            In the Missouri Court of Appeals
                   Eastern District
                                   DIVISION FOUR

GATEWAY METRO FEDERAL                       )
CREDIT UNION,                               )        No. ED108286
                                            )
       Respondent,                          )        Appeal from the Circuit Court
                                            )        of St. Louis County
v.                                          )        Cause No. 18SL-CC01239
                                            )
DOMINIC JONES,                              )        Honorable Joseph S. Dueker
                                            )
       Appellant.                           )        Filed: June 9, 2020


                                      Introduction

       Dominic Jones (Jones) appeals the trial court’s summary judgment in favor of

Gateway Metro Federal Credit Union (Gateway) on Gateway’s suit on a promissory note

and Jones’ counterclaim for unjust enrichment. Because we find the evidence in the

summary judgment record did not establish the balance that remains due on the promissory

note, an element of Gateway’s claim, we must reverse the summary judgment in favor of

Gateway on the promissory note, as well as the summary judgment on Jones’ counterclaim.

                                      Background

        On January 25, 2007, Jones executed a promissory note (2007 Note) in the

principal amount of $109,000, and a deed of trust to secure the promissory note. On April

25, 2008, Jones executed a second promissory note in the principal amount of $376,800
(2008 Note), also secured by a deed of trust. Gateway is the holder of both notes and

entered into a subordination agreement to subordinate the 2007 Note and deed of trust to

the 2008 Note and deed of trust.

       Jones subsequently failed to make all payments due under both notes. Gateway

foreclosed on the 2007 Note and purchased the underlying real estate for $103,107.41.

Gateway stated in its motion for summary judgment that it spent $39,532.07 to improve

the property and then sold the property for $264,396.41. Gateway further stated that after

applying the proceeds of the sale, the principal balance due on the 2008 Note was

$333,926.21, and that balance continued to accrue interest.

       Additionally, Gateway obtained a default judgment against Jones in St. Charles

County, Missouri, which Gateway later filed with a district court in Colorado. The

Colorado court issued a writ of continuing garnishment against Jones, through which

Gateway collected $10,515.73. The Circuit Court of St. Charles County later set aside the

default judgment against Jones for lack of personal jurisdiction. The garnishment in

Colorado has not been contested or set aside.

       Gateway filed the present suit to collect on the 2008 Note in March of 2018. In its

statement of uncontroverted material facts attached to its motion for summary judgment,

Gateway claimed that as of May 14, 2019, after applying the proceeds received in the

Colorado garnishment, the principal balance on the 2008 Note was $333,926.21, the

interest balance was $175,306.09, and the late fee balance was $13,350.48. Gateway

attached an affidavit executed by Lisa Ellison (Ellison affidavit), Respondent’s Vice

President of Risk Management, to support these facts. Jones responded that Jones could

not admit or deny these facts without further discovery. Jones counterclaimed for unjust



                                            2
enrichment, arguing that because the Colorado garnishment was based on a void judgment,

the $10,515.73 that Gateway collected is unjustly retained by Gateway. Jones further

argued that the merger doctrine operated to extinguish Gateway’s mortgage interest in the

property, or at minimum, a question of fact remained regarding the applicability of the

merger doctrine.

       The trial court granted summary judgment in favor of Gateway on both Gateway’s

claim and Jones’ counterclaim. The trial court ordered Jones to pay $333,926.21 in

principal, $175,306.09 in interest, $13,350.48 in late fees, and $52,856.44 in attorney’s

fees. This appeal follows.

                                    Standard of Review

       Our review of summary judgment is essentially de novo. ITT Commercial Fin.

Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We use

the same criteria the trial court employed to determine whether the movant has made a

prima facie showing under Rule 74.04(c) that there is no genuine issue regarding the

material facts, and that the movant is entitled to judgment as a matter of law. Id. at 376,

378, 381. Additionally, where the movant has first made a prima facie showing and the

non-movant raises an affirmative defense, we must determine whether the movant has

established that the affirmative defense fails as a matter of law. Id. at 381. We view the

record in the light most favorable to the non-movant, according the non-movant the benefit

of all reasonable inferences from the record. Id. at 376. We take facts set forth by affidavit

or otherwise in support of the motion as true unless contradicted by the non-movant’s

response. Id.




                                              3
                                               Discussion

        Jones raises four points on appeal. In Point I, he argues that the trial court erred in

granting summary judgment on Gateway’s suit on account because the Ellison affidavit

attached to the motion was not based on personal knowledge. In Point II, Jones argues that

the trial court erred in granting summary judgment as a matter of law because the merger

doctrine, which Jones asserted as an affirmative defense, prevents Gateway from obtaining

relief on the 2008 Note. Jones argues in Point III that Gateway failed to prove damages in

that the Ellison affidavit is inconsistent with the promissory note as well as a prior affidavit

Ellison executed, which Gateway attached to its earlier motion for default judgment. In

Point IV, Jones argues that the trial court erred in granting summary judgment in favor of

Gateway on Jones’ counterclaim for unjust enrichment because the Colorado garnishment

judgment is void in light of the St. Charles County court setting aside its default judgment

against Jones. Regarding the summary judgment on Gateway’s suit on account, we find

Point I is dispositive. Thus, we discuss only Points I and IV. 1

                                                 Point I

        Jones argues that the Ellison affidavit is invalid because it is not based on personal

knowledge. We agree that the Ellison affidavit, which was the only evidence offered to

show Jones’ default and the amount due on the 2008 Note, was insufficient to establish a

prima facie right to summary judgment in favor of Gateway.




1
  Point II, regarding Jones’ affirmative defense based on the merger doctrine, is denied as moot. Because we
find Gateway failed to establish a prima facie showing of entitlement to summary judgment, we do not reach
the question of whether Gateway also established that Jones’ affirmative defense failed as a matter of law.
See ITT Commercial Fin. Corp., 854 S.W.2d at 381. Additionally, Point III is denied as moot, as we are
striking the Ellison affidavit on other grounds.

                                                     4
         First, to make a prima facie showing of a right to summary judgment on a suit on

account, Gateway had to establish the following elements by undisputed facts: (1) the

existence of a valid promissory note signed by the maker, (2) a remaining balance due, and

(3) that a demand for payment has been made and refused, leaving the maker in default.

The Bus. Bank of St. Louis v. Apollo Invs., Inc., 366 S.W.3d 76, 80 (Mo. App. E.D. 2012).

Gateway can make such a case “by producing the note admittedly signed by the maker and

showing the balance due.” Sverdrup Corp. v. Politis, 888 S.W.2d 753, 755 (Mo. App. E.D.

1994).

         Here, Gateway attached the 2008 Note to the initial petition, which Jones admitted

was an accurate copy of the note and did contain Jones’ signature. Jones further admitted

he failed to make all of the payments due on the 2008 Note. 2 In order to show the remaining

element, the balance due on the note, Gateway submitted the Ellison affidavit.

         Regarding affidavits attached to motions for summary judgment, Rule 74.04(e)

requires the following:

                  Supporting and opposing affidavits 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. Sworn or
                  certified copies of all papers or parts thereof referred to in an
                  affidavit shall be attached thereto or served therewith.

While an affidavit need not contain a particular “magic phrase” in order to establish that it

is made on personal knowledge, the averments should still demonstrate that the affiant has

personal knowledge of the matters contained in the affidavit. See Scott v. Ranch Roy-L,

Inc., 182 S.W.3d 627, 635 (Mo. App. E.D. 2005); see also May & May Trucking, L.L.C.


2
 He disputed that his lack of payments rendered him in default, arguing that the merger doctrine extinguished
his obligation to pay the balance. However, this issue of fact relates to his affirmative defense and is relevant
only once Gateway makes its initial prima facie showing under Rule 74.04.

