Case Summary for September 4, 2002

Your Missouri Courts - Supreme Court

Home

Case Summary for September 4, 2002

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

ATTACHED TO THE FOLLOWING DOCKETED CASES ARE ELECTRONIC COPIES OF THE BRIEF(S) FILED BY THE PARTY OR PARTIES. THESE ELECTRONIC BRIEFS HAVE BEEN CONVERTED TO PDF BY THE COURT'S STAFF TO ACCOMMODATE VARIOUS WORD PROCESSORS. (If you do not already have the Acrobat reader, you may obtain it free at the Adobe website.) THE ATTACHMENTS MAY NOT REFLECT ALL BRIEFS FILED WITH THE COURT, THE COMPLETE ELECTRONIC FILING, OR THE FORMAT OF THE ORGINAL FILING. APPENDICES AND OTHER ATTACHMENTS GENERALLY WILL NOT BE POSTED HERE. (To determine whether or which briefs have been filed in a particular case, visit Case.net.) POSTING OF THE BRIEFS DOES NOT REFLECT ANY OPINION OF THE COURT ABOUT THE APPROPRIATENESS OF THE FORMAT OF THE BRIEFS OR THE MERITS OF A CASE. THESE POSTINGS ARE NOT OFFICIAL COURT RECORDS. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION.

DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

Wednesday, September 4, 2002

________________________________________________________________________

SC84306
State ex rel. Rebecca Bierman, Thomas Chida and United Behavioral Health, Inc. v. The Honorable Margaret M. Neill, Judge, Division 1, Circuit Court of City of St. Louis
St. Louis city
Venue

Gary Diven committed suicide after receiving treatment from United Behavioral Health, Inc., in St. Louis County. In April 2001, his son, St. Louis County resident Patrick Diven, brought a medical malpractice suit against California resident Rebecca Bierman in St. Louis city. Five days later, he added St. Louis County residents Thomas Chida and United Behavioral to the lawsuit. Diven alleged negligent medical care caused or contributed to his father's suicide. The defendants moved to change venue to St. Louis County. The court denied the motions, noting that venue in St. Louis City was proper under section 508.010(4), RSMo, because, at the time the suit originally was filed, the only defendant was Bierman, a nonresident. In October 2001, while Bierman's original motion still was pending, the Supreme Court held in State ex rel. Linthicum v. Calvin, 57 S.W.3d 855 (Mo. banc 2001), that venue must be redetermined when an amended petition adds defendants. Chida and United Behavioral subsequently asked the trial court to reconsider, but the court denied all the motions, concluding that the defendants had failed to prove that venue was improper and that Bierman's motion was untimely. All three defendants seek relief from this Court by writ of prohibition.

Bierman, Chida and United Behavioral argue venue lies solely in St. Louis County and that the trial court must be ordered to transfer the case from the city to the county. They contend they were not required to prove venue is improper in the city under section 508.010(6). They claim Diven never pleaded that section as a basis for venue, concedes this section does not apply and never claimed his cause of action accrued in the city. They further argue that the trial court should have allowed them to supplement the record with their affidavits because the court unexpectedly sought to uphold venue in the city on the unpleaded basis of section 508.010(6).

Diven responds that case law places the burdens of proof and persuasion that venue was improper on Bierman, Chida and United Behavioral and that they failed to carry their burdens. He argues that because he did not plead a basis for venue in his suit, the defendants had to offer evidence that all bases for venue in the city were improper. He contends they failed in their burdens because they never offered any evidence until after the court already had ruled that venue was proper in the city. He responds that the court was not required to entertain this evidence because it was not offered in a timely fashion.

