The Flag, Sept. - Oct. 2020
Vol. 76, No. 5 / Sept. - Oct. 2020
W. Dudley McCarter
W. Dudley McCarter, a former president of The Missouri Bar, is a partner in the St. Louis law firm of Behr, McCarter & Potter, P.C.
A NEW PARTY CANNOT BE ADDED AFTER THE STATUTE OF LIMITATIONS HAD RUN
The plaintiffs in this wrongful death action [Sofia v. Dodson] appeal the circuit court’s summary judgment in favor of Mercy Hospital Joplin due to the expiration of the statute of limitations. They concede the statute of limitations had run prior to filing their current claim against Mercy Hospital but nonetheless argue they were entitled to the benefit of the one-year savings statute that applies to nonsuits because they had taken a nonsuit against Mercy Hospital less than one year before filing their present petition.
The circuit court properly dismissed Mercy Hospital. A nonsuit is the termination of a particular suit or cause of action. The plaintiffs did not suffer a nonsuit against Mercy Hospital. Rather, with the court’s permission, they substituted Mercy Clinic Joplin, LLC, in place of Mercy Hospital under Rule 55.33(c). The circuit court’s judgment in favor of Mercy Hospital is affirmed.2
“The facts of this case are not in dispute. Gladys Walker died April 10, 2011, four days after undergoing a gallbladder removal surgery performed by Dr. Robert W. Dodson at Mercy Hospital. Londa L. Sophia, Gayla Woodcock, and Robin Frazier (‘the plaintiffs’) are Ms. Walker’s daughters.3
The plaintiffs timely filed their wrongful death action under section 537.080.1(1), naming only Mercy Hospital and Dr. Dodson as defendants. The original petition incorrectly stated Dr. Dodson was the agent and employee of Mercy Hospital.
Close to two years after the three-year statute of limitations expired on April 10, 2014, the plaintiffs realized through review of discovery responses that Mercy Clinic, not Mercy Hospital, employed Dr. Dodson and, in July 2016, filed a motion for leave to amend their petition under Rule 55.33(c) to substitute Mercy Clinic “in place and instead of” Mercy Hospital.”4
“The circuit court sustained the plaintiffs’ motion, and the amended petition naming Mercy Clinic and Dr. Dodson was filed on July 11, 2014.5 “Mercy Hospital, of course, by then no longer was in the case, a new petition already having been filed substituting Mercy Clinic in its place.”6
“… Mercy Clinic filed a motion to dismiss, claiming the action against it was time-barred because it was filed after the three-year limitations period expired.7
“[F]our months after they were permitted to substitute Mercy Clinic for Mercy Hospital, the plaintiffs sought leave for a second time to amend their petition under Rule 55.33(c)…8 to add party Defendant Mercy Hospital. “The plaintiffs thereby sought to add Mercy Hospital even though they previously had replaced it with Mercy Clinic based on their mistake regarding ‘the correct Mercy entity that employed Dr. Dodson.”’9
“The circuit court allowed the untimely addition of Mercy Hospital….”10 “Mercy Hospital subsequently moved for summary judgment, arguing the action against it was time-barred because it was added to the suit long after the statute of limitations had expired. The circuit court agreed and entered judgment in favor of Mercy Hospital.11
It is well-settled that “the saving[s] statute does not ‘save’ actions that are time-barred. Instead, the saving[s] statute provides a one-year grace period for actions that are  timely filed and  suffer a nonsuit.” McMillan v. Pilot Travel Ctrs., LLC, 515 S.W.3d 699, 705 (Mo. App. 2016) (emphasis omitted). It permits a plaintiff “to commence a new wrongful death action within one year after a nonsuit.” State ex rel. Goldworthy v. Kanatzar, 543 S.W.3d 582, 585 (Mo. banc 2018).
