BSCR Firm News/Blogs Feed Oct 2021 00:00:00 -0800firmwise Publishes Brandy Simpson and Jessica Cozart Article on Employer Return-to-Work and Vaccine Mandates Oct 2021Publications<p>Brandy Simpson and Jessica Cozart&rsquo;s article &ldquo;<a href=""><span style="color: rgb(204, 0, 0);">Employer Return-to-Work and Vaccine Mandates: Just Because You Can Doesn&rsquo;t Mean You Should</span></a>&rdquo; is featured in the October 2021 edition of Defense Research Institute&rsquo;s Women in the Law Committee newsletter.</p> <p>The article addresses two of the most popular employer questions of 2021: (1) whether employers can require employees to return to the workplace, and (2) whether employers can mandate their employees be vaccinated against COVID-19.</p> <p>Simpson and Cozart are located in the firm&rsquo;s St. Louis office. Simpson&rsquo;s practice focuses on medical malpractice defense along with premises liability, personal injury, and product liability matters. Cozart&rsquo;s practice focuses on property and casualty litigation, insurance coverage, and insurance defense involving claims of personal injury, premises liability, and products liability.</p> Sterchi Attorney David Eisenberg Featured in St. Louis Record Article Oct 2021Publications<p>Baker Sterchi Member David Eisenberg is quoted in a recent&nbsp;St. Louis Record&nbsp;article &ldquo;<a href=""><span style="color: rgb(204, 0, 0);">Supreme Court ruling paves way for GOP clerk to resume duties at Lincoln County courthouse</span></a>&rdquo; regarding the Missouri Supreme Court&rsquo;s reversal of a circuit court&rsquo;s judgment which denied an elected circuit court clerk&rsquo;s request for injunctive relief.<o:p></o:p></p> <p>Eisenberg notes &ldquo;what&rsquo;s surprising about the case is that something resembling open warfare had broken out between the circuit clerk and the presiding judge in that judicial district&rdquo; and adds that although court professionals view themselves as parties who should be above the political fray, &ldquo;quite the opposite was happening at the Lincoln County Courthouse.&rdquo;<o:p></o:p></p> <p>Eisenberg has over thirty years of experience representing Fortune 100 and other companies in employment and labor law matters, consumer and general business litigation, and appellate litigation. He is the Editor of Baker Sterchi&rsquo;s Missouri, Employment &amp; Labor, and Product Liability blogs and has served on the Editorial Board of the ABA Appellate Practice Committee, and on that Committee&rsquo;s Appellate Rules subcommittee.<o:p></o:p></p> <p>The&nbsp;St. Louis Record, a publication of the U.S. Chamber Institute for Legal Reform, covers the legal system, focusing on civil actions in the St. Louis area.</p> Gas Company Cannot Evade Anti-Indemnification Statute's Application in Dispute with Utility Locator after JJ's Restaurant Explosion Oct 2021Missouri Law Blog<p>More than eight years after the Country Club Plaza district in Kansas City, Missouri was rocked by a gas line explosion that destroyed JJ&rsquo;s Restaurant, the United States Court of Appeals for the Eighth Circuit has <a href="">ruled</a> that utility-locating company USIC has no duty to indemnify natural gas company Spire.</p> <p>The explosion led to a series of lawsuits against Spire, many of which Spire settled for a collective $75 million. USIC was subsequently asked to indemnify it on the basis that the contract between the two companies placed sole financial responsibility upon USIC&mdash;regardless of who was actually at fault. To that end, Spire sought a declaratory judgment that USIC owed Spire for the amount of the prior settlements in addition to any future settlements. USIC moved for summary judgment arguing that R.S.Mo. &sect; 434.100.1, Missouri&rsquo;s anti-indemnification statute, precluded Spire&rsquo;s attempt to escape financial liability.</p> <p>The anti-indemnification statute generally prohibits contractual clauses which force one party to hold another party harmless and indemnify them for their own negligence. In other words, the law prevents a subcontractor from indemnifying a general contractor for any damage caused by the general contractor&rsquo;s negligence. However, this statute only applies to &ldquo;any contract or agreement for public or private construction work.