W. Dudley McCarter
Behr, McCarter & Potter

John Stehno worked on a temporary basis in the Data Management Department of Sprint Spectrum, L.P. He left Sprint due to problems with other employees and then went to work for Modis. Modis had a contract with Amdocs, which, in turn, contracted with Sprint to develop a billing system. Modis assigned Stehno to work for Amdocs, which assigned him to the Sprint account. A few days after Stehno began working at Sprint, a Sprint manager became aware of it and advised Amdocs of the difficulties Sprint had had with Stehno. In e-mails, Stehno was described as "high maintenance" and a "magnet for conflict." Amdocs then removed Stehno from the project and Modis fired him because it had no other assignments for him. Stehno then sued Sprint and Amdocs for tortious interference with a business expectancy. The jury returned verdicts for Sprint and Amdocs, but the trial court granted Stehno a new trial. The Supreme Court reversed, however, in Stehno v. Sprint Spectrum, No. SC 87023 (Mo. banc 2006), finding Stehno had not made a submissible case of tortious interference.

A submissible case of tortious interference requires the plaintiff to adduce evidence of: (1) a valid business expectancy; (2) defendant's knowledge of the relationship; (3) a breach induced or caused by defendant's intentional interference; (4)absence of justification; and (5) damages. The valid business expectancy requirement involves more than a mere subjective expectancy – it must be a reasonable expectancy of continued employment. The plaintiff must have more than a "mere hope" of continued employment. Stehno was a temporary contractor. While he may have had a subjective hope of long-term employment on the Sprint project, both Amdocs and Sprint retained the right to end his assignment without even consulting him. It is specious that Stehno believed he had any chance of long-term employment on the project. Clearly, any expectation he had of continued employment on the Sprint project was not a valid, reasonable business expectation.

Stehno also failed to adduce substantial evidence on the element of absence of justification. The plaintiff carries the burden of affirmatively showing lack of justification. If the defendant has a legitimate interest, economic or otherwise, in the expectancy the plaintiff seeks to protect, then the plaintiff must show that the defendant employed improper means in seeking to further only its own interests. Improper means are those that are independently wrongful, such as threats, violence, trespass, defamation, misrepresentation of fact, restraint of trade, or any other wrongful act recognized by statute or common law. Sprint had an economic interest in controlling who worked on its projects. No liability arises for interfering with a business expectancy if the action complained of was an act that the defendant had a definite legal right to do without any qualification. Sprint had a legitimate economic interest in choosing who worked on its projects and did not employ improper means in protecting that interest. Stehno failed to produce evidence to the contrary and did not meet his burden of showing absence of justification.

Prior Accidents Were Not Sufficiently Similar to be Admissible

Randall Peters, as next friend for his wife, Constance, filed a product liability suit against General Motors alleging that the cruise control in their 1993 Oldsmobile Cutlass malfunctioned and caused an accident that left her in a persistent vegetative state. No witnesses observed the accident. Peters alleged that, as his wife was traveling in reverse to leave the driveway of their residence, the cruise control malfunctioned and caused the vehicle to accelerate, and continue to travel in reverse across the street in front of the Peters' house and into a tree in the neighbor's front yard. At trial, General Motors defended on the basis of no evidence being presented to prove that the cruise control malfunctioned and post-accident inspections showed that the system appeared to be working properly. General Motors contended that the likely cause of the accident was inadvertent application of the accelerator pedal by Mrs. Peters. Mr. Peters called seven witnesses who testified about their experiences of sudden unwarranted vehicular acceleration while driving a General Motors-made vehicle manufactured between 1988 and 1993 and equipped with cruise control. The jury awarded a total of $30 million in compensatory damages to Mr. and Mrs. Peters and $50 million in punitive damages. The Court of Appeals reversed and remanded, however, in Peters v. General Motors Corporation, No. WD62807 (Mo. App. W.D. 2006).

In products liability cases, evidence of other accidents may be relevant (1) to prove the existence of a particular physical condition or defect, (2) to show that the defect or dangerous situation caused the injury, (3) to show the risk that defendant's conduct created, and (4) to prove that defendant had notice. Evidence of an accident similar in nature to that which injured the plaintiff is admissible provided the evidence is relevant and sufficiently similar to the injury-causing accident so as to outweigh concerns of undue prejudice and confusion of the issues. To be sufficiently similar, each occurrence must: (1) be of like character; (2) occur under substantially the same circumstances; and (3) result from the same cause as that alleged to have caused the accident in question. Here, the testimonies of seven witnesses were presented as evidence that the Cutlass' cruise control was defectively designed — a particular physical condition or defect.

