BSCR Firm News/Blogs Feedhttps://www.bscr-law.com/?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10en-us13 Jan 2022 00:00:00 -0800firmwisehttps://blogs.law.harvard.edu/tech/rss"Judicial Hellholes" - A trio of Illinois Counties Move Up the List while the City of St. Louis Remains an Honoreehttps://www.bscr-law.com/?t=40&an=120021&format=xml&p=5258&stylesheet=blog28 Dec 2021Missouri Law Blog<p>Yet again, Cook, Madison and St. Clair Counties in Illinois and the City of St. Louis are included in the 2021/2022 &ldquo;Judicial Hellholes Report&rdquo; from the American Tort Reform Foundation. This year, the trio of Illinois counties moves up from 8<sup>th</sup> place on last year&rsquo;s list to 5<sup>th</sup> place, and the City of St. Louis remains in 7<sup>th</sup> place.&nbsp;The list is rounded out with California (#1), New York (#2), the Georgia Supreme Court (#3), the Philadelphia Court of Common Pleas &amp; the Supreme Court of Pennsylvania (#4), Louisiana (#6), and South Carolina asbestos litigation (#8).&nbsp;The trio of Illinois Counties lay across the Mississippi River from the City of St. Louis and are all plaintiff-friendly venues, with a mass influx of product liability litigation (including talc and asbestos lawsuits), highlighting the need for liability reform.</p> <p>While asbestos cases decreased nationwide by 11% in 2020, both Madison and St. Clair Counties in Illinois have seen an increase in filings in asbestos litigation in the last year.&nbsp;Plaintiffs&rsquo; firms continue to seek out these venues for their overall low evidentiary standards, plaintiff-friendly judges, and persistent ability to find new and unique defendants, despite the increase in defendant bankruptcy filings over the last few years.&nbsp;Additionally, Cook County remains a hotbed for asbestos litigation.&nbsp;Despite limited resources due to the Covid-19 pandemic, Cook County has hosted 3 asbestos trials to verdict since October 2021, with more on the horizon for early 2022.</p> <p>Illinois is also flooded with &ldquo;no-injury&rdquo; Biometric Information Privacy Act (&ldquo;BIPA&rdquo;) lawsuits, a majority of which are brought by employees against their employers, due to the fact that a 2019 Illinois Supreme Court decision held that a plaintiff does not need to show any harm in order to collect damages under the Act, which requires companies to inform an individual in writing and receive a written release prior to obtaining or retaining his or her biometric data.&nbsp;This has triggered a slew of litigation for any company that uses fingerprints, voiceprints, hand or facial scanning as identifiers for specific access to its systems or for clocking in and clocking out.&nbsp;Unsurprisingly, this has been further complicated by a September 2021 Illinois appellate court decision that found that a five-year statute of limitations applies to most BIPA claims, so long as there is no dispute that the person&rsquo;s information was publicized (in which case a one-year statute of limitations would apply).</p> <p>Other factors pushing Illinois Counties back up in the rankings include various legislative enactments, including the Prejudgment Interest Act and S.B. 2406 which will break up the 20<sup>th</sup> Judicial Circuit Court and redraw the supreme court districts for the first time since 1964.</p> <p>The City of St. Louis, similar to the Illinois Counties described above, continues to draw a product liability litigation crowd, including in cases involving talc, Roundup&reg; weed killer, and asbestos.&nbsp;This summer, the United States Supreme Court got in on the action, when in June 2021, it announced that it would not review a landmark Johnson &amp; Johnson cosmetic talcum powder case which resulted in a $4.69 billion verdict ($550 million in actual damages and $4.14 billion in punitive damages) in the St. Louis Circuit Court but was reduced by the Missouri Court of Appeals for the Eastern District to $2.12 billion ($500 million in actual damages and $1.62 billion in punitive damages).</p> <p>Missouri courts continue to push the boundaries when it comes to unreasonable punitive damages awards, as can be noted in the J&amp;J talc litigation. Moreover, in March 2021, the Missouri Supreme Court affirmed a lower court&rsquo;s decision to award punitive damages in a medical malpractice case, applying a relatively lax standard.&nbsp;Specifically, the Court in <i>Rhoden v. Missouri Delta Med. Ctr.</i>, ruled that &ldquo;acting willfully, wantonly, or maliciously is equivalent to acting with a complete indifference to or in conscious disregard for the rights or safety of others.&rdquo;&nbsp;Effective and applicable to causes of action arising after August 28, 2020, newly enacted legislation - SB 591 - takes this issue head on and requires that a jury find &ldquo;the evidence clearly and convincingly demonstrated that the health care provider intentionally caused damage to the plaintiff or demonstrated malicious misconduct that caused damage to the plaintiff.&rdquo; &sect; 538.210.8, RSMo. (2020). Further, the statute explicitly states that: &ldquo;Evidence of negligence including, but not limited to, indifference to or conscious disregard for the safety of others shall not constitute intentional conduct or malicious misconduct.&rdquo; The legislation was enacted as a counter to the intermediate appellate court&rsquo;s decision in <i>Rhoden</i>, and its failure to recognize the distinction between negligence and intentional or malicious misconduct. This change reflects a return to the original common-law standard of intentional misconduct and is an effort to clarify for the courts the proper standard and prohibit the use of lesser standards. The implications of this decision have yet to be seen, but the hope is that at least for cases filed after August 28, 2020, decisions like <i>Rhoden </i>will have become a thing of the past.</p> <p>While the Missouri legislature is moving forward in enacting stricter reform related to lawsuit abuse, it remains to be seen what impact, over time, those laws will have on litigation in the City of St. Louis.&nbsp;Until then, we will likely continue to see it included on the list of &ldquo;Judicial Hellholes&rdquo;.&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Once More unto the Breach: the Missouri Supreme Court Again Takes Up the Question of Constitutional Limits on Missouri's Statutory Punitive Damages Caphttps://www.bscr-law.com/?t=40&an=119517&format=xml&p=5258&stylesheet=blog10 Nov 2021Missouri Law Blog<p>In 2012 and 2014, the Missouri Supreme Court sent shudders down the spine of defense lawyers throughout the state, via its decisions in <i>Watts v. Lester E. Cox. Medical Centers </i>and <i>Lewellen v. Franklin</i>, which refused to apply statutory limitations on noneconomic damages (<i>Watts</i>) and punitive damages (<i>Lewellen</i>), on the grounds that the statutes abridged the Missouri Constitution&rsquo;s right to trial by jury. Those cases reversed decades of Supreme Court authority to the contrary.&nbsp;The legal theory goes as follows: (1) if a case has been brought under a common law cause of action (e.g., fraud); (2) that same cause of action existed at the time the state Constitution was enacted in 1820; (3) and that cause of action included the right to a jury trial back in 1820; then the application of a statutory limit on punitive damages or noneconomic damages abridges the right to a trial by jury.</p> <p>This same legal theory has been tested in 31 states.