                                                   In the
                              Missouri Court of Appeals
                                          Western District

                                                         
 CYGNUS SBL LOANS, LLC.,                                 
                                                             WD81675 (CONSOLIDATED WITH WD81676)
                    Respondent,                          
 v.                                                          OPINION FILED: MARCH 5, 2019
                                                         
 MICHAEL J. HEJNA, ET AL.,                               
                                                         
                     Appellants.                         
                                                         
                                                         

                   Appeal from the Circuit Court of Jackson County, Missouri
                           The Honorable S. Margene Burnett, Judge

  Before Division Three: Mark D. Pfeiffer, Presiding Judge, Lisa White Hardwick, Judge,
                             Anthony Rex Gabbert, Judge


        Michael J. Hejna and Monique C. Hejna (“Hejna” collectively), Gordon A. Gundaker, Jr.,

and Gordon A. Gundaker, Jr. as trustee of the Gordan A. Gundaker, Jr. Revocable Trust dated

January 6, 1997 (“Gundaker” collectively),1 appeal the circuit court’s grant of partial summary

judgment to Cygnus SBL Loans, LLC.2 Appellants contend the circuit court erred, 1) in denying



        1
          Hejna and Gundaker will be referenced as “Appellants” collectively. Hejna and Gundaker separately
appealed the court’s judgment. Those appeals have been consolidated. Various points on appeal in the Hejna and
Gundaker briefs overlap. Where possible, overlapping points will be addressed together.
        2
            Cygnus received the original loan promissory note during the pendency of the underlying litigation from
CADC /RADC VENTURE 2011-1, LLC. On September 14, 2017, Cygnus filed a Motion to Substitute upon Transfer
of Interest. The motion was granted. As both CADC and Cygnus were Respondents at various points in the litigation,
they may both be referenced as “Respondent” herein.
Appellants’ motions to transfer venue, 2) in denying Appellants’ motions to strike the affidavit of

Mante Dzakuma, 3) in finding Respondent had standing to sue, 4) in entering summary judgment

on Count VI of Respondent’s petition without determining the Deed in Lieu Agreement invalid, 5)

in entering summary judgment on Count VI after accepting additional materials raising new facts

and evidence, and 6) in entering summary judgment on Count VI against Gundaker without

Respondent showing Gundaker executed and delivered a guaranty, that credit was extended in

reliance upon a guaranty, or that amounts remained due under an enforceable obligation. We

affirm.

                            Background and Procedural Information

          Gunnett, LLC (“Gunnett”) is a Missouri limited liability company. Its members are Gordan

Gundaker, Michael Hejna, and Steve Stinnett. Gunnett entered into a loan with Premier Bank in

2006, borrowing approximately $8.3 million. The loan was secured by real property (“Property”)

located in Christian County, Missouri. Members of Gunnett, along with Monique C. Hejna,

Deborah Stinnett, and Gordon A. Gundaker in his capacity as trustee of the Gordon A. Gundaker,

Jr. Revocable Trust dated January 6, 1997 (collectively “Guarantors”), each executed and delivered

guaranties in 2006 promising repayment of the loan. From 2006 to 2010, Gunnett renewed the

note six times. The last note renewal was on January 15, 2010, in the principal amount of

$8,160,175, with a maturity date of January 15, 2011. Guarantors amended and restated their

guaranties on January 15, 2010.

          Premier Bank was closed in 2010 by the Missouri Division of Finance, which appointed

the Federal Deposit Insurance Corporation (FDIC) as receiver with authority to handle and dispose

of Premier Bank’s assets, liabilities, and operations. The note matured on January 15, 2011, and

was unpaid. As part of the FDIC’s liquidation of Premier Bank, CADC/RADC VENTURE 2011-

                                                 2
1, LLC (CADC), a Delaware limited liability company, received the original loan promissory note

from Gunnett, endorsed in blank, together with all related loan documents.3 Sabal Financial

Group, L.P. (“Sabal”) was a disclosed agent for CADC. Mante Dzakuma was an asset manager

for Sabal and a disclosed agent for CADC. Karick M. Brown was a portfolio manager with Sabal

and a disclosed agent for CADC.4

          In 2012, CADC, acting through Sabal, contacted Gunnett and Guarantors about repaying

the indebtedness. On or about July 6, 2012, Gunnett, Guarantors, and CADC executed a Deed-in-

Lieu Agreement (the “DIL”) related to the loan. Therein Guarantors agreed to each “execute and

deliver to Lender” promissory notes for specified amounts, referenced in the DIL as “Deficiency

Notes;” these notes were collectively equal to the overall deficiency amount in proportion to each

Guarantor’s liability under the guaranty. A developer agreement, lease agreement, and agreements

to convey certain documents were also included in the DIL. The Deficiency Notes stated they

were to replace the original guaranties. The DIL provided for the revival of Guarantors’ liability

under the loan and guaranties if the DIL or any related payments failed. The DIL and the maturity

dates of the Deficiency Notes provided Guarantors three years, to July 6, 2015, to sell the Property

in order to reduce or extinguish the deficiency amount. On July 6, 2015, the deficiency remained

unpaid.

