14:23 PM

The Flag, March-April 2020

Vol. 76, No. 2 / March - April 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.


“Dollar Tree Stores, Inc., and Janie Harper (collectively, ‘Dollar Tree’) appeal from the circuit court’s order overruling their motion to compel arbitration on their former employee’s claim of disability discrimination. The former employee, Nina Theroff, and Dollar Tree disputed whether there was assent to the arbitration agreement.”2

“The circuit court’s order overruling Dollar Tree’s motion to compel arbitration and stay proceedings [was] affirmed” in Theroff v. Dollar Tree Stores.3

Theroff alleged Dollar Tree constructively discharged her by refusing her request for a reasonable accommodation – allowing her service dog to accompany her. She filed charges with the Missouri Commission on Human Rights against Dollar Tree for discrimination based on disability and received a notice of right to sue letter. Theroff filed a petition in the circuit court asserting a single claim of disability discrimination under the Missouri Human Rights Act against Dollar Tree. Dollar Tree filed a motion to compel arbitration and stay proceedings. The circuit court held an evidentiary hearing on the motion to compel at which the following evidence was adduced:4

“Theroff applied for employment at Dollar Tree.”5 “… Theroff informed [Dollar Tree] she was legally blind and used various assistive devices.”6 After being informed she was hired, she returned to Dollar Tree to complete the hiring paperwork electronically. “One of the documents bearing Theroff’s digital signature was a mutual agreement to arbitrate claims.”7

“There was conflicting evidence about Theroff’s knowledge of the existence of the mutual agreement and her electronic signature on it. According to Theroff, when she returned to complete the hiring paperwork, she did not know the hiring process would occur on a computer, and she only brought a small magnifier.”8 “Without being able to see content on the computer screen, Theroff asserted”9 that she was told it was “a standard document. Just hit enter.”

Theroff testified that arbitration, waiver of a jury trial, or JAMS rules were never mentioned to her before she signed the documents electronically.

“When there are factual disputes regarding the existence of an arbitration agreement, the circuit court shall conduct an evidentiary hearing to determine whether an arbitration agreement exists. See section 435.355.1; Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339, 352 (Mo. banc 2006).”10 “[I]n an appeal from the circuit court’s order overruling a motion to compel arbitration when there is a dispute as to whether the arbitration exists, the circuit court’s judgment will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. See Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).”11

[T]his “Court reviews de novo the legal issues of whether a valid, enforceable delegation clause exists within an arbitration agreement.” State ex rel. Newberry v. Jackson, 575 S.W.3d 471, 474 (Mo. banc 2019) (emphasis added). Because contract interpretation is a question of law, State ex rel. Pinkerton v. Fahnestock, 531 S.W.3d 36, 44 (Mo. banc 2017), a de novo standard of review is appropriate for appellate review of denial of a motion to compel arbitration when a court must analyze the terms of an arbitration agreement.12
‘“[A]rbitration is a matter of contract.’ Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010).”13
This case presents facts raising an issue of first impression for this Court – the question of whether there was, in the first instance, assent to the arbitration agreement. Unlike the standard scenario in which there is no dispute about whether a party signed an arbitration agreement, when a party disputes signing, the court must first decide the existence of an agreement to arbitrate. See Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 854 (11th Cir. 1992)….14

“Theroff’s argument that assent, or meeting of the minds, did not occur is a challenge to the agreement’s existence, and existence of the agreement to arbitrate is a prerequisite to compelling arbitration.”15

“Contractual arrangements to arbitrate gateway questions of arbitrability occur when the parties include a ‘delegation provision’ in the arbitration agreement. Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68-69 (2010).”16 “When evaluating the intention of parties to delegate threshold arbitrability issues to the arbitrator, ‘[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is clea[r] and unmistakabl[e] evidence that they did so.’ Id at 43 (alterations in original) (quoting Rent-A-Ctr., W., Inc., 561 U.S. at 69 n.1).”17

“Theroff’s challenge to the existence of the mutual agreement in its entirety because of a lack of assent necessarily challenges the existence of any delegation provision it contains.”18 “It follows that there is not clear and unmistakable evidence of the existence of assent to a delegation provision. Under these facts, the circuit court cannot delegate the matter to an arbitrator whose very existence depends upon an agreement.”19


