8000 Maryland v. Huntleigh Financial Serv., ED 91382.

• Court: Court of Appeal of Missouri (US)
• Citation: 292 S.W.3d 439
• Docket Number: No. ED 91634.,No. ED 91633.,No. ED 91382.,ED 91382.,ED 91633.,ED 91634.
• Parties: 8000 MARYLAND, LLC, Plaintiff/Respondent, v. HUNTLEIGH FINANCIAL SERVICES INC., and Longrow Holdings, Inc., Defendants/Appellants, and Huntleigh Capital Management, Inc., HFI Securities, Inc., Longrow Insurance Agency, Inc., Moses.com Securities, Inc., James A. Winkelmann, and Don C. Weir, Defendants. 8000 Maryland, LLC, Plaintiff/Appellant, v. Huntleigh Financial Services Inc., Longrow Holdings, Inc., Huntleigh Capital Management, Inc., HFI Securities, Inc., Longrow Insurance Agency, Inc., Moses.com Securities, Inc., Defendants, and James A. Winkelmann, and Don C. Weir, Defendants/Respondents.
• Decision Date: 21 July 2009

292 S.W.3d 439 8000 MARYLAND, LLC, Plaintiff/Respondent,
v.
HUNTLEIGH FINANCIAL SERVICES INC., and Longrow Holdings, Inc., Defendants/Appellants, and
Huntleigh Capital Management, Inc., HFI Securities, Inc., Longrow Insurance Agency, Inc., Moses.com Securities, Inc., James A. Winkelmann, and Don C. Weir, Defendants.
8000 Maryland, LLC, Plaintiff/Appellant,
v.
Huntleigh Financial Services Inc., Longrow Holdings, Inc., Huntleigh Capital Management, Inc., HFI Securities, Inc., Longrow Insurance Agency, Inc., Moses.com Securities, Inc., Defendants, and
James A. Winkelmann, and Don C. Weir, Defendants/Respondents. No. ED 91382. No. ED 91633. No. ED 91634. Missouri Court of Appeals, Eastern District, Division Four. July 21, 2009. Motion for Rehearing and/or Transfer to Supreme Court Denied September 1, 2009.

[292 S.W.3d 440]

Application for Transfer Denied October 6, 2009.

[292 S.W.3d 443]

Paul N. Rechenberg, Chesterfield, MO, for plaintiff/respondent/cross-appellant.

Robert D. Blitz, R. Thomas Avery, Douglas A. Stockenberg, Blitz, Bardgett & Deutsch, L.C., St. