The materials below are provided solely for the interest and convenience of the reader, are not official Court records, and should not be quoted or cited as such. Once cases are docketed, the briefs filed by the parties typically are posted within a day or so. Summaries of the cases are prepared by the Court’s communications counsel and typically are posted the week before arguments. Audio files and information about attorneys who argued typically are posted within a day or so after arguments. Further information about the cases may be available through Case.net.
DOCKET SUMMARIES
SUPREME COURT OF MISSOURI
9:30 a.m. Tuesday, September 19, 2017
SC96280
Sun Aviation Inc. v. L-3 Communications Avionics Systems Inc.
Jackson County
Challenge to propriety of judgment in favor of aircraft component distributor
Listen to the oral argument: SC96280 MP3 audio file
L-3 was represented during arguments by Elizabeth Carver of Bryan Cave LLP in St. Louis; Sun was represented by Michael Healy of The Healy Law Firm LLC in Lee’s Summit.
For nearly a decade, Sun Aviation Inc. sold to airplane owners and operators certain aircraft components manufactured by L-3 Communications Avionics System Inc. The companies’ relationship was unwritten except for a contract in effect between December 2008 and December 2010. In 2012, L-3’s parent company directed L-3 to terminate its distributorship with Sun after deciding to manage distribution of the avionics products in a different way. A dispute then arose over payment for products Sun ordered before and after receiving the termination notice as well as over return of unsold inventory. In 2013, Sun sued L-3 under Missouri’s merchandising practices act, alleging termination without proper notice, termination without good cause, refusal to repurchase inventory and fraudulent concealment of the parent company’s evolving corporate plans. L-3 filed counterclaims, alleging breach of contract, action on account, unjust enrichment and a “quantum meruit” claim alleging Sun failed to pay for products ordered and delivered after it received notice of termination. The parties filed competing motions for summary judgment (judgment on the court filings, without a trial). The circuit court entered partial summary judgment in Sun’s favor, finding L-3 liable for termination without proper notice, termination without good cause and refusal to repurchase inventory. Following a September 2015 trial regarding damages for these three claims and the remaining issues in the case, the circuit court entered its judgment in favor of Sun on its remaining claim as well as L-3’s counterclaims. The court awarded Sun approximately $7.6 million in damages for lost profits through 2030 plus an additional $50,000 plus prejudgment interest for L-3’s refusal to accept return of inventory. The court later amended its judgment to add an award of $900,000 in attorney fees and more than $42,000 in costs. L-3 appeals.
This appeal raises several questions for the Court. One is whether L-3’s products are “industrial” products within the scope of those covered by the power equipment and inventory repurchase portions of the statutory act. Another involves whether the potential for terminating Sun’s distributorship was “material” and whether L-3 had a duty to disclose its parent corporation’s consolidation process. Additional questions involves the circuit court’s award of 18 years of lost profit as damages – whether the franchise portion of the statutory act limits recovery of such damages to the 90-day notice period and whether the amount of the award was speculative, irrational or against the weight of the evidence. Further questions involve L-3’s counterclaim for action on account and whether the circuit court misapplied or erroneously declared the law, improperly found no evidence that the parties agreed as to the amount due or that Sun acknowledged the obligation or made an unconditional promise to pay, or incorrectly concluding L-3 failed to prove its charges were reasonable and it was not the first to breach the parties’ agreement.
Two organizations filed briefs as friends of the Court. Associated Industries of Missouri argues the relevant statutory provisions protect dealers of large, expensive machines, not sellers of devices using electricity, and these provisions should be construed narrowly to avoid creating perpetual distribution agreements. It further argues a statutory claim for termination without notice cannot be repackaged as a fraud claim. Mid-Continent Instrument Company argues the relevant statutory provision does protect distributors of power equipment used in the aviation industry and such equipment should not exclude distributors from statutory protection just because it is used on aircraft. It disputes whether construing the statute accordingly will create perpetual distributorships.
Listen to the oral argument: SC96280 MP3 audio file
L-3 was represented during arguments by Elizabeth Carver of Bryan Cave LLP in St. Louis; Sun was represented by Michael Healy of The Healy Law Firm LLC in Lee’s Summit.
For nearly a decade, Sun Aviation Inc. sold to airplane owners and operators certain aircraft components manufactured by L-3 Communications Avionics System Inc. The companies’ relationship was unwritten except for a contract in effect between December 2008 and December 2010. In 2012, L-3’s parent company directed L-3 to terminate its distributorship with Sun after deciding to manage distribution of the avionics products in a different way. A dispute then arose over payment for products Sun ordered before and after receiving the termination notice as well as over return of unsold inventory. In 2013, Sun sued L-3 under Missouri’s merchandising practices act, alleging termination without proper notice, termination without good cause, refusal to repurchase inventory and fraudulent concealment of the parent company’s evolving corporate plans. L-3 filed counterclaims, alleging breach of contract, action on account, unjust enrichment and a “quantum meruit” claim alleging Sun failed to pay for products ordered and delivered after it received notice of termination. The parties filed competing motions for summary judgment (judgment on the court filings, without a trial). The circuit court entered partial summary judgment in Sun’s favor, finding L-3 liable for termination without proper notice, termination without good cause and refusal to repurchase inventory. Following a September 2015 trial regarding damages for these three claims and the remaining issues in the case, the circuit court entered its judgment in favor of Sun on its remaining claim as well as L-3’s counterclaims. The court awarded Sun approximately $7.6 million in damages for lost profits through 2030 plus an additional $50,000 plus prejudgment interest for L-3’s refusal to accept return of inventory. The court later amended its judgment to add an award of $900,000 in attorney fees and more than $42,000 in costs. L-3 appeals.
This appeal raises several questions for the Court. One is whether L-3’s products are “industrial” products within the scope of those covered by the power equipment and inventory repurchase portions of the statutory act. Another involves whether the potential for terminating Sun’s distributorship was “material” and whether L-3 had a duty to disclose its parent corporation’s consolidation process. Additional questions involves the circuit court’s award of 18 years of lost profit as damages – whether the franchise portion of the statutory act limits recovery of such damages to the 90-day notice period and whether the amount of the award was speculative, irrational or against the weight of the evidence. Further questions involve L-3’s counterclaim for action on account and whether the circuit court misapplied or erroneously declared the law, improperly found no evidence that the parties agreed as to the amount due or that Sun acknowledged the obligation or made an unconditional promise to pay, or incorrectly concluding L-3 failed to prove its charges were reasonable and it was not the first to breach the parties’ agreement.
Two organizations filed briefs as friends of the Court. Associated Industries of Missouri argues the relevant statutory provisions protect dealers of large, expensive machines, not sellers of devices using electricity, and these provisions should be construed narrowly to avoid creating perpetual distribution agreements. It further argues a statutory claim for termination without notice cannot be repackaged as a fraud claim. Mid-Continent Instrument Company argues the relevant statutory provision does protect distributors of power equipment used in the aviation industry and such equipment should not exclude distributors from statutory protection just because it is used on aircraft. It disputes whether construing the statute accordingly will create perpetual distributorships.
SC96280_L-3_Communications_Avionics_Systems_brief.pdf
SC96280_Sun_Aviation_brief.pdf
SC96280_L-3_Communications_Avionics_Systems_reply_brief
SC96280_Associated_Industries_of_Missouri_amicus_brief.pdf
SC96280_Mid-Continent_Instrument_Co._amicus_brief.pdf
SC96188
Susan Gall, et al. v. Russell E. Steele, Kristie Swaim
Adair and Boone counties
Question of who has legal appointing authority over deputy circuit clerks
Listen to the oral argument: SC96188 MP3 audio file
The presiding judge was represented during arguments by Charles Adamson of the attorney general’s office in Jefferson City; Gall and Decker were represented by Robert Herman of Schwartz, Herman & Davidson in St. Louis.