Evidence that the vehicles driven by the seven witnesses accelerated without operator activation of the accelerator pedal was not sufficient, without more, to warrant admission of their occurrences in this case as other similar incidents to demonstrate defective design. The expert witness called by plaintiff testified that a cruise control system, even if defectively designed, will not function when the brake pedal is applied. Six of the seven witnesses claim that they applied the brake pedal as hard as they could but the engine continued to run and the car did not stop. This occurrence is obviously dissimilar to that presented by the plaintiff, which suggested that Mrs. Peters never pressed the brake pedal at any time during the incident. The testimonies of the seven witnesses could not demonstrate that the cruise control on the Cutlass was defectively designed. Without evidence in some form that the cruise control systems on the vehicles driven by the seven witnesses were defective and caused the unwanted sudden acceleration of the vehicles, the trial court could not reasonably conclude that these incidents of vehicular acceleration resulted from the same cause that Mr. Peters asserted, a requirement for showing sufficient similarity. Because the other incidents were not shown to have been caused by defective cruise control, they were not sufficiently similar to the accident in this case, and General Motors was unduly prejudiced when this testimony was offered as proof of defective design.

Punitive Damages Must Be Supported By Clear and Convincing Evidence of Outrageous Conduct With Evil Motive or Reckless Indifference

In Peters v. General Motors Corporation, No. WD62807 (Mo. App. W.D. 2006), discussed above, the Court of Appeals also set aside the jury verdict for $50 million in punitive damages with a finding that Mr. Peters failed to prove entitlement to punitive damages and that the claim for punitive damages is concluded.

Punitive damages are properly submitted in a strict liability case only if there is clear and convincing evidence that defendant placed in commerce an unreasonably dangerous product with actual knowledge of the product's defect. Both strict liability and negligence theories require evidence that the defendant showed a complete indifference to or conscious disregard for the safety of others. Punitive damages are appropriate only when the defendant's conduct is outrageous due to evil motive or reckless indifference to the rights of others, which must be proven by clear and convincing evidence. Because the remedy is so extraordinary or harsh, punitive damages should be applied only sparingly.

To satisfy the clear and convincing standard of proof, evidence must show that the defendant either knew or had reason to know that there was a high degree of probability that the defendant's conduct would result in injury. Actual knowledge of the dangerous condition furnishes the element of reckless conduct justifying a punitive damage award. The defendant's conduct must be tantamount to intentional wrongdoing where the natural and probable consequences of the conduct is injury. The clear, cogent and convincing standard of proof requires evidence that instantly tilts the scales in the affirmative when weighed against evidence in opposition; that is, evidence which clearly convinces the fact finder of the truth of the proposition to be proved. In its search for clear and convincing evidence, the circuit court must scrutinize the evidence in much closer detail than it does in cases in which the standard of proof is a mere preponderance.

Here, to submit on the issue of punitive damages, GM must have had actual knowledge of the cruise control's dangerous proclivity to permit a transient charge to enter the device and cause the vehicle in which it was installed to accelerate without driver input, and GM must have, with evil motive or reckless indifference, placed the Cutlass in commerce. The evidence — giving full play to the jury's right to determine credibility, weigh the evidence, and draw justifiable inferences of fact — was insufficient to permit a reasonable jury to conclude that GM's conduct was outrageous because of evil motive or reckless indifference. Because the evidence is not persuasive that GM acted with evil motive or reckless indifference when it sold the Cutlass, the standard requiring clear and convincing evidence was not met and Mr. Peters failed to prove a case for punitive damages.

Knowledge of Construction Defect Allows Exception to Statute of Repose

Athena Thompson was injured when an outdoor balcony she was standing on collapsed. The balcony was attached to a second floor apartment in a building constructed 11 years earlier by O'Riley Brothers Development Company. O'Riley, which acted as developer and builder of the apartment building, completed construction of the apartments in 1992. It conveyed the apartment building to the current owners in 1993 and the collapse occurred in 2003. It was determined that the deck screws were insufficient to support the balcony. O'Riley was an experienced builder that had constructed a number of major projects. In Thompson's suit for personal injuries, O'Riley filed a motion for summary judgment, contending that her claim was barred by the 10-year statute of repose under § 516.097 RSMo., but the Court of Appeals reversed in Thompson v. Higgenbotham, et al, No. WD 65473 (Mo. App. W.D. 2006).

