BSCR Firm News/Blogs Feed Feb 2021 00:00:00 -0800firmwise Debates Adding a Statute of Repose Feb 2021Missouri Law Blog<p>A statute of repose is a law that cuts off a right of action after a specified time period has elapsed, regardless of when the cause of action accrues. Most states have such statutes, but they vary widely as to limitation periods, what is covered, and whom the statute protects. A statute of repose differs from a statute of limitation in that a time period specified in a statute of limitations usually does not begin to run until the injury or damage actually occurs, irrespective of when the product was sold.</p> <p>Missouri took an important first step in creating a statute of repose for product liability claims by debating Senate Bill #7 in committee at the end of January. If it passes the Legislature and is signed by the governor, Senate Bill # 7 would place Missouri among the many states with some type of statute of repose for product liability claims.&nbsp;<br /> <br /> The proposed bill sets a statute of repose of fifteen years and would bar claims for personal injury, property damage, wrongful death, or economic loss.&nbsp;The time period would begin to run when the product is first sold or leased to any person or otherwise placed in the stream of commerce.&nbsp;The catchall of &ldquo;otherwise placed into the stream of commerce&rdquo; will be an important for component parts manufacturers and suppliers along with those who sell their products to distributors as it could cut off claims at an earlier date than when the plaintiff first purchased the product.</p> <p>There are some significant exceptions built into the proposed bill.&nbsp;First, it would not apply to any product that is real property or an improvement to real property.&nbsp;However, Section 516.097, which has a shorter statute of repose, may bar some of those claims.&nbsp;The proposed statute would also not bar any claims for negligent servicing or negligent maintenance of a product.</p> <p>Second, if the defective or unsafe condition was knowingly concealed or negligence in the construction, manufacture, sale or distribution was knowingly concealed, those claims are not barred.&nbsp;However, the concealed defective or unsafe condition or the concealed negligence must directly result in the claims asserted.&nbsp;Similarly, if the product was subject to a government mandated product recall related to consumer safety, the statute of repose would not bar those claims if the reason for the recall and the subject of the claims are the same.&nbsp;</p> <p>The bill would also exempt any product that has an expected useful life exceeding fifteen years.&nbsp;This exception would only apply if the useful life is stated by the manufacturer, seller or lessor in a written warranty or in an advertisement to the public.&nbsp;However, the bill would cut off claims two years after the stated useful life.&nbsp;If a claim arose during the potential useful life of a product, a jury may, in determining whether the product&rsquo;s useful safe life has expired, consider the amount of wear and tear, deterioration from natural causes including storing conditions, normal practices regarding the product&rsquo;s use, repairs, renewals and replacements, any stated useful safe life by the manufacturer or modifications made to the product.&nbsp;</p> <p>Finally, the statute would impact toxic tort claims. The statute would not apply to any claims where a defective or unsafe condition allegedly caused a respiratory or malignant disease with a latency of more than fifteen years.&nbsp;However, it does bar claims against the sellers of any such products unless the seller is also the manufacturer.&nbsp;</p> <p>The proposed bill would have a significant impact on product liability claims in Missouri.&nbsp;The bill would apply to all civil actions commenced on or after August 28, 2021, or to any new causes of action asserted in civil actions pending on or after that date.&nbsp;The proposal also provides a safe harbor provision that any claims that would be barred by the statute that accrued on or before August 28, 2021, must be brought no later than August 21, 2022.</p> <p>The bill recently passed the Government Accountability and Fiscal Oversight Committee.&nbsp;If the bill passes the full Senate, it will then be sent to the Missouri House of Representatives for potential amendment. If the bill passes both chambers, it will be sent to the governor for signature.&nbsp;We will continue monitoring the bill&rsquo;s progress through the legislative process and provide updates.</p> Kansas City Area Saw Trials Plummet in 2020 Due to the Pandemic Feb 2021Missouri Law Blog<p>Little about 2020 was normal, and the number of trials in the Kansas City area was no exception. Data released by the Greater Kansas City Jury Verdict Service shows that the total number of jury trials in the Kansas City area was down over 65% in 2020 when compared to 2019.</p> <p>In 2020, 29 trials were reported, compared to 86 trials in 2019, and 104 in 2018. The numbers were significantly impacted by the fact that many Kansas City area courts, especially state courts, had to postpone civil jury trials due to the Coronavirus.<br /> <br /> <img src=" 1 - Total Number of Trials.JPG" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="400" height="225" /></p> <p><b>The Percentage of Jury Verdicts Favoring Defendants Remained Constant from 2019</b></p> <p>In the Kansas City area, juries decided a total of 29 cases in 2020. Within those 29 cases, the Jury Verdict Service reports on the number of claims in each case which totaled 73 overall claims. Of the verdicts reported on the 73 claims, 41% (30 out of 73 claims) resulted in some amount of recovery to the plaintiff(s), while 59% (43 out of 73 claims) were defense verdicts. Similarly, in 2019 41% (75 out of 181 claims) of claims resulted in some amount of recovery for the plaintiff, while 59% (106 out of 181 claims) were defense verdicts. This put an end to a recent upward trend in defense verdicts, from 51% in 2017, to 52% in 2018, to 59% in 2019.