Section 483.245, RSMo, provides the elected circuit clerk in each judicial circuit is the appointing authority for deputy circuit clerks in that court. Pursuant to its general superintending control and supervisory authority over all courts granted by article V, section 4 of the state constitution, the Supreme Court of Missouri in October 2009 issued an administrative order requiring circuit courts to consolidate all deputy circuit clerks under the supervision of one appointing authority – the circuit clerk, an associate circuit judge in the county or the circuit’s presiding judge – and giving the circuit court budget committee oversight over all circuit consolidation plans. The original consolidation agreement for the 2nd Judicial Circuit (which includes Adair County) named the circuit clerk as appointing authority. It was changed twice, once in 2013 – naming the presiding judge as appointing authority – and again in 2014 – naming an Adair County associate circuit judge as appointing authority.
In December 2013, former Adair County deputy circuit clerk Susan Gall filed a federal lawsuit against the presiding judge, alleging he removed her from her position earlier that year without authority because only the elected circuit clerk, Linda Decker, had legal authority to remove her from office pursuant to section 483.245. In January 2015, the federal court stayed Gall’s lawsuit so the parties could resolve the state law issues in the Missouri state courts. Gall and Decker subsequently filed a state court declaratory judgment action, and both sides ultimately sought summary judgment (judgment on the court filings, without a trial). In January 2016, the circuit court entered its judgment finding the 2nd circuit’s 2013 and 2014 consolidation orders were invalid and Decker, as the elected circuit clerk, is the sole appointing authority for Adair County deputy circuit clerks. The circuit court found the 2013 order was procedurally defective and both orders were invalid for unilaterally taking away the circuit clerk’s statutorily granted appointing authority without her consent. The presiding judge appeals.
This appeal presents several questions regarding who has the proper authority to appoint deputy circuit clerks. One is which controls such authority – section 483.245 or this Court’s 2009 order regarding court clerk consolidation. A related question involves the interplay of the supervisory power granted by article V, section 4 and the provision in article V, section 15 of the state constitution, that personnel to aid in a circuit court’s business “shall be selected as provided by law” as well as the extent to which this Court’s administrative powers can supersede legislation. Another question is whether the elected circuit clerk has exclusive appointing authority and whether this Court’s 2009 consolidation order permits the 2nd circuit to remove the Adair County circuit clerk of her statutory authority over deputy circuit clerks. Additional questions involve whether Gall and Decker waived their claim about any procedural defects in the 2013 order, whether the presiding judge consulted with the court en banc as required by this Court’s 2009 order, whether the 2009 order even applied to courts such as the 2nd circuit that already had entered into consolidation agreements, and whether substantial evidence supports the circuit court’s judgment that the presiding judge unilaterally and ineffectively modified the original consolidation agreement. Further questions involve whether Gall had standing to bring the action and whether Decker’s legal remedy should have been an appeal to the circuit court budget committee rather than a declaratory judgment action.
Listen to the oral argument: SC96188 MP3 audio file
The presiding judge was represented during arguments by Charles Adamson of the attorney general’s office in Jefferson City; Gall and Decker were represented by Robert Herman of Schwartz, Herman & Davidson in St. Louis.
Section 483.245, RSMo, provides the elected circuit clerk in each judicial circuit is the appointing authority for deputy circuit clerks in that court. Pursuant to its general superintending control and supervisory authority over all courts granted by article V, section 4 of the state constitution, the Supreme Court of Missouri in October 2009 issued an administrative order requiring circuit courts to consolidate all deputy circuit clerks under the supervision of one appointing authority – the circuit clerk, an associate circuit judge in the county or the circuit’s presiding judge – and giving the circuit court budget committee oversight over all circuit consolidation plans. The original consolidation agreement for the 2nd Judicial Circuit (which includes Adair County) named the circuit clerk as appointing authority. It was changed twice, once in 2013 – naming the presiding judge as appointing authority – and again in 2014 – naming an Adair County associate circuit judge as appointing authority.
