Tuesday, January 11, 2011
Sewer Connection Fee Ordinance was not an Unconstitutional Special Law
By W. Dudley McCarter
In 1996, the City of Sullivan developed a plan to improve its sewer system and install new sewer lines in areas that previously had no sewer access. The City submitted a $3.3 million dollar revenue bond to fund the sewer project, which was approved by the voters. The City adopted an ordinance that established higher sewer connection fees for properties located in areas that did not have sewer service prior to the 1996 improvement project. The sewer connection fees for properties in the new area would be $3,750 (for a gravity connection) or $4,250 (for a pressure connection), compared to connection fees in the existing sewer system area of $60.00 or $75.00, respectively. Judith Ann Sites, who owned property located in an area that previously did not have sewer access, challenged the ordinance as a “special law,” in violation of Missouri Constitution article 3, §40(30). When Sites refused to pay the connection fee, the City filed suit against her. She asserted that the ordinance wrongly created an improper subclass within the larger class of “all new sewer connections” by treating disparately sewer connections for properties located in the newly sewered areas. The trial court entered judgment in favor of the City and the Supreme Court of Missouri affirmed in City of Sullivan v. Sites, No. SC90866 (Mo.banc 2010).
Article 3, §40(30) provides that “[t]he General Assembly shall not pass any local or special law…where a general law can be made applicable. This prohibition against special laws also extends to city ordinances. McKaig v. Kansas City, 256 S.W.2d 815, 816 (Mo.banc 1953). A general law is a statute that relates to persons or things as a class, whereas a special law relates to particular persons or things of a class. City of Springfield v. Sprint Spectrum, L.P., 203 S.W.3d 177, 184 (Mo.banc 2006). Consideration for whether a law is special or general includes examination of whether the categories created under the law are open-ended or fixed, based on an immutable characteristic. Id. But whether a law implicates a geographically fixed category is not the dispositive factor in deciding if it is an unconstitutional special law. The class at issue in the sewer connection fee ordinance is fixed according to location, but this does not render the ordinance unconstitutional, unless there is no substantial justification for creating the class. Id at 185-86.
Here, the evidence established substantial justification for creating a class of newer sewer connections that was required to pay higher connection fees before accessing new portions of the City’s sewer system. The higher connection fees were imposed in a way that embraced all of the class to which the higher fees naturally related. The creation of the class contemplated an important government function. The class’s impact extended beyond the geographic bounds of the properties in the class. The sewer connection fee ordinance was an important component of the City’s overall efforts to implement its sewer improvement project, which extended sanitary sewer services to more households and provided needed improvements to the City’s sewer infrastructure. The imposition of higher fees for the properties connecting to the new portions of the City’s sewer system contributed to the City’s ability to fund the sewer project as a whole. Considering the facts of this case, the City was justified in creating the class of new sewer connections charged higher connection fees.
TRESPASS RESULTS FROM THE UNAUTHORIZED
ENTRY UPON LAND, EVEN IF NO DAMAGE IS DONE
Jerald and Jilana Grossman filed suit against their neighbors, Steve and Vicki St. John, for injunctive relief and damages after the St. Johns erected a fence on the Grossman’s property. At trial, Steve St. John testified that, before erecting the fence, he had cleared out debris, laid sod, planted bushes and removed a tree from the area that he later enclosed with the fence. He further testified that the Grossmans never said anything about the work that St. Johns did in that disputed area of property and he was not aware that the property belonged to the Grossmans. The property survey that was entered into evidence showed that the disputed area belonged to the Grossmans. The trial court entered judgment in favor of the St. Johns, but the Court of Appeals reversed in Grossman v. St. John, No. WD 71882 (Mo.App. W.D. 2010).
“Trespass is the unauthorized entry by a person upon the land of another, regardless of the degree of force used, even if no damage is done, or the injury is slight.” Ogg v. Mediacom, LLC, 142 S.W.3d 801, 807 (Mo.App. W.D. 2004). Liability for trespass exists “whether or not [the trespass was] done in good faith and with reasonable care, in ignorance or under mistake of law or fact.” Kitterman v. Simrall, 924 S.W.2d 872, 878 (Mo.App. W.D. 1996). “In Missouri, consent to trespass may be implied from conduct.” Sinopole v. Morris, 743 S.W.2d 81, 86 (Mo.App. E.D. 1987). “Implied consent may be shown from custom, usage or conduct, and it continues until revoked…” St. Louis County v. Stone, 776 S.W.2d 885, 889 (Mo.App. E.D. 1989). While the Grossmans impliedly consented to the St. Johns’ use and maintenance of the property, it cannot be inferred or implied that they consented to the construction of the St. Johns fence. Once the St. Johns began erecting their fence, the previous implied consent was exceeded in scope. For trespass, “the law simply presumes that damage resulted.” Simpkins v. Ryder Freight Sys., Inc., 855 S.W.2d 416, 422 (Mo.App. W.D. 1993). Accordingly, the proof of trespass entitles the victim to damages. If there is no action “present loss of any measurable kind,…nominal damages are recoverable. Id. at 423.