<br /> <br /> <img src=" 2 - Percent of Verdicts in Favor of Defendants.JPG" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="400" height="225" /></p> <p><b>The Overall Average Monetary Award for Plaintiff Verdicts Drastically Decreased </b></p> <p>In 2020, when plaintiffs were awarded damages by juries, the awards were significantly smaller than in recent years.&nbsp;The overall average of plaintiff verdicts in the Kansas City area in 2020 was $502,261, which included two outlier trials resulting in larger verdicts of $4.9 million and $7 million. In 2019 the average Plaintiff verdict was $2,255,380; however, this was due to one outlier verdict of $117,921,154. 2018&rsquo;s average Plaintiff&rsquo;s verdict was $1,810,693; however, there was an outlier verdict that year of $76,000,000.&nbsp;</p> <p>When the outliers from each year were set aside the average jury award for 2018 was $882,500. 2019&rsquo;s average was $692,000. &nbsp;And 2020&rsquo;s average was $45,000. In 2020, 77% of jury awards were below $100,000, with an average jury award of approximately $45,000. Despite this, the proportion of six-figure jury awards to plaintiffs held steady at about 16% (12 out of 73 claims in 2020, compared to 31 out of 181 claims in 2019, and 29 out of 168 claims in 2018). Nonetheless, the average jury verdict awarded in 2020 decreased sharply from the previous years.<br /> <br /> <img src=" 3 - Average Award for Plaintiff Verdicts Excluding Outlier Verdicts.JPG" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="400" height="225" /></p> <p><b>Juries in Missouri Federal Courts Prove Most Generous in 2020 </b></p> <p>To add to the anomalies of 2020, juries in Federal Courts accounted for all five of the jury verdicts in excess of $1,000,000 in 2020. The U.S. District Court for the Western District was responsible for one of these verdicts, and the other four came out of U.S. District Court for the District of Kansas. In 2019 there were 10 verdicts that exceeded $1 million, 30% of which originated in federal courts. In 2018 there were 14 verdicts over $1 million, 14% of which originated in federal courts.</p> <p>The number of state court trials fell dramatically in 2020 while the percentage of federal court trials greatly increased. &nbsp;In 2020 state court verdicts accounted for 53% of claims, whereas federal court verdicts accounted for 47% of claims. This was a stark change from 2019 and 2018 where state court claims accounted for 83% of verdicts, and federal court claims accounted for 17% of verdicts in both years.</p> <p>The likely explanation is that federal courts continued conducting civil trials throughout most of the year, while state courts postponed numerous trials due to the ongoing pandemic. Once state courts begin to conduct civil jury trials again that will likely reverse the current trend, and restore the old adage that federal courts are better for Defendants, and state courts more hospitable toward Plaintiffs.<br /> <br /> <img src=" 4 - Percentage of State vs. Federal Court Verdicts.JPG" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="400" height="225" /></p> of St. Louis and Multiple Illinois Counties Again Distinguish Themselves as "Judicial Hellholes" Jan 2021Missouri Law Blog<p>The 2020/2021 &ldquo;Judicial Hellholes Report&rdquo; from the American Tort Reform Foundation has arrived and certain Missouri and Illinois jurisdictions again find themselves on this infamous list. The City of St. Louis comes in at #7 on the list while the trio of Cook, Madison, and St. Clair Counties in Illinois wins the #8 spot. The silver lining? Both of these rankings are down from the previous slots of #5 and #7 held by these counties, respectively, in the previous Judicial Hellholes Report.</p> <p>Since 2002, the American Tort Reform Foundation has identified and documented places &ldquo;where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants.&rdquo; The stated goal of the Foundation&rsquo;s program is &ldquo;to shine a light on imbalances in the courts and thereby encourage positive changes by the judges themselves and, when needed, through legislative action or popular referenda.&rdquo;</p> <p>Coming in at #7 on the list, the City of St. Louis, Missouri, is singled out as being notorious for blatant forum shopping and excessive punitive damage awards, helping to earn Missouri the &ldquo;Show-Me-Your-Lawsuit&rdquo; nickname. The report also asserts that the court fails to ensure that cases are guided by sound science, citing instances where Plaintiff&rsquo;s experts, whose testimony has been determined to not be based in science by other state court, have been permitted to testify in City of St. Louis courts. The report does see some hope for the City and the State of Missouri in general with the 2020 legislative enactment of several reforms intended to curb unreliable expert testimony and reduce litigation tourism, but cautions that true future success is contingent on the City of St. Louis Court&rsquo;s compliance with the new statutes. The report notes that &ldquo;some St. Louis judges have a history of ignoring both state law and U.S. Supreme Court precedent with regard to expert evidence standards, personal jurisdiction and venue, and damage awards.&rdquo;</p> <p>Number 8 on the list is the grouping of Cook, Madison and St. Clair Counties in Illinois. The report singles out these three counties as continuing to be preferred jurisdictions for plaintiffs&rsquo; lawyers &ldquo;thanks to no-injury lawsuits, plaintiff-friendly rulings in asbestos litigation, and the promise of a liability-expanding legislative agenda each and every year.&rdquo; The report calls Illinois ground zero for no-injury lawsuits, thanks in large part to the Biometric Information Privacy Act and the numerous expansive judicial interpretations of that law. The report finds some encouraging news in the Illinois Supreme Court&rsquo;s June 2020 ruling in <i>Rios v. Bayer Corp</i>., where the court dismissed the claims of out-of-state plaintiffs for lack of jurisdiction because Bayer is not located in Illinois and does limited business there, the product was not manufactured in Illinois, and the plaintiffs experienced their injuries outside of Illinois.