BSCR Firm News/Blogs Feed Apr 2019 00:00:00 -0800firmwise Court of Missouri Issues First-Of-Its-Kind Ruling Overturning a $2.3 Million Negligent Credentialing Verdict Mar 2019Missouri Law Blog<p>In <i>Thomas E. Tharp, et al. v. St. Luke's Surgicenter &ndash; Lee's Summit, LLC</i>, the Supreme Court of Missouri <a href="">overturned</a> a $2.3 million jury verdict in favor of a patient and his wife against a hospital, because there was no proof the hospital negligently granted staff privileges to a surgeon. The opinion is the first from the Supreme Court of Missouri to address the requirements of a negligent credentialing claim.&nbsp;</p> <p>The plaintiff alleged injuries stemming from a surgical procedure to remove his gallbladder.&nbsp;The plaintiff and his wife settled their claims with the surgeon, but went to trial against the hospital alleging it negligently granted privileges to the surgeon.&nbsp;At trial, plaintiffs presented evidence that the surgeon failed to disclose to the hospital all prior malpractice suits.</p> <p>The hospital filed a motion for directed verdict at the close of all evidence on two grounds: (1) There was insufficient evidence to establish it had been negligent; and (2) the act of granting privileges to the surgeon was not the proximate cause of the injury.&nbsp;The trial court denied this motion, and the jury returned a verdict in favor of the plaintiffs.&nbsp;The trial court also overruled the hospital&rsquo;s post trial motion for judgment notwithstanding the verdict, asserting the same arguments set forth above.</p> <p>In a 6-1 decision, the Supreme Court held that a breach of the hospital&rsquo;s bylaws (requiring the surgeon to report all prior malpractice suits) was not enough to support a negligent credentialing claim, and found no evidence that the grant of staff privileges to the surgeon was the proximate cause of the injury.</p> <p>Addressing the nature of the relationship between a modern healthcare facility and its medical staff, the Court observed that &ldquo;Physicians working under staff privileges are typically independent contractors, not hospital employees,&rdquo; and that &ldquo;staff privileges allow physicians to utilize a healthcare facility to admit and treat patients as independent care providers rather than as employees of the facility.&rdquo;&nbsp;Under appropriate circumstances, a negligent credentialing claim can provide an avenue for potential liability against a hospital for injury caused by an independent contractor.&nbsp;The focus is whether the hospital gathered pertinent information to make a reasonable decision as to whether to grant privileges.&nbsp;The proper inquiry is whether the physician was competent and possessed the necessary knowledge, skill and experience to perform his job without creating unreasonable risk of injury to others.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>One of the requirements in the hospital&rsquo;s bylaws was full disclosure of all prior malpractice suits, and the failure to do so was grounds to automatically remove a physician from staff privilege consideration.&nbsp;The evidence at trial showed the surgeon failed to list on his application each suit he had defended over his career, but there was no evidence that addressed the surgeon&rsquo;s qualifications to perform surgery.&nbsp;The plaintiff&rsquo;s own expert admitted there was no &ldquo;magical number&rdquo; of malpractice suits that shows a surgeon is unqualified.&nbsp;Further, plaintiff&rsquo;s expert cited a statistical study showing physician malpractice claim rates vary widely depending, in large part, on the medical specialty involved.&nbsp;&ldquo;Even acts of repeated negligence do not support a finding a surgeon is incompetent when there is no evidence that shows a surgeon generally lacks a professional ability.&rdquo;&nbsp;Thus, the Court found the plaintiffs failed to make a submissible case of negligent credentialing.&nbsp;</p> <p>The Court also found the plaintiffs failed to prove the credentialing of the surgeon was the proximate cause of the injury.&nbsp;It was not enough to prove that but for the credentialing, the surgeon could not have performed the surgery that produced the injury.&nbsp;Rather, the plaintiffs needed to prove the injury was the natural and probable consequence of the surgeon&rsquo;s incompetence.&nbsp;&ldquo;Even a supremely qualified, competent, and careful physician may nevertheless injure a patient through an isolated negligent act.&rdquo;&nbsp;Because plaintiffs failed to show the surgeon was incompetent, they could not prove the injury was the result of the surgeon&rsquo;s incompetence and thus failed to make a submissible case.&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>In this first ruling of its kind in Missouri, the Missouri Supreme Court has provided guidance to Missouri lower courts and practitioners prosecuting or defending a negligent credentialing claim.&nbsp;These claims are difficult to prove, as they require proof beyond that which is required to support a malpractice claim against a physician.&nbsp;Absent credible evidence of a physician&rsquo;s incompetence generally, and the negligent failure of a hospital to discover the incompetence and act accordingly, courts should dispose of these claims via dispositive motion. &nbsp;&nbsp;&nbsp;&nbsp;</p> <p>The opinion did not address whether the negligent credentialing theory conflicts with Mo.Rev.Stat. &sect; 538.210.4, which provides, in part, that &ldquo;[n]o health care provider whose liability is limited by the provisions of this chapter shall be liable to any plaintiff based on the actions or omissions of any other entity or individual who is not an employee of such health care provider . . . .&rdquo;&nbsp;Negligent credentialing liability necessarily depends on the negligent act or omission of a non-employee physician.&nbsp;In the event this argument is raised, it is unclear how the Court would address the apparent conflict of law.