Eastern District affirms, remands trial court’s judgments in divorce dispute

The Missouri Court of Appeals Eastern District reversed part of the St. Louis County Circuit Court’s ruling in a dispute over a marital settlement agreement, finding the lower court misread the contract’s language. Judge James M. Dowd authored the opinion, joined by Judge Rebeca Navarro-McKelvey and Judge Gary M. Gaertner Jr.

In a decision issued Feb. 17, the court held that the trial court erred in concluding that a mortgage forbearance period did not trigger a contractual sale provision and further found that attorney’s fees should have been awarded, while affirming the lower court’s ruling regarding insurance proceeds.

The issue goes back to Dec. 4, 2020, when the St. Louis County Circuit Court entered a dissolution judgment for the marriage between husband William Troupe and wife Deborah Troupe. The judgment included a marital settlement agreement, or MSA.

The two owned a house in Black Jack, where the wife would continue living, as well as a second rental house on the same property. The wife would manage and rent out the second house and keep the rental income. Both parties were responsible for half of the mortgage payment, which the husband would send his portion to the wife.

The MSA included a provision that said if the wife failed to make her one-half of the mortgage payment for 90 days or longer, the husband would have the option to sell the property.

In early 2020, the wife lost her job as a school bus driver due to the COVID-19 pandemic. In January 2021, she enrolled in a mortgage forbearance program offered by the lender under a COVID-19 relief plan that would last from January 2021 to August 2021. During that time, the wife stopped making mortgage payments and did not tell the husband she had enrolled in forbearance while he continued sending his half of the mortgage. According to court documents, the wife admitted she kept the husband “out of the loop” because she did not want him to sell the property.

On April 14, 2023, the husband filed a motion to enforce the dissolution decree after learning that the wife had failed to make mortgage payments for six months in 2021 and kept his contributions.

He wanted to sell the Black Jack property on the grounds that his contractual right to sell the property under the MSA was triggered after the wife failed to make mortgage payments for at least 90 days.

Also at issue was $88,357.69 worth of insurance proceeds from November 2022, when a vehicle struck the rental home. Both the wife and the husband were named insurers; the wife initiated the claim and used the proceeds to repair the damage. However, the husband claimed the wife used the insurance proceeds without his consent. He sought half the insurance proceeds, escrow of the remaining funds and equal division upon sale.

The husband also requested attorney’s fees under the MSA, which contained a fee-shifting provision if counsel had to be hired to enforce the agreement.

The trial court ruled in July 2024 that the wife had not breached the MSA by failing to pay during forbearance because the loan was not technically delinquent. It did, however, find that the wife breached the agreement when she retained the husband’s payments and failed to let him know about the forbearance. She was ordered to pay $13,256.25 in damages. The husband was also found by the court to have breached the MSA by occasionally making slightly late payments.

On the insurance issue, the trial court found that the husband was not entitled to reimbursement since the wife used the insurance proceeds for repairs. No attorney’s fees were awarded to either party.

The husband appealed, arguing that the lower court misinterpreted the sale trigger in the MSA, that it was wrong to deny the attorney’s fees, it erred regarding the insurance proceeds, and it was wrong in finding him in breach for the late mortgage payments.

The appeals court found that the trial court erred when it did not find the wife in breach of the MSA for not making the mortgage payments in 2021.

“We find dubious the trial court’s rationale that Wife’s enrollment in the forbearance program meant she did not breach because the mortgage was never delinquent for over ninety days. The word ‘delinquent’ or its equivalent does not appear in the contract and courts are not permitted to supply language,” the opinion stated, referencing Textor Constr., Inc. v. Forsyth R-II Sch. Dist. “The MSA merely posits whether or not Wife failed to make the mortgage payments for ninety days or more.”

The appellate court ordered the husband be granted the right to sell the property, with the authority to hire a real estate agent, set listing terms and negotiate offers. Any offer of $800,000 or more — the agreed fair market value in the MSA — can be accepted; offers under $800,000 require the wife’s written consent.

The trial court was also found to be in error when it did not grant attorney’s fees on the reasoning that both the wife and husband breached the MSA in some manner. The higher court held that the wife had committed multiple material breaches, from failing to make mortgage payments and concealing the forbearance, to retaining the husband’s contributions.

Since the husband was required to hire an attorney to enforce the MSA, and the contract’s plain language states that once enforcement litigation was required, the breaching party must pay fees, the case was remanded for the trial court to determine the reasonable amount of attorney’s fees owed to the husband.

The appeals court did side with the trial court regarding the insurance proceeds since the proceeds were used for their intended purpose.

“While the MSA may be silent on the specific question … that is, how to handle proceeds from an insurance claim for damage to the property. Its silence here is merely a placeholder for common sense,” stated the opinion. “The trial court reached a common sense conclusion that Wife only made the repairs that were the subject of the insurance claim to make the rental home habitable once again and used the money as intended.”

The case is Troupe v. Troupe, Case No. ED113119.