<br /> <br /> The report also gives a dishonorable mention to the Missouri Court of Appeal thanks to a recent opinion addressing Section 537.065. This section permits a defendant to allow a plaintiff to obtain a judgment against it in court so long as the plaintiff agrees to only seek to collect the award from the defendant&rsquo;s insurer. The Missouri legislature amended Section 537.065 in 2017 to require that parties give notice to the insurer that they have entered such an agreement so that the insurer can intervene and protect its interests, if needed. The report interprets a Missouri appellate court decision from 2020 as limiting an insurer&rsquo;s ability to contest the policyholder&rsquo;s liability or the plaintiff&rsquo;s damages when it intervenes after the entry of arbitration award.</p> While there are some potential future bright spots for these Missouri and Illinois jurisdictions and their individual rankings are moving in the right direction, there seems to be a long way to go before we no longer see these local courts on the &ldquo;Judicial Hellholes&rdquo; list.'s Pandemic Protections for Providers - Governor Parson Encourages Tort Liability Legislation During COVID-19 State of Emergency Dec 2020Missouri Law Blog<p><u>Introduction</u></p> <p>On November 12, Governor Parson issued a written proclamation encouraging lawmakers to author new tort liability legislation insulating defendants from lawsuits arising out of the COVID-19 state of emergency that has existed since March. This effort is designed to allow these individuals and entities to continue to serve the public without threat of unnecessary and frivolous litigation.&nbsp;We have since learned that the Missouri legislature is not likely to address this issue until early 2021.&nbsp;Governor Parson seems to have reconsidered the timing for the agenda and directed the legislature to address this, not during the ongoing special session, but during the regular January session.&nbsp;The bill will be titled SB1.&nbsp;&nbsp;&nbsp;</p> <p>In the statement, the Governor explained one of the main purposes of this action is to assist healthcare providers who have gone well beyond normal duty to provide exceptional care to Missourians despite great personal risk to their own health and well-being by amending and expanding upon &sect; 44.045, RSMo, to afford liability protections for healthcare workers who provide necessary care during a declared state of emergency. &nbsp;Though not dealt with here, the Governor&rsquo;s proclamation also identifies other organizations instrumental to COVID-19 response efforts, including product manufacturers and premises owners like schools and churches that provide fundamental societal functions.&nbsp;This potentially includes a new Section in Chapter 537, RSMo, to provide products liability protection for product manufacturers, designers, distributors, and sellers involved in bringing products to market in direct response to a state of emergency.&nbsp;It also potentially includes a new section to provide premises liability protection for exposure claims arising from a declared state of emergency.&nbsp;</p> <p><u>Why Is This Necessary?</u></p> <p>The threat of COVID litigation is real.&nbsp;There have been an estimated 10,000 COVID-related lawsuits filed nationally.&nbsp;This includes hundreds of healthcare specific suits and is almost certain to continue well into the next year and beyond.&nbsp;&nbsp; &nbsp;</p> <p>The risk to healthcare workers is real too.&nbsp;As of December 21, there were almost 17.8 million COVID cases and more than 315,000 deaths in the U.S.&nbsp;Healthcare workers make up a significant portion of nationwide COVID-19 infections.&nbsp;As of July, there were 100,000 cases of COVID-19 infecting healthcare workers.&nbsp;By September 2020, more than 1,700 U.S. healthcare workers had died from COVID-19.&nbsp;Per the CDC, healthcare workers make up approximately 6% of adults hospitalized with COVID-19.&nbsp;Among those, 36% were in the nursing field, and 28% were admitted to an ICU.&nbsp;Sixteen percent required invasive mechanical ventilation, and 4% died.&nbsp;</p> <p>None of this is surprising considering healthcare workers are on the frontline of battling this global pandemic and, in doing so, expose themselves to great personal risk each shift providing exceptional care for their communities.&nbsp;They must deal with the challenge not only of exposing themselves to the virus, but also observing terrible suffering and outcomes of their patients, and doing this with limited resources, equipment and healthcare staff.&nbsp;The author of this blog believes prudent legislative action is necessary under the circumstances and likely to be helpful in mitigating some litigation risk for healthcare professionals.&nbsp;</p> <p><u>A National Approach to Liability Protections</u></p> <p>Missouri is not the only state to consider such liability protections.&nbsp;Other states have provided this through executive order and/or legislative action.&nbsp;For example, the neighboring states of Arkansas, Iowa, Illinois, Kansas, Kentucky, and Oklahoma have already passed COVID liability protections.&nbsp;Many of these states&rsquo; protections afford immunity from civil damages for licensed healthcare providers but carve out exceptions for injuries or death caused by gross negligence, willful and criminal misconduct and intentional infliction of harm, and fraud.&nbsp;</p> <p>Although there was much discussion during negotiations for a federal COVID-19 relief package as to whether it would include liability protections for healthcare providers and other businesses, in the end, no such provision was included in the $900 billion program.