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IN THE MISSOURI COURT OF APPEALS EASTERN DISTRICT

NO. ED106463

TITAN FISH TWO, LLC,

Appellant,

v.

TRIAD BANK, et al.,

Respondents.

Appeal from the Circuit Court of the County of St. Charles, State of Missouri The Honorable Jon Cunningham, Circuit Judge

Case No. 1511-CC00246

BRIEF OF RESPONDENT TRIAD BANK

CARMODY MACDONALD P.C. David P. Stoeberl, #46024 Tina N. Babel, #58247 120 South Central Avenue, Suite 1800 St. Louis, Missouri 63105 (314) 854-8600 Telephone (314) 854-8660 Facsimile dps@carmodymacdonald.com tnb@carmodymacdonald.com Attorneys for Respondent Triad Bank

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TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Page(s)

Cases

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JURISDICTIONAL STATEMENT

On May 21, 2018, this Court entered an order asking the parties to address

whether this appeal is premature due to lack of a final judgment because Respondent

Triad Bank’s (“Triad”) claim for declaratory judgment had not been ruled upon by the

trial court. This Court expressed its suspicion that Triad’s claim had either been

abandoned or implicitly resolved such that this appeal is ripe. Triad agrees.

By way of brief background, on April 28, 2015, Triad moved to intervene in Titan

Fish’s lawsuit seeking a receivership against Respondent McEagle Properties, LLC

(“McEagle”), amongst other relief, in order to protect Triad’s rights as a senior secured

creditor of McEagle. (L.F. 467). The trial court allowed Triad’s single-count petition,

which sought a declaration that its security interest in certain collateral was senior to any

claim by Appellant Titan Fish (“Titan Fish”). (L.F. 315).

As explained in the fact section of this brief, on May 18, 2015, Triad conducted a

UCC sale of its collateral. Upset at the outcome of Triad’s sale, Titan Fish thereafter

brought several claims against Triad that are the subject of this lawsuit, including several

that challenged Triad’s UCC sale. None of those, however, challenged the seniority of

Triad’s lien. To the contrary, Titan Fish conceded in its Third Amended Petition (the

pleading upon which this trial occurred) that Triad held a valid, senior security interest in

certain collateral of McEagle. (L.F. Doc. 329 at 5, ¶ 21). At trial, Triad did not submit to

the Court its claim for a declaratory judgment given that the sale and pleading rendered

the subject moot. After the jury returned a verdict in Triad’s favor, Triad submitted a

motion to dispose of the sole remaining equitable claim against it given the jury’s

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decision. (L.F. Doc 395). The Court granted that motion and thereafter entered a form of

judgment tendered by Triad which made clear that Triad desired to have a final judgment

entered on “all remaining counts.” (L.F. 416; L.F. 417 at 3). Admittedly, the failure to

explicitly mention Triad’s declaratory judgment claim was an oversight by counsel, but

there was nothing remaining to be decided by the Court, especially given Titan Fish’s

repeated concession of the priority of Triad’s lien.

A party may abandon a claim, and thereby fully dispose of it, by not prosecuting it

at trial. Unnerstall Contracting Co., Ltd. v. City of Salem, 962 S.W.2d 1, 5-6 (Mo. App.

S.D. 1997). In Unnerstall, the court held that a judgment was final even though it failed

to mention one of the claims. The Court reached its decision because it found the claim

had been “abandoned.” Id. at 6. In arriving at its conclusion, the Court noted that

nothing in the record suggested that the omitted count was prosecuted at trial or severed

from it. In addition, the tendered verdict-directing instruction did not mention it. Id. at 5.

Likewise here, the tendered order from Triad explicitly stated the intention to

resolve all remaining counts but inadvertently omitted reference to the declaratory

judgment claim, which by that point had been mooted by Triad’s decision not to

prosecute it in the face of Titan Fish’s concession. Accordingly, the judgment in this

matter is final and this appeal should proceed.

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MOTION TO DISMISS

At the outset of this Respondent’s Brief, Triad moves to dismiss Titan Fish’s

appeal due to Titan Fish’s litany of failures to comply with the requirements of Missouri

Supreme Court Rule 84.04. Rule 84.04 sets forth the mandatory rules for appellate

briefing. Mandatory compliance with Rule 84.04 is required for two reasons: (1) it gives

notice to the respondent of the precise matters which must be contended with and

answered; and (2) it ensures unnecessary burdens are not imposed on the appellate court

and so that the appellate courts do not become advocates for the appellant by speculating

upon facts and arguments that have not been made. Smith v. Med Plus Healthcare, 401

S.W.3d 573, 575 (Mo. App. E.D. 2013). Failure to comply with Rule 84.04 preserves

nothing for review and is grounds for dismissing an appeal. Johnson v. Buffalo Lodging

Associates, 300 S.W.3d 580, 581 (Mo. App. E.D. 2009). Here, Titan Fish’s Appellant’s

Brief falls woefully short of complying with Rule 84.04 in a multitude of instances.

First, the Statement of Facts fails to provide “a fair and concise statement of the

facts relevant to the questions presented for determination without argument” as required

under Rule 84.04(c). “The primary purpose of the statement of facts is to afford an

immediate, accurate, complete and unbiased understanding of the facts of the case.” Kent

v. Charlie Chicken, II, Inc., 972 S.W.2d 513, 515 (Mo. App. E.D. 1998). Additionally,

“[a]n appellant must provide the facts in the light most favorable to the verdict, not

simply recount appellant's version of the facts presented at trial.” Blanks v. Fluor Corp.,

450 S.W.3d 308, 324 n.1 (Mo. App. E.D. 2014). Here, Titan Fish presents the facts

entirely biased in its favor while completely ignoring facts favorable to the jury’s verdict.

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In fact, Titan Fish refuses to even include in its Statement of Facts what the jury decided,

which was a complete defense verdict against Titan Fish. (See App. Br. at 10-26).

Further, Titan Fish freely admits that “[m]any of the facts described in the factual

description of the case in this Statement of Facts were excluded from evidence . . .” and

thus not even heard by the jury. Titan Fish also includes numerous argumentative

statements in its Statement of Facts, including entire sections referring to “Wrongful

conduct committed against Titan Fish”, “The Amount Due on the Titan Fish Note”, and

“Titan Fish’s Damages” even though the jury returned a verdict finding that no wrongful

conduct occurred against Titan Fish, no amounts were owed on the Titan Fish Note, and

Titan Fish was not entitled to any damages. (See L.F. 396, 398, 399, 400). In addition to

the foregoing, Titan Fish also repeatedly misstates the evidence and its citations to the

record do not support the factual statement represented by Titan Fish. See Blanks v.

Fluor Corp., 450 S.W.3d 308, 324 n.1 (holding that it is not the appellate court’s “duty or

place to comb through the record, ferreting out facts, to gain an understanding of the

case.”) The deficiencies in the Statement of Facts alone is sufficient to warrant dismissal

of the appeal. Id.

Second, Titan Fish’s Points Relied On fail to comply with the requirements of

Rule 84.04 in several respects. Initially, several of the Points (I, III, and IV) fail to track

the structure of Rule 84.04(d) and, in particular, fail to either state the legal reasons for

the alleged claim of reversible error or explain why those legal reasons support a claim

for reversible error in the context of the case. (See App. Br. At 27-28). See State ex rel.

Koster v. Allen, 298 S.W.3d 139, 143 (Mo. App. S.D. 2009) “The requirement that

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the point relied on clearly state the contention on appeal is not simply a judicial word

game or a matter of hypertechnicality on the part of appellate courts . . . [but] is to give

notice to the opposing party as to the precise matters that must be contended with and to

inform the court of the issues presented for review.” In re Marriage of Shumpert, 144

S.W.3d 317, 320 (Mo. App. E.D. 2004) (citations omitted). For example, Titan Fish’s

Point Relied On I generally states in part that the trial court erred by excluding “relevant

and probative evidence” without identifying a specific ruling by the trial court or

identifying the legal reason why the purported exclusion of this unspecified evidence

constituted reversible error in the context of the case. (App. Br. at 27). This Point Relied

On, as written, is vague, multifarious, and fails to provide the respondents notice of the

precise matters they must contend with and answer. Improper points relied on preserve

nothing for review. Martin v. Reed, 147 S.W.3d 860, 863 (Mo. App. S.D. 2004).

Third, Titan Fish’s Argument Section fails to comply with Rule 84.04(e)’s

mandate that “[t]he argument shall be limited to those errors included in the ‘Points

Relied On.’” Arguments raised for the first time in the argument section “will be

considered abandoned.” In re Marriage of Flud, 926 S.W.2d 201, 206 (Mo. App. S.D.

1996). Titan Fish raises several sub-arguments in its Argument Section not included

within its Points. Additionally, Titan Fish fails to fully develop many of these sub-

arguments and/or supply supporting authority or explain why such authority is

unavailable on these points. By inserting these numerous sub-arguments, Titan Fish

leaves respondents – and this Court – with the task of guessing as to the missing portions

of Titan Fish’s half-arguments. Because the Respondent and the Court should not be

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forced to guess, “[i]f a party fails to support a contention with relevant authority or

argument beyond conclusions, the point is considered abandoned.” Luft v. Schoenhoff,

935 S.W.2d 685, 687 (Mo. App. E.D. 1996).

The deficiencies in Titan Fish’s brief are too numerous to list in this motion, but

Triad will identify major deficiencies throughout the remainder of its Respondent’s Brief.

