Behr, McCarter & Potter, P.C. BLOG

SLCRN Meet and Greet Presents "China's Lambert Hub: A Tremendous Opportunity for New Business" Featuring Paul McKee

2011-05-18T14:56:00.000-07:00

St. Louis Contractor Referral Network (SLCRN) is excited to announce that Paul McKee of McEagle Properties will be its featured speaker for its fourth "Meet and Greet" event. Paul and Steve Stone will discuss their five year collaboration with a coalition of government entities that brought China's Midwest hub for the transport of goods to St. Louis. Paul and Steve will also discuss the impact that this development will likely have on the region and on the construction industry. This is an incredibly timely event that you will not want to miss.

In addition to the foregoing, there will be time to network and breakfast will be provided.

Date and Time: Friday, May 20, 2011 from 7:30 to 9:00 a.m. Location: Des Peres Lodge, 1050 Des Peres Road, Des Peres, MO 63131 (just off Manchester).

The last two events were attended by more than 150 group members. This event will likely be the best attended event yet. So, please RSVP to me at jblanner@bmplaw.com. Also, several people have asked if they could bring someone from their workplace or someone from the industry who is not a group members. Please note that the event is open to guests. So, if you have a guest you would like to bring, please e-mail me their name. Thank you and I hope to see you there.

View more event information at http://linkd.in/lpMH08 .

Behr and McCarter named to Super Lawyers list

2011-03-09T14:34:00.000-08:00

Behr and McCarter named to Super Lawyers list

(Left to right) W.Dudley McCarter and Anthony Behr.

Anthony R. Behr and W. Dudley McCarter, principals in the St. Louis law firm of Behr, McCarter & Potter, have been named to 2010's Super Lawyers in Missouri and Kansas.

The publication lists lawyers in more than 70 practice categories, using a selection process that combines peer nomination and evaluation with third-party research.

Behr, of Sunset Hills, was named in three practice categories: personal injury defense-medical malpractice, business litigation, and personal injury defense-general. McCarter, of Creve Coeur, was named to the practice category of business litigation.

Posted in News on Wednesday, March 9, 2011 3:00 am Updated: 10:03 am. | Tags: Creve Coeur Mo, Sunset Hills Mo

Announcement from St. Louis Contractor Referral Network

2011-02-25T13:05:00.000-08:00

I am excited to announce that the St. Louis Contractor Referral Network has grown to over 1,400 members since it was formed about a year ago. At its inception, this Group was intended to serve as a forum for people in the greater St. Louis construction industry to network, gain and give referrals and gain valuable industry related information. So how have we done?

NETWORKING
In the last year, SLCRN has put on three tremendous networking events, which were attended by over 150 people each. Each of the events featured an area political, construction or economic leader. More recently, people have begun getting together in other capacities for happy hours, etc. In addition to this, the Discussion Page has served as a forum for Group members to promote other networking events.

REFERRALS

The Discussion Page has been filled with people looking for certain contractors, trades or material suppliers. In addition to this, many jobs have been posted. Companies have gained referrals and individuals have found employment as a result of these postings.

INDUSTRY RELATED INFORMATION

I have tried to contribute a number of articles on legal topics relevant to those in the industry. Others have done this on related topics. There have also been many helpful news articles and informative discussions posted. All of this has led to the exchange of valuable and timely industry releated information.

Based on the foreoing, I am certain that being a member of SLCRN has been worth the cost of membership (which is free). I want to encourage you, as members of the Group, to invite your industry connections to join.

You can easily send invitations to your St.Louis area construction connections by going to the main page for the group. At the upper right hand of the screen it says "Forward this Group". If you click this tab, it allows you to forward an invitation to join the group to people in your connections. You have to click the "In" icon and then select which connnections to send it to. You can also customize the message, which I would stronly recommend. You can also send an invitation to people who are not on LInkedIn by adding their e-mail address on the forward this group section.

If you have questions about the foregoing, please let me know.
Thank you for your participation in the Group and your assistance,

Joe Blanner,
Partner at Behr, McCarter & Potter, P.C. and founder of SLCRN

CROSS-EXAMINATION IS PERMITTED ON ISSUES RELEVANT TO THE WITNESS’S VERACITY REGARDLESS OF WHETHER THE SUBJECT OF THE FALSEHOOD IS MATERIAL

2011-01-11T13:21:00.000-08:00

By W. Dudley McCarter

Elizabeth Mitchell filed a medical negligence action against Dr. Milton Kardesch, alleging that Dr. Kardesch deviated from the standard of care while treating her husband and that Dr. Kardesch’s negligence resulted in her husband’s death. One night, Mr. Mitchell had chest pains and a nightmare about death. The next morning, Mrs. Mitchell called Dr. Kardesch, who was her husband’s internist. She spoke with Dr. Kardesch’s medical assistant and relayed the previous night’s occurrence. Dr. Kardesch’s medical assistant testified that she could not specifically recall Mrs. Mitchell’s call, but that she believed she told Mrs. Mitchell to take her husband to the emergency room because of the chest pain. Dr. Kardesch testified that he remembered Mrs. Mitchell’s call and that he had instructed his assistant to tell her to get her husband to the emergency room. Mrs. Mitchell testified that she was never instructed to take her husband to the emergency room. Fourteen days later, Mr. Mitchell again felt tightness in his chest and went to the hospital. He died the next day from complications arising from myocardial infarction and arteriosclerosis. The trial court prohibited Mrs. Mitchell’s counsel from impeaching Dr. Kardesch with his interrogatory answer in which he had denied that his license had been suspended or revoked.
In fact, his Missouri and New York licenses to practice medicine both had been suspended due to a Missouri felony conviction unrelated to his medical abilities, as he later admitted in a deposition. The jury returned a verdict in favor of Dr. Kardesch, but the Supreme Court of Missouri reversed in Mitchell v. Kardesch, No. SC 90370 (Mo.banc 2010).