                                                       5
v. Progressive Nw. Ins. Co., 429 S.W.3d 511, 515 (Mo. App. W.D. 2014). On the other

hand, “[a]n affidavit which relates information gained from other documents relates

hearsay, not such facts as would be admissible in evidence, and is not sufficient to support

a motion for summary judgment.” Perry v. Kelsey-Hayes Co., 728 S.W.2d 278, 280 (Mo.

App. W.D. 1987) (quoting Allen v. St. Lukes Hosp. of Kan. City, 532 S.W.2d 505, 508

(Mo. App. W.D. 1975)); see also May & May Trucking, 429 S.W.3d at 516 (holding that

affidavit by claims specialist who relied on documents to form her statements contained

hearsay and was not made on personal knowledge). In such a case, if the documents

themselves qualify as business records, a party may submit them through use of a business

records affidavit to avoid any hearsay issue. 3 Section 490.692, (RSMo. 2000).

         Here, the Ellison affidavit opens with the following statements:

                  1. I am employed as a Vice President of Risk Management for
                     [Gateway].
                  2. In my position with Gateway, part of my day-to-day
                     responsibilities include supervising, maintaining and
                     reviewing the records and information pertaining to the [sic]
                     Gateway’s loans. It is within this capacity I have reviewed
                     the records that Gateway maintains with respect to the loan
                     made to [Jones].
                  3. Gateway’s records include a physical loan file and a
                     computer database of acts, transactions, payments,
                     communications, escrow account activity, disbursements,
                     events and analyses with respect to the [sic] Gateway’s loans
                     (the “Loan Records”). The information described herein and
                     referenced below is found in the [sic] Gateway’s business
                     records. The entries in those records are made at the time of
                     the events and conditions they describe either by people with
                     first-hand knowledge of those events and conditions or from
                     information provided by people with such first-hand

3
  Business records are admissible as an exception to the hearsay rule, provided the proponent lays a
foundation through either testimony or affidavit, by a person who has sufficient knowledge of the business
operation and methods of keeping records of the business, who testifies to the records’ identity and mode of
preparation and that the records were made in the regular course of business, at or near the time of the acts,
conditions, or events. Sections 490.680, 490.692, (RSMo. 2000); CACH, LLC v. Askew, 358 S.W.3d 58,
64 (Mo. banc 2012).

                                                      6
                   knowledge. Recording such information is a regular practice
                   of Gateway’s regularly conducted business activities. I have
                   access to the Loan Records with respect to the subject loan
                   and have knowledge of how they are maintained. Based
                   upon my review of those records, I have gained knowledge
                   of the facts set forth herein, and if called upon to testify as a
                   witness, I could competently do so under the penalty of
                   perjury.

The affidavit goes on to describe the loan’s history, including the current balance due in

principal, interest, and late fees. There are no records or other documents attached to the

affidavit.

        We find these statements do not sufficiently establish that Ellison has personal

knowledge or that she is competent to testify to the matters contained in her affidavit, and

as such, the affidavit does not satisfy the requirements of Rule 74.04(e). While Ellison

avers that she has gained knowledge of the facts set forth in her affidavit, it is clear from

the first three paragraphs of her affidavit that her knowledge has come exclusively from

the business records of Gateway that she reviewed. However, rather than attach the records

containing the information Ellison relays, Gateway submitted only this affidavit. Because

it contains information gained from records, rather than Ellison’s personal knowledge, it

relates hearsay and does not sufficiently support a motion for summary judgment. Perry,

728 S.W.2d at 280.

        Gateway argues that Ellison’s position alone as Vice President of Risk

Management, whose day-to-day responsibilities included the review of Gateway’s loan

records, was sufficient to establish she had personal knowledge. Gateway relies on two

cases, both of which we find distinguishable. In Syngenta Crop Protection, Inc. v. Outdoor