&nbsp; &nbsp;</p> On the Missouri Bandwagon? Not So Fast Out of State Litigants. Mar 2019Missouri Law Blog<p>In an effort to overhaul Missouri&rsquo;s current venue and joinder laws, Missouri lawmakers introduced <a href=";BillID=29">Senate Bill 7</a>, aimed at restricting non-Missouri plaintiffs from joining their claims in the same lawsuit, with those of a Missouri resident, even though the non-residents&rsquo; claims have no legal nexus to Missouri. The most immediate and prominent impact of the bill, if enacted, would be upon mass tort litigation. The bill also limits the use of joinder in product liability cases, prohibiting joining claims arising out of separate purchases or separate incidents related to the same product.&nbsp;</p> <p>Following its introduction, <a href=";BillID=29">Senate Bill 7</a> was revised to adopt the February 13, 2019 Missouri Supreme Court ruling in <i><a href="">State ex rel. Johnson &amp; Johnson v. Burlison</a></i>. The Missouri Senate subsequently passed the revised version on March 4, 2019.&nbsp; The <i>Johnson &amp; Johnson </i>case dealt with the talcum powder litigation filed in St. Louis City Circuit Courts, involving many plaintiffs with both non-Missouri and Missouri residents, and held that plaintiffs cannot use joinder rules to establish venue in a jurisdiction where it otherwise would not exist.&nbsp;</p> <p><a href=";BillID=29">Senate Bill 7</a> moved onto the House, which recently considered similar legislation. <i>See </i><a href=";year=2019&amp;code=R">House Bill 231</a>.&nbsp; As of March 6, 2019, the Senate bill was read and referred to the Judiciary Committee.&nbsp;</p> <p>Proponents of the legislation say that it will help address &ldquo;a crisis&rdquo; in Missouri&rsquo;s courts, where out of state plaintiffs have flocked to litigate their claims in perceived plaintiff-friendly venues, such as St. Louis City (which has been dubbed a &ldquo;Judicial Hellhole&rdquo; by the defense bar); and Jackson County, which includes the greater Kansas City area.&nbsp; The Senate bill&rsquo;s sponsor, Ed Emery, notes that out of the 13,252 mass tort plaintiffs involved in cases being heard in St. Louis City, only 1,035 are Missouri residents.</p> <p>Proponents of the bill say that its passage will also have significant economic benefits, because Missouri taxpayers are currently paying for out of state plaintiffs to clog the Missouri courts with claims that have nothing to do with Missouri, thus taking up precious judicial resources that would better be used to adjudicate the claims of Missouri citizens.&nbsp; Opponents of <a href=";BillID=29">Senate Bill 7</a> primarily argue that it makes sense to have groups of plaintiffs, who all purportedly suffered similar injuries, to bring their claims together in the same court and lawsuit.&nbsp;</p> <p>The current bill contains &ldquo;grandfather&rdquo; provisions, making the legislation inapplicable to any action that meets two criteria:&nbsp; (1) the action is pending as of February 13, 2019 (when the Supreme Court decided <i>Johnson &amp; Johnson</i>), and (2) the action is set for trial on or before August 28, 2019 (the date on which the new legislation is scheduled to take effect.).&nbsp;</p> If enacted, this legislation may significantly alter the landscape of tort litigation in Missouri, both for litigants, and for the judiciary (especially in St. Louis City and Jackson County).&nbsp; Companies that do business in Missouri should follow its progress closely. County Circuit Court's Fine of City of Raytown Is a Sunshine Law Cautionary Tale Mar 2019Missouri Law Blog<p>A Jackson County, Missouri, Circuit Court Judge ordered the City of Raytown - specifically its City Clerk - to pay more than $42,000 in attorney fees and civil penalties after ruling in July 2018 that the city violated Missouri&rsquo;s Sunshine Law. The City Clerk denied the release of records in an apparent attempt to shield the city from litigation involving the design of one of the city&rsquo;s intersections.</p> <p>Several months after Plaintiff Paula Wyrick&rsquo;s mother died in a vehicle crash at an intersection in Raytown. Wyrick requested records from the City about the intersection, including its design, any traffic or other diagnostic studies conducted there, and any complaints about the safety of or accidents occurring at or around the intersection.&nbsp; On multiple occasions, the City Clerk refused to produce the requested records, asserting all requests fell within the Sunshine Law&rsquo;s litigation exception.&nbsp; The litigation exception protects, in part, documents related to potential legal actions or litigation involving a public governmental body.&nbsp;</p> <p>Wyrick filed suit seeking declaratory and injunctive relief against the City Clerk.&nbsp; Wyrick moved for summary judgment asserting that the City Clerk, on behalf of her office, &ldquo;took a position completely unheard of under Sunshine Law, namely, that a specific category of records can be closed only to Plaintiff and her lawyers, but otherwise open to anyone else.&nbsp; Put another way, the City Clerk has admitted that she would search for and produce records responsive to Paula Wyrick&rsquo;s requests, if only the requests would come from a different person.&rdquo;</p> <p>The City Clerk countered that Wyrick only sought the records to use in potential litigation against the City of Raytown as a result of her mother&rsquo;s death.&nbsp; In the face of this clear and unequivocal threat of litigation in this matter, the City Clerk argued she was justified in closing and refusing to produce the records.</p> <p>In July 2018, Jackson County Circuit Court Judge S. Margene Burnett granted Wyrick partial summary judgment and ordered production of the design records and traffic studies conducted at the intersection.&nbsp; She ruled that while Wyrick admitted she was contemplating litigation against the City, the City Clerk&rsquo;s use of the Sunshine Law as a &ldquo;shield to hide behind rather than shed light on potentially inappropriate governmental activity&hellip;is precisely why the Sunshine Law was enacted.&rdquo;&nbsp;</p> <p>Initially, Judge Burnett declined to order civil penalties against the City Clerk, finding that the refusal to comply was done under an incorrect reading of Missouri law.&nbsp; However, the Judge reconsidered in November 2018 after hearing additional arguments, which convinced her that the city clerk&rsquo;s actions rose to a knowing and purposeful violation of the Sunshine Law.&nbsp; The Clerk had testified that she &ldquo;implemented a policy to refuse the production of any requested documents to any citizen if that citizen has filed a notice of claim against the City of Raytown, regardless of the nature of the document requested.