The single issue before the Court on appeal is whether the plaintiffs took a nonsuit, entitling them to the benefit of the one-year savings provision.12
The taking of nonsuit “is a final termination of the particular suit,” Rainwater v. Wallace, 174 S.W.2d 835, 838 (Mo. 1943), or “action.” Cady v. Harlan, 442 S.W.2d 517, 519 (Mo. 1969). A nonsuit “means any judgment or discontinuance or dismissal whereby the merits are left untouched. In other words, a nonsuit occurs when a court order terminates a cause of action without prejudice.” Kanatzar, 543 S.W.3d at 585 n. 3.13
“[T]he action against the initially named Mercy Hospital was not dismissed or terminated; it proceeded, just against the proper defendant, which was substituted for incorrectly sued Mercy Hospital.”14 “[T]he plaintiffs cannot get around the passage of the statute of limitations by adding Mercy Hospital back in once Mercy Clinic was substituted for it. That would allow them to bypass the prohibition against adding a new party after the statute of limitations has run. The savings statute applies only to nonsuits, not to such substitutions.”15
“The plaintiffs’ substitution of Mercy Clinic in place of Mercy Hospital was not a nonsuit entitling them to the benefit of the one-year savings provision. Because the savings statute does not apply, and because the action against Mercy Hospital was filed after the three-year statute of limitations expired, it is time-barred.”16
ASSIGNEE OF INSTALLMENT SALE CONTRACT IS SUBJECT TO A MISSOURI MERCHANDISING PRACTICES ACT CLAIM BASED ON THE UNDERLYING SALE
“Tommy Heinz bought a 2015 Toyota Tacoma automobile from Driven Auto Sales…. Driven Auto and Heinz entered into an installment sale contract and security financing agreement for the outstanding balance of the purchase price.”17
Driven Auto assigned its rights and responsibilities in those agreements to First Community Credit Union which began collecting monthly payments from Heinz. When Driven Auto failed to provide Heinz the title to the vehicle as required by § 301.210, Heinz sued Driven Auto for violation of the Missouri Merchandising Practice Act (MMPA), 407.025. Heinz also sued First Community under the MMPA based on First Community’s status as Driven Auto’s assignee and holder of Heinz’s sale contract and loan.18
“[T]he trial court granted First Community’s motion to dismiss.”19
In Heinz v. Driven Auto Sales, the Court of Appeals reversed, “finding that Heinz’s petition states a cause of action against First Community because by virtue of its status as the assignee and holder of Driven Auto’s sale contract and loan, First Community ‘stands in the shoes’ of Driven Auto for all purposes including being subject to the same liability exposure in connection with those transactions.20
The fundamental purpose of the MMPA is to protect customers and consumers. Arcese v. Daniel Schmitt & Co., 504 S.W.3d 772, 789 (Mo. App. E.D. 2016) (citing Berry v. Volkswagen Grp. of Am., Inc., 397 S.W.3d 425, 433 (Mo. banc 2013)). “The MMPA is paternalistic legislation designed to protect those that could not otherwise protect themselves.” Berry, 397 S.W.3d at 433. To promote this laudable purpose, the MMPA broadly prohibits false, fraudulent, or deceptive merchandising practices and affords our trial courts remedial measures (i.e., damages, injunctions, equitable relief, and attorney’s fees), “designed not only to remedy violations of the MMPA, but also prospectively to deter prohibited conduct and protect Missouri citizens.”Id.21
“The UCC applies to the assignment of sales agreements that occur in Missouri like the one here. Section 400.2-210(5) provides that ‘[a]n assignment . . . is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.’ 400.2-210(5).”22
“[By] operation of 400.2-210(5), First Community’s acceptance of the assignment, which is undisputed here, constituted an affirmative promise by First Community to perform Driven Auto’s duties under the contract which included, according to the allegations in Heinz’s petition, to provide Heinz with the title to the vehicle.”23
The general rule is that the assignee of a non-negotiable obligation occupies exactly the same position the assignor occupied. Peel v. Credit Acceptance Corp., 408 S.W.3d 191, 206 (Mo. App. W.D 2013) (citing United Fin. Plan, Inc. v. Parkview Drugs, Inc., 250 S.W.2d 181, 184 (Mo. App. 1952)). And just as the assignee accepts performance of all of the assignor’s duties under the contract, the assignee also takes subject to all defenses that might have been made against it while in the hands of the assignor at the time of assignment. Id.24
In many respects, the FTC holder rule mirrors the foregoing principles of Missouri law regarding assignee liability. The FTC holder rule provides that “any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained . . .” 16 C.F.R. 433.2. And like the MMPA, the FTC holder rule “exists to preserve consumer rights against holders[.]” Boulds v. Chase Auto Fin. Corp., 266 S.W.3d 847, 852 (Mo. App. E.D. 2008).