The issue in this case, which is a matter of first impression, is whether a builder/vendor who has reason to know and fails to disclose that an improvement to real property involves an unreasonable risk to persons, loses the protection afforded by § 516.097, RSMo. Here, the plaintiff's pleadings were sufficient to show a connection of O'Riley with the unsafe or defective condition of the building, other than as a designer and builder of the building.

Plaintiffs alleged that O'Rileys were connected to the defective condition that caused [the] injury in three ways: as the (i) designers, planners and builders, (ii) property owners, and . . . vendors with superior knowledge of a defective and unreasonably dangerous condition. . . . [W]hile former owners generally owe no duty to those later injured by a defective or unsafe condition of property, there is an exception [under] Restatement (Second) of Torts, § 353 that provides . . .: (1) A vendor of land who conceals or fails to disclose to his vendee any condition, whether natural or artificial, which involves unreasonable risk to persons on the land, is subject to liability to the vendee and others upon the land with the consent of the vendee or his subvendee for physical harm caused by the condition after the vendee has taken possession, if (a) the vendee does not know or have reason to know of the condition or the risk involved, and (b) the vendor knows or has reason to know of the condition, and realizes or should realize the risk involved, and has reason to believe that the vendee will not discover the condition or realize the risk. . . .

The Missouri courts have not specifically adopted this section of the Restatement, but it is recognized in many other states and reflects developments in the law with respect to an increased regard for human safety and the need to improve bargaining ethics. If we recognize such a duty on the part of vendors in the context of finding an exception to our statute of repose, we will foster greater openness and candor in real estate transactions. We will also, however, possibly open the door to potentially unlimited extensions of liability. Because we believe that each case must be decided on its facts, we do not believe that this potential negative consequence outweighs the potential benefits. O'Riley was a "sophisticated, knowledgeable, and experienced builder." It "may have had reason to know that the use of three deck screws to attach the balcony floor to its support would not hold the weight of more than a few people. . . . What the vendors knew or should have known, what the vendees knew or had reason to know, and how obvious the allegedly defective/unsafe condition was are all material matters that involve actual disputes and cannot be determined as a matter of law by summary judgment. . . . There are material facts in dispute as to whether the O'Rileys owed a duty to the Plaintiffs as vendors who had reason to know about a risky condition and failed to disclose it to their vendee and thus did not have a sole connection to the defective balcony as designers, planners and builders.

Appellate Court May Review Merits of Appeal Under Exceptions to Mootness Doctrine; Hospital May Petition for Involuntary Electroconvulsive Therapy for a Patient

Barnes-Jewish Hospital appealed the judgment of the probate court of the City of St. Louis, dismissing its petition for involuntary electroconvulsive therapy for one of its patients. After the probate court dismissed the petition, the hospital transferred the patient to its St. Louis County facility and filed the same petition in the St. Louis County Probate Court. That petition was granted and the patient received the treatment. The hospital appealed the judgment of the St. Louis City Probate Court and the Court of Appeals reversed that judgment under an exception to the mootness doctrine in the case of In the Matter of Myrtle Dunn, No. ED 86151 (Mo. App. E.D. 2006).

When an event occurs that makes a court's decision unnecessary or makes the court's granting of relief impossible, the case is moot. Because the patient received the treatment after the favorable ruling from the St. Louis County Probate Court, the case is moot. The Court of Appeals may, however, in its discretion, review the merits of an appeal if one of the exceptions to the mootness doctrine applies. The first exception occurs if a case becomes moot after argument and submission. The second occurs if a case presents an issue that (1) is of general public interest, (2) will recur, and (3) will evade appellate review in future live controversies. This case falls within the "general public interest" exception to the mootness doctrine. The question of who has standing to petition for involuntary electroconvulsive therapy is of general public interest. Second, this issue will recur. Finally, this issue will evade appellate review in future cases. This case involves therapy to help treat assaultive thoughts and behavior and intermittent suicidal ideation, which poses a threat to others and one's self. As a result, practically, patients requiring this treatment may be put at risk waiting for appellate review necessitating treatment in another setting.

The probate court's interpretation of § 630.130, RSMo, was incorrect. The statute is intended to provide patients with the right to refuse electroconvulsive therapy. In the event a patient refuses treatment, but the treatment is otherwise necessary, the statute provides a mechanism for treatment after a full evidentiary hearing. The statute allows a healthcare provider who has a duty of care to act in a patient's best interest, even where the patient has refused treatment, if the patient is in need of therapy. To ensure that parents or legal guardians act in the best interests of a minor or incompetent patient, the statute requires parents and legal guardians to obtain a court order, in accordance with § 630.130, RSMo, before electro-convulsive therapy can be administered to a minor or incompetent patient. The probate court's interpretation that only parents or legal guardians may obtain court orders for electroconvulsive therapy for a minor or incompetent patient is contrary to the statute's purpose.