&nbsp;Though not dealt with in detail here, federal liability protections are already available under the 2005 Public Readiness Emergency Preparedness (PREP) Act, which authorizes the Secretary of the US Department of Health and Human Services to issue a declaration in response to a public health emergency.&nbsp;On March 10, 2020, Secretary of HHS Alex Azar issued such a declaration, effective February 4, 2020, which provides immunity to &ldquo;covered persons,&rdquo; such as healthcare providers, using certain &ldquo;covered countermeasures,&rdquo; including masks, respirators, and vaccines, that are necessary to combat the public health emergency.&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</p> <p>The Missouri Chamber of Commerce and industry stakeholders overwhelmingly support these protections.&nbsp;The American Medical Association has pushed for states to pursue liability protections for healthcare professionals during the COVID-19 emergency.&nbsp;However, this is not without criticism, with some suggesting such policies would protect irresponsible businesses from accountability and fail to protect the public.&nbsp;&nbsp;&nbsp;</p> <p>It is important to note that the anticipated liability protections parallel &ldquo;good Samaritan&rdquo; laws that have existed throughout the country for decades and afford qualified immunity from civil liability for healthcare professionals who volunteer their services as a generous compassionate act unless they engage in willful or intentional misconduct.&nbsp;</p> <p>We will continue to follow this issue and look for activity during the January 2021 general legislative session.&nbsp;</p> enacts significant changes affecting punitive damages and consumer protection claims Oct 2020Missouri Law Blog<p>Missouri defendants will welcome several recently enacted changes to the manner in which punitive damages can be sought and awarded in most civil actions. <a href="">SB 591</a> raises the bar for both pleading and proving punitive damages and provides additional protections to employers who might otherwise have been exposed to punitive damages for the unlawful conduct of low-level employees.</p> <p>Most damages in civil lawsuits are intended to compensate plaintiffs for their losses, whether economic or noneconomic.&nbsp;But punitive damages, also called &ldquo;exemplary damages&rdquo; in Missouri, are different in that they are intended to punish civil wrongdoing and to serve as a deterrent to others who may be tempted to engage in similar conduct.&nbsp;SB 591, which became law on August 28, 2020, significantly changes how these damages can be awarded in Missouri.</p> <p>Most notably, punitive damages in most cases now must be based on &ldquo;clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.&rdquo;&nbsp;This is a heightened standard from previously existing Missouri law, which required a showing of &ldquo;complete indifference or conscious disregard for the safety of others.&rdquo;&nbsp;Under the new standard, punitive damages are appropriate only if the defendant <i>intentionally</i> injured the plaintiff or did so by <i>deliberately and flagrantly</i> disregarding risk of injury.</p> <p>The new law also bars plaintiffs from seeking punitive damages in their initial pleadings, a change intended to curb premature or frivolous punitive damages allegations. &nbsp;Instead, a party seeking to assert a claim for punitive damages now must first file a motion for leave to do so, which will be granted only if the judge finds that admissible evidence exists upon which a jury could reasonably conclude that the punitive damages standard has been met.&nbsp;This roughly mirrors the procedures for asserting punitive damages in Kansas and Illinois state courts.</p> <p>Employers are also protected under the bill from liability for punitive damages arising out of the conduct of their employees.&nbsp;Where plaintiff seeks to hold an employer vicariously liable for the wrongful acts of an employee or other agent, punitive damages will be awarded against the employer only if: (1) the employer authorized both the wrongful act and the manner in which it was done; (2) the employee was unfit to such a degree that it was reckless for the employer to hire and/or retain the employee; (3) the employee alleged to have committed the wrongful act held a management position and was acting within the scope of his or her managerial duties; or (4) the employer ratified or approved the wrongful act after it was committed.</p> <p><b><u>MMPA Reform</u></b></p> <p>The Missouri Merchandising Practices Act was originally intended to protect Missouri consumers from businesses that employ unfair and deceptive commercial practices.&nbsp;But thanks to Missouri courts&rsquo; expansive interpretation of statutory language that was often vague to begin with, the MMPA has been misused and stretched far beyond its original purpose.&nbsp;SB 591 makes a number of changes designed to reverse those trends.</p> <p>Some of the changes are simple.&nbsp;For example, to prevail on MMPA claims, plaintiffs now must prove that they acted &ldquo;as a reasonable consumer&rdquo; would have acted under similar circumstances.&nbsp;Additionally, all MMPA claimants (or, in the case of class actions, all class representatives) must support their claimed damages with evidence that is &ldquo;sufficiently definitive and objective&rdquo; to allow their losses to be calculated to a reasonable degree of certainty.&nbsp;These changes&mdash;which should be part of any consumer protection statute&mdash;should provide at least some level of protection to businesses by deterring the assertion of frivolous claims and by offering a path to dismissal when those claims are filed.</p> <p>The amendments also provide that any award of attorneys&rsquo; fees must &ldquo;bear a reasonable relationship to the amount of the judgment&rdquo; awarded to an MMPA claimant.&nbsp;Prior to SB 591, the act allowed prevailing plaintiffs to recover their attorneys&rsquo; fees, even where their recovery was nominal and any actual harm suffered was trivial.