The Flag, Nov. - Dec. 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.

ARBITRATION WILL BE COMPELLED ONLY IF A VALID ARBITRATION AGREEMENT EXISTS

Johnson v. Menard, No WD 84138 (Mo. App. W.D. 2021).

Telissah Johnson sued her former employer, Menard Inc., in the Circuit Court of Platte County alleging employment discrimination. Menard filed a motion to compel arbitration, which was denied by the trial court. Menard appealed that order, and the judgment was affirmed in Johnson v. Menard.²

Whether a dispute is covered by an arbitration agreement and whether there is a valid, enforceable delegation clause in the agreement are legal issues that are both reviewed de novo.³ Arbitration is a contract under the Federal Arbitration Act,⁴ and parties in a contract can agree to allow an arbitrator, rather than a court, to resolve disputes that arise from that contract.⁵ However, “‘[a] party cannot be required to arbitrate a dispute that it has not agreed to arbitrate[,]’ and arbitration will only be compelled where ‘a valid arbitration agreement exists and … the specific dispute falls within the scope of that agreement.’”⁶

A delegation clause is an agreement between the parties to allow an arbitrator to resolve “threshold issues concerning the arbitration agreement.”⁷ If there is ambiguity about the arbitrable issue, it “should be resolved in favor of arbitration.”⁸ If a court or an arbitrator is deciding threshold questions of arbitrability, though, “there is generally a presumption against arbitrability.”⁹ The parties arbitrating questions of arbitrability must show “clear and unmistakable evidence” to “overcome this presumption.”¹⁰

Menard retained the unilateral authority to modify the delegation clause without limit or notice to Johnson. This rendered Menard’s promises illusionary, and “[s]uch illusory promises provide no valid consideration.”¹¹

JUDGMENT CREDITOR MUST STRICTLY COMPLY WITH STATUTORY REQUIREMENTS TO OBTAIN A DEFICIENCY JUDGMENT

The Central Trust Bank v. Branch, No ED109020 (Mo. App. E.D. 2021).

The Central Trust Bank appealed a judgment, entered after a bench trial, in favor of Barbara and Alexis Branch on the bank’s petition seeking a deficiency judgment, with respect to the repossession and sale of the Branches’ 2010 Chevrolet Impala that had been financed by Central Trust Bank. The Missouri Court of Appeals-Eastern District affirmed the judgment in The Central Trust Bank v. Branch.¹²

The right to a deficiency judgment can only occur when the party seeking the judgment has complied with statutory requirements.¹³ Section 408.556.1, RSMo requires a lender such as Central Trust Bank to “allege the facts of the borrower’s default, facts sufficient to show compliance with the provisions of sections 400.9-601 to 400.9-629 [of the Uniform Commercial Code (“UCC”)], which provisions are hereby deemed applicable to all credit transactions.”¹⁴ Section 400.9-616(b)(1) of the UCC requires the secured party to send an explanation to the debtor or consumer who is liable for a deficiency.

Central Trust Bank mailed the Branches the post-sale notice by certified mail to the address that was listed in the agreement. Upon delivery, there were no authorized recipients available, so the post-sale notice was unclaimed and returned to Central Trust Bank. Since Central Trust Bank knew the notice was unclaimed, it was “reasonably required to take additional steps to inform [the Branches] of the Post-Sale Notice in ordinary course,”¹⁵ such as delivering it via regular, first-class mail. This action would have allowed Central Trust Bank to “meet the second statutory requirement of the test for properly sending a post-sale notice.”¹⁶

The appellate court ruled the trial court did not err in finding that Central Trust Bank failed to properly send the post-sale notice to the Branches as required under Missouri law.¹⁷ Since Central Trust Bank did not comply with the statutory requirements for sending a post-sale notice, the court ruled, it is not entitled to a deficiency judgement against the Branches.¹⁸

JUDGES ARE ENTITLED TO JUDICIAL IMMUNITY BECAUSE OF THE SPECIAL NATURE OF THEIR RESPONSIBILITIES

Stalnacker v. Dolan, No SD 36954 (Mo. App. S.D. 2021).

Doris Jean Stalnacker filed a civil suit against Judge David Dolan, in which she alleged that Dolan was a circuit court judge who presided over a case in which Stalnacker was charged with a criminal offense and was placed on probation. Stalnacker served 26 months in the Missouri Department of Corrections before a habeas court ordered that Stalnacker be released from confinement. Stalnacker sued Dolan for false imprisonment. Dolan filed a motion to dismiss, arguing that Stalnacker’s petition was barred by the doctrine of judicial immunity. The trial court agreed and granted Dolan’s motion. Stalnacker appealed the trial court’s dismissal, and the Missouri Court of Appeals-Southern District affirmed ruling in Stalnacker v. Dolan.¹⁹

Missouri recognizes the doctrine of judicial immunity, which is absolute and protects “[c]onduct which is ‘intimately associated with the judicial phase’ of the judicial process.”²⁰ Judges’ hold “special responsibilities,” and the absolute immunity can protect judges who are accused of acting maliciously and/or corruptly.²¹ “His errors may be corrected on appeal, but he should not have to fear that unsatisfied litigants may hound him with litigation charging malice or corruption. Imposing such a burden on judges would contribute not to principled and fearless decision making but to intimidation.”²² Judicial immunity applies as long as a “judge does not act wholly without jurisdiction”²³

Missouri courts have held that “[a] judge with subject matter jurisdiction has judicial immunity from all actions taken, even when acting in excess of his [authority].”²⁴

CLASS ACTION CERTIFICATION WAS NOT AN ABUSE OF DISCRETION

Smith v. Leif Johnson Ford Inc., No ED 109494 (Mo. App. E.D. 2021).