SC84320
State ex rel. S.C. Management, Inc. and Kenneth Stone, M.D. v. The Honorable Margaret M. Neill, Judge of the Missouri Circuit Court, 22nd Judicial Circuit
St. Louis city
Venue

In July 1999, Raymond Young was treated at Twin Rivers Medical Center in Kennett. In March 2000, Young sued the medical center's owner and operator, S.C. Management, Inc. (SCM), and SCM's parent corporation, Tenet Healthcare Corporation, in St. Louis city. He alleged he received negligent medical care in the Twin Rivers emergency room. SCM is a Washington corporation with its principal place of business in California and a registered agent in St. Louis County. Tenet is a Nevada corporation, and Young alleged it had a registered agent in St. Louis city. The next day, Young amended his lawsuit, adding emergency room doctor and Scott County resident Kenneth Stone, M.D., as a defendant. Tenet sought to dismiss the case against it, arguing there is no personal jurisdiction because it does not maintain a registered agent anywhere in Missouri, and SCM and Stone sought to change venue out of St. Louis city. In October 2001, while these motions were pending, the Supreme Court held in State ex rel. Linthicum v. Calvin, 57 S.W.3d 855 (Mo. banc 2001), that venue must be redetermined when an amended petition adds defendants. In December 2000, the court dismissed Tenet for lack of personal jurisdiction and denied SCM and Stone's venue transfer motions, determining that venue is proper under section 508.010, RSMo, because they failed to present any evidence that Stone did not reside in St. Louis city. They moved the court to reconsider, submitting an affidavit in which Stone stated he never has lived in St. Louis city. The court denied the motion, and both defendants seek relief from this Court by writ of prohibition. Although Young died in March 2002, counsel continues this case on behalf of him and SCM.

SCM and Stone argue venue in St. Louis city is improper under section 508.010, RSMo. They contend the cause of action accrued in Dunklin County, Stone lives in Scott County, and SCM's registered agent is in St. Louis County. They argue they are not required to disprove unpleaded venue theories. Even so, they contend that before the court ruled on their motions to change venue, the court had evidence before it that Stone lives in Sikeston through his signed and sworn interrogatory answer filed during discovery.

Young responds that, as the parties challenging venue, SCM and Stone had the burden to prove venue should not be in St. Louis city. He argues they failed to present any competent evidence establishing Stone's residence before the trial court ruled on the motion for change of venue. He contends the court was not required to reconsider its ruling based on evidence that was not presented in a timely manner.

SC84210
In re Ancillary Adversary Proceeding Questions: State Treasurer, Nancy Farmer v. Julie Smith, Receiver, Deborah Cheshire, Circuit Clerk and the County of Cole
Cole County
Treasurer's authority over receivership funds; constitutionality of unclaimed property act

This case involves funds deposited into a Cole County Circuit Court registry after a surcharge utility companies had imposed on their customers was invalidated. The principal funds have gone unclaimed for more than five years. In 1984, the general assembly enacted a uniform disposition of unclaimed property act giving the director of the department of economic development authority to bring actions to recover unclaimed property. This authority was transferred to the state treasurer in 1993.

In July 2001, the attorney general commenced legal action against the receiver, seeking transfer of the funds and interest to the state treasurer pursuant to the unclaimed property act. The receiver sought to join additional parties and relief in an ancillary adversary proceeding. The circuit court ordered a separate trial and proceedings with regard to the ancillary proceeding questions, determining that the only issues for determination would be those ancillary questions outlined in the receiver's motion and petition. The court also ordered the state treasurer, circuit clerk and county to be joined as parties. The judge then recused himself as to the ancillary questions but retained jurisdiction as to all other issues, including investment of any funds not required to be disbursed to the state treasurer. The treasurer made a special appearance, seeking to vacate the order and disqualify the judge, but she did not file an answer in the ancillary proceeding. Almost three months later, the receiver moved for a judgment on the pleadings.

In November 2001, the court overruled the treasurer's motion, determining that because the funds at issue are not state or federal funds, she lacked standing to assert claims against the receivership funds or the receiver. The court also determined that sections 447.575 and 447.532, RSMo, giving the treasurer power to bring an action to collect unclaimed property from the courts, are unconstitutional. The court held that the funds are subject to disposition and disposal by the Cole County Circuit Court, pursuant to section 483.310.2, RSMo, and that the balance of the interest could be paid to Cole County. The treasurer appeals.

