                    MISSOURI COURT OF APPEALS
                        WESTERN DISTRICT


OLD REPUBLIC NATIONAL                       )
TITLE INSURANCE COMPANY,                    )   WD77113
                                            )
                   Respondent,              )   OPINION FILED:
   v.                                       )
                                            )   October 21, 2014
KATHERINE A. COX, ET AL.,                   )
                                            )
                    Appellants.             )


              Appeal from the Circuit Court of Clay County, Missouri
                     Honorable Janet Lodwick Sutton, Judge

                     Before Division Three: Gary D. Witt, P.J.,
                    Joseph M. Ellis, and Thomas H. Newton, JJ.


        Ms. Katherine A. Cox appeals the summary judgment entered in favor of Old

Republic National Title Insurance Company (Old Republic). We reverse.

                         Factual and Procedural Background

        Mr. Dennis Cox and Ms. Cox defaulted on a loan that refinanced their house. US

Bank Nat’l Ass’n v. Cox, 341 S.W.3d 846, 849 (Mo. App. W.D. 2011). Ms. Cox had

solely executed a promissory note of $261,000, secured by a deed of trust bearing the

Coxes‘ signatures. Id. at 848. The property identified in the deed of trust mistakenly

referred to an adjacent tract of land. Id. at 849. US Bank, the holder of the promissory

note and deed of trust, filed an amended petition that requested a reformation of the deed
of trust to correctly describe the Coxes‘ property. Id. Additionally, the petition requested

an award of the amount of the promissory note, under an unjust enrichment theory. Id.

The Coxes counterclaimed, seeking a declaratory judgment that the deed of trust was

void and a legal nullity. Id.

       After a bench trial, the trial court denied US Bank‘s petition and found in the

Coxes‘ favor. Id. at 850. US Bank appealed and then assigned the promissory note and

deed of trust to its title insurance company. Id. The Coxes filed a motion to dismiss the

appeal based on the assignment. Id. This court acknowledged the assignment, but denied

the motion to dismiss. Id. at 851. We affirmed the trial court‘s judgment. Id. at 857.

Specifically, we held that substantial evidence supported the trial court‘s finding that Mr.

Cox‘s signature was a forgery and its conclusion of law that the deed of trust was thereby

nullified. Id. at 856. We also held that the law supported the trial court‘s denial of the

unjust enrichment claim against the Coxes because the evidence showed that the original

lender received what it had ―bargained for,‖ which was a promise of repayment from Ms.

Cox, whose genuine signature was on the promissory note. Id. at 853.

       Old Republic, a title insurance company and the endorsee of the note, then sued

Ms. Cox for damages to collect the balance owed on the promissory note. Ms. Cox filed

an answer, denying the allegations relating to the assignments of the note and asserting

res judicata and collateral estoppel as affirmative defenses.        She argued that Old

Republic, the assignee of US Bank, should not be allowed to split its cause of action

against her. Old Republic filed a motion for summary judgment on its claim and on Ms.



                                             2
Cox‘s affirmative defenses. Ms. Cox filed a response. The trial court granted summary

judgment in Old Republic‘s favor. Ms. Cox appeals.

                                   Standard of Review

       Our review of a trial court‘s decision to grant summary judgment is de novo.

Mobley v. Baker, 72 S.W.3d 251, 256 (Mo. App. W.D. 2002).                In determining the

propriety of the summary judgment, we use the same criteria the trial court used in

determining whether to grant summary judgment. Id. The moving party must show that

no genuine dispute exists as to the material facts and that the undisputed facts entitle it to

judgment as a matter of law. Id. We view the record and any accompanying reasonable

inferences in the light most favorable to the non-movant. Id.

                                      Legal Analysis

       Ms. Cox raises two points. In the first point, she argues that the trial court erred in

entering summary judgment because Old Republic did not establish that it was entitled to

judgment as a matter of law. Specifically, she argues that the trial court should not have

considered the evidence Old Republic proffered to support its allegations that it was the

holder of the note through various assignments because she denied those allegations in

her answer and the documents purporting assignments were neither attested to nor

supported by affidavit. We note that this argument was not raised with the trial court.

       To make a prima facie case for summary judgment, a plaintiff must show that the

material facts needed to prove its claim are not in genuine dispute. Wilkes v. St. Paul Fire

& Marine Ins. Co., 92 S.W.3d 116, 120 (Mo. App. E.D. 2002). A plaintiff must also


                                              3
show that any affirmative defense properly pleaded by a defendant fails as a matter of

law. Id. Once a prima facie case is made, the non-movant must show that material facts

are in genuine dispute or its affirmative defense does not fail as a matter of law. See id.

Under Rule 74.04(c)(2),1 a non-movant demonstrates a genuine issue of material fact by

denying the allegation and making specific references to attached documents or affidavits

showing a genuine issue of material fact. Failure to follow the rule as to each allegation

results in that fact being admitted as true. Id.

          In a suit on a note, the plaintiff must show: ―(1) . . . the note (2) signed by the

maker and (3) . . . the balance due.‖ Fed. Nat. Mortg. Ass’n v. Bostwick, 414 S.W.3d 521,

526 (Mo. App. W.D. 2013) (internal quotation marks and citation omitted); see also

Sverdrup Corp. v. Politis, 888 S.W.2d 753, 755 (Mo. App. E.D. 1994) (citing § 400.3–

308(b)). Ms. Cox does not dispute the facts supporting these elements in arguing that

Old Republic should not prevail on its claim as a matter of law. Instead, she argues that

Old Republic failed to show there is no genuine dispute as to its ownership of the note.

Ms. Cox claims that because she denied the allegations relating to the various

assignments that resulted in Old Republic as the current holder, the ownership of the note

was placed in dispute and required Old Republic to present substantial evidence to

establish the ―genuineness of the endorsement.‖           She claims that the assignment

documents that Old Republic relied on to support its allegation of ownership would not

be admissible at trial because they constituted inadmissible hearsay. She further claims


1
    Rule references are to Missouri Court Rules 2012.


                                                   4
that Old Republic failed to provide an affidavit attesting to the assignments, and that such

failure in proof defeats the prima facie case for the claim.

          ―In order to recover an amount owed to some other party, the plaintiff is required

to prove the assignment of the account to show that is the rightful owner of the debt.

When there are multiple assignments, each assignment must be proven valid.‖ Fed. Nat.

Mortg. Ass’n, 414 S.W.3d at 525 (citing CACH, LLC v. Askew, 358 S.W.3d 58, 61-62

(Mo. banc 2012)). Ms. Cox is correct that precedent holds that a defendant‘s general

denial of an endorsement places ownership of a note and the validity of the assignments

at issue. See, e.g., Sec. Inv. Co. v. Hicks, 444 S.W.2d 6, 9 (Mo. App. 1969). However,

this precedent may no longer be applicable to negotiable instruments after Missouri‘s

adoption of the Uniform Commercial Code (UCC). See id. at 8 (stating that the recently

enacted UCC was not applicable to the case because the transaction occurred before its

effective date). The UCC states that ―‗ownership‘ of a note is not required in order to

enforce it.‖ Fed. Nat. Mortg. Ass’n v. Conover, 428 S.W.3d 661, 669 (Mo. App. W.D.

2014); see also § 400.3-301.2 The UCC also states that all signatures on a promissory

note and the attached documents are presumed valid ―unless specifically denied in the

pleadings.‖ § 400.3-308; see also § 400.3-204.3 Under the UCC, Ms. Cox‘s general

denial did not place the endorsements in question such that no genuine dispute as to

ownership existed.


2
    Statutory references are to RSMo 2000 and the Cumulative Supplement 2012.
3
 Section 400.3-304, in relevant part, states that ―[f]or the purpose of determining whether a signature
is made on an instrument, a paper affixed to the instrument is a part of the instrument.‖


                                                  5
       Additionally, it appears that the precedent relied on by Ms. Cox has been

superseded by the promulgation of Rule 55.23 in 1973. Rule 55.23 states, ―When any

claim . . . is founded upon a written instrument and . . . a copy attached thereto as an

exhibit, the execution of such instrument shall be deemed confessed unless the party

charged to have executed the same shall specifically deny the execution thereof.‖

Applying this rule to a summary judgment proceeding, our supreme court has declared

that a ―defendant must clearly state its position if an issue of authenticity of a document

attached to the petition is intended to be raised. . . . . [It] cannot be challenged by way of

response to a properly supported summary judgment motion.‖ ITT Commercial Fin.

Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 389 (Mo. banc 1993). Old

Republic‘s petition had the promissory note attached to it, and Ms. Cox failed to deny the

veracity of the assignments with specific language questioning the authenticity of the

endorsements. So Ms. Cox‘s general denial was insufficient under Rule 55.23.

       Moreover, Ms. Cox‘s general denial did not comply with Rule 74.04(c)(2) in her

response to Old Republic‘s motion for summary judgment. In its motion for summary

judgment, Old Republic alleged as an uncontroverted fact that it was the current holder of

the promissory note. It referenced the assignments of the promissory note and the deed

of trust between the original lender and US Bank, and between it and US Bank. Old

Republic also referenced a signed affidavit from its Vice President and Claims Counsel,

stating that Old Republic gained ownership of the note and deed through those

assignments. Ms. Cox wrote, ―Denied,‖ for each allegation and simply referenced the

documents that Old Republic attached as exhibits in support of its claim. Ms. Cox‘s

                                              6
failure to deny the allegations and reference a document showing a genuine dispute

results in her admission of these assignments. See Rule 74.04(c)(2).

       Finally, Ms. Cox‘s argument is meritless because Old Republic did provide an

affidavit stating that Old Republic became the holder of the note through assignments

from the original lender. Ms. Cox cited to the affidavit in support of her denial. As Old

Republic asserts, section 490.5104 allows statements of an assignment within an affidavit

to serve as prima facie evidence of that assignment. It is also meritless because this court

in 2011 recognized US Bank‘s assignment to its title insurance company, which

presumably is Old Republic, after the Coxes sought a dismissal of the appeal of the prior

litigation based on that assignment. See US Bank, 341 S.W.3d at 850. Ms. Cox‘s first

point is denied.

       In the second point, Ms. Cox argues that the trial court erred in entering summary

judgment because Old Republic failed to show that her affirmative defenses of res

judicata and collateral estoppel failed as a matter of law. Specifically, she argues: that the

uncontroverted facts established that Old Republic‘s claim for payment arose out of the

prior action brought by US Bank, its predecessor; that the subject matter and evidence in

the prior action were the same; and that the issues were determined against US Bank and

in the Coxes‘ favor.

       Although Old Republic pleaded undisputed facts establishing the elements of its

claim, that did not establish a prima facie case. Mobley, 72 S.W.3d at 257. ―The key to

4
 Section 490.510 states that ―[w]henever it becomes necessary in any suit to prove an assignment of
or an endorsement on any bond, bill or note, an affidavit of a competent witness, proving the same,
shall be received as prima facie evidence of the facts s tated in such affidavit.‖


                                                7
summary judgment is the undisputed right to judgment as a matter of law; not simply the

absence of a fact question.‖ ITT Commercial Fin. Corp., 854 S.W.2d at 380. ―[W]here

the defendant has raised an affirmative defense, a claimant‘s right to judgment depends

just as much on the non-viability of that affirmative defense as it does on the viability of

the claimant‘s claim.‖ Id. at 381. Old Republic prevails on its motion for summary

judgment by showing, as to each affirmative defense sufficiently raised, that Ms. Cox

lacked one of the necessary facts to support the defense. See id.

