In re: the Matter of Murphy & Company, ED78900

• Decision Date: 16 October 2001
• Docket Number: ED78900
• Citation: 59 S.W.3d 39
• Parties: In re: The Matter of Murphy & Company, Inc. ED78900 Missouri Court of Appeals Eastern District
• Court: Missouri Court of Appeals

In re: The Matter of Murphy & Company, Inc.

ED78900

Missouri Court of Appeals Eastern District

10/16/2001

Appeal From: Circuit Court of St. Louis County, Hon. Kenneth M. Romines

Counsel for Appellant: Thomas B. Weaver and Cynthia A. Sciuto

Counsel for Respondent: Gregory P. White

Opinion Summary:

International Business Machines Corporation appeals the judgment authorizing Murphy & Company, Inc., to perpetuate testimony pursuant to Rule 57.02.

Division Four holds: (1) A judgment authorizing a deposition to preserve testimony is a final and appealable judgment; (2) the information sought by Murphy clearly would be available to Murphy when, as and if it filed suit and thus was not a proper subject for Rule 57.02 relief; and (3) Rule 57.02 may not be invoked merely to conduct discovery to determine whether a cause of action exists.

Sullivan, P.J., and Mooney, J., concur.

Lawrence G. Crahan, Judge

International Business Machines Corporation ("IBM") appeals the judgment authorizing Murphy & Company, Inc. ("Murphy") to perpetuate testimony pursuant to Rule 57.02. We reverse and remand.

Murphy brought this action pursuant to Rule 57.02, which permits a person presently unable to bring an action or cause it to be brought to seek an order allowing the perpetuation of testimony by filing a verified petition in the circuit court in the county of residence of any expected adverse party.¹ According to its petition, Murphy entered into a contract with a Japanese company, Technology Interlink Management, K.K., to perform consulting and marketing services in connection with online banking. A copy of the contract was attached to the petition. The contract expressly states that it is solely for the benefit of the contracting parties or their successors and is not assignable. Murphy alleged that its representative, Paul Murphy, traveled to Japan to perform the contracted services. While in Japan, Paul Murphy met with the President of Technology Interlink Management and the Manager of Solution Branch Office No. 2 of IBM Japan, Ltd. and was introduced to various clients of IBM Japan, Ltd. for the purpose of performing the contracted services. Murphy performed the contracted services, which were allegedly of benefit to IBM Japan, Ltd.. The President of Technology Interlink Management has acknowledged that it owes Murphy $22,178.65 and has promised to pay this amount on numerous occasions but has failed to do so. According to the petition, the President of Technology Interlink Management has represented to Murphy that IBM Japan, Ltd. has not paid it for work performed by Murphy.

Murphy claims that it expects to be a party plaintiff in an action cognizable in a court of Missouri but is presently unable to bring the action due to its inability to obtain information. The subject matter of the expected action is a breach of contract action against Technology Interlink Management, K.K., and claim for unjust enrichment and quantum meruit against IBM Japan, Ltd. The petition seeks an order requiring IBM and IBM Japan, Ltd. each to designate a corporate representative for deposition to permit Murphy to determine "what causes of action exist, if any, as well as what writs, if any, can be brought against IBM Corporation, IBM Japan, Ltd., or parties unknown." Specifically Murphy seeks to depose the designees about:

1) The relationship between International Business Machine Corporation and IBM Japan, Ltd.;

2) All obligations, duties and benefits arising as a result of any relationship between the two entities;

3) What presence, if any, IBM Japan, Ltd. has in the United States;

4) The officers, directors and Managing Member of IBM Japan, Ltd.;

5) Monies due IBM Japan, Ltd. from IBM and Qunio Takashima, Technology Interlink;

6) Audit committees of IBM and IBM Japan, Ltd.;

7) Amounts payable from IBM to IBM Japan, Ltd.;

8) All contracts by and between IBM and Technology Interlink;

9) All amounts payable from IBM and Technology Interlink;

10) All contracts between IBM Japan, Ltd. and Technology Interlink;

