Case Summary for January 30 and 31, and February 1, 2001

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Case Summary for January 30 and 31, and February 1, 2001

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.

DOCKET SUMMARIES
SUPREME COURT OF MISSOURI
January 30 and 31, February 1, 2001

Tuesday, January 30, 2001 at 1:00 p.m.

SC82776
State ex rel. MSX International, Inc. v. The Honorable Colleen Dolan, etc.
St. Louis County
Workers' Compensation/statutory employee

Douglas Price was hurt while working for LMS, which contracted with MSX for the work. Price sued MSX. MSX seeks to prohibit the court from proceeding.

MSX argues the Missouri Division of Workers' Compensation has exclusive jurisdiction. Since Price's employer contracted with MSX for work on its premises, and the injury occurred on the premises while he was working in the course of usual business, under section 287.040, MSX was Price's statutory employer. Price cannot maintain a common law action against MSX.

Price counters that he was a LMS employee, not MSX's statutory employee. He was not engaged in MSX's usual business, or at least that was a question for a jury to decide.

SC82732
Wilson's Total Fitness Center, Inc. v. Director of Revenue
Boone and St. Louis Counties
Amusement tax on fitness center

Section 144.020.1(2) assesses sales taxes on fees for places of amusement, entertainment or recreation, games and athletic events. Wilson's Total Fitness Center, Inc., paid sales tax on its clients' membership dues and sought a refund. The Administrative Hearing Commission upheld the assessment. Wilson's appeals.

Wilson's argues the membership fees should not be subject to the amusement tax because the primary purpose of its facilities is to improve health through physical fitness, nutrition, and exercise, rather than diversion or entertainment.

The Director or Revenue contends that Wilson's fees are subject to the tax because the facilities are places of entertainment, amusement or recreation. Wilson's offers, and provides more than a de minimis portion of its facilities for, activities traditionally considered recreational, such as basketball, volleyball, racquetball, tennis and swimming. The trade name and advertising also promoted recreational aspects.

SC82740
Steven Guyer v. City of Kirkwood
St. Louis County
Sunshine Law

Police Officer Steven Guyer was investigated by internal affairs based on a citizen complaint. The complaint was unsupported and the file closed. Guyer sought disclosure, which Kirkwood refused and the court upheld. He appeals.

Guyer argues the record implicated criminal wrongdoing and is a criminal investigative report, which Chapter 610 expressly opens once the investigation is inactive. The court improperly classified the report under certain 610.021 exceptions, both of which are inapplicable to inactive criminal investigations.

The City responds that internal investigations of police are personnel records relating to the hiring, firing, disciplining, or promoting of employees, which are closed under section 610.021(3) and (13). This report was such an internal personnel assessment, not a criminal investigation into whether someone should be arrested or prosecuted so as to implicate section 610.100. Opening the records would jeopardize criminal investigations, sources wishing to remain confidential, and internal investigation techniques, procedures, and guidelines.

SC82279
State of Missouri v. Gary Black
Jasper County
First-degree murder; death penalty

Gary Black cut a victim's carotid artery and jugular vein in a fight in the street, at 5th St. and Joplin Avenue, October 1998. The victim died several days later. Black was convicted of first-degree murder. The jury recommended a death sentence, which the court imposed. He appeals.

Black argues: (1) He did not knowingly cause the victim's death after cool deliberation. He heatedly followed the victim a mile and stabbed him once in the neck after his girlfriend pointed the victim out as one who just accosted her. (2) The court should have permitted evidence that the victim died from insufficient medical treatment, to show Black did not cause the death, to rebut the state's claim that the wound was so severe it must have been made with intent to kill, to impeach an expert, and to rebut the state's evidence of efforts to save the victim's life. (3) The court should have instructed the jury on lesser offenses of second-degree murder or voluntary manslaughter, since the jury could have found Black did not deliberately kill or that he acted in sudden passion. (4) The court should have excluded a knife because the state failed to connect it to the crime. (5) The court should have delayed voir dire one day because the attorney who prepared for it was sick.

(6) Black did not knowingly, voluntarily, and intelligently waive his right to be present at the instructional conference and penalty phase. (7) The court should have permitted Black to show a 40-oz. beer bottle and ruler as demonstrative aids, to show Black acted in self-defense when the victim swung the bottle at him, and to show an expert exaggerated the victim's injury. (8) The state's closing arguments were improper, including alleging racial motivation, arguing no evidence disputed the cause of death when the state prevented the jury from hearing such evidence, misstating the law on aggravators, vouching, and personalizing. (9) The "outrageously and wantonly vile" aggravator is too vague. (10) The jury was improperly instructed on the serious assaultive criminal conviction aggravator.