WHETHER THE WORKERS’ COMPENSATION LAW DIVESTS
CIRCUIT COURT OF SUBJECT MATTER JURISDICTION MUST
BE RAISED AS AN AFFIRMATIVE DEFENSE
Larry Treaster was employed by Mokan Transit Concrete, as a concrete truck driver. While pouring concrete at a job site, the “drum” of the truck stopped operating. Treaster took the truck back to the Mokan yard, where he was instructed by his supervisor, Steve Betts, to pour water, through a hose, into the drum. When Treaster was on top of the drum with the hose, the truck’s drum rotated suddenly, throwing Treaster to the ground below. Treaster filed a personal injury action against Betts. Betts filed a motion to dismiss contending that Treaster’s claims were pre-empted by the Missouri Workers’ Compensation Law, §287.120 RSMo. The Circuit Court granted Betts’ motion to dismiss, finding that it lacked subject matter jurisdiction over this cause of action. Treaster appealed and the Court of Appeals reversed in Treaster v. Betts, No. WD 71654 (Mo.App. W.D. 2010).
After the trial court’s ruling in this case, the Missouri Supreme Court made it clear that the Workers’ Compensation Law’s exclusivity defense is not a matter of subject matter jurisdiction, but rather constitutes an affirmative defense. See McCracken v. Wal-Mart Stores E., LP, 298 S.W.3d 473 (Mo.banc 2009). The Missouri Supreme Court in McCracken considered the same issue that is currently before us: whether the Workers’ Compensation Law divests the Circuit Court of subject matter jurisdiction over claims that fall within the statutes’ purview. Id. The unequivocal answer is no. Id. The issue of whether a claim is covered by the workers’ compensation statutes “should be raised as an affirmative defense to the circuit court’s statutory authority to proceed with resolving his claim.” Id.
The case of Fortenberry v. Buck, 307 S.W.3d 676, 679 (Mo.App. W.D. 2010), provides a succinct explanation of the path before the parties upon remand. In a motion for summary judgment based on the affirmative defense of the workers’ compensation statutes, Betts has the burden to show there is no genuine issue of material fact in dispute with respect to the following elements: (1) Treaster’s claim is based on an accident arising out of and in the course of Treaster’s employment; Id.; see §287.120; (2) Betts was acting as an employee of Mokan, see Fortenberry, 307 S.W.3d at 679; and (3) Betts was acting pursuant to a non-delegable duty that Mokan owed to its employees. Id.
If Betts meets this threshold, the burden will shift to Treaster. In order to avoid summary judgment, Treaster would need to show that there is a genuine issue of material fact as to whether Betts’ conduct falls within an exception to co-employee immunity. For example, Treaster claimed below that Treaster’s conduct satisfies the “something more” exception to co-employee immunity. See Fortenberry, 307 S.W.3d at 679. The case is remanded with instructions to proceed consistent with the principles set forth in this opinion.
SPOLIATION DOCTRINE REQUIRES
PROOF OF FRAUD, DECEIT OR BAD FAITH
Martin Prins was stopped by a Missouri State Highway Patrol trooper and arrested for driving while intoxicated. The trooper’s vehicle was equipped with two video cameras, which recorded both audio and visual events. The cameras recorded Prins’s operation of his vehicle and his interactions with the trooper after he was stopped. Following an administrative hearing, Prins was notified that his driving privileges would be suspended. Prins then filed a petition for trial de novo and requested a copy of the video that recorded his arrest. The video could not be produced, because the Highway Patrol computer system had purged it. The trooper testified that he attempted to retain the video in the computer system, but was misinformed about how the software worked. He believed at the time that if he classified the video as a driving while intoxicated offense, the video would not be purged from the system. Later, he found out, however, that a particular check box had to be marked to retain the video in the system and because he had not marked that box, the video was automatically purged from the system after 90 days. The trooper acknowledged that the destruction of the video was in violation of the Highway Patrol policy, but testified that he did not intentionally delete it. Because the video was destroyed, the trial court did not allow the introduction of any evidence or testimony from the trooper regarding his stop of Prins’ vehicle and also found in favor of Prins on the charges against him. The Missouri Court of Appeals reversed, however, in Prins v. Director of Revenue, No. WD71833 (Mo.App. W.D. 2010).