In December 2013, former Adair County deputy circuit clerk Susan Gall filed a federal lawsuit against the presiding judge, alleging he removed her from her position earlier that year without authority because only the elected circuit clerk, Linda Decker, had legal authority to remove her from office pursuant to section 483.245. In January 2015, the federal court stayed Gall’s lawsuit so the parties could resolve the state law issues in the Missouri state courts. Gall and Decker subsequently filed a state court declaratory judgment action, and both sides ultimately sought summary judgment (judgment on the court filings, without a trial). In January 2016, the circuit court entered its judgment finding the 2nd circuit’s 2013 and 2014 consolidation orders were invalid and Decker, as the elected circuit clerk, is the sole appointing authority for Adair County deputy circuit clerks. The circuit court found the 2013 order was procedurally defective and both orders were invalid for unilaterally taking away the circuit clerk’s statutorily granted appointing authority without her consent. The presiding judge appeals.
This appeal presents several questions regarding who has the proper authority to appoint deputy circuit clerks. One is which controls such authority – section 483.245 or this Court’s 2009 order regarding court clerk consolidation. A related question involves the interplay of the supervisory power granted by article V, section 4 and the provision in article V, section 15 of the state constitution, that personnel to aid in a circuit court’s business “shall be selected as provided by law” as well as the extent to which this Court’s administrative powers can supersede legislation. Another question is whether the elected circuit clerk has exclusive appointing authority and whether this Court’s 2009 consolidation order permits the 2nd circuit to remove the Adair County circuit clerk of her statutory authority over deputy circuit clerks. Additional questions involve whether Gall and Decker waived their claim about any procedural defects in the 2013 order, whether the presiding judge consulted with the court en banc as required by this Court’s 2009 order, whether the 2009 order even applied to courts such as the 2nd circuit that already had entered into consolidation agreements, and whether substantial evidence supports the circuit court’s judgment that the presiding judge unilaterally and ineffectively modified the original consolidation agreement. Further questions involve whether Gall had standing to bring the action and whether Decker’s legal remedy should have been an appeal to the circuit court budget committee rather than a declaratory judgment action.
SC96188_Presiding_Judge_brief.pdf
SC96188_Decker_and_Gall_brief.pdf
SC96188_Presiding_Judge_reply_brief.pdf
SC96248
In re: Troy R. Penny
St. Louis city
Attorney discipline
Listen to the oral argument: SC96248 MP3 audio file
Alan Pratzel, the chief disciplinary counsel, represented his office in Jefferson City during arguments; Penny was represented by Sara Rittman of Rittman Law LLC in Jefferson City.
The chief disciplinary counsel’s office received two reports from a bank in March 2014 advising that St. Louis attorney Troy Penny had overdrawn the trust account in which he kept his clients’ funds. Following an investigation, the chief disciplinary counsel began disciplinary proceedings against Penny. Following a hearing, a regional disciplinary hearing panel found Penny had violated Rule 4-1.15. It found two overdrafts of Penny’s trust account occurred after payment was stopped on a check for damages due to one of Penny’s clients. It further found Penny improperly made payments from his trust account to pay his state taxes and his tax preparer using earned fees he had failed to transfer to his operating account. The panel recommended Penny be reprimanded. Penny accepted the panel’s recommendation, but the chief disciplinary counsel rejected it. The chief disciplinary panel now asks this Court to suspend Penny’s law license, stay the suspension and place Penny on probation.
This case presents two primary issues for the Court – whether Penny violated the rules of professional responsibility and, if so, what discipline, if any, is appropriate.
Listen to the oral argument: SC96248 MP3 audio file
Alan Pratzel, the chief disciplinary counsel, represented his office in Jefferson City during arguments; Penny was represented by Sara Rittman of Rittman Law LLC in Jefferson City.
The chief disciplinary counsel’s office received two reports from a bank in March 2014 advising that St. Louis attorney Troy Penny had overdrawn the trust account in which he kept his clients’ funds. Following an investigation, the chief disciplinary counsel began disciplinary proceedings against Penny. Following a hearing, a regional disciplinary hearing panel found Penny had violated Rule 4-1.15. It found two overdrafts of Penny’s trust account occurred after payment was stopped on a check for damages due to one of Penny’s clients. It further found Penny improperly made payments from his trust account to pay his state taxes and his tax preparer using earned fees he had failed to transfer to his operating account. The panel recommended Penny be reprimanded. Penny accepted the panel’s recommendation, but the chief disciplinary counsel rejected it. The chief disciplinary panel now asks this Court to suspend Penny’s law license, stay the suspension and place Penny on probation.