          On October 28, 2015, Respondent filed a Petition against Guarantors to collect the

deficiency. Count I through Count III of the Petition alleged breach of each Deficiency Note as a


          3
         The FDIC delivered the original note, endorsed in blank, together with all related loan documents to CADC
on August 24, 2011.
          4
          Cygnus is a Georgia limited liability company that, during the underlying litigation, received the original
loan promissory note, endorsed in blank, together with all related loan documents from CADC. Andrew Cummings
is a manager of Cygnus.


                                                         3
written contract for repayment of a debt. Guarantors defended the suit by alleging the Deficiency

Notes were unenforceable because Guarantors had never delivered the notes as required under the

DIL. (Copies of signed Deficiency Notes were delivered to Respondent, but not the original

Deficiency Notes.) Respondent then amended its petition and added an alternative count (Count

VI) alleging breach of the original guaranties.

       After service of both the initial petition and First Amended Petition, Appellants filed

motions to transfer venue, arguing the DIL’s forum selection clause was unenforceable because

the original Deficiency Notes were not delivered. The motions were denied.

       Respondent filed a motion for partial summary judgment on September 9, 2016. For Count

VI, Respondent requested a determination of Appellants’ liability only on the breach of guaranties

claim. The guaranties provided for an interest component that continued to accrue. Respondent

requested that determination as to damages be made separately from underlying liability.

Appellants opposed summary judgment and filed separate motions to strike the affidavit of Mante

Dzakuma, which had been included with Respondent’s summary judgment motion.

       On January 12, 2017, the court denied the Motion to Strike, and on January 17, 2017,

entered an order partially granting and partially denying summary judgment. Partial summary

judgment was granted on Guarantors’ liability under their original guaranties. Summary judgment

was denied on the remaining counts.

       On January 20 and 23, 2017, Appellants filed motions to disqualify the judge arguing that

Respondent’s counsel’s wife’s father was first cousin to the judge’s law clerk’s grandfather. The

court informed the parties that the relationship had no connection and did not affect the court’s

ability to preside over the case, but the judge, nevertheless, recused himself on January 25, 2017.



                                                  4
Before ordering the case transferred for reassignment, the judge vacated the partial summary

judgment and order denying the Motion to Strike.

       The case was reassigned on January 26, 2017. On November 2, 2017, the court denied the

Motion to Strike and found after reviewing the pleadings that there was no issue of material fact

regarding Count VI, Respondent’s claim for breach of contract on the original guaranty. The court

granted Respondent’s motion for summary judgment as to Count VI only.

       Thereafter, Respondent dismissed Counts I through V. On December 1, 2017, Respondent

filed a Motion for Entry of Final Judgment in which Respondent waived its claim for interest,

attorney’s fees, and costs available under the original guaranties. Respondent requested that the

$2,597,874 debt, which was the amount owed pursuant to the Deficiency Notes had they been

delivered, be declared the final judgment amount. Gundaker objection to the motion. Appellants

also filed motions to reconsider the partial summary judgment, which the court denied. Gundaker

then filed another motion to transfer venue. On January 8, 2018, the court entered an order denying

all pending motions and objections and setting for trial the remaining issues as to “interest,

attorneys’ fees, and court costs.”

       On February 2, 2018, Respondent filed a Motion for Entry of Final Judgment on Count VI

citing Rule 74.04 and seeking final judgment on the amount of damages. Appellants did not

respond to this motion. On March 15, 2018, the circuit court entered final judgment. This appeal

follows.

                                      Standard of Review

       The standard of review for an appeal challenging the grant of a motion for summary

judgment is de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d

371, 376 (Mo. banc 1993). Accordingly, we do not defer to the trial court’s decision, but instead

                                                5
use the same criteria that the trial court should have employed in initially deciding whether to grant

Respondent’s motion. Barekman v. City of Republic, 232 S.W.3d 675, 677 (Mo. App. 2007)

(internal citations omitted). Under Rule 74.04, the court considers the motion, the response, the

reply, and the sur-reply in making a ruling on motions for summary judgment. Rule 74.04(c)(6).

We review the record in the light most favorable to the party against whom judgment was entered

and accord that party the benefit of all inferences which may reasonably be drawn from the record.

Barekman, 232 S.W.3d at 677. Summary judgment is appropriate where the moving party has

demonstrated, on the basis of facts as to which there is no genuine dispute, a right to judgment as

a matter of law. ITT Commercial Fin. Corp., 854 S.W.2d at 376. “Facts set forth by affidavit or

otherwise in support of a party’s motion are taken as true unless contradicted by the non-moving

party’s response to the summary judgment motion.” Id.

                                         Points on Appeal

                  Motions to Transfer – Hejna’s Point I, Gundaker’s Point V

       Appellants argue that the circuit court erred in denying their motions to transfer venue

because no defendant resided in Jackson County and the Deficiency Notes containing the forum

selection clause were never delivered.

       “To the extent that a court bases its venue ruling on factual matters and inferences, this

court reviews the trial court’s ruling under an abuse of discretion standard.” McCoy v. The

Hershewe Law Firm, P.C., 366 S.W.3d 586, 592 (Mo. App. 2012). “To the extent to which the

venue decision is governed by the interpretation of a statute, the ruling is a question of law, and

accordingly this court reviews the ruling to determine whether the trial court misinterpreted or

misapplied the law.” Id.