While Triad includes in its brief a Statement of Facts under the correct standard in the

light most favorable to the jury’s verdict and endeavors to decipher and address all of

Titan Fish’s arguments, given Titan Fish’s numerous failures to comply with Rule 84.04

and the resulting hardship on the Respondents as well as this Court, Triad respectfully

requests that Titan Fish’s appeal be dismissed.

INTRODUCTION

This case presented two core issues:

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• Whether McEagle breached a promissory note which Titan Fish claimed it

purchased from Multibank and, if so, in what amount; and

• Whether Triad’s actions were wrongful in conducting a UCC sale of collateral

pledged by McEagle under a defaulted loan owed to Triad.

The jury, after an eight-day trial, found no liability under the promissory note and

rejected the contention that Triad Bank’s UCC sale amounted to a fraudulent conveyance

or tortious interference with Titan Fish’s claimed promissory note. Having failed to

demonstrate the note obligation, the trial court likewise dismissed all of Titan Fish’s

equitable claims which were predicated on proof of that obligation. Stated another way,

Titan Fish’s failure to prove up its promissory note claim doomed everything else.

Titan Fish’s assault on Triad’s UCC sale floundered for other reasons too.

Missouri’s version of the UCC gives a remedy for a commercially unreasonable sale.

Titan Fish brought such a claim (Count XI), but voluntarily dismissed it before the start

of trial. The remaining claims it proceeded upon were crippled out of the gate as they

were inapposite to the facts. Its claim under the Missouri Uniform Fraudulent Transfer

Act (“MUFTA”) never had application to a sale of collateral by a creditor; by its terms

the MUFTA only applied to transfers by debtors, not other creditors foreclosing on

collateral. The tortious interference claim likewise didn’t fit the facts either. Triad’s

actions could never cause the breach of Titan Fish’s note because that note had been in

breach for years beforehand. And Triad was justified in exercising its legal rights as a

secured creditor. The jury agreed.

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Nevertheless, in kitchen-sink fashion, Titan Fish now complains about every

evidentiary and legal ruling of the Court in an attempt to undo the jury’s and trial court’s

decision. To save its case, it also attempts to recast and obfuscate what this case was

about. Triad’s UCC sale now barely merits mention. Instead, Titan Fish claims its case

was gutted because the trial court disallowed evidence of the “termination of key

agreements” involving McEagle’s subsidiaries. Nevermind that these “key agreements”

are not identified in the record and the subsidiaries were not even parties at trial.

As demonstrated below, the jury’s verdict and trial court’s judgment should be

affirmed because:

• The trial court’s evidentiary decisions were sound and Titan Fish’s arguments

are unsupported by the record and applicable law;

• The trial court rightly rejected Titan Fish’s marshalling claim because Titan

Fish could not prove an element of that claim—that it was a creditor—after the

jury rejected its note claim;

• The trial court properly denied a directed verdict on the note claim because

Titan Fish failed to demonstrate a balance due through a clear admission by

McEagle; and

• Titan Fish failed to preserve an objection to Instruction 16 on grounds that it

improperly allowed the jury to decide standing; in any event, that instruction

accurately recited the elements of a statutory cause of action for fraudulent

transfer.

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STATEMENT OF FACTS1

A. The Triad and McEagle Relationship

In 2006, a year after Triad was established as a full-service financial institution in

Frontenac, Missouri, McEagle approached Triad to borrow $2 million on a line of credit

to finance certain expenses for its developments. (Tr. Vol. III, 948:13-25; Tr. Vol. II,

623:12-25, 624:25-625:3, 632:10-13). At the time, McEagle had established itself as a

successful real estate development company headed by Respondent Paul McKee, Jr.

(“McKee”) (Tr. Vol. II., 623:12-25, 631:20-632:9). As of 2006, McKee had a

substantial net worth and McEagle had a strong balance sheet independent of McKee.

(Tr. Vol. II, 631:25-632:9). Based upon McEagle’s financial outlook and certain

guarantees given by McKee and his trust, Triad agreed to enter into a $2 million

unsecured line of credit, as evidenced by a Promissory Note (the “Triad Note”). (Tr.

Vol. II, 628:23-629:9, TB-14).

From 2006 to 2009, the performance of the McEagle loan went “quite well.” (Tr.

Vol. II, 643:20-644:1). Triad increased the line of credit from $2 million to $2.5 million

as a result. (Tr. Vol. II, 645:4-9). However, when the real estate crisis hit in 2009,

McKee had gone from a strong positive net worth to a negative one and the McEagle loan

was placed on Triad’s watch list, meaning it was classified as a “problem loan.” (Tr.

Vol. II, 645:14-24, 647:19-648:4).

1 The Statement of Facts in Appellant’s Brief is inaccurate, incomplete, and argumentative and therefore, Triad presents this Statement of Facts pursuant to Rule 84.04(f).

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Triad attempted to work with McEagle in an attempt to get the $2.5 million

balance reduced over time. (Tr. Vol. II, 646:2-9, 647:9-16). When McEagle’s struggles

to make timely payments continued, Triad requested security for the remaining balance.

(Tr. Vol. II, 648:14-25).

On May 21, 2010, McEagle entered into a Commercial Security Agreement in

favor of Triad in the amount of $1,999,645.40 (the “Triad Security Agreement”). (Tr.

Vol. II, 649:1-5, 650:15-21; TB-45). The Triad Security Agreement granted Triad a

“blanket lien” in all of McEagle’s assets, including all of McEagle’s “inventory,

equipment, accounts, including but not limited to all healthcare insurance receivables,

chattel paper, instruments, including but not limited to all promissory notes, letter of

credit rights, letter of credits, documents, deposit accounts, investment property, money,

other rights to payment and performance, and general intangibles, including but not

limited to all software and all payment intangibles,” among other things. (Tr. Vol. II,

652:4-653:16, 654:4-14; TB-45). At McEagle’s request, the only collateral excluded

from the blanket lien were membership interests in limited liability companies owned by

the guarantor and McEagle. (Tr. Vol. II, 657:4-658:6).

Triad thereafter filed its UCC Financing Statement, which provided notice that

Triad had an interest in the McEagle collateral, and which was subsequently renewed in

2015. (Tr. Vol. II, 661:21-25, 662:8-663:3; TB-48; TB-94).

Thereafter, until 2015, McEagle continued to struggle financially. (Tr. Vol. II,

667:16-68:2). The Triad Note was modified no less than a dozen times as a consequence

of McEagle’s continuing payment issues. (Tr. Vol. II, 668:10-15).

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Triad continued trying to work with its troubled borrower through 2015,

sometimes forgiving or deferring McEagle’s payments, in an attempt to collect on its

“problem” loan. (Tr. Vol. II, 668:3-9).

B. In 2015, Titan Fish – a Distressed Loan Buyer – Purchased an Unrelated McEagle Loan and Two Months Later Tried to Put McEagle Into Receivership, Jeopardizing Titan Fish’s Collateral

Titan Fish Two, LLC (“Titan Fish”), was formed for the sole purpose of acquiring

defaulted and distressed loans. (Tr. Vol. III, 979:24-980:14).

Unbeknownst to Triad, on March 9, 2015, Titan Fish purchased five distressed

loans from Multibank. (Tr. Vol. III, 995:25-996:11, 999:18-1000:1; Ex. 10). One of the

distressed loans Titan Fish purchased from Multibank was between Corn Belt Bank &

Trust Company (“Corn Belt”) and McEagle. The Corn Belt loan had been seized by the

FDIC when Corn Belt failed, and was later purchased by Multibank (the “Titan Fish

Note”). (Tr. Vol. III, 1001:12-17, 1002:2-8; Ex. 10).

On March 27, 2015, eighteen (18) days after its purchase of the Titan Fish Note

from Multibank, Titan Fish filed a Petition against McEagle for Breach of Promissory

Note, Breach of Security Agreement, Replevin, and Receivership (“Petition for

Receivership”). (Tr. Vol. III, 1063:17-19). On April 6, 2015, Titan Fish filed a Motion

for Appointment of Receiver. (L.F. 312).

Titan Fish filed its Petition for Receivership despite knowing that Triad also had a

loan with McEagle and a first-priority, secured interest on McEagle’s collateral. (Tr.

Vol. III, 1063:6-11, 20-22). Even knowing that Titan Fish had a subordinate interest to

Triad, it did not contact Triad or interact with Triad in any way before trying to put

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McEagle’s assets in receivership. When asked whether Titan Fish contacted Triad prior

to collect on McEagle’s collateral, Mr. Joseph Campbell, the manager responsible for the

day-to-day operations of Titan Fish testified “I don’t believe we did, no.” (Tr. Vol. III,

1048:8-17; 1064:17-1065:6).

Titan Fish’s filing of the Petition for Receivership put the troubled Triad Note into

default. (Tr. Vol. II, 426:16-23; Tr. Vol. II, 638:21-639:21; TB-168).