From our analysis, … we reach the critical conclusion that the “subject to all claims” language from the FTC holder rule is broad and encompasses the MMPA claim at issue here. In Boulds, we found that “the liability of the holder is as broad as that of the seller under the FTC holder rule[.]” 266 S.W.3d at 852. And Missouri courts have consistently held that an assignee-holder, “by virtue of being an assignee,” may be liable on an MMPA claim regardless of whether the assignee committed fraudulent or unlawful conduct. Peel, 408 S.W.3d at 205-206 (holding that the assignee-holder of a retail installment contract from the purchase of a vehicle was liable, “by virtue of being an assignee,” for a consumer’s MMPA claim filed against the holder even if based solely on the seller’s failure to deliver title upon delivery of vehicle)….25
The language of our cases cannot be more explicit. “[T]his provision [the FTC holder rule] in a Retail Installment Contract puts the holder in the shoes of the seller[,]” Peel, 408 S.W.3d at 205; “the assignment of [a] sales contract [containing such language] . . . carries with it responsibility of owning that contract[,]” id.; and “[t]he general rule is that the assignee of a non[-]negotiable obligation occupies exactly the same position with respect thereto that his assignor occupied.” Id. at 206 (citing Parkview Drugs, 250 S.W.2d at 184).26
‘“[T]he FTC Holder Rule is unambiguous and, on its face, places no limitation on the types of claims or defenses that a debtor may assert against a creditor-assignee.’ Beemus v. Interstate Nat’l Dealer Services, 823 A.2d 979, 984 (Pa. Super. 2003).”27
WHISTLEBLOWER’S ALLEGATIONS WERE SUFFICIENT TO ALLEGE WRONGFUL DISCHARGE UNDER PUBLIC POLICY EXCEPTION
“Michael Jaeger appeals the dismissal of his petition in the Jackson County Circuit Court. He claims in his sole point on appeal that the trial court erred because his petition stated a cause of action for wrongful termination. The judgment is reversed and the case is remanded”28 in Jaeger v. Resources for Human Development.
“Michael Jaeger is a former employee of Resources for Human Development, Inc. (‘RHD’), a non-for-profit corporation that provides services to individuals who need continuing care due to developmental disability. RHD receives funding through Developmental Disability Services of Jackson County (‘EITAS’). Jaeger filed a petition against RHD … alleging wrongful termination….”29
Jaeger alleged that he
was directed by RHD to restrict a client’s (“Client”) conduct, contact, and communication with other individuals, including Client’s girlfriend. Jaeger refused to carry out RHD’s instructions and complained about the lack of due process or procedures, which he alleges is required by EITAS. Jaeger reported RHD’s directions to EITAS. EITAS advised RHD that the directions were unlawful and should not be carried out. Jaeger was then terminated from his employment because he reported RHD’s actions to EITAS. He claimed he was a whistleblower terminated in violation of public policy.30
“The at-will employment doctrine is well-established Missouri law.” Margiotta v. Christian Hosp. N.E. N.W., 315 S.W.3d 342, 345 (Mo. banc 2010).“Absent an employment contract with a definite statement of duration … an employment at will is created.” Id. (internal quotation marks omitted). “An employer may terminate an at-will employee for any reason or for no reason.” Id. (internal quotation marks omitted).