The treasurer argues that the receivership funds are unclaimed property, within the definition of section 447.575, and that she has standing to assert claims against those funds because she is obligated to enforce delivery of unclaimed property to the state. She contends that section 483.310 requires the circuit clerk, not the judge, to determine how the funds should be invested. She claims the court should not have entered judgment or directed any orders toward her because it did not have jurisdiction to do so and because the case was not ripe for adjudication. The treasurer argues the court violated the constitutional separation of power among the branches of state government when it ordered her to assert her claims in the ancillary proceedings. She contends the original judge was disqualified by Rule 51.07 from denying her motion to vacate the order because he had a substantial interest in the case's outcome and a close relationship with the receiver. The treasurer also argues the court should not have conducted a hearing on the receiver's motion for judgment on the pleadings because she was not given sufficient notice under Rule 44.01.

The receiver responds that the treasurer lacks authority over the receivership funds because they not state or federal funds and because the unclaimed property act, purporting to give the treasurer such authority, is unconstitutional. She contends the circuit court, not the treasurer, has the authority to dispose of the receivership principal and interest as provided in the circuit court orders and in section 483.310.2. The receiver responds that the court continues to have jurisdiction over the funds and has the authority to require the treasurer to assert any claims to those funds in the ancillary proceeding.

The circuit clerk responds that the circuit court may disburse and use interest from the receivership funds as provided in section 483.310.2 and Rule 68.02. The county responds that section 483.310 does not mandate who may invest and administer funds in the circuit court's registry. It argues the statute does not require the circuit clerk to serve as custodian of the funds. The county further responds that the circuit court here did not interfere with the circuit clerk's statutory discretion to make purchases for the public good under section 483.310.

SC84211
In re Ancillary Adversary Proceeding Questions: State Treasurer, Nancy Farmer v. Elaine Healey, Trustee, Deborah Cheshire, Circuit Clerk and the County of Cole
Cole County
Treasurer's authority over trust funds; constitutionality of unclaimed property act

This case is substantially the same as its companion case, SC84210, although the funds here derive from settlement proceeds from the liquidation of a life insurance company. The principal funds have gone unclaimed for more than five years.

The procedure and arguments in this case follow the same path as in the companion case, SC84210, summarized above.

SC84212
In re Ancillary Adversary Proceeding Questions: State Treasurer, Nancy Farmer v. Jackie Blackwell, Receiver, Deborah Cheshire, Circuit Clerk and the County of Cole
Cole County
Treasurer's authority over receivership funds; constitutionality of unclaimed property act

This case is substantially the same as its companion case, SC84210, although the funds here are the portion of telephone charges collected from customers that exceeded the lower telephone rates ordered by the public service commission. The principal funds have gone unclaimed for more than five years.

The procedure in this case follows the same path as in the companion case, SC84210, summarized above, and the state treasurer appeals. The parties make the same arguments here as they made in SC84210.

Several other organizations have filed briefs on these issues as amici curiae. The state's legal services organizations, which are beneficiaries of the residuary funds at issue, argue the report and turnover provisions of the unclaimed property act do not apply to courts and that the circuit court, therefore, is not required to disburse the receivership funds to the treasurer. They contend that circuit courts retain their traditional equity jurisdiction to dispose of residual funds. They argue the state failed to follow the procedures to gain custody of those funds as required in the judicial escheats act, chapter 470, which governs the transfer to the state of residual proceeds from rate refund cases.

The Missouri Bar argues that the doctrine of cy pres distribution, which permits a court to substitute another similar beneficiary for the original beneficiaries when it becomes impossible to carry out the fund's original purpose, should be endorsed for class funds such as those in this case. It also argues that organizations such as the state's legal services organizations are proper cy pres recipients of the residual funds.