&rdquo;</p> <p>Spire took the position that USIC&rsquo;s services could not be considered &ldquo;construction work&rdquo; within the statute&rsquo;s meaning. The Eighth Circuit looked to subsection 3 of the anti-indemnification statute, which defined the terms to include &ldquo;construction, alteration, maintenance or repair of any . . . pipeline.&rdquo; The Court easily dispensed with Spire&rsquo;s argument and held that USIC&rsquo;s work in locating and marking the gas line meant that USIC was preserving the lines and keeping them in a state of repair. The Court found it irrelevant that USIC did not construct something within the usual meaning of the word since the anti-indemnification statute&rsquo;s definition of construction controlled the dispute.</p> <p>In addition to illustrating the scope of the anti-indemnification&rsquo;s statute in the construction industry, this case also teaches about litigation strategy. Here, Spire opted to pursue an &ldquo;all-or-nothing approach&rdquo; and appealed solely on the basis that USIC&rsquo;s purported obligation to indemnify was absolute. To that end, Spire did not seek any decision on whether it was actually negligent, or whether USIC had an obligation to indemnify it for any amount less than the full cost of the settlements. In that sense, the case suggests that parties may be well-served to pursue other issues in a case, even if those issues may not lead to a full and complete victory.&nbsp;&nbsp;</p> Lawyers Media Honors Kehl Friesen with Up & Coming Award Sep 2021Recognition<p>Baker Sterchi attorney Kehl Friesen (Kansas City) has been recognized by Missouri Lawyers Media as a 2021 Up &amp; Coming honoree, joining 50 attorneys from around the state of Missouri to receive the award.</p> <p>Friesen defends personal injury, premises, product liability, toxic tort, and consumer matters throughout the Midwest, and has successfully represented clients through motion practice and at trial.</p> <p>He is an active member of Baker Sterchi&rsquo;s Diversity &amp; Inclusion Committee, serving as a liaison to the firm&rsquo;s Recruiting and Retention Committee, and is a member of ALFA International&rsquo;s Future Leaders Forum, Hospitality &amp; Retail Practice Group Steering Committee, and Product Liability Practice Group. He is also a member of the Asian American Bar Association of Kansas City and serves on the Young Lawyers Committee of DRI.&nbsp;</p> <p>Conferred on early-career lawyers who have demonstrated professional accomplishment and community leadership beyond their years, Up &amp; Coming honorees were recognized at an awards luncheon on Sept. 29 at the Hyatt Regency in St. Louis.&nbsp;</p> Circuit breathes new life into In Re Bair Hugger Products Liability MDL Sep 2021Product Liability Law Blog<p>On August 16, 2021, the Eighth Circuit Court of Appeals reversed a <a href="">District Court decision</a> striking class action plaintiffs&rsquo; experts and granting summary judgment to 3M Company in the <i>In re Bair Hugger Forced Air Warming Devices Products Liability Litigation. </i>This case is part of Multi-district Litigation (MDL) proceedings, consisting of nearly 6,000 lawsuits, pending in the District of Minnesota.&nbsp;The MDL court, following similar rulings by the trial court in the first bellwether case, excluded Plaintiffs&rsquo; general-causation medical experts as well as one of their engineering experts, and granted 3M summary judgment as to all of plaintiffs&rsquo; claims.</p> <p>Plaintiffs in the MDL have brought claims against 3M asserting that they contracted periprosthetic joint infections due to the use of 3M&rsquo;s Bair Hugger.&nbsp;The Bair Hugger is a convective, or forced-air, patient-warming device intended to stave off hypothermia related complications that can arise during or after surgery.&nbsp;The device consists of a central heating unit, a hose, and a disposable perforated blanket that is placed over the patient.&nbsp;The central unit draws in air through a filter, warms the air, and blows it out through the hose into the perforated blanket.&nbsp;&nbsp;</p> <p>MDL plaintiffs proffer two theories of causation: first, waste heat from the device creates currents that carry bacteria from nonsterile areas of the operating room to the surgical site (&ldquo;the airflow theory&rdquo;); or second, the device is internally contaminated and projects bacteria through the blanket into the operating room (&ldquo;the contaminated product theory&rdquo;).