&nbsp;And as the New Mexico Supreme Court wrote earlier this year, &ldquo;Of the thirty jurisdictions to consider whether a statutory cap on damages violated the constitutional right to a trial by jury, twenty-four have applied such caps, reasoning that a statutory limit on recovery is a matter of law within the purview of the state legislature&rdquo;.&nbsp;(The New Mexico court&rsquo;s ruling made the score 25 to 6 in support of the legislative caps.)</p> <p>The Missouri Supreme Court has since re-examined this issue, each time attempting to carefully circumscribe its holdings in <i>Watts </i>and <i>Lewellen.&nbsp;</i>In <i>Dodson v. Ferrara, </i>decided in 2016, the plaintiffs challenged the application of the statutory noneconomic damages cap in a wrongful death case, attempting to analogize a common law claim that existed in 1820, for the loss of services of a child whose death was wrongfully caused.&nbsp;The Court rejected plaintiff&rsquo;s argument, reasoning that a wrongful-death claim and a common-law &ldquo;loss of services&rdquo; claim based on a wrongful death &ldquo;may both be civil actions for monetary damages&rdquo; arising out of a wrongful death, &ldquo;but they arise from completely different principles of law.&rdquo; The Court accordingly found the analogy too strained to support an argument that wrongful-death claims are analogous to claims that were tried to a jury in 1820.</p> <p>Then, earlier this year, in <i>Ordinola v. University Physician Associates, </i>the Court similarly rejected a plaintiff&rsquo;s attempt to broadly construe the <i>Watts </i>decision.&nbsp;In <i>Ordinola, </i>the plaintiff brought statutory claims for medical negligence, and argued that because medical negligence claims were triable to juries at common law in 1820, the damages caps could not be applied.&nbsp;The Supreme Court disagreed, holding that the legislature had the authority to abolish common law causes of action, and replace them a statutory cause of action, which may in turn include limitations on what measure of damages can be recovered.&nbsp;That is what the state legislature did with medical negligence claims, and the statutory damages caps were therefore held to be enforceable.</p> <p>In the current <i>All Star Awards </i>case, the plaintiff company&rsquo;s (All Star) general manager terminated his employment with All Star and went to work for the defendant (HALO), a competitor.&nbsp;He allegedly diverted substantial amounts of business to HALO.&nbsp;Plaintiff brought claims against the manager for breaching his duty of loyalty, and against HALO under two legal theories: tortious interference with business expectancy, and civil conspiracy to breach a duty of loyalty.&nbsp;At trial, the jury rendered a verdict against HALO that included punitive damages of well beyond five times the total compensatory damages award, and the Circuit Court judge applied Missouri&rsquo;s statutory damages cap and reduced the punitive damages award from $5.5 million to $2,627,709.40.</p> <p>On appeal, the Western District Court of Appeals reversed the trial court&rsquo;s application of the damages cap, essentially holding that plaintiff&rsquo;s causes of action against HALO would have been cognizable under common law and triable by jury in 1820, because they involved &ldquo;wrongs to the person or property for which money damages are claimed.&rdquo;&nbsp;On appeal to the Supreme Court, HALO has argued &ndash; convincingly, in our view &ndash; that Missouri common law claims for tortious interference with business expectancy did not exist in 1820, and in fact were not recognized until 1953; and that claims for breach of duty of loyalty (let alone conspiracy to breach that duty) did not exist until 1966. The <i>Dodson </i>case certainly appears to stand for the principle that the 1820 common law claim must be either the same or very closely analogous to claim in the case currently before the court, and that broad generalizations will not carry the day for a plaintiff.&nbsp;(In <i>Lewellen, </i>the plaintiff&rsquo;s claim was for consumer fraud, and such claims were recognized at common law in 1820.)</p> <p>On the damages cap issue, HALO has made a twofold argument to the Supreme Court:&nbsp;that it should at very least reinstate the trial court&rsquo;s holding that the damages cap applies in a case like this, but that more properly, the Court should reconsider its holdings in <i>Watts </i>and <i>Lewellen.&nbsp;</i>And given the very strong consensus among courts across the nation that damages caps are enforceable and can withstand state constitutional challenge, there is much to be said for the latter approach.&nbsp;We believe that in accepting this case for review, the Supreme Court, at minimum, is thinking that this case bears some resemblance to <i>Dodson.</i> &nbsp;</p> <p>In its appeal, HALO has argued several other legal points: that there was insufficient evidence to support a claim for tortious interference; that the award in plaintiff&rsquo;s favor was based on inadmissible damages testimony from a lay witness, who incorrectly calculated lost profits; and that the punitive damages award was so disproportionate to actual damages that it violated due process.&nbsp;But we believe the reason the Supreme Court accepted this case is to weigh in once again on the damages cap, and that is where the action is. &nbsp;The case has been docketed for oral argument in early December 2021. Stay tuned.</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Natural Gas Company Cannot Evade Anti-Indemnification Statute's Application in Dispute with Utility Locator after JJ's Restaurant Explosionhttps://www.bscr-law.com/?t=40&an=119049&format=xml&p=5258&stylesheet=blog05 Oct 2021Missouri Law Blog<p>More than eight years after the Country Club Plaza district in Kansas City, Missouri was rocked by a gas line explosion that destroyed JJ&rsquo;s Restaurant, the United States Court of Appeals for the Eighth Circuit has <a href="https://ecf.ca8.uscourts.gov/opndir/21/09/201790P.pdf">ruled</a> that utility-locating company USIC has no duty to indemnify natural gas company Spire.</p> <p>The explosion led to a series of lawsuits against Spire, many of which Spire settled for a collective $75 million. USIC was subsequently asked to indemnify it on the basis that the contract between the two companies placed sole financial responsibility upon USIC&mdash;regardless of who was actually at fault. To that end, Spire sought a declaratory judgment that USIC owed Spire for the amount of the prior settlements in addition to any future settlements. USIC moved for summary judgment arguing that R.S.Mo. &sect; 434.100.1, Missouri&rsquo;s anti-indemnification statute, precluded Spire&rsquo;s attempt to escape financial liability.</p> <p>The anti-indemnification statute generally prohibits contractual clauses which force one party to hold another party harmless and indemnify them for their own negligence. In other words, the law prevents a subcontractor from indemnifying a general contractor for any damage caused by the general contractor&rsquo;s negligence. However, this statute only applies to &ldquo;any contract or agreement for public or private construction work.&rdquo;</p> <p>Spire took the position that USIC&rsquo;s services could not be considered &ldquo;construction work&rdquo; within the statute&rsquo;s meaning. The Eighth Circuit looked to subsection 3 of the anti-indemnification statute, which defined the terms to include &ldquo;construction, alteration, maintenance or repair of any . . . pipeline.&rdquo; The Court easily dispensed with Spire&rsquo;s argument and held that USIC&rsquo;s work in locating and marking the gas line meant that USIC was preserving the lines and keeping them in a state of repair. The Court found it irrelevant that USIC did not construct something within the usual meaning of the word since the anti-indemnification statute&rsquo;s definition of construction controlled the dispute.</p> <p>In addition to illustrating the scope of the anti-indemnification&rsquo;s statute in the construction industry, this case also teaches about litigation strategy. Here, Spire opted to pursue an &ldquo;all-or-nothing approach&rdquo; and appealed solely on the basis that USIC&rsquo;s purported obligation to indemnify was absolute. To that end, Spire did not seek any decision on whether it was actually negligent, or whether USIC had an obligation to indemnify it for any amount less than the full cost of the settlements. In that sense, the case suggests that parties may be well-served to pursue other issues in a case, even if those issues may not lead to a full and complete victory.&nbsp;&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Missouri Court of Appeals Finds Arbitrator Lacked Authority to Resolve Automobile Repossession Disputehttps://www.bscr-law.com/?t=40&an=118861&format=xml&p=5258&stylesheet=blog20 Sep 2021Missouri Law Blog<p>The Missouri Court of Appeals, Western District, recently <a href="https://www.courts.mo.gov/file/WD/Opinion_WD84054.pdf">reversed</a> a trial court decision and subsequent arbitration award in favor of an automobile repossessor. In Car Credit, Inc. v. Pitts, the Court of Appeals held that the trial court incorrectly allowed arbitration of Pitts&rsquo; claims against Car Credit. The contract at issue designated the National Arbitration Forum (&ldquo;NAF&rdquo;) as arbitrator of disputes arising between Car Credit and Pitts related to the vehicle purchase.&nbsp; At the time Pitts filed her lawsuit, the NAF was not available to serve as arbiter.&nbsp; Consequently, Car Credit could not resolve Pitts&rsquo; claims through arbitration.&nbsp;&nbsp;</p> <p>Following Car Credit&rsquo;s repossession of her vehicle in 2015, Pitts sued Car Credit and claimed breach of contract.&nbsp; Pitts also sought to pursue a class action lawsuit against Car Credit.&nbsp; Pitts alleged Car Credit engaged in a &ldquo;deceptive pattern of wrongdoing . . . regarding collection of alleged deficiencies.&rdquo;&nbsp; Car Credit moved to compel arbitration of Pitts&rsquo; claims.&nbsp; Pitts purchased the vehicle at issue from Car Credit in 2011 and financed the purchase.&nbsp; Pitts signed an arbitration agreement at the time of purchase:</p> <p style="margin-left: 40px;">You and we [Car Credit] agree that if any Dispute arises, either you or we may choose to have the Dispute resolved by binding arbitration under the rules then in effect of the Arbitration Organization shown below (if no Arbitration Organization is shown below, the Arbitration Organization shall be the National Arbitration Forum). If such rules conflict with this Arbitration Agreement, the terms of this Arbitration Agreement shall apply.</p> <p>While the arbitration clause referenced an arbitration organization &ldquo;listed below,&rdquo; the arbitration agreement did not identify any specific organization, leaving the NAF as the applicable arbitration organization.&nbsp; Car Credit cited this arbitration agreement and moved to compel arbitration.&nbsp; Pitts correctly pointed out that the NAF was no longer available to serve as arbitrator.&nbsp; Pitts argued that since the NAF was the sole designated arbitration agency and was not available, the court should not compel arbitration.&nbsp; The NAF stopped providing arbitration services in 2009 after Minnesota&rsquo;s Attorney General sued it for alleged consumer fraud, false advertising, and deceptive trade practices.</p> <p>The trial court denied Car Credit&rsquo;s first motion to compel arbitration.&nbsp; However, after Pitts moved to certify the class action claims against Car Credit, Car Credit made a renewed motion to compel arbitration.&nbsp; At the time, the Missouri Court of Appeals had recently held that an arbitration agreement was enforceable even though it designated the NAF as arbitrator in <i>A-1 Premium Acceptance v. Hunter</i>, WD79735, 2017 WL 3026917, at * 5 (Mo. App. W.D. July 18, 2017).&nbsp; The trial court granted Car Credit&rsquo;s renewed motion and Pitts&rsquo; claims proceeded to arbitration.&nbsp; After the trial court granted arbitration of Pitts&rsquo; claims, the Missouri Supreme Court overruled the Court of Appeals&rsquo; decision in the separate case,<i> A-1 Premium Acceptance v. Hunter</i>, 557 S.W.3d 923, 929 (Mo. banc 2018), and held that separate organization could not arbitrate disputes where the NAF was unavailable.&nbsp;</p> <p>Meanwhile, in Pitts&rsquo; case, since the NAF was unavailable, an arbitrator from the American Arbitration Association (&ldquo;AAA&rdquo;) reviewed Pitts&rsquo; claims.&nbsp; That arbitrator found in favor of Car Credit.&nbsp; Based on that determination, the trial court entered judgment in favor of Car Credit and decertified the class action claims.&nbsp; Pitts appealed.&nbsp;</p> <p>The Court of Appeals reversed, holding that since Pitts and Car Credit agreed to resolve their disputes before the NAF, the AAA arbitrator lacked the authority to determine the validity of Pitts&rsquo; claims.&nbsp; The appellate Court held that the applicable federal law&mdash;the Federal Arbitration Act&mdash;does not require a court to compel arbitration when the parties agree to arbitrate only before a specified arbitrator.&nbsp; Furthermore, the Missouri Supreme Court&rsquo;s recent decision in <i>A-1 Premium Acceptance v. Hunter </i>was on point.&nbsp; In both cases, the parties agreed that the NAF would resolve disputes: &ldquo;[T]he agreement clearly provided the parties the opportunity to identify an organization other than NAF, and, with equal clarity, the parties unambiguously declined to do so . . .&rdquo;</p> <p>&nbsp;While Car Credit will have the opportunity to appeal this decision to the Missouri Supreme Court, it is likely that the recent decision in <i>A-1 Premium Acceptance v. Hunter </i>will result in Pitts&rsquo; claims against Car Credit, including Pitts&rsquo; class action claims, moving forward.&nbsp; If the applicable arbitration agreement had designated a different arbitrator from the NAF, or had provided an alternative arbitrator, Pitts&rsquo; claims likely would have been resolved through arbitration.&nbsp; Careless drafting was also a key factor here.&nbsp; Pitts entered into this agreement in 2011, nearly two years <u>after</u> the NAF had stopped arbitration.&nbsp; Had the applicable arbitration agreement been updated to remove the NAF as arbitrator and designate a different organization after Minnesota&rsquo;s lawsuit in 2009, Car Credit may have been able to successfully compel arbitration.&nbsp; Parties seeking to resolve disputes through arbitration should be careful to ensure their agreements are up to date with the current law.&nbsp;&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Back to Basics: Missouri Court of Appeals Highlights Importance of "Plain-Meaning" Rule in Contract Interpretationhttps://www.bscr-law.com/?t=40&an=118701&format=xml&p=5258&stylesheet=blog08 Sep 2021Missouri Law Blog<p>The Eastern District of the Missouri Court of Appeals <a href="https://www.courts.mo.gov/file.jsp?id=179376">reversed</a> a trial court&rsquo;s grant of summary judgment in <i>Pelopidas, LLC et al. v. Keller</i> due to that court&rsquo;s erroneous contract interpretation, and instead ordered that summary judgment be entered for the opposing party. In its ruling, the Court of Appeals underscored the basic tenets of contract interpretation and highlighted the role of the American Bar Association&rsquo;s <i>A Manual of Style for Contract Drafting</i> as &ldquo;a highly regarded authority on contract drafting.