&rdquo;&nbsp; The Court awarded $38,550.00 in attorney fees and assessed civil penalties of $4,000.00, representing $1,000.00 for each of the four distinct violations of the Sunshine Law established by the evidence.&nbsp; The City filed a Notice of Appeal on February 14, 2019.</p> <p>This ruling is likely to encourage municipalities to take a closer look at their open-records policies to ensure they are encouraging the spirit of openness which is embodied in the state&rsquo;s Sunshine Law.</p> <i>Paula Wyrick v. Teresa M. Henry, in her capacity as City Clerk of the City of Raytown</i>, No. 1716-CV-24321, Circuit Court of Jackson County, Missouri.&nbsp;&nbsp; Court of Appeals Rules Venue Proper Only in County Where Decedent First Ingested Opioid Pain Medication and Not Where Drug Prescribed Feb 2019Missouri Law Blog<p>In <i>State ex rel. Mylan Bertek Pharmaceuticals, Inc. v. Vincent</i>, the Missouri Court of Appeals, Eastern District, <a href=" ">held </a>that, in a case alleging wrongful death, medical malpractice, and pharmaceutical liability, venue was proper only in the county where the decedent first ingested opioid pain medication, rather than the county where a defendant prescribed it. &nbsp;</p> <p>Decedent&rsquo;s widow filed suit in St. Louis County, alleging that defendants&rsquo; negligence caused her husband to become addicted to opioid pain medication, leading to unbearable withdrawal symptoms that caused him to commit suicide.&nbsp;The defendants were the physician who prescribed the medication for a back injury and several pharmaceutical companies that manufactured it. &nbsp;The plaintiff alleged the physician defendant first prescribed opioids at his medical office located in St. Louis County and continued to do so over a period of twelve years.&nbsp;Later, while travelling in Florida, the decedent ran out of medication and could not refill it.&nbsp;Plaintiff alleged the decedent suffered intense withdrawal symptoms and, as a result, shot himself in the chest and died.&nbsp;</p> <p>One of the pharmaceutical company defendants filed a motion to transfer venue asserting that venue was proper only in St. Charles County because that was the county where the decedent lived and first ingested the medication. &nbsp;Plaintiff successfully opposed the motion, arguing that St. Louis County was the proper venue because that was where he was first exposed to the physician defendant&rsquo;s negligent prescribing practices in his medical office.&nbsp;</p> <p>The appellate court analyzed &sect; 508.010, RSMo, which sets venue in the county where the plaintiff was &ldquo;first injured.&rdquo;&nbsp;Section 508.010.14 provides that a plaintiff is &ldquo;considered first injured where the trauma or exposure occurred rather than where the symptoms are first manifested.&rdquo;&nbsp;</p> <p>The court explained the alleged bodily injury to the decedent &ndash; opioid addiction, resulting pain and suffering, and ultimately death &ndash; could only have occurred when he ingested the medication.&nbsp;In other words, no bodily injury could have occurred at the time of prescribing, and it was not until the decedent ingested the medication that he exposed his body to the ill-effects of the drug.&nbsp;Under that analysis, venue was proper only in St. Charles County (where decedent first ingested the drug) and not in St. Louis County (where the physician prescribed the drug).&nbsp;&nbsp;</p> <p>Accordingly, the appellate court reversed the trial court&rsquo;s order, issued a writ of prohibition directing the St. Louis County judge not to proceed with the case, and remanded with instructions to transfer to St. Charles County.&nbsp;The court&rsquo;s analysis demonstrates that: (1) under Missouri venue law, the key inquiry is the location where the injury occurred, rather than where the allegedly negligent conduct occurred; and, (2) the alleged injury and alleged negligence do not necessarily occur in the same location.&nbsp;</p> <p class="MsoNormal">The opinion does not reference Section 538.232, which states that, in any action against a health care provider, &ldquo;the plaintiff shall be considered injured by the health care provider only in the county where the plaintiff first received treatment by a defendant for a medical condition at issue in the case.&rdquo;&nbsp; It is unclear what effect that section, if discussed, would have had on the court&rsquo;s analysis.&nbsp; &nbsp; &nbsp;<o:p></o:p></p> trials in the Kansas City area slightly increase in number, but jury verdicts decline in amount Feb 2019Missouri Law Blog<p>Data from the Greater Kansas City Jury Verdict Service shows that while there were slightly more jury trials in 2018 than in 2017, the average monetary awards for Plaintiffs declined significantly. Every year, the Greater Kansas City Jury Verdict Service issues a &ldquo;Summary and Statistics of Jury Verdicts&rdquo; for the greater Kansas City area. The report includes verdicts from the Kansas City division of the U.S. District Court for the Western District of Missouri; the Kansas City branch of the U.S. District Court for the District of Kansas; and state courts in Jackson, Clay and Platte counties in Missouri; and Johnson and Wyandotte counties in Kansas.&nbsp;The statistics in 2018 indicate various shifts from 2017.</p> <p><b>More Trials, with a Lower Percentage of Plaintiffs&rsquo; Verdicts</b></p> <p>The Jury Verdict Service&rsquo;s annual summary reported on 104 trials in 2018, compared to 97 in 2017.&nbsp; Previously, there were 113 trials in 2016, 110 trials in 2015, and 133 trials in 2014.&nbsp;</p> <p>Because trials often involve multiple claims and multiple verdicts, the verdict statistics are based on the claims adjudicated, rather than simply the number of cases.&nbsp;The 104 trials in 2018 resulted in 168 verdicts; and the 97 trials in 2017 resulted in 193 verdicts.&nbsp;</p> <p style="text-align: left;"><img src=" of Trials and Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p>While the number of jury trials slightly increased in 2018, the percentage of Plaintiffs&rsquo; verdicts decreased very slightly.&nbsp;In 2018, 48% of the verdicts were for Plaintiffs compared to 49% for Plaintiffs in 2017.&nbsp;These figures go against what had been a trend of increases in the percentage of Plaintiffs&rsquo; verdicts dating back to 2014.