&nbsp;This allowed MMPA claimants to use the threat of ballooning attorney fees to deter defendants from litigating in earnest and to extract settlements wildly disproportionate to their actual losses (if any).&nbsp;&nbsp; This change looks to curb those abuses of the MMPA.</p> <p>The amendments also expressly exclude certain types of claims that are intended to be governed by other bodies of law.&nbsp;For example, the amended MMPA excludes claims arising out of the rendering or failure to render healthcare services, a change intended to stop the assertion of medical malpractice claims under the guise of this consumer protection statute.&nbsp;Similarly, a new provision in the law excludes certain new home warranties from the definition of &ldquo;merchandise,&rdquo; so long as the warranty documents contain and prominently display specified disclaimer language.</p> <p>The changes enacted under SB 591&mdash;both to punitive damages claims and to the MMPA&mdash;will apply only to cases governed by Missouri law and filed after August 28, 2020.&nbsp;Any case filed before that date will be subject to the previously existing standards.&nbsp;We will continue to monitor how these important changes are implemented and interpreted by Missouri courts.</p> There Has Been No Genuine Opportunity to Conduct Relevant Discovery, a Motion for Summary Judgment is Premature Oct 2020Missouri Law Blog<p>The Missouri Court of Appeals recently <a href="">held</a> that a trial court abused its discretion when it granted summary judgment to the defendants before the plaintiff deposed a witness whose testimony could not be secured by affidavit. The appeals court in <i>Traweek v. Smith </i>disagreed with a trial court&rsquo;s dismissal of the plaintiff&rsquo;s amended petition only two weeks after leave had been granted to add a claim for reformation, and before the plaintiff could present evidence to oppose the defendants&rsquo; motion for summary judgment. Having complied with Rule 74.04(f)&rsquo;s requirement of presenting an affidavit specifying the discovery that was needed and why it was needed, the appeals court held that two weeks was not enough time for the plaintiff to conduct the discovery specified in the affidavit and reversed the trial court&rsquo;s decision.</p> <p><i>Traweek </i>involved an automobile accident in which the plaintiff was injured while riding in a vehicle driven by someone else. The plaintiff spent two months in a coma and suffered severe head trauma, loss of memory, and loss of cognitive skills. The plaintiff entered an out-of-court policy limits settlement with the fault driver then filed suit against the driver and owner of the other vehicle involved in the accident. In exchange for a policy limits payment, the plaintiff executed a release prepared by the fault driver&rsquo;s insurer.</p> <p>The defendants moved for summary judgment on the basis of the release which contained language releasing the fault driver, its insurer, &ldquo;and all other persons, firms or corporations liable, or who might be claimed to be liable.&rdquo; The defendants argued that the plaintiff&rsquo;s claims against them were barred because she had already released them from any claims arising out of the accident. In opposition, the plaintiff invoked Rule 74.04(f) and argued that summary judgment would be premature because she had just been granted leave to amend the petition to add a claim for reformation of the release. The plaintiff presented evidence that she did not intend to release the defendants and that the fault driver&rsquo;s insurance adjuster had admitted to her lawyer that the insurer intended to release only the fault driver. On this basis, the plaintiff argued that there was a mutual mistake that warranted reformation of the release to reflect the parties&rsquo; true intent. However, because the adjuster was unwilling to sign an affidavit attesting to that, the plaintiff contended that she needed to take his deposition to elicit this information.</p> <p>The appeals court acknowledged that a trial court generally has discretion to either permit or deny additional time to conduct discovery before ruling on a pending summary judgment motion, but ruled that granting summary judgment only two weeks after allowing the plaintiff to add a claim for reformation of the settlement agreement was an abuse of discretion because the plaintiff had met Rule 74.04(f)&rsquo;s requirement.</p> <p>For a trial court to consider a request under Rule 74.04(f), the party requesting time to conduct discovery must present an affidavit specifying the additional evidence sought and explain how it will support the existence of a factual dispute. In <i>Traweek, </i>the plaintiff&rsquo;s lawyer filed an affidavit detailing his contacts with the insurance adjuster and the adjuster&rsquo;s unwillingness to cooperate to correct the release. The affidavit also stated that the plaintiff intended to depose the adjuster to elicit this information and how it pertained to the plaintiff&rsquo;s argument that there was a mutual mistake in the release. Also, the appeals court noted there was evidence in the record that the plaintiff did not intend to release the defendants from liability by entering a settlement with the fault driver. Taken together, the adjuster&rsquo;s testimony and the evidence already in the record would create a genuine dispute of fact on the existence of mutual mistake which would justify reformation of the release. Accordingly, the appeals court found that the trial court acted hastily in entering summary judgment, and the case was remanded to the trial court to allow the plaintiff enough time to depose the adjuster.</p> Logo Liability for Motor Carriers Sep 2020Missouri Law Blog<p>While questions remain under Missouri law as to whether and under what circumstances the presumption of &ldquo;logo liability&rdquo; for motor carriers applies, and is rebuttable, the Missouri Court of Appeals recently <a href="">affirmed</a> that the doctrine only applies when there is evidence that the motor carrier operates as a carrier-lessee.