SPRINGFIELD, Mo. (BP)–Missouri Baptist Convention attorneys urged an appeals court to permit the MBC to pursue recovery of 1,300 acres of land on the Lake of the Ozarks even though a prior appellate opinion ruled that the MBC could not regain control of the Windermere Corporation entity.
Oral arguments were held Jan. 15 before a three-judge panel of the Missouri Court of Appeals, Southern District, in Springfield. It was the latest round in the legal efforts by the Missouri Baptist Convention to recover the real estate transferred to the Windermere Corporation in 2001.
Windermere was one of five MBC subsidiary corporations which broke from the convention in 2000-01 by changing their charters to create self-perpetuating trustee boards. The other breakaway entities are Missouri Baptist University, the Missouri Baptist Foundation, The Baptist Home retirement center and the Word & Way newsjournal.
MBC attorney Michael Blanton asked the Springfield appeals panel to reverse a Camden County trial judge’s order in April 2009 dismissing several defendants, including the Windermere corporation, several lenders and William Jester of Springfield, Mo. The trial judge had based his ruling in part on his view that a February 2009 appellate opinion from the Kansas City Court of Appeals already had decided most issues in the Camden County case.
Blanton argued that a case filed by the convention in Cole County and the one in Camden County involved different legal claims and issues, and thus the earlier Cole County appellate opinion did not resolve the Camden County case. In Camden County, the MBC sought to “quiet title” to 1,300 acres, which includes 943 acres that the Windermere corporation transferred to National City Bank of the Midwest in late 2005 in lieu of foreclosure. In February 2006, the bank sold the property to Windermere Development Co. LLC (WDC), a company set up by William Jester, who gave mortgages to Consolidated Mortgage and National City Bank for the $5.5 million purchase price.
Attorney Michael Cessna appeared on behalf of Consolidated Mortgage, National City Bank and First American Title Company. He argued that the convention had not filed its notice of appeal on time after the April 2009 dismissal, and thus the appeals court lacked jurisdiction. Blanton argued that MBC’s appeal was timely because the April 2009 dismissal did not trigger the notice deadline. When a final judgment was entered on June 22, 2009, the MBC filed a timely notice on June 30.
Eric Walter, attorney for the Windermere corporation, argued that the Cole County case was essentially the same as the Camden County case, and thus the earlier appeal should have ended both cases. Attorney James Gallagher, attorney for two California banks and a Georgia church bond firm, argued that the banks did nothing wrong and should not be at risk of losing their loans if the Missouri Baptist Convention were to recover the land.
Presiding Judge Jeffrey Bates asked Blanton whether the convention was required to bring all its claims in one action in one county. Blanton explained that the claims could not lawfully have been brought in one county. The Cole County case dealt with corporate control and named the Secretary of State as a defendant, who could only be sued in Cole County. The Camden County case was a “quiet title” action which seeks to determine title to real estate, and by statute such claim must be brought in the county where the land lies, which is Camden County.
The other judges on the appeals panel, Don Burrell and Nancy Steffen Rahmeyer, also asked questions about the differences between the Cole County claims and the Camden County quiet title action. They quizzed the defense counsel about the fact that the trial judge did not expressly state that his April ruling was “with prejudice,” which is normally required for a final appealable judgment. Defense counsel admitted that was the general rule but they urged the panel to make an exception.
The Missouri convention was allowed 15 minutes of argument followed by 15 minutes shared by all defendants. Cessna and Walter each took six minutes; Gallaher took three minutes. Blanton then was allowed five minutes for rebuttal to all three defense lawyers. At the close of argument, Judge Bates commended all the attorneys for an excellent argument. “Very helpful,” he said. “I wish all our arguments could be this good.”
A written decision by the panel typically is rendered within two to three months.
Also attending the oral arguments were Randy Comer, chairman of the Missouri convention’s Agency Recovery Group; Michael Whitehead, MBC legal counsel; Larry Johnson, retired Baptist Home CEO; Dan Bench, former Missouri Baptist Foundation trustee and a current director for the Windermere corporation; Jim Shoemake, lead attorney for Windermere, Missouri Baptist Foundation and the Baptist Home; Jester’s CFO, Jerald Hill, brother of Jim Hill, former MBC executive director.
On Jan. 14, the day before the oral argument, Jester filed a bankruptcy petition for WDC in order to stop a foreclosure sale in Camden County of 943 Windermere acres. The sale had been initiated by Consolidated Mortgage. Filing the bankruptcy petition at 2 p.m. had the legal effect of automatically “staying” other civil legal proceedings involving WDC and thus forced the cancellation of the foreclosure sale.
WDC is a limited liability company formed by Jester to hold title to the former Windermere acreage, which Jester’s company purchased from National City Bank in February 2006. WDC’s “sole member” is Jester Capital Management, LLC, which, in turn, is owned by Jester.
National City Bank’s $21 million mortgage on all 1,300 acres of Windermere was in default when NCB agreed take a deed in lieu of foreclosure for 943 acres in November 2005. NCB then sold the land to Jester’s company in February 2006, with financing through Consolidated Mortgage and NCB for a purchase price of $5.5 million.
In December 2009, Consolidated Mortgage declared that WDC was in default on making payments on the mortgage and started publication of legal notice of a foreclosure sale on Jan. 14, 2010, at 4 p.m.
A “first meeting of creditors'” under Section 341 of the Bankruptcy Code is set for Feb. 19 at 8:30 a.m. at the Federal Courthouse in Springfield. The petition lists Consolidated Mortgage and NCB and three other creditors: Allstate Consultants in Columbia, Mo.; Camden County Collector of Revenue; and CM Capital Services.
MBC attorney Michael Whitehead said it is not yet clear what impact the bankruptcy filing will have on legal proceedings related to the property.
In another development, the Cole County circuit judge who handled the Windermere proceedings there, Richard Callahan, resigned from the bench Jan. 15 to become the new U.S. Attorney for the Eastern District of Missouri in St. Louis, a position to which he was appointed by President Obama and confirmed by the U.S. Senate.
Callahan’s successor, Paul Wilson, 48, was appointed by Gov. Jay Nixon.
Reported by the staff of The Pathway, newsjournal of the Missouri Baptist Convention.