&rdquo;</p> <p>The case originated from a 2016 dispute concerning the management of a commercial enterprise jointly owned by ex-spouses. The parties entered into a settlement agreement in September 2019, whereby the ex-wife (Keller) agreed to transfer her 50% ownership in the business to Respondents (Pelopidas, LLC and Brown) in exchange for compensation of $8.85 million. Following the September 2019 settlement agreement, the timing of the Keller&rsquo;s transfer of her Pelopidas stock became a point of contention between the parties, as the contract itself did not contain a date of transfer. Respondents sued to enforce the terms of the settlement agreement, claiming that Keller had transferred her 50% ownership interest effective as of the date of the settlement agreement; seeking to enjoin Keller from claiming she still had an ownership interest in the company; instructing the parties to finalize the settlement under which Keller was to be paid $1.1 million that Brown had placed in escrow; and awarding Respondents their reasonable attorneys&rsquo; fees. Keller counterclaimed, seeking damages for Respondents&rsquo; alleged failure and refusal to make an accelerated payment of $8.6 million pursuant to the terms of the settlement agreement.</p> <p>The disputed language in the settlement agreement reads as follows: &ldquo;&hellip; [Keller&rsquo;s] stock <b><i>shall be</i> </b>surrendered/sold, escrowed and pledged back to plaintiff.&rdquo; Respondents argued that the language required Keller&rsquo;s stock to be immediately transferred upon the date of settlement, September 30, 2019. Keller contended that, according to the settlement agreement&rsquo;s language, the transfer would become effective on &ldquo;some future date (i.e., whenever the parties could negotiate, draft, and execute the necessary supplemental documentation).&rdquo;</p> <p>The trial court granted summary judgment in favor of the Respondents, finding that &ldquo;Keller surrendered, transferred, and assigned all right, title, and interest in Pelopidas, LLC effective September 20, 2019.&rdquo; &nbsp;The trial court likewise denied Keller&rsquo;s cross-motion for summary judgment, and awarded Respondents over $400,000 in attorneys&rsquo; fees.</p> <p>On appeal, Keller argued that the lower court erred and that Respondents were not entitled to judgment as a matter of law because the settlement agreement &ldquo;contained a promise of <i>future performance</i> regarding the transfer of her stock in Pelopidas to Brown.&rdquo;&nbsp; Rather, Keller argued, she was entitled to summary judgment, ordering that payment be made at some reasonable future date. The Court of Appeals agreed with Keller.</p> <p>The appellate court noted that summary judgment in contract interpretation disputes is not appropriate where the contract language is ambiguous or requires a factual determination by the court. But here, there was no dispute that the contract language required Keller to transfer her stock, and the only question at issue was <i>when </i>that transfer should occur. That issue, the Court of Appeals concluded, was ripe for summary disposition.</p> <p>On the matter of contract interpretation, the appellate court emphasized the familiar principle that the judiciary should use the &ldquo;plain, ordinary, and usual meaning of the contract&rsquo;s words&rdquo; in order to give effect to the intention of the contracting parties. In determining the timing of Keller&rsquo;s stock transfer to Respondents, the court ruled that the use of &ldquo;<i>shall be</i>&rdquo; in the parties&rsquo; settlement agreement imposed a <i>future</i> obligation on Keller and did not create a requirement for <i>immediate</i> performance.</p> <p>In its decision, the court endorsed Keller&rsquo;s citations to the ABA<a href="https://www.americanbar.org/products/inv/book/297140045/"><i> Manual of Style for Contract Drafting</i></a>,<i> </i>which instructs that contract drafters can select between &ldquo;language of performance&rdquo; and &ldquo;language of obligation&rdquo; among other types operative contract language. Language of performance &ldquo;expresses actions accomplished by means of signing the contract itself&rdquo; and is typically accompanied by use of the word &ldquo;hereby.&rdquo; Language of obligation &ldquo;is used to state any duty a contract imposes on one or more parties and is typically accomplished by the use of the word &ldquo;shall.&rdquo;&rdquo; The court further emphasized that because the English language does not contain a future tense, &ldquo;shall and will have come to be used with future time.&rdquo; The court further instructs that, even though &ldquo;shall&rdquo; is &ldquo;now used in a variety of other ways, &ldquo;in the stylized context of the language of business contracts &hellip; <i>shall</i> continues to serve as the principal means of expressing obligations.&rdquo; The court also found that Keller&rsquo;s interpretation of &ldquo;shall&rdquo; was consistent with dictionary definitions for the term.</p> <p>Based on their findings, the appellate court reversed the trial court&rsquo;s grant of summary judgment against Keller and instead directed the circuit court to enter judgment for Keller, plus interest and attorneys&rsquo; fees.</p> <p>This case serves as an important reminder to go back to basics when drafting business contracts in Missouri. Drafters must pay special attention to the plain language meaning of the language they choose, to avoid ambiguity and ensure that the contract accurately reflects the intention of the parties. And they should pay special heed to the distinction between &ldquo;language of performance&rdquo; and &ldquo;language of obligation&rdquo;.<br /> <br /> <em>* Hannah D. Chanin assisted in the research and drafting of this post.&nbsp; Chanin earned her J.D. from Washington University School of Law in St. Louis this spring and is a current candidate for admission to the Missouri Bar.&nbsp; &nbsp;</em></p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Missouri Court of Appeals affirms denial of motion to compel arbitration based on contract of adhesionhttps://www.bscr-law.com/?t=40&an=118354&format=xml&p=5258&stylesheet=blog10 Aug 2021Missouri Law Blog<p>The Eastern District Missouri Court of Appeals recently affirmed a trial court decision that denied Verizon&rsquo;s motion to compel arbitration. In <i>Rose v. Verizon Wireless Services, LLC, </i>the Court of Appeals held that an arbitration provision was not enforceable because the contract at issue was an unenforceable contract of adhesion and did not match the reasonable expectations of the parties.</p> <p>Plaintiff Breanna Rose sued Verizon Wireless and its employee Santiago Sabala, Jr. based on a visit to a Verizon store in St. Louis County to exchange her iPhone 6s for a newer model. Rose alleged that Sabala took her iPhone into the back of the store, purportedly to evaluate its condition for the trade in; but that four months later, she discovered Sabala sent an email from Rose&rsquo;s phone to Sabala&rsquo;s email address, attaching intimate photographs of Rose. Obtaining private, intimate images of a person without their consent is a felony under Missouri law. R.S. Mo &sect; 573.110.2. Rose claimed negligent infliction of emotional distress and invasion of privacy by Sabala, and negligence and negligent hiring, retention and supervision by Verizon Wireless Services, as the employer of Sabala.