(11) The court should have permitted evidence of a deputy's drug possession and termination to impeach and discredit him. (12) Black's death sentence was disproportionate, based on jury passion on racism, and compared to other death penalty cases.

The state counters: (1) Jurors could infer from the evidence that Black deliberated on the murder. (2) Black's proposed evidence was properly excluded. It failed to show that the stab wound did not cause the victim's death, inadequate medical care, lack of deliberation, or impeachment. (3) Black did not request lesser-included offense instructions, which is often trial strategy, and waived this claim. (4) The knife was connected to the murder. It was undisputed Black stabbed the victim with a knife. (5) Black failed to file a motion for continuance with an affidavit. He failed to show his other two, present attorneys were unprepared to proceed with voir dire.

(6) Black validly waived his right to be present at the conference and penalty phase. His absence at the conference had no relation to his opportunity to defend. (7) The bottle was not proper to use as a demonstration. It was not in evidence and had not been used to illustrate testimony or verified as similar to the victim's bottle. Black did not request the jury be told the bottle was unrelated to the offense. (8) The closing arguments were proper and supported by evidence, or the court gave curative instructions, and Black strategically did not object. (9) The court did not err in instructing the jury on the depravity of mind aggravator because it also submitted another valid statutory circumstance. (10) The court properly instructed the jury on serious assaultive convictions, including submitting Black's prior convictions for felonious assault and armed robbery as serious assaultive convictions.

(11) Proposed evidence was inadmissible as bad acts, and the deputy was not terminated. (12) The sentence passes independent proportionality review.

Wednesday, January 31, 2001, at 9:00 a.m.

SC82325
Kimberly R. Alcorn v. Union Pacific Railroad Company and National Railroad Passenger Corp. d/b/a Amtrak; Curtis Edwards
Jackson and Johnson Counties
Railroad accident, large damage awards

An Amtrak train hit the car in which Alcorn was riding on Union Pacific's track on County Road 501 between Sedalia and Warrensburg, Johnson County, August 1997. She sued UP, Amtrak, and the driver. The jury awarded over $40 million in compensatory damages, allocating 25% fault to Amtrak, 75% fault to UP, and none to the driver. The jury awarded $120 million punitive damages against UP. The court remitted the awards to $25 million compensatory and $50 million punitive. Union Pacific appeals.

Amtrak and UP argue that there is no rational basis for the judgments. Generally, they argue: Amtrak faces a $25 million judgment because its crew allegedly failed to anticipate that a car would not stop in broad daylight. Union Pacific faces $75 million for complying with a state railroad-crossing program designed for safety. And the driver, who was so distracted by his passenger that he did not notice warning signs or the track, and never looked for or heard the train, was assessed no liability.

Specifically, they argue: (1) State law preempts Alcorn's claim for failure to warn or inadequate warning devices. Under section 389.610, the state, not UP, had the duty to determine whether the crossing had appropriate warning devices or authority to install more. The state determination of reflectorized crossbucks is presumed adequate. (2) & (3) UP was not negligent in failing to warn; punitive damages were unwarranted. Alcorn failed to show UP knew the crossing was unusually dangerous because of sight problems in a certain area, or to show any alleged breach of duty caused the injury. No prior incidents involved that area. No evidence showed the sight problem was the reason the driver drove onto the tracks; instead he was preoccupied. No evidence showed warning devices could have been installed before the accident. (4) Amtrak was not negligent. A car's unwavering approach does not indicate a collision is imminent and require the train to slow. A train is entitled to expect drivers to stop. The train stopped as soon as it determined the driver was not going to stop. Alcorn failed to show Amtrak's conduct caused the injury. (5) Evidence of a prior accident and "near misses" should have been excluded because they were not sufficiently similar to this accident. It was also irrelevant to negligence claims because it was offered to prove the defendants breached a duty that did not exist as a matter of law because it had been preempted by state and federal statutes.