Equipment Co., this Court found a former president of the respondent company, who stated

he was familiar with matters relating to the company’s purchases from vendors including

                                              7
the appellant company, had sufficient personal knowledge to support the affidavit. 241

S.W.3d 425, 428 (Mo. App. E.D. 2007). However, personal knowledge did not stem

simply from the affiant’s role as president of the company. Rather, this Court noted that

the affiant “clearly claim[ed] that he had personal knowledge of the business relationship

between [Respondent] and [Appellant].” Id. Conversely, here, Ellison did not claim any

personal familiarity with the loan to Jones, but rather, she stated that her knowledge of the

business relationship between Gateway and Jones came from her review of the business

records pertaining to the loan, which she specifically notes were made by others with first-

hand knowledge.

       Gateway also cites Rustco Products Co. v. Food Corn, Inc., in which the Western

District found an affidavit satisfied Rule 74.04(e), reasoning in part that based on the

affiant’s role as “director of food oils” for the respondent company, he would have had

knowledge of an agreement for the sale of coconut oil to the appellant company. 925

S.W.2d 917, 924 (Mo. App. W.D. 1996). However, the court also noted that the affidavit

opened by stating not only the affiant’s position, but also “that he has personal knowledge

of the facts set forth within the affidavit.” Id. (emphasis added). Moreover, the affidavit

attached invoices to verify the statements in the affidavit, and the appellant had admitted

the authenticity of the invoices. Id. In contrast, there are no documents attached to the

Ellison affidavit, and she fails to state that she has personal knowledge of the contents of

her affidavit. Further, she specifically states that she gained knowledge of the facts from

Gateway’s business records. We do not find a case standing for the proposition that an

affiant’s position alone establishes personal knowledge under such circumstances.




                                             8
         Instead, in summary judgments on suits on accounts, even where affiants claim to

have personal knowledge of the balances due, the parties typically attach records verifying

such balance to the affidavit. See id.; Student Loan Marketing Ass’n v. Raja, 878 S.W.2d

830, 831 (Mo. App. W.D. 1994) (affidavit attached copies of notes and payment records);

Am. Bank of Princeton v. Stiles, 731 S.W.2d 332, 340-42 (Mo. App. W.D. 1987)

(considering several affidavits, finding those stating personal knowledge with copies of

documents attached sufficient and striking portions that refer to records but fail to attach

such records). Likewise, Rule 74.04(e) mandates that any records referred to by the affiant

must be attached to the affidavit. 4

         Here, because Ellison’s statements show that the information she relays comes

solely from the business records of Gateway, records which presumably would have been

admissible based on their status as business records, and because the statements in the

affidavit do not demonstrate her personal knowledge of the matters stated therein, the

Ellison affidavit does not satisfy the requirements of Rule 74.04(e) and should not have

been considered by the trial court. Therefore, Gateway failed to make a prima facie

showing of entitlement to summary judgment, because Gateway did not establish the

balance due on the note.

         Gateway argues that Jones’ admissions regarding the validity of the 2008 Note and

his failure to make payments are sufficient to show a right to judgment as a matter of law,



4
 We note this Court in Wood v. Proctor & Gamble Mfg. Co. suggests that where an affidavit is “based upon
personal knowledge, sworn or certified copies of the records reviewed are unnecessary.” 787 S.W.2d 816,
821 (Mo. App. E.D. 1990). In that case, the affiant stated her affidavit was “based upon [her] personal
knowledge and upon a review of the records of P & G.” Id. at 820. Further, the relevant business records
were already part of the record. Id. at 821. Thus, while the general statement that personal knowledge
obviates the requirement to attach copies of records may not comport with Rule 74.04(e), an issue we need
not address in this case, these particular factual circumstances of Wood also distinguish it from the present
case.