                                                  6
       In disputing venue to the trial court, Appellants acknowledged that Deficiency Notes upon

which Respondent’s suit was founded contain a forum selection clause designating Jackson

County, Missouri as venue for suit. The Deficiency Notes specifically provide “that any litigation

initiated by Borrower or Lender in connection with this Note may be venued in either the state or

federal courts located in Jackson County, Missouri[.]” Appellants further acknowledged that the

Deficiency Notes were named in and were to be incorporated into the DIL entered into by

Appellants with Respondent. Appellants contended, however, that delivery of the Deficiency

Notes was contingent upon delivery of a “Developer Agreement” that was never created and,

consequently, the DIL did not close. Appellants argued that, because Appellants never delivered

the original notes, Respondent could not enforce the notes and, therefore, the forum selection

clauses within the notes were also unenforceable. We disagree.

                                 First Motion to Transfer Venue

       “Missouri has long held that freely negotiated forum selection agreements are enforceable

‘so long as doing so is neither unfair nor unreasonable.’” GP&W Inc. v. Daibes Oil, LLC, 497

S.W.3d 866, 869 (Mo. App. 2016) (quoting High Life Sales Co. v. Brown-Forman Corp., 823

S.W.2d 493, 497 (Mo. banc 1992)). “The party resisting enforcement of the forum selection clause

bears a heavy burden in convincing the court that he or she should not be held to the bargain

because it is unfair or unreasonable.” GP&W Inc., 497 S.W.3d at 869. “A forum-selection clause

is prima facie valid.” Hope’s Windows, Inc. v. McClain, 394 S.W.3d 478, 484 (Mo. App. 2013).

“Where the enforceability of a forum-selection clause is at issue, the proper approach for a court

to take is to enforce the clause specifically, unless the challenging party can clearly show that

enforcement would be unreasonable and unjust, or that the clause is invalid for such reasons as

fraud or overreaching.” Id. (internal quotation marks and citations omitted). Whether a forum

                                                7
selection clause that by its terms applies to contract actions also reaches other claims depends on

whether resolution of the claims relates to interpretation of the contract. Reed v. Reilly Company,

LLC, 534 S.W.3d 809, 811 (Mo. banc 2017) (internal quotation marks and citations omitted).

“Missouri law recognizes and enforces incorporation clauses in contracts. Matters incorporated

into a contract by reference are as much part of the contract as if they had been set out in the

contract in haec verba.” Sabatino v. LaSalle Bank, N.A., 96 S.W.3d 113, 118 (Mo. App. 2003)

(internal quotation marks and citations omitted).

       All of Respondent’s claims within its initial petition involved the DIL, which incorporated

the Deficiency Notes. Appellants signed the DIL, therein agreeing to deliver the notes. When

Respondent filed suit, Resolution of the claims of all parties necessarily required inquest into the

terms and enforceability of the DIL and the Deficiency Notes. Appellants never argued that they

did not agree to the forum selection clause or that venue in Jackson County was unfair or

unreasonable; Appellants sole contention was that they agreed in the DIL to deliver the signed

promissory notes (containing the forum clauses) but, because of an unmet contingency, never

followed through with that agreement.

       The DIL states that “simultaneously” with execution of the DIL, Appellants were to execute

and deliver the Deficiency Notes. The DIL states that Appellants were to additionally provide at

closing other executed original documents, including “Developer Agreement in the form attached

hereto as Exhibit H.” Nothing within the DIL references the contingency Appellants claim existed;

Respondents disputed the existence of a contingency.          Nonetheless, Appellants agreed to

incorporate the Deficiency Notes containing the forum selection clause into the DIL and allow any

litigation in connection with the notes to be venued in Jackson County. Resolution of the parties’

dispute as to whether the DIL ever closed required interpretation of that contract.

                                                 8
          Whether Respondents were entitled to enforce the Deficiency Notes under Section 400.3-

3015 as non-holders of the instruments does not impact enforcement of the forum selection clause.

Pursuant to Section 400.3-104, a “negotiable instrument” that is a “note” is, with certain

requirements, an unconditional promise to pay a fixed amount of money. Hence, the inability to

enforce under Section 400.3-301 applies to enforcement of the promise to pay; an agreement as to

venue for disputes regarding the Deficiency Notes is a separate issue.

          The circuit court did not abuse its discretion in refusing to transfer venue after Appellants’

first motion as allegations within Respondent’s petition pertained to enforceability of the contract

that contained the forum selection clause.

                                         Second Motion to Transfer Venue

          Prior to the court’s first ruling on venue, Respondent amended the petition to include an

alternate count based on Appellants’ contentions that the DIL was unenforceable; Respondent’s

First Amended Petition alleged in Count VI that if the DIL was “undone,” then Appellants were

liable under their original guaranties. After Respondent amended its petition, Appellant Gundaker

provided a supplemental statement in support of the requests to transfer venue. This statement

continued to argue that the forum selection clause incorporated into the DIL was ineffective

because Appellants never delivered the notes including that clause, and additionally argued that,

under Count VI, venue was proper in St. Louis County due to a forum selection clause in the

original guaranty.6



          5
              All statutory citations are to the Revised Statutes of Missouri as updated through 2018, unless otherwise
stated.
          6
              Appellants never asked to sever the counts within Respondent’s petition.



                                                            9
         After Appellants’ motions for change of venue were denied, the parties moved forward in

Jackson County with Appellants seeking affirmative relief therein and conducting discovery.

Appellants did not seek a writ of prohibition under Rule 97 alleging improper venue.7 Respondents

ultimately sought summary judgment on all counts within the petition -- the counts involving the

Deficiency Notes under the DIL and the count involving the original guaranties. After the court

granted partial summary judgment on the count involving the original guaranties, Respondent

dismissed the other counts.

         Appellant Gundaker then filed a second motion to transfer venue arguing that the

guaranties sued upon in Count VI expressly provided that venue was proper only in St. Louis

County, Missouri, and Respondent’s dismissal of Counts I through V rendered the issue of the

original guaranty “the only civil action between the parties.” The court denied Gundaker’s motion.

Gundaker makes the same argument on appeal and contends the court erred in failing to transfer

the case under Rule 51.045.

         Respondents requested summary judgment on all counts. The Partial Summary Judgment

provided, in pertinent part:

         [T]his Court … finds that there is no issue of material fact regarding Count VI,
         Plaintiffs claim for breach of contract on the original guaranty. Under the original
         guaranty, Defendants owe a total of $2,597,874 as of September 9, 2016. The
         Defendants are jointly and severally liable up to the limit of each Defendant’s
         Guaranty, plus interest per the terms of the parties contract, attorney’s fees and costs
         of this action related to Count VI to be determined by this Court. Therefore,
         Plaintiff’s Motion is hereby GRANTED as to Count VI only.

         However, with regard to Counts I-V, there are material issues of fact and, as a result,
         said Motion is DENIED as to those Counts.


         7
           Although Respondent argues Appellants waived their venue claim by proceeding and not pursuing a writ
of prohibition, we note that Rule 51.045(a) states that, “If a timely motion to transfer venue is filed, the venue issue is
not waived by any other action in the case.” Respondent makes no claim that Appellants’ motions were untimely.

                                                           10
       Section 476.410 states that “[t]he division of a circuit court in which a case is filed laying

venue in the wrong division or wrong circuit shall transfer the case to any division or circuit in

which it could have been brought.” (Emphasis added). Here, the case was properly filed in Jackson

County, as discussed above. Respondent’s dismissal of the petition’s additional counts to allow

for final judgment did not alter the fact that venue was proper when the case was brought.

Regardless, “[e]ven assuming the circuit court erred by [] failing to transfer venue …, an error

does not warrant reversal on appeal unless the error results in prejudice.” Barron v. Abbott

Laboratories, Inc., 529 S.W.3d 795, 798 (Mo. banc 2017). Appellant Gundaker, the only appellant

making the second transfer request and appealing this specific issue, does not contend the court’s

decision resulted in prejudice and thereby fails to satisfy the prejudice requirement for reversal.

Id.

       Appellant Hejna’s first and Appellant Gundaker’s fifth points on appeal are denied.

           Affidavit of Mante Dzakuma – Hejna’s Point II and Gundaker’s Point I

       Hejna asserts in their second point on appeal, and Gundaker in his first, that the circuit

court erred in denying Appellants’ motions to strike the affidavit of Mante Dzakuma. Appellants

assert that the Dzakuma affidavit was inadmissible for failure to comply with Rule 74.04(3)

because Dzakuma had no personal knowledge of the chain of title that led to Respondent becoming

holder of the note, and failed to set forth facts that would be admissible in evidence.

       Rule 74.04(e) requires that supporting and opposing affidavits accompanying motions for

summary judgment “shall be made on personal knowledge, shall set forth such facts as would be

admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the

matters stated therein.” See Scott v. Ranch Roy-L, Inc., 182 S.W.3d 627, 634-635 (Mo. App. 2005).

“Facts set forth by affidavit or otherwise to support the motion are taken as true unless contradicted

                                                 11
by the non-movant’s response to the summary judgment motion.” Juan v. Growe, 547 S.W.3d 585,

591 (Mo. App. 2018). We give the non-movant the benefit of all reasonable inferences from the

record. Id.

       Mante Dzakuma states in the first page of his affidavit:

              I, Mante Dzakuma, hereby declare upon my oath that the following
       statements are true:

              1. I am an adult resident of California. I hold the position of Asset
                 Manager with Sabal Financial Group, L.P. as agent for CADC/RADC
                 VENTURE 2011-1, LLC.

              2. My job responsibilities include working with our attorneys and
                 assisting in litigation in which CADC/RADC VENTURE 2011-1,
                 LLC, is involved.

              3. As part of my job responsibilities, I am familiar with CADC/RADC
                 VENTURE 2011-1, LLC’S assets including the loan at issue in this
                 litigation.

              4. I have personal knowledge of the facts contained in this affidavit by
                 virtue of my employment at Sabal Financial Group, L.P., as agent for
                 CADC/RADC VENTURE 2011-1, LLC and my review of business
                 records.


Thereafter, Dzakuma attested to, among other things, various aspects of the loan, the chain of title,

default of the loan, and the DIL.

       Dzakuma’s affidavit was not the only exhibit submitted by Respondents in support of their

motion for summary judgment. Respondent’s motion for summary judgment also included an

affidavit of Appellant Michael Hejna wherein he acknowledges involvement in negotiations

between Gunnett and CADC involving a promissory note Gunnett executed in favor of Premier

Bank. Michael Hejna’s affidavit does not question CADC’s authority to negotiate the terms of the




                                                 12
original guaranty and attests that Michael Hejna delivered an executed DIL to CADC. He also

attests to purposefully not delivering the signed Deficiency Notes referenced in the DIL.

        Respondent also attached to the summary judgment motion interrogatories completed by

Michael Hejna. Therein, Michael Hejna states that in 2012 Dzakuma and his superior were part of

negotiations regarding the DIL, and that the DIL replaced the original loan and guarantees.

        In opposition to Respondent’s motion for summary judgment, Michael Hejna submitted an

affidavit wherein he states that he was a member of Gunnett, which was a party to the loan with

Premier Bank. He states he was the primary individual who handled matters with Premier Bank;

he was also the primary individual who handled matters with Sabal and was advised in 2012 that

Sabal was a successor in interest to Premier Bank. Michael Hejna’s affidavit does not question

Sabal’s authority to act on Premier Bank’s loan and Michael Hejna states that “discussions with

Gunnett were primarily between me and Mante Dzakuma.” Michael Hejna states that he signed

the DIL. In the DIL, Appellants admit that CADC is the “successor by assignment to the Federal

Deposit Insurance Corporation, receiver for Premier Bank.” In Hejna’s interrogatories, attached

to Respondent’s motion, Hejna states that the DIL replaced the original loan and guarantees. In

Hejna’s admissions, attached to Respondent’s motion, Hejna admits that the signatures on the 2010

guaranty “appear to be those of Hejna Defendants.” Also in Hejna’s admissions, Hejna admits the

DIL attached to the Petition was a true and accurate copy and that Hejna signed the DIL attached

to the petition.

        In answer to Respondent’s First Amended Petition, Gundaker admits entering into certain

agreements with Premier Bank. In response to Respondent’s uncontroverted statement of facts, an

affidavit of Gordon Gundaker was attached by Gundaker. Therein Gundaker states that, in 2012,

Gundaker was involved in negotiations regarding “an alleged obligation of Gunnett to Premier

                                               13
Bank” and that during said negotiations the DIL was discussed. Gundaker states that he executed

the Gundaker Deficiency Note and delivered to Michael Hejna who was to deliver the same once

the DIL was completed. In Response to Respondent’s statement of facts, Gundaker attaches

Exhibit G which has the DIL attached.

       In reply to Appellants’ suggestion that there was no proof CADC held the original note,

Respondent submitted the affidavit of Michelle Masoner, “legal counsel for Plaintiff

CADC/RADC VENTURE 2011-1, LLC, ACTING BY AND THROUGH Sabal Financial Group,

L.P.” Therein Masoner attests that the original note is located in her law firm’s vault and is

available for inspection. Masoner attached a copy of the original note along with copies of allonges

showing the note was ultimately assigned to CADC. No one disputes on appeal that CADC held

the original note at the time partial summary judgment was entered.

       Appellants contend that the court erred in admitting the Dzakuma Affidavit because

Dzakuma’s recitation of chain of title did not come from Dzakuma’s personal knowledge because

Dzakuma was never an employee of Premier Bank, the FDIC, or of CADC. Gundaker Appellants

state that, without the Dzakuma Affidavit, “there is no evidence to support the trial court’s order

granting partial summary judgment.” Yet, documentation submitted by appellants themselves

shows at the very least that Dzakuma, an agent for CADC, had personal knowledge of CADC’s

status as note holder at the time the DIL was negotiated. Dzakuma averred that he had personal

knowledge of the facts contained within his affidavit and Appellants’ documentation supports that

Dzakuma had personal knowledge of the details of the DIL. Approximately eight of the nine pages

of Dzakuma’s affidavit reference the DIL. As all parties verified that Dzakuma was involved in

negotiation of that agreement, the court did not abuse its discretion in allowing those portions of

the Dzakuma affidavit.

                                                14
         With regard to the remaining portion of Dzakuma’s affidavit reciting chain of title, we need

not consider whether the court erred in admitting those statements because Appellants cannot prove

prejudice. Although Appellants argue Dzakuma’s affidavit was the only evidence before the court

allowing the court to conclude CADC had authority to enforce the original guaranty,8 the affidavit

of Michelle Masoner was also before the court. This affidavit states that CADC held the original

note. Appellants do not dispute that CADC possessed the original note or that the note had been

endorsed in blank, but appear to argue that the court could not have reached the conclusion that

Respondent was the “holder” of the note, such that the guaranties could be enforced, without the

Dzakuma affidavit. We disagree.

         “When endorsed in blank, an instrument becomes payable to bearer and may be negotiated

by transfer of possession alone until specially endorsed.” § 400.3-205(b).

