In the Missouri Court of Appeals Western District

 MARK STEVENSON,   WD82549 Appellant,  OPINION FILED: v.   MAY 26, 2020 MARY MAXWELL,   Respondent.   

Appeal from the Circuit Court of Boone County, Missouri The Honorable Jodie C. Asel, Judge

Before Division Three: Anthony Rex Gabbert, Presiding Judge, Edward R. Ardini, Jr., Judge, W. Douglas Thomson, Judge

Mark Stevenson appeals the circuit court’s judgment finding in favor of Mary Maxwell on

Stevenson’s November 3, 2015, Petition alleging Mary Maxwell1 defaulted on an April 8, 1998, promissory note and demanding immediate payment of the note balance and foreclosure of the Second Deed of Trust which secured the debt. Stevenson raises three points on appeal. First, he contends the circuit court erred in finding Stevenson’s claim time-barred because Wayne and Mary

Maxwell (“the Maxwells” collectively) expressly acknowledged the existence of the debt and their intent to pay in full via three Chapter 13 bankruptcy plans, and thereby revived the debt pursuant 1, 2003, and recorded March 3, 2004, in Boone County. Roby conveyed its interest in the real estate to the Maxwells by a “Corrective Warranty Deed” dated September 20, 2004, and recorded

September 21, 2004 in Boone County. The Corrective Warranty Deed states that the Deed is intended to correct a mistaken conveyance by Stevenson to Roby, an LLC Stevenson managed.

On November 27, 2007, the Maxwells filed a Chapter 13 bankruptcy petition in the United

States Bankruptcy Court for the Western District of Missouri (“2007 Bankruptcy”). The Maxwells filed a Chapter 13 Plan in the 2007 Bankruptcy which provided they make certain installment payments to the Chapter 13 bankruptcy trustee. During the 2007 Bankruptcy, the Maxwells made certain payments to the Chapter 13 bankruptcy trustee.

On March 14, 2008, Stevenson filed a secured claim in the 2007 Bankruptcy in the amount of $38,971.28. Stevenson’s loan to the Maxwells was included in the confirmed 2007 Bankruptcy

Plan. During the 2007 Bankruptcy, the Chapter 13 trustee made distributions to Stevenson, with the first being September 1, 2008, and the final being May 1, 2009, for a total of approximately

$9,798.17. The 2007 Bankruptcy was dismissed by the Bankruptcy Court on April 16, 2009, as a result of default by the Maxwells in making certain payments to the Chapter 13 bankruptcy trustee due under the confirmed Chapter 13 Plan.

On August 21, 2009, the Maxwells filed a second Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Western District of Missouri (“2009 Bankruptcy”). The Maxwells filed a Chapter 13 Plan in the 2009 Bankruptcy which provided they make certain installment payments to the Chapter 13 bankruptcy trustee in accordance with their confirmed

Chapter 13 Plan in the 2009 Bankruptcy. On January 8, 2010, Stevenson filed a secured claim in the 2009 Bankruptcy for $32,271.10. Stevenson’s loan to the Maxwells was included in the confirmed 2009 Bankruptcy Plan. During the 2009 Bankruptcy, the Chapter 13 trustee made distributions to Stevenson, with the first being February 1, 2010, and the final being December 1, 2010, for a total of approximately $6,324.27. The 2009 Bankruptcy was dismissed by the Bankruptcy Court on January 12, 2011, due to default by the Maxwells in making certain payments to the Chapter 13 trustee due under the confirmed Chapter 13 Plan in the 2009 Bankruptcy.

On November 18, 2011, the Maxwells filed a third Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Western District of Missouri (“2011 Bankruptcy”). The Maxwells filed a Chapter 13 Plan which provided they make certain installment payments to the Chapter 13 bankruptcy trustee pursuant to their Amended Chapter 13 Plan, which was never confirmed. During the 2011 Bankruptcy, the Maxwells made certain payments to the Chapter 13 bankruptcy trustee in accordance with the proposed Chapter 13 Plan. On May 15, 2012, Stevenson filed a secured claim in the 2011 Bankruptcy for $47,564.54. Stevenson’s loan to the Maxwells was included in the Maxwells’ 2011 Bankruptcy Plan. During the 2011 Bankruptcy, the Chapter

13 trustee made distributions to Stevenson in August and September, 2012, for a total of approximately $3,750.

Wayne Maxwell died September 13, 2013.