“However, the at-will doctrine is limited in certain respects.” Id. “An employer cannot terminate an at-will employee for being a member of protected class, such as ‘race, color, religion, national origin, sex, ancestry, age, or disability.”’ Id. (quoting section 213.055). “In addition, Missouri recognizes the public-policy exception to the at-will-employment rule.” Id.31
To plead a claim of whistleblowing, the employee must allege that: (1) he reported serious misconduct constituting a violation of well-established and clearly mandated public policy; (2) the employer terminated his employment; and (3) there is a causal connection between his reporting and his termination. Van Kirk v. Burns & McConnell Eng. Co., Inc., 484 S.W.3d 840, 844-45 (Mo. App. W.D. 2016); Fleshner v. Pepose Vision Inst., P.C., 304 S.W.3d 81, 91 (Mo. banc 2010).32
“[P]ublic policy is not found in the varying personal opinions and whims of judges or courts, charged with the interpretation and declaration of the established law, as to what they themselves believe to be the demands or interests of the public.” Margiotta, 315 S.W.3d at 346 (internal quotation marks admitted). Thus, a wrongful discharge action must be based on a constitutional provision, a statute, a regulation based on statute, a rule created by a governmental body, the judicial decisions of state and federal courts, the constant practice of government officials, and, in certain instances, professional codes of ethics. Delaney V. Signature Health Care Foundation, 376 S.W.3d at 56-57 (Mo. App. E.D. 2016); Hedrick v. Jay Wolfe Imports I, LLC, 404 S.W.3d 454, 458 (Mo. App. W.D. 2013).33
“[A] plaintiff need not rely on an employer’s direct violation of statute or regulation.” Fleshner, 304 S.W.3d at 96 (emphasis in original). “Instead, the public policy must be reflected by a constitutional provision, statute, regulation promulgated pursuant to statute, or rule created by a governmental body.” Id. (emphasis in original). “Moreover, there is no requirement that the violation that the employee reports affect the employee personally, nor that the law violated prohibit or penalize retaliation against those reporting its violation.” Id. at 97.34
The purpose of the public policy exception is to prevent employers from discharging employees, without consequences, for doing that which is beneficial to society. Id at 92. Viewing the facts contained in the petition as true and in the light most favorable to Jaeger, as we must, Jaeger was responsible for caring for a client with developmental disabilities. RHD was violating the rule it agreed to uphold when it accepted taxpayer money from EITAS by attempting to restrict Client’s ability to interact with others without providing Client the required procedural process.35
TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON LIABILITY BASED ON THE UNCONTROVERTED MATERIAL FACTS SUBMITTED
“Mehrdad Fotoohighiam appeals the circuit court’s entry of partial summary judgment on the issue of liability in favor of Marcia Green. Because the Rule 74.04(c) paragraphs and responses demonstrated there were no genuine issues of material fact and that Marcia was entitled to judgment as a matter of law, the circuit court did not err in entering partial summary judgment in Marcia’s favor.36 The circuit court’s judgment was affirmed in Green v. Fotoohighiam.
“While asleep in her mobile home, noises from outside Marcia’s door woke her. Once out of bed, Marcia realized her mobile home was on fire. To escape the blaze, she broke a window in her bedroom and jumped out head-first to safety. Marcia sustained several injuries.”37 “[H]er mobile home and all personal property inside were destroyed.”38
Marcia sued Mehrdad, James Hall, David Reed, Electenergy Technologies, Inc., and ETI, L.L.C., alleging Mehrdad and the other defendants conspired to set her mobile home on fire, causing Marcia mental and physical harm as well as property damage. Following discovery, Marcia moved for partial summary judgment against Mehrdad on the issue of liability. Pursuant to Rule 74.04, Marcia included with her motion a statement of uncontroverted material facts containing the following allegations: (1) Mehrdad owns a mobile home adjacent to Marcia’s lot; (2) Scotty Christopher and Hall performed work on Mehrdad’s property; (3) Mehrdad offered Hall and Christopher $500 to set Marcia’s mobile home on fire; (4) Mehrdad told former employee, Louis Spano, that he hired Hall and Reed to set Marcia’s mobile home on fire; and (5) Marcia’s mobile home was actually burned down, causing her damage. Each of these allegations cited to deposition testimony or an affidavit supporting it.