</p> <p style="text-align: left;"><img src=" of Plaintiffs Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p><b>Decrease in Average Monetary Awards for Plaintiffs</b>&nbsp;</p> <p>The overall average of monetary awards for Plaintiffs experienced a significant decrease in 2018 from 2017, but was still higher than in earlier years.&nbsp;In 2018, the overall average monetary award was $1,810,693, down from $4,204,501 in 2017.&nbsp;However, first appearances are somewhat deceiving, since the Jury Verdict Service reported that the average in 2017 was greatly inflated by two verdicts of $217.7 million and $139.8 million.&nbsp;In 2018, in contrast, there was only one very large verdict for $76 million.&nbsp;Additionally, the 2018 figure of $1,810,693 represents an increase from the figures from the years prior to 2017.&nbsp;In 2016, the average Plaintiff&rsquo;s verdicts was $1,383,549, while the average in 2015 was $1,376,323.&nbsp;</p> <p><b>Slight Increase in Number of Million-Dollar Verdicts</b>&nbsp;</p> <p>In 2018, there were 14 verdicts of $1 million or more, compared to 11 such verdicts in 2017.&nbsp;But the 14 verdicts figure is slightly lower than in 2016, when there were 16 verdicts of $1 million or more.&nbsp;Of the 14 verdicts of $1 million or more in 2018, 6 were in Jackson County, MO Circuit Court (1 in Kansas City and 5 in Independence), 4 were in the Circuit Court of Clay County, MO, 2 were in the Circuit Court of Platte County, MO, and 2 were in the U.S. District Court for the Western District of MO.&nbsp;Finally, the number of verdicts between $100,000 and $999,999 decreased slightly in 2018 (29 verdicts) from 2017 (36 verdicts).</p> <p style="text-align: left;"><img src=" Monetary Awards for Plfs Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p><b>Key Observations and Conclusion</b>&nbsp;</p> <p>While the percentage of Plaintiffs&rsquo; verdicts decreased ever-so-slightly in 2018, the 48% figure still remains much higher than where it stood 4 years earlier (38%).&nbsp;Additionally, the average Plaintiff&rsquo;s verdicts ($1,810,693) &ndash; while down from the inflated figures of 2017 &ndash; continues to trend upward from the $1.3 million range of 2016 and 2015 and the low point figure of $350,730 in 2014.&nbsp;Almost half of the verdicts awarded in 2018 that were $1 million or more were in Jackson County, MO, which was again consistent with the view that this can be a Plaintiff-friendly forum.&nbsp;As we have stated in our previous Jury Verdict roundups, clients and national counsel should work with local counsel to carefully consider the forum when assessing the value of a case.</p> <p><u>_____</u></p> <p><img src=" Verdict Data_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="150" /><br /> <span style="font-size: smaller;">Source: Greater Kansas City Jury Verdict Service Year-End Reports 2014 -2018</span></p> 2017 Amendment to Statute, Court of Appeals Holds Section 490.715 Fails to Preclude Evidence of "Charged" Amounts of Medical Expenses at Trial Jan 2019Missouri Law Blog<p style="text-align: left;"><o:p></o:p></p> <p style="text-align: left;">In what was widely seen as an attempt to prevent plaintiffs from introducing evidence at trial of the full, undiscounted &ldquo;amounts charged&rdquo; for medical treatment, a revised version of &sect; 490.715 was signed into law in 2017. It provides that &ldquo;parties may introduce evidence of the <b><i>actual cost</i></b> of the medical care or treatment rendered to a plaintiff or a patient whose care is at issue.&rdquo;&nbsp;<i>See </i>&sect; 490.715(5)(1), RSMo. (emphasis added).&nbsp;&ldquo;Actual cost&rdquo; is defined as:</p> <p style="margin-left: 40px;">&ldquo;a sum of money not to exceed the dollar amounts paid by or on behalf of a plaintiff or a patient whose care is at issue plus any remaining dollar amount necessary to satisfy the financial obligation for medical care or treatment by a health care provider <b><i>after adjustment for any contractual discounts, price reduction, or write-offs by any person or entity</i></b>.&nbsp;<i>See</i> &sect; 490.715(5)(2) (emphasis added).</p> <p>But in the recent case of <i>Brancati v. Bi-State Development Agency</i>, the Eastern District Court of Appeals <a href="">held</a> that evidence of the &ldquo;amount charged&rdquo; could still be introduced at trial, effectively rendering the revised version of &sect; 490.715 meaningless.&nbsp;<i>Brancati</i> was a general liability case with stipulations that the &ldquo;amount charged&rdquo; for medical treatment totaled $77,515.48 while the actual &ldquo;amount paid&rdquo; to satisfy the financial obligation was $40,842.95.&nbsp;Before trial, Brancati filed a pre-trial Motion, arguing that the revised version of &sect; 490.715 did not apply retroactively to this case. The trial court ruled that &sect; 490.715.5, as amended, did not apply and that the parties could offer evidence of the value of medical treatment by allowing both the &ldquo;amount charged&rdquo; as well as the &ldquo;amount paid&rdquo; into evidence.</p> <p>After a $625,000 adverse jury verdict, Bi-State appealed and argued, in part, that the revised version of &sect; 490.715 applied retroactively to limit the evidence admissible regarding the cost of Brancati&rsquo;s medical care to the &ldquo;amount paid&rdquo; and not the &ldquo;amount charged.&rdquo;&nbsp;</p> <p>The Eastern District affirmed the trial court and held that the revised version of &sect; 490.715 did not eliminate the ability to introduce evidence of the &ldquo;amount charged&rdquo; for medical bills.&nbsp;The Court ruled that the statute did not expressly prohibit the introduction of &ldquo;amounts charged&rdquo; and merely permitted parties to introduce the &ldquo;actual costs&rdquo; of medical treatment.&nbsp;It also relied on Subsection 4, which provides that evidence admissible for &ldquo;another purpose&rdquo; may be introduced.&nbsp;Notably, the decision is devoid of any discussion about what other purpose was at issue to support the admission during trial of the &ldquo;amount charged.&rdquo;&nbsp;</p> <p>There are two other fundamental problems with the Eastern District&rsquo;s decision, one dealing with legal and logical relevance, and the other with maxims of statutory construction.