&nbsp;</p> <p>The MDL court excluded plaintiffs&rsquo; engineering expert on the grounds his opinion relied upon modeling developed for litigation and was unproven and untested in real-world operating rooms.</p> <p>Plaintiffs&rsquo; engineering expert created a computational-fluid-dynamics (&ldquo;CFD&rdquo;) model to support the airflow theory that was eventually published in a peer-reviewed journal, and which the MDL court found to be reliable based upon the underlying physics. &nbsp;Nonetheless, the MDL court excluded plaintiffs&rsquo; engineer because his conclusion &ldquo;relies on an unproven and untested premise&rdquo; in actual practice, and the CFD model was developed for litigation, raising &ldquo;concerns about its reliability and objectivity.&rdquo;&nbsp;The Eighth Circuit disagreed, ruling that when a &ldquo;hired gun&rdquo; expert&rsquo;s work has been peer reviewed and published, and the developed-for-litigation concern is the only basis for excluding an expert, lingering questions of reliability and objectivity go to the weight of the evidence, rather than its admissibility.&nbsp;<i>DiCarlo v. Keller Ladders, Inc.</i>, 211 F.3d 465, 468 (8th Cir. 2000).&nbsp;The Eighth Circuit found it was an abuse of discretion to wholly exclude the engineer&rsquo;s testimony.</p> <p>Plaintiffs&rsquo; medical causation experts asserted causation based upon the CFD model and an observational epidemiological study, which disclaimed establishing a causal connection, finding that patients warmed by the Bair Hugger were four times more likely to contract an infection.</p> <p>The MDL court excluded plaintiffs&rsquo; medical experts, finding their opinions unreliable because there was &ldquo;too great an analytical gap between the literature and the experts&rsquo; general causation opinion.&rdquo; &nbsp;&nbsp;The MDL court deemed it unreliable for the medical experts to draw an inference of causation from a study that disclaimed proving causation.&nbsp;The Eighth Circuit rejected that it is <i>per se </i>unreliable for an expert to draw an inference of causation from a study disclaiming having proved causation, if the expert does the work to bridge the gap between association and causation.&nbsp;The Eighth Circuit found that plaintiffs&rsquo; experts also relied on studies and reports showing plausible mechanisms for forced-air warming to cause infections.&nbsp;As such, the District Court should not have wholly excluded the experts as the disclaimer of causation from the epidemiological study went to the weight of the opinions rather than render them unreliable and inadmissible.</p> <p>The MDL court&rsquo;s grant of summary judgment to 3M was derivative of its order excluding Plaintiffs&rsquo; experts, and thus was reversed by the Eighth Circuit.</p> <p><b>What does this mean for your company?</b></p> <p>While the Eighth Circuit&rsquo;s decision seems to be a boon to plaintiffs, who have the burden of proving their case, companies defending products liability cases can create a strategic advantage by retaining the right counsel and experts.&nbsp;If you, like 3M, are defending products liability litigation, you want to retain experts who can effectively bridge the gap between theory and the real world.&nbsp;</p> Court of Appeals Finds Arbitrator Lacked Authority to Resolve Automobile Repossession Dispute Sep 2021Missouri Law Blog<p>The Missouri Court of Appeals, Western District, recently <a href="">reversed</a> a trial court decision and subsequent arbitration award in favor of an automobile repossessor. In Car Credit, Inc. v. Pitts, the Court of Appeals held that the trial court incorrectly allowed arbitration of Pitts&rsquo; claims against Car Credit. The contract at issue designated the National Arbitration Forum (&ldquo;NAF&rdquo;) as arbitrator of disputes arising between Car Credit and Pitts related to the vehicle purchase.&nbsp; At the time Pitts filed her lawsuit, the NAF was not available to serve as arbiter.&nbsp; Consequently, Car Credit could not resolve Pitts&rsquo; claims through arbitration.&nbsp;&nbsp;</p> <p>Following Car Credit&rsquo;s repossession of her vehicle in 2015, Pitts sued Car Credit and claimed breach of contract.&nbsp; Pitts also sought to pursue a class action lawsuit against Car Credit.