11) All ongoing work by and between IBM Japan, Ltd. and Technology Interlink;

12) All payments due to Technology Interlink; and

13) The relationship between IBM Japan, Ltd. and Technology Interlink, with respect to work performed by Murphy & Company for Technology

Interlink;

Contrary to the provisions of Rule 57.02(a)(2)² and without notice to any of the named potential defendants, the trial court entered an ex parte order authorizing Murphy to depose a corporate designee of IBM on the subjects indicated in the petition. Upon service of Murphy's notice of deposition, IBM entered its limited appearance and moved to quash the deposition and to dismiss the petition on the grounds that, inter alia, the petitioner had not followed the procedures set forth in Rule 57.02(a)(2) and the nature of the discovery sought by Murphy was not authorized by Rule 57.02. The trial court quashed the notice of deposition, ordered by Murphy to serve its petition on IBM and scheduled a hearing on IBM's motion to dismiss. Following argument of IBM's motion, the trial court entered judgment denying IBM's motion to dismiss and its motion to quash, effectively reinstating its prior authorization to depose IBM's corporate designee. IBM then filed the instant appeal.

Although neither party challenges our jurisdiction, we observe that the issue of whether a judgment authorizing a deposition to preserve testimony pursuant to Rule 57.02 is a final and appealable judgment is apparently a question of first impression in Missouri. A final judgment for purposes of appeal is one that disposes of all of the issues and parties to an action. Saeuberlich v. Saeuberlich, 782 S.W.2d 78, 81 (Mo. App. 1989). Application of this tenet to the proceeding contemplated in Rule 57.02 is somewhat confusing in that the rule essentially contemplates only one party, the petitioner, and service of the petition on those persons or entities "expected to be adverse parties" in some future litigation. Rule 57.02(a)(1). There is no provision for such expected adverse parties to file an answer to the petition and it is not clear that the rule contemplates that service of the petition makes them parties to the proceeding. They do have the right to participate in any deposition that may be ordered by the court but the proceeding contemplated in Rule 57.02 will not result in adjudication of any claim that may later be filed against them. The person or entity to be deposed need not be an expected adverse party and ordinarily would not be considered a party to the Rule 57.02 proceeding any more than would a non-party witness to be deposed in a typical case. Nevertheless, by its entry of appearance and filing its motion to quash and dismiss, IBM effectively made itself a party to the proceeding and is clearly aggrieved by the judgment. A rule 57.02 proceeding presents only one issue: Whether preservation of the testimony may prevent a failure or delay of justice.³ The judgment in this case fully disposes of that issue and thus qualifies as a final judgment for purposes of appeal. This conclusion is consistent with the federal decisions construing Fed. R. Civ. P. 27 which was the source of Missouri's Rule 57.02. Mosseller v. United States, 158 F.2d 380, 383 (2nd Cir.1946) (Order authorizing deposition pursuant to Fed. R. Civ. P. 27(a) is final for purposes of appeal); Ash v. Cort, 512 F.2d 909, 912 (3rd Cir.1975) (Order denying motion to perpetuate testimony pursuant to Fed. R. Civ. P. 27(b) is final for purposes of appeal). Accordingly, we conclude that we have jurisdiction to decide this appeal.⁴

In its sole point on appeal, IBM claims the trial court abused its discretion in authorizing the deposition of its corporate designee because Murphy failed to demonstrate why it is necessary to perpetuate such testimony. Further, IBM claims the record establishes that Murphy is attempting to use Rule 57.02 for an improper purpose --i.e., to conduct discovery in the absence of any exigency to determine whether a cause of action exists against IBM. We agree with both of these contentions.

Whether Rule 57.02 may be employed in the manner proposed by Murphy is also a question of apparent first impression in Missouri. Neither party has cited any Missouri cases construing Rule 57.02 and our own independent research failed to produce any applicable Missouri precedent. However, the Committee Note to Rule 57.02 states that the rule is substantially the same as Fed. R. Civ. P. 27. When a Missouri rule is adopted from a...