Leif Johnson Ford, Inc., appealed from the circuit court’s order certifying a class action filed by Dennis N. Smith Jr. individually and on behalf of all other similarly situated plaintiffs alleging a violation of the Telephone Consumer Protection Act (“TCPA”). Ford claimed the circuit court erred in certifying the class, but the Missouri Court of Appeals-Eastern District ruled the circuit court did not abuse its discretion in certifying the class.²⁵

Courts review an order certifying a class using the abuse-of-discretion standard,²⁶ and it is the circuit court’s discretion to certify a class action.²⁷ “[T]he underlying question many class action certification is whether the class action device provides the most efficient and just method to resolve the controversy at hand, all things considered.”²⁸ “A court should err in favor, and not against, allowing maintenance of the class action” when determining whether to certify a proposed class because the certification could be modified later.²⁹

Ford stated the circuit court erred in certifying the class because Smith is not typical of the class and is not a member of the class. Since a court should err in favor of certification of a class, the appellate court ruled the circuit court did not abuse its discretion by acting in an “illogical, arbitrary, or unreasonable manner” when deciding the class satisfied the typicality requirement.³⁰

Ford also challenged the circuit court’s order certifying the class because the individual issues relevant to Smith and other class members predominate over common issues shared by them. Rule 52.08(a), which governs class action certification, requires a class meet the criteria of “numerosity, commonality, typicality, and adequacy.”³¹ If a class meets the Rule 52.08(a) prerequisites, the plaintiff must also show that the class satisfies one of the three additional standards in Rule 52.08(b) for the class to be maintained.³² Rule 52.08(b)(3) provides that an action may be maintained as a class action if the circuit court “finds that questions of law or fact common to members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”

The appellate court stated the circuit court “logically and properly found that the proposed class met the common-question-predominance requirement of Rule 52.08(b)(3) because every member of the class, consisting of the owners of the 3,769 phone numbers on the Manifest, has the same TCPA claim.”³³

“Ford’s speculation as to potential variations on some individual facts and party defenses does not meet its burden of proving circuit court error, because the predominant common issue presented in this litigation is the central legal question of whether the owners of the phone numbers on the Manifest during the relevant timeframe consented to receive the ringless voicemails.”³⁴
 

Endnotes
1 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.

2  No. WD84138 (Mo. App. W.D. 2021).

3 Theroff v. Dollar Tree Stores, Inc., 591 S.W. 3d 432, 436 (Mo. banc 2020).

4 Pinkerton v. Technical Educ. Servs., Inc., 616 S.W.3d 477, 482 (Mo. App. W.D. 2020)(quoting Soars v. Easter Seals Midwest, 563 S.W.3d 111, 114 (Mo. banc 2018)).

5 TD Auto Fin., LLC v. Bedrosian, 609 S.W.3d 763, 768 (Mo. App. E.D. 2020) (citing Henry Schein, Inc. v. Archer and White Sales, Inc., 139 S. Ct. 524, 527 (2019); Ellis v. JF. Enters., LLC, 482 S.W.3d 417, 420 (Mo. banc 2016)).

6 Hughes v. Ancestry.com, 580 S.W.3d 42, 47 (Mo. App. W.D. 2019).

7 Soars, 563 S.W.3d at 114 (quoting Rent-A-Ctr. W., Inc. v. Jackson, 561 U.S. 63, 68 (2010)).

8 Id. (quoting Pinkerton v. Fahnestock, 531 S.W.3d 36 (Mo. banc 2017)).

9 Id. (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (1995)) (emphasis included).

10 Id. (citing Rent-A-Ctr., 561 U.S. at 69 n.1).

11 Harris v. Volt Mgmt. Corp., 2021 WL 1972434, *7 (Mo. App. E.D. 2021).

12 No. ED109020 (Mo. App. E.D. 2021).

13 State ex rel. General Credit Acceptance Company, LLC v. Vincent, 570 S.W.3d 42, 48 n.4 (Mo. banc 2019).

14 Id.

15 Central Trust Bank, No. ED109020 at 7.

16 Id. at 7-8.

17 Id.

18 Id.; see also Vincent, 570 S.W.3d at 48.

19 No. SD 36954 (Mo. App. S.D. 2021).

20 Bugg v. Rutter, 466 S.W.3d 596, 603 (Mo. App. W.D. 2015) (quoting White v. Camden Cnty. Sheriff’s Dep’t, 106 S.W.3d 626, 633 (Mo. App. S.D. 2003)).

21 Butz v. Economou, 438 U.S. 478 (1978).

22 Pierson v. Ray, 386 U.S. 547, 554 (1967).

23 Id. (quoting Nelson v. McDaniel, 865 S.W.2d 747, 748 (Mo. App. W.D. 1993)).

24 State ex rel. Raack v. Kohn, 720 S.W.2d 941, 944 (Mo. banc 1986); Long, 103 S.W.3d at 253 (emphasis added).

25 Smith v. Ford, No. ED109494 (Mo. App. E.D. 2021).

26 Frank v. Enviro-Tech Services, 577 S.W.3d 163, 166 (Mo. App. E.D. 2019).

27 Vincent, 570 S.W.3d at 46.

28 Id. (quoting State ex rel. Coca-cola v. Nixon, 249 S.W.3d 855, 860-61 (Mo. banc 2008)).

29 Frank, 577 S.W.3d at 167.

30 Id. at *5; see also Frank, 577 S.W.3d at 166-67.

31 See Vincent, 570 S.W.3d at 47.

32 Id.

33 Id. at *6 (emphasis included).

34 Id. at *7; see also Vincent, 570 S.W.3d at 47.