“It has long been the rule in Missouri that on cross-examination, a witness may be asked any questions which tend to test his accuracy, veracity or credibility…” Sandy Ford Ranch, Inc. v. Dill, 449 S.W.2d 1, 6 (Mo. 1970). Much of the trial turned on whether the jury believed Dr. Kardesch or Mrs. Mitchell. Because credibility was such a central issue, Mrs. Mitchell requested permission to ask Dr. Kardesch about a false answer that he gave in his sworn response to an interrogatory answer regarding the suspension or revocation of his professional license. “As a general proposition, the credibility of witnesses is always a relevant issue in a lawsuit.” State v. Smith, 996 S.W.2d 518, 521 (Mo.App. 1999). Impeachment provides a tool to test a witness’s perception, credibility, and truthfulness, which is essential because a jury is free to believe any, all or none of a witness’s testimony. State v. Hineman, 14 S.W.3d 924, 927 (Mo.banc 1999). Most relevant here, cross-examination also long has been permitted to impeach a witness on his or her character for truth and veracity. This means of impeachment, however, must be directed only toward the ultimate issue of a witness’s credibility; thus, a witness may not be impeached by evidence that his or her “general moral character is bad,” or that his or her “general reputation for morality” is bad. Therefore, this form of impeachment must be confined to the witness’s character for truthfulness and veracity. State v. Gregory, 822 S.W.2d 946, 949 (Mo.App. 1992).

When a person, regardless of whether a party, is being questioned on the witness stand, then long-standing Missouri law holds that the person may be asked about specific instances of his or her own conduct that speak to his or her own character for truth or veracity, even when the issue inquired about is not material to the substantive issues in the case. To the extent that State v. Wolfe, 13 S.W.3d 248, 258 (Mo.banc 2000) and cases following it, hold that a witness may not be impeached by asking him or her about specific instances of conduct relevant to his or her character for truth and veracity, it no longer should be followed. Cross-examination may be had on issues relevant to the witness’s character for truth and veracity, regardless of whether the subject of the falsehood is material. See State v. Zahn, 823 S.W.2d 18, 22 (Mo.App. 1991).

Parties are permitted to introduce extrinsic evidence to impeach a witness by showing his or her inability to perceive the events testified to; prior convictions; or to show bias, prejudice or interest in the proceeding, regardless of whether the subject of the extrinsic evidence is independently material to the case. State v. Johnson, 706 S.W.2d 815, 817-18 (Mo.banc 1985) (bias); State v. Kaston, 509 S.W.2d 39, 41 (Mo.1974) (ability to perceive). The real issue to be decided by the trial court is whether admission of the extrinsic evidence would be more probative or more prejudicial. In cases involving character of the witness for truth and veracity, it will be the unusual case where that balancing weighs in favor of admission of extrinsic evidence, but where it does so, such evidence should be admitted. If a new trial occurs, Plaintiff may cross-examine Dr. Kardesch about his interrogatory answer and, if necessary, impeach him with it and with his deposition testimony, subject to the trial court’s exercise of discretion to limit such testimonies so as to avoid distraction of the jury for undue prejudice to Dr. Kardesch.

PHYSICIAN-PATIENT PRIVILEGE
APPLIES TO ALL ASPECTS OF DISCOVERY

William Stinson was involved in a high-speed automobile collision that resulted in the death of Ricky Young. Young’s daughter filed a wrongful death suit against Stinson and his parents. The suit alleged that Stinson was under the influence of intoxicants at the time of the crash. It also alleged that Stinson’s parents negligently entrusted Stinson with the vehicle involved in the crash; that they knew or should have known that Stinson was addicted to alcohol and drugs that impaired his driving ability. Plaintiff’s counsel submitted a medical records authorization to Stinson, permitting the disclosure of all records pertaining to treatment he had received for alcohol, drug or substance abuse problems during the prior 14 years. The trial court overruled Stinson’s objection and ordered him to execute the medical records authorization. The Supreme Court, however, issued a writ of prohibition in State ex rel. Stinson v. House, No. SC90364 (Mo.banc 2010).

The physician-privilege is established by §491.060 RSMo. The physician-patient privilege “applies to medical records and all aspects of discovery.” State ex rel. Dean v. Cunningham, 182 S.W.3d 561, 567 (Mo.banc 2006). In this case, the medical records sought by Young fall within the protective scope of the physician-patient privilege. There is no evidence that Stinson placed any of his medical conditions in issue or took any other steps to affirmatively waive the privilege.

Also, the mere fact that Stinson has denied liability and is defending against the present suit does not constitute a waiver of the privilege. Rodriguez, 996 S.W.2d 47, 63 (Mo.banc 1999). The mere fact that the privileged medical records may be relevant to Young’s claim for negligent entrustment does not mean that the medical records are discoverable. The very nature of an evidentiary privilege is that it removes evidence that is otherwise relevant and discoverable from the scope of discovery. See Rule 56.01(b)(1). Therefore, the fact that the medical records might be relevant to Young’s claim for negligent entrustment does not alter the conclusion that the records are undiscoverable.

The language of §491.060 does not limit the application of the privilege only to situations in which the confidential medical information will be used against the physician’s patient. Because the legislature did not limit the scope of the privilege only to situations in which the confidential medical information will be used against the patient, the privilege applies to all circumstances in which a physician or psychologist is called on to give testimony or produce records concerning information that was acquired from the patient, regardless of whether the information will be used against the patient. “The purpose of the physician-patient privilege is to enable the patient to secure complete and appropriate medical treatment by encouraging candid communication between patient and physician, free from fear of the possible embarrassment and invasion of privacy engendered by an unauthorized disclosure of information.” State ex rel. Woytus v. Ryan, 776 S.W.2d 389, 392 (Mo.banc 1989).

The public policy of encouraging candid communication between patient and physician would be undermined if patients feared that their physicians or psychologists could disclose their confidential communications in any lawsuit, regardless of whether the information would be used against the patient or a third party. Information contained in a patient’s medical file becomes no less private or potentially embarrassing to the patient, merely because the information will be utilized against someone other than the patient. Stinson faces the same possibility of embarrassment and invasion of privacy that he would face if his medical records were released to prove claims against him personally, rather than his parents. Consequently, the requested disclosure fits squarely within the policy rationale underlying the physician-patient privilege.

IF OBJECT OF UTILITY FEES IS TO FUND A CITY’S
GENERAL REVENUE, THE HANCOCK AMENDMENT IS VIOLATED.