&nbsp;First, legal relevance requires a trial court to weigh the probative value of proffered evidence against its costs, such as unfair prejudice, confusion of the issues, misleading the jury, or wasting time.&nbsp;<i>Reed v. Kansas City Missouri School District</i>, 504 S.W.3d 235, 242 (Mo. App. W.D. 2016).&nbsp;Missouri courts have long held that a plaintiff may recover only those medical treatment expenses that he was liable to pay for the medical treatment, and actually incurred.&nbsp;<i>See Cordray v. City of Brookfield</i>, 88 S.W.2d 161, 164 (Mo. 1935); <i>Zachary v. Korger, Inc.</i>, 332 S.W.2d 471, 475 (Mo. App. W.D. 1960).&nbsp;To allow the introduction of the full, undiscounted &ldquo;amount charged&rdquo; for medical expenses defies both basic principles of logical relevance (the evidence tends to make the existence of any material fact more or less probable than it would be without the evidence) and legal relevance.&nbsp;Evidence of the &ldquo;amount charged&rdquo; does not meet the litmus test of logical relevance because its introduction does not affect a plaintiff&rsquo;s ability to recover the &ldquo;amount paid&rdquo; for medical treatment. Nor does it meet the litmus test of legal relevance because its probative value is far outweighed by the dangers of confusing the issue and misleading the jury.&nbsp;</p> <p>Second, this decision disregards the most basic canons of statutory construction.&nbsp;A fundamental principle of statutory construction is that a primary role of the courts in construing statutes is to &ldquo;ascertain the legislature&rsquo;s intent from the language used in the statute and, if possible, give effect to that intent.&rdquo;&nbsp;<i>State ex rel. Koehler v. Lewis,</i> 844 S.W.2d 483, 487 (Mo. App. W.D. 1992).&nbsp;Under the &ldquo;Reenactment Canon,&rdquo; &ldquo;when the Legislature amends a statute, it is presumed that the legislature intended to effect some change in the existing law.&rdquo;&nbsp;<i>State v. Liberty</i>, 370 S.W.3d 537, 561 (Mo. banc 2012).&nbsp;This is because &ldquo;to amend a statute and accomplish nothing from the amendment would be a meaningless act, and the legislature is presumed not to undertaken meaningless acts.&rdquo;&nbsp;<i>Id.</i>&nbsp;By continuing to allow plaintiffs to introduce evidence of the &ldquo;amount charged&rdquo; for medical expenses, the <i>Brancati</i> court appears have rendered this legislative amendment meaningless.&nbsp;Further, in considering the landscape prior to the 2017 amendment, specifically that both the Eastern District and Missouri Supreme Court held that the &ldquo;amount charged&rdquo; for medical expenses could be introduced at trial, the language used in the 2017 statute clearly evinces an attempt to eliminate this practice.&nbsp;<i>See Berra v. Danter</i>, 299 S.W.3d 690 (Mo. App. E.D. 2009); <i>Deck v. Teasley</i>, 322 S.W.3d 536 (Mo. banc 2010).&nbsp;Likewise, this decision violates the canon that courts &ldquo;must examine the language of the statutes as they are written [and] cannot simply insert terms that the legislature has omitted.&rdquo;&nbsp;<i>Loren Cook Co. v. Director of Revenue</i>, 414 S.W.3d 451, 454 (Mo. banc 2013).&nbsp;</p> <p>A request&nbsp;that&nbsp;the <i>Brancati </i>case be transferred&nbsp;to the Missouri Supreme Court for review is presently pending.&nbsp; Whether or not the Supreme Court takes the <i>Brancati&nbsp;</i>case, we are confident that we&nbsp;have not seen the last of litigation on this issue.&nbsp;</p> it Comes to Nonconforming Goods, is the Customer Always Right? Jan 2019Missouri Law Blog<p>There are two important lessons to be learned from <i>Williams v. Medalist Golf</i>, a recent case from the Eighth Circuit Court of Appeals, applying Missouri law. First, when a company guarantees customer satisfaction, only to leave the customer unsatisfied, it risks not only its business reputation, but also its legal right to collect payment.&nbsp;Second, when giving testimony about the meaning of a contract, it is almost always best to let the written document speak for itself.</p> <p>Plaintiff Cane Creek Sod submitted a bid to provide almost a million square feet of grass for the construction of a new golf course at Big Cedar Lodge in Branson, Missouri.&nbsp;Cane Creek promised to provide premium Meyer Zoysia grass, and it offered a lower price than any other bidder.&nbsp;Defendant Medalist Golf, Inc., accepted the bid and provided a &ldquo;Grass Supplier Agreement&rdquo; for Cane Creek to sign.</p> <p>The Grass Supplier Agreement provided that the seller &ldquo;guarantees the quality and specification of the materials provided.&rdquo;&nbsp;Supplier Cane Creek&rsquo;s owner testified that he understood this to mean he &ldquo;was guaranteeing that they were going to get Meyer Zoysia and that it would be the quality that satisfied the customer [or Cane Creek] would fix it.&rdquo;&nbsp;The contract set a fixed price per square foot and provided an estimate of the quantity that would be need.&nbsp;But it also cautioned that this was &ldquo;a target and not a guaranteed amount&rdquo; and affirmed the parties&rsquo; understanding that the project &ldquo;may use more or less than estimated quantities.&rdquo;</p> <p>Over the following months, Cane Creek devoted considerable time and resources to growing dozens of acres of Meyer Zoysia.&nbsp;Shortly before the sod was to be harvested, the golf course&rsquo;s developer asked Medalist Golf to visit the sod farm to inspect the quality of the grass.&nbsp;After inspecting and photographing the sod, the developer decided the quality of the grass was unacceptable for the course and instructed Medalist Golf to reject it.&nbsp;Medalist did so, and then purchased the required grass from another bidder.&nbsp;Cane Creek was able to find alternative buyers for some, but not all, of what it had grown for Medalist.</p> <p>The supplier sued Medalist for breach of contract, arguing that Medalist had been contractually obligated to purchase all of the grass needed for this golf course exclusively from Cane Creek.&nbsp;Medalist moved for summary judgment, arguing that: (1) no enforceable contract existed, and (2) even if a contract did exist, Medalist was relieved of any obligations, because Cane Creek&rsquo;s sod failed to conform to the contract.&nbsp;The trial court granted Medalist&rsquo;s motion, and Cane Creek appealed.