381-82.

I. Pulaski’s Failure to File an Answer The C.W. defendants contend that Pulaski’s failure to file an answer to their counterclaim for lulling, as required by Section 509.010,2 resulted in the claims contained therein being deemed admitted pursuant to Section 509.100. The C.W. defendants aver that such admissions raised a genuine issue of inaterial fact about Ptllasl<i’s "rights in the inatter,” a genuine issue which needed to be disposed of before sunimaryjtrclginent could properly be entered. We disagree.

There is no dispute that Pulasl<i failed to file an answer to the C.W. defendants’ counterclaim as required by Section 509.010. Nor is there any dispute that Section 509.l00 specifies that “[a]verineiits in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleadings." Section 509.100. Ho\vever, l\/lissouri courts have repeatedly held that "the failure to file an Answer is effective as an admission only if the plaintiff has objected to such failure although the filing of an Answer is inandatory, this requirement is vvaived unless the opposing party requests enforcement of the mandate by timely and proper action." Blaise v. Ratliff, 672 S.W.Zd 683, 683 (Mo. App. E.D. 1984) (Citing Cooper v. Anschtltz Uranium Corp., 625 S.W.Zd 165, 171 (lvlo. App. E.D. 1981)); Malitlrin v. St. Ltlke’s Hosp. of Kansas City, 809 S.W.Zd 418, (Mo. App. W.D. l99l) (“Tliis is not to say that the filing of an answer is not required; it is to Section 509.0 |0 reads, in relevant part, as follows: "There shail be a petition and an answer; and there shall be a reply if the answer contains a counterclaim denominated as such." Section 509.010.

say that enforcement of the requirement of an answer is waived unless the opposing party invokes its enforcement by timely and proper action.").

Here, the C.W. defendants took no timely or proper action seeking to enforce the requirement that Pulaski file an answer to the counterclaim. The C.W. defendants did not, for example, seek a default judgment or a judgment on the pleadings Nor did the C.W. defendants raise the issue in their response to Pulaski’s motion for summary judgment Ilrstead, the C.W. defendants proceeded on the merits at the sunnnary judgment stage having lodged no objection to Pulaski’s failure to file an answer other than raising the issue during oral argument on the motion for summary judgment By failing to object to Pulaski’s failure to file an answer by a timely and proper action, the C.W. defendants waived the requirement that Pulaski tile an answer. See, e.g., Cooper, 625 S.W.Qd at 171 ("'I`lie record does not show plaintiff objected to defendant's failure to file an answer by seeking a defaultjudginent or otherwise."); Blaise, 672 S.W.Zd at 688 ("Clarence proceeded to trial without objecting to the failure of the Bank to file its Answer, without moving that it be required to do so, and without taking a default He therefore waived the inandatory filing of an Answer and his complaint is without merit."); St. Louis County v. St. Louis County Police Offrcers Ass’n, Loeal 844, 652 S.W.Zd 142, 145 (Mo. App. E.D. 1983) ("Tlre record does not show that plaintiffs objected to defendants’ failure to file an answer before proceeding on the irrerits."). Thus, the averineiits contained in the C.W. defendants’ counterclaim were not deemed admitted for purposes of Pulaski’s inotioii for summary judgment II. Propriety of Slln\nlary Judglnent We are therefore left to determine whether the trial court erred in concluding, on the basis of the tindisprited facts, that Pulaski was entitled to judgment as a matter of law on the C.W. defendants’ counterclaim for lulling.

The C.W. defendants alleged in their counterclaim that Ptllasl<i lulled them into rnal<irig payments on the Notes based on "sigiis,” "actioris," and "represeritatioris” that Pulaski would "work with" them on niodifyiiig the Notes rather than foreclosing The only evidence offered in support of the counterclaim were the affidavits executed by the Gtlarantors, each of which stated simply "I was lulled into continuing to make payments by being given a false promise that credit would be continued to be extended to me." The trial court concluded that the allegations outlined above, without inore, "provide no basis for a counterclaim against Pulaski." Importantly, the C.W. defendants did not allege the existence of-or produce~a u'ririn'g evidencing the false promise alleged in the counterclaim.

The trial court held that the absence of such a writing was "fatal" to the C.W. defendants’ counterclaiin. We agree.

Missouri’s commercial credit agreement statute of frauds provision, codified in Section 432.047, provides as fo|lows: l. For the purposes of this section, the term "credit agreement" nieans an agreement to lend or forbear repayment of money, to otherwise extend credit, or to rnake any other financial accommodation.

2. A debtor party may not lnaintaiil an action upon or a defense, regardless of legal theory in which it is based, in any way related to a credit agreement unless the credit agreement is in writing, provides for the payment of interest or for other consideration, sets forth the relevant terms and conditions, and the credit agreement is executed by the debtor and the lender.

3. (l) Wlieri a written credit agreement has been signed by a debtor, subsection 2 of this section shall not apply to any credit agreement between such debtor and creditor unless such written credit agreement contains the following language in boldface ten-point type: "Oral or tlnexectlted agreements or connnitrtielits to loan inoney, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable, regardless of the legai theory upon vvhicli it is based that is in any vvay related to the credit agreement. To protect you (borro\ver(s)) and us (creditor) from niisunderstaiiding or disappointment, any agreements \ve reach covering such niatters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to niodify it." (2) Notwitltstalidiltg any other law to the contrary in this chapter, the provisions of this section shall apply to cornmercial credit agreements only and shall not apply to credit agreements for personal, family, or liouseliold purposes Section 432.047 (ernphasis added).

C.W. Holdings is a conimercial entity, and both Note One and Note Two contain the required statutory language quoted above in boldface ten-point type, making Section 432.047 applicable This Court has held that Section 432.047 evinces a clear legislative intent "to eliminate all claims and defenses relating to a credit agreement if that credit agreement is not in vvritilig." BancorpSotlth Bank v. Parainont Properties, L.L.C., 349 S.W.3d 363, 367 (Mo. App. E.D. 201 l). Specitically, Section 432.047 states that “[a] debtor party may not maintain an action upon or a defense, regardless of legal theory in which it is based, in any way related to a credit agreement unless the credit agreement is in \vritiiig." Here, the C.W. defendants based their cottnterclaint for lulling upon alleged "signs," "actions," and "represeritatioiis" that Pulaski made a "false promise" to "work \vith" them on modifying the Notes rather than foreclosing The C.W. defendants never alleged or provided evidence that any such alleged false promises were contained in a written credit agreement (or in any written document at ail) in coinpliance with the provisions of Section 432.047. As the trial