Arbor Investment Co. owns property in the City of Hermann and paid utility charges for gas, electricity, water/sewer and refuse/waste. It filed suit against the City asserting that the City inflated its utility rates to generate revenue to finance its ordinary governmental operations. Arbor alleged that the City had, without a vote of the people, effectively levied hidden taxes on its citizens through the excessive charges for services and utilities. The trial court granted Summary Judgment to the City finding in favor of the City on four of the five factors established by Keller v. Marion County Ambulance District, 820 S.W. 2d 301 (Mo. banc 1991). The Court of Appeals reversed and remanded, however, in Arbor Investment Co. v. City of Hermann, No. ED 92933 (Mo. App. E.D. 2010).

The purpose of the Hancock Amendment is to “limit taxes by establishing tax and revenue limits and expenditure limits for the state and other political subdivisions which may not be exceeded without voter approval.” Rohrer v. Emnons, 289 S.W. 3d 600, 603 (Mo. App. E.D. 2009). The Hancock Amendment attempts to erect a comprehensive, constitutionally-rooted shield to protect taxpayers from government’s ability to increase the tax burden above that born by the tax payers on November 4, 1980, the date the amendment was approved. Id. At its essence, the Hancock Amendment reveals the voter’s basic distrust of the ability of representative government to keep its taxing and spending requirements in check. Id.

Taxes are proportional contributions imposed by the state upon individuals for the support of government and for all public needs. Zahnar v. City of Perryville, 813 S.W. 2d 855, 859, (Mo. banc 1991). Taxes are not payments for a special privilege or a special service rendered. Id. Fees or charges prescribed by law to be paid by certain individuals to public officers for services rendered in connection with a specific purpose ordinarily are not taxes, unless the object of the requirement is to raise revenue to be paid into the general fund of the government to defray customary governmental expenditures rather than compensation of public officers for particular services rendered. Id.

Here, two of the five Keller factors weigh in favor of the City and three involve genuine disputes of material fact. Therefore, the trial court erred in entering summary judgment in favor of the City because there is a dispute of material fact as to whether the City increased utility fees in violation of the Hancock Amendment by setting charges at a level to increase the City’s general revenue and to subsidize general government expenditures rather than to compensate for the provision of services. If it is shown on remand that the object of the fees is to fund the City’s general revenue, then this constitutes a violation of the Hancock Amendment.

IN A MEDICAL NEGLIGENCE CASE, THE REQUIRED
HEALTH CARE AFFIDAVIT NEED NOT BE BASED ON THE
OPINION OF A HEALTH CARE PROVIDER WHO HAS THE
SAME BOARD CERTIFICATION AS THE DEFENDANT

Ann Spradling suffered from compression fractures in her lower back as a result of a fall. She was admitted to SSM Health care d/b/a St. Mary’s Health Center in St. Louis, where Dr. William Sprich, a neurosurgeon, performed a vertebroplasty. Following the vertebroplasty, she became paralyzed in her lower extremities. She and her husband filed a medical negligence lawsuit against St. Mary’s. Their attorney filed an affidavit stating that he had obtained a written opinion from Dr. John Mathis, a board certified radiologist, finding that Dr. Sprich failed to use reasonable care in his treatment. Defendants moved to dismiss the lawsuit, contending that the affidavit filed by the Spradlings’ attorney was insufficient in that it was not based on the written opinion of a “legally qualified health care provider.” The trial court dismissed the Spradling suit, but the Supreme Court of Missouri reversed in Spradling v. SSM Health care, No. SC 90613 (Mo.banc 2010).

The health care affidavit statute, §538.225, first was promulgated in 1986. This court has recognized that the statute was a “legislative response to the public concern over the increased cost of health care and the continued integrity of that system of essential services.” Mahoney v. Doerhoff Surgical Services, Inc., 807 S.W.2d 503, 507 (Mo.banc 1991). Although §538.225 RSMo. 1986, did not define “legally qualified health care provider,” in 2005, the legislature passed House Bill 393, which did include a definition. That definition stated that a “legally qualified health care provider” is one who is “either actively practicing or within five years of retirement from actively practicing substantially the same specialty as the defendant.” The words “substantially the same specialty” must modify “actively practicing,” as well as “within five years of retirement from actively practicing.” Considering the legislature’s intent in passing House Bill 393 and the grammatical construction of the statute, “substantially the same specialty” is as applicable to “actively practicing” as it is to “within five years of retirement from actively practicing.”

The legislature chose to modify “specialty” with the phrase “substantially the same.” By using that phrase, the legislature recognized that there may be situations in which the health care provider who gives an opinion as to the standard of care may not have the exact board certification as the defendant. Instead, the health care provider may have a different board certification, but may practice “substantially the same specialty” because of an expertise in the medical procedure at issue. Many medical procedures are not peculiar to one board certification. While Dr. Mathes is a radiologist rather than a neurosurgeon, his experience establishes that he was actively practicing “substantially the same specialty” as the defendant in that he has sufficient experience in performing vertebroplasties. Dr. Mathes is not board certified in the same field of medicine as Dr. Sprich, but under Webster’s dictionary definition of “specialty,” Dr. Mathes has an aptitude or special skill in performing vertebroplasties, as evidenced by his performance of or assistance in over 3,000 vertebroplasties. In addition, his publications, lectures and seminars exhibit his academic interest and expertise in vertebroplasties. Dr. Mathes is the type of “legally qualified health care provider,” as intended by the legislature when it used the phrase “substantially the same specialty.” By enacting §538.225, the legislature sought to prevent plaintiffs from relying on opinions from health care providers with minimal to no experience in performing the procedure in question. The Spradlings’ reliance on Dr. Mathes’ opinion was the type of reliance the legislature sought to authorize.

PENALTIES UNDER THE MEDICAID
FRAUD STATUTE ARE CONSTITUTIONAL

Stephanie Spilton, a clinical social worker licensed as a Missouri Medicaid Service Provider, was investigated by the Attorney General’s Medicaid Fraud Unit. That investigation revealed that Spilton had committed 325 violations of the Medicaid Fraud Statute. After being served with a subpoena, she met with the Medicaid Fraud Control Unit and admitted that she had submitted claims for services she did not provide. The state of Missouri filed suit against Spilton and the trial court granted summary judgment to the state. The trial court awarded the state actual damages of $45,385.00, civil penalties in the amount of $1,625,000 and treble damages in the amount of $136,155. Spilton appealed contending that the penalties under the Medicaid Fraud Statute violated the due process clauses of the Missouri and the United States Constitutions. The Supreme Court affirmed the judgment against Spilton in State of Missouri v. Spilton, No. SC 90586 (Mo.banc 2010).