Missouri courts have long recognized the spoliation doctrine, which pertains to the destruction or significant alteration of evidence. Baldridge v. Director of Revenue, 82 S.W.3d, 212, 222 (Mo.App. W.D. 2002). If a party intentionally spoliates evidence, the party is subject to an adverse evidentiary inference. Id. at 223. “The standard for application of the spoliation doctrine requires that ‘there is evidence of an intentional destruction of the evidence indicating fraud and a desire to suppress the truth.’” Id. (Quoting Moore v. General Motors Corp., 558 S.W.2d 720, 733 (Mo.App. 1977)). Although in some circumstances, the destruction of evidence without a satisfactory explanation may give rise to an unfavorable inference against the spoliator, the party seeking the benefit of the doctrine must still show that the spoliator destroyed the evidence, “under circumstances manifesting fraud, deceit or bad faith.” Id. Simple negligence is insufficient to warrant the application of the spoliation doctrine. Id.
Overall, the record indicates that the trial court did not believe that the trooper intentionally destroyed the video under circumstances indicating fraud, deceit or bad faith. Rather, the trial court based its judgment on a belief that, where drivers are held to strict adherence to the law, law enforcement should likewise be held responsible when it fails to follow its own procedures. Thus, the spoliation doctrine was inapplicable to this case and was not a proper basis on which to exclude the Director’s evidence. The case is remanded for a new hearing on Prins’s petition to permit the trial court to determine in the first instance whether the credible evidence supports the suspension of his driving privileges and to afford him the opportunity to present evidence rebutting the Director’s contentions.
VOLUNTEER FIREFIGHTER ENTITLED TO
PROTECTION OF OFFICIAL IMMUNITY
AND THE PUBLIC DUTY DOCTRINE
During October, 2007, emergency personnel were summoned to respond to a vehicular accident that occurred on Highway 13 in Greene County, Missouri. Both the Greene County Sheriff’s Department and the Ebenezer Fire Protection District were alerted to the accident. The Sheriff’s Deputy, Gary McCormick, responded to the call, as did Joshua Douglas, a volunteer fire fighter for the Ebenezer Fire Protection District. Douglas was instructed by the dispatcher to drive to the fire station to pick up an ambulance. Douglas left his house in a vehicle equipped with emergency lights and sirens, which were activated. In route to the fire station, Douglas collided at an intersection with the vehicle being driven by McCormick who died as a result of the collision. At the intersection where the collision occurred, a stop sign governed Douglas’ direction, but there were no traffic control devices governing McCormick’s vehicle. Douglas was also injured in the collision and had no memory of it.
An accident reconstruction report prepared by the Missouri State Highway Patrol determined that McCormick’s vehicle was traveling about 75 miles per hour at impact and that Douglas’ vehicle was going approximately 27 miles per hour at impact. Trees and vegetation at the intersection made visibility of other cars difficult. The Highway Patrol Report concluded that the collision was caused by Douglas’ failure to stop or slow his vehicle at the stop sign posted for his lane of traffic. The policy of the Fire District required district fire fighters who are responding to an emergency call to come to a complete stop, establish eye contact with drivers of other vehicles, wait 2 seconds and then proceed with caution. The trial court granted summary judgment to Douglas on the basis of official immunity and the public duty doctrine, and the Court of Appeals affirmed in the McCormick v. Douglas, S.D. 30274 (Mo.App.S.D. 2010).
Official immunity is a doctrine that shields public employees from liability for acts of negligence during the course of their official duties in the performance of discretionary acts. Southers v. City of Farmington, 263 S.W.3d 603, 610 (Mo.banc 2008). Three factors are considered in determining whether or not there is ministerial or discretionary: (1) the nature of the public employee’s duty; (2) the extent to which the act involves policy making or exercise of professional judgment; (3) the consequences of not applying official immunity. Southers 263 S.W.3d at 610. The policy behind official immunity encourages officials to make decisions that affect public safety and welfare free from the “fear of personal liability.” Green v. Denison, 738 S.W.2d 861, 865 (Mo.banc 1987), overruled on other grounds by Davis v. Lambert St. Louis International Airport, 193 S.W.3d 760, 766 (Mo.banc 2006). Public officials are engaging in discretionary conduct when responding to emergency calls in emergency vehicles. Southers, 263 S.W.3d at 618-19, Davis,193 S.W.3d at 763.