Dwight Tuttle appeals a judgment dismissing his claims for relief under the Missouri Human Rights Act (“MHRA”) for age discrimination and retaliation. Because Tuttle was not aggrieved by any alleged act to have occurred in Missouri, the express provisions of the MHRA coupled with the presumption against extraterritorial application of laws precludes this Court from applying the MHRA to Tuttle’s claims.20

The circuit court’s judgment was affirmed in Tuttle v. Dobbs Tire & Auto Centers.21

“Dobbs Tire & Auto Centers, Inc. is a corporation formed under the laws of Missouri with its headquarters in Jefferson County, Missouri. Dobbs Tire owns and operates tire and automotive services in several counties in both Missouri and Illinois. Tuttle was employed by Dobbs Tire from March 1989 until March 2017. From July 2003 until November 2016, he served as the store manager of Dobbs Tire’s Shiloh, Illinois, store.”22 “Tuttle alleges that, since 2015, he became the subject of discriminatory employment practices because of his age.”23 “Tuttle considered himself constructively discharged and tendered his resignation March 13, 2017.”24

Tuttle filed the instant lawsuit in St. Louis County, claiming both age discrimination in violation of§ 213.055 and retaliation in violation of § 213.070. Tuttle alleged that because “[o]ne or more of the discriminatory decisions or actions taken against the Plaintiff alleged herein took place in the State of Missouri,” jurisdiction and venue were proper in the circuit court. Dobbs Tire filed a motion to dismiss arguing, among other reasons, Tuttle’s petition did not state a claim upon which relief could be granted because MHRA does not apply to an Illinois employee who faced alleged discriminatory acts in Illinois.25
“The MHRA protects important societal interests by prohibiting unlawful employment practices on the basis of . . . age.” Kader v. Bd. Of Regents of Harris-Stowe State University, 565 S.W.3d 182, 186 (Mo. banc 2019) (emphasis added). “It shall be an unlawful employment practice . . .[f]or an employer . . . to discharge any individual . . . because of such individual’s . . . age[.]” § 213.055.1(1)(a). The MHRA requires that a person be aggrieved by an unlawful discriminatory practice before filing a complaint with the MCHR. See §

“The MRHA defines the phrase ‘unlawful discriminatory practice’ as ‘any act that is unlawful under this chapter.’ § 213.010(18). ‘Aggrieved’ is not defined by the MRHA.”27

Tuttle does not specify in his petition exactly where each alleged discriminatory action took place. Instead, he merely states, “some of the decisions and actions against plaintiff took place in Missouri.” His reasoning appears to be that, because Dobbs Tire is headquartered in Missouri, the decision-making process underlying all of the discriminatory acts must have taken place in Missouri. However, as explained in Kader, it is not the decision that gives rise to a cause of action under the MHRA. Rather, it is being aggrieved by an unlawful discriminatory practice that does so. Tuttle was not aggrieved until the alleged discriminatory practices resulted in an adverse impact, but that adverse impact occurred in Illinois. Tuttle does not dispute that the manner in which he was aggrieved is his loss of wages in Illinois, benefits of his employment in Illinois, and mental anguish arising from his constructive discharge from his Illinois job. Taking all of these allegations as true, all of the adverse impact alleged by Tuttle occurred in Illinois.
Further supporting this construction of the MHRA, this Court applies the long-standing presumption that Missouri statutes, absent express text to the contrary, apply only within the boundaries of this state and have no extraterritorial effect. Rositzky v. Rositzky, 46 S.W.2d 591, 595 (Mo. 1931)….28

“While Tuttle may have been aggrieved, he was aggrieved in Illinois. Therefore, the presumption against extraterritorial application precludes the application of the MHRA to Tuttle’s age discrimination and retaliation claims.”29

“Because Tuttle was aggrieved solely in Illinois, the express language of the MHRA, coupled with the presumption against extraterritorial application of laws, precludes this Court from applying the MHRA to his claim.”30


“Andrea Steinbach (‘Steinbach’) appeals the judgment entered upon a jury verdict in favor of Anastasia Collier’s (‘Collier’) action for personal injury following a motor vehicle accident.”31

“Collier filed a petition for damages against Steinbach alleging negligence resulting from a motor vehicle accident.”32