Spilton argues that the Medicaid Fraud Statute is impermissibly vague because it provides for a range of penalties without instructing the court whether to select the low or high end of the range in any specific case. However, a statute that provides for a range of penalties is not constitutionally deficient. See e.g. Battis v. Hofmann, 832 S.W.2d 937, 941 (Mo.App. 1992); Pratt v. Missouri Pacific Ry. Co., 122 S.W.1125, 1129 (Mo.App. 1909). A statute is presumed constitutional unless it “clearly and undoubtedly violates some constitutional provision and palpably affronts fundamental law embodied in the constitution.” Board of Education of St. Louis v. State, 47 S.W.3d 366, 368-9 (Mo.banc 2001).

A statute is not vague because it allows for judicial discretion in imposing penalties, but, rather when its language does not convey, to a person or ordinary intelligence, adequate notice of what conduct is proscribed. Cocktail Fortune, Inc. v. Supervisor of Liquor Control, 994 S.W.2d 955, 957 (Mo.banc 1999). Where a law can be supported by “a reasonable or practical construction,” it will be valid. Id. Further, “laws imposing civil penalties rather than criminal are afforded more tolerance.” Harris v. Hunt, 122 S.W.3d 683, 689 (Mo.App. 2003). Although the Missouri and United States Constitutions prohibit the imposition of excessive fines, the Missouri General Assembly has always had wide latitude to decide the severity of civil penalties for violations of law. Missouri Public Service Com’n. v. Hurricane Deck Holding Co., 302 S.W.3d 786 (Mo.App. 2010).

Statutory civil penalties are different than jury-imposed punitive damages, because statutes define, in advance, “the prohibited conduct and…the legislative proscribed penalty.” Carpenter v. Countrywide Home Loans, Inc., 250 S.W.3d 697, 702 (Mo.banc 2008). Further, statutes – like this one – that provide for treble damages in addition to actual damages sustained are not constitutionally invalid. Carpenter v. Countrywide Home Loans, Inc., 250 S.W.3d 697 (Mo.banc 2006). Civil fines within statutory limits will not be considered excessive, as a matter of law, when the statute authorizing the punishment is valid and when the punishment imposed is within the range proscribed by the legislature. State v. Polley, 2 S.W.3d 887, 894 (Mo.App. 1999). This Court is unpersuaded that the $5,000 per violation penalty assessed against Spilton is so grossly excessive as to shock the conscience. A litigant attacking the constitutional validity of a statute bears “an extremely heavy burden.” Linton v. Mo. Veterinary Med. Bd., 988 S.W.2d 513, 515 (Mo.banc 1999).

MECHANIC’S LIEN HAD PRIORITY OVER DEED OF TRUST

Glenstone Block Company supplied blocks that were used in the construction of a block wall during the building of the Parkview Bay Condominiums. When Glenstone was not paid by the subcontractor it supplied the blocks to, it filed a mechanic’s lien and then sued to enforce its mechanic’s lien. At trial, Glenstone contended that its mechanic’s lien was superior to the deed of trust securing a loan for the condominium development that was made by Union Planters Bank. Glenstone presented evidence at trial to show that advancements made by the bank under the previously recorded deed of trust were for construction of condominium buildings. The trial court found that the deed of trust was superior to Glenstone’s mechanic’s lien, but the Court of Appeals reversed in Glenstone Block Company v. Pebworth, No. SD29899 (Mo.App. S.D. 2010).

Mechanic’s liens are legislatively created claims that give a security interest to mechanics and materialmen for labor and materials furnished in the improvement of property, property that often is already encumbered by a mortgage, deed of trust, or similar instrument. Sections 429.010-429.350 RSMo. Under §429.050, a mechanic’s lien for materials furnished “shall attach to the buildings, erections or improvements for which they are furnished…in preference to any prior lien or encumbrance or mortgage upon the land upon which said buildings, erections or improvements…have been erected. Section 429.050. Under §429.060, a mechanic’s lien for materials furnished shall be preferred to all other encumbrances which may be attached to or upon the building or improvement or the land upon which the building or improvement are situated, or either of them, subsequent to the commencement of such building or improvement. Section 429.060.

A lender who knows and contemplates that mechanic’s liens and materialmen’s liens can arise from a construction project for which the loan is being made, waives the claim of priority of its deed of trust as to the mechanic’s lien. Cinco Enterprises, Inc. v. Lake St. Louis Estates Co., Inc., 557 S.W.2d 9, 10 (Mo.App. E.D. 1977). The evidence established that the funds advanced by the bank were to be used for construction. Therefore, the beneficiary of the deed of trust waived its priority as to Glenstone’s mechanic’s lien.

IF YOU PICK A FIGHT IN MISSOURI OVER THE INTERNET,
YOU CAN EXPECT TO SETTLE IT HERE

The Baldwins owned Whispering Lane Kennel, at which they bred dogs for American Kennel Club shows. The Baldwins primarily bred Chinese Crested dogs and have won various awards. Karen Fischer-Smith and Patricia Hall, residents of Arizona and Pennsylvania respectively, also bred and showed Chinese Cresteds in competition with the Baldwins. The Baldwins filed suit against Fischer-Smith and Hall, alleging that the defendants libeled them through an internet web site with a home page titled “STOP WHISPERING LANE KENNEL.” This web site could be viewed by anyone with internet access. The web site stated that Whispering Lane was in Ava, Missouri and was owned by the Baldwins. Google searches for the name of Whispering Lane Kennel returned links to the defendants’ web site, which received some 2,500 “hits” or visits from internet users in one year. At least 25 hits were by Missouri residents involved in the dog business, as owners, breeders and/or exhibitors. Defendants sought dismissal of the suit for lack of personal jurisdiction. The trial court found that the defendants lacked sufficient minimum contacts to satisfy due process, but the Court of Appeals reversed in Baldwin v. Fischer-Smith, No. SD 30235 (Mo.App. S.D. 2010).

Indeed, “the body of law surrounding Internet personal jurisdiction remains unquestionably vague.” Teresa J. Cassidy, Civil Procedure-Effects of the "Effects Test": Problems of Personal Jurisdiction and the Internet; Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008), 9 Wyo. L. Rev. 575, 594 (2009). As here, the “key question” in Tamburo v. Dworkin, 601 F.3d 693, 703 (7th Cir. 2010) involved the defendants’ “minimum contacts” with the forum state. Id. at 700-01 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). “Stated differently, each defendant must have purposely established minimum contacts with the forum state such that he or she ‘should reasonably anticipate being haled into court’ there.” Id. at 701 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). Again, like our case, Tamburo “primarily concern[ed] the question whether the defendants ‘purposely directed’ their conduct at the forum state.” Id. This purposeful-direction inquiry “can appear in different guises.” Id. For intentional torts, however, “the inquiry focuses on whether the conduct underlying the claims was purposely directed at the forum state.” Id. Here, defendants’ contacts were constitutionally sufficient for the trial court to exercise personal jurisdiction over them.

Our Missouri Supreme Court recently expressed a broad jurisdictional view of communication that gives rise to intentional tort claims. “Where ‘the actual content of communications with a forum gives rise to intentional tort causes of action,’… ‘this alone constitutes purposeful availment.’” Bryant v. Smith Interior Design Group, Inc., No. SC 90205 (Mo.banc 2010). To tweak an observation from Revell v. Lidov, 317 F.3d 467, 476 (5th Cir. 2002), if you pick a fight in Missouri, you can reasonably expect to settle it here. Since defendants’ contacts are constitutionally sufficient, jurisdiction is appropriate unless it offends traditional notions of fair play and substantial justice. This is a much easier call and requires no extended discussion. Due process is not offended if Missouri exercises jurisdiction over defendants in this case.

2011-01-11T13:06:00.000-08:00

IN PERSONAL INJURY ACTION, EVIDENCE MAY BE
PRESENTED ON THE VALUE OF MEDICAL TREATMENT
RECEIVED TO REBUT PRESUMPTION THAT MEDICAL
EXPENSES ARE LIMITED TO THE AMOUNT ACTUALLY PAID

By W. Dudley McCarter

Delmar Teasley drove his vehicle into the back of a line of vehicles stopped at a traffic signal, causing the vehicle behind Edith Deck to collide with her vehicle. Deck sustained injuries in the collision and underwent surgery, physical therapy and other medical care. Deck was billed $27,991 for her treatment, but the amount actually paid for her treatment, after adjustments, was $9,904. Payments were made by Medicare, supplemental insurance and by Deck. Before the trial on her suit against Teasley, Teasley filed a motion to determine the value of her medical treatment pursuant to Section 490.715.5. At the hearing on Teasley's motion, Deck presented testimony from three individuals who previously or currently worked in healthcare positions involving the cost of providing medical services. Each testified that the amount billed to Deck for her medical treatment was customary, fair and reasonable. They also testified that the face value of the bills was the value of the medical services provided, not the amount reimbursed by Medicare.

The trial court found that the presumption in Section 490.715 was not rebutted and determined that the value of Deck's medical treatment was limited to the amount actually paid for it, together with any amount she was still obligated to pay. During trial, Deck made an offer of proof regarding the value of her medical expenses, again attempting to rebut the presumption of value under Section 490.715. The trial court again ruled that Deck could not present evidence to the jury of her medical bills that had not been paid by her or on her behalf. The jury rendered a verdict in favor of Deck and assessed her damages in the amount of $42,500. On appeal, the Supreme Court remanded the case for a new trial on the issue of damages only, finding that Deck had presented substantial evidence that her total medical bills represented the value of her medical treatment and that she had rebutted the presumption under Section 490.715. Deck v. Teasley, No. SC90628 (Mo.banc 2010).

Section 490.715, sub-section 5, newly enacted in 2005, governs the admissibility of evidence regarding a specific type of damages, the value of medical treatment rendered to a party. It provides that evidence of the dollar amount necessary to satisfy the financial obligation to health care providers is admissible at trial and creates the rebuttable presumption that such amount represents the value of the medical treatment rendered. On the motion of any party, the court may determine whether other evidence of value is admissible at trial and delineates that the other evidence may include, but is not limited to: the medical bills incurred; the amount actually paid for the medical treatments; or the amount or estimate of the amount not paid that such party is obligated to pay in the event of a recovery. The rebuttable presumption created by Section 490.715.5 is that the dollar amount paid to satisfy the financial obligation to the healthcare providers is the value of the medical treatment rendered.

The rebuttable presumption in Section 490.715.5 requires the trial court to determine if the party seeking to rebut the presumption has presented substantial evidence that the value of medical treatment rendered is an amount different from the dollar amount necessary to satisfy the financial obligations to health care providers. If such substantial evidence is proffered, the statutory presumption is rebutted. When the presumption is rebutted, the party's other evidence of value, as well as the amount necessary to satisfy the financial obligations is admitted at trial as if no presumption exists. If the presumption is not rebutted, then the only evidence of the value of medical treatment rendered is the dollar amount necessary to satisfy the financial obligation of the health care provider.

Here, Deck presented substantial evidence at the pre-trial hearing and the offer of proof that the amount she was billed is the value of the medical treatment rendered to her; in light of such substantial evidence, the trial court misapplied the law in ruling that the statutory presumption in Section 590.715.5 was not rebutted. Deck proffered evidence that the value of the medical treatment rendered to her was $27,991. However, due to the trial court's exclusion of that evidence, the jury only was permitted to hear evidence that the value of her medical treatment was $9,904, the amount that she, Medicaid and supplemental insurance actually paid for her treatment after adjustments. The exclusion of evidence of the additional $18,087 in potential damages the jury should have been allowed to consider, materially affected the merits of the action. See Accomac Realty Co. v. City of St. Louis, 152 S.W.2d 100, 103 (Mo. 1941). Accordingly, the trial court's exclusion of Deck's evidence of the value of her medical treatment was prejudicial and she is entitled to a new trial on the issue of damages.

JUDGMENT OF FOREIGN STATE IS PRESUMED VALID;
BURDEN IS ON DEFENDANT TO PROVE LACK OF
PERSONAL JURISDICTION BY FOREIGN STATE

People’s Bank obtained a judgment in an Oklahoma court against Missouri resident H. L. Frazee. People’s Bank proceeded to enforce the judgment in the circuit court of Wright County, Missouri. The circuit court found that the Oklahoma court lacked personal jurisdiction over Frazee and quashed the registration of the foreign judgment. The judgment was entered in Oklahoma on a guarantee signed by Frazee for a loan to his son and his son’s wife. People’s Bank had prepared the guarantee and mailed it to Frazee in Missouri. Frazee signed the guarantee and mailed it back to People’s Bank. In the suit People’s Bank filed to enforce the guarantee, a summons was mailed to Frazee by certified mail, but he refused service. The Oklahoma court entered a default judgment against him. The circuit court found that the Oklahoma court lacked personal jurisdiction over Frazee, but the Supreme Court of Missouri reversed in People’s Bank v. Frazee, No. SC 90536 (Mo.banc 2010).

Generally, when personal jurisdiction is contested by the filing of a motion to dismiss a Missouri action, the plaintiff bears the burden of establishing that the defendant’s contacts with the forum state were sufficient. State ex rel. Ranni Assocs., Inc. v. Hartenbach, 742 S.W.2d 134, 137 (Mo.banc 1987). When the challenge to personal jurisdiction arises in the context of a motion to register a foreign judgment, however, the strong presumption of the validity of a foreign judgment that is regular on its face makes the general rule inapplicable. Here, Frazee defaulted in the Oklahoma action and he contested Oklahoma’s personal jurisdiction over him for the first time in the Missouri circuit court. Because the issue was not litigated in the foreign state, Frazee had right to attack the judgment for lack of personal jurisdiction in the Missouri circuit court. Miller v. Dean, 289 S.W.3d 620, 624 (Mo.App. 2009). The Oklahoma judgment Frazee was contesting is regular on its face, so the judgment was subject to the strong presumption that the Oklahoma court had jurisdiction. As the party asserting invalidity of the foreign judgment, Frazee bore the burden of establishing that the Oklahoma court lacked personal jurisdiction.

Because this jurisdictional challenge arises in the context of a motion to register a foreign judgment, this court must look to the rendering state’s law – that is, Oklahoma substantive law – to determine whether the Oklahoma court had personal jurisdiction over Frazee. See Phillips v. Fallen, 6 S.W.3d 862, 868 (Mo.banc 1999). The inquiry is whether the Oklahoma court’s exercise of personal jurisdiction over Frazee comports with federal due process. See Gilbert v. SEC. Fin. Corp. of Okla., Inc., 152 P.3d 165, 173 (Okla. 2006). “In some cases, single or isolated acts by a defendant in a state, because of their nature and quality and the circumstances of their commission, provided sufficient minimum contacts to support jurisdiction for liability arising from those acts.” Bryant v. Smith Interior Design Group, Inc., 310 S.W.3d 227, 233 (Mo.banc 2010).

Here, Frazee knew he was dealing with an Oklahoma bank when he signed the guarantee. He also knew that People’s Bank would not have provided a loan to Frazee’s son and daughter-in-law without Frazee’s guarantee. Frazee engaged in telephone conversations with People’s Bank and mailed the guarantee back to Oklahoma after he signed it. Contrary to Frazee’s assertion that a non-resident guarantor must reap a pecuniary gain, other courts have found that a personal financial benefit or pecuniary gain by the guarantor is unnecessary to exercise personal jurisdiction over the non-resident guarantor. E. G. Mellon Bank, (East) PSFS, Nat’l Ass’n. v. Farino, 960 F.2d 1217, 1225 (3rd Cir. 1992). There are also sound policy reasons for exercising jurisdiction over non-resident guarantors. “[T]he Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed.” Mellon Bank, 960 F.2d at 1222. In this case, Frazee voluntarily assumed the obligation of guaranteeing the note. He purposely directed activity into the forum and purposely availed himself to the protections of Oklahoma and should not be able to avoid his interstate obligation by asserting lack of personal jurisdiction.

Because of the strong presumption of validity of foreign state judgments, Frazee had the burden to establish that the judgment was irregular or that Oklahoma lacked personal jurisdiction over him. Every personal jurisdiction case involves a fact-specific inquiry; it does not lend itself to categorical determinations. Mellon Bank, 960 F.2d at 1225. Under the facts and circumstances surrounding Frazee’s execution of the guarantee, he had the required minimum contacts with Oklahoma. Therefore, the Oklahoma courts exercise of personal jurisdiction over Frazee comports with Oklahoma’s long-arm statute and due process.

DEFECTIVE CONSTRUCTION CLAIM
BARRED BY TEN YEAR STATUTE OF REPOSE

In 1987, Mr. Dell Foods hired Dennis Watson Construction as general contractor for the construction of an addition to Dell's production facility. The proposed addition included an insulated room to be used as a walk-in freezer. Watson engaged Williams-Carver to construct a refrigeration system for the freezer. In 2001, a fire was intentionally set by a Dell employee in a room adjacent to the freezer. A concrete block wall separated the room from the freezer, but there was a gap of between 16 to 24 inches above the concrete wall. The fire spread from the adjacent room to the freezer by going over the top of the concrete wall. As the insurer for Dell, Travelers paid in excess of $5,000,000.00 for the fire damage and received an assignment of Dell's rights. In 2005, Travelers filed suit against Williams-Carver for negligent installation of the freezer, alleging that Williams-Carver concealed the defective gap at the top of the wall of the freezer. The trial court granted summary judgment to Williams-Carver, finding that Travelers claims were filed beyond the 10-year statute of repose, Section 516.097 RSMo. and further finding that the concealment exception of the statute did not apply. The Court of Appeals affirmed in Travelers Indemnity Co. v. The Williams-Carver Co., W.D. 71181 (Mo.App. W.D. 2010).

The Missouri Supreme Court has defined the phrase "sole connection with the improvement" in Section 516.097 as "a connection to a defective or unsafe condition of an improvement or real estate giving rise to liability." Magee v. Blue Ridge Professional Bldg. Co., 821 S.W.2d 839, 843 (Mo.banc 1991). "If a defendant has any connection that gives rise to liability with respect to an improvement other than by design, planning or construction, Section 516.097 is not available as an affirmative defense." Lay v. P & G Healthcare, Inc., 37 S.W.3d 310, 321 (Mo.App. 2000). The defendant's sole connection to the defective or unsafe improvement to real property must be as an architect, engineer or builder. Id. Here, the sole connection of Williams-Carver with the improvement was as the builder of the refrigeration system. Traveler's lawsuit against Williams-Carver was filed more than 10 years after the improvements to Dell's production facility were completed in 1988. Williams-Carver properly invoked the affirmative defense of the 10-year statute of repose in Section 516.097 by presenting uncontroverted evidence that its sole connection with the improvements was to perform or furnish construction services.

The concealment exception in Section 516.097 does not apply. As used in the statute, the term "conceals" means "an affirmative act, something actually done directly intended to prevent discovery or to thwart investigation." Magee, 821 S.W.2d at 844. Deposition testimony established that the gap between the top of the concrete wall and the roof was open and obvious. To rebut the evidence of openness, Travelers alleges the defective nature of the gap was "latent" and, therefore, its significance should have been disclosed by Williams-Carver. However, latent defects are not the same as concealed defects. Fueston v. Burns & McDonnell Eng'g Co., 877 S.W.2d 631, 638 (Mo.App. 1994). "Conceals" means more than a failure to reveal information allegedly known. Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15, 19-20 (Mo.banc 1995). Rather, it carries the "implication of intentional conduct designed to prevent discovery." Id. at 19. There is no evidence that Williams-Carver acted affirmatively to prevent the discovery of the gap at the top of the wall. Given the open and obvious nature of the alleged defective condition, there is no factual dispute as to whether the concealment exception in Section 516.097.4(2) could be applied.

OFFICIAL IMMUNITY IS AVAILABLE TO PUBLICLY-EMPLOYED EMERGENCY RESPONDERS ONLY IN A TRUE EMERGENCY SITUATION

Anthony Thomas called 9-1-1 complaining of chest pains and difficulty breathing. Within a short time, an ambulance unit from the Community Fire Protection District arrived at his home. The unit was manned by Michael Brant, a licensed emergency medical technician, and James Loehrer, a licensed paramedic. Upon arrival, Brant and Loehrer examined Thomas and collected his vital signs. They diagnosed his problem as acid reflux and recommended over-the-counter medication. Believing he was in no immediate medical danger, they left his home 15 minutes after arriving. The next morning, Thomas again called 9-1-1, still complaining of chest pains and difficulty breathing. An ambulance unit from Community Fire Protection District, manned by a different two-person team, arrived at his home. That team began administering emergency medical care and transported him to DePaul Health Center, where he died later that day from cardiac arrest. The spouse and son of Thomas filed a wrongful death suit against Community Fire Protection District, Brant and Loehrer. The trial court granted summary judgment to Grant and Loehrer, finding that they were entitled to official immunity. The Court of Appeals reversed, however, in Thomas v. Brant, No. ED 94414 (Mo.App. E.D. 2010).

Official immunity is a judicially-created doctrine designed to protect public employees from liability for allegedly negligent acts committed during their performance of official duties. Southers v. City of Farmington, 263 S.W.3d 603, 610 (Mo.banc 2008). Generally, whether public employees are protected turns on the type of act involved; the court must determine whether the challenged act was discretionary or ministerial. Davis v. Lambert-St. Louis Intern. Airport, 193 S.W.3d 760, 763 (Mo.banc 2006). Acts which are discretionary are protected, while acts which are ministerial are not. Id. A discretionary act is one that requires “the exercise of reason in the adaptation of means to an end and discretion in determining how or whether an act should be done or course pursued.” Id. A ministerial act is a clerical duty performed pursuant to a mandate with no exercise of judgment involved. State ex rel. Eli Lilly & Co. v. Gaertner, 619 S.W.2d 761, 765 (Mo.App. E.D. 1981). The doctrine is intended to encourage a “vigorous and effective government” where public officials can make decisions free of fear of personal liability. Southers, 263 S.W.3d at 611; Eli Lilly, 619 S.W.2d at 763.

When the issue of official immunity involves a publicly-employed medical professional, there is a second step to the analysis. In Richardson v. City of St. Louis, 293 S.W.3d 133 (Mo.App. E.D. 2009), this court held that whether the actions of emergency medical responders are protected turns on the circumstances of the situation. When emergency responders are acting in a rapidly-evolving emergency situation with limited information, they are protected by official immunity. Id. Without commenting on the vitality of Eli Lilly, this court reaffirms the approach advanced in Richardson.

When publicly-employed emergency medical personnel are treating patients, their negligent acts are protected by official immunity only if they are acting in a true emergency situation. This true emergency situation is a strict requirement. A true emergency is one involving rapidly-evolving circumstances where the medical personnel have limited information. The court should determine whether the situation involved a true emergency on a case-by-case basis by evaluating the totality of the circumstances. Here, the two-person team that responded to the first 9-1-1 call was not acting in a true emergency situation. The time and information available to them was more like that of a doctor treating a patient in a hospital than that of an emergency responder arriving to find a patient in critical condition. Responders acting in non-emergency situations will be held to the same standard of care as their privately-employed counterparts. Official immunity is available to publicly-employed emergency responders only if they are acting in a true emergency situation. In this case, the first two responders were not acting in a true emergency situation.

CONTRACTOR MAY RECOVER ATTORNEY'S FEES
UNDER PRIVATE PROMPT PAYMENT ACT

Lucas Stucco & EIFS Design, LLC (Contractor) entered into a contract with Loren Landau (Owner) for the installation of a stucco finish on Owner's building. After the project was completed, Owner still owed Contractor a balance of $4,900. Contractor filed suit for breach of contract, action on account, quantum meruit, and unjust enrichment. In the prayer to each count of Contractor's Petition, Contractor requested an award of attorney's fees. After a bench trial, the trial court awarded Contractor $4,900, plus attorney's fees of $10,567. The Supreme Court of Missouri affirmed in Lucas Stucco & EIFS Design, LLC v. Landau, No. SC90771, Mo.banc 2010.

The general rule in Missouri is that attorney's fees are not awarded to every successful litigant. Harris v. Union Elec. Co., 766 S.W.2d 80, 89 (Mo.banc 1989). Attorney's fees are recoverable in two situations: when a statute specifically authorizes recovery and when the contract provides for attorney's fees. Essex Contracting, Inc. v. Jefferson County, 277 S.W.3d 647, 657 (Mo.banc 2009). The Missouri Private Prompt Payment Act, Section 431.180, provides that "[a]ll persons who enter into a contract for private design or construction work…shall make all scheduled payments pursuant to the terms of the contract." Section 431.180.1. Any person who fails to make such payments may be subject to an action under the statute. Section 431.180.2. In resolving the action, "[t]he court may, in addition to any other award of damages…[award] reasonable attorney's fees to the prevailing party." Id. Although the issue in this case is one of first impression, Vance Brothers, Inc. v. Obermiller Construction Services, Inc., 181 S.W.3d 562 (Mo.banc 2006), discussed the pleading requirements of the Act. Vance concluded that there are two requirements for pleading a violation of the Act: (1) the parties entered into a private construction contract; and (2) one or more payments were not made pursuant to the contract. Id. at 564.