C. Triad Decides That It Must Hold a UCC Sale in an Attempt to Protect Its Collateral

McEagle was bound under the Triad Note to keep Triad apprised about its

financial status. (Tr. Vol. II, 700:21-24). As a result, in March 2015, McEagle informed

Triad about Titan Fish and that Titan Fish had filed its Petition for Receivership to have a

receiver appointed over its assets and to collect on the Titan Fish Note. (Tr. Vol. II,

701:8-19). This was the first time Triad had heard of Titan Fish or that it was pursuing

legal action against McEagle. (Tr. Vol. III, 951:25-952:2; Tr. Vol. II, 701:8-19).

On April 28, 2015, Triad intervened in that action. (Tr. Vol. II, 702: 4-20, L.F.

467). Mr. Thomas Anstey, the loan officer at Triad handling the loan, testified that Triad

did so because if it feared it would be unable to preserve its rights as the senior creditor if

it did not. (Tr. Vol. II, 703:4-15). Mr. Anstey testified: “We feared that the receiver

would perform a quick liquidation of McEagle Properties which, as I’ve explained

before, did not contains assets that had sufficient value to repay our loan in full.” (Tr.

Vol. II, 703:21-704:18). The loan balance on the Triad Note at this point in time was

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$748,399.61. (Tr. Vol. II, 764:22-24). Titan Fish, who had never spoken to Triad, the

senior lender, opposed Triad’s Petition to Intervene. (Tr. Vol. II, 704:19-705:10).

The next day, on April 29, 2015, Triad met with McEagle and its attorney to

inform McEagle that it had decided to hold a public UCC sale to sell the McEagle

collateral. (Tr. Vol. II, 709:14-710:16). Triad informed McEagle that it hoped that

another party – whether it was Titan Fish or an unrelated third party – would be the

winning bidder so that the Triad Note would be paid off in full. (Tr. Vol. II, 710:7-16).

Triad’s decision to hold a UCC sale was without any involvement by McEagle and

McEagle was not happy that Triad would be selling the collateral. (Tr. Vol. II,

711:12-14, 712:4-10).

In fact, a few days after that meeting and during the hearing on Titan Fish’s

motion to appoint a receiver, Titan Fish’s counsel stated that Triad had no standing to

object to the receivership unless Triad held a UCC sale. (Tr. Vol. II, 716:9-23). It was

clear to Triad at that point that it needed to pursue a UCC sale to protect its senior

interests in the McEagle collateral. (Tr. Vol. II, 716:18-717:2).

D. McKee Forms M Property to Bid on the Assets

On May 5, 2018, after Triad had already decided to hold a UCC sale, Triad had

another meeting with McEagle and its counsel. (Tr. Vol. II, 719:8-17). At that meeting,

McKee notified Triad that he had formed a new entity called M Property Services, LLC

(“M Property”) and that M Property intended to bid on the McEagle assets at the UCC

sale. (Tr. Vol. II, 719:18-720:2). This meeting – which occurred after M Property’s

formation – was the first time Triad had ever heard of M Property. (Tr. Vol. II, 720:3-9).

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Triad was not involved in any way with McKee’s decision to form M Property. McKee

testified:

Q. And four days later [after the April 30 meeting], you created the new entity M Property?

A. That’s correct.

Q. And that was because Triad Bank had told you that they were doing a UCC sale?

A. Correct.

Q. And you did not tell Triad Bank that that is what you were doing?

A. No, ma’am.

Q. It was not [Triad’s] decision for you to create M Property?

A. Absolutely not.

Q. And you did not have any agreements with Triad Bank regarding the formation of M Property, is that correct?

A. No, ma’am.

Q. In fact, you told Triad Bank you were going to start M Property regardless of what Triad Bank did?

A. Correct. Because we didn’t know what would happen at the sale.

(Tr. Vol. II, 427:2-22).

At the meeting, McKee asked Triad to consider providing M Property a loan to

purchase the assets if it was the winning bidder at the sale. (Tr. Vol. II, 719:18-720:2).

Triad informed McKee that any such loan would need to be presented to and approved by

Triad’s loan committee. (Tr. Vol. II, 721:2-8).

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In the meantime, Triad’s counsel reached out to Titan Fish’s counsel a number of

times asking for Titan Fish to bid on the McEagle collateral or purchase the Triad Note.

(Tr. Vol. II, 721:9-722:4, Tr. Vol. III, 1075:24-1076:9). Titan Fish, however, chose not

to make an offer to purchase the Triad Note. (Tr. Vol. II, 721:9-722:4). Triad was

concerned that Titan Fish would not bid on the assets at the UCC sale and that there

would be no other bidders at the UCC sale. (Tr. Vol. II, 721:9-722:4).

Triad therefore submitted the M Property request to its loan committee on May 11,

2015. (Tr. Vol. II, 722:11-20, 729:12-16). Triad decided, as set forth in a Conditional

Loan Commitment letter, that Triad would loan M Property funds to purchase the

collateral, but only if it was the winning bidder at the UCC sale. (Tr. Vol. II, 730:16-

731:4).

E. The Triad UCC Sale

On May 18, 2015, at 8:00 a.m., after notice was published and given to Titan Fish

and McEagle, Triad conducted its public auction of the McEagle collateral. (Tr. Vol. III,

751:23-753:5, 754:14-19; Ex. 33; TB-150).

Titan Fish did nothing before the sale to try to stop the UCC sale. (Tr. Vol. III,

1088:1-4). Even though there was an action was pending between the parties in light of

Titan Fish’s filing of the Petition for Receivership and Triad’s intervention, Titan Fish

did not file anything to object to or try to stop the sale in that action. (Tr. Vol. III,

1088:23-1088:4; L.F. 312). Even during the sale, Titan Fish did not object. (Tr. Vol. III,

1088:5-7). In all respects, Triad conducted its sale in a commercially reasonable manner.

(Tr. Vol. IV, 1299:6-13, 1308:25-1320:18).

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Though Titan Fish attended the auction it did not bid on the collateral, despite the

fact that Mr. Campbell testified that he had a million dollars in his pocket that he could

have bid to win the auction – one $500,000 cashier’s check and five $100,000 cashier’s

checks. (Tr. Vol. III, 755:12-20, 1038:9-25, 1073:23-1074:2).

M Property made the only bid on the collateral. (Tr. Vol. III, 755:3-20).

M Property therefore had the winning bid of $748,399 and became the owner of the

McEagle collateral. (Tr. Vol. III, 755:3-20, 757:13-23; TB-214).

On the same day, but after the Triad UCC sale, Titan Fish held its own auction at

the office of Lewis Rice where it auctioned off 95% of the membership interest in

McEagle to itself for a purported credit bid of $100,000. (Tr. Vol. III, 1144:21-24).

After the sale, on June 10, 2015, Titan Fish filed suit a Petition for Declaratory

Judgment and Damages against Triad in the St. Louis County Court, Case No.

15SL-CC01970, relating to Triad’s UCC sale. That suit was involuntarily dismissed on

December 1, 2015, because the St. Louis County Court held that the claims were

counterclaims that should be consolidated in this underlying action.

On January 5, 2016 and April 8, 2016, the Petition in this action was amended to

include claims against Triad relating to the UCC sale, among other things. (L.F. 329).

Titan Fish’s final Third Amended Petition contained nineteen causes of action

against fourteen different individuals, trusts, limited liability companies, and a bank.

(L.F. 329). Other than McEagle, M Property, McKee and Triad, whom Titan Fish

brought legal claims against that went to trial, some of the other defendants included

McEagle EIP, LLC (“EIP”) and Create, LLC (“Create”) – which owned McEagle;

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McEagle Property Services, LLC, McEagle Development, LC, and McEagle Realty, LLC

– subsidiaries of McEagle; Glenn Mitchell – McKee’s son-in-law and a managing

member of M Property; Marquerite Ann McKee, McKee, and Marquerite Brown, as

trustees of certain trusts; and William Laskowsky – who owned part of McEagle. (L.F.

329; Tr. Vol. II, 411:12-16). Many of these “other” defendants were dismissed prior to

trial, as set forth below, or related only to Titan Fish’s equitable claims. (L.F. 329, L.F.

385).

F. The Trial

Between October 24, 2018 and November 2, 2018, the Court proceeded with an 8-

day jury trial on the following legal claims: Count I – Breach of a Promissory Note, as

amended by the Forbearance Agreement (against McEagle); Count XII for Tortious

Interference (against Triad); Count XIV for Fraudulent Transfer (against McEagle and

M Property), Count XV for Conspiracy to Engage in Fraudulent Transfer (against

McEagle, M Property, Triad, and McKee). (L.F. 398, 399, 400, and 401).