         Missouri has adopted the Uniform Commercial Code (UCC), which governs
         commercial transactions. See Section 400, et seq. ‘Application of the UCC is
         straightforward regarding [the] question of who may enforce the Note.’ U.S. Bank
         Nat’l Ass’n v. Burns, 406 S.W.3d 495, 497 (Mo. App. 2013). Under Section 400.3-
         301, the holder of a negotiable instrument is entitled to enforce it. Id. ‘A holder is
         one (1) who possesses the instrument, and (2) to whom the instrument is made
         payable.’ Id.; Section 400.1-201(20). An instrument may be endorsed in blank and
         such instrument then becomes payable to its bearer. Sections 400.3-205(a) and (b).
         A party that possesses a negotiable instrument containing a blank endorsement that
         does not identify the person to whom it is payable has standing to enforce the note[.]

Deutsche Bank National Trust Company v. Vaughn, 524 S.W.3d 193, 198 (Mo. App. 2017). A

personal guaranty follows assignment of a note. Federal Nat. Morg. Ass’n v. Bostwick, 414 S.W.3d

521, 526 (Mo. App. 2013).




         8
           Appellant Hejna asserts the “Dzakuma affidavit was Plaintiff’s only proof of its allegation in paragraph 47
of its motion that it is the holder of the original loan documents.” Hejna argues that, “[n]one of the assignment
documents, however, were submitted to the court (other than the ultimate assignment to Cygnus), with Plaintiff and
the court instead relying on Mr. Dzakuma’s legal opinion.”

                                                         15
       Given the Masoner affidavit showing CADC as holders of the original note, even if

Appellants could prove Dzakuma’s statements regarding chain of title were improperly admitted,

Appellants cannot show admission of those statements resulted in prejudice.

       Hejna’s second point on appeal, and Gundaker’s first, is denied.

                    Standing – Hejna’s Point III and Gundaker’s Point III

       In Hejna’s third point on appeal and part of Gundaker’s third, the Appellants contend

CADC did not properly plead standing. Appellants argue that, although CADC purported to be a

“holder” of a promissory note with standing to sue on the underlying guaranty, Respondent makes

no attempt to address CACH, LLC v. Askew, 358 S.W.3d 58 (Mo. banc 2012). CACH held that, a

debt collector attempting to collect on a debtor’s outstanding credit card account was required to

show proof of assignment of the right to collect the debt to establish standing. Id. at 62. Appellants

argue that CADC failed to establish itself as “holder” of the original notes because the original

notes were made payable to Premier Bank and not CADC.

       “A party has standing to sue when it has an interest in the subject matter of the suit that

gives it a right to recovery, if validated.” Portfolio Recovery Assocs., LLC v. Schultz, 449 S.W.3d

427, 434 (Mo. App. 2014). “Lack of standing cannot be waived and may be considered by the

court sua sponte.” Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 622 (Mo. App. 2009).

       Respondent’s Consolidated Memorandum in Reply in Support of Plaintiff’s Motion for

Summary Judgment and in Opposition to Defendant’s Motions to Strike the Affidavit of Mante

Dzakuma included Exhibit B, an affidavit of Respondent’s attorney, Michelle Masoner. Therein

she states that the original note was in CADC’s possession and was physically located in a vault

at Masoner’s law firm. Attached to Masoner’s affidavit was a copy of that note and two allonges;

one allonge showed that the January 15, 2010 promissory note payable by Gunnett to Premier

                                                 16
Bank was assigned by the FDIC, in its capacity as receiver for Premier Bank, to CADC. The other

allonge was endorsed in blank by CADC. “An ‘allonge’ is a piece of paper annexed to a negotiable

instrument or promissory note on which to write endorsements for which there is no room on the

instrument itself.” Federal Nat. Mortg. Ass’n v. Conover, 428 S.W.3d 661, 664 n.3 (Mo App.

2014) (internal quotation marks and citations omitted).

       Section 400.3-301 provides that a “Person entitled to enforce” includes “the holder of the

instrument.” Exhibit B to Respondent’s reply memorandum showed that CADC possessed the

note   and    that   the   allonges   made     the   note   payable    to    CADC      specifically.

As “holder,” CADC was entitled to enforce the note and accompanying guaranties. “A transfer of

the principal obligation is held to operate as an assignment of the guaranty[.]” American First

Fedral, Inc. v. Battlefield Center, L.P., 282 S.W.3d 1, 5 (Mo. App. 2009).

       Appellants’ reliance on CACH is misplaced; CACH involved assignment of the right to

collect credit card debt; it did not involve a promissory note or other negotiable instrument

governed by Article 3 of the UCC. Here, Gunnett signed the original note and the Guarantors

signed the guaranties. Therein the Guarantors agreed that the note and guaranties could be

assigned, with Guarantors indebted to the lender as well as the lender’s successors.

       Appellants additionally contend the allonge pages should not have been considered by the

court because they were not part of the promissory notes attached to the petition, were not part of

the Motion for Summary Judgment, were not part of the Statement of Undisputed Facts, and were

not part of the Dzakuma Affidavit. Appellants contend that the existence of the allonges was

alleged only after Appellants filed responses to the Motion for Summary Judgment and Masoner

has no personal knowledge regarding CADC’s acquisition of the notes.



                                                17
         Rule 74.04(c)(3) allows for “Replies in Support of Motions for Summary Judgment” after

Responses to such motions are served. This rule provides that a movant for summary judgment

may respond to the adverse party’s additional material facts that remain in dispute and file a

statement of additional material facts as to which movant claims there is no genuine issue.