&nbsp; Pitts alleged Car Credit engaged in a &ldquo;deceptive pattern of wrongdoing . . . regarding collection of alleged deficiencies.&rdquo;&nbsp; Car Credit moved to compel arbitration of Pitts&rsquo; claims.&nbsp; Pitts purchased the vehicle at issue from Car Credit in 2011 and financed the purchase.&nbsp; Pitts signed an arbitration agreement at the time of purchase:</p> <p style="margin-left: 40px;">You and we [Car Credit] agree that if any Dispute arises, either you or we may choose to have the Dispute resolved by binding arbitration under the rules then in effect of the Arbitration Organization shown below (if no Arbitration Organization is shown below, the Arbitration Organization shall be the National Arbitration Forum). If such rules conflict with this Arbitration Agreement, the terms of this Arbitration Agreement shall apply.</p> <p>While the arbitration clause referenced an arbitration organization &ldquo;listed below,&rdquo; the arbitration agreement did not identify any specific organization, leaving the NAF as the applicable arbitration organization.&nbsp; Car Credit cited this arbitration agreement and moved to compel arbitration.&nbsp; Pitts correctly pointed out that the NAF was no longer available to serve as arbitrator.&nbsp; Pitts argued that since the NAF was the sole designated arbitration agency and was not available, the court should not compel arbitration.&nbsp; The NAF stopped providing arbitration services in 2009 after Minnesota&rsquo;s Attorney General sued it for alleged consumer fraud, false advertising, and deceptive trade practices.</p> <p>The trial court denied Car Credit&rsquo;s first motion to compel arbitration.&nbsp; However, after Pitts moved to certify the class action claims against Car Credit, Car Credit made a renewed motion to compel arbitration.&nbsp; At the time, the Missouri Court of Appeals had recently held that an arbitration agreement was enforceable even though it designated the NAF as arbitrator in <i>A-1 Premium Acceptance v. Hunter</i>, WD79735, 2017 WL 3026917, at * 5 (Mo. App. W.D. July 18, 2017).&nbsp; The trial court granted Car Credit&rsquo;s renewed motion and Pitts&rsquo; claims proceeded to arbitration.&nbsp; After the trial court granted arbitration of Pitts&rsquo; claims, the Missouri Supreme Court overruled the Court of Appeals&rsquo; decision in the separate case,<i> A-1 Premium Acceptance v. Hunter</i>, 557 S.W.3d 923, 929 (Mo. banc 2018), and held that separate organization could not arbitrate disputes where the NAF was unavailable.&nbsp;</p> <p>Meanwhile, in Pitts&rsquo; case, since the NAF was unavailable, an arbitrator from the American Arbitration Association (&ldquo;AAA&rdquo;) reviewed Pitts&rsquo; claims.&nbsp; That arbitrator found in favor of Car Credit.&nbsp; Based on that determination, the trial court entered judgment in favor of Car Credit and decertified the class action claims.&nbsp; Pitts appealed.&nbsp;</p> <p>The Court of Appeals reversed, holding that since Pitts and Car Credit agreed to resolve their disputes before the NAF, the AAA arbitrator lacked the authority to determine the validity of Pitts&rsquo; claims.&nbsp; The appellate Court held that the applicable federal law&mdash;the Federal Arbitration Act&mdash;does not require a court to compel arbitration when the parties agree to arbitrate only before a specified arbitrator.&nbsp; Furthermore, the Missouri Supreme Court&rsquo;s recent decision in <i>A-1 Premium Acceptance v. Hunter </i>was on point.&nbsp; In both cases, the parties agreed that the NAF would resolve disputes: &ldquo;[T]he agreement clearly provided the parties the opportunity to identify an organization other than NAF, and, with equal clarity, the parties unambiguously declined to do so . . .&rdquo;</p> <p>&nbsp;While Car Credit will have the opportunity to appeal this decision to the Missouri Supreme Court, it is likely that the recent decision in <i>A-1 Premium Acceptance v. Hunter </i>will result in Pitts&rsquo; claims against Car Credit, including Pitts&rsquo; class action claims, moving forward.&nbsp; If the applicable arbitration agreement had designated a different arbitrator from the NAF, or had provided an alternative arbitrator, Pitts&rsquo; claims likely would have been resolved through arbitration.&nbsp; Careless drafting was also a key factor here.&nbsp; Pitts entered into this agreement in 2011, nearly two years <u>after</u> the NAF had stopped arbitration.