Prior to trial (but effective at the conclusion of evidence), Titan Fish voluntarily

dismissed Counts V for Replevin (against McEagle), VI for Replevin (against EIP), VII

for Replevin (against Create), VIII for Replevin (against Laskowsky), IX for

Receivership (against McEagle), XI for Damages Pursuant to R.S.Mo. §400.9-625

(against Triad), XVI for Aiding and Abetting Fraudulent Transfer (against Triad, Midge

Trust, Paul Trust and Dalbow Trust), and XVII for Constructive Fraudulent Transfers

(against McEagle and M Property). (L.F. 385, at 3; L.F. 403; L.F. 329). The trial court

also ruled that it would try Counts II (Breach of Security Agreement as to McEagle), III

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(Breach of EIP Security Agreement as to EIP), IV (Breach of Security Agreement as to

Create), XIII (Breach of Duty to Marshal Assets as to Triad), XVIII (Constructive Trust

as to M Property, McKee, Midge Trust, Dalbow Trust, and Paul Trust), and XIX (Alter

Ego/Successor Liability as to M Property, McKee, Mitchell, Midge Trust, Dalbow Trust,

and Paul Trust) as equitable claims separate from the jury. (L.F. 385 at 3).

On November 2, 2017, the jury entered verdict for the Respondents on all counts.

(L.F. 396, 398, 399, 400). The jury’s verdict was unanimous for Triad on the claims

against it for Tortious Interference (L.F. 399). The jury did not reach the claim for

conspiracy, as it was only to be addressed if the jury found that Titan Fish succeeded on

its claim for fraudulent transfer. (L.F. 401, 396).

On November 27, 2017, the trial court entered judgment on the equitable claims

(Counts II, III, IV, XIII, XVIII, and XIX) because it found that each claim required a

finding that Titan Fish was a creditor of McEagle, but the jury found otherwise when it

rendered a verdict against Titan Fish on its promissory note claim. (L.F. 415, 416).

POINTS RELIED ON

22

ARGUMENT

I. With Regards to Titan Fish’s Point Relied On I, The Trial Court Did Not Err as it is Unclear What “Key Agreements” Titan Fish Contends Were Excluded and How Their Exclusion Caused Prejudice, Titan Fish’s First Point Relied Upon Substantially Fails to Comply with Rule 84.04 and Fails to Concisely State or Explain the Reasons for the Claim or Error (responding to Titan Fish’s Point Relied On I), A Motion in Limine Does Not Constitute an Appealable Order, and The Argument About “Non-Debtor Assets” is Nonsensical.

A. Standard of Review

Trial courts enjoy considerable discretion in the admission or exclusion of

evidence, and an appellate court will not disturb the lower court’s evidentiary rulings

absent a clear abuse of discretion. Moore v. Ford Motor Co., 332 S.W.3d 749, 756 (Mo.

banc 2011). A trial court abuses its discretion only if the evidentiary ruling “is clearly

against the logic of the circumstances . . . and is so arbitrary and unreasonable that it

shocks the sense of justice and indicates a lack of careful consideration.”

8000 Maryland, LLC v. Huntleigh Fin. Servs. Inc., 292 S.W.3d 439, 446 (Mo. App. E.D.

2009) (citation omitted).

Furthermore, in order to obtain a reversal based on the exclusion of evidence, an

appellant must demonstrate the excluded evidence would have materially affected the

merits of the cause of action. Williams v. Trans States Airlines, Inc., 281 S.W.3d 854,

872 (Mo. App. E.D. 2009) (citation omitted). The Court will not find an abuse of

discretion in excluding evidence “unless the materiality and probative value of the

evidence were sufficiently clear, and the risk of confusion and prejudice so minimal, that

we could say that it was an abuse of discretion to include it.” Id. (citation omitted).

23

Where evidence is excluded, the relevant issue is not whether the evidence was

admissible, but whether the trial court abused its discretion by excluding it. Id.

Titan Fish’s standard of review on its first point on appeal is incorrect and should

be ignored. Titan Fish first claims that the standard of review is that there is “[n]o

presumption of correctness accorded to a trial court’s declaration and application of law

as both present independent issues for review by the appellate court.” (App. Br. at 30).

This is not the standard of review in determining whether evidence was properly

excluded. Moreover, when Titan Fish discusses the abuse of discretion standard, it states

that the Court of Appeals must first consider whether the trial court erred in excluding

evidence. (App. Br. at 30). It then states that in examining this factor: “If the evidence

was admissible, the court erred in excluding it.” (App. Br. at 30). This is not the

standard for abuse of discretion and is clearly not the law: just because evidence is

admissible, does not mean that the trial court erred in excluding it. And the legal citation

Titan Fish provides for this untenable proposition, Richcreek v. Gen Motors Corp., 908

S.W.2d 772, 777 (Mo. App. W.D. 1995), states no such thing.

B. Titan Fish’s Point Relied On I Fails as It Relates to the “Termination of Key Agreements”

i. Titan Fish’s Point Relied On I Fails Because It Never Cites What Terminated “Key Agreements” It Was Precluded from Offering

Titan Fish’s sole contention in its first point relied upon is that the trial court erred

by failing to allow it to present evidence that the termination of “key agreements”

24

constituted a fraudulent transfer. (App. Br. at 30). It remains wholly unclear what “key

agreements” Titan Fish contends it was precluded from offering evidence regarding.

The word “key” only appears in the points relied upon and nowhere in the

argument section of the brief.

The only reference to “agreement” throughout the entirety of the Point Relied On I

section is one line under Paragraph A that “the ruling2 [that allegedly deprived Titan Fish

the opportunity to litigate its claims] was based on two erroneous premises: (1) that the

Subsidiaries and the revenue they generated were irrelevant non-debtor assets and (2) that

the termination of any management or development agreements of Subsidiaries does

not constitute a relevant and probative evidence.” (App. Br. at 31, Sec. A) (emphasis

added). There is no record citation to any management or development agreements.

Reference to management and/or development “contracts” then appears only two

other times in Titan Fish’s Point Relied On I. First, on page 34, Titan Fish states: “The

jury was not allowed to hear what the Subsidiaries did, how they were controlled by

McKee, how the assets were transferred outside the UCC sale, and how Titan Fish was

damaged. The court’s error prevented Titan Fish from presenting the jury with evidence

of these management and development contracts and the fraudulent transfer scheme.”

(App. Br. at 34) (emphasis added). The proceeding sentence or sentences have nothing to

do with “these” management and development contracts, and (again) no record citation is

2 What “ruling” Titan Fish is referring to here is undefined and therefore in violation of Rule 84.04. (App. Br. at 31); see Rule 84.04(d) (Where the appellate court reviews the decision of a trial court, each point shall (A) identify the trial court ruling or action that the appellant challenges).

25

given regarding what management and development agreements or contracts it is

referring to.

Then, on page 35, Titan Fish states that “At the direction of M Property and

McKee, the Subsidiaries fraudulently transferred revenue-producing management and

development contracts to M Property.” Again, there is no citation to the record.

Throughout its Brief, Titan Fish also fails to point to any exhibit reflecting a “key

agreement” – be it a management agreement, a development agreement or otherwise –

which Titan Fish contends was terminated. Given the lack of record citations, it remains

unclear who entered into the alleged key agreements, what these so-called key

agreements provided, who terminated them, whether there is more than one, when they

were terminated, whether they were terminated pursuant to their terms, and why

termination mattered. Nothing was presented or preserved for appeal on this issue.

Because of the lack of explanation and record citation, there is no way for this

Court to determine error of any sort, much less prejudice. See 8000 Maryland, LLC v.

Huntleigh Financial Services Inc., 292 S.W.3d 439, 445 (Mo. App. E.D. 2009) (“we

deem abandoned any issues identified in the point relied on that are not supported by

argument in the argument portion of the brief”).

As the only error raised in the first point relates to the termination of “key

agreements” and those are not identified, Point Relied On I should be denied in its

entirety.

26

ii. Exclusion of Evidence of the Termination of Contracts and Transfer of Non-Debtor Assets Cannot Be Prejudicial Because the Termination of Contracts Is Not A Transfer Under MUFTA Which Only Protects Transfers By A Debtor

Even if this Court still reviews the other arguments raised in Point Relied On I, the

trial court’s ruling as a matter of law was correct.

In order to “prevail on a claim under the Missouri Uniform Fraudulent Transfer

Act, the creditor must prove a transfer of assets was made by a debtor with an actual

intent to hinder, delay, or defraud a creditor of the debtor.” May v. Williams, 531 S.W.3d

576, 584 (Mo. App. W.D. 2017) (emphasis added). The trial court’s motion in limine

order merely reiterates that simple rule: evidence of termination of agreements – which

are not “transfers” under the clear language of the statute – by non-debtors could not be

presented as evidence of a fraudulent transfer. See R.S.Mo. §428.009 (debtor is defined

as someone who is “liable on a claim” and defining transfer as ways of “disposing of or

parting with an asset or interest in an asset”). Here, the “non-debtors” that Titan Fish

refers to appear to be the “Subsidiaries” of McEagle: McEagle Property Services, LLC,

McEagle Development, LLC or McEagle Realty LLC. It is undisputed, however, that the

Subsidiaries were not “debtors” of Titan Fish. In fact, Titan Fish chose not to pursue any

claims against any of those entities. (L.F. 398, 399, 400, 401).

Though again unclear, Titan Fish also seemingly argues that this evidence

supported piercing of the corporate veil. (App. Br. at 33-35). However, Titan Fish made

no claims for piercing against the Subsidiaries. (L.F. 385 at 3; L.F. 329). The only claim

Titan Fish made regarding piercing was a request to pierce M Property, McKee, Mitchell,

27

and various trusts. (L.F. 385 at 3; L.F. 329). These unrelated alter ego claims were not to

be tried to the jury, but were to be tried as equitable claims to the trial court. (L.F. 385).