“Attached to the supplemental statement shall be a copy of any additional discovery, exhibits or

affidavits on which the supplemental statement relies.” Id. It was within this rule Respondent

filed Masoner’s affidavit and the allonges. Appellants never objected to Respondent’s Reply.

         Although Appellants acknowledge that Rule 74.04(c)(3) “provides the procedure whereby

a movant may submit additional evidence in support of its motion,” Appellants argue that the court

was to consider nothing beyond Appellants’ response to Respondent’s motion for summary

judgment. Yet, the case law upon which Appellants rely interprets a prior version of Rule 74.04,

wherein replies and sur-replies were not provided for. See New Prime, Inc. v. Professional

Logistics Management Co., Inc., 28 S.W.3d 898, 904 (Mo. App. 2000); Missouri Rules of Civil

Procedure (2000).9 Rule 74.04 has since been amended to allow replies and sur-replies and Rule

74.04(c)(6) in the Missouri Rules of Civil Procedure (2018), states that “[a]fter the response, reply

and any sur-reply have been filed or the deadlines therefor have expired, the court shall decide the

motion.”

         The circuit court did not err in concluding Respondents had standing to bring the action as

holder of the original note.

         Appellants’ third points on appeal (as related to this issue) are denied.


         9
             This court stated in New Prime that the plain meaning of Rule 74.04(c)(3) requires that the trial court, in
deciding whether to grant a motion for summary judgment, should consider only the motion and the response, and
that a trial court’s decision on a motion for summary judgment should not be based on anything filed after the non-
moving party files its response. New Prime, 28 S.W.3d at 904.

                                                           18
               Validity of the DIL – Hejna’s Point IV and Gundaker’s Point III

       In Hejna’s fourth point on appeal and part of Gundaker’s third, Appellants argue the trial

court erred in entering summary judgment on Count VI because the Judgment did not conform to

the pleadings. Appellants contend the court awarded damages on a claim that was expressly

contingent upon the DIL being invalidated, and the DIL was not invalidated; Appellants claim that,

the nature of Respondent’s pleadings required the court make an express finding that the DIL was

invalid before ruling in Respondent’s favor on Count VI. Appellants’ further claim that the DIL

released Appellants from their obligations under the original guaranty.

       Count VI in Respondent’s First Amended Petition incorporated by reference all foregoing

paragraphs. Incorporated within those paragraphs were references to the DIL, including the DIL’s

provision for revival of the Defendants’ liability under the original loan if the DIL, or any related

documents, were subsequently invalidated. Count VI further alleged that, “In an alternative count

to Counts I through IV herein, and in the event the [DIL] is undone, then under such circumstances,

the Defendants remain obligated under their original Guaranty.”

       We disagree that Respondent’s pleadings required the court to completely invalidate the

DIL before entering Judgment in favor of Respondents on Count VI. Appellants admitted to

executing the DIL, complying with certain terms therein, partially performing, and enjoying some

of its benefits. Appellants also admitted to failing to comply with certain terms, but alleged they

did so with good cause. Consequently, the court rightly determined that fact issues still existed

under the counts involving the DIL which precluded summary judgment on those counts. The

court would have had to delve into those fact issues before determining the DIL invalid.

       Appellants also admitted, however, to defaulting under the original agreement and

executing the DIL to avoid the consequences of that default. By arguing the DIL never closed,

                                                 19
Appellants essentially agreed to resurrection of the original note and guaranties under Count VI.

Given the record, it was not necessary for the court to declare the DIL invalid before determining

Appellants’ liability under the original guaranties. The record shows there were no material facts

in dispute as to Appellants’ liability under the original guaranties where Appellants admitted to

executing the DIL after defaulting on the original guaranties, and then contended the DIL never

closed; by arguing the DIL never closed, Appellants could not also claim protection under the

DIL’s release provision regarding the original guaranties.

          Hejna’s fourth point on appeal, and Gundaker’s third point (as related to this issue), are

denied.

          Additional Evidence - Hejna’s Fifth Point and Gundaker’s Third and Fourth

          In Hejna’s fifth point on appeal, part of Gundaker’s third, and Gundaker’s fourth,

Appellants contend the trial court erred in entering summary judgment on Count VI because

Respondent improperly attached new evidence to its Motion for Entry of Final Judgment.

Appellants suggest that Respondent’s Motion for Entry of Final Judgment on Count VI was

supplemental to its previous motion, and the documents attached to the motion were therefore

unauthorized.

          On December 1, 2017, Respondent filed a Motion for Entry of Final Judgment, not

pursuant to Rule 74.04, wherein Respondent waived its claim for interest and attorneys’ fees and

costs under the original guaranty. Appellant Gundaker objected to this motion and Appellants filed

various other motions. On January 8, 2018, the circuit court entered an order denying all pending

motions and objections and setting for trial all issues remaining.

          On February 2, 2018, Respondent filed a Motion for Entry of Final Judgment on the

Amount of Damages citing Rule 74.04, therein providing a statement of uncontroverted material

                                                  20
facts regarding damages and attaching two affidavits as allowed by Rule 74.04(c)(1). This was a

stand-alone motion. Appellants filed no response, and the court entered Final Judgment on March

15, 2018.

