In the Missouri Court of Appeals
Eastern District
DIVISION ONE
MICHAEL KLENC and SUSAN KLENC, ) No. ED102819
)
Appellants, ) Appeal from the Circuit Court
) of the City of St. Louis
vs. )
) Hon. Calea F. Stovall-Reid
JOHN BEAL, INCORPORATED, )
) Filed:
Respondent. ) December 8, 2015
Michael and Susan Klenc appeal from the summary judgment entered in favor of John
Beal, Inc. (“JBI”), in which the trial court found that the Klencs lacked standing to sue JBI for
breach of a contract. We affirm the judgment as modified.
The Klencs own one of three units at a condominium building; the other units are owned
by Eric Ausubel and Helen Becker. The condominium declarations and by-laws provide as
follows. Each unit owner is a member of the Raymon Condominium Association (“the
Association”), a nonprofit corporation that conducts no business. The Association is the
governing body for the maintenance, administration and operation of the condominium property.
It has a Board of Managers, which appears to consist of Ausubel as the president and Becker as
the secretary and treasurer.
All the unit owners own the common elements of the condominium—defined as any
property that is not part of one of the units—as tenants in common in accordance with their
respective percentages of ownership interests as set forth in the declarations. The Klencs have a
36% ownership interest in the common elements, and each other unit owner has a 32%
ownership interest therein. The unit owners pay for expenses associated with the common
elements—maintenance, repair, replacement, administration and operation—in proportion to
their percentage of ownership interest. These common expenses are paid to the Association.
Maintenance, repairs and replacement of the common elements are to be furnished by the
Association.
The Association contracted with JBI to provide brickwork on three of the building’s
exterior walls and the chimney, which are common elements. The contract is a two-sided form
proposal prepared and submitted by JBI to “Raymon Condo Assoc./ Helen Becker.” The front
side describes the work and the price. At the bottom is a place for the “Owner’s Acceptance of
Proposal,” which indicates that the terms and conditions “on the reverse side” are accepted.
Becker and Ausubel signed the proposal on behalf of the Association. On the reverse side, the
first listed paragraph states:
1. Hereafter, “Owner” and “Your” mean all Owners of the property. If less
than all the Owners sign this agreement, the person(s) signing this agreement
expressly represent that they are authorized by all Owners to sign on their
behalf and bind them to these terms.
After the work was completed and paid for, the Klencs filed a petition against JBI
alleging breach of contract. They alleged that the term “owner” in the contract meant all owners
of the property. They claimed that JBI failed to perform the work as specified in the contract or
in a workmanlike manner. According to their affidavits, Ausubel and Becker found JBI’s work
to be in compliance with the contract. The Klencs sought damages in the amount of $3,358
(which allegedly represented 36% of the amount the Association paid JBI) and $750 in costs the
Klencs incurred cleaning up mortar JBI had left behind. JBI moved to dismiss the petition on the
ground that the Klencs lacked standing to maintain this action and failed to join the Association
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as a necessary and indispensable party. In response, the Klencs were granted leave to file an
amended petition. Therein, they restated their status as an “owner” under the contract, made
similar allegations regarding breach and added a claim against the Association for breach of its
fiduciary duty to join the lawsuit as a plaintiff in order to protect the property rights of all the
unit owners. JBI then filed a motion for summary judgment, arguing again that the Klencs
lacked standing. This time, the court granted the motion. After the Klencs voluntarily dismissed
their claim against the Association, the court entered a final judgment, granting summary
judgment in JBI’s favor. This appeal follows.
First, we note that disposing of a case for lack of standing is not a disposition of the
merits of the case. Thus, it is not appropriate to enter summary judgment—an inherently merits-
based disposition—when the party seeking relief lacks standing. See Borges v. Missouri Public
Entity Risk Management Fund, 358 S.W.3d 177, 180 (Mo. App. W.D. 2012). “As a result, even
if the standing argument is raised in a motion for summary judgment or other motion in which
matters outside the pleadings are considered, the court must still enter dismissal as opposed to
summary judgment.” Id. Regardless of the procedural context, our review of the court’s
determination regarding standing is de novo, and the party seeking relief bears the burden to
establish standing. See id. at 181; see also Matter of Adoption of E.N.C., 458 S.W.3d 387, 398
(Mo. App. E.D. 2014). We determine standing as a matter of law on the basis of the petition and
the undisputed facts. Matter of Adoption of E.N.C., 458 S.W.3d at 398.