Titan Fish did not state a claim for piercing the corporate veil of the Subsidiaries – which

were not even parties at the time of trial. (L.F. 385, p. 3; L.F. 329; Tr. Vol. I, 61:12-18).

Therefore, Titan Fish’s contention that evidence of the Subsidiaries assets was relevant to

prove a non-existent alter-ego claim is a red herring. See Levesque v. Levesque, 773

S.W.2d 220, 222 (Mo. App. E.D. 1989) (court lacked jurisdiction to make decision

regarding company’s property when company was not party to litigation).

C. Titan Fish’s First Point Relied On Fails as: (a) It Does Not Comply With Rule 84.04(3), (b) The Trial Court’s Motion In Limine Ruling Is Unappealable, and (c) It Is Unsupported by the Record.

i. Titan Fish’s Argument Regarding “Non-Debtor Assets” Should Not Be Reached Because It Is Not Contained in the Points Relied Upon

Titan Fish contends in its Point I that the trial court’s “ruling” deprived Titan Fish

of the opportunity to litigate its claims based on two false premises, one of which

included that the “Subsidiaries and the revenue they generated were irrelevant ‘non-

debtor’ assets.” (App. Br. at 31, sec. A).

Nowhere is this premise contained in the points relied upon. As a result, Titan

Fish’s contention on the “non-debtor assets” should not be considered on review. See

Rule 84.04(e) (“The argument shall be limited to those errors included in the Points

Relied Upon”); see also 8000 Maryland, LLC v. Huntleigh Financial Services Inc., 292

S.W.3d 439, 445 (Mo. App. E.D. 2009) (“Rule 84.04(e) limits the argument portion of a

brief to those claims of error that appear in a point relied on. As a result, our review is

28

likewise limited to those errors. We do not consider grounds for reversal that appear

solely in the argument portion of the brief.”) (citation omitted).

ii. The Trial Court’s Motion in Limine Order Is Not Appealable and Did Not Constitute Summary Judgment

Though again unclear, Titan Fish seemingly contends in its Point I that the Court

erred and effectively granted summary judgment where it made the following decision on

one of McEagle’s motions in limine: “McEagle defendants’ motion in limine regarding

non-debtor assets is granted. Plaintiff’s witnesses are precluded from testifying or

referring to any assets not owned or transferred by McEagle and plaintiff’s counsel may

not argue or offer evidence on these issues.” (L.F. 381).

Rulings on a motion in limine are merely a preliminary expression of the trial

court’s opinion as to the admissibility of the evidence and are subject to change when the

subject matter is presented to the court in proper prospective in the trial of the case. Amin

v. Bi-State Development Agency, 657 S.W.2d 382, 385 (Mo. App. E.D. 1983). Therefore,

a complaint against a trial court’s in limine ruling preserves nothing for appellate review.

Henderson v. Fields, 68 S.W.3d 455, 468 (Mo. App. W.D. 2001). To preserve an issue

relating to a motion in limine, the proponent of the evidence must (a) attempt to present

the excluded evidence at trial and, if an objection to the proffered evidence is sustained,

(b) the proponent must then make an offer of proof. Id. at 469. This Titan Fish did not

do.

Trying to get around this procedural burden – because it cannot be satisfied –

Titan Fish contends that the motion in limine order is not, in fact, a motion in limine

29

ruling, but rather a summary judgment order as it relates to the “non-debtor assets,”

whatever that means. However, as the trial court order related to admissibility of

evidence and did not dispose of a claim or affirmative defense, it is unclear how it could

be considered a motion for summary judgment.

The cases cited by Titan Fish for this proposition are inapposite. In Reed v. Rope,

817 S.W.2d 503 (Mo. App. W.D. 2001), the main case Titan Fish relies upon, the

defendant’s motion in limine attempted to strike the plaintiff’s affirmative defense on the

statute of limitations, and the trial court ruled that it would not submit a statute of

limitations jury instruction. The ruling in Reed which struck an entire affirmative defense

is not comparable to the evidentiary ruling at issue here which related only to certain

pieces of evidence, not the entirety of a claim or defense. See also Hanna v. Darr, 154

S.W.3d 2, (Mo. App. E.D. 2004) (in this case cited by Titan Fish, the parties specifically

agreed to treat the motion in limine as a motion for summary judgment).

The motion in limine order therefore cannot be appealed as it is an interlocutory

order.

iii. Titan Fish Fails to Specify What Evidence Was Excluded, How “Non-Debtor” Assets Are at Issue or How the Exclusion of Such Evidence Was Prejudicial

Rather than identifying the trial court’s ruling or action challenged, pointing to

specific testimony or evidence offered and excluded, stating concisely the legal reasons

for the claim or error regarding that evidence, and then showing the prejudice incurred as

a result of the ruling, as required by Rule 84.04, Titan Fish sets forth a litany of

summaries of its offers of proof with citations of “general” evidence it contends was not

30

admitted – which generally do not cite to the ruling or specific evidence excluded – and

then contends that generally the “excluded evidence” was generally prejudicial because it

pertained to liability, causation and damages. Titan Fish never explains what specific

information was excluded or how it would have affected the outcome. (App. Br.

at 30-39); see Blanks v. Fluor Corp., 450 S.W.3d 308, 384 (Mo. App. E.D. 2014) (failure

to support a point with relevant legal authority or argument beyond conclusory statements

preserves nothing for appeal and in such instances, the Court will deem the issue

abandoned).

Titan Fish’s logic and citations are nearly impossible to follow. See Smith v. Med

Plus Healthcare, 401 S.W.3d 573, 576 (Mo. App. E.D. 2013) (compliance with the

requirements of Rule 84.04 is required to give notice to the respondent of the precise

matters which must be contended with and answered). Simply by way of example, Titan

Fish contends that it “was precluded from eliciting testimony that it was denied all rights

associated with the membership it had purchased.” (App. Br. at 32). To support this

unclear contention, Titan Fish cites to its own counsel’s unsupported statement to the trial

court that it was “denied all rights of ownership associated” with its interest. (App. Br.

at 32; Tr. Vol. III, 844:8-16). It merely references Titan Fish’s counsel’s conclusion.

There is no reference to what this actually means or any evidence or testimony proferred

which would have supported that contention.

Titan Fish then contends, in summary fashion, “that McEagle’s Membership

Interests were transferred to M Property, without consideration, to the detriment of Titan

Fish both as creditor and as owner of sufficient membership interests to control

31

McEagle.” (App. Br. at 33). Again, it is unclear what this actually means, what

membership interests it is referring to, and, other than conclusory statements, Appellant’s

Brief does not indicate how these purported Membership Interests were supposedly

transferred. Titan Fish defines capitalized “Membership Interest” in its Brief generally as

a “member’s entire interest in the Company.” (App. Br. at 16). Titan Fish’s citation to

the record to evidence its point was a stipulation from McEagle’s counsel stating that

there is no such thing as an ownership interest in an LLC and that “Create and EIP at no

time ever transferred any ownership to Titan Fish or any membership interest to Titan

Fish.” (App. Br. at 33; Tr. Vol. II, 375:1-5) (emphasis added). How this supports Titan

Fish’s contention that membership interests were transferred to M Property, without

consideration, is completely unclear.

Titan Fish next states that Titan Fish was prohibited from describing how

M Property generates revenue. (App. Br. at 33). The citation to the record on this point

is Titan Fish’s counsel’s argument to the trial court, again, that it “cannot talk about” how

M Property generates revenue or what “M Property and McEagle Property” do. (App.

Br. at 33, Tr. Vol. III, 847:4-18). Titan Fish’s counsel arguing how he interpreted the

trial court’s evidentiary rulings again is not evidence of it being excluded.

Moreover, Titan Fish was repeatedly allowed to present evidence on how

M Property and McEagle generated revenue and what they do, despite Titan Fish’s

numerous contentions to the contrary. (Tr. Vol. II, 322:8-15, 389:18-391:12, 521:7-

522:2, 522:20-523:24, 525:8-16, 528:17-529:23, 554:14).

32

It remains unclear throughout the entire argument section on Point Relied On I to

what Membership Interests or Residual Interests he is referring. Titan Fish defines

“Residual Interests” in a footnote on page 15 of its brief as the “percentage interests of

McEagle in other revenue-producing entities” identified in Exhibit 63, but a read of that

document certainly does make clear the point. (App. Br. At 15).

After all of this, Titan Fish contends that the “conveyance of the assets of

McEagle to M Property was to avoid Titan Fish as a creditor.” (App. Br. at 34). There is

no citation to this statement. Nowhere in Point I does Titan Fish state how it contends

these Membership Interests or Residual Interests (whatever they are) were conveyed to

M Property – whether it was via the UCC sale, before, or after, if at all.

In sum, Titan Fish’s legal contentions – which are unclear – are unsupported by

the factual contentions – which are also unclear or misrepresented. As a result, Titan

Fish’s Point I should be denied in its entirety.

