The Flag, Sept. - Oct. 2021
Vol. 77, No. 5 / Sept. - Oct. 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.
MANAGING MEMBER OF LIMITED LIABILTY COMPANY OWED FIDUCIARY DUTY TO OTHER MEMBERS
Schieve v. Meyer, 2021 WL 2197406 (Mo. App. W.D. 2021).
Following a bench trial, John Meyer appealed a judgment of $205,982.55 plus court costs entered against him in favor of Lynn Schieve. Schieve claimed Meyer, as acting manager of the Carroll Meyer Family Limited Liability Company, breached his fiduciary duty to the LLC members by taking the LLC’s money for his personal use and failed to issue distributions required by the LLC’s operating agreement. The Missouri Court of Appeals-Western District affirmed the judgment.2
When a breach of fiduciary duty is asserted in a tort, the plaintiff must establish that (1) a fiduciary duty existed between it and the defendant, (2) the defendant breached the fiduciary duty, and (3) the defendant’s breach of duty caused the plaintiff to experience harm.3 Under § 347.088.3 of the Revised Statutes of Missouri, the manager of an LLC holds funds as a trustee “from any personal use by [the manager] of the property of the limited liability company . . . entrusted to him as a result of his status as manager or member.” This law codifies a Missouri LLC’s duty of loyalty and prohibits its manager from self-dealings.4 “[I]t is certain that, as general proposition, neither the executive officers nor the directors of an incorporated company have a right to convert its assets to their own use, or give them away, or make any self-serving disposition of them against the interest of the company.”5
The operating agreement would only shield Meyer from liability if he acted in good faith. Since he did not act in good faith, he was not shielded from liability. This meant the ordinary fiduciary duties as a manager applied.6 Meyer argued the trial court misapplied the law when it granted Schieve attorneys’ fees. Since Schieve was the prevailing party in the suit, she was entitled to attorneys’ fees under § 9.15 of the LLC’s operating agreement, and the trial court was required to award them.7
POLICE OFFICERS IN POLICE PURSUIT WERE PROTECTED BY OFFICIAL IMMUNITY
State ex rel. Officer Sergeant Dirk Helms v. Rathert, No. SC 98711 (Mo. banc 2021).
Lonnie Decker filed a petition for wrongful death against Sgt. Dirk Helms and Police Chief Joe Edwards of the De Soto Police Department as well as several other defendants following the death of Decker’s daughter, Lillian Flath. Flath was a passenger in a vehicle who died during an automobile accident during a police pursuit by separate defendant Officer David Krassinger.8 Helms and Edwards filed separate motions to dismiss Decker’s claims against them, arguing they are protected under the official immunity doctrine.
The official immunity doctrine protects public officials from being sued in individual capacities for alleged negligible acts committed while those individuals were performing official duties during discretionary situations.9 Decker argued § 544.157.4 states the duty to supervise vehicular pursuits is ministerial. However, if a public officer does not perform a ministerial duty that is required by law, that individual may be personally liable for damages caused by not performing that duty.10 A ministerial duty “is one in which a certain act is to be performed upon a given state of facts in a prescribed manner in obedience to the mandate of legal authority, and without regard to [the public official’s] judgment or opinion concerning the propriety or impropriety of the act to be performed.”11The central question when determining whether an act is ministerial “is whether there is any room whatsoever for variation in when and how a particular task can be done.”12 If there is, the duty is not ministerial.13 The decision to terminate a police pursuit is a “highly discretionary supervisory and policy decision [] that the [official immunity] doctrine is intended to shield.”14
The circuit court overruled the motions submitted by Helms and Edwards, but the Supreme Court of Missouri issued a Permanent Writ of Prohibition. “Sergeant Helms and Chief Edwards may have been negligent in failing to fulfill these discretionary duties with due regard for the public safety and in such a way as to protect Ms. Flath – and this Court assumes as much for purposes of this analysis – but the doctrine of official immunity prohibits the courts of this state from holding them personally liable for such a failure.”15
UNDER SUNSHINE LAW, A GOVERNMENTAL BODY MAY NOT CHARGE ATTORNEY REVIEW TIME TO RESPOND TO REQUEST
Gross v. Parson, 2021 WL 2668318 (Mo. banc 2021).
Elad Gross appealed the circuit court’s judgment in favor of Gov. Michael Parson and the custodian of records for the Governor’s Office regarding two public records requests Gross submitted under the Sunshine Law. Gross claimed the circuit court erred in entering judgment because the Governor’s Office violated the Sunshine Law when it required Gross to pre-pay an estimated expense for his requests, and that estimated cost included attorney-review time. The judgment was vacated, and the Supreme Court of Missouri remanded the case in Gross v. Parson.16
Under § 610.026.1, public governmental bodies must “provide access to and, upon request, furnish copies of public records,” but the section also authorizes public governmental bodies to charge a requester certain fees for providing access or furnishing copies of public records. Pursuant to § 610.026.1(1), the only authorized fees that might conceivably include attorney review time are fees for “research time.” Section 610.026.1(1), however, does not authorize a public governmental body to charge a requester for any and all research time. It authorizes a public governmental body to charge a requester for only a subset of research time “required for fulfilling public records requests.” So, the issue is what “research time” is “required for fulfilling public records requests.”