       Ms. Cox alleged in her answer that Old Republic‘s claim was barred by the legal

doctrines of res judicata5 and collateral estoppel.6 She further alleged that the prior

litigation brought by Old Republic‘s assignor, US Bank, sought to recover judgment

against her and that US Bank adduced evidence ―which would be identical to that

evidence which [Old Republic] would present at any trial or hearing on [the] petition.‖

She argued that allowing the suit on note ―would be an improper splitting of [Old

Republic]‘s cause of action and should be prohibited.‖


5
 The necessary facts needed to show res judicata are: ―(1) identity of the thing sued for; (2) identity
of the cause of action; (3) identity of the persons and parties to the action; and (4) identity of the
quality of the person for or against whom the claim is made.‖         King Gen. Contractors, Inc. v.
Reorganized Church of Jesus Christ of Latter Day Saints , 821 S.W.2d 495, 501 (Mo. banc 1991).
6
 ―That theory means that when an issue of ultimate fact has been determined by a valid judgment, it
may not again be litigated between the same parties.‖ King Gen. Contractors, Inc., 821 S.W.2d at
500. The necessary facts needed to show collateral estopp el are:

           (1) . .the issue is identical to the issue decided in the prior adjudication; (2). . .
           the prior adjudication resulted in a judgment on the merits; (3) . . . the party
           against whom collateral estoppel is asserted was a party, or was in privity wi th a
           party, to the prior adjudication; and (4) . . . the party against whom collateral
           estoppel is asserted had a full and fair opportunity to litigate the issue in the prior
           adjudication.

Wilkes v. St. Paul Fire & Marine Ins. Co., 92 S.W.3d 116, 120 (Mo. App. E.D. 2002).


                                                   8
       As shown above, Ms. Cox‘s answer did not plead the necessary facts to show res

judicata or collateral estoppel. When an affirmative defense is insufficiently pleaded as a

matter of law, the moving party ―is not required to negate it in order to make a prima

facie case for summary judgment.‖ Mobley, 72 S.W.3d at 258. Thus, Old Republic was

not required to show that these affirmative defenses failed as a matter of law. However,

Ms. Cox did plead allegations sufficient to allege the rule against splitting a cause of

action, which is what she argued in her memorandum opposing the motion for summary

judgment.

       She also erroneously argues on appeal that her affirmative defenses of collateral

estoppel and res judicata were not shown to be defeated as a matter of law. Because

splitting a cause of action is a form of res judicata,7 we will read the point to challenge

the viability of an affirmative defense of splitting a cause of action.

       In its motion for summary judgment, Old Republic sought to defeat this defense

with the allegations that the prior action did not contain a claim as to the validity of the

note, the enforceability of the note, or Ms. Cox‘s liability on the note and that the trial

court did not make related findings. Ms. Cox denied those allegations, citing to the

amended petition. The amended petition shows a request for a reformation of the deed of

trust and an unjust enrichment claim seeking $261,000. The unjust enrichment claim

alleged:

       22. Plaintiff restates and incorporates by reference paragraphs 1 through 16
          above.
7
―Res judicata, or its modern term, claim preclusion, prohibits ‗splitting‘ a claim or cause of action.‖
Chesterfield Vill., Inc. v. City of Chesterfield, 64 S.W.3d 315, 318 (Mo. banc 2002).


                                                  9
       23. Defendants Cox received benefits from the Refinance.

       24. Defendants Cox retained the benefits from the Refinance and have
           neither repaid them nor tendered payments when due.

       25. If the Deed of Trust should be adjudicated as invalid, Defendants Cox
           will be unjustly enriched in the amount of $261,000.00 as a result of
           the benefits conferred from the Refinance.

            WHEREFORE, Plaintiff prays for judgment against Dennis and
       Katherine Cox in the amount of $261,000.00, for continuing interest at the
       statutory rate, for its costs and expenses incurred herein, and for such relief
       as the Court deems just.

The amended petition does not show a request for relief based on the note. Because Ms.

Cox only generally denied Old Republic‘s allegations, she failed to show a genuine

dispute with these allegations. Ms. Cox‘s failure to comply with this rule results in her

admission of these allegations under Rule 74.04(c). The question then becomes whether

these allegations defeat her defense of splitting a cause of action. We do not think so.