(6) The court should have excluded testimony, based on a computer simulation, that the train stopped after the crossing. No evidence showed the computer program was authenticated, functioning properly, or generally accepted by accident reconstructions. The testimony showed the facts on which the simulation was based were incorrect. (7) A jury instruction gave a roving commission to find UP negligent, offering no factual guidelines, rather allowing jurors to speculate about facts on which liability could be based. (8) Juror misconduct (non-disclosure of involvement in a prior suit and visiting the scene) deprived defendants of an impartial jury and a verdict based only on the evidence at trial. (9) Section 537.675.2 purports to authorize punitive damages and paying part of them to the state, violating the Eighth and the takings clause as a penal fine. There are inadequate standards for reviewing such damages and protecting defendants' rights. (10) The compensatory damages far exceed fair and reasonable compensation for the injuries. The non-economic part of the damages is grossly disproportionate to the maximum economic damages and dwarfs non-economic awards in other cases with more serious injuries.

(11) The punitive damages are grossly excessive. They are not supported by evidence of Union Pacific's conduct or compensatory damages. They far exceed civil penalties in comparable cases, and they violate federal constitutional standards. (12) Prejudgment interest on punitive damages is not authorized and does not serve the public policies on which the prejudgment interest statute is based.

Alcorn responds that UP and Amtrak knew the crossing was dangerous and drivers could hardly see the train coming, especially based on prior incidents, but did nothing. State and federal standards did not prevent more warning devices.

Alcorn argues: (1) The doctrine of preemption did not relieve UP of its duty to exercise due care to protect the public at railroad crossings. (2) The driver exercised care; UP's failure to warn with active signaling devices caused the wreck. UP has a duty to warn of the trains because of sight deficiencies at the crossing. Drivers have a hard time seeing the trains due to land layout and other factors. (3) Punitive damages are appropriate because UP knew of the inadequate visibility, knew or should have known its failure to warn created a probability of injury, and consciously disregarded or had reckless indifference to others' safety. (4) Amtrak is liable because law requires a train operator to brake emergently to slow down for a known, specific local hazard, like a car coming. Failing to brake caused the injuries. (5) The court properly admitted prior accident and near misses at the crossing.

(6) The computer simulation is generally-accepted in the industry to determine stopping distances and was not admitted as substantive evidence. Amtrak had the opportunity to cross-examine the witness on it. (7) The jury had no roving commission. Any error was cured by submitting UP's requested instructions. (8) A juror did not intentionally fail to disclose a lawsuit not served before voir dire was completed. The Mansfield rule prohibits impeaching a jury verdict where the prevailing party objects. (9) Section 537.675.2 violates Alcorn's Fifth Amendment rights. (10) As remitted, the compensatory damages are fair and reasonable for the 46-plus years Alcorn will bear the burden of UP and Amtrak's conduct.

(11) The punitive damage remittitur is consistent with due process safeguards and was necessary to deter UP from similar future conduct. (12) The trial court properly awarded prejudgment interest.

Curtis Edwards argues: (1) This Court should dismiss the appeal against him. Amtrak and UP did not brief any error pertaining to the judgment for him. (2) The court properly instructed the jury in the verdict director as to UP, specifically, that the sight distance deficiencies caused or contributed to the collision. (3) The court properly instructed the jury as to Amtrak, specifically that the crew's failure to slow when it realized the car was not stopping caused or contributed to the collision. (4) There was no intentional juror misconduct and no prejudice.

The Association of American Railroads filed an amicus curiae brief in support of UP and Amtrak. The association traces legislative history and argues that Missouri law vests exclusive power in the Department of Economic Development's Division of Motor Carrier and Railroad Safety to determine the warning devices for crossings.

The Railwatch and National RailRoad Safety Coalition, Inc. filed an amicus curiae brief in support of Alcorn. The coalition argues: UP intentionally ignores its duty to keep crossings safe and is not safety conscious; gates and flashing lights are effective and affordable; railroads should not be able to create a preemption defense by manipulating the federal funding program; and statute does not relieve UP of its duty.

SC82805
Greenbriar Hills Country Club v. Director of Revenue
St. Louis and Cole Counties
Attorney fees in tax case

Greenbriar Hills Country Club paid sales tax on its members' monthly service charge for staff gratuities. The club recovered the taxes through litigation, then sought to recover its attorney fees from the Director of Revenue. The Administrative Hearing Commission denied the fees and expenses. The club appeals.

The club argues: (1) Statute permits attorney fees when the Director's position is not substantially justified. Her position was not substantially justified. She repudiated her own rule and never repealed it. It is arbitrary and unfair for the club to bear the cost of establishing the state's public policy. (2) The AHC's decision was based on a theory that the Director abandoned by failing to refer to it in her brief. An abandoned argument in the underlying case cannot be resurrected to establish substantial justification in the fee litigation.