D. Point Relied On I Cannot Be Prejudicial Because the Jury Found Against Titan Fish on the Promissory Note Count Which Was Dispositive of the MUFTA, Conspiracy and Tortious Interference Claims

Titan Fish asserts that the evidence it claims was improperly excluded relates to its

fraudulent transfer, conspiracy, or tortious interference counts. (App. Br. at 30).

However, because the jury found that there was no breach of the Titan Fish Note, those

other claims must fail because Titan Fish had to establish it was a creditor to succeed on

them. Given that Titan Fish does not protest exclusion of evidence on its note claim, the

exclusion of evidence on other points cannot be prejudicial.

33

The MUFTA claim clearly required Titan Fish to prove it was a creditor by its

plain terms. Section 428.024.1 of the MUFTA, the section sued upon, provides that a

“transfer made …by the debtor is fraudulent as to a creditor . . . if the debtor made the

transfer . . . [w]ith actual intent to hinder, delay, or defraud any creditor of the debtor.”

(emphasis added). A “creditor” is defined by the statute as a “person who has a claim”

and a “debtor” is defined as a “person who is liable on a claim.” R.S.Mo. §429.009(4)

and (6). By virtue of the jury’s finding on Count I, McEagle was not a debtor and Titan

Fish was not a creditor; Titan Fish therefore could not state a claim for fraudulent

transfer. (L.F. 398).

The same is necessarily true for conspiracy as its is merely a derivative claim and

failed if the MUFTA claim fails. Hibbs v. Berger, 430 S.W.3d 296, 320 (Mo. App. E.D.

2014).

Titan Fish also cannot state a claim for tortious interference because that claim too

presupposes a contract, i.e., the Titan Fish Note, was breached and damages caused by

some tortious conduct. See Central Trust and Inv. Co. v. Signalpoint Asset Mgmt., 422

S.W.3d 312, 324 (Mo. banc 2014) (elements of tortious interference include (1) a

contract or valid business expectancy, (2) defendant’s knowledge of the contract or

relationship, (3) intentional interference by the defendant inducing or causing a breach of

the contract or relationship, (4) absence of justification, and (5) damages) (emphasis

added); The Manors at Village Green Condominium, Inc. v. Webb, 341 S.W.3d 162, 164

(Mo. App. 2011) (in tort claims, damage award must be based on more than a “gossamer

web of shimmering speculation and finely-spun theory,” and rather party claiming

34

damage has burden of proving the existence and the amount with reasonable certainty

and must be supported by competent and substantial evidence without resorting to

speculation). If Titan Fish had no enforceable note with a balance due it stands to reason

it could not have suffered damages from its interference.

Therefore, any claimed evidentiary error regarding those claims could not be

prejudicial.

E. The TDD Note Evidence Was Irrelevant, Collateral and Properly Excluded

At the end of its argument on its first Point, Titan Fish lobs in the complaint that

the trial court wrongly excluded evidence that the TDD Notes, which were part of the

collateral to the Triad Note, were not included in Triad’s UCC auction. (App. Br. at 40).

Titan Fish asserts that it would have used such evidence to “impeach” Triad’s position

that Triad wanted Titan Fish to bid at Triad’s UCC sale. (Id. at 40.)

As a preliminary matter, this argument was abandoned because it was not included

in a point relief upon. See United Missouri Bank, N.A., v. City of Grandview, 179.S.W.3d

362, 366 (Mo. App. W.D. 2005).

Even if considered, it has no merit. As a threshold matter, the offer of proof cited

by Titan Fish (Tr. 494:4-11; 1185:3-11; Ex. 51 at 7.) does not include the proposition it

claims: “Titan Fish considered their removal in determining whether to bid.” (App. Br.

at 40.) It is not even clear why Triad’s intentions could be somehow impeached by Titan

Fish’s. Simply put, the evidence was irrelevant. But these defects aside, Titan Fish’s

point is a peripheral one at best and Titan Fish makes no showing to the contrary.

35

Moreover, Triad’s feeling about Titan Fish’s bidding was not a crucial issue in

controversy, but a mere collateral one. As such, the point should be denied as “[i]t is not

error for a trial judge to exclude offers of extrinsic evidence for impeachment relating to

a collateral matter.” Benedict v. N. Pipeline Const., 44 S.W.3d 410, 427 (Mo. App. W.D.

2001) (citations omitted).

II. With Regards to Titan Fish’s Point Relied On II, The Trial Court Did Not Err in Dismissing the Equitable Claims as Its Judgment is Consistent with the Jury’s Verdict.

A. Standard of Review.

Where, as here, a case presents mixed issues of law and equity, “trials should be

conducted to allow the legal claims to be tried to a jury, with the court reserving for its

own determination only equitable claims and defenses, which it should decide

consistently with the factual findings made by the jury.” State ex rel. Barker v. Tobben,

311 S.W.3d 798, 800 (Mo. banc 2010) (citing State ex rel. Leonardi v. Sherry, 137

S.W.3d 462, 473 (Mo. banc 2004)). After the jury rendered its verdict in favor of

Respondents on all counts, the trial court entered its judgment denying Titan Fish’s

related equitable claims. (L.F. 415, 416). The Court of Appeals will affirm the trial

court’s judgment on court-tried claims “unless there is no substantial evidence to support

it, it is against the weight of the evidence, it erroneously declares the law, or it

erroneously applies the law.” Cent. Parking Sys. of Missouri, LLC v. Tucker Parking

Holdings, LLC, 519 S.W.3d 485, 493 (Mo. App. E.D. 2017) (citing Murphy v. Carron,

536 S.W.2d 30 (Mo. banc 1976)).

36

B. The Trial Court Did Not Err in Dismissing Equitable Marshalling Claim as Trial Court’s Ruling Was Consistent with Jury’s Findings That Titan Fish Was Not a Creditor of McEagle.

Titan Fish argues that although the jury returned a defense verdict on Titan Fish’s

claim for Breach of Promissory Note (as well as Titan Fish’s claims for Tortious

Interference, Fraudulent Transfer, and Conspiracy) the trial court erred in dismissing

Titan Fish’s equitable claim of marshalling because “a finding in favor of Titan Fish on

the equitable claims would not be inconsistent with the jury verdict.” (App. Brief at 41.)

To the contrary, the trial court did error in dismissing Titan Fish’s claim of marshalling

because the jury’s finding that McEagle was not liable under the Titan Fish Note

precluded Titan Fish from being able to prove an essential element necessary for the

application of the doctrine of marshalling – namely, that Titan Fish is a creditor of

McEagle.

The Missouri Supreme Court has described the equitable doctrine of marshalling

as follows:

[W]here a creditor has a lien on two funds, or two parcels of property, and another creditor has a lien upon but one of them, the former creditor will, in equity, be required to seek satisfaction out of that fund or parcel upon which the other creditor has no lien.

Tower Grove Bank & Trust Co. v. Duing, 346 Mo. 896, 144 S.W.2d 69, 72 (1940) (citing

Speer v. Home Bank of Forest City, 206 S.W. 405, 407 (Mo. App. 1918). The application

of the doctrine of marshalling presupposes that party seeking to invoke it is in fact a

creditor with the right to collect amounts owed from the debtor’s property. See Eisenhart

v. Schreimann, 889 S.W.2d 887, 892 (Mo. App. S.D. 1994) (“The doctrine of marshalling

37

assets is an equitable one and can only be invoked at the instance of a creditor . . . .”)

(quoting State ex rel. Fields v. Cryts, 87 Mo. App. 440 (1901)) (emphasis added).3

Here, Titan Fish alleged that it was McEagle’s creditor under the Titan Fish Note

and related forbearance and security agreements stemming therefrom. (See generally

L.F. 329). In seeking to collect the amounts McEagle allegedly owed on the Titan Fish

Note, Titan Fish further alleged that the doctrine of marshalling should apply because

Triad, another creditor of McEagle, had liens on both the collateral sold at Triad’s UCC

auction and the TDD Notes, while, in contrast, Titan Fish had a lien only on the collateral

sold at the UCC auction. (L.F. 329 at 43-44). Titan Fish alleged that because Triad did

not levy on the TDD Notes before satisfying its claim against McEagle from the

collateral at the UCC auction, under the doctrine of marshalling, “Titan Fish is entitled to

be subrogated to Triad Bank’s rights to proceeds of Triad Bank’s [UCC] Sale or,

alternatively, Titan Fish is entitled to recover from Triad Bank the value of the TDD

Notes.” (Id. at 44).

Titan Fish’s claim seeking to invoke the doctrine of marshalling was premised on

the presupposition that Titan Fish was a creditor of McEagle by virtue of the Titan Fish

Note. However, the jury rendered its verdict finding that McEagle is not liable under the

Titan Fish Note. (L.F. 398). As such, the jury’s verdict precluded Titan Fish from

3 More specifically, not only must the party invoking the doctrine of marshalling be a

creditor, it must be a creditor “holding a junior mortgage.” Eisenhart, 889 S.W.2d at

892.

38

proving an element of its claim for marshalling – that Titan Fish is a creditor of McEagle

– and therefore the trial court’s judgment dismissing the claim of marshalling was

consistent with the findings of the jury.

