Burney v. McLaughlin
Missouri Court of Appeals
63 S.W.3d 223 (2001)
Gary and Martha Burney (plaintiffs) and Gary and Patsy Snadon (plaintiffs) owned two adjacent parcels on which the plaintiffs constructed a hotel. C & J Properties, Inc. (C & J) purchased the hotel and the front parcel from the plaintiffs for $3.3 million. C & J paid nearly $1 million in cash, gave a deed of trust for $1.1 million to Ozark Mountain Bank (OMB), and gave the plaintiffs a note for $1.2 million secured by a second deed of trust. The next year, C & J purchased the rear lot from the plaintiffs and borrowed an additional $3.2 million from Bank of America, N.A. (Bank) (defendant) to refinance the original OMB loan and continue construction on the hotel. As part of C & J’s loan transaction, on June 23, 1993, C & J borrowed money from the Bank against the front parcel and paid the balance of the note secured by the first deed of trust with OMB. That same day, the plaintiffs executed a new deed of trust with the Bank, subordinating the earlier note taken by plaintiffs on C & J’s original purchase of the front parcel. In 1994, C & J gave the Bank a new deed of trust covering both parcels as security for the new loans. After encountering financial difficulties, C & J negotiated eight agreements with the Bank that modified the existing loan structure. The modified agreements, entered from 1993 to 1999 and recorded, extended the maturity date, increased the interest rate, and otherwise changed the terms of the loan. The plaintiffs did not consent to and were unaware of the modification to the terms of the subordination agreement. C & J quickly defaulted on the loan, due in part to the increased interest under the modified agreements. Two days before the Bank’s scheduled foreclosure sale, the plaintiffs sued the Bank for equitable relief. The plaintiffs argued that the agreements, as modified, materially and adversely affected the subordination agreement made between the plaintiffs and the Bank on June 23, 1993. As a result, the plaintiffs claimed a security interest on the front parcel superior to the Bank’s interest under the modified agreements. The trial court ruled in favor of the plaintiffs. The Bank appealed.
Rule of Law
Holding and Reasoning (Barney, C.J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 174,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.