The Director argues: (1) The AHC correctly denied fees because it did not have jurisdiction to consider the fee application. Section 136.315 governs fees in tax cases. The club filed only under 536.087 (the attorney fee statute for other administrative proceedings), which does not apply, and the club is not a "party" eligible to file under 136.315. The club also filed over 30 days after it had prevailed. (2) The Director's position in the underlying litigation was substantially justified. It was reasonable and in good faith. The Director's regulation applied to gratuities and not service charges. The Director's counsel's alleged repudiation of this rule and the Director's failure to repeal it were irrelevant. The AHC adopted the Director's interpretation of the tax law. This Court on review stated it was open to different interpretations.

SC92967
Danny T. James v. Robert M. Paul
Jackson and Greene Counties
Insurance coverage for stabbing

Robert Paul stabbed a man he saw with his estranged wife. The victim sued Paul. Paul's insurer refused to defend or cover Paul. The victim and Paul settled, agreeing Paul would not present evidence at trial. The court found Paul negligent and awarded the victim damages. The victim sought to garnish Paul's insurer. The court permitted the garnishment, finding the insurer bound by the judgment that the conduct was negligent (not intentional). The insurer appeals.

The insurer argues: (1) The insurer should be able to litigate its defenses. Neither estoppel nor law of the case prevents it from asserting defenses because it was not a party to the tort case and had no opportunity to litigate its defenses. (2) The court's order effectively bars the insurer from any forum to litigate its defenses. State Farm could not raise its defenses in the tort or a declaratory judgment action. (3) The policy did not cover Paul's actions, which were intentional. His intent can be inferred as a matter of law. The victim is collaterally estopped by from asserting otherwise by Paul's guilty plea on his assault charge. (4) Requiring coverage violates public policy by insuring intentional acts.

The victim responds: (1) The insurer is bound by the judgment that Paul's conduct was negligent. The insurer breached its duty to defend and thereby waived its right to contest the findings. (2) The insurer was not prevented from presenting coverage defenses. It could have defended Paul or filed for declaratory judgment. (3) The policy covered Paul's action, which was negligent. Paul's intent cannot be inferred as a matter of law. His guilty plea in a criminal proceeding is not binding in this proceeding. (4) Public policy against insuring intentional acts is inapplicable, as the court found the act negligent. (5) If the Court determines retransfer is appropriate, it should do so with instructions to remand.

SC82841
State Board of Registration for the Healing Arts v. Richard Fallon
Cole County
Physician licensing board subpoena

The State Board of Registration for the Healing Arts received a complaint against Dr. Richard Fallon for denying, as director of Prudential Health Care, Inc., coverage for an individual's surgery. He refused to respond to a Board subpoena about it. The court directed him to appear. He appeals.

Dr. Fallon argues the subpoena was invalid: (1) The federal Employee Retirement Income Security Act (section 514(a)) supercedes the state statute authorizing the subpoena (section 334.127). (2) Chapter 334 does not authorize the Board to investigate "utilization review" cases, which authority lies with the Department of Insurance. Dr. Fallon did not treat the patient but only conducted a utilization review of her proposed treatment. (3) Chapter 334 does not authorize the Board to investigate matters other than those that might lead to some action by the Board, which was not the case.

The Board counters that the subpoena was valid: (1) ERISA does not supercede section 334.127. (2) Chapters 374 and 376 do not preclude the Board from overseeing its licensees making medical decisions. Such oversight is properly with the Board. Dr. Fallon exercised his medical judgment in making medical decisions about the patient's care, which exceeds a utilization review agent's scope. (3) Chapter 334 authorized the subpoena. It could lead to license discipline. Dr. Fallon's medical judgment as to the necessity of a patient's treatment is practicing medicine, not utilization review.

Thursday, February 1, 2001 at 9:00 a.m.

SC82969
Robert Curry v. Ozarks Electric Corp. and Continental Western Insurance Co. and Cox Health Systems
Workers Compensation

Robert Curry fell from scaffold while working for Ozarks Electric Corp. Curry filed a workers' compensation claim. The hospital sought directly from the employer's insurer pursuant to section 287.140.13(6). Curry, the employer, and its insurer settled the claim. The Labor and Industrial Relations Commission found the hospital was entitled to directly recover its medical bills. The employer and insurer appeal.

They argue: (1) The Commission had no authority to award the hospital payments after the workers' compensation settlement was approved. (2) Section 287.140.13(6) requires the healthcare provider to obtain authorization in advance of its medical services in order to seek direct payment. The hospital did not get advance authorization from the employer or its insurer.