This case presents two primary issues for the Court – whether Penny violated the rules of professional responsibility and, if so, what discipline, if any, is appropriate.
SC96248_Chief_Disciplinary_Counsel_brief.pdf
SC96248_Penny_brief.pdf
SC96078
In re: Rita Kay Sanders
Greene County
Attorney discipline
Listen to the oral argument: SC96078 MP3 audio file
The chief disciplinary counsel was represented during arguments by Deputy Chief Disciplinary Counsel Sam Phillips of the chief disciplinary counsel’s office in Jefferson City; Sanders was represented by Robert Russell of Kempton and Russell in Sedalia.
Springfield attorney Rita Kay Sanders – a former law enforcement officer – also maintains an office in Forsythe in the same building as a friend’s bail bond office. The state charged Sanders with kidnapping, armed criminal action, unlawful use of a weapon and fugitive recovery, alleging inappropriate activities in assisting her friend and local law enforcement officers in the search for a fugitive in Reeds Springs in May 2012 and seizure of some of the fugitive’s property. Ultimately, she pleaded guilty to a peace disturbance charge. Also in 2012, the chief disciplinary counsel’s office received notifications from a bank that Sanders had overdrawn the trust account in which she kept her clients’ funds, and the office sent her letters cautioning her about proper maintenance of her trust account. In 2014, the chief disciplinary counsel’s office received another overdraft notification. The chief disciplinary counsel’s office began disciplinary proceedings against Sanders. Following a hearing, a regional disciplinary hearing panel found Sanders had violated Rule 4-1.15 by disbursing funds from her trust account without reference to specific fees earned from specific clients and Rule 4-8.4 for her involvement in the fugitive recovery. The panel recommended a reprimand with requirements for trust account monitoring. The chief disciplinary counsel now asks this Court to suspend Sanders’ law license, stay the suspension and place her on probation.
This case presents two primary issues for the Court – whether Sanders violated the rules of professional responsibility and, if so, what discipline, if any, is appropriate.
Listen to the oral argument: SC96078 MP3 audio file
The chief disciplinary counsel was represented during arguments by Deputy Chief Disciplinary Counsel Sam Phillips of the chief disciplinary counsel’s office in Jefferson City; Sanders was represented by Robert Russell of Kempton and Russell in Sedalia.
Springfield attorney Rita Kay Sanders – a former law enforcement officer – also maintains an office in Forsythe in the same building as a friend’s bail bond office. The state charged Sanders with kidnapping, armed criminal action, unlawful use of a weapon and fugitive recovery, alleging inappropriate activities in assisting her friend and local law enforcement officers in the search for a fugitive in Reeds Springs in May 2012 and seizure of some of the fugitive’s property. Ultimately, she pleaded guilty to a peace disturbance charge. Also in 2012, the chief disciplinary counsel’s office received notifications from a bank that Sanders had overdrawn the trust account in which she kept her clients’ funds, and the office sent her letters cautioning her about proper maintenance of her trust account. In 2014, the chief disciplinary counsel’s office received another overdraft notification. The chief disciplinary counsel’s office began disciplinary proceedings against Sanders. Following a hearing, a regional disciplinary hearing panel found Sanders had violated Rule 4-1.15 by disbursing funds from her trust account without reference to specific fees earned from specific clients and Rule 4-8.4 for her involvement in the fugitive recovery. The panel recommended a reprimand with requirements for trust account monitoring. The chief disciplinary counsel now asks this Court to suspend Sanders’ law license, stay the suspension and place her on probation.
This case presents two primary issues for the Court – whether Sanders violated the rules of professional responsibility and, if so, what discipline, if any, is appropriate.