“Because the Sunshine Law obligates a public governmental body to separate exempt and non-exempt material without regard to any particular records request, attorney review time to determine whether responsive documents contain privileged information is not ‘[r]esearch time required for fulfilling records requests.’ It is not a public records request that requires the closing of records. A public request may be fulfilled without any attorney review time. Therefore, section 610.026.1(1) does not authorize a public governmental body to charge attorney review time as research time required for fulfilling records requests.”17
Attorney review time does not relate to providing public records that are stored on computers, recording devices, videotapes, pictures, or other similar audio and visual items, the Supreme Court of Missouri ruled. This means, under § 610.026.1(2), the Governor’s Office cannot charge Gross for time its staff lawyers spend reviewing responsive documents for privileged information.18
NON-ECONOMIC DAMAGE CAPS IN MEDICAL NEGLIGENCE CASES ARE CONSTITUTIONAL
Ordinola Velazquez v. University Physician Associates, No. SC 98977 (Mo. banc 2021).
Maria del Carmen Ordinola Velazquez appealed the circuit court’s reduction of a damages award in her favor in a medical negligence case against the University Physician Associates (“UPA”). The Supreme Court of Missouri affirmed the judgment in Ordinola Velazquez v. University Physician Associates.19
At trial, the jury allocated 100% of fault to the UPA. The jury awarded Ordinola $30,000 in past economic damages (including past medical damages), $300,000 in past non-economic damages, and $700,000 in future non-economic damages. The UPA filed various motions for remitter, asking the circuit court – pursuant to § 538.210.2(1)’s cap on non-catastrophic personal injury damages – to reduce the total non-economic damages award to $400,000. Ordinola reiterated her constitutional objections to the non-economic damage caps.
The circuit court declined to conclude § 538.210’s non-economical damage caps are unconstitutional. The circuit court reduced the jury’s non-economic damages award from $1 million to $748,828. Ordinola claimed the non-economic damages caps contained in § 538.210 violated her right to trial by jury guaranteed by Article I, § 22(a) of the Missouri Constitution.
This Supreme Court of Missouri rejected Ordinola’s argument in Sanders v. Ahmed.20 In Sanders, the plaintiff’s wife died from irreversible brain damage caused by seizure medication prescribed by her doctor. The plaintiff brought a wrongful death claim against the doctor, and the jury awarded him $920,745.88 in economic damages and $9.2 million in non-economic damages.21 The doctor moved to reduce the non-economic damages pursuant to § 538.210, RSMo 2000, and the circuit court agreed.22 Like Ordinola, the plaintiff argued on appeal that the statutory cap on non-economic damages violated Article I, § 22(a).23
In Sanders v. Ahmed, the Supreme Court of Missouri held that wrongful death is a statutory cause of action that did not exist at common law. Therefore, “[t]he legislature has the power to define the remedy available if it creates the cause of action. . . The legislature in so doing, at least in regard to a statutorily created cause of action. . . limited the substance of the claims themselves, as it has a right to do in setting out the parameters of a statutory cause of action.”24
Because a medical negligence action is a statutorily created cause of action, the General Assembly had the authority to enact statutory non-economic damage caps.25 Accordingly, § 538.210’s non-economic damages caps do not violate Article I, § 22(a) of the Missouri Constitution. Since Ordinola challenged a statutory cap on non-economic damages for a statutorily created cause of action, the Supreme Court of Missouri affirmed the circuit court’s judgment based on the Sanders ruling.26
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, P.C.
2 Schieve v. Meyer, 2021 WL 2197406 (Mo. App. W.D. 2021) (this opinion may be subject to a motion for rehearing or transfer).
3 Zakibe v. Ahrens & McCarron, Inc., 28 S.W.3d 373, 381 (Mo. App. E.D. 2000).
4 Schieve, 2021 WL 2197406at *6.
5 Zakibe, 28 S.W.3d 373 at 383.
6 Schieve, 2021 WL 2197406 at *6.
7 Id.
8 State ex rel. Officer Sergeant Dirk Helms v. Rathert, No. SC 98711 (Mo. banc 2021).
9 State ex rel. Alsup v. Kanatzar, 588 S.W.3d 187, 190 (Mo. banc 2019).
10 Id.
11 Id at 191.
12 Id.
13 Id.
14 Southers v. City of Farmington, 263 S.W.3d 603, 621 (Mo. banc 2008).
15 Helms, No. SC 98711 at 8.
16 2021 WL 2668318 (Mo. banc 2021).
17 Id. at *6.
18 Id.
19 No SC 98977 (Mo. banc 2021).
20 364 S.W.3d 195 (Mo. banc 2012).
21 Id. at 201.
22 Id. at 202.
23 Id.
24 Id. at 203.
25 Id.
26 Ordinola, SC 98977.