</p> <p>Verizon moved to compel arbitration. Verizon argued that Rose agreed to Verizon&rsquo;s customer agreement when she purchased her iPhone 6s. That agreement contained a clause requiring arbitration of any customer dispute, under the Federal Arbitration Act:</p> <p style="text-align: left; margin-left: 40px;">ANY DISPUTE THAT IN ANY WAY RELATES TO OR ARISES OUT OF THIS AGREEMENT OR FROM ANY EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE FROM US (OR FROM ANY ADVERTISING FOR ANY SUCH PRODUCTS OR SERVICES), INCLUDING ANY DISPUTES YOU HAVE WITH OUR EMPLOYEES OR AGENTS, WILL BE RESOLVED BY ONE OR MORE NEUTRAL ARBITRATORS . . ..</p> <p>Rose argued that Verizon&rsquo;s customer agreement constituted a contract of adhesion. Contracts of adhesion are typically contracts offered on a &ldquo;take this or nothing basis,&rdquo; as opposed to a contract where the terms are negotiated by the parties. <i>Swain v. Auto Servs., Inc.</i>, 128 S.W.3d 103, 107 (Mo. App. E.D. 2003). Most people have experienced contracts of adhesion when scrolling through lengthy terms and conditions of service and clicking &ldquo;accept,&rdquo; usually without actually reading the terms and conditions. The Circuit Court agreed with Rose, and denied Verizon&rsquo;s motion to compel arbitration. Ordinarily parties must wait to appeal until a final judgment is entered, but Missouri law allows an immediate appeal from an order denying an application to compel arbitration. &sect; 435.440.1(1), RSMo. Verizon appealed.</p> <p>The appellate Court ruled against Verizon and affirmed the circuit court&rsquo;s decision to deny arbitration. As the appellate Court noted, contracts of adhesion can be enforceable, depending on whether the contract matches the reasonable expectations of the parties. However, the store receipt signed by Rose when she purchased her phone did not contain the above arbitration clause itself, but merely referenced the online customer agreement and arbitration, as follows (emphasis added):</p> <p style="margin-left: 40px;">I AGREE TO THE CURRENT VERIZON WIRELESS CUSTOMER AGREEMENT (WITH EXTENDED LIMITED WARRANTY/SERVICE CONTRACT, IF APPLICABLE), INCLUDING THE TERMS AND CONDITIONS OF MY PLAN AND ANY OPTIONAL SERVICES I HAVE AGREED TO PURCHASE AS REFLECTED ON THE SERVICE SUMMARY, ALL OF WHICH I HAVE HAD THE OPPORTUNITY TO REVIEW. I UNDERSTAND THAT I AM AGREEING TO AN EARLY TERMINATION FEE PER LINE, LIMITATIONS OF LIABILITY FOR SERVICE AND EQUIPMENT, <b><u>SETTLEMENT OF DISPUTES BY ARBITRATION INSTEAD OF JURY TRIALS</u></b>, AND OTHER IMPORTANT TERMS IN THE CUSTOMER AGREEMENT. I AM AWARE THAT I CAN VIEW THE CUSTOMER AGREEMENT ANYTIME AT VERIZONWIRELESS.COM OR IN MY VERIZON ACCOUNT.</p> <p>The appellate Court noted that while the receipt Rose signed does mention settling disputes by arbitration, that reference was merely a portion of a single sentence and did not set out the full terms of arbitration, as described in Verizon&rsquo;s customer agreement. The full customer agreement was a separate document from the one signed by Rose. The appellate Court also ruled that the circumstances of the transaction weighed against Verizon, in that Santiago&rsquo;s alleged actions did not relate to Verizon&rsquo;s telecommunications business. Because the reasonable expectations of the parties would not include arbitrating disputes related to a Verizon employee allegedly obtaining intimate photographs of a customer, the appellate Court held that Verizon was not entitled to arbitration.</p> <p>Arbitration is often favored as a less expensive method of resolving disputes. Parties can forego the expense related to interviewing and selecting jurors and generally reach a quicker resolution, while trials may take months or even years. The appellate Court&rsquo;s decision does not mean that all contracts of adhesion are unenforceable, or even that contracts of adhesion containing arbitration clauses are unenforceable. The Court emphasized that its decision was narrow and based on the specific allegations of misconduct by Sabala. If the allegations were different &ndash; for example, if an employee dropped and broke a customer&rsquo;s phone while handling it &ndash; the appellate Court may have permitted arbitration. Likewise, if the full terms regarding arbitration were contained in the receipt signed by Rose, the appellate Court may have permitted arbitration. Parties entering into written contracts should be careful to ensure both sides fully appreciate the contractual terms they are agreeing to, especially terms requiring arbitration of disputes.&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10The Consequences of Extending Counteroffers to Pre-Suit Settlement Demandshttps://www.bscr-law.com/?t=40&an=118228&format=xml&p=5258&stylesheet=blog29 Jul 2021Missouri Law Blog<p><a href="https://www.courts.mo.gov/file/ED/Opinion_ED109161.pdf"><i>Jameson v. Still</i></a>&nbsp;arose from an auto accident between Still&rsquo;s vehicle and Jameson&rsquo;s on New Year&rsquo;s Eve 2018. Jameson&rsquo;s counsel sent a settlement demand for $150,000 or all available coverages to Still&rsquo;s insurer. Jameson&rsquo;s demand was entitled &ldquo;Offer to Settle Pursuant to RSMo &sect;408.040 and RSMo &sect;537.058.&rdquo; By law, offers of settlement made pursuant to &sect; 408.040 and &sect; 537.058 &ldquo;shall remain open&rdquo; for a period of 90 days.</p> <p>Section 408.040 provides that a plaintiff must comply with specific statutory requirements to recover prejudgment interest. Section 537.058 provides that a settlement demand is inadmissible in a bad faith failure to settle claim unless the demand complies with the statute. In compliance with &sect; 408.040 and &sect; 537.058, Jameson&rsquo;s settlement demand stated the &ldquo;offer to settle will remain open for ninety (90) days.&rdquo; Jameson&rsquo;s demand was sent on May 20, 2019 and expired on August 18, 2019.</p> <p>Still&rsquo;s insurer responded to Jameson&rsquo;s settlement demand with an offer of settlement for $24,751 on June 21, 2019. On June 24, 2019, Jameson filed his Petition alleging negligence by Still in St. Louis County Circuit Court. Jameson&rsquo;s Petition alleged, &ldquo;Plaintiff&rsquo;s RSMo section 408.040 offer was rejected on June 21, 2019.&rdquo; On August 6, 2019 Still&rsquo;s insurer offered the applicable policy limits of $100,000. On August 14, 2019 Still&rsquo;s insurer re-offered the $100,000 policy limits. Then, on August 15, 2019, prior to expiration of the original time-limited demand, Still&rsquo;s insurer sent a letter purporting to accept the original May 20, 2019 settlement demand. Still moved for summary judgment, alleging the parties settled the case. The trial court granted that motion. Jameson appealed.</p> <p>Until 2015, Missouri&rsquo;s pre-judgment interest statute contained language specifically addressing rejection of a time-limited demand: &ldquo;2. Any such demand or offer shall be made in writing and sent by certified mail and shall be left open for sixty days <b>unless rejected earlier</b>.&rdquo; &sect; 408.040 2005 Mo. Legis. Serv. H.B. 393 (emphasis added). In 2015, the Missouri legislature amended &sect; 408.040 and extended the time for pre-judgment settlement demands to ninety days. The amended version of &sect;408.040 did not contain the &ldquo;unless rejected earlier&rdquo; language. In her brief in support of her summary judgment motion, Still argued that the removal of the &ldquo;unless rejected earlier&rdquo; language in the amended &sect; 408.040 reflected the legislature&rsquo;s intent that pre-suit settlement demands are not rejected by a counteroffer.