&nbsp; Had the applicable arbitration agreement been updated to remove the NAF as arbitrator and designate a different organization after Minnesota&rsquo;s lawsuit in 2009, Car Credit may have been able to successfully compel arbitration.&nbsp; Parties seeking to resolve disputes through arbitration should be careful to ensure their agreements are up to date with the current law.&nbsp;&nbsp;</p> to Work Post-COVID – Handle with Care, Employers Sep 2021Employment & Labor Law Blog<p>COVID-19 created unprecedented situations in every type of job, industry, and profession, including the legal field.&nbsp; Change, evolution, and adaptation became commonplace as everyone learned how to navigate the process of operating from both work and home. Essentially, the COVID-19 pandemic turned our working lives upside down for the better part of two years.</p> <p>As more people become fully vaccinated, many are eagerly anticipating a return to &ldquo;normalcy.&rdquo;&nbsp; For most, that includes returning to the office (whether full-time, part-time, or by remote or virtual means). But more than 100 million Americans have worked remotely (at least part-time) since the beginning of the pandemic. And many of these employees hope to work remotely permanently. However, for employers intending for their employees to return to the office, potential pitfalls await.</p> <p>Employees who have learned to enjoy the work-from-home model see a variety of benefits, including:</p> <ol start="1" type="1"> <li>Not having to commute to work;</li> <li>No required dress code (unless you are on a video conferencing call, such as with a Court);</li> <li>The ability to take care of work/projects at home while on breaks from office work;</li> <li>The ability to stay home with a sick family member;</li> <li>The ability to more easily schedule personal appointments around work.&nbsp;</li> </ol> <p>But there are pitfalls to working from home, which include:</p> <ol start="1" type="1"> <li>Potentially having to purchase additional office equipment to effectively do work (e.g., printer/scanners, computer monitor);</li> <li>Taking extra precautions to keep client information safe and confidential;</li> <li>Blurring the lines between being present at work and being present at home;</li> <li>Losing some collaboration, communication, and visibility with your colleagues/team/management;</li> <li>More distractions at home to sidetrack you from getting your &ldquo;office&rdquo; work done.</li> </ol> <p>Recent studies indicate that some categories of employees are less eager than others to return to the office. One such survey [<a href="">Who Wants To Return To The Office? | FiveThirtyEight</a>] indicates that women and minorities are less eager to return to in-person work, while white men are the group most eager to return to the office. In many families, women bear the load of being both the primary caregiver, as well as a full-time employee, and providing options to work from home provides potentially more time to devote to both. Another factor that may be at play is an office culture in some workplaces that has given white men a higher comfort level than other groups. Whether it&rsquo;s &ldquo;water cooler talk,&rdquo; &ldquo;the good ol&rsquo; boys club,&rdquo; or the standing Friday afternoon round of golf, certain employees can feel excluded and alienated in the workplace.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>Employers should take note, as return-to-work and remote work policies may someday serve as the basis for disparate impact claims under Title VII or Equal Pay Act claims. If women and minorities are more likely to opt to work from home (or risk termination or quit when return to the office is mandated), then employers must carefully implement policies or practices to avoid violating the law.&nbsp; These policies or practices should be implemented both to comply with the law, and to promote the well-being and job satisfaction of all of their employees.</p> <p><b>Disparate Impact under Title VII</b></p> <p>Disparate impact claims under Title VII can be tricky for employers to defend because there is no intent requirement. To state a claim of disparate impact, a plaintiff must allege a facially neutral policy that causes statistically significant disparities in employment between a favored class and a disfavored class. Here, women or minorities may be able state a claim for disparate impact where a remote work policy caused them to be disfavored.