                  Rule 74.04(c)(2) requires a non-movant responding to a summary judgment
          motion to ‘set forth each statement of fact in its original paragraph number and
          immediately thereunder admit or deny each of movant’s factual statements.’ The
          rule also requires the non-movant to support each denial ‘with specific references
          to the discovery, exhibits or affidavits that demonstrate specific facts showing that
          there is a genuine issue for trial.’ Rule 74.04(c)(2). These requirements are
          mandatory. Cnty. Asphalt Paving, Co. v. Mosley Constr., Inc., 239 S.W.3d 704, 708
          (Mo. App. 2007). A response that does not comply with Rule 74.04(c)(2)’s
          requirements ‘with respect to any numbered paragraph in movant’s statement is an
          admission of the truth of that numbered paragraph.’ Rule 74.04(c)(2).

Jordan v. Peet, 409 S.W.3d 553, 558 (Mo. App. 2013).

          The affidavits attached to Respondent’s motion were filed under Rule 74.04 and Appellants

never challenged their propriety. By filing no response to Respondent’s motion, Appellants

admitted the facts contained within the motion and waived any claim on appeal that the court

improperly relied on those facts. As those facts involved the calculation of damages, Appellants

waived any claim that the court improperly calculated damages.

          Hejna’s Fifth point and Gundaker’s third and fourth points (as related to this issue) are

denied.

                            Gundaker’s Liability – Gundaker’s Point II

          Gundaker asserts in his second point on appeal that the circuit court erred in granting

summary judgment, contending Respondent failed to show Gundaker executed and delivered a

guaranty, that credit was extended in reliance upon a guaranty, or that amounts remain due under

an enforceable obligation.




                                                   21
       Respondent’s First Amended Petition alleged that Gundaker, individually and as trustee,

executed and delivered guaranties which promised payment of Gunnett’s indebtedness up to a

specified amount. Respondent attached and incorporated signed copies of all guaranties to the

First Amended Petition. One guaranty, Exhibit J, was signed by Gordon Gundaker individually.

Another, Exhibit K, was signed by Gordon Gundaker in his capacity as trustee for the Gordon A.

Gundaker, Jr. Revocable Trust. Both were dated December 6, 2006. Exhibit L represented an

“Amended and Restated Continuing Unconditional Limited Guaranty” signed by Gordon

Gundaker individually and as trustee on March 22, 2010. The DIL, signed by all Guarantors,

including Gundaker individually and as trustee, was also attached to Respondent’s Petition.

       Pursuant to Section 509.240, when any claim is founded upon a written instrument with a

copy attached to the pleading, “the execution of such instrument shall be deemed confessed unless

the party charged to have executed the same shall specifically deny the execution thereof.” In

answer to Respondent’s petition, Gundaker never denied executing the guaranties. To the contrary,

Gundaker admitted entering into agreements with Premier Bank and other entities but alleged “that

the terms and conditions of any binding agreements supersede any summary description thereof in

the Petition and [Gundaker] reserves the right to review the originals of any such agreements.” He

denied the allegations until “the original of any such agreement is provided.” Gundaker does not

dispute that originals were available for inspection. Gundaker presented no evidence controverting

his execution and delivery of the guaranties. Gundaker also admitted executing the DIL which

references the indebtedness under the guaranties.

       “In a suit on a promissory note a prima facie case is made when the note, admittedly signed

by the makers, is introduced and evidence follows demonstrating the note is unpaid or that a

balance is due and owing.” Bank of Kirksville v. Small, 742 S.W.2d 127, 130 (Mo. banc 1987).

                                               22
Here, although Gundaker suggests he never admitted executing a guaranty, under Section 509.240,

he admitted execution by making no specific denial. The guaranties incorporate the indebtedness

evidenced by the note. The original guaranties and note show that credit was extended in reliance

on the guaranties serving as collateral for the loan. It was uncontroverted that the note remained

unpaid.

          Gundaker’s second point on appeal is denied.

                                              Conclusion

          We conclude that the circuit court did not err, 1) in denying Appellants’ motions to transfer

venue as resolution of the claims of all parties required inquest into the terms and enforceability

of the DIL and incorporated Deficiency Notes, which contained forum selection clauses

designating venue for “any litigation” in connection with the notes; 2) in denying Appellants’

motions to strike Mante Dzakuma’s affidavit as the record shows Dzakuma had personal

knowledge of matters attested to in his affidavit and, even if Appellants could prove the affidavit

was improperly admitted, Appellants fail to prove prejudice; 3) in finding Respondent had standing

to bring the action as holder of the original note; 4) in entering summary judgment on Count VI

without first finding the DIL invalid as such was not required to determine that no material facts

were in dispute and Respondent was entitled to judgment as a matter of law; 5) in accepting

affidavits allowed by Rule 74.04(c)(1) along with Respondent’s Rule 74.04 Motion for Entry of

Final Judgment, and; 6) in entering summary judgment on Count VI against Appellant Gundaker

as the record showed Gundaker executed and delivered guaranties, that credit was extended in

reliance, and that amounts remained due under an enforceable obligation.




                                                   23
       We affirm the circuit court’s judgment.



                                                      ____________________________________
                                                      Anthony Rex Gabbert, Judge


All concur.




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