The Flag, Jan. - Feb. 2021
Vol. 77, No. 1 / Jan. - Feb. 2021
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.
SUIT ON UNPAID INVOICES MUST BE BROUGHT WITHIN FIVE YEARS
DiGregorio Food Products, Inc. v. Racanelli, 609 S.W.3d 478 (Mo. banc 2020)
“John Racanelli appeals the circuit court’s judgment in favor of DiGregorio Food Products, Inc. Because the underlying action is governed by the five-year statute of limitations set forth in § 516.120(1), the circuit court erroneously declared the law when it determined the 10-year statute of limitations contained in § 516.110(1) governed and entered judgment.”2 The circuit court’s judgment was reversed in DiGregorio Food Products, Inc. v. Racanelli, No SC 98443 (Mo. banc 2020).3
John Racanelli operates pizza restaurants in the St. Louis area. DiGregorio Food Products, Inc. is a food manufacturing, retail, and services distribution business. At some point in the late 1980s or mid-1990s, DiGregorio became an ingredient supplier for Racanelli’s pizza restaurants.4
“The course of business between DiGregorio and Racanelli’s restaurants was as follows. A manager from one of Racanelli’s restaurants would call DiGregorio and place an order. The next day, the delivery driver would receive an invoice for the order, load the delivery truck, and transport the goods to the appropriate Racanelli’s restaurant. Upon arrival at the restaurant, a Racnelli’s manager would sign the invoice and return it to the driver.”5
“Racanelli’s began making payments sporadically and then, in 2009 or 2010, failed to make payments altogether. Racanelli’s unpaid invoices totaled $44,383.85. DiGregorio contacted Racanelli and his wife and requested payment for the unpaid invoices; they refused to pay. DiGregorio ended its business relationship with Racanelli and his restaurant.”6
“DiGregorio filed suit in the circuit court of St. Louis County. The petition pleaded claims for suit on account and account stated. Racanelli moved for summary judgment, arguing both DiGregorio’s causes of action were barred by the five-year statute of limitations contained in 516.120(1). The circuit court overruled the motion for summary judgment, and the case proceeded to a bench trial.”7
“After trial, the circuit court declared the 10-year statute of limitations applied and concluded Racanelli was responsible for the amount of the unpaid invoices as damages. Racanelli argues the circuit court erred in concluding § 516.110(1)’s 10-year statute of limitations – as opposed to 516.120(1)’s five-year statute of limitations – applied to DiGregorio’s claims.”8
“Missouri has two statute of limitations relating generally to contract actions: section § 516.110(1) and 516.120[(1)].” Hughes Dev. Co. v. Omega Realty Co., 951 S.W.2d 615, 616 (Mo. banc 1997). Section 516.120(1) requires “[a]ll actions upon contracts, obligations or liabilities, express or implied, except those mentioned in section § 516.110, and except upon judgment or decrees of a court of record, and except where a different time is herein limited” to be brought within five years. Section § 516.110(1) requires “[a]n action upon any writing, whether sealed or unsealed, for the payment of money or property” to be brought within 10 years.9
The Court discussed the interplay between § 516.110(1) and § 516.120(1) in Rolwing v. Nestle Holdings, Inc.:
Section 516.110(1) is an exception to the general five-year limitations period established by section 516.120(1). The exception mentioned in section 516.110(1) consists of actions upon a written contract … for the payment of money or property. The plain language of section 516.120(1), however, applies generally to all breach of contract actions, including written contracts containing a promise for the payment of money or property.10
“437 S.W.3d 180, 182 (Mo. banc 2014). Said differently, § 516.110(1) “applies when a plaintiff files suit to enforce a written promise to pay money.” Id at 183.”11