</p> <p>For example, a mandatory return to the office under threat of termination may cause a disparate impact if it causes women and minorities to quit in much higher numbers than white workers or men. The policy itself does not discriminate based on race or sex, so it is facially neutral. However, if it falls more harshly on a particular group, it may support a claim.</p> <p>Disparate impact claims are analyzed under a burden-shifting scheme similar to the familiar <i>McDonnell Douglass</i> framework. If the plaintiff makes a prima facie case, then the burden shifts to the employer to demonstrate that the policy serves a &ldquo;legitimate, non-discriminatory business purpose.&rdquo; Then the burden shifts back to the plaintiff to show that the articulated reason is pretextual.</p> <p>Some employers may have difficulty proving a legitimate business justification for ordering employees to return to the office. Many employers have seen that productivity has remained steady or in some cases increased as more employees work from home. In some cases, it may be more expensive for employers to have workers in the office than working remotely. Therefore, employers seeking company-wide return to work should carefully consider the reasons for doing so.</p> <p><b>Minimizing Impacts on Remote Workers</b></p> <p>A major potential pitfall will be in promotions. Employers <i>must</i> be mindful of the subjective and objective criteria managers employ in determining promotions. Traditional factors such as &ldquo;face time&rdquo; with the boss, being seen in the office early in the morning and late at night, or overall &ldquo;attitude,&rdquo; &ldquo;personality,&rdquo; or &ldquo;fit,&rdquo; may disfavor remote workers. Where these factors would tend to disfavor remote workers, they may work to cause statistical disparities between male and female or white and minority workers.</p> <p><b>Equal Pay Act</b></p> <p>The Equal Pay Act requires that employees of opposite sexes be paid the same for &ldquo;equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.&rdquo;). In the absence of direct evidence of discriminatory intent, the court applies the familiar <i>McDonnell Douglas</i> burden-shifting framework. The plaintiff puts forth a prima facie case, and the employer must show that there exists a legitimate nondiscriminatory factor on which it based the wages paid. Legitimate factors include seniority systems, merit systems, piecework pay rates, for example. The burden then shifts back to the plaintiff to come forward with evidence that the proffered reason was pretextual.</p> <p>Some employers may feel inclined to pay remote workers less than in-office workers. And studies indicate that some workers would be willing to take a pay cut to work from home. However, if disproportionate numbers of women intend to continue working remotely, then pay differentials could potentially support an Equal Pay Act claim. It is not a complete defense that there are also some men who work remotely at lower salaries. Likewise, it is an open question whether working from home versus working in the office would be a legitimate nondiscriminatory factor supporting pay disparities. However, if an employer saves money by having employees work remotely, it will be hard to avail themselves of that defense.</p> <p><b>Planning and Recordkeeping Can Help Avoid Liability</b></p> <p>In crafting a return-to-work policy that works for everyone, for purposes of potential employment-related claims, employers should consider:</p> <ul> <li>Whether an across-the-board return to work policy is necessary or desirable.</li> <li>If individual approval of remote work is practical. A policy should be based on specific, objective (and recorded) criteria such as seniority, performance evaluations, disciplinary history, and productivity. A copy of the determination should be placed in the employee&rsquo;s file.</li> <li>Whether to re-evaluate promotion and job performance criteria, to focus on objective work-related factors, while weeding out unintentionally discriminatory factors (such as face time with the boss, early arrival at work, etc.).</li> <li>Whether remote work may be a reasonable accommodation for disabled workers.