The Flag, July - August 2022
Vol. 78, No. 4 / July - August 2022
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, Neely & Hyde.
CONTRACT MUST INCLUDE STATUTORY NOTICE OF ARBITRATION FOR ARBITRATION TO BE COMPELLED
Wind v. McClure, 643 S.W.3d 691 (Mo. App. E.D. 2022).
Mark McClure appealed the circuit court decision to deny his motion to compel arbitration in a breach of contract action filed by Todd J. Wind and Todd J. Wind Enterprises, LLC. The circuit court ruled that since the parties’ Asset Purchase Agreement failed to include the notice of arbitration statement required by § 435.460, RSMo, the court ruled their agreement to arbitrate was unenforceable. The Missouri Court of Appeals-Eastern District affirmed this ruling in Wind v. McClure.
Section 435.460 requires each contract containing a binding arbitration provision to “include adjacent to, or above the space provided for signatures a statement, in ten point capital letters, which read[s] substantially as follows: ‘THE CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.’” “The language of the statute is clear and unambiguous. The requirement is absolute, and all contracts containing an arbitration provision must include the prescribed notice statement.” In Hefele v. Catanzaro, the Court of Appeals held that if an arbitration agreement subject to § 435.460 does not contain the mandatory notice statement, then it will not be enforced.
McClure argued the court should “apply a judicially created exception to the unambiguous statutory requirements of § 435.460.” In support of his argument, McClure argues Forest Hill Country Club v. Fred Weber, Inc. suggests that noncompliance with § 435.460 may be excused if the evidence shows the parties had “actual notice” of the arbitration provision. “Section 435.460 requires that all contracts containing an arbitration provision must include the prescribed notice language. The statute provides no exception to compliance. Allowing a broad, judicially-created ‘actual notice’ exception for the inclusion of the required statement undermines the purpose of § 435.460 and is at odds with the statutory language,” the Court of Appeals ruled. Since the Asset Purchase Agreement did not contain the mandatory notice language, the arbitration provision is unenforceable and Wind cannot be compelled to arbitrate. It also noted the Forest Hills suggestion of compliance with § 435.460 being excused upon proof of actual notice to the parties of the arbitration provision, “should no longer be followed.”
TRIAL COURT DID NOT ABUSE ITS DISCRETION IN DENYING MOTION TO SET ASIDE DEFAULT JUDGMENT
370/Missouri Bottom Road/Taussig Road Community Improvement District v. Ice Zone Partners, LLC, 2022 WL 1217754 (Mo. App. E.D. 2022).
Ice Zone Partners, LLC, appealed the trial court’s denial of its motion to set aside the default judgment entered against it and in favor of Missouri Bottom/Taussig Road Community Improvement District (MB-CID) and 370 Missouri Bottom Road/Taussig Road Transportation Development District (MB-TDD). MB-CID and MB-TDD filed a lawsuit alleging Ice Zone failed to pay tax assessments levied by MB-CID and MB-TDD for 2017 through 2020.The circuit court found that Ice Zone’s registered agent acted recklessly when he left town following MB-CID and MB-TDD filing the lawsuit and knowingly failed to check his mail for nearly six months during which time MB-CID and MB-TDD served him with their first amended petition, which Ice Zone failed to answer in a timely manner. The Missouri Court of Appeals-Eastern District found “no abuse of discretion” and affirmed the circuit court’s ruling.
The decision whether to grant a motion to set aside a default judgment is at the trial court’s discretion, and an appellate court will only interfere if the record convincingly demonstrates abuse. An abuse of discretion occurs when the “ruling is clearly against the logic of the circumstances then before the trial court and is so unreasonable and arbitrary that the ruling shocks the sense of justice and indicates a lack of careful consideration.” Appellate courts accord more deference to the circuit court’s decision to set aside a default judgment and “are more likely to reverse a judgment denying a motion to set aside a default judgment than one granting relief.”
Rule 74.05(d) provides that a default judgment may be set aside “[u]pon motion stating facts constituting a meritorious defense and for good cause shown,” so long as the motion to set aside is filed within one year after the entry of the judgment. Rule 74.05(d) defines “good cause” to include “a mistake or conduct that is not intentionally or recklessly designed to impede the judicial process.” As the party seeking to set aside the default judgment, Ice Zone had the burden to prove it had a meritorious defense to MB-CID and MB-TDD’s claims and that Ice Zone had good cause for its default. The failure to prove either element requires denial of the motion. “Thus, the trial court did not abuse its discretion when it concluded that Ice Zone failed to establish the element of good cause to set aside the default judgment,” the Court of Appeals found.
UNSUCCESSFUL INTERVENOR HAS NO STANDING TO APPEAL
Yuncker v. Dodds Logistics, LLC, 2022 WL 1548013 (Mo. App. W.D. 2022).
Zurich America Insurance Co. appealed the Jackson County Circuit Court judgment confirming an arbitration award that found Keith Dodds and Dodds Logistics, LLC, negligent following an October 2020 accident involving a tractor-trailer (driven by Dodds) and a motor vehicle (driven by Thomas Yuncker). The court awarded damages to Yuncker and Christopher Gutierrez, who was a passenger in Yuncker’s vehicle. Zurich said the circuit court erred in failing to rule on its post-judgment motion to intervene, denying or impliedly denying its motion to vacate or set aside the judgment, and entering the judgment without proper notice to Zurich under § 537.065.2. Because Zurich was not a party to the lawsuit nor aggrieved by the circuit court’s judgment entered on May 26, 2021, the Missouri Court of Appeals-Western District found that Zurich had no standing to appeal under § 537.065.2 and dismissed the appeal.