“The issue presented in this case is whether the signed invoices actually contain a written promise to pay money. If so, § 516.110(1)’s 10-year statute of limitations applies, and DiGregorio’s claims were timely filed. If not, § 516.120(1)’s general five-year statute of limitations applies, and DiGregorio’s claims are barred.”12
“’[T]he essence of promise to pay money is that it is an acknowledgment of an indebtedness, an admission of debt due and unpaid.’ Martin v. Potashnick, 217 S.W.2d 379, 381 (Mo. 1949).”13
“The only term on the invoice possibly attributable to Racanelli is the restaurant manager’s signature. The invoices are silent, however, as to the significance of the signature. The invoice does not contain any language suggesting or implying the signature is Racenelli’s acknowledgment of indebtedness or his admission of a debt due and unpaid.”14
“The signed invoices in this case do not contain any language […] evidencing or implying Racanelli’s promise to pay money to DiGregorio. Because DeGregorio’s claims do not seek to enforce a written promise to pay money, § 516.110(1) does not apply.”15
ALLEGATIONS OF JUROR MISCONDUCT MUST BE RAISED PROMPTLY
Kahn v. Blackwell, 2020 WL 6732662, ED 108947 (Nov. 17, 2020)
“James P. Kahn (“Kahn”) appeals from trial court’s “Order and Judgment” (“Judgment”) finding in his favor, and against Triston Blackwell (“Blackwell”), on Kahn’s negligence claim against Blackwell, claiming that the trial court erred in denying his Motion for New Trial.”16 The denial of the Motion for New Trial was affirmed in Kahn v. Blackwell, 2020 WL 6732662, ED 108947 (Nov. 17, 2020).17
On October 4, 2015, Kahn was injured in an automobile collision when Blackwell’s vehicle, while traveling at a high rate of speed, crossed the center line of the road and struck the front of Kahn’s vehicle, which was traveling in the opposite direction. As a result of the collision, Kahn suffered serious injury to his legs, back, neck, shoulder, head, and left hand. […] Kahn filed a petition for damages alleging personal injury stemming from Blackwell’s negligence.18
A trial commenced and was submitted to the jury. The jury returned a verdict for Kahn on January 24, 2020 and assessed his damages at $10,000.00.19
“On January 30, 2020, Kahn filed a Motion for New Trial alleging that on the afternoon of January 24, 2020, during a break in the trial proceedings ‘just after the close of [Blackwell]’s case and just prior to closing arguments, there was improper contact between [Blackwell] and multiple jurors.’ Kahn attached his affidavit and those of his counsel, Steve Wolf (“Wolf”) and Mark Rudder (“Rudder”).”20
In Kahn’s affidavit, he noted that during the January 24, 2020 lunch break, he and his wife were exiting the courthouse when he observed Blackwell standing in the smoking area with two jurors in the case. Kahn provided that his wife stated, “Hey wait a minute, you can’t be down here talking with them,” and that he stated “it was against the rules for the defendant or plaintiff to be conversing with jurors.” Kahn noted that Blackwell “just smiled” at them, and one of the jurors, a “dark-haired female,” asked, “What do you want us to do, this is where we have to come smoke.”21
In Wolf’s affidavit, he provided that on January 24, 2020, he “witnessed an incident of possible improper contact between [Blackwell] and certain members of the jury just prior to closing arguments.”22 In Rudder’s affidavit, he noted that he, “became aware of improper contact between [Blackwell] and multiple jurors” on January 24, 2020.23
Kahn argues that the trial court abused its discretion in failing to grant his Motion for New Trial because he presented sufficient evidence “to demonstrate jury misconduct and improper contact with [Blackwell].”24
“A party cannot witness misconduct on the part of the court or jury and sit by and wait the result of the verdict, and then, if it proves to be against him, object to the alleged misconduct.” Nash v. Ozark Barbeque, Inc., 901 S.W.2d 353, 359 (Mo. App. S.D. 1995) (quoting Disbrow v. Boehmer, 711 S.W.2d 917, 927 (Mo. App. E.D. 1986)); see also Contestible v. Brookshire, 355 S.W.2d 36, 43 (Mo. 1962A) (overruled on other grounds by Bennett v. Owens-Corning Fiberglass Corp., 896 S.W.2d 464 (Mo. banc 1995)) (disallowing defendant’s juror misconduct point on appeal because “defendant waived the objection by not objecting at the time of the occurrence to the alleged misconduct of the juror.”).25