The Missouri Bankers Association, whose members contract with the state treasurer to serve as depositories for state public funds, argues the court registry funds are not state or federal funds and, therefore, the treasurer's claims over those funds violate the constitutional limitations on her office. It also argues that because the unclaimed property act is a custodial statute, not an escheat statute, the funds to which it applies are not state funds and the treasurer's constitutional powers cannot extend to them.

The National Consumer Law Center, a nationally recognized expert in consumer credit law and state utility regulation, argues the purposes of consumer protection statutes best are served by distribution of unclaimed class action funds under the cy pres doctrine. It also argues the circuit court's broad equitable powers are not overcome by the state's unclaimed property act.

SC84213
In re Ancillary Adversary Proceeding Questions: State Treasurer, Nancy Farmer v. Sharon Morgan, Receiver, Deborah Cheshire, Circuit Clerk and the County of Cole
Cole County
Treasurer's authority over receivership funds; constitutionality of unclaimed property act

This case is substantially the same as its companion case, SC84210, and involves the same funds as in SC84212. The principal funds have gone unclaimed for more than five years.

The procedure and arguments in this case follow the same path as in the companion case, SC84210, summarized above. Several other organizations have filed briefs on these issues as amici curiae. The legal services organizations of western, southern and mid-Missouri, which are beneficiaries of the residuary funds at issue, make the same arguments here as they did in SC84212. The Missouri Bar and National Consumer Law Center also make the same arguments here as they did in SC84212.

SC84301
State of Missouri, ex inf. Jeremiah W. (Jay) Nixon, Attorney General of Missouri v. Cole County Circuit Judges Byron L. Kinder and Thomas J. Brown
Cole County
Treasurer's authority over receivership funds; constitutionality of unclaimed property act

For many years, the Cole County Circuit Court has kept, held and directed four funds in the circuit court's registry. Investment of each fund was made pursuant to court order in keeping with section 483.310. These are the same funds that are discussed above in SC84210 through SC84213.

In April 2001, the attorney general sought writs from the court of appeals directing that the funds and interest be transferred to the state treasurer pursuant to the unclaimed property act. This law directs that monies a court or any public officer of the state holds for another person who has a legal or equitable interest in the property for five years are presumed abandoned and must be turned over to the state treasurer. The attorney general's request was denied in May 2001. The next month, he requested from the Osage County Circuit Court a preliminary order in quo warranto (an action challenging one's right or authority). He sought to prevent the Cole County Circuit Court from holding the four funds or spending interest generated by these funds. The Osage County Circuit Court granted judgment on the pleadings, characterizing the case as one presenting a claim for a writ of prohibition and/or mandamus rather than as a quo warranto case.

The attorney general appeals, arguing his pleading met the requirements of a claim in quo warranto because it alleges facts, presumed true for purposes of the motion, demonstrating that the judges acted wholly without authority and intruded on the office of the state treasurer. He contends the trial court improperly focused on a legal conclusion that quo warranto was not an appropriate remedy for the situation. He claims his pleading contained well-described facts that properly allege a quo warranto claim.

The judges respond that it is unconstitutional to use quo warranto to oust a circuit judge. They argue it also is unconstitutional for one circuit court to assume a superintending role over another circuit court. They contend that, by proceeding against them in quo warranto, the attorney general is attempting to usurp judicial powers, which is an unconstitutional violation of the separation of powers. They claim they have absolute judicial immunity against personal liability for their judicial activities. The judges also respond that jurisdiction over the registry funds at issue is in the Cole County Circuit Court, and another circuit court cannot acquire jurisdiction over the same subject matter.