“The essence of standing is that the party seeking relief has a personal interest at stake in
the dispute, even if that interest is attenuated, slight or remote.” Roberts v. BJC Health System,
391 S.W.3d 433, 438 (Mo. banc 2013). The party seeking relief must show some legally
protectable interest in the litigation so as to be directly and adversely affected by its outcome. Id.
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One is “interested” when he or she has a legal right or liability that will be directly affected by
the judgment. Matter of Adoption of E.N.C., 458 S.W.3d at 398.
The Klencs argue that the Condominium Property Act establishes their standing in this
lawsuit. That statute provides that “[w]ithout limiting the rights of any unit owner, actions may
be brought in the names of the members of the board of managers on behalf of two or more of
the unit owners, as their respective interests may appear, with respect to any cause of action
relating to the common elements or more than one unit.” Section 448.190.1 (applicable to
condominiums created before September 28, 1983); see also Uniform Condominium Act,
Section 448.3-102.1(4) (applicable to condominiums created after September 28, 1983) (unit
owners’ association has power to “institute, defend, or intervene in litigation . . . on behalf of
itself or two or more unit owners on matters affecting the condominium”). The parties argue
about which statute is applicable and dispute whether this condominium was created at the time
its declarations were made (September 19, 1983) or at the time of the Association’s
incorporation (January 6, 2011). We need not resolve this dispute however because these
statutes only address the standing of an association to sue on behalf of the unit owners, which is
not questioned in this case. And while the rights of unit owners are expressly preserved in
section 448.190, nothing in either statute actually confers standing on the unit owners. Rather,
standing in this breach of contract case is determined by whether the Klencs are a party to the
contract.1
Only a party or a third-party beneficiary of a contract may maintain a cause of action for
breach of that contract. Verni v. Cleveland Chiropractic College, 212 S.W.3d 150, 153 (Mo.
1
Similarly, the Klencs’ standing to bring this breach of contract claim does not depend on their status as tenants in
common of the common elements. The cases they cite in support of that basis for standing were not breach of
contract cases, in which standing depends on the plaintiff’s interest in the contract. See Poetz v. Klamberg, 781
S.W.2d 253, 256 (Mo. App. E.D. 1989) (co-owner of car not precluded from seeking recovery for damages to car
after collision with defendant); Winslow v. Sauerwein, 285 S.W.2d 21, 25 (Mo. App. 1955) (one owner of jointly
held easement could maintain action to enjoin interference therewith).
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banc 2007. To be bound as a third-party beneficiary, the terms of the contract must clearly and
directly express intent to benefit that party or an identifiable class of which the party is a
member. Id.; see also Drury Company v. Missouri United School Insurance Counsel, 455
S.W.3d 30, 34 (Mo. App. E.D. 2014). Where the contract lacks an express declaration of that
intent, there is a “strong presumption” that the third party is not a beneficiary. Verni, 212
S.W.3d at 153. “Third party beneficiary rights depend on, and are measured by, the terms of the
contract between the promisor and the promisee.” Drury Company, 455 S.W.3d at 34. We must
not speculate as to whether the contracting parties intended to benefit the third party. Bear Foot,
Inc. v. Chandler, 965 S.W.2d 386, 388 (Mo. App. E.D. 1998).
Here, the Klencs claim that paragraph one on the reverse side of the contract expresses
the intent that all the owners of the common elements were third party beneficiaries thereof. We
disagree. This preprinted form language in JBI’s proposal does not express anything clearly or
directly about these parties’ intent as to who benefits from the contract. Rather, in the context of
this case—where an entity is the party who entered the contract—the language in that paragraph
merely indicates that the individual who signed the contract (since an entity cannot sign a
document) represents that it had authority to sign for the Association. Moreover, nothing in the
contract indicates that JBI intended to assume a direct obligation to anyone other than the
Association. “Third party beneficiary status depends not so much on a desire or purpose to
confer a benefit on the third person, but rather on an intent that the promisor assume a direct
obligation to him.” Chesus v. Watts, 967 S.W.2d 97, 106 (Mo. App. W.D. 1998). Absent a clear
expression of such intentions, we cannot conclude that the Klencs were third party beneficiaries
for purposes of standing to sue for breach of this contract.
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Therefore, we affirm the trial court’s conclusion that the Klencs lacked standing and enter
the order the circuit court should have entered, dismissing without prejudice the Klencs’ petition.
See Borges, 358 S.W.3d at 184.
ROBERT G. DOWD, JR., Presiding Judge
Mary K. Hoff, J. and
Roy L. Richter, J., concur.
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