The hospital responds: (1) The Commission had authority to award the payments. The employer had a statutory duty to provide the treatment. The settlement could not have been a final settlement; it did not resolve all claims of all parties. (2) The employer authorized the medical services to the employee who suffered injuries arising out of and in the course of employment.

The Missouri Hospital Association filed an amicus curiae brief in support of the hospital's request for direct payment independent of the settlement agreement. The statute as a whole, case law, and public policy support such an independent claim.

SC82758
Missouri State Medical Association, et al. v. Missouri Department of Health
Cole County
Constitutionality of health services law

In 1999, House Bill 191, originally titled "An Act relating to insurance coverage for cancer early detection," was adopted as relating to "health services." The Missouri State Medical Association and named physicians challenge the constitutionality of the statute's passage.

They argue: (1) The bill's amendments changed its original purpose, in violation of article III, section 21. The bill was changed from pertaining only to insurance coverage for cancer early detection to many purposes, including HIV record confidentiality, insurance coverage for alcoholism and chemical dependence and mental illness, standardizing information for insurers, coverage for cancer early detection, and requiring physicians to distribute information relating to breast implant operations. (2) The bill contains more than one subject, violating article III, section 23. (3) The bill violates the "clear title" provisions of article III, section 23.

The Department of Health responds: (1) The bill was not amended to change its original purpose, insurance coverage for early detection. It retained this purpose with others reasonably related under the title "health services." (2) All of the provisions fell under the umbrella of "health services," which is the single subject of the bill. (3) The title "health services" is neither too amorphous nor too restrictive but adequately notified both legislators and the public of the bill's provisions.

SC82797
DST Systems, Inc. v. Director of Revenue
Cole County
Sales/Use Tax

DST Systems, Inc. and Data Switch Corp. sought sales/use tax refunds on machinery and equipment Data sold DST. The Administrative Hearing Commission denied the request. DST appeals.

DST argues section 144.030.2(5) exempts from local sales tax machinery and equipment to establish or expand manufacturing and other plants if the equipment makes a product to be sold for final use. DST's purchases (computers, scanners, etc.) were used to make a product (customized print materials) for clients, despite that the computer equipment is in a different location than the printing, and even though the equipment is not exclusively for manufacturing the product subject to sales tax. DST also argues the Commission erred in concluding that a previous Supreme Court decision (IBM v. DOR) (which changed the law to allow computer hardware as exempt machinery) was an unexpected decision.

The Director responds that the plant expansion exemption does not apply. DST largely runs computerized accounts for mutual fund and other businesses, with the printing for them done by a related entity. The property was not "machinery and equipment." It was not "used directly" in manufacturing. There was no expansion of manufacturing. The product was not intended to be sold for final use. The Director also argues the Commission did not render an unexpected decision in that it did not apply new law and was reasonably foreseeable.

SC82940
Laurie (Woods) Stowe v. Donald Ray Spence, Jr., et al.
Dunklin County
Child relocation

The mother planned to move to Michigan, so the father sought to obtain primary custody of their child. The mother moved then sought court permission to move. The court permitted the move with legal custody, awarded joint physical custody, and altered the visitation schedule. The father appeals.

He argues: (1) The move is not in the child's best interests. The move improved economic circumstances only yet was not economically necessary. It diminished relationships with the father and other relatives. The mother's move without father's consent, her guilty plea to child abduction, and her refusal to bring the child for father's visitation indicate suspect motive and raise doubt about her compliance with future visitation. The father seeks only to maintain the child's relationship with him and her grandparents and relatives. Relocation allows no realistic opportunity for frequent, continuing and meaningful contact, as required by appellate court interpretation of the statute requiring an opportunity to preserve and foster the non-custodial parent's relationship. (2) A change of custody to father is in the child's best interests. Changed circumstances include the mother's unapproved move, which indicates little regard for judicial process or the child's relationships. (3) The visitation schedule reduces father's visitation, increases his cost, and allows the mother to control its timing and cost, despite her hostility to it.

The mother argues the move is in the child's best interests. She argues that the case should be decided under the relocation law that was in effect when she moved, rather than as it was amended when the hearing was held. An appellate court decision (Sadler v. Favro) which purports to change the last of the 4-part test for relocation was likewise decided based on the new law. In any event, the fourth factor as to whether the move is in the child's best interests retains the same import, keeping the focus on whether the non-relocating party can continue and foster the relationship, which is possible here. As to other factors, the job and home were better, and visitation would be extensive in the summer and other school breaks. Finally, the visitation schedule is reasonably based on a school schedule and does not encourage the mother to deny visitation.

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