Despite the foregoing, Titan Fish argues that the trial court should not have

dismissed its marshalling claim because “[n]othing about the [jury’s] verdict dealt with

the TDD Notes and the marshalling claim.” (App. Brief at 43). In support, Titan Fish

cites to Missouri caselaw applying the doctrine of “estoppel by verdict” under which “[a]

judgment between the same parties on a different cause of action is binding as to the facts

actually decided, and necessarily determined in rendering a judgment.” Kozeny-Wagner,

Inc. v. Shark, 752 S.W.2d 889, 892 (Mo. App. E.D. 1988) (quoting Abeles v. Wurdack,

285 S.W.2d 544 (Mo.1956) (emphasis added by Shark Court).

Assuming, arguendo, that “estoppel by verdict” provides the proper analysis for

assessing whether the trial court’s judgment on Titan Fish’s equitable claims is

“consistent” with the jury’s verdict, Titan Fish’s argument is flawed in that Titan Fish is

seeking to have the trial court re-litigate the very issues the jury found in favor of the

Respondents. Specifically, on Titan Fish’s Breach of Promissory Note claim, the jury

was instructed to find in favor of Titan Fish only if it believed that:

First, Defendant McEagle Properties LLC did not make all payments required under said Promissory Note as amended by the Forbearance Agreement, and

Second, because of such failure, Defendant McEagle Properties, LLC’s contract obligations were not performed, and

39

Third, Plaintiff Titan Fish Two LLC was thereby damaged.

(L.F. 398 at 4). Not believing one or more of the above elements, the jury found in favor

of McEagle and that Titan Fish was entitled to no damages on the Titan Fish Note. (Id. at

6).

To apply the doctrine of marshalling, the trial court would have to find that Titan

Fish was a creditor of McEagle and therefore necessarily believe each of the above

elements of Titan Fish’s Breach of Promissory Note claim in contravention of the

findings of the jury. Applying the doctrine of “estoppel by verdict,” as suggested by

Titan Fish, the jury’s findings that McEagle is not a creditor under the Titan Fish Note is

binding on Titan Fish and may not be subsequently re-litigated by the trial court. See

e.g., Charter Communications Operating, LLC v. SATMAP Inc., 2018 WL 6497793, at

*10 (Mo. App. E.D. Dec. 11, 2018) (“Missouri law does not permit [a party] to re-litigate

the same principles of law, under the identical contract provisions as it did against the

same party in a prior [proceeding].”) As such, the trial court’s judgment dismissing Titan

Fish’s marshalling claim is consistent with the jury’s binding determination that McEagle

is not a creditor to Titan Fish and should therefore be affirmed.4

4 Triad notes that in its Point II, Titan Fish also argues that the trial court erred in dismissing its equitable claims for constructive trust and alter ego. (App. Brief at 43). Triad does not respond to these claims of error as Titan Fish did not direct these claims against Triad in its Third Amended Petition. (See L.F. 329 at 56-60). However, these claims suffer the same fate as Titan Fish’s marshalling claim as they are both attempts to provide equitable remedies that are dependent on a preliminary finding that Titan Fish is a creditor of McEagle in the first instance.

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III. With Regards to Titan Fish’s Point Relied On III, The Trial Court Did Not Err in Failing to Award A Directed Verdict to Titan Fish on the Breach of the Note Claim Because Titan Fish – Which Had the Burden of Proof – Failed to Provide A Clear Admission By McEagle To Establish the Balance Due.

A. Standard of Review.

The standard of review for the denial of a judgment notwithstanding the verdict

(“JNOV”) is “essentially the same as review of the denial for directed verdict.”

Timberland Forest Products, Inc. v. Franks, 419 S.W.3d 806, 809 (Mo. App. S.D. 2013)

(citation omitted). Therefore, a trial court only commits error in denying a motion for

JNOV if it erroneously denied the underlying motion for directed verdict.

The general rule, however, is that “verdicts may not be directed in favor of the

party having the burden of proof.” Id. (citation omitted). “Except for the Coleman

exception to the rule – that judgment may be entered against a party who admits by

pleadings or by counsel in open court the truth of the basis facts upon which the claim of

the proponent rests and such proof establishes beyond all doubt the truth of facts which as

a matter of law entitles the proponent to the relief sought and such proof is unimpeached

and uncontradicted – a directed verdict is not given in favor of the party having the

burden of proof “no matter how overwhelming that party’s evidence may be or how

miniscule the other part’s evidence may be; a directed verdict in favor of the party having

the burden of proof (usually the plaintiff) is never based upon the plaintiff’s evidence.”

Id. (quoting Brandt v. Pelican, 856 S.W.2d 658, 664-65 (Mo. banc 1993)).

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B. The Trial Court Did Not Err in Denying Titan Fish’s Motion for Directed Verdict Because Titan Fish Failed to Establish Through A Clear Admission By McEagle the Amount Allegedly Owed on The Titan Fish Note.

Titan Fish claims the trial court erred by not granting its directed verdict and

JNOV motion on its promissory note claim. A party suing on a promissory note must

demonstrate the existence of a balance due and its amount. Federal Nat. Mortg. Ass’n v.

Bostwick, 414 S.W.3d 521, 527 (Mo. App. W.D. 2013). In this case, Titan Fish’s did not

establish its balance due “beyond all doubt” with unimpeached and uncontested evidence

from McEagle such that it was entitled to a directed verdict.

Titan Fish did not sue on a simple promissory note. Rather, as it concedes, the

Titan Fish Note consisted of the original Corn Belt promissory note modified by a

Forebearance Agreement with Multibank that was admitted into evidence as Exhibit 6.

(App’s. Br. at 46.) Titan Fish’s proof of balance due is based on a recitation in that

agreement which reflected a $3 million balance as of November 5, 2010, shortly before

the Forbearance Agreement was executed on November 16, 2010. (App. Br. at 46;

Ex. 6). Knowing that $5 million in payments were made after that agreement, Titan Fish

asserts that Mr. McKee “unequivocally acknowledged that the lender did not allocate any

portion of the $5 million payment to the McEagle note.” (App. Br. at 46). Titan Fish

bases its argument on appeal that the balance due was uncontested entirely on this

claimed admission by Mr. McKee.

Mr. McKee, however, made no such admission. Instead, he testified that

$5,185,000 in payments were made by McEagle after execution of the Forbearance

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Agreement on the McEagle Properties’ loans. (Tr. 410:23-411:5). Mr. McKee then

confirms that the consequence of those payments was to “pa[y] down a considerable

amount of the debt.” (Tr. 435:3-8). The exact exchange Titan Fish cites occurred after

this testimony, but it too contains no such admission. To the contrary, Mr. McKee

simply stated that at the time the Forbearance Agreement was being negotiated, “[he]

believed McEagle Properties was going to be released from all of its debt, and prior to

closing they reneged on that transaction and didn’t allocate it that way. But I can clearly

tell you we had dialogue with Rialto and Multibank in that direction.” (Tr. 435:9-436:6).

Titan Fish did nothing to clarify what allocation of payments occurred. Whatever may

be said about the clarity of Mr. McKee’s point, Mr. McKee certainly did not

“unequivocally acknowledge that the lender did not allocate any portion of the $5 million

payment to the McEagle note.” (App. Br. at 46). To the contrary, he made it clear that

he understood that Multibank would pay the Titan Fish Note down entirely but later

reneged and applied only some unspecified but “considerable amount.”

In short, there was no sufficient basis to grant a directed verdict. The case of First

Bank Centre v. Thompson, et al., 906 S.W.2d 849 (Mo. App. S.D. 1995) is dispositive

and right on point.

In Thompson, the plaintiff First Bank Centre brought suit against two guarantors

arising out of two loans it provided to Sylvan Bay Golf & Country Club, Inc. (“SBG”).

Id. at 851. At the close of evidence, the trial court entered a directed verdict against the

plaintiff because it failed to show the amount due under the loans. Id. The Missouri

Court of Appeals, giving the plaintiff the benefit of all inferences which could reasonably

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be drawn from the evidence (the standard of review on a directed verdict), found that the

plaintiff failed to establish the amount SBG owed at the time of the trial. Id. at 854. In

coming to that conclusion, the Court noted that plaintiff had made various payments and,

with varying interest rates, it was unclear how the amount due would or should be

calculated. Id. Although letters from Plaintiff were put into evidence stating the amount

due, the letters were well before trial and payments had been applied since that time,

making it difficult to calculate the amount due, especially with application of the interest

rate. Id.

The Court concluded that even assuming Plaintiff could have shown the amount

originally owed, the jury had “no evidence from which it could determine the amount

due.” Id. at 855. Specifically, the Court held:

Generally, damages need not be established with absolute certainty, but reasonable certainty is required as to both existence and amount, and the evidence must not leave the matter to speculation . . . Assuming, arguendo, that the evidence, viewed favorably to Plaintiff, was sufficient to support a finding that SBG owed Plaintiff some undetermined amount on each note at the time of trial, there was no evidence from which a fact finder could determine the sum due on either note. Consequently, any sum awarded Plaintiff against any defendant would have been based on sheer speculation. Damages that are entirely speculative cannot be allowed.

Id.at 855-6 (citations omitted). The Court noted – like here – that “Why Plaintiff was

unable to present business records showing the dates and amounts of the disbursals of

principals, the dates and amounts of payments by [Plaintiff], and the interest owed on

each note at the time of each payment is unexplained.” Id. at 857.