Public Policy Supports Continuing Care Exception to Statute of Limitations

Alfred Cole was examined at the Ferrell-Duncan Clinic in December of 1997, when he was 61. He reported frequent urination at night and was given a digital rectal exam. The physician reported no irregularity as to his prostate gland. During January of 1999, he was examined again at the clinic and had another digital rectal exam. The physician reported his prostate as normal. During August of 2001, he was again examined and his prostate was found to be "a little enlarged." No PSA testing of Cole's blood was ordered. During July 2002, he was examined by another physician at the clinic, who ordered a PSA test that showed Cole's PSA to be significantly elevated. Further tests were positive for cancer and also revealed that it had spread to surrounding tissues. He then went to the Mayo Clinic, where his prostate cancer was treated surgically. He filed suit against the clinic in April of 2003. Over defendant's objection, medical experts testified that the failure to inform Cole of PSA testing in 1997 and 1998 was a deviation from the accepted standard of care. Defendants argued that the jury should not receive any evidence of negligence based on treatment prior to April of 2001. The trial judge overruled such objections because of the "continuing care" exception to the statute of limitations (§ 516.105, RSMo). The jury found for plaintiff and the Court of Appeals affirmed in Cole v. Ferrell-Duncan Clinic, No. 26731 (Mo. App. S.D. 2006).

The continuing care exception is recognized under Missouri law. It applies when the treatment which continues is of such a nature as to charge the defendant with the duty of continuing care and treatment that is essential to recovery. The "continuing care" duty lasts "unless the physician-patient relationship is ended by (1) mutual consent of the parties, (2) the physician's withdrawal after reasonable notice, (3) dismissal of the physician by the patient, or (4) the cessation of the necessity that gives rise to the relationship." Public policy supports the continuing care exception. It is based on the concept that it stems primarily from the nature of the relationship and that the obligation and treatment be considered as a "whole" until it ceases and the obligations arising therefrom should not be conceptually fragmented.

In analyzing the "continuing care" exception, the courts have said that treatment includes measures necessary for the physical well-being of the patient. Also, treatment has been described as covering all the steps taken to effect a cure of an injury or disease, including examination and diagnosis, as well as application of remedies. Thus, beginning in 1997, examination of Cole's prostate gland was "treatment" in that early detection of prostate cancer was a measure necessary for his physical well-being and an important step toward its cure or containment. The "continuing care" exception was properly applied here. The treatment was periodic, continuing prostate examinations; it was treatment of such a nature as to charge defendant with the duty of continuing care; and it was treatment that was essential to recovery. Thus, the trial court did not err when it let the jury hear evidence about Cole's visits to the clinic in 1997 and 1999 and be instructed thereon.

Passage of Ordinance Approving Contract Was Insufficient to Bind City to Contract Not Signed by Other Party

The City of St. Charles solicited proposals for the development of property that it owned. After selecting the proposal submitted by Client Services, Inc. (CSI), the city passed an ordinance authorizing the mayor and city clerk to execute an agreement with CSI. The sale agreement was signed by the mayor and city clerk and sent to CSI, but CSI did not sign and return the agreement to the city. After further discussions between the city and CSI, the city council directed the city administrator to revoke the agreement sent to CSI. After the city administrator delivered a notice of revocation to CSI, CSI signed and returned the agreement to the city. When the city refused to comply with the contract, CSI filed a suit for specific performance. The city responded that no enforceable contract existed and that there was no contractual relationship between the parties. The trial court granted summary judgment to the city, finding that the agreement was null and void and that there was no contractual relationship between the parties. The Court of Appeals affirmed in Client Services, Inc. v. City of St. Charles, No. ED 85579 (Mo. App. E.D. 2006).

Under § 432.070, RSMo, a contract between a city and another party shall be subscribed by the parties thereto and in writing. While the city chose to authorize the contract in the form of an ordinance, the ordinance merely authorized and directed the mayor and city clerk to execute an agreement with CSI; the offer to CSI was not actually made by the ordinance. By signing and delivering the agreement to CSI, the mayor and city clerk complied with the ordinance. The ordinance can only be regarded as the necessary approval given by the city council authorizing the mayor, as a duly-appointed agent, to enter into a contract on behalf of the city as required by law. Because CSI had not signed the contract nor performed any of its terms, there was not yet a contractual relationship between the parties prior to the withdrawal of the offer by the city. The requirements of § 432.070, RSMo, for a binding contract with the city were not met.