&nbsp;The Eighth Circuit <a href="">affirmed</a> the summary judgment in Medalist&rsquo;s favor.</p> <p>The Eighth Circuit rejected Medalist&rsquo;s first argument&mdash;that no enforceable contract ever existed between Medalist and Cane Creek.&nbsp;The &ldquo;Grass Supplier Agreement&rdquo; was an enforceable &ldquo;requirements contract.&rdquo;&nbsp;A requirements contract is one in which &ldquo;one party promises to supply all the specific goods or services which the other party may need during a certain period at an agreed price, and the other party promises that he will obtain his required goods or services from the first party exclusively.&rdquo;&nbsp;</p> <p>The court held that imprecise estimates of the quantity to be purchased were sufficient to support such a contract, and it saw ample evidence that the parties intended for Medalist to buy all of the grass needed for this golf course exclusively from Cane Creek, at an agreed-upon price.&nbsp;Thus, the court concluded, there was a valid agreement upon which Cane Creek could base its breach of contract claim.</p> <p>But the breach of contract claim still failed as a matter of law, because the court agreed with Medalist that the sod failed to conform to the contract.&nbsp;The Uniform Commercial Code as adopted in Missouri allows a buyer to reject tendered goods without payment, if they &ldquo;fail in any respect to conform to the contract.&rdquo;&nbsp;Mo. Rev. Stat. &sect; 400.2-601.&nbsp;Therefore, if the sod was not of the quality that was promised, Medalist had the right to reject it and no obligation to pay for it.</p> <p>The case ultimately turned on the contract&rsquo;s provision that Cane Creek would &ldquo;guarantee the quality and specification of the materials provided.&rdquo; This language, Medalist argued, required more than just sod that was acceptable to an expert or another golf course; it required that the sod be to the <b><i>customer&rsquo;s</i></b> satisfaction.</p> <p>Notably, though, the contractual language itself only required Cane Creek to &ldquo;guarantee the quality and standards&rdquo; of its product.&nbsp;It did not specify how the sod&rsquo;s &ldquo;quality and standards&rdquo; were to be judged.&nbsp;Although it conceded that Medalist did not act in bad faith, Cane Creek tried to present other evidence that the grass lived up to the &ldquo;quality and standards&rdquo; required by the contract, including: (1) expert testimony that the sod was high quality, (2) the results of a test finding the sod to be free of &ldquo;noxious weed contaminates,&rdquo; and (3) the fact that some of the same sod was subsequently sold to and used by another golf course.&nbsp;Cane Creek argued that this evidence at least created a genuine factual dispute as to whether Medalist wrongfully rejected the sod.&nbsp;</p> <p>But Cane Creeks&rsquo; position was seriously undermined at its owner&rsquo;s deposition, where he testified that he understood the &ldquo;guarantee&rdquo; to mean that he &ldquo;was guaranteeing that they were going to get Meyer Zoysia <b><i>and that it would be the quality</i></b> <b><i>that satisfied the customer</i></b>, [or Cane Creek] would fix it.&rdquo;&nbsp;This testimony arguably broadened Cane Creek&rsquo;s duties under the contract.&nbsp;It made the customer&rsquo;s judgment as to the sod&rsquo;s quality&mdash;as subjective as that may be&mdash;the ultimate and final measuring stick for compliance with the contract.&nbsp;Unfortunately for Cane Creek, this rendered irrelevant all of its expert opinions, test results, and other evidence about the high quality of the sod.&nbsp;If Medalist was unsatisfied, the sod was nonconforming and could be rejected.&nbsp;Full stop. &nbsp;(Had there been evidence that Medalist rejected the goods purely out of bad faith, the court would have been obliged to consider it; but concededly, this was not the case.)&nbsp;&nbsp;</p> <p>Customer satisfaction is always the goal, of course.&nbsp;But it is also an inherently subjective and often unpredictable concept.&nbsp;A customer may be dissatisfied simply because he or she is persnickety, capricious, or just misinformed.&nbsp;As tempting as it is to &ldquo;guarantee&rdquo; that a customer will be satisfied, businesses must understand the legal implications of doing so.&nbsp;Courts will enforce quality guarantees, and they will usually leave it to the parties to decide how quality should be measured. &nbsp;A guarantee of customer satisfaction may make for a good sales pitch, but it is a poor legal standard.</p> of St. Louis – Still A Judicial Hellhole Dec 2018Missouri Law Blog<p>The <a href="">2018-2019 ATRF Judicial Hellholes Report</a> is out, and, surprise, surprise, the &ldquo;Show Me Your Lawsuit&rdquo; state, specifically the City of St. Louis, landed fourth on the list&mdash;only behind California, Florida, and New York City. While it must be noted that St. Louis has moved down in the ATRF Judicial Hellhole rankings (St. Louis was ranked No. 3 in 2017-2018 and No. 1 in 2016-2017), St. Louis is still considered by many to be one of the most plaintiff-friendly courts in the nation, making it an inhospitable venue for corporate defendants, or any defendants for that matter. &nbsp;While the term &ldquo;hellhole&rdquo; may be a bit over the top, defense counsel must nonetheless be wary of this venue and advise their clients accordingly.&nbsp;And in-house counsel should pay particular heed when drafting jurisdiction and venue clauses in corporate agreements.</p> <p>There was initial optimism from 2017 that political changes in the executive branch would aid business interests and result in certain statutory reforms.&nbsp;The ATRF Report bursts that balloon, reporting that optimism &ldquo;quickly evaporated in 2018 as massive verdicts, blatant forum shopping, and legislative ineptitude plagued the &lsquo;Show Me Your Lawsuit&rsquo; state.&rdquo;&nbsp;</p> <p>The ATRF Report also attributes St. Louis&rsquo; inability to become a more balanced venue to its &ldquo;loose&rdquo; application of procedural rules, and an unwillingness to consistently follow Missouri appellate court and U.S. Supreme Court precedent, especially as it applies to a court&rsquo;s exercise of jurisdiction over out-of-state defendants.