The Docket: Missouri Appeals Court Addresses Challenges to Standing

December 14, 2017

The Docket is a monthly TitleNews Online feature provided by ALTA’s Title Counsel Committee, which reviews significant court rulings and other legal developments, and explains the relevance to the title insurance industry.

Mary W. Giles of the law firm Briner Law Group LLC reviews a recent decision by the Missouri Court of Appeals Western District, which detailed the Uniform Commercial Code application to subsequent holders of promissory notes and their ability to reform deeds of trust securing the promissory notes. Giles can be reached at

Citation: Deutsche Bank National Trust Co. v. Vaughn, 524 S.W.3d 193 (Mo.App.W.D. 2017).

Facts: Jennifer and Wallace Vaughn purchased two pieces of real property. One was located on 77th Terrace in Kansas City, Mo. The other was located on College Avenue in Kansas City, Missouri.  In 2005, the Vaughns refinanced the two properties. One of the deeds of trust executed by the Vaughns during the refinance process described the property it encumbered inconsistently—i.e., the common address and the tax identification number described the 77th Terrace property but the legal description described the College property. Deutsche Bank National Trust Co. (DBNT) filed suit to reform the subject deed of trust to substitute in the 77th Terrace property’s legal description in place of the College property description. DBNT’s suit also included a count for declaratory judgment and prayed that the court declare the subject deed of trust had priority over subsequent conveyances of title given that title to the 77th Terrace property had been conveyed several times since the Vaughns had refinanced it, but only to and from Wallace Vaughn related entities. The trial court ruled in favor of DBNT and reformed the subject deed of trust to include the legal description for the 77th Terrace property and it also declared that the subject deed of trust had priority, despite the intervening transfers of title. Wallace Vaughn appealed the trial court’s judgment.

Holding: Wallace Vaughn raised six points on appeal. Five of the six are evidentiary challenges and will not be addressed for purposes of this docket. The single point on appeal that will be addressed is Wallace Vaughn’s challenge to the trial court’s holding that DBNT had standing to proceed with its reformation and declaratory judgment action. The court in Vaughn affirmed the trial court’s ruling that DBNT had standing to reform and enforce the promissory note and deed of trust and in doing so, it detailed the application of the Uniform Commercial Code (UCC) to promissory notes secured by deeds of trust, who has standing to enforce them, and the relevant facts for each step of the analysis.

Importance to the title industry: A challenge to standing is the go-to argument for many borrowers contesting a subsequent holder’s ability to reform loan documents. This case is important and useful to the title industry because the court’s holding in Vaughn clearly and concisely details the UCC’s application to subsequent holders of promissory notes and their ability to reform deeds of trust securing the promissory notes. Vaughn provides title litigators in Missouri a strong case, which rules in favor of a subsequent holder of a promissory note, to defeat the ever-so-often arising challenges to standing.

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