       The rule against ―splitting a cause of action . . . [is] designed to prevent a

multiplicity of lawsuits.‖ King Gen. Contractors, Inc., 821 S.W.2d at 501 (internal

quotation marks and citation omitted). ―A cause of action which is single may not be

split and filed or tried piecemeal, the penalty for which is that an adjudication on the

merits in the first suit is a bar to a second suit.‖ Id. (internal quotation marks and citation

omitted). The necessary facts needed to defeat a defense of splitting a cause of action

are: ―(1) . . . separate actions brought arise out of the same act, contract or transaction; (2)

or . . . the parties, subject matter and evidence necessary to sustain the claim are [not] the

same in both actions.‖          Id. (internal quotation marks and citation omitted).

―‗[T]ransaction‘ . . . . has been defined as the aggregate of all the circumstances [that]

                                              10
constitute the foundation for a claim[,] includ[ing] all of the facts and circumstances out

of which an injury arose.‖ Id. (internal quotation marks and citation omitted).

       A plaintiff does not violate the rule if it ―bring[s] separate and distinct causes of

action separately, even if they arise out of the same transaction.‖ Shores v. Express

Lending Servs., Inc., 998 S.W.2d 122, 127-28 (Mo. App. E.D. 1999) (emphasis added);

see also Collins v. Burg, 996 S.W.2d 512, 517 (Mo. App. E.D. 1999) (finding the rule was

not violated after a plaintiff filed a subsequent trespass action against the same defendant

after having previously filed an intentional and/or negligent infliction of emotional

distress claim because the demand to vacate the premises needed to substantiate the claim

occurred after the first suit). ―Further, the prohibition against splitting a cause of action

does not apply where the parties are different.‖ Shores, 998 S.W.2d at 128 (finding

reversible error in finding a split cause of action because although plaintiff‘s current

action arose from the same chain of events, it constituted a separate action against a

different party).

       ―To determine whether [a party] asserts the same claims in both cases, a court

looks to the factual bases for the claims, not the legal theories.‖ Chesterfield Vill., Inc. v.

City of Chesterfield, 64 S.W.3d 315, 319 (Mo. banc 2002). ―Separate legal theories are

not to be considered as separate claims, even if the several legal theories depend on

different shadings of the facts, would emphasize different elements of the facts, or would

call for different measures of liability or different kinds of relief.‖            King Gen.

Contractors, Inc., 821 S.W.2d at 501 (internal quotation marks and citation omitted).



                                              11
       In the prior litigation, US Bank did seek a judgment from the court in its unjust

enrichment claim requiring the Coxes to pay $261,000. However, the bases for the

request were that the Coxes had received that amount to refinance their home and that

they had promised to repay that amount under the deed of trust. Giving legal effect to the

deed of trust, along with holding both Mr. and Ms. Cox liable for the debt, were US

Bank‘s concerns. The suit on note arises from this same refinance transaction. In fact,

the claim to foreclose the deed of trust required a default on the note, as the deed of trust

served as security for the note. In 2011, this court wondered why US Bank failed to seek

recovery from Ms. Cox alone on the promissory note. US Bank, 341 S.W.3d at 853 n.7.

We also stated that a collection of the promissory note was an ―unrelated inquiry‖ to the

enforceability of the deed of the trust. Id. at 853. That is not to say, however, that

enforcement of the deed of trust could have been pursued without a default on the note.

In fact, without a default on the note, US Bank would have had no ability to assert a

claim for unjust enrichment or to pursue enforcement of the deed of trust.

       The unjust enrichment claim from the prior litigation thus sought the same remedy

as suit on the note could have sought—collection of the debt. The deed of trust secured

the note, which was referenced within the deed as evidence of the loan. As stated above,

the refinance loan and the resulting default on the note are the factual bases for both legal

theories US Bank elected to pursue. It is undisputed that, in the prior litigation, US Bank:

alleged that Mr. Cox and Ms. Cox failed to make payments due under the terms of the

note and deed of trust; presented testimony concerning the balance currently owed; and

presented evidence that Ms. Cox had not made payments since the filing of the suit in

                                             12
March 2008. The same evidence would be presented in the suit on the note, albeit

shading facts in a different manner, with a focus on different elements. Because the same

evidence would be presented, there is no question but that US Bank would be barred to

assert a claim on the note having failed to do so in its litigation.                 See King Gen.