</li> <li>How to ensure that remote workers have equal access to career-advancing training, mentorship, and special projects.</li> </ul> <p>There is never a bad time to consider whether office culture can be made more inclusive. As more people return to the office, it is important to ask whether there are employees who are reluctant to return, and why.&nbsp;</p> Returns Favorable Verdict for Trucking Client in Personal Injury Action Sep 2021Results<p>Baker Sterchi a favorable verdict for a trucking client, one of the nation&rsquo;s leading flatbed trucking companies, and its driver, in a personal injury action tried in the United States District Court for the Southern District of Illinois. Originally filed in Cook County, Illinois, plaintiff&rsquo;s petition alleged his vehicle was stopped on I-70 Highway due to a traffic backup, when our client&rsquo;s semi-tractor trailer violently struck his vehicle from behind. &nbsp;Our clients&rsquo; dash camera (capturing both inward and outward views) showed 9 seconds of driver inattention and a violent crash. &nbsp;Plaintiff further alleged the crash caused him to suffer lumbar and cervical surgeries resulting in total disability, future lost wages of over $1.5M and medical specials of over $165,000.&nbsp; Our clients admitted liability at the trial, which was conducted under the court&rsquo;s COVID-19 Plan; it is tough to read faces through a mask.&nbsp; The jury returned a verdict below the medical specials proven by plaintiff.&nbsp;&nbsp;</p> to Basics: Missouri Court of Appeals Highlights Importance of "Plain-Meaning" Rule in Contract Interpretation Sep 2021Missouri Law Blog<p>The Eastern District of the Missouri Court of Appeals <a href="">reversed</a> a trial court&rsquo;s grant of summary judgment in <i>Pelopidas, LLC et al. v. Keller</i> due to that court&rsquo;s erroneous contract interpretation, and instead ordered that summary judgment be entered for the opposing party. In its ruling, the Court of Appeals underscored the basic tenets of contract interpretation and highlighted the role of the American Bar Association&rsquo;s <i>A Manual of Style for Contract Drafting</i> as &ldquo;a highly regarded authority on contract drafting.&rdquo;</p> <p>The case originated from a 2016 dispute concerning the management of a commercial enterprise jointly owned by ex-spouses. The parties entered into a settlement agreement in September 2019, whereby the ex-wife (Keller) agreed to transfer her 50% ownership in the business to Respondents (Pelopidas, LLC and Brown) in exchange for compensation of $8.85 million. Following the September 2019 settlement agreement, the timing of the Keller&rsquo;s transfer of her Pelopidas stock became a point of contention between the parties, as the contract itself did not contain a date of transfer. Respondents sued to enforce the terms of the settlement agreement, claiming that Keller had transferred her 50% ownership interest effective as of the date of the settlement agreement; seeking to enjoin Keller from claiming she still had an ownership interest in the company; instructing the parties to finalize the settlement under which Keller was to be paid $1.1 million that Brown had placed in escrow; and awarding Respondents their reasonable attorneys&rsquo; fees. Keller counterclaimed, seeking damages for Respondents&rsquo; alleged failure and refusal to make an accelerated payment of $8.6 million pursuant to the terms of the settlement agreement.</p> <p>The disputed language in the settlement agreement reads as follows: &ldquo;&hellip; [Keller&rsquo;s] stock <b><i>shall be</i> </b>surrendered/sold, escrowed and pledged back to plaintiff.&rdquo; Respondents argued that the language required Keller&rsquo;s stock to be immediately transferred upon the date of settlement, September 30, 2019. Keller contended that, according to the settlement agreement&rsquo;s language, the transfer would become effective on &ldquo;some future date (i.e., whenever the parties could negotiate, draft, and execute the necessary supplemental documentation).&rdquo;</p> <p>The trial court granted summary judgment in favor of the Respondents, finding that &ldquo;Keller surrendered, transferred, and assigned all right, title, and interest in Pelopidas, LLC effective September 20, 2019.&rdquo; &nbsp;The trial court likewise denied Keller&rsquo;s cross-motion for summary judgment, and awarded Respondents over $400,000 in attorneys&rsquo; fees.