Municipal Zoning Decisions Are Presumed Valid

Matthew Turner and others filed suit against the City of Independence, challenging two zoning ordinances passed by the city council that rezoned two parcels of land to make way for two planned unit development communities. The city council rezoned the land from agricultural to planned unit development. The plaintiffs contended that the development would create numerous problems for them, including dangerous traffic conditions on the narrow roads abutting their properties. They further alleged that the ordinances were arbitrary and capricious. After a bench trial, the circuit court entered judgment for the city and the property owners appealed. The Court of Appeals affirmed the decision in Turner v. City of Independence, No. WD 64998 (Mo. App. W.D. 2006).

The property owners had standing to challenge the city's zoning decision. To show standing in a zoning decision, a plaintiff must establish either that a statute confers him or her with standing or that the decision adversely affects more distinctly and directly his or her interest than it affects the general public's interest. An interest adversely affected still affords standing, even if it is attenuated, slight or remote. If a zoning decision affects or will affect the plaintiff's property interest adversely, the plaintiff has the requisite interest in the controversy. An adjoining, confronting or nearby property owner has standing, without further proof of special damage, to assert the right for review of an administrative decision affecting the property in question. Here, the plaintiffs demonstrated that the rezoning ordinance of the city impacted them more adversely and more distinctly than the community in general. This was sufficient to establish standing.

Zoning decisions must be reasonable, but because they are legislative acts, the circuit court was obligated to presume that the city's zoning decision was valid and to resolve uncertainty about its reasonableness in the city's favor. The only proper basis for the circuit court's declaring the zoning decisions to be unreasonable was that they bore no substantial relationship to public health, safety, morals or general welfare. But, even when the zoning legislation bears a substantial relationship to public health, safety, morals or general welfare, Missouri courts have declared that the legislation can be unreasonable if private detriment to surrounding property owners is significantly greater than public benefit. There can arguably be no private detriment in the absence of a demonstrated negative impact on property value. Here, the property owners did not carry their burden of overcoming the presumption that the circuit court's decision was correct in declaring the city council's rezoning decisions to be reasonable. The circuit court found that the rezoning conformed to the character of surrounding neighborhoods and to the comprehensive plan. There was also evidence that the rezoning was important to the city's economic development. Although the property owners presented evidence of private detriment, sufficient evidence supported the circuit court's conclusion that public benefit significantly outweighed the private detriment.

Claim Barred After Check Cashed With Payment in Full Endorsement

Gene Rogers invested $22,500 to be a shareholder in Albany Home Sales, Inc. After voicing his concerns about operations of the company and requesting an accounting, the shareholder who formed the corporation sent him a check for $26,000. The check contained a restrictive endorsement stating that it was for the purchase of all Rogers' interest in Albany Home Sales, Inc. On the memo line on the front of the check was the statement "buy-out of 9% ownership" in Albany Home Sales, Inc. Upon receiving the check, Rogers placed his own restrictive endorsement, stating that it was received as "partial payment" for his ownership in Albany Home Sales. He then signed and deposited the check. After that, Rogers sent a letter to Albany requesting permission to examine its books and records. Albany responded by telling Rogers that he was no longer a shareholder and could not have access to Albany's corporate records. Rogers then filed a suit against Albany requesting an accounting, along with an injunction to enjoin the sale of Albany's assets. The trial court entered judgment in favor of Albany, finding that Rogers was not a shareholder and had no standing to bring a claim for accounting. The Court of Appeals affirmed in Walker v. Rogers, No. WD 64708 (Mo. App. W.D. 2006).

The endorsement on the check sent to Rogers was sufficiently clear that it was an offer to purchase Rogers' entire interest in Albany. By signing the check and retaining the proceeds, Rogers accepted the offer to purchase his entire ownership interest in the company. A valid contract cannot be found based on the secret intentions of one of the parties, but must be based on the objective outward acts of both parties involved. By cashing the check, Rogers accepted the condition that it constituted full payment for his interest in the company. One party to a contract cannot change the terms by forming a contrary subjective intent, crossing his fingers, adding another endorsement and cashing the check. By cashing the check, Rogers accepted the offer for his interest in the company. If Rogers intended to modify the terms of the offer, he could not do so secretly by placing his own restrictive endorsement on the check. Rogers received payment of $26,000 and this was sufficient consideration to support a contract for the sale of his ownership interest in the company. Thus, when he requested an accounting of Albany's corporate records, he was not a current shareholder with standing to bring an accounting claim under §351.215, RSMo.