Collier began the trial by expressly referring to Steinbach’s liability insurer, Automobile Club Inter-Insurance Exchange (“AAA”) during her opening statement. Then, in her case in chief, Collier called Susan Paglusch (“Paglusch”), an employee of AAA and James Zeman, an independent investigator retained by Paglusch on behalf of AAA, who conducted surveillance on Collier following the accident. In her closing argument, Collier continued to make repeated references to AAA’s involvement in the case.33

“The jury returned a verdict in favor of Collier and against Steinbach, for a total of one million five hundred thousand dollars. The jury assessed twenty percent fault to Collier and eighty percent fault to Steinbach, thereby reducing Collier’s recovery to one million two hundred thousand dollars. The trial court entered judgment upon the jury’s verdict….”34 The judgment was reversed and remanded in Collier v. Steinbach.35

It has long been generally considered reversible error in personal injury actions to show, directly or indirectly, that the defendant carries liability insurance. Means v. Sears, Roebuck & Co., 550 S.W.2d 780, 787 (Mo. banc 1977). However, in very rare instances, it may be proper to prove the existence of defendant’s liability insurance if the evidence is relevant and material to an issue in the case. Pope v. Pope, 179 S.W.3d 442, 463 (Mo. App. W.D. 2005). Yet, even in such rare circumstance, the trial court must exercise the greatest caution and restraint because the “plaintiff does not have free ‘license to flaunt insurance coverage in the jury’s face.’” Id. at 464 (internal quotation omitted).
Moreover, a limiting instruction must be given if evidence of liability insurance is properly introduced. 179 S.W.3d at 464. In Pope, the instruction was not given following properly admissible and relevant evidence of defendant’s liability insurance.36

“The Western District held that when a reference to liability insurance is properly made at trial, the court’s decision not to give such an instruction on its own motion is an abuse of discretion. Id. at 465.”37

“Here, Collier sought to proactively mitigate potentially harmful evidence from the surveillance of her post-accident conduct upon the assumption Steinbach would later introduce it in her defense.”38

Even if Collier’s assessment of Steinbach’s intent to produce the evidence at trial was accurate, the investigation was not relevant or admissible unless and until it was introduced by Steinbach. Collier’s premature, tactical use of AAA’s involvement was so pervasive that the insurance coverage was beyond “flaunted” to the jury, as prohibited by Pope. See id. In fact, it constituted an effective weaponization of a narrow exception to the general rule prohibiting its admission. Thus, it is unequivocal reversible error to admit insurance coverage as relevant and material evidence to mitigate other, potentially damaging evidence that may or may not be introduced later at trial by the defense. Id. at 463.
In conclusion, while reference to AAA’s involvement may have been relevant and admissible in certain limited circumstances, it is clear from the record in this case Collier improperly weaponized the exception with pervasive references to Steinbach’s liability insurer.39


“Robert Sharon appeals the judgment in favor of American Family Mutual Insurance Company declaring that there is no duty to defend or indemnify the insureds Gregory and Kristine Schwezer against Sharon’s underlying claims for negligent misrepresentation and violation of the Missouri Merchandising Practice Act (MMPA).”40 The Court of Appeals held “that American Family has a duty to provide the Schwenzers with a legal defense in Sharon’s underlying suit” in American Family Mutual Ins. Co. v. Sharon.41

“Sharon sued the Schwenzers for, among other things, negligent misrepresentation and unlawful merchandising practices in connection with Sharon’s purchase of the Schwenzers’ home in Lawson, Missouri (the Property).”42 The petition alleges that in the Seller’s Disclosure and Condition of Property Addendum to the sales contract, “[the Schwenzers] represented that there had not been any water leakage or dampness in the house….”43 “The petition further alleges that these representations ‘were false, in that the [the Schwenzers] had previously experienced water leaks and water damage in the basement of the . . . Property and had made repairs in an attempt to correct said issue’….”44

“In addition, with respect to his negligent misrepresentation claim specifically, the petition alleges that Sharon ‘rel[ied] and was justified in relying on the information provided by [the Schwenzers] regarding the condition of the . . . Property and the existence of water leaks and prior water damage within the basement of the . . . Property….’”45

“[T]he Schwenzers tendered defense of Sharon’s lawsuit to American Family and sought indemnification for his claims, and American Family filed the present action seeking a declaration that it is not required to provide a legal defense or indemnity for the Schwenzers in Sharon’s underlying suit.”46