Stevenson filed a Petition on November 3, 2015, alleging breach of the Promissory Note and demanding payment of $49,125.803 and foreclosure on the Second Deed of Trust. Mary Maxwell contended Stevenson’s claims were barred by the statute of limitations and the doctrine of merger. The trial court entered judgment in favor of Mary Maxwell. This appeal follows.

Standard of Review

Our standard of review is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc

1976). Schollmeyer v. Schollmeyer, 393 S.W.3d 120, 122 (Mo. App. 2013). We will affirm the circuit court’s judgment unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. at 122-123. We view the evidence and all reasonable inferences in the light most favorable to the court’s judgment. Id. at 123. We will affirm the judgment if it is correct under any reasonable theory supported by the evidence.

Williams v. State, Dept. of Social Services, Children's Div., 440 S.W.3d 425, 427 (Mo. banc 2014).

“Whether a statute of limitations applies to a given cause of action is [] reviewed de novo.”

Davison v. Dairy Farmers of America, Inc., 449 S.W.3d 81, 83 (Mo. App. 2014).

Point I – Section 516.320 Acknowledgment of Debt via Bankruptcy Plan

Stevenson contends in his first point on appeal that the circuit court erred in finding his claim time-barred, arguing the Maxwells’ Chapter 13 Plans represented written acknowledgements of the debt, with an intention to pay pursuant to Section 516.320, so as to “revive” the debt.

“A cause of action accrues, and the limitation period begins to run, when the right to sue arises.” Boland v. Saint Luke's Health Sys., Inc., 471 S.W.3d 703, 710 (Mo. banc 2015). When a

payment obligation has a specific due date, the cause of action accrues on that date. Harms v. Harms, 496 S.W.3d 534, 537-39 (Mo. App. 2016) (finding that a cause of action on a promissory note accrued under Section 516.110 on the note’s stated maturity date). Here, the stated maturity date requiring payment in full of all principal and accrued interest was April 8, 1999. Pursuant to

Section 516.110, the limitations period, therefore, expired April 8, 2009.4

Stevenson filed his Petition on November 3, 2015. Although filed more than six years after the limitations period expired, Stevenson contends the Maxwells’ Chapter 13 bankruptcy filings

“revived” the debt such as to restart the statute of limitations under Section 516.320.

Section 516.320 provides:

In actions founded on any contract, no acknowledgment or promise hereafter made shall be evidence of a new or continuing contract, whereby to take any case out of the operation of the provisions of sections 516.100 to 516.370, or deprive any party of the benefit thereof, unless such acknowledgment or promise be made or contained by or in some writing subscribed by the party chargeable thereby.

“Whether an acknowledgment is sufficient to take a contract out of the statute of limitations in satisfaction of § 516.320 is a question of law, not of fact.” Millington v. Masters, 96 S.W.3d 822, 831 (Mo. App. 2002). While no specific form or format for the acknowledgment is required and the promise may be implied, an acknowledgment must include an “unqualified and direct

admission of a present promise.” Id. (Internal quotation marks and citation omitted). “The acknowledgment must be distinct, unqualified, unconditional, clear, and unequivocal; mere vague and uncertain expressions or conversations will not suffice.” Id.

Stevenson argues that the Maxwells’ “listing of their indebtedness to him, along with an

indication of their intent to pay it in full during the life of each of their three Chapter 13 Plans, constitutes an ‘acknowledgement contained by or in some writing subscribed by the part(ies) chargeable thereby,’ and revived the debt.” Stevenson contends that, unlike Chapter 7 bankruptcy which allows a debtor to receive a fresh start, Chapter 13 bankruptcy enables debtors to pay their

debts through restructuring. Therefore, he claims including a debt in a Chapter 13 plan is a distinct, unqualified, unconditional, clear, and unequivocal acknowledgment of an intent to pay that debt.^[5]

Stevenson contends the Maxwells first acknowledged and promised to pay the debt in their

2007 Bankruptcy via the July 17, 2008, Chapter 13 Plan filed in connection therewith, with the limitations period beginning anew on that date and renewing with each payment made on that Plan by the bankruptcy trustee. In support of these positions Stevenson asserts that, when

acknowledgment is made before a debt is barred, the statute of limitations begins to run from the time of acknowledgment.

