Missouri Court Voids Bank’s Deed of Trust — And What It Means for Protecting Injury Settlement Money

When a Missouri appeals court issued its ruling in Cerruti v. Bank of Odessa on March 24, 2026, it may not have made headlines — but for anyone who has placed assets in a trust, the decision carries a powerful message: done right, a trust can be one of the strongest shields your money has.

What Happened

Dennis Hess and Lena Hayes married in 2005 and, like many couples planning for the future, took steps to protect what they had built together. In 2008, Lena created the Lena M. Hayes-Hess Revocable Trust, and the couple transferred their North Kansas City property into it. It was a smart move — placing assets in a trust is one of the most common ways families safeguard real estate and other property for their heirs.

That same year, the couple borrowed $345,000 from the Bank of Odessa. To secure the loan, the Bank prepared a Deed of Trust on the property. Here is where things went wrong — for the Bank. Instead of naming Lena as Trustee as the grantor on the deed (which is required by Missouri law), the Bank’s loan secretary listed the Trust itself as the grantor. It seems like a small paperwork detail. It turned out to be a fatal one.

Dennis died in 2009. Lena passed away in 2015, with the loan still unpaid. When the Bank moved to foreclose on the property, Lena’s successor trustee — her stepdaughter Michelle Cerruti — fought back. She argued the Deed of Trust was legally void from the start. The trial court agreed and voided the Bank’s security interest entirely. The Bank appealed, raising nine separate arguments. The Missouri Court of Appeals Western District affirmed the ruling in full.

What the Court Decided

The appeals court did not have to wade deep into the legal weeds. The Bank’s appeal had a fatal flaw of its own: it only challenged one of several independent reasons the trial court gave for voiding the Deed of Trust. Under Missouri appellate rules, when a lower court gives multiple grounds for its ruling, an appellant must challenge every single one. Miss even one, and the appeal fails — because the unchallenged grounds stand on their own.

The court also confirmed that a trust, by itself, cannot be a grantor on a deed. A trust is not a legal entity capable of owning or conveying property in its own name. Only the trustee — the human being (or institution) managing the trust — can sign as grantor. The Bank knew it was dealing with trust property, had access to the trust documents, and still got the paperwork wrong. When it tried years later to fix the error through a legal remedy called “reformation,” the court said no.

Why This Matters for Injury Victims and Their Families

This case may look like a banking and real estate dispute on the surface, but it has direct implications for personal injury and wrongful death clients — and here is why.

When someone receives a significant personal injury settlement, one of the smartest things they can do is place that money into a trust. Trusts offer real protection. Many of them include a spendthrift clause — a provision that prevents trust assets from being pledged as collateral or reached by a beneficiary’s creditors. In Cerruti, the Trust had exactly that kind of clause, and it was one of the reasons the Bank’s attempt to use the trust property as loan collateral was legally invalid. The court’s ruling reinforces that when a trust is set up correctly with the right protective provisions, it can hold firm even when a creditor tries to reach those assets years later.

The case is also a reminder about what happens to assets — including settlement proceeds — when a loved one passes away. Lena died before this dispute was fully resolved. It was her successor trustee, her stepdaughter, who had to step in and fight for years to protect the trust property from the Bank’s foreclosure. In wrongful death cases, families are often left managing a sudden and unexpected estate. Having a properly drafted trust with a clear successor trustee in place can make all the difference in protecting what was left behind.

Finally, the Bank’s loss on appeal teaches an important lesson about litigation. It is not enough to win one argument — you have to address every issue the other side raises. The Bank raised nine points on appeal but failed to challenge all the grounds the trial court relied on. That procedural misstep ended the case before the court even reached the substance of most of the Bank’s arguments. For anyone involved in litigation, this is a reminder that the details of how a case is handled — not just the facts — can determine the outcome.

Takeaway

A trust is only as strong as the documents behind it, and the law only protects you when those documents are done right. If you have received a personal injury settlement, lost a family member, or are trying to protect assets for the future, understanding how to properly structure your legal protections matters enormously. The experienced attorneys at TJH Legal are here to help you navigate those decisions. Contact us today for a consultation.