SC84328
Nancy Farmer, Missouri State Treasurer v. Honorable Byron L. Kinder and Honorable Thomas J. Brown, III, et al.
Cole County
Treasurer's authority over receivership funds; constitutionality of unclaimed property act

The facts of this case are substantially similar to those summarized above in SC84301. In July 2001, the state treasurer sued to recover from the Cole County Circuit Court funds in the court's registry, which she characterized as abandoned property. Ultimately, the trial court held that these funds are not state or federal funds and that the unclaimed property act and statutes giving the treasurer power to collect unclaimed property from the courts and other public officers are unconstitutional. The court also held that the treasurer's lawsuit to collect unclaimed property from the Cole County Circuit Court violates the doctrine of separation of powers contained in article II, section 1 of the state constitution.

The treasurer appeals, arguing that funds that have remained unclaimed for more than five years are unclaimed property that she has the constitutional authority to return to their proper owners or transfer into the state's general revenue fund. She claims her petition of the judicial branch to enforce delivery of abandoned property to her office does not violate the separation of powers doctrine. She contends she is not attempting to exercise superintending control or other supervisory authority over the judiciary by seeking to recover unclaimed property held by the circuit court. The treasurer argues the pending case doctrine does not apply to the receiverships from which she attempts to recover funds because the cases creating the receiverships are closed. She argues the court erred in granting judgment on the pleadings because the pleadings were not closed, the motions to dismiss never were noticed for hearing and the court considered matters outside the pleadings. The treasurer also argues the Cole County judges and receivers do not have absolute judicial and official immunity in this matter because none of them were functioning in a judicial capacity when they administered the funds and because the receivers' acts were ministerial in nature.

The judges respond that there is no cause of action or subject matter jurisdiction over the treasurer's lawsuit because it was filed against them as individual judges and not against the Cole County Circuit Court, which is the judicial institution holding the funds the treasurer seeks. They argue it is unconstitutional for the treasurer to attempt to assume a superintending role over the circuit court and that her lawsuit violates the separation of powers doctrine because it is an unlawful attempt to usurp judicial powers. They contend that, to the extent the treasurer is attempting to fix personal liability on them, they have absolute judicial immunity. The judges further respond that jurisdiction over the funds is in the underlying receivership cases, and this case cannot acquire jurisdiction over the same subject.

The receivers respond that the state treasurer has no standing to collect unclaimed property they hold or administer the unclaimed property act. They argue that these funds are not state or federal funds and, therefore, the treasurer constitutionally cannot exercise any authority over them. They also argue the statutes purporting to give the treasurer such authority were enacted in violation of the single subject and clear title provisions of the state constitution. Even assuming, arguendo, that the treasurer has the authority to assert claims and collect unclaimed property, they contend the court properly held that the disposition of the funds and their interest lie within the Cole County Circuit Court's authority. The receivers further respond that the interest on the funds in the underlying cases may be used and disbursed as provided by the circuit court's orders and in section 483.310.2, RSMo. They argue the court properly concluded, based on all the pleadings filed in the case, that the treasurer could not assert or had not asserted properly a claim to the funds.

Two organizations have filed briefs in this case as amici curiae. The National Association of Unclaimed Property Administrators argues the Missouri uniform disposition of unclaimed property act governs the disposition of the funds in the four underlying cases. It contends the unclaimed property act is a comprehensive program for administering property presumed abandoned that was enacted in exercise of the state's police power and that is binding on the parties and the Cole County Circuit Court. The Utility Consumers Council of Missouri, Inc., argues that it is in the public interest to transfer the funds at issue to the abandoned fund account and that such a transfer is directed by the unclaimed property act. It contends the constitutional limitations on the treasurer's authority do not bar her from seeking to recover the funds at issue because the funds are state funds subject to the unclaimed property law and because the state is entitled to the relief Farmer seeks. It claims that civil procedure does not prevent the funds' transfer to the state's abandoned fund account. The council further argues that there is no violation here of the state constitution's separation of powers doctrine and that permitting the treasurer to proceed with this action would not give her unconstitutional superintending control or supervisory authority over the circuit court.