</p> <p>The plaintiffs in <i>Hearns v. ABF Freight System, Inc.,</i> were involved in a motor vehicle accident with a tractor trailer displaying the ABF signage.&nbsp;The tractor-trailer failed to stop following the accident and left the scene.&nbsp;The driver of the truck was never identified.&nbsp;</p> <p>At trial, the plaintiffs moved for a directed verdict under the logo liability doctrine.&nbsp;They contended that the only evidence in the case proved the accident truck displayed ABF signage.&nbsp;ABF contested the motion by arguing logo liability was inapplicable because it did not use leased drivers&mdash;all of its drivers are employees.&nbsp;ABF contended the traditional agency and vicarious liability principles applied.&nbsp;The Court treated plaintiffs&rsquo; motion as one for summary judgment and denied the motion.&nbsp;</p> <p>The issue returned during the instruction conference when plaintiffs tendered instructions based on logo liability.&nbsp;The Court rejected the instructions and found that there was no evidence in the case that a carrier-lessee relationship existed.&nbsp;The Court instructed the jury that in order to find for the plaintiffs, it must first find that the driver was acting in the course and scope of his employment with ABF.&nbsp;The jury returned a defense verdict.&nbsp;</p> <p>The Missouri Supreme Court identified the elements for logo liability under Missouri law as requiring: (1) that a sign or identifying legend was furnished by the carrier in connection with a lease; (2) that the sign was on the truck at the time of the accident; and (3) the truck was hauling regulated freight at the time of the accident.&nbsp;<i>Johnson v. Pac. Intermountain Express Co.</i>, 662 S.W.2d 237, 245 (Mo. banc. 1983).</p> <p>At issue in <i>Hearns</i> is the first element.&nbsp;The trial court, in rejecting plaintiffs&rsquo; proposed jury instruction on logo liability, determined that there was no evidence supporting that the unidentified driver was a leased driver.&nbsp;In fact, the only evidence demonstrated that all of ABF&rsquo;s drivers were employees.&nbsp;</p> <p>The plaintiffs argued the jury should have been instructed on logo liability.&nbsp;The Court of Appeals noted the application of logo liability would have shifted the burden of proof.&nbsp;Under logo liability, it would be ABF&rsquo;s burden to prove that unidentified driver was on a personal mission not connected to hauling regulated freight.&nbsp;However, under vicarious liability, plaintiffs bear the burden of proving the unidentified driver was acting in the course and scope of his employment with ABF.&nbsp;The Court of Appeals found the record was completely devoid of any evidence that ABF ever operated as carrier-lessee.</p> <p>Plaintiffs asserted logo liability is not limited to carrier-lessee situation and applies in any situation when a commercial vehicle is displaying a motor carrier&rsquo;s placard.&nbsp;The Court of Appeals rejected this argument.&nbsp;It noted plaintiffs&rsquo; failure to cite any Missouri case in which logo liability had been applied in cases where a lease was not at issue.&nbsp;It refused to extend the doctrine to cases where there was no evidence that the motor carrier operated using leased drivers.&nbsp;It r-iterated the first element of logo liability, as directed by the Missouri Supreme Court, required the plaintiffs to prove the placards were provided in connection with a lease.&nbsp;</p> <p>The Court also discounted plaintiffs&rsquo; public policy arguments that applying logo liability only in carrier-lessee situations runs counter to the reasons the doctrine was created.&nbsp;Plaintiffs asserted the doctrine was designed to address motor carriers attempting to avoid liability by hiring independent contractors to haul freight.&nbsp;The Court held:</p> <p>Without question, the public policy supporting the creation of the logo-liability doctrine stemmed from a concern over a very specific issue that had arisen&mdash;and not to supplant the general rules of vicarious liability as developed under common law.</p> <p>In affirming the defense verdict, the Court of Appeals confirmed that the mere presence of a motor carrier&rsquo;s placard on a vehicle alone is insufficient to invoke logo liability.&nbsp;Plaintiffs must satisfy all of the required elements of logo-liability including that the placard was furnished in connection with a lease.&nbsp;Without evidence demonstrating the motor carrier utilized some leased drivers, plaintiffs cannot rely on logo liability.&nbsp;</p> <p>While questions remain whether the presumption created by logo liability is truly rebuttable, and if so, what evidence is sufficient to rebut the presumption, motor carriers now have excellent case law barring the application of the doctrine when the only evidence is that the motor carrier&rsquo;s placard was on the accident truck.&nbsp;The Court of Appeals affirmed that the doctrine applies only if there is evidence that the motor carrier operated as a carrier-lessee.</p> Upholds Principle That Plaintiffs Need Not Sue All Tortfeasors in a Single Action Aug 2020Missouri Law Blog<p>In the recent decision of <i>State Ex rel. Woodco, Inc. v. Phillips</i>, the Missouri Supreme Court <a href="">upheld</a> the long-standing principle that joinder of all tortfeasors in a single suit is not required under Missouri&rsquo;s compulsory joinder rule. On a writ of prohibition, the Supreme Court considered the application of Missouri&rsquo;s compulsory joinder rule, Mo. R. Civ. P. 52.04, in a construction defect case arising from the construction of a senior living facility. In the underlying case, the general contractor sued all but one of the subcontractors for breach of contract and negligence. The circuit court allowed the other subcontractors to add the subcontractor that had not been sued by the plaintiff. But the Supreme Court ruled that Rule 52.04 did not require the addition of unnamed subcontractor, and prohibited the circuit court from allowing the defendants to join as a defendant the subcontractor that had not been sued by the plaintiff.