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Titan Fish is also not rescued by its claim that payment is an affirmative defense.

It is still a plaintiff’s burden in a promissory note case to demonstrate the balance due.

Bostwick, 414 S.W.3d at 526 (to recover on a promissory note, the plaintiff must

(1) produce the note, (2) signed by the maker, and (3) show the balance due, and making

clear that plaintiff has burden of showing amount due with “reasonable certainty,” despite

defense of “payment” being affirmative defense).

At bottom, as in Thompson, Titan Fish failed to put on evidence through clear,

uncontested admissions of McEagle regarding the amount currently due under the Titan

Fish Note and the directed verdict and JNOV motions were therefore properly denied.

IV. With Regards to Titan Fish’s Point Relied On IV, The Trial Court Did Not Err in Receiving Respondents’ Instruction 16 and Rejecting Titan Fish’s Proposed Instruction 16A.

A. Standard of Review

Whether or not a jury was properly instructed is a question of law which is

reviewed de novo. Stanton v. Hart, 356 S.W.3d 330, 334 (Mo. App. W.D. 2011)

(citation omitted). When reviewing claimed instructional error, the Court reviews the

evidence most favorably to the instruction, disregards contrary evidence, and reverses

where the party challenging the instruction shows that the instruction misdirected, misled

or confused the jury, and there is a substantial indication of prejudice. Sutherland v.

Sutherland, 348 S.W.3d 84, 89 (Mo. App. W.D. 2011) (citation omitted). If the

instruction is supportable by any theory, then its submission is proper. Id. “Instructional

errors are reversed only if the error resulted in prejudice that materially affects the merits

of the action.” Id.

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A jury verdict will not be reversed on the ground of instructional error unless it

appears that the instruction “misdirected, misled, or confused the jury, resulting in

prejudice to the party challenging the instruction.” Livingston v. Baxter Health Care

Corp., 313 S.W.3d 717, 727-728 (Mo. App. W.D. 2010) (citation omitted). The test for

determining whether the jury was misdirected, misled or confused is “whether an average

juror would correctly understand the applicable rule of law being conveyed by the jury

instruction.” Id. at 728. To show prejudice resulting from an instructional error, it must

be shown that the error “materially affected the merits and outcome of the case.” Id.

B. The Trial Court Did Not Err in Accepting Respondents’ Instruction 16 as Titan Fish Did Not Preserve Its Objection to the Instruction for Appeal and, in Any Event, the Instruction 16 Used Properly Tracked the Statutory Elements of Fraudulent Conveyance.

Titan Fish’s fourth Point challenges Instruction 16, which was the verdict directing

instruction on its claim for fraudulent conveyance under R.S.Mo. 423.024.1.5

Specifically, Titan Fish argues that the submitted instruction wrongfully charged the jury

with finding that Titan Fish had a “claim” against McEagle on May 18, 2015 because

such a finding is a matter of standing for the trial court to decide.

5 Titan Fish’s Point IV also states that the giving of Instruction 16 was error because it “[required] Titan Fish to prove both actual and constructive fraudulent transfer.” Titan Fish, however, does not further this point in the argument section – which in fact makes no reference to “actual” or “constructive” fraudulent transfers or how Instruction 16 failed in that regard. “Arguments raised in the points relief on which are not supported by argument in the argument portion of the brief are deemed abandond and present nothing for appellate review.” Luft v. Schoenhoff, 935 S.W.2d 685, 687 (Mo. App. E.D. 1996). Accordingly, Triad does not address this point given that it has been abandoned (and Triad has no way to respond in the absence of argument by Titan Fish).

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Titan Fish’s point fails for two reasons. First, it was not preserved for appeal

because Titan Fish never objected on this ground during the instruction conference and

its own submitted instruction contained the same language (albeit deftly omitted from

what they have told this Court). Second, it is an element of a fraudulent conveyance and

was properly included.

To preserve the issue for appeal, Titan Fish had to “make specific objections to

instructions considered erroneous” before “the jury retires to consider its verdict.” Rule

70.03; see also Howard v. City of Kansas City, 332 S.W.3d 772, 790 (Mo. banc 2011).

Such objections much “[state] distinctly the matter objected to and the grounds of the

objection.” Rule 70.03.

Before the jury was charged, an instruction conference was held on the record

between the parties. (Tr. 1384-1475). During the course of discussion on Instruction 16,

there was no objection raised by Titan Fish on standing grounds that the jury should not

be allowed to find whether or not it had a claim against McEagle on May 18, 2015. (Tr.

1436-1451). Titan Fish asserts otherwise. (App. Br. at 49). But this misstates the record.

Most of the transcript citations Titan Fish references do not reflect any objection

whatsoever on standing or even whether the jury needed to find that Titan Fish had a

claim. (Tr. 1445:15-1446:4; 1449:4-17; 1450:8-13). The others (Tr. 1466:8-1467:19)

reference a different instruction, Instruction 20, the verdict directing instruction on

conspiracy. (Tr. 1462:25-1463:16; 1469:3-7). In short, the record is devoid of any

objection to Instruction 16 on grounds of standing.

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Titan Fish’s failure to object is not surprising: its own proferred instruction,

included the same “claim” language as the “First” finding the jury needed to make:

(L.F. 391 at 3, L.F. 392 at 22). Plaintiff’s brief misleads on this point: it omits the

“First” paragraph of its own refused instruction even though it was required to cite it in

full under Rule 84.04(e). (App. Br. at 49). At bottom, Titan Fish’s failure to object at the

instruction conference is fatal to this point on appeal as the issue has not been preserved.

Putting aside a lack of preservation, the instruction was written properly and

included a requirement that Titan Fish had a claim. Rule 70.02(e) makes clear that where

there are not applicable, approved instructions, the instruction given “shall be simple,

brief, impartial, free from argument, and shall not submit to the jury or require finding of

detailed evidentiary facts.” Stated more simply: “[t]he ultimate test of an instructing not

in MAI is whether it follows the substantive law and can be readily understood.” Bayne

v. Jenkins, 593 S.W.2d 519, 530 (Mo. banc 1980). In cases involving statutory

violations, it is generally sufficient to couch a verdict-directing instruction in

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substantially similar language to the statute except where it requires further construction.

Id. at 530-31.

Here, Titan Fish had to have a claim against McEagle to prevail in a cause of

action under R.S.Mo. 428.024.1. Specifically, the statute empowers only a “creditor” to

bring an action under it. Id. A “creditor” in turn is defined as “a person who has a

claim.” R.S.Mo. 428.009(4). A “claim,” in turn, is defined as a right to payment. Id. at

(3). Whether Titan Fish had a claim was in issue (as evidenced by the jury’s conclusion

it had none) and therefore it was appropriate to include a finding of “claim” in the

instruction.6

Titan Fish suggests too that the inclusion of “claim” allowed McEagle

Defendants’ counsel to make inappropriate standing arguments in closing. Not true. The

arguments cited (Tr. 1537:9-12; 1540:20-1541:8; 1544:19-1545:18). do not make any

standing arguments. Rather, they simply point out that the carelessness of Titan Fish in

getting its paperwork in order was because it knew that its claim had no value and was

meritless. Titan Fish also failed to object to these arguments during closing or raise this

issue in a motion for new trial, so nothing is preserved for this Court’s review. See

Hensic v. Afshari Enterprises, Inc., 599 S.W.2d 522, 526 (Mo. App. E.D. 1980).

6 Titan Fish makes passing reference that the phrases “for less than the reasonably equivalent valued of the property transferred” and “not for a valid business purpose” were also improper in Instruction 16 because they claim they required a “heightened burden of proof.” (App. Br. at 50.) This argument too, if there is one, was abandoned because it was not included in a point relief upon. See United Missouri Bank, N.A., v. City of Grandview, 179.S.W.3d 362. 366 (Mo. App. W.D. 2005). Even if it had been, the language had nothing to do with the burden of proof which appeared in Instruction 15, to which there is no appeal. (L.F. 400.)

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CONCLUSION

For the reasons set forth herein, Respondent Trian Bank respectfully requests this

Court to affirm the trial court’s judgment in his favor.

Respectfully submitted, CARMODY MACDONALD P.C. By: /s/ David P. Stoeberl David P. Stoeberl #46024 Tina N. Babel, #58247 120 South Central Avenue, Suite 1800 St. Louis, Missouri 63105 (314) 854-8600 Telephone (314) 854-8660 Facsimile dps@carmodymacdonald.com tnb@carmodymacdonald.com Attorneys for Respondent Triad Bank

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CERTIFICATE OF COMPLIANCE WITH RULE 84.06 AND LOCAL RULE 360

The undersigned certifies that the foregoing Respondent’s Brief includes the information required by Rule 55.03, and complies with the requirements contained in Rule 84.06 and Local Rule 360. Relying on the word count of the Microsoft Word program, the undersigned certifies that the total number of words contained in the Respondent’s Brief is ------ exclusive of the cover, table of contents, table of authorities, signature block and certificates of service and compliance.

/s/ David P. Stoeberl

CERTIFICATE OF SERVICE

I hereby certify that on December __, 2018, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which sent notification to all parties in interest herein.

/s/ David P. Stoeberl