Here, both Kahn and Wolf explained in their affidavit that prior to closing arguments, they observed Blackwell and two jurors standing in a smoking area together. Kahn indicated that he explained to them that it was “against the rules for the defendant or the plaintiff to be conversing with the jurors,” but that no one left, Blackwell only smiled at Kahn, and one of the jurors asked what Kahn, “want[ed] us to do.” […] Although Rudder claims he was not “fully informed” of the alleged situation until after the jury rendered its verdict.26
Kahn, Wolf, and Rudder each established by their own admissions in their affidavits that they either observed or had some knowledge of potential improper contact between Blackwell and two jurors prior to the jury’s verdict. Despite these admissions, they made no effort to raise the issue with the trial court prior to the jury’s verdict on January 24, 2020. Instead, the issue was raised on January 30, 2020, six days after the jury rendered its verdict. “A party who witnesses misconduct and decides to play a game of chance cannot object to the alleged misconduct if it proves to be against him.” Wells v. Burlington Northern Railroad Company, 719 S.W.2d 793, 800 9Mo. App. E.D. 1986).27
Here, Kahn, took no action to raise any issue regarding the alleged improper contact with the trial court before the jury rendered its verdict.28 Instead, the issue was not raised until six days after the alleged occurrence.29 Accordingly, “Kahn’s inaction constituted a waiver of his allegation of error regarding Blackwell’s alleged improper contact with jurors.”30
THE STATUTE OF LIMITATIONS FOR LEGAL MALPRACTICE MAY ACCRUE BEFORE THE COLLATERAL LITIGATION ENDS
Duvall v. Yungwirth, 2020 WL 6572575, WD 83645 (Nov. 10, 2020)
“Lynn and Connie Duvall filed suit against attorney Joseph Yungwirth in the Circuit Court of Boone County, alleging claims for legal malpractice, breach of fiduciary duty, and negligent misrepresentation. The circuit court granted summary judgment to Yungwirth, finding that the Duvalls’ claims were time-barred under the five-year statute of limitations found in § 516.120(4).”31 The Duvalls appealed and the judgment was affirmed in Duvall v. Yungwirth, 2020 WL 6572575, WD 83645 (Nov. 10, 2020).32
The Duvalls’ claims in this action arise from estate-planning legal services provided by Yungwirth to Lynn Duvall’s aunt, Ruth Duvall in 2002.33 One of the goals of the Yungwirth’s work was to qualify Ruth for Medicaid benefits.34
“On July 28, 2002, Ruth executed documents prepared by Yungwirth to establish the M. Ruth Duvall Trust, with Lynn Duvall as trustee.”35
Yungwirth calculated that the value of Ruth’s assets, together with the amounts she had gifted to the Duvalls and their children in the previous three years, was equal to 98% of the value of the Duvalls’ home in Monroe County. In order to qualify for Medicaid benefits, and based on Yungwirth’s recommendation, Ruth transferred all of her assets (including her home, bank account and investment accounts, and personal property) to the Duvalls.36
Following the execution of documents Yungwirth had prepared, Ruth began receiving Medicaid benefits. While Ruth’s Medicaid application was being processed in 2003, the Department of Health and Senior Services (“DHSS”) received a “hotline” report that Lynn was financially exploiting Ruth.37
“On April 18, 2006, DHSS filed a claim in the probate proceedings involving Ruth’s estate, which was pending in the Circuit Court of Randolph County. DHSS’s claim sought to recover over $75,000 in Medicaid benefits paid by the State on Ruth’s behalf. In August 2006, DHSS filed a petition against the Duvalls in the probate proceedings for an accounting and discovery of assets.”38