                                                     9
even without the Ellison affidavit. However, a balance due is one of the elements of

Gateway’s prima facie showing. The Bus. Bank of St. Louis, 366 S.W.3d at 80. Jones did

not admit owing a balance on the note, and without any competent evidence of such a

balance, Gateway has not made a prima facie showing of entitlement to summary

judgment. Gateway’s argument that Jones did not properly respond to the motion for

summary judgment with opposing affidavits, and therefore admitted the factual allegations

in Gateway’s motion regarding the balance, is misplaced. “Until the [movant] meet[s] [his

or her] burden under Rule 74.04(c) . . ., [the non-movant] does not have to show anything.”

Williams v. Hubbard, 455 S.W.3d 426, 435 (Mo. banc 2015). Point granted.

                                           Point IV

       Jones argues that the trial court erred in granting summary judgment in favor of

Gateway on Jones’ counterclaim for unjust enrichment. In light of our reversal of summary

judgment on Gateway’s claim, we must also reverse the trial court’s summary judgment

on Jones’ counterclaim under the circumstances here.

       Jones raised a claim of unjust enrichment based on the fact Gateway collected

money through the Colorado garnishment, obtained on the basis of the now-void St.

Charles County default judgment. “The essential elements of unjust enrichment are “(1)

[that] the defendant was enriched by the receipt of a benefit; (2) that the enrichment was at

the expense of the plaintiff; and (3) that it would be unjust to allow the defendant to retain

the benefit.” Roberts v. Roberts, 580 S.W.3d 600, 605 (Mo. App. E.D. 2019) (quoting

Cent. Parking Sys. of Mo., LLC v. Tucker Parking Holdings, LLC, 519 S.W.3d 485, 498

(Mo. App. E.D. 2017)) (internal quotations omitted). Unjust enrichment is based on

equitable principles, and its essence is that the defendant has received a benefit that it would



                                              10
be inequitable for him or her to retain. Id. “[I]f no injustice results from the retention of

the benefit, then no cause of action for unjust enrichment will lie.” Id. (quoting Peel v.

Credit Acceptance Corp., 408 S.W.3d 191, 216 (Mo. App. W.D. 2013)).

         Here, because it remains a disputed fact what balance, if any, is due on the 2008

Note, we cannot say whether the $10,515.73 Gateway collected through the Colorado

garnishment is unjustly retained by Gateway. 5 Thus, summary judgment was inappropriate

on Jones’ claim for unjust enrichment. Point granted.

                                                 Conclusion

         The Ellison affidavit does not establish that Ellison had personal knowledge of the

matters discussed in her affidavit, but rather contains hearsay in that Ellison stated she

gained her knowledge of the facts solely through Gateway’s business records. The

affidavit alone, therefore, does not satisfy the requirements of Rule 74.04(e) and should

not have been considered by the trial court. Without the affidavit, Gateway failed to

establish an element of its claim, and thus failed to make the prima facie showing of

entitlement to judgment as a matter of law under Rule 74.04. As such, summary judgment

on Gateway’s suit on note was inappropriate. Accordingly, because the trial court lacked

evidence regarding what balance, if any, Jones owes to Gateway, summary judgment on

Jones’ claim of unjust enrichment was premature. We reverse and remand the trial court’s

summary judgment on both claims.




5
  We note Jones’ argument that whether he owes any balance or not, the garnishment is unjustly retained
because Gateway collected the money on the basis of a void judgment. However, there is no evidence in the
record that Jones sought to set aside the Colorado garnishment order or sought return of payments through
that court. See Hansen v. Pingenot, 739 P.2d 911, 913 (Colo. Ct. App. 1987) (noting that foreign judgment
entered without personal jurisdiction is void and will not be enforced in Colorado). Relying instead on
equitable principles here necessitates Jones establishing that it is unjust for Gateway to retain the funds, which
we cannot determine at this point in the proceedings.

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                                 _________________________________
                                 Gary M. Gaertner, Jr., Judge


James M. Dowd, P.J., and
Robin Ransom, J., concur.




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