Yet, a written acknowledgment sufficient to take a contract out of the statute of limitations

in satisfaction of Section 516.320 must be prepared for and delivered to the creditor. Millington, 96 S.W.3d at 831; Estate of Markley, 922 S.W.2d 87, 95 (Mo. App. 1996). In Estate of Markley

we found that a debt listed in a “Statement of Marital Property, Non-Marital Property and Liabilities” during a debtor’s divorce was insufficient to satisfy Section 516.320 because the document was prepared for the debtor’s divorce, not the creditor; it was also not sent to the creditor.

922 S.W.2d at 95. Likewise, in Millington v. Masters, the Southern District presumed that a contract to sell a tract of land was entered into by litigants Millington and Masters. 96 S.W.3d at

830. Although Millington filed her petition to enforce that contract approximately four years after the statute of limitations expired, Millington claimed Masters acknowledged the contract in a letter

to another individual (who ultimately purchased the home located in front of the tract of land Millington desired). Id. at 831. The court found that the letter was insufficient written acknowledgment under Section 516.320 of the alleged contract because the letter was not prepared

for or sent to Millington. Id. The same is true here. The Bankruptcy Plans were prepared for the bankruptcy court, not Stevenson. Consequently, the Bankruptcy Plans are insufficient

“acknowledgments” of the Promissory Note debt such as to take the contract out of the statute of limitations in satisfaction of Section 516.320. Millington, 96 S.W.3d at 831.

Further, as discussed above, an acknowledgment must be “distinct, unqualified, unconditional, clear, and unequivocal.” Id. Here, in reviewing the writings (i.e., 2007, 2009, and 2011 Bankruptcy Plans) subscribed to by the Maxwells, we cannot agree that these represent unqualified, unconditional, or unequivocal acknowledgments of an intent to pay the debt owed

Stevenson on any terms other than those set forth in the Bankruptcy Plans. In each of the Bankruptcy Plans subscribed to by the Maxwells, acknowledgment of and payment of the debt to

Stevenson is qualified by the terms of each Plan. The 2007 and 2009 Plans state that the debt will be repaid “through this Plan.” The 2011 Plan states that the debt will be paid “from the plan payments.” Further, that Stevenson’s claim could be modified pursuant to 11 U.S.C. § 1322(a)(5).6

6 11 U.S.C. § 1325(a)(5) states that, with respect to each allowed secured claim provided for by the plan, the plan must provide that the holder of the claim retain the lien until the earlier of the payment of the underlying debt determined under non-bankruptcy law or discharge under Section 1328. 11 U.S.C. § 1325(a)(5) further states that, “if the case under this chapter is dismissed or converted without completion of the plan, such lien shall also be retained by such holder to the extent recognized by applicable nonbankruptcy law.” 11 U.S.C. § 1325(a)(5)(B)(i)(II).

We find the “writings” in this case insufficient to satisfy the standard required under Section

516.320.

We conclude that, because the Maxwells’ Bankruptcy Plans were not prepared for Stevenson and do not reflect an unconditional, unqualified intent by the Maxwells to repay the loan, the Plans are insufficient acknowledgment of the debt under Section 516.320.

Point I is denied.

Point II - Section 516.320 Acknowledgment of Debt via Bankruptcy Payments

In Stevenson’s second point on appeal, he contends the bankruptcy trustees’ payments in connection with the Maxwells’ three bankruptcies revived the debt because the payments evidenced intent on the part of the Maxwells to pay the debt pursuant to Section 516.320.

There is no evidence in the record that the payments to Stevenson made by the bankruptcy trustees were subscribed by the Maxwells as required to constitute as a written acknowledgment

of a contract under Section 516.320. Section 516.320 necessitates a “writing subscribed by the party chargeable thereby.”7 Stevenson ignores this element of Section 516.320 and instead emphasizes that the Maxwells “directed” the trustees to make payments pursuant to the Bankruptcy

Plans and contends this proves “an obvious and voluntary expression of their intention to repay the subject debt in full.”

Yet, for a payment to toll the statute of limitations, “the payment must be made by someone legally bound to pay the debt.” Corrales v. Murwood, Inc. 232 S.W.3d 609, 612 (Mo. App. 2007)

(emphasis original) (citing Coleman v. Trueblood, 172 S.W.2d 863, 865 (Mo. 1943). Corrales v. Murwood, Inc. explains examples in Missouri case law where, although an individual agreed to assume an original debtor’s debt and made payments on that debt, the payments represented no contractual obligation with the lender such that the payments extended the statute of limitations on

the original note between the lender and the original debtor. Id. at 612-614 (discussing Frase v. Lee, 134 S.W. ^[10] (Mo. App. 1911) and Regan v. Williams, 84 S.W. 959 (Mo. banc 1905)).