“Five years later, on August 20, 2013, the Duvalls entered into a settlement agreement with the State, which required the Duvalls to pay $10,300 to Ruth Duvall’s estate.”39
“Eight days after settling the State’s claims, on August 28, 2013, the Duvalls filed the present action against Yungwirth, asserting claims for legal malpractice, breach of fiduciary duty, and negligent misrepresentation.”40
“The Duvalls contend that the statute of limitation did not begin to run on their claims until they reached a settlement with the State in the probate proceeding involving Ruth Duvall’s estate on August 20, 2013.”41
Section 516.100 governs the accrual of causes of action subject to the statutes of limitations found in chapter 516.42 Section 516.100 provides, in relevant part,
that for the purposes of sections 516.100 to 516.370, the cause of action shall not be deemed to accrue when the wrong is done or the technical breach of contract or duty occurs, but when the damage resulting therefrom is sustained and is capable of ascertainment, and, if more than one item of damage, then the last item, so that all resulting damage may be recovered, and full and complete relief obtained.43
Damage is “sustained and capable of ascertainment” “when it can be discovered or made known, even though the amount of damage is unascertained.” M & D Enterps. V. Wolff, 923 S.W.389, 394 (Mo. App. 1996). “[T]he fact of damage may be ascertainable ‘even if the exact amount of damage cannot be verified or if some additional damage may arise at a future time.’” Verbrugge v. ABC Seamless Steel Siding, Inc. 157 S.W.3d 298, 302 (Mo. App. S.D. 2005). “All possible damages do not have to be known, or even knowable before the statute accrues.” Klemme v. Best, 941 S.W.2d 493, 497 (Mo. 1997). “That additional damage may yet occur does not matter.” Day v. DeVries & Assocs., 98 S.W.3d 92, 96 (Mo. App. W.D. 2003).44
Missouri courts have repeatedly rejected arguments like the Duvalls’. Prior decisions hold that claims for attorney negligence can accrue prior to the final resolution of collateral litigation which is triggered by the attorney’s malpractice, where the malpractice plaintiff incurred damages in defending the collateral litigation prior to its conclusion.
[T]here are a number of cases which have held that, in malpractice claims against attorneys, the statute of limitations commenced to run before resolution of the underlying dispute upon which those claims were based . . . In none of those cases was the accrual of cause of action delayed by the fact that a person sustained later damage resulting from the same acts which also produced earlier ascertainable damage.
M & D Enterps. v. Wolf, 923 S.W.2d 389, 398 (Mo. App. S.D. 1996).45
“Even where an uncertain future event (such as the conclusion of collateral litigation) is “a very significant circumstance” in determining the full extent of the client’s injury, accrual is not delayed pending that event where the client is otherwise aware at an earlier time of the existence of potential legal malpractice claim, and has sustained present damages.”46
Several cases have come to the same conclusion: a cause of action for lawyer’s negligence may accrue prior to the conclusion of litigation caused by the lawyer’s negligence, if the client incurs some damages at an earlier time.47
“Missouri decisions have repeatedly held that a cause of action may accrue even through the full extent of the plaintiff’s injuries is not yet determinable. The running of the statute of limitations is not suspended by the ‘mere aggravating circumstances enhancing a legal injury already inflicted, or the mere development of such injury.’ Allison v. Mo. Power & Light Co., 59 S.W.2d 771, 773 (Mo. App. 1933).”
“This case does not involve a ‘continuing wrong’; on the contrary, all of the Duvalls’ alleged damages arose from legal services that Yungwrith provided in 2002. Although Yungwirth’s alleged malpractice may have caused ‘[d]amage . . . [which] bec[a]me more serious over time,’ the damages alleged by the Duvalls here stemmed from ‘one completed, wrongful act’ – Yungwirth’s alleged faulty estate-planning services in 2002.”