</p> <p>The lawsuit came about as a result of a settlement reached between the project&rsquo;s general contractor and owner after discovering defects in the construction of the project. Pursuant to the settlement agreement, the project owner assigned its claims against the subcontractors to the general contractor. Subsequently, the general contractor filed suit against the project&rsquo;s architect, structural engineer, construction company, supplier, and framer, asserting breach of contract and tort claims, but did not include the masonry company. The architect, structural engineer, and construction company moved to join the masonry company as a defendant, arguing that its joinder was required under Rule 52.04, which the trial court allowed.</p> <p>The general contractor sought a writ of prohibition to direct the trial court to remove the masonry company from the action, which the Court of Appeals denied. The case proceeded to the Supreme Court, where the general contractor argued that Rule 52.04 did not require that the masonry company be added as a party defendant to the lawsuit. This time, the general contractor&rsquo;s writ was granted, and the Supreme Court directed the trial court to remove the masonry company as a defendant.</p> <p>Missouri&rsquo;s compulsory joinder rule, found in Rule 52.04, requires joinder of a party in either of two situations: when complete relief for parties to the action cannot otherwise be obtained, or when either the absent party&rsquo;s interest would be prejudiced or when the parties before the court would be subject to inconsistent obligations due to the absent party&rsquo;s claimed interest. The subcontractor defendants argued that the masonry company&rsquo;s joinder was required under Rule 52.04 because complete relief for the other parties was not possible in its absence, and there would be a risk of inconsistent obligations to the existing parties without the masonry company. The Supreme Court disagreed.</p> <p>The Supreme Court found that joinder of the masonry company was not required under either scenario set forth in Rule 52.04. First, the masonry company was not a party to any of the contracts upon which the general contractor was suing the other defendants. Thus, although the contractual disputes at issue might concern work performed by the masonry company, the masonry company would not be affected by the outcome and the breach of contract claims could be fully resolved among the existing defendants.&nbsp;<br /> <br /> <em>* Hannah Chanin, Summer Law Clerk in the St. Louis office of Baker Sterchi, assisted in the research and drafting of this post. Chanin is a rising 3L student at the Washington University St. Louis School of Law.</em></p>'s Be Specific About Personal Jurisdiction: Missouri and Illinois Address Bristol-Myers Squibb v. Superior Court of California Jul 2020Missouri Law Blog<p>The Supreme Courts of Missouri and Illinois have recently addressed the constitutional limitations on the exercise of specific personal jurisdiction. In both states, the Courts held that due process prohibits the exercise of specific personal jurisdiction over out-of-state defendants in cases where the defendant does not have sufficient minimum contacts with the forum state and in cases where the alleged injury does not arise from those contacts.</p> <p>In <i>State ex rel. LG Chem, Ltd. v. The Hon. Nancy Watkins Laughlin</i>, 2020 Mo. LEXIS 193 (Mo. banc June 2, 2020), Plaintiff Peter Bishop brought suit against Defendant LG Chem, a Korean company, in St. Louis County Circuit Court. Bishop alleged he was injured when a lithium-ion battery manufactured by LG Chem exploded in his pocket. Bishop also alleged LG Chem sold the battery to an intermediate distributor, which independently sold the battery to a retailer of electronic cigarettes in Missouri from whom Bishop purchased the battery.</p> <p>LG Chem moved for dismissal based on lack of personal jurisdiction. In opposing LG Chem&rsquo;s motion, Bishop relied on <i>Bristol-Myers Squibb Co. v. Superior Court of California,</i> 137 S. Ct. 1773 (2017). In <i>Bristol-Myers</i>, the United States Supreme Court held that a state court could not exercise specific personal jurisdiction over an out-of-state defendant unless there was &ldquo;an affiliation between the forum and the underlying controversy, principally&hellip;an occurrence that takes place in the forum state.&rdquo; <i>Id.</i> at 1781. Bishop argued there was a sufficient &ldquo;affiliation&rdquo; between Missouri and the underlying controversy to justify the exercise of specific personal jurisdiction over LG Chem because the battery had made its way to Missouri through the third-party distributor and caused injury in Missouri. LG Chem&rsquo;s motion to dismiss was denied.&nbsp;Ultimately, the Missouri Supreme Court found Bishop&rsquo;s application of <i>Bristol-Myers</i> to be overbroad and held the actions of a third party, standing alone, cannot be used to satisfy the due process requirement of the specific personal jurisdiction analysis. Since the subject battery had been sold to the Missouri retailer by an independent third party, the Court directed the circuit court to vacate its order overruling LG Chem&rsquo;s motion to dismiss for lack of personal jurisdiction.</p> <p>Two days later, the Supreme Court of Illinois also issued an opinion addressing the exercise of personal jurisdiction over an out-of-state defendant, but unlike the Missouri case, the case involved claims brought by out-of-state plaintiffs. In <i>Rios v. Bayer Corp.,</i> 2020 IL 125020 (June 4, 2020), the Court held that due process did not allow Illinois courts to exercise specific personal jurisdiction over an out-of-state defendant as to the claims of out-of-state plaintiffs for personal injuries suffered outside of the state from a device manufactured outside of the state. At issue were two cases, both filed in Madison County, Illinois, in which 180 women from more than twenty states alleged injuries related to the use of a permanent birth control device called Essure. The out-of-state plaintiffs had not had the Essure device prescribed or implanted in Illinois and had not sought treatment for their alleged injuries in Illinois. Bayer moved for dismissal of the out-of-state plaintiffs&rsquo; claims based on lack of personal jurisdiction. In response to Bayer&rsquo;s motion, the out-of-state plaintiffs argued the trial court could exercise specific personal jurisdiction over Bayer for their claims because Bayer had developed, labeled, marketed and worked on gaining regulatory approval for Essure in Illinois, and the plaintiffs&rsquo; claims arose, in part, from those &ldquo;minimum contacts&rdquo; between Bayer and the State of Illinois.