In Enderle v. Gercken Kelsey LLC, WD 87646, the Missouri Court of Appeals, Western District (Ahuja, J.), addressed a multi-front attack on a real-estate transaction—undue influence, lack of capacity, illusory consideration, and unconscionability—and clarified several doctrines that routinely present in contract rescission litigation.
Background
Seller and Buyer were close high-school friends who lost touch but reconnected decades later. After reconnecting, Seller approached Buyer, who was a developer, about purchasing his 5-acre property. After an earlier 2018 purchase agreement expired, the parties executed a package of documents on November 12, 2019, the same day as the seller’s scheduled surgery. The documents executed included a sale agreement and deed, a $200,000 note payable to Seller after four years, a $1/month leaseback of the property to Seller for four years for $1 a month, and a separate $50,000 note payable to Buyer (rolling in Seller’s prior debts and allowing additional borrowing). Later, Seller’s son was appointed as Seller’s guardian/conservator and sued to unwind the transaction, alleging undue influence, lack of mental capacity, and unconscionability.
The trial court: (1) rejected the claim of unconscionability as a matter of law; (2) directed a verdict for the buyer on the claim of undue influence; and (3) submitted the issue of capacity to the jury, which found for the Buyer. The Western District affirmed, and its analysis is most valuable for the legal principles it strongly reaffirms.
1) Undue influence: a “good friend” is not automatically a confidential relationship
Seller’s guardian’s first challenge in seeking rescission based upon undue influence was foundational: a presumption of undue influence requires proof of a confidential or fiduciary relationship. The Court emphasized that the “confidential relationship” inquiry is not about warmth, loyalty, or gratitude, but focuses on reliance and decision-making authority.
Missouri recognizes that people often naturally trust close friends, relatives, and helpful neighbors—but that kind of commonplace trust does not ordinarily establish the confidential relationship required for undue influence. What matters is evidence that one party handled the other’s affairs, made decisions for the other, or that the other party regularly deferred in a way that demonstrates reliance, not just affection.
Here, the record didn’t show that the Buyer managed the Seller’s finances or that the Seller ever ceded decision-making. Even the prior friendship was diluted by decades of little contact. Without the requisite relationship, Seller’s guardian could not establish the presumption—and the broader “totality of circumstances” theory also failed because the evidence did not show coercion, over persuasion, or an inability to resist.
The Court also treated several “suspicious” circumstances as insufficient on this record: the Seller’s gullibility in sending money to online contacts did not equal inability to exercise free will; and signing documents shortly before surgery was not undue influence absent evidence the Seller couldn’t postpone, refuse, or seek advice. The Court also rejected Guardian’s claim that Seller did not understand that the transaction involved the sale of his property noting that the discussions relating to the sale of the property occurred over more than a year, often initiated by Seller. Missouri law presumes parties know what they sign and have a duty to read contracts.
Takeaway: If you’re pleading undue influence in a contract case, you need more than closeness. You need evidence of reposed trust + reliance that looks like deference, management, or control.
2) Consideration and “illusory promise”: the offset/reconveyance provision didn’t sink the deal
Seller’s guardian argued the $200,000 note payable to Seller after 4 years was illusory because the note’s provisions allowed Buyer to reconvey the property to Seller and extinguish Buyer’s payment obligation at any time before the end of the 4 years. The Court refused to view that clause in isolation. Looking at the full set of November 2019 agreements, the Court concluded the provision did not allow Buyer “to escape” all meaningful obligations or deprive Seller of the bargain’s benefit.
Among other things, reconveyance would have practical and legal consequences (including extinguishing the leaseback arrangement), and the separate $50,000 note obligations would survive. The transaction also included ongoing obligations on the part of Buyer that could not be undone retroactively. The bottom line: the clause did not render the overall transaction illusory or unsupported by consideration.
Takeaway: “Illusory” arguments often fail when courts read the documents as an integrated transaction rather than attacking a single clause in a vacuum.
3) Capacity: In rescission cases, the challenger bears the burden if proof
Seller’s guardian attacked the jury instructions, arguing they failed to place the burden of proof on Buyer to prove capacity. The Western District disagreed and reaffirmed the general rule in Missouri contract rescission cases:
- Contracting parties are presumed to have capacity.
- The party seeking rescission based on incapacity bears the burden of proving lack of capacity.
The court distinguished probate-context cases where the burden may fall on proponents of testamentary or trust documents, explaining that those rules do not displace the well-settled allocation of proof in contract rescission litigation.
Takeaway: If you are the party seeking to unwind a contract for incapacity, understand that you carry the proof burden to prove lack of capacity and build the record accordingly.
4) Unconscionability: A question of law for the court, not the jury
Finally, Seller’s guardian argued the jury, not the trial court, should have decided the issue of unconscionability. The Western District held the opposite: unconscionability is for the court to decide as a matter of law, even if the analysis may be fact-specific. And where the dispute is about what contract provisions mean and how they operate, that is contract interpretation, also a legal question for the judge. The Western District observed that the Supreme Court in State ex rel. Vincent v Schneider, 194 S.W. 3d 853 (Mo 2006) found § 400.2-302 instructive even though guiding the analysis of unconscionability of a real estate transaction The Western District emphasized that even though a determination of unconscionability may require a fact specific inquiry, such issues are for the court, and not a jury to decide. The Western District further cited § 400.2-302(1), which expressly provides that the question of unconscionability shall be decided by “the court as a matter of law.”
Takeaway: Don’t expect to “jury” unconscionability in Missouri. The court decides that issue and attempts to repackage contract-interpretation issues as jury fact questions are likely to fail.
Practical implications
For litigators, Enderle is a clean reminder of four points that win (or lose) these cases:
- Undue influence needs actual reliance, not just friendship.
- Consideration/illusory claims rise or fall on the full transaction.
- Rescission for incapacity puts the proof burden on the challenger.
Unconscionability is for the court to decide, period.