</p> <p>The Missouri Court of Appeals disagreed. Longstanding black letter Missouri law provides that a counteroffer operates as a rejection of a contractual offer and as a new offer. Here, Jameson&rsquo;s 90-day settlement demand was a contractual offer of settlement, and Still&rsquo;s June 21, 2019 offer of $24,751 modified the proposed contractual terms. The appellate Court held that in doing so, Still extended a counteroffer.</p> <p>The Court noted two circumstances under Missouri law where contractual offers may be irrevocable: 1) when parties enter into an option contract - inapplicable here - and 2), when a statute mandates the offer is irrevocable. Missouri courts interpret statutes by reviewing the plain and ordinary meaning of the words contained. As the appellate Court noted, &ldquo;[n]either section 408.040 nor section 537.058 use the words <i>irrevocable </i>or<i> non-rejectable</i> or their equivalents.&rdquo; &nbsp;It thus concluded that the Missouri legislature did not intend to make time-limited settlement demands pursuant to &sect; 408.040 and &sect; 537.058 irrevocable.</p> <p>The appellate Court reversed and remanded the case to the trial court. Still has applied to have the case transferred to the Missouri Supreme Court, and that application is still pending. Given the frequency of pre-suit settlement demands in litigation, it is possible the Missouri Supreme Court may accept transfer of this matter to resolve a question of general importance.</p> <p>Parties should be aware of the consequences of time-limited demands before providing a response to a pre-suit settlement demand. While this case is not yet fully resolved, and it is possible the Missouri Supreme Court may choose to weigh in, it appears the longstanding rule that a counteroffer constitutes rejection and a new offer still applies in the context of settlement demands made pursuant to &sect;408.040 and &sect;537.058, RSMo. Accordingly, a response to a pre-suit settlement demand that modifies the terms - here, the amount of settlement - may function as a counteroffer. Parties who extend counteroffers to pre-suit settlement demands should carefully evaluate the potential for excess liability and a corresponding bad faith claim.&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10COVID Liability Bill Update - Governor Signs Legislation Shielding Healthcare Providers and Others From Most COVID-Related Lawsuitshttps://www.bscr-law.com/?t=40&an=118253&format=xml&p=5258&stylesheet=blog27 Jul 2021Missouri Law Blog<p>As discussed in our<u><a href="https://www.bscr-law.com/?t=40&amp;an=116511&amp;format=xml&amp;stylesheet=blog&amp;p=5258"><u>June 1, 2021, blog post</u></a></u>, the Missouri Legislature passed a COVID liability bill (SB 51) that contains protections for healthcare providers, manufacturers, and other businesses from tort liability related to the COVID-19 pandemic. On July 7, Governor Parson signed the legislation, which has an effective date of August 28, 2021.</p> <p>Whether COVID-19 tort liability protections are reasonable and necessary is a hotly debated topic among various stakeholders, including the Missouri Chamber of Commerce, the American Medical Association, and trial lawyer organizations.&nbsp; Proponents of the new law believe it is critical to the State's economic recovery and to stopping those who would seek to profit from the pandemic. &nbsp;Opponents argue that the law will provide blanket immunity to negligent nursing homes and others who harm innocent Missourians.</p> <p>As discussed in our&nbsp;<a href="https://www.bscr-law.com/?t=40&amp;an=114077&amp;format=xml&amp;stylesheet=blog&amp;p=5258">December 21, 2020 blog post</a>, Governor Parson has encouraged lawmakers to author this sort of tort liability legislation since at least November 2020, when he issued a written proclamation on the topic.&nbsp; SB 51 passed the Missouri Senate in February 2021.&nbsp; A key benefit of the bill to defendants generally is protection from suits stemming from COVID-19 exposures unless a plaintiff can show clear and convincing evidence of recklessness or willful misconduct and the exposure caused personal injury.&nbsp;</p> <p>There are protections in the bill specific to healthcare providers.&nbsp; In the healthcare context, the bill states that &ldquo;[a]n elective procedure that is delayed for good cause shall not be considered recklessness or willful misconduct.&rdquo;&nbsp; There is also a shortened limitations period for bringing a COVID-19 medical liability action.&nbsp; Such an action &ldquo;may not be commenced in any Missouri court later than one year after the date of the discovery of the alleged harm, damage, breach, or tort unless tolled for proof of fraud, intentional concealment, or the presence of a foreign body which has no therapeutic or diagnostic purpose or effect.&rdquo;&nbsp;</p> <p>The bill also limits punitive damages in a COVID-19 related action to a maximum of nine times the compensatory damages.&nbsp; However, &sect; 510.265, RSMo. (2005), may provide greater protection to healthcare provider defendants, in that it limits punitive damages to $500,000, or five times the net amount of the judgment awarded to the plaintiff, whichever is greater.</p> <p>SB 51 comes in the wake of the filing of thousands of COVID-related lawsuits nationally.&nbsp; Missouri alone has seen more than 140 COVID-related suits since the start of 2020.&nbsp; One potential unintended consequence of this legislation could be a sharp rise in COVID-related suits filed hastily in Missouri courts during the several weeks leading up to the August 28 effective date to circumvent the new law.&nbsp; Should this occur, many of these suits could be meritless and lacking adequate pre-suit investigation.&nbsp;</p> <p>Missouri will not be alone in providing COVID-19 tort liability protections.&nbsp; Other states have done so through executive order and/or legislative action.&nbsp; In addition, federal liability protections are already available under the 2005 Public Readiness and Emergency Preparedness (PREP) Act, which provides immunity to certain defendants, including healthcare provider defendants in certain situations.</p> <p>We will continue to monitor the implementation of this new law and its impact on our courts.&nbsp;&nbsp;</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10Hey Now, You're an All Star, Get Your Punitives, Get Paid. Missouri Court of Appeals Finds Punitive Damages Cap Unconstitutionalhttps://www.bscr-law.com/?t=40&an=116969&format=xml&p=5258&stylesheet=blog08 Jul 2021Missouri Law Blog<p>The Missouri Court of Appeals, Western District, recently held, in a case involving an employee&rsquo;s breach of his duty of loyalty to his employer, that a statutory cap on punitive damages was a violation of the prevailing plaintiff&rsquo;s constitutional right to trial by jury. Referring back to the establishment of the Missouri Constitution, the court of appeals reexamined the constitutionality of the punitive damages cap.</p> <p><i>All Star Awards v. Halo</i> involved an employee at All Star who decided to leave his employer to work for a competitor. Before leaving All Star, however, the employee poached a few clients from his former employer by telling the clients that All Star was experiencing cash flow and ownership issues. Finding this behavior reprehensible, the trial court stated that &ldquo;taking business from a small mom-and-pop awards and promotions shop with supposed cash-flow issues <i>while its sales manager was still in its employ</i> is the definition of evil motive and reckless indifference.