The public duty doctrine, on the other hand, protects public employees from civil liability for the breach of the duty owed to the general public, as opposed to a particular individual. Southers, 263 S.W.3d at 611. “This public duty rule is based on the absence of a duty to the particular individual, as contrasted to the duty owed to the general public.” Id. The rule does not shield a public employee from a breach of a duty involving a ministerial act in which the injured party had a “special, direct and distinctive interest.” State ex rel v. Twiehaus v. Adolph, 706 S.W.2d 443, 445 (Mo.banc 1986). Southers makes clear that a public employee’s conduct in responding to an emergency arises from a duty owed to the public. Id. at 618-20. Plaintiffs claim that Douglas’ violation of the Fire District’s internal “intersection crossing policy” in driving through a stop sign without stopping was willfully wrong, in bad faith or with malice. This allegation, if proven at trial, is simply an allegation of negligence and, thus, does not rise to the level of bad faith or malice. We find no meaningful distinction between this case and in Southers sufficient to hold that Douglas acted willfully wrong, in bad faith, or with malice even if he did run the stop sign when his vehicle collided with Deputy McCormick’s vehicle.
ECONOMIC LOSS DOCTRINE IS NOT A BAR TO AN
ACTION IN TORT IF THERE IS A SPECIAL
CONTRACTUAL RELATIONSHIP BETWEEN THE PARTIES
Autry Morlan Chevrolet Cadillac, Inc. (“Morlan”) operated a Chevrolet and Cadillac automobile dealership in Dexter, Missouri. Morlan obtained its floor-plan financing from U. S. Bancorp, Inc., which had a security interest in the automobiles on Morlan’s lot. Bancorp required Morlan to maintain insurance on the vehicles that was satisfactory to Bancorp. RJF Agencies, an insurance broker, provided an insurance program tailored to meet the insurance needs of automobile dealerships. That program offered an aggregate weather deductible, which would limit a dealer’s financial exposure in the event of a catastrophic weather-related claim. In Bancorp’s financing agreements with Morlan, Bancorp had the ability to accept or reject the insurance coverage on the collateral and Bancorp was designated as a loss payee on the policies.
In January 2006, RJF notified Bancorp that the cost of the aggregate weather deductible was going to increase significantly and that the deductible amount itself was going to substantially increase. Bancorp notified RJF that the aggregate weather deductible would not be renewed. After the aggregate weather coverage lapsed, hailstorms struck the Morlan lot and damaged hundreds of vehicle. Morlan sustained damage in excess of $600,000. Morlan filed suit against RJF and Bancorp, alleging that each were negligent and breached fiduciary and other duties they owed to Morlan. Bancorp and RJF filed motions for summary judgment on the grounds that Morlan’s claims were barred by the economic loss doctrine. The trial court granted their motions for summary judgment, but the Court of Appeals reversed in Autry Morlan Chevrolet, Cadillac, Inc. v. RJF Agencies, Inc., No. SD 30329, Mo. App. S.D. 2010.
In Missouri, the economic loss doctrine has been observed to prohibit a plaintiff from seeking to recover in tort for economic losses that are contractual in nature. A number of Missouri decisions have held that recovery in tort for pure economic damages are only limited to cases where there is personal injury, damage to property other than that sold, or destruction of the property sold due to some violent occurrence. See Wilburn Waggoner Equipment and Excavating Company v. Clark Equipment Co., 668 S.W.2d 601, 603 (Mo.App. E.D. 1984); Crowder v. Vandendeale, 564 S.W.2d 879, 881 (Mo.banc 1978); Forrest v. Chrysler Corp., 632 S.W.2d 29 (Mo.App. E.D. 1982); Clevenger & Wright Co. v. A. O. Smith Harvestore Productss, Inc. 625 S.W.2d 906 (Mo.App.W.D. 1981); Gibson v. Reliable Chevrolet, Inc., 608 S.W.2d 471 (Mo.App. S.D. 1980).