Additionally, included with the documents supporting the statement of uncontroverted material facts were portions of Mehrdad’s deposition testimony that were not cited or otherwise referenced by Marcia.39
… Mehrdad failed to file a response to Marcia’s motion for partial summary judgment. The circuit court entered partial summary judgment as to liability on Marcia’s favor. In its order, the circuit court noted Mehrdad’s failure to timely respond resulted in an admission to all facts set forth in Marcia’s statement of uncontroverted facts. The circuit court also relied on the fact that Mehrdad asserted his Fifth Amendment right to remain silent when asked certain questions during his deposition; therefore, it assumed any answer that would have been given would have been adverse to Mehrdad.40
“The case proceeded to a jury trial on the issue of damages only. The jury returned a verdict of $250,000 in actual damages and $2,500,000 in punitive damages.”41
“Summary Judgment practice is governed by Rule 74.04 and this Court’s decision in ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993). As the movant, Marcia ‘must establish that there is no genuine dispute as to those material facts upon which [she] would have had the burden of persuasion at trial.’ ITT, 854 S.W.2d at 381….”42 “[T]he movant must attach to the motion for summary judgment a statement of uncontroverted material facts that ‘state[s] with particularity in separately numbered paragraphs each material fact as to which movant claims there is no genuine issue, with specific references to the pleadings, discovery, exhibits or affidavits that demonstrate the lack of genuine issue as to such facts.’ Rule 74.04(c)(1).”43 “After the movant makes this submission, the non-movant is required to file a response either admitting or denying the movant’s material facts.”44
Taken together, these summary judgment principles require a court to “determine whether uncontroverted facts established via Rule 74.04(c) paragraphs and responses demonstrate [movant’s] right to judgment regardless of other facts or factual disputes.” Pemiscot County Port Authority [v. Rail Switching Services, Inc.], 523 S.W.3d at 534 [(Mo. App. 2017)] (emphasis in original).
These summary judgment principles do not require the circuit court or any appellate court to sit through the entire record to identify disputed issues, which, in turn, would cause a court to impermissibly act as an advocate for a party. Lackey v. Iberia R-V Sch. Dist., 487 S.W.3d 57, 62 (Mo. App. 2016). Moreover, requiring a court to comb through the entire record to determine if any disputed issues of material fact existed would render the 1994 amendments to Rule 74.04 meaningless….45
Because the circuit court had no obligation to look outside discovery, exhibits, and affidavits referenced in Rule 74.04(c) paragraphs and responses, it correctly determined the uncontroverted material facts established Marcia’s right to partial summary judgment on the issue of liability.
Mehrdad’s argument that the circuit court and this Court must consider uncited deposition testimony that creates a genuine issue of material fact is based solely on Street v. Harris, 505 S.W.3d 414 (Mo. App. 2016).46
“A review of other court of appeals cases demonstrates the court of appeals has understood and correctly applied the changes to Rule 74.04, leaving Street as the clear outlier.”47
“It is clear that any court – whether it be the circuit court addressing summary judgment in the first instance or an appellate court reviewing an entry of summary judgment – need only consult what was properly put before it by way of Rule 74.04(c) paragraphs and responses. For the foregoing reasons, Street is overruled to the extent it is inconsistent with this opinion and Rule 74.04.”48
1 W. Dudley McCarter, a former president of The Missouri Bar, is a partner in the St. Louis law firm of Behr, McCarter & Potter, P.C.
2 Sofia v. Dodson, No. SC97854 (Mo. banc 2020).
17 Heinz v. Driven Auto Sales, No. ED107617 (Mo. App. E.D. 2020).
28 Jaeger v. Resources for Human Development, No. WD83141 (Mo. App. W.D. 2020).
36 Green v. Fotoohighiam, No. SC98262 (Mo. banc 2020).