“The bankruptcy trustee is not the agent or employee of the bankrupt but merely manages

the estate of the bankrupt; as such, the trustee has no authority to make promises on behalf of the bankrupt.” Person Earth Movers, Inc. v. Buckland, 525 S.E.2d 239, 241 (N.C. App. 2000). The Maxwells’ bankruptcy filings did not make the trustees a party to the Promissory Note; no legal obligations were created between the trustees and Stevenson. There is no evidence in the record as to who signed the payments, and a trustee’s signature on a payment would be insufficient written acknowledgment by the Maxwells under Section 516.320, because that provision specifically

requires the writing be signed by the party chargeable thereby. The Maxwells, and not the bankruptcy trustees, were liable for the debt, and the trustees were not agents of the Maxwells such that a trustee signature could bind the Maxwells.^[8]

Stevenson also argues that, because Chapter 13 bankruptcy filings are “voluntary,” then any debt included within a Chapter 13 payment plan is a voluntary acknowledgment of that debt sufficient to toll the statute of limitations under Section 516.320, and any payments made pursuant to a plan further evidence voluntary acknowledgments of and promises to pay the debt.^[9] Stevenson relies on In re Fielding, 2015 WL 1676877 (Bankr. N.D. Tex. 2015), which allowed Chapter 13 bankruptcy debtors to dictate to the IRS how proceeds from the sale of exempt bankruptcy property

would be allocated toward IRS debt. Id. at 2, 6-7. The IRS argued that, under IRS rules, a debtor may only dictate how voluntary payments are allocated, and payments made after the initiation of bankruptcy proceedings are involuntary. Id. at 2. The court concluded that the payments in Fielding were “voluntary.”

We find Fielding limited to the facts of that case and inapposite here. Id. at 8. The Fielding payments were pre-confirmation; they were not payments within any bankruptcy plan. Id. at 3.

The IRS had a claim within the bankruptcy and the debtors’ intent was to use proceeds from the sale of exempt property to lower the balance of the IRS debt. Id. at 6. The debtors’ unconfirmed, Amended Plan with the bankruptcy court stated that, “Debtors intend to sell assets against which

IRS has a lien in order to pay the secured and priority claims of IRS.” Id. at 3. Although the debtors also intended to sell non-exempt assets to pay down the debt, Fielding only considered

proceeds from the sale of an exempt (homestead) asset. Id. at 1. In concluding payment to the IRS of the proceeds from sale of the exempt asset was “voluntary,” the court pointedly noted: “It is important to recognize that in the case at bar, the Proceeds stem from the sale of an exempt asset.

Therefore, Debtors’ application of the Proceeds would not frustrate confirmation of Debtors’

Amended Plan.” Id. at 9. The court found that the exempt asset, because of its exemption, would not even be considered in confirmation of the plan. Id. Hence, while the bankruptcy court

broached the “voluntary” versus “involuntary” payment issue10 after the IRS objected to the debtors’ Motion to Sell the property, the court did not conclude, as suggested by Stevenson, that payments made in accordance with Chapter 13 bankruptcy plans are “voluntary.” This issue was

not addressed. The court found only that payment to the IRS of proceeds resulting from the voluntary sale of property exempt from consideration in the bankruptcy plan was “voluntary” such that the debtors, and not the IRS, could dictate the manner in which the IRS was to allocate the debt.^[11]

We conclude that, because the payments made by trustees under the Bankruptcy Plans were

not subscribed to by the Maxwells, the payments do not evidence written acknowledgments of the Promissory Note debt sufficient to take the contract out of the statute of limitations in satisfaction of Section 516.320.

Point II is denied.

Because we find Stevenson’s action on the Promissory Note barred by the statute of limitations, we need not address Stevenson’s third point on appeal addressing whether Stevenson’s

Second Deed of Trust was extinguished by the doctrine of merger. Where Stevenson’s action on the Promissory Note is barred by the statute of limitations, his right to foreclose on the Second

Deed of Trust is also barred. § 516.150; Sabine v. Leonard, 322 S.W.2d 831, 837 (Mo. 1959).

Conclusion

We affirm the circuit court’s judgment.

Anthony Rex Gabbert, Judge All concur.