Here, Contractor pleaded these two act requirements. Contractor requested reasonable attorney's fees in the prayer. The act does not require specific reference to the statute in the petition as a requirement to seek the relief it affords. Instead, a court may award any relief a statute provides, including attorney's fees, as long as the party has pleaded the necessary elements of the act and has requested that relief in the prayer. By alleging in the Petition all of the elements necessary to bring a claim under the act, Contractor met the pleading requirements of the statute, such that a specific request for "reasonable attorney's fees" and the prayer may be granted.

A MUNICIPALITY OR OTHER PUBLIC
CORPORATION MAY BRING A DECLARATORY JUDGMENT
ACTION TO DETERMINE A BOUNDARY DISPUTE

The City of Lake St. Louis, MO filed a declaratory judgment action against the City of O'Fallon, seeking to invalidate O'Fallon's annexation of certain disputed property. The suit alleged that Lake St. Louis had a legally protected interest in enforcing its ordinances, collecting and administering taxes, and protecting the rights of the city and its residents in the disputed area, and asked the trial court to enter judgment declaring that O'Fallon had not legally annexed the property that Lake St. Louis claimed to be within its boundaries. O'Fallon filed a motion to dismiss, asserting that Lake St. Louis was not entitled to bring a declaratory judgment action to determine its boundaries. The trial court granted O'Fallon's motion, but the Supreme Court of Missouri reversed in City of Lake St. Louis v. City of O'Fallon, No. SC90790 (Mo.banc 2010).

While O'Fallon is correct that individuals are not permitted to bring declaratory judgment actions seeking to determine boundaries or to oust a municipal or other public corporation from disputed territory, municipalities, school districts and other public corporations are permitted to bring such actions. "A declaratory judgment provides guidance to the parties, declaring their rights and obligations and otherwise governing their relationship…" Shipley v. Cates, 200 S.W.3d 529, 534 (Mo.banc 2006). While the attorney general and prosecutor may bring a suit in quo warranto when two governmental entities assert claims over a disputed area, whether they choose to do so is within those officials' discretion. The governmental entity, therefore, as the party directly affected, should have the right instead to bring a declaratory judgment action in its own name to vindicate its directly affected interest in the territory.

To require a directly affected municipality or other similar public corporation to rely on a third party -- the attorney general or a county prosecutor -- to bring suit over its very boundaries would risk leaving it without a remedy if the attorney general and prosecutor exercise their discretion not to act. While this is appropriate where an individual litigant is involved, to avoid the multiplicity of suits that otherwise would ensue and to ensure that spurious claims are not asserted in an effort to adversely affect the public body, such reasoning does not apply to the municipality or other public corporation itself, as it has a direct and vital interest in determining its own boundaries. While a quo warranto action may be brought by the attorney general or prosecuting or circuit attorney at the relation of the public corporation to determine a boundary dispute, a declaratory judgment action may also be brought directly by the municipality or other public corporation itself.

Sewer Connection Fee Ordinance was not an Unconstitutional Special Law

2011-01-11T12:52:00.000-08:00

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.

A Prescription for the Physician-Don’t Meet With Defense Counsel Privately When Your Patient is in a Law Suit

2011-01-03T09:46:00.000-08:00

By Stacy G. Jackson

If you are a health care provider practicing in Missouri, you probably have been or will be a witness in litigation. Workers’ compensation claims, personal injury or medical malpractice; chances are one of your patients has filed a personal injury claim. As a treating physician or health care provider, your opinions are vital. After you receive medical authorizations and records requests, your office will probably receive a phone call from the attorneys for the defendant, wanting to know what you know about your patient in regard to the litigation. They may even tell you that this is a good way to avoid a deposition: an informal meeting just to get your opinions. It seems easier than a deposition and, after all, it is perfectly okay in Missouri. Or at least, it was!

This past August, the Missouri Supreme Court handed down an opinion that non-formal, private meetings between a plaintiff’s health care provider and defense counsel may create violations of the patient’s privacy rights under federal law.

In Missouri, it was a long held practice that as long as defense counsel provided a medical authorization signed by the plaintiff, a health care provider could speak to defense counsel in private, without the presence of the patient or the patient’s attorney. Mind you, it was never encouraged by the courts, and a physician or other provider was not compelled to have a private meeting. But in the case of Brandt v. Med.Def. Assocs., 856 S.W.2d 667(Mo.Banc 1993) (commonly called Brandt II), the Missouri Supreme Court held that in the absence of any state or federal law to the contrary, such actions were permissible.

However, after Brandt II, along came a federal law called the Health Insurance Portability and Accountability Act (HIPAA). HIPAA set some privacy security rules, and compliance with those rules was mandatory by 2003.

In State ex rel. Proctor v. Messina, SC90610, handed down this past August, the Missouri Supreme Court ruled that any private, non-formal communication between a plaintiff’s treating physician and defense counsel created the possibility of a treating physician violating the patient’s privacy rights under HIPAA. And with the recent changes to HIPAA, this could make the physician subject to fines up to $50,000, or imprisonment for up to one year, or both. See 42 U.S.C.A. §1320D-6.

So what should a treating physician or health care provider do? Even with this opinion, there is still much debate in the legal community about how strictly this ruling should be read. But with potential fines and prison time hanging over a health care provider’s head, it would seem best to err on the side of caution: seek the advice of counsel, and as inconvenient as it may be to one’s busy schedule, to be safe give your opinions in the formal proceeding of a deposition.

HIPAA compliance was mandated by 2003, and the Missouri Supreme Court just handed down their decision this year. That allows for roughly seven years of possible HIPAA violations by treating health care providers.

The law is ever-changing and, as a health care provider, your needs will change with it. If you have any questions in relation to how the law is affecting you, please contact Stacy Jackson at sjackson@bmplaw.com.