&rdquo; The jury, like the trial court, also upset with the defendants, awarded actual damages of $512,000, and punitive damages of $5.5 million. However, the trial court reduced the punitive damages by almost half ($2,627,709) on the basis of Section 510.265, which imposed a punitive-damages cap, because All Star&rsquo;s claims &ldquo;were not common law claims.&rdquo;</p> <p>On appeal, All Star contended that the trial court misapplied the section on the punitive-damages cap, violating All Star&rsquo;s right to a jury. Citing the case of <i>Lewellen,</i> the court of appeals stated that they would review constitutional challenges <i>de novo</i>, without regard to the trial court&rsquo;s decision.</p> <p>The Missouri Constitution states that the right to a jury trial &ldquo;as heretofore enjoyed shall remain inviolate.&rdquo; In other words, any changes to the rights to a jury as existed when the constitution was adopted in 1820 are unconstitutional. Halo contended that there were no claims like the breach of duty of loyalty in Missouri before the Constitution was signed and, therefore, it would not have been recognized. All Star argued to the contrary that it does not matter if Missouri recognized the cause of action in 1820, but rather whether this claim for relief existed in English common law prior to the signing of the Missouri constitution.</p> <p>The Court of Appeals agreed with All Star finding these types of loyalty and tortious interference claims have been recognized under English common law since at least 1621. Therefore, the date that the Missouri courts recognized a particular common law cause of action is irrelevant. Rather, the more important question to ask is, &ldquo;did the action or an analogous action exist at common law when our constitution was adopted?&rdquo; &nbsp;Finding the answer in the affirmative here, the court found the punitive damage cap to be unconstitutional.</p> <p>Although Halo raised a concern that this ruling could radically expand <i>Lewellen</i>, the Court disagreed, concluding that Missouri&rsquo;s common law is based on the common law of England as of 1607 - the common law claims of England became a part of Missouri common law when the state constitution was adopted; and that its refusal to apply the damages cap was therefore consistent with <i>Lewellen</i>. In the back and forth on the application of a cap on punitive damages, this is a win for the &ldquo;no-cap&rdquo; folks.&nbsp;Whether this Court of Appeals decision is the last word on this subject remains to be seen.<br /> <br /> <em>* Avery Goodman, a summer law clerk in the firm's St. Louis office,&nbsp;assisted in the research and drafting of this post.&nbsp;Goodman is a&nbsp;rising 3L student at&nbsp;Washington University School of Law.</em></p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10A Question of Separation of Powers: The Battle Over Missouri Civil Discovery Ruleshttps://www.bscr-law.com/?t=40&an=116690&format=xml&p=5258&stylesheet=blog22 Jun 2021Missouri Law Blog<p>The Missouri legislature passed a bill to amend certain rules of court, including civil discovery rules 56.01, 57.01, 57.03, 57.04, 58.01, 59.01, and 61.01, in 2019, via Senate Bill 224. These particular rules relate to the scope of discovery, interrogatories, and requests for production of documents and things. &nbsp;The governor signed the bill on July 10, 2019.&nbsp; Pursuant to Article III, &sect;&nbsp;20 of the Missouri Constitution, the General Assembly&rsquo;s regular session terminates on May 30 of each year.&nbsp; &ldquo;A law passed by the general assembly takes effect ninety days after the adjournment of the session at which it is enacted.&rdquo;&nbsp; Mo. Rev. Stat. &sect;&nbsp;1.130.&nbsp; This equates to August 28 of the year in which the law is passed.&nbsp; Accordingly, SB 224 should have become effective on August&nbsp;28, 2019.&nbsp;</p> <p>We believe that it did.&nbsp;However, the Missouri Supreme Court resisted the General Assembly&rsquo;s amendment of the rules of civil procedure. &nbsp;The court initially noted that SB 224 &ldquo;purports to amend&rdquo; the rules, subsequently failed to acknowledge SB 224 at all, and ultimately, in March 2021, adopted its own version of the affected rules to take effect September&nbsp;2, 2021.&nbsp;This leaves civil litigators in something of a limbo state as to what are the current versions of rules 56.01, 57.01, 57.03, 57.04, 58.01, 59.01, and 61.01.&nbsp;As discussed herein, the legislature had the legal authority to enact modifications to the court rules, including the rules of civil procedure, and the Missouri Supreme Court&rsquo;s March 2021 order does not invalidate the General Assembly&rsquo;s law under well-settled principals of the separation of powers.&nbsp;Indeed, the Supreme Court&rsquo;s order makes no reference at all to SB 224.&nbsp;It is not a finding that SB 224 was enacted without authority.</p> <p>The Supreme Court&rsquo;s own precedent admonishes against the approach it has taken with respect to SB 224.&nbsp;&ldquo;It is essential that the bench, the bar, and the public be clearly advised as to the procedural rules that are actually in effect at a given time.&rdquo;&nbsp;<i>State ex rel. K.C. v. Gant</i>, 661 S.W.2d 483, 485 (Mo. 1983).&nbsp;Rather than any express order addressing the status of SB 224, the Supreme Court dropped a footnote on its rules website, designating the law as one that &ldquo;purports&rdquo; to amend the rules, without <b><i>clearly advising</i></b> the bench, the bar, or the public as to what the rules are post-SB 224 and before the effective date of the court&rsquo;s own rule amendments ordered as of March&nbsp;2, 2021.&nbsp;Indeed, there will be a two-year period between the effective date of SB&nbsp;224 and the Supreme Court&rsquo;s own amendment of Rules 56.01, 57.01, 57.03, 57.04, 58.01, 59.01, and 61.01, in which there is an unsettled dispute as to what the rules of civil procedure even are.</p> <p>Article V, &sect;&nbsp;5 of the Missouri Constitution expressly authorizes the General Assembly to amend court rules: &ldquo;The supreme court may establish rules relating to practice, procedure and pleading for all courts . . .&nbsp;Any rule may be annulled or amended in whole or in part by a law limited to the purpose.&rdquo;&nbsp;Accordingly, the General Assembly had the authority to amend, in whole or in part, court rules, by a law &ldquo;limited to the purpose.&rdquo;</p> <p>Was SB 224 &ldquo;limited to the purpose&rdquo; of amending the court rules?&nbsp;Absolutely.&nbsp;SB 224, in its entirety, was a bill &ldquo;to amend supreme court rules 25.03, 56.01, 57.01, 57.03, 57.04, 58.01, 59.01, and 61.01, relating to discovery.&rdquo;&nbsp;&ldquo;For a statute to qualify as one &lsquo;limited to the purpose&rsquo; of annulling or amending a rule, it &lsquo;must refer expressly to the rule&rsquo; and be limited to the purpose of amending or annulling it.&rdquo;&nbsp;<i>City of Normandy v. Greitens</i>, 518 S.W.3d 183, 201 (Mo. 2017).&nbsp;SB 224 expressly refers to the rules to be amended, and is limited to the purpose of amending these rules.&nbsp;On the face of SB 224, it addresses no matter other than changes to the listed court rules.</p> <p>The counterargument on whether SB 224 was &ldquo;limited to the purpose&rdquo; of amending court rules is the claim that, because multiple rules were amended in one bill, the bill was not limited to the purpose of amending &ldquo;any rule.&rdquo;&nbsp;The judicial doctrine adopted by the Missouri Supreme Court in case law is simply that the bill must identify the rule to be amended and do nothing but amend the rule.&nbsp;No prior case has held that the constitution requires a separate bill for each rule to be amended, nor is that interpretation compelled by Article V, &sect;&nbsp;5.&nbsp;The only circumstances in which the Missouri Supreme Court has previously found that the General Assembly failed to properly exercise its constitutional authority to amend court rules are (1) where the bill fails to explicitly identify the rule amended, and (2) where the bill was a &ldquo;massive piece of legislation&rdquo; that enacted or modified statutes other than the court rules.&nbsp;<i>See State ex rel. Collector of Winchester v. Jamison</i>, 357 S.W.3d 589, 593 (Mo. 2012).</p> <p>To the extent that opponents of SB 224 might argue that there was insufficient time between the signing of SB 224 and its effective date on August&nbsp;28, 2019, Article V, &sect;&nbsp;5 prevents <b><i>court-established</i></b> rules from taking effect sooner than six months after its publication by the Supreme Court.&nbsp;There is no corresponding restriction in the Constitution on actions by the General Assembly to annul or amend court rules.&nbsp;Indeed, it would be highly impractical for this to be the case, as the General Assembly is only in general session between &ldquo;the first Wednesday after the first Monday in January&rdquo; and May 30.&nbsp;Missouri Constitution, Article III, &sect;&nbsp;20.&nbsp;Any bills enacted during this approximately four-month session take effect by August&nbsp;28 of the same year.&nbsp;Mo. Rev. Stat. &sect;&nbsp;1.130.</p> <p>The Missouri Supreme Court has repeatedly recognized that, in adopting procedural rules, it may be &ldquo;overruled&rdquo; by the General Assembly if it chooses to annul or amend the Court&rsquo;s rules.&nbsp;<i>See State v. Reese</i>, 920 S.W.2d 94, 95 (Mo. 1996); <i>Ostermueller v. Potter</i>, 868 S.W.2d 110, 111 (Mo. 1993); <i>see also State ex rel. Kinsky v. Pratte</i>, 994 S.W.2d 74, 76 (Mo. App. E.D. 1999) (&ldquo;the constitution did not make its grant of rule making power to the judiciary exclusive. &nbsp;.&nbsp;.&nbsp;. &nbsp;The legislature continues to have the power to establish procedures&rdquo;).&nbsp;&ldquo;The constitution does not make this power the exclusive province of the judiciary.&rdquo;&nbsp;<i>In re Marriage of Chastain</i>, 1996 Mo. LEXIS 67, at *7 (Mo. Oct.&nbsp;21, 1996).&nbsp;The court recognizes that Article V, &sect;&nbsp;5 strikes a balance between the legislature and the court, with express limitations on the court&rsquo;s authority.&nbsp;<i>See, e.g., Goldsby v. Lombardi</i>, 559 S.W.3d 878, 881 (Mo. banc 2018) (recognizing that the section carves out authority for each branch).</p> <p style="margin-left: 40px;">The Constitution of 1945 introduced an innovative distribution of power between the General Assembly and this Court in the formulation of rules of practice and procedure for the courts of the state. Procedural requirements, historically, had been prescribed by statute. This Court now may adopt rules of practice and procedure, and rules so adopted, with a few exceptions not here material, may even go to the point of modifying existing statutory requirements. The apparent purpose of the new constitutional procedure is to relieve the legislature of the burden of continuous surveillance of details of judicial procedure, <b>while preserving its ultimate authority through the power to amend or annul any rule adopted by the Court</b> by means of &quot;a law limited to the purpose.&quot;</p> <p><i>State ex rel. K.C. v. Gant</i>, 661 S.W.2d 483, 485 (Mo. 1983) (emphasis added).&nbsp;</p> <p>&ldquo;The constitutional prescription of the manner in which the General Assembly must act is of <b>pristine importance</b>.&rdquo;&nbsp;<i>Id.</i> (emphasis added). &nbsp;&ldquo;The constitution, therefore, in no way &lsquo;limit[s] or constrict[s] the power of the General Assembly. Its power is plenary, so long as it follows the constitutional procedure.&rsquo;&rdquo;&nbsp;<i>State ex rel. Collector of Winchester v. Jamison</i>, 357 S.W.3d 589, 592 (Mo. banc 2012) (quoting <i>Grant</i>).</p> <p>The most developed area of Missouri Supreme Court precedent is with respect to rules that it enacts that conflict with pre-existing statutes.&nbsp;The Supreme Court has created a doctrine whereby its rules can purportedly invalidate statutes unless the General Assembly acts to invalidate the court rule.&nbsp;&ldquo;Where such a rule adopted by this court under the express authority of the constitution is inconsistent with a statute and has not been annulled or amended by later enactment of the legislature, the rule supersedes that statute.&rdquo;&nbsp;<i>State ex rel. Peabody Coal Co. v. Powell</i>, 574 S.W.2d 423, 426 (Mo. 1978).&nbsp;Although this is now a decades-old common law rule, it is unclear how this approach is properly reconciled with the Missouri Constitution&rsquo;s separation of powers.&nbsp;However, it is an acknowledgement that the legislature has the authority to countermand the Supreme Court&rsquo;s rules of procedure.</p> <p>It is worth noting that, while Article V, &sect;&nbsp;5 of the Missouri Constitution authorizes the Missouri Supreme Court to enact court rules, &ldquo;The rules shall not change substantive rights, or the law relating to evidence, the oral examination of witnesses, juries, the right of trial by jury, or the right of appeal.&rdquo;&nbsp;There is a branch of the Missouri government that has the authority to change substantive rights and the laws relating to evidence and competence of witnesses &ndash; the General Assembly.&nbsp;Indeed, unlike in many other jurisdictions, Missouri has no rules of evidence, but has many statutes pertaining to evidence and witnesses, including a statute regarding the admissibility of expert testimony.&nbsp;The separation of powers contemplated by the Missouri Constitution evidences an intent to temper the authority of the Missouri Supreme Court, and for the General Assembly to occupy the same sphere of power with respect to amendment of court rules.</p> <p style="margin-left: 40px;">Article II, &sect;&nbsp;1 provides:</p> <p style="margin-left: 80px;">The powers of government shall be divided into three distinct departments&mdash;the legislative, executive and judicial&mdash;each of which shall be confided to a separate magistracy, and no person, or collection of persons, charged with the exercise of powers properly belonging to one of those departments, shall exercise any power properly belonging to either of the others, except in the instances in this constitution expressly directed or permitted.</p> <p>The General Assembly is expressly permitted to exercise power to amend court rules by Article V, &sect;&nbsp;5.&nbsp;Accordingly, it is unclear on what basis the Missouri Supreme Court&rsquo;s skepticism of SB 224 has any legal force or effect.&nbsp;There is no provision in the Missouri Constitution for a &ldquo;pocket veto&rdquo; of legislation by the Missouri Supreme Court.&nbsp;There is no precedent for the Court to simply ignore or refuse to implement legislation without a specific order making findings that the General Assembly acted without authority.</p> <p>We are of the belief, therefore, that the 2019 General Assembly amendments to Rules 56.01, 57.01, 57.03, 57.04, 58.01, 59.01, and 61.01 took effect on August 28, 2019, and will remain in effect until September&nbsp;2, 2021.&nbsp;A redline comparison of the court rules, per the Supreme Court&rsquo;s March&nbsp;2, 2021 order, compared to the provisions of SB 224, can be found&nbsp;<a href="/B07AF5/assets/files/Documents/A Question of Separation of Powers Blog Post Attachment.pdf">here</a>.</p>https://www.bscr-law.com?t=39&anc=370&format=xml&directive=0&stylesheet=rss&records=10