Zurich’s motion to intervene was filed after the circuit court’s entry of a Rule 74.01(a) judgment that resolved all issues then pending before the court and was therefore eligible for appeal, triggering Rule 75.01. Zurich’s motion to intervene was not an authorized after-trial motion because such motions must be filed by parties to the underlying matter.
“Though a motion to intervene is not an authorized after-trial motion, it is nonetheless a motion that is allowed to be filed after a Rule 74.01(a) judgment is entered … Because a post-judgment motion to intervene is not an authorized after-trial motion, it must be ruled on, if at all, within the 30-day window contemplated by Rule 75.01 …When a post-judgment motion to intervene is not ruled on within 30 days of entry of a Rule 74.01(a) judgment, the judgment becomes final for purposes of appeal under Rule 81.05(a), and the movant, who is not aggrieved by the judgment, remains a non-party to the proceeding, the same status the movant had when the judgment was entered.”
Since Zurich was not a party to the lawsuit when the circuit court entered its May 26, 2021, judgment, Zurich did not become a party to the lawsuit when it filed a post-judgment motion to intervene. The Court of Appeals ruled Zurich also remained a non-party to the lawsuit, unaggrieved by the judgment, when the circuit court failed to rule on the motion to intervene during the 30-day window contemplated by Rule 75.01, the court notes.
HOMEOWNER’S ASSOCIATION HAD NO DUTY TO LIGHT PRIVATE PROPERTY
Reddick v. Spring Estates Homeowner’s Association, 2022 WL 1548150 (Mo. App. E.D. 2022).
Appellant Michael Reddick brought a wrongful death lawsuit against his parents and their neighbor following his wife’s fatal fall from a wall adjoining their properties. Reddick settled with his parents and their neighbor before filing amended petitions adding the Spring Lake Estates Homeowner’s Association as respondents. Reddick argued the circuit court erred in granting summary judgment to the association because the association had a duty to adequately light the subdivision. The Missouri Court of Appeals-Eastern District affirmed the judgment for the homeowner’s association in Reddick v. Spring Estates Homeowner’s Association.
To prevail on a negligence claim in a wrongful death case, a plaintiff must prove: (1) the defendant owed a duty of care to the decedent; (2) the defendant breached that duty; (3) the breach was the actual and proximate cause of the decedent’s death; and (4) the plaintiff suffered damages as a result of the breach. Reddick acknowledged in his appellate brief that a Missouri court has not found a duty by a homeowner’s association in these circumstances.
In Reddick’s case, the homeowner’s association has no control over the private property on which the decedent fell. He argued the association undertook a duty to light the area where his wife fell because it contemplated lighting the subdivision and installed five streetlights in common areas. “Reddick is correct insofar as a defendant who assumes a duty, by conduct or contract, may be liable for injuries caused by the unsafe performance of the assumed duty.” “However, a defendant’s liability is no broader than the duty assumed.” “[B]y discussing lighting the subdivision and installing five streetlights in common areas, the Association did not assume a duty to adequately light every area of the subdivision, including the private property where the decedent fell,” the Court of Appeals ruled.
 W. Dudley McCarter, a former president of The Missouri Bar, is a partner in the St. Louis law firm of Behr, McCarter, Potter, Neely & Hyde.
 Wind v. McClure, 643 S.W.3d 691 (Mo. App. E.D. 2022).
 Section 435.460, RSMo (2016).
 643 S.W.3d at 695.
 727 S.W.2d 475 (Mo. App. E.D. 1987).
 643 S.W.3d at 696.
 691 S.W.2d 361 (Mo. App. E.D. 1985).
 643 S.W.3d at 698.
 370/Missouri Bottom Road/Taussig Road Community Improvement District v. Ice Zone Partners, LLC, 2022 WL 1217754, 1 (Mo. App. E.D. 2022).
 Id. at 1.
 Brungard v. Risky’s, Inc., 240 S.W.3d 685, 687-88 (Mo. banc 2007).
 Vogel v. Schoenberg, 620 S.W.3d 106, 111 (Mo. App. 2021).
 620 S.W.3d at 111.
 2022 WL 1217754 at 5.
 Yuncker v. Dodds Logistics, LLC, 2022 WL 1548013 (Mo. App. W.D. 2022).
 See State ex rel. AJKJ, Inc. v. Hellmann, 574 S.W.3d 239, 242 (Mo. banc 2019).
 2022 WL 1548013 at 4 (citing State ex rel. AJKJ, Inc., 574 S.W.3d).
 2022 WL 1548150 (Mo. App. E.D. 2022).
 Scales v. Whitaker, 615 S.W.3d 425, 429 (Mo. App. E.D. 2022).
 2022 WL 1548150 at 6 (citing Bowan v. Express Med. Transp., Inc., 135 S.W.3d 452, 457 (Mo. App. E.D. 2004)).
 Kraus v. Hy-Vee, Inc., 147 S.W.3d 907, 920 (Mo. App. W.D. 2004) (citing Teichman v. Potashnick Constr., Inc., 446 S.W.2d 393 (Mo. banc 1969)).
 2022 WL 1548150 at 6.