&nbsp;</p> <p>While Bayer&rsquo;s motion was pending in the trial court, the United States Supreme Court issued its opinion in <i>Bristol-Myers</i>. Despite the new guidance provided in <i>Bristol-Myers</i>, the trial court denied Bayer&rsquo;s motion, relying on <i>M.M. v. GlaxoSmithKline LLC,</i> 2016 IL App (1<sup>st</sup>) 151909, wherein the Illinois Court of Appeals had found the exercise of personal jurisdiction over an out-of-state defendant did not violate the due process clause in product liability cases brought by out-of-state plaintiffs where clinical trials had been conducted in Illinois. Bayer appealed. The appellate court held the exercise of personal jurisdiction over Bayer by the trial court was constitutional because the out-of-state plaintiffs&rsquo; claims arose, at least in part, from Bayer&rsquo;s marketing, clinical trials and physician accreditation programs related to Essure in Illinois.</p> <p>Ultimately, the Illinois Supreme Court reversed the appellate and trial courts. The Court determined <i>Bristol-Myers</i> had foreclosed the plaintiffs&rsquo; theory of specific personal jurisdiction and concluded that the out-of-state plaintiffs&rsquo; claims did not arise out of Bayer&rsquo;s activities in Illinois; therefore, due process did not allow the trial court&rsquo;s exercise of specific personal jurisdiction over Bayer as to the out-of-state plaintiffs&rsquo; claims.&nbsp;&nbsp;</p> <p>These cases represent the first application of the limitations on specific personal jurisdiction expressed in <i>Bristol-Myers</i> by each state&rsquo;s Supreme Court.&nbsp;The conclusion reached by both Courts emphasizes the importance of conducting a comprehensive evaluation of a defendant&rsquo;s contacts with the forum state immediately upon service of the summons in every instance.</p> You Compel Arbitration? You May Have the Right to Ask Your Arbitrator Jul 2020Missouri Law Blog<p>Do you have a valid and enforceable arbitration agreement? Is your arbitration provision unconscionable?&nbsp;Have you waived your right to arbitration?&nbsp;Missouri litigants may have the right to submit these threshold legal questions to an arbitrator.</p> <p>In <i>TD Auto Finance, LLC v. Bedrosian</i>, the Missouri Court of Appeals, Eastern District, reversed the circuit court&rsquo;s denial of a motion to compel arbitration, <a href="">finding</a> that the threshold issues of arbitrability were delegated to an arbitrator under the parties&rsquo; agreement and the circuit court erred in finding a lack of consideration for the arbitration agreement.</p> <p>Bedrosian purchased a vehicle from a Missouri dealership.&nbsp;In seeking to finance her purchase, Bedrosian executed a Credit Application through TD Auto Finance, LLC (&ldquo;TD Auto&rdquo;).&nbsp;Bedrosian ultimately defaulted on her loan payments.&nbsp;TD Auto repossessed and sold the vehicle and then sued Bedrosian to the collect the deficiency.&nbsp;Bedrosian answered and filed a counterclaim.&nbsp;TD Auto moved to compel arbitration.</p> <p>The credit application contained a section titled: &ldquo;IMPORTANT CONTRACT OF ARBITRATION.&rdquo; (Capitalized text in original)&nbsp;The arbitration provisions that provided &ldquo;If any of us chooses, any dispute between or among us will be decided by arbitration and not in court&rdquo; and &ldquo;Any claim or dispute, whether in contract &hellip; (including any dispute over the interpretation, scope, or validity of this Important Contract of Arbitration or the arbitrability of any issue)&hellip; shall, at the election of any of us&hellip; be resolved by neutral, binding arbitration and not by a court action.&rdquo;</p> <p>Bedrosian opposed arbitration claiming: (1) the purported arbitration agreement was never formed or concluded because it lacked mutual promises and thus lacked consideration; (2) even if the arbitration agreement had been formed, the agreement was unconscionable; and (3) event if the agreement was valid and enforceable TD Auto had waived its right to arbitration by repossessing the vehicle and initiating a lawsuit against her.&nbsp;The trial court agreed with all three points raised by Bedrosian and denied the motion to compel arbitration.</p> <p>On appeal, TD Auto contended: (1) the claims addressed by the circuit court were reserved for an arbitrator to decide, including the threshold issues of arbitrability; and (2) the court erred in finding a lack of consideration because the arbitration provision was part of the credit application which did have mutual obligations.</p> <p>The Court of Appeals found that the circuit court erred in evaluating separate consideration for the arbitration provision because under <i>Eaton v. CMH Homes, Inc.</i>, mutuality of the whole agreement satisfies the consideration for an arbitration provision.&nbsp;</p> <p>The Court of Appeals also found that like arbitration in general, the question of who decides threshold arbitrability questions is a matter of contract and that the parties can agree by contract that an arbitrator will resolve threshold arbitrability questions as well as the underlying disputes.&nbsp;</p> <p>The Court of Appeals thus concluded that threshold questions of arbitrability, concerning unconscionability and waiver by litigation were &ldquo;reserved for the arbitrator. The circuit court should not have ruled on these matters.&rdquo;</p>