&nbsp;A combination of these two elements is what generally encourages forum shopping and out-of-state plaintiffs to seek out this jurisdiction, which gained national recognition in recent substantial toxic exposure verdicts.</p> <p>Looking ahead to the 2019 Missouri General Assembly legislative session, the Missouri Chamber of Commerce President and CEO, Daniel P. Mehan, recently vowed to address this state&rsquo;s litigious climate which he describes as a &ldquo;black eye for Missouri.&rdquo;&nbsp;He intends to push for new legislation to make Missouri&rsquo;s courtrooms more balanced when the Missouri General Assembly convenes for their legislative session in January 2019.&nbsp;More recently, the Missouri Chamber Board of Directors has approved the organization&rsquo;s 2019 Legislative Agenda which include several modifications that are aimed specifically at curtailing Missouri&rsquo;s Judicial Hellhole status.&nbsp;These reforms contain measures that would:</p> <p>1.&nbsp;&nbsp;&nbsp; Clarify venue and joinder laws in an effort to curb venue/forum shopping;</p> <p>2.&nbsp;&nbsp;&nbsp; Strengthen the Missouri Merchandising Practices Act to reduce frivolous class action lawsuits;</p> <p>3.&nbsp;&nbsp;&nbsp; Increase transparency in toxic exposure litigation to curtail fraudulent claims and ensure compensation for future claimants;</p> <p>4.&nbsp;&nbsp;&nbsp; Strengthen Missouri&rsquo;s employment arbitration climate in an effort to avoid costly litigation and resolve disputes rapidly;</p> <p>5.&nbsp;&nbsp;&nbsp; Establish a statute of repose to stop new regulations from opening additional paths to litigation; and</p> <p>6.&nbsp;&nbsp;&nbsp; Reforming the statutes regarding punitive damages to clarify the standard and define when an employer can be held liable for such damages.</p> <p>Whether or not all of these reforms will make it to committee is still yet to be determined, especially since several of these reforms were attempted in 2018 but failed.&nbsp;Nonetheless, 2019 is a new year!</p> Passive Website Is Insufficient to Confer Personal Jurisdiction in Missouri Dec 2018Missouri Law Blog<p>Over the years &ndash; and to the dismay of out-of-state defendants &ndash; state trial courts have often taken an expansive view of when they may exercise personal jurisdiction over companies with limited ties to Missouri. Recently, however, the Missouri Supreme Court made permanent a preliminary writ of prohibition in the case of <i>State of Missouri ex rel PPG Industries, Inc. v. The Honorable Maura McShane, Case No. SC97006</i>.&nbsp;Advertisement on a passive website by an out of state company is not conduct sufficient to confer personal jurisdiction under the Missouri long arm statute.&nbsp;</p> <p><u>Facts</u></p> <p>Hilboldt Curtainwall, Inc. provided materials for a Missouri construction project.&nbsp;Some of these materials were to be coated with a product made by PPG Industries, Inc., a Pennsylvania corporation.&nbsp;Hildboldt reviewed PPG&rsquo;s website and identified Finishing Dynamics, LLC as an &ldquo;approved applicator&rdquo; of the coating product manufactured by PPG.&nbsp;Finishing Dynamics failed to properly apply the coating product, rendering useless the products which were coated.&nbsp;Hilboldt subsequently filed suit in the Circuit Court of St. Louis County, Missouri against Finishing Dynamics for breach of contract and implied warranty of merchantability.&nbsp;Hilboldt also sued PPG under a negligent misrepresentation theory stemming from the information obtained by Hilblodt from PPG&rsquo;s website.</p> <p>PPG filed a motion to dismiss Hilboldt&rsquo;s negligent misrepresentation claim for lack of personal jurisdiction.&nbsp;PPG argued that its website advertising was insufficient conduct to confer personal jurisdiction, stating that representations on its passive website, which were not aimed specifically to Missouri consumers, were insufficient to confer personal jurisdiction.&nbsp;PPG had no other ties to Missouri.</p> <p>Hilboldt argued that, under its negligent misrepresentation theory, PPG committed a tortious act in the state of Missouri.&nbsp;Hilboldt believed conduct sufficient to confer personal jurisdiction in Missouri existed because the representations on PPG&rsquo;s website were received by Hilboldt in Missouri, relied upon by Hilboldt in Missouri, and caused injury to Hilboldt in Missouri.</p> <p>The Circuit Court denied PPG&rsquo;s motion to dismiss, and PPG filed a petition for a writ of prohibition in the Missouri Supreme Court to prevent the circuit court from taking any further action other than to dismiss PPG from the case.&nbsp;The Supreme Court issued a preliminary writ, and this decision followed.</p> <p><u>PPG&rsquo;s Conduct Was Insufficient to Confer Personal Jurisdiction</u>.</p> <p>The Supreme Court agreed with PPG that the passive website, visible within Missouri but not used for direct communication or negotiation, was not conduct falling under the Missouri long arm statute.&nbsp;The Court stated that, in light of &ldquo;the broad and general nature of PPG&rsquo;s website, PPG&rsquo;s suit-related contacts with Missouri are not sufficient to be considered tortious acts in Missouri.&rdquo;</p> <p>Missouri courts apply a two part test to determine whether personal jurisdiction exists over a nonresident defendant.&nbsp;First, the nonresident&rsquo;s conduct must fall within the Missouri long arm statute.&nbsp;That statute, RSMo. &sect;506.500(3), confers personal jurisdiction upon foreign persons and firms who commit a tortious act within the state. Secondly, once it is determined that the conduct does fall under the statute, the Court must determine whether the defendant has sufficient minimum contacts with Missouri to satisfy due process.</p> <p>The Court emphasized that no direct or individual communications occurred between Hilboldt and PPG, PPG did not contact any Hilboldt representative through the website and Hilboldt did not interact with any PPG representative using the website.&nbsp;The website was not used to complete any transaction, facilitate communication or conduct any interactions between Hilboldt and PPG.&nbsp;The website was merely accessible by Missouri residents, as well as residents of every other state, but PPG did not specifically target or solicit web traffic from Missouri.</p> <p>Furthermore, the Court noted that the information from PPG&rsquo;s website, even if false, was used by Hilboldt to enter into a contract with third-party Finishing Dynamics.