Contractors, Inc., 821 S.W.2d at 501. Though the physical note was transferred to Old

Republic after a defect in title was discovered,8 it is uncontested that the note was in

default when it was assigned to Old Republic, rendering Old Republic a mere holder, and

not a holder in due course, of the note. See section 400.3-302(a) (defining a ―holder in

due course‖ as a holder who takes an instrument ―without notice that the instrument is

overdue,‖ among other things). Old Republic is thus subject to Ms. Cox‘s personal

defenses to payment, which include that US Bank was required to pursue collection of

the note, if at all, in its lawsuit. See Gibson v. Harl, 857 S.W.2d 260, 267, 273-74 (Mo.

App. W.D. 1993) (finding the transferee of a nonnegotiable instrument takes it subject to

all defenses that a maker may have against the transferor, and acquires no rights superior

to those held by the transferor).

          Old Republic‘s contention that there exists two separate actions focuses on the

additional evidence that would be presented at a trial on the suit on note, which was not

presented at the prior trial. Specifically, Old Republic claims that the required element of

demand had not been made until after the first lawsuit.9 Old Republic relies on Collins,


8
    This discovery may have triggered US Bank to make a claim on its title policy.
9
  This is partially true because the written demand is date d February 2, 2009. The first petition was
filed in 2008, which is before the date of the written demand. However, the petition was amended in
April 2009, which is after the date of the written demand.

                                                   13
996 S.W.2d at 517. In Collins, the trial court found that a plaintiff‘s trespass claim was

barred because she had previously brought a suit to judgment against the same defendant

for negligent and/or intentional emotional distress.      The Collins court reversed the

decision because the claim of trespass did not exist until after a demand to vacate was

made and the demand occurred after the previous suit was filed. Id. at 517.

       Here, it is arguable whether a demand had to be shown in order to bring a suit on

note. As stated earlier, section 400.3-308(b) requires a showing of a balance without

mentioning a demand. In Mobley, we listed demand for payment as an element of a suit

on note, but only in the context of showing the maker was in default. 72 S.W.3d at 257

(stating the elements of a suit on note to include: ―(1) there exists a valid promissory note

signed by the maker; (2) there remains a balance due on the note; and (3) demand on the

maker for payment has been made and refused, leaving the maker in default.‖). The

Missouri Approved Jury Instructions for actions on mature debt require that the jury find

that a defendant either ―refused‖ or ―failed‖ to pay the sum. MAI § 26.04 (2012). Thus,

a default on the note is seemingly the necessary element, and not a demand, to bring a

suit on the note. In fact, the requirement of a demand is generally to establish a claim to

the accrual of interest on the balance due. See Watters v. Travel Guard Int’l, 136 S.W.3d

100, 111 (Mo. App. E.D. 2004) (citing section 408.020 that states the rate of interest,

when there is no agreed upon percentage, begins to accrue on a balance after a demand to

pay has been made).

       Notwithstanding, the lack of evidence at a prior trial is of little importance when it

does not constitute a ―new ultimate fact[] . . . that form[s] the basis of a new claim for

                                             14
relief.‖ See Chesterfield, 64 S.W.3d at 320. ―Claim preclusion prevents reassertion of

the same claim even though additional or different evidence or legal theories might be

advanced to support it.‖ Id. (internal quotation marks and citation omitted) (finding that

plaintiff split its cause of action by bringing a claim for damages for a city‘s refusal to

rezone after prevailing in a prior litigation against the city, based on the same operative

facts). Evidence had already been presented about Ms. Cox‘s default on the note. The

additional fact of the demand to pay on the note is of no consequence.

       Accordingly, Old Republic did not negate the defense of splitting a cause of action

as a matter of law, despite Ms. Cox‘s deemed admissions. Old Republic‘s claim merged

into the first judgment and is precluded. Ms. Cox‘s second point is granted.

                                       Conclusion

       For the above reasons, we reverse.



                                                 /s/THOMAS H. NEWTON___
                                                 Thomas H. Newton, Judge


Witt, P.J., and Ellis, J. concur.




                                            15