BREACH OF CONTRACT AND QUANTUM MERUIT CLAIMS WERE NOT MUTUALLY EXCLUSIVE
Twehous Excavating, Inc. v. Jefferson City Ret., LLC, No. WD83547 (Mo. App. W.D. 2020)
“Jefferson City Retirement, LLC, (“JCR”) appeals from the circuit court’s judgment in favor of Twehous Excavating, Inc., (“Twehous”) on Twehous’s claims for breach of contract and quantum meruit. JCR contends that the court erred in granting Twehous relief on both claims because the claims were mutually exclusive and inconsistent as a matter of law.”48 The judgment was affirmed in Twehous Excavating, Inc. v. Jefferson City Ret., LLC, No. WD83547 (Mo. App. W.D. 2020).49
“In 2013, JCR began building a retirement and assisted living community on property it owns in Jefferson City. JCR hired Omni Construction Company, Inc., (“Omni”) as the general contractor on the project. Omni entered into a subcontract agreement with Twehous to provide excavation work under Omni’s direction and supervision.”50
JCR terminated Omni as the general contractor for this project.51 When JCR terminated Omni, $91,663.50 in retainage had been withheld from Twehous.52 After JCR terminated Omni as the general contractor it asked Twehous to complete the work due under the subcontract agreement. “JCR also asked Twehous to perform additional work on the project beyond the work provided in the subcontract agreement.”53
“Twehous agreed to finish the work provided in the subcontract agreement and to perform additional work as directed by JCR on time and material basis. […] Twehous performed the work, and JCR paid the amounts billed on a time and material basis, less retainage.”54 […] When Twehous demanded final payment, JCR advised Twehous that it was undergoing arbitration with Omni and that JCR’s “resources for money have been tapped out until we recoup costs from Omni.”55
“Twehous subsequently filed a petition against JCR for breach of contract and quantum meruit. Twehous alleged that, under either theory, it was entitled to payment of the $98,550.65 in retainage.”56
“The court found in favor of Twehous on both its breach of contract and quantum meruit claims. The court found that, under either theory of recovery, the principal amount owed was $98,550.65.”57 “JCR argues that the two claims are mutually exclusive and inconsistent as a matter of law, and Twehous was required to elect its theory of recovery.”58
In Joseph F. Wagner, Jr. Revocable Trust U/A v. Thomson, 586 S.W.3d 273, 278-80 (Mo. App. 2019), this court found no instructional error when the circuit court submitted instructions on breach of contract and unjust enrichment claims, and the jury found in favor of the plaintiff on both claims. We found that “the evidence lent itself to various factual scenarios that supported both contract and implied contract theories,” and submission of both theories did not cause the jury to reach an inconsistent result. Id. at 279-80. Specifically, we explained that, “[a]lthough unjust enrichment implies a contract where none exists, the nonexistence of a contract is not an actual element of unjust enrichment; the elements of unjust enrichment include a benefit given, appreciated, and unjustly retained.” Id. at 280. “Hence, the existence of a contract does not negate, repudiate, or disprove that a benefit was conferred, recognized, and unjustly retained.” Id. Because the defendants disputed the contract’s existence and the evidence allowed the jury to agree with the defendants on that issue but still find that the defendants were unjustly enriched at the plaintiff’s expense, we concluded that it was not improper to submit both breach of contract and unjust enrichment claims to the jury. Id.59
The same principles apply in this case. Twehous presented evidence that an oral contract was formed when JRC asked Twehous to stay on the job after Omni was fired, Twehous agreed to stay and complete the work due under the subcontract agreement and to do additional work on a time and material basis, and JCR promised Twehous that it would be compensated in full for all of its work.60 […] Twehous also presented evidence that JCR received the benefit of its work, accepted its work, and did not pay Twehous for all of its work. Here, as in Joseph F. Wagner, Jr. Revocable Trusts U/A, the evidence supported both theories, and the existence of a contract did not negate, repudiate, or disprove the elements of a quantum meruit claim. Twehous was not required to elect its theory of recovery, and it properly submitted both claims to the court. Id.61
JCR argues that the court’s finding in favor of Twehous on both claims and its finding that Twehous was entitled to the same damages on both claims allowed Twehous a double recovery. JCR is correct that a party “in not entitled to be made more than whole or receive more than one full recovery for the same harm.” Davis v. Clearly Bldg. Corp., 143 S.W.3d 659, 670 (Mo. App. 2004).62 […] In its judgment, the court stated that the damages under the two theories of recovery were the same. Therefore, the damages merged into one award. Id.63
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 DiGregorio Food Products, Inc. v. Racanelli, 609 S.W.3d 478 (Mo. banc 2020).
16 Kahn v. Blackwell, 2020 WL 6732662, ED 108947 (Nov. 17, 2020).
31 Duvall v. Yungwirth, 2020 WL 6572575, WD 83645 (Nov. 10, 2020).
45 Id. at *6.
48 Twehous Excavating, Inc. v. Jefferson City Ret., LLC, No. WD83547 (Mo. App. W.D. 2020).