In Missouri, “economic loss” in this context was first defined in Groppel Company, Inc. v. U. S. Gypsum Co., 616 S.W.2d 49 (Mo.App. E.D. 1981). “’Economic loss includes cost of repair and replacement of defective property which is the subject of the transaction, as well as commercial loss for inadequate value and consequent loss of profits or use.’” Id. at 55 n. 5 (quoting Salmon Rivers Sportsman Camp, Inc. v. Cessna Aircraft Co., 544 p.2d 306, 309-10 (Idaho 1975)). Our supreme court specifically discussed the economic loss doctrine in Sharp v. American Hoist, 703 S.W.2d 901, 903 (Mo.banc 1986) when it held that a plaintiff cannot recover on a strict-liability-in-tort theory where the only damage is to the product sold and there is no personal damage.
Significantly, the common thread running through these cases is the effort to impose tort liability on the builder of a home, or to recover in tort for the failure of a product which is alleged to be defective. The economic loss doctrine, however, has been held not to bar an action in tort if the contract recognizes a special relationship. Our Western District noted:
The courts of our state have never recognized the mere breach of a contract as providing a basis for tort liability. In contract, however, the complained of act or omission which breaches a contract may also be a negligent act which would give rise to a liability in tort. In this latter instance, it is the act and not the breach of the contract which serves as the basis for the tort claim. Where the parties have entered into a contract, our common law has imposed the duty to perform with skill, care, and reasonable expedience and faithfulness in regard to the thing to be done or accomplished within the contract. The negligent failure to observe and perform any portion of that duty gives rise to an action in tort as well as an action for breach of contract.
American Mortgage Investment Company v. Hardin-Stockton Corp., 671 S.W.2d 283, 293, (Mo.App. W.D. 1987)
The allegations in Morlan’s Petition make it clear that the nature of the tort action asserted by Morlan arises from the rendering of services to be provided by a contract and that the conduct of Bancorp and RJF is the basis of the allegations. Morlan’s pleadings cite a special relationship among the parties to locate, acquire and maintain the proper type and amount of insurance as requested by Morlan. Morlan alleges a duty arose from defendant’s relationship with Morlan or the status the parties created by agreement. If proven, Morlan’s claims against defendants would not be barred by the economic loss doctrine. Defendants have not established, as a matter of law, that the economic loss doctrine barred Morlan’s claim.
JUDICIAL REVIEW OF ARBITRATION AWARDS IS STRICTLY LIMITED
Asset Acceptance, LLC filed an arbitration claim against Chris Shauman, alleging he was in default on his MBNA America credit card in the amount of $3,810. The arbitrator found that the arbitration agreement was valid and enforceable and issued an award in favor of Asset Acceptance. Asset Acceptance filed a Petition to confirm the arbitration award, which was served on Shauman. Shauman’s counsel filed an Answer to the Petition, challenging the award on several grounds. The trial court confirmed the arbitration award, finding that Shauman failed to file a motion to vacate the award in accordance with §435.405 RSMo. Shauman appealed and the Court of Appeals affirmed in Asset Acceptance, LLC v. Shauman, No. ED 94619 (Mo.App. E.D. 2010).
Courts favor and encourage arbitration proceedings. Cornerstone Propane, L.P. v. Precision Invs., LLC, 126 S.W.3d 419, 423 (Mo.App. S.D. 2004). “The object of arbitration is to obtain a settlement that will put an end to the dispute; therefore, every reasonable meaning is indulged in favor of an arbitration award.” Id. Judicial review of arbitration awards is “strictly limited.” Decker v. Kamil, 100 S.W.3d 115, 117 (Mo.App. E.D. 2003). A party challenging an arbitration award on appeal is not entitled to reconsideration of the merits of the case and bears the burden of proving the invalidity of the award. Id. Upon application of a party, the trial court shall confirm an award, unless the party opposing the confirmation of the award cites grounds for vacating, modifying or correcting the award.” Doyle v. Thomas, 109 S.W.3d 215, 218 (Mo.App. E.D. 2003); §435.405. A party who wishes to vacate an arbitration award must submit an application to the trial court “within 90 days after delivery of a copy of the award to the applicant.” §435.405.2. In vacating an arbitration award, courts are limited to the grounds set forth in §435.405.1. Air Shield Remodelers, Inc. v. Biggs, 969 S.W.2d 315, 317 (Mo.App. E.D. 1998). Shauman failed to meet his burden of demonstrating the invalidity of the award. Air Shield Remodelers, Inc., 969 S.W.2d at 317.