&nbsp;The true basis for Hilboldt&rsquo;s underlying claim was the mistakes made by the third-party in failing to appropriately apply PPG&rsquo;s coating product, further &ldquo;muddling&rdquo; any connection between Hilboldt and PPG.</p> <p>Because PPG&rsquo;s limited conduct was found not to fall under the first prong of the Missouri personal jurisdiction analysis, the Court did not determine whether PPG&rsquo;s contacts with Missouri were sufficient to satisfy due process under the second prong of the analysis.</p> <p><u>Conclusion</u></p> <p>The Supreme Court <a href="">ruling</a> establishes that a &ldquo;passive website&rdquo; which is used only for advertising and is not used to facilitate communication or negotiations will not provide the basis for conduct sufficient to confer personal jurisdiction against nonresident parties under the Missouri long arm statute.&nbsp;</p> May Challenge an Allegedly Discriminatory Property Tax Assessment? And What is the Burden of Proof? Dec 2018Missouri Law Blog<p>In <i>Crowell v. David Cox, Assessor, </i> Missouri&rsquo;s Western District Court of Appeals <a href="">reaffirmed</a> that a taxpayer lacks standing to protest a property assessment made before the taxpayer owned the property.&nbsp;It also held that a taxpayer asserting a discrimination claim carries the burden of proving that other similarly situated properties were undervalued compared to their property, including presenting evidence of the fair market value of the similarly situated properties.</p> <p>In 2014, the Crowells bought residential property in Parkville, Platte County, Missouri.&nbsp;As of 2006, the property had an appraised value of $48,832 (the value the assessor determined was the property&rsquo;s fair market value) and an assessed value of $9,278 (a percentage of the appraised value which serves as the basis for calculating real estate tax liability).&nbsp;After extensive repairs and renovations, the property sold in December 2007 for $234,000.&nbsp;Based upon the sale, the appraised value increased in 2008 to $230,660, with the assessed value increasing to $43,825.&nbsp;These valuations were applied to the property for tax years 2008 through 2014 with no protests of the valuations.&nbsp;In October 2014, the Crowells purchased the property for $230,000.</p> <p>After the purchase and after doing some research into the assessment and sales history, the Crowells engaged in informal negotiations with the assessor to have the appraised and assessed values of the property reduced.&nbsp;In 2015, the assessor reduced the appraised/assessed values to $210,660/$40,025.&nbsp;Dissatisfied with the reduction, the Crowells pursued formal review and appeal through the Platte County Board of Equalization, which affirmed, and the State Tax Commission.&nbsp;</p> <p>Before the State Tax Commission, the Crowells argued discrimination in that their property was appraised at a higher ratio of its sale price than five other comparable properties.&nbsp;The five other properties were all recent sales and, unlike the Crowells&rsquo; property, none of them received an increase in assessed value based upon the sale.&nbsp;The Crowells also presented a chart comparing 41 other Platte County properties, as to square footage, appraised/assessed values, tax amount, and tax amount per square foot.&nbsp;Based on this comparison, the Crowells argued their property was assessed at a higher rate per square foot than all 41 comparison properties.&nbsp;The Crowells did not dispute, however, that the fair market value of their property was $210,660.&nbsp;Nor did they present any evidence of the fair market value of the comparison properties.&nbsp;</p> <p>The State Tax Commission concluded the Crowells lacked standing to challenge the 2008 assessment because they did not own the property until 2014.&nbsp;It also found no discrimination because the Crowells failed to show that other properties in the same general class, i.e. residential, were undervalued.&nbsp;The Commission found the Crowells presented no evidence from which a comparison could be made between the median level of assessment of residential property in the county and the actual level of assessment of their property.&nbsp;</p> <p>The Crowells filed a petition for review in the Circuit Court asserting disparate and discriminatory treatment because the 2008 assessment increase was based on the property&rsquo;s sale price whereas none of the other properties sold in the Crowell&rsquo;s neighborhood between 2008 and 2015 received an assessment increase based on the sale price.&nbsp;The Circuit Court affirmed the Commission&rsquo;s decision and order.</p> <p>On appeal, the Crowells argued two points: (1) the 2008 assessment violated Missouri law and was thus void <i>ab initio</i>, even if the Crowell lacked standing to challenge the assessment at the time it was imposed; and (2) the Commission had erroneously concluded that the Crowells were required to prove all other property in the same class was undervalued.</p> <p>As to the challenge to the 2008 assessment, the Western District reaffirmed the long-standing rule that individual taxpayer plaintiffs lack standing to challenge other taxpayers&rsquo; property tax assessments, as they are not injured personally by others&rsquo; assessment calculations.&nbsp;This is true even though the allegedly legally faulty 2008 assessment in this case set in motion a chain of events which was directly and causally connected to the performance of the Crowells&rsquo; 2015 appraisal and assessment.&nbsp;According to the Court, a taxpayer lacks standing to challenge another taxpayer&rsquo;s assessment even if the assessment results in a tax increase for the complaining taxpayer.&nbsp;</p> <p>As to the Crowells&rsquo; discrimination claim, the Western District found the Crowells failed to meet their burden of showing that disparate treatment caused them to bear an unfair share of the property tax burden compared to the other properties. &nbsp;Even had the Crowells&rsquo; property been the only one reassessed based on its sale price that alone, would be insufficient.&nbsp;The Crowells failed to prove that the other recently sold properties were not assessed at their fair market values, and that failure was fatal to their claim.&nbsp;</p>