</p> <p>On appeal, Keller argued that the lower court erred and that Respondents were not entitled to judgment as a matter of law because the settlement agreement &ldquo;contained a promise of <i>future performance</i> regarding the transfer of her stock in Pelopidas to Brown.&rdquo;&nbsp; Rather, Keller argued, she was entitled to summary judgment, ordering that payment be made at some reasonable future date. The Court of Appeals agreed with Keller.</p> <p>The appellate court noted that summary judgment in contract interpretation disputes is not appropriate where the contract language is ambiguous or requires a factual determination by the court. But here, there was no dispute that the contract language required Keller to transfer her stock, and the only question at issue was <i>when </i>that transfer should occur. That issue, the Court of Appeals concluded, was ripe for summary disposition.</p> <p>On the matter of contract interpretation, the appellate court emphasized the familiar principle that the judiciary should use the &ldquo;plain, ordinary, and usual meaning of the contract&rsquo;s words&rdquo; in order to give effect to the intention of the contracting parties. In determining the timing of Keller&rsquo;s stock transfer to Respondents, the court ruled that the use of &ldquo;<i>shall be</i>&rdquo; in the parties&rsquo; settlement agreement imposed a <i>future</i> obligation on Keller and did not create a requirement for <i>immediate</i> performance.</p> <p>In its decision, the court endorsed Keller&rsquo;s citations to the ABA<a href=""><i> Manual of Style for Contract Drafting</i></a>,<i> </i>which instructs that contract drafters can select between &ldquo;language of performance&rdquo; and &ldquo;language of obligation&rdquo; among other types operative contract language. Language of performance &ldquo;expresses actions accomplished by means of signing the contract itself&rdquo; and is typically accompanied by use of the word &ldquo;hereby.&rdquo; Language of obligation &ldquo;is used to state any duty a contract imposes on one or more parties and is typically accomplished by the use of the word &ldquo;shall.&rdquo;&rdquo; The court further emphasized that because the English language does not contain a future tense, &ldquo;shall and will have come to be used with future time.&rdquo; The court further instructs that, even though &ldquo;shall&rdquo; is &ldquo;now used in a variety of other ways, &ldquo;in the stylized context of the language of business contracts &hellip; <i>shall</i> continues to serve as the principal means of expressing obligations.&rdquo; The court also found that Keller&rsquo;s interpretation of &ldquo;shall&rdquo; was consistent with dictionary definitions for the term.</p> <p>Based on their findings, the appellate court reversed the trial court&rsquo;s grant of summary judgment against Keller and instead directed the circuit court to enter judgment for Keller, plus interest and attorneys&rsquo; fees.</p> <p>This case serves as an important reminder to go back to basics when drafting business contracts in Missouri. Drafters must pay special attention to the plain language meaning of the language they choose, to avoid ambiguity and ensure that the contract accurately reflects the intention of the parties. And they should pay special heed to the distinction between &ldquo;language of performance&rdquo; and &ldquo;language of obligation&rdquo;.<br /> <br /> <em>* Hannah D. Chanin assisted in the research and drafting of this post.&nbsp; Chanin earned her J.D. from Washington University School of Law in St. Louis this spring and is a current candidate for admission to the Missouri Bar.&nbsp; &nbsp;</em></p> Sterchi Obtains Defense Verdict in State Court for Trucking Client Sep 2021ResultsAfter a week-long trial in Missouri State Court, Baker Sterchi successfully obtained a defense verdict in a wrongful death claim. Defendants were a trucking company and its driver.&nbsp;&nbsp; Plaintiff alleged the driver could have avoided the interstate accident, which resulted in the death of her husband.&nbsp;&nbsp; The case involved significant pretrial motion practice.&nbsp; At trial, multiple experts testified for the parties.&nbsp; Plaintiff asked the jury for $3M.&nbsp; Ultimately, after a hard-fought battle, the jury agreed with the defense position.&nbsp;&nbsp;