The duty to defend is broader that the duty to indemnify. “The duty to defend arises whenever there is a potential or possible liability to pay based on the facts at the outset of the case and is not dependent on the probable liability to pay based on the facts ascertained through trial.” Am. States Ins. Co. v. Herman C. Kempker Constr. Co., 71 S.W.3d 232, 236 (Mo. App. W.D. 2002) (quoting McCormack Baron Mgmt. Servs., Inc. v. Am. Guarantee & Liab. Ins. Co., 989 S.W.2d 168, 170 (Mo. banc 1999)). “The duty to defend is determined by comparing the language of the insurance policy with the allegations in the complaint.” Id. (quoting McCormack, 989 S.W.2d at 170). “If the complaint merely alleges the facts that give rise to a claim potentially within the policy’s coverage, the insurer has a duty to defend.” Id. (quoting McCormack, 989 S.W.2d at 170-71). “Where there is no duty to defend, there is no duty to indemnify.” Id.47
The insured bears the initial burden of proving that the claims in the underlying action are covered by the policy. Penn-Star Ins. Co. v. Griffey, 306 S.W.2d 591, 596 (Mo. App. W.D. 2010). In the present case, Sharon, as the party seeking coverage, must establish that his underlying negligent misrepresentation and unlawful merchandising claims against the Schwenzers are covered by the Policy’s general coverage provisions. Conversely, the insurer has the burden to demonstrate that an exclusion to coverage applies. Id.48
An alleged negligent misrepresentation can be an accident for purposes of determining whether there is coverage under an “occurrence” provision of an insurance policy. In Wood v. Safeco Insurance Company of America, 980 S.W.2d 43 (Mo. App. E.D. 1998), the Eastern District of this court held, “Missouri authority . . . allows[s] negligent conduct to be encompassed by a liability policy providing coverage for an ‘occurrence’ defined as an ‘accident’ [as t]his comports with a reasonable person’s expectation of liability coverage.” Id. at 50.49

“We agree with Sharon that, under Wood, a negligent misrepresentation can be an ‘accident,’ thus satisfying part of the definition of an ‘occurrence.”’50 “[A]n unlawful merchandising claim can also be an ‘accident,’ satisfying that portion of the definition of an ‘occurrence.”’51

“We agree that undiscovered defects that exist at the time of the sale are not caused by the misrepresentation.”52“… Sharon cannot recover costs to repair defects that existed at the time of sale because they are not damages to tangible property caused by the misrepresentation.”53 “In Wood, the Eastern District of this court found that alleged water damage following the sale could meet the definition of property damage. Wood, 980 S.W.2d at 53.”54

“The Policy excludes personal liability coverage for ‘punitive, exemplary, statutorily [-]imposed, multiple, or aggravated damages.’ Sharon seeks punitive damages in connection with his negligent misrepresentation claim. But the punitive-damages exclusion does not act as a complete bar to coverage because Sharon also seeks compensatory damages for the Schwenzers’ negligent misrepresentation….”55 “[T]he punitive-damage exclusion does not apply to Sharon’s negligent misrepresentation claim to the extent he seeks other types of damages.”56

“[W]e conclude that American Family has a duty to provide the Schwenzers with a legal defense [i]n Sharon’s underlying suit….”57


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.

2Theroff v. Dollar Tree Stores, No. SC97235 (Mo. banc 2020).


4 Id.

5 Id.

6 Id.

7 Id.

8 Id.

9 Id.

10 Id.

11 Id.

12 Id.

13 Id.

14 Id.

15 Id.

16 Id.

17 Id.

18 Id.

19 Id.

20 Tuttle v. Dobbs Tire & Auto Centers, No. SC 97721 (Mo. banc 2019).

21 Id.

22 Id.

23 Id.

24 Id.

25 Id.

26 Id.

27 Id.

28 Id.

29 Id.

30 Id.

31 Collier v. Steinbach, No. ED 107154 (Mo. App. E.D. 2019).

32 Id.

33 Id.

34 Id.

35 Id.

36 Id.

37 Id.

38 Id.

39 Id.

40 American Family Mutual Ins. Co. v. Sharon, No. WD 82461 (Mo. App. W.D. 2020).

41 Id.

42 Id.

43 Id.

44 Id.

45 Id.

46 Id.

47 Id.

48 Id.

49 Id.

50 Id.

51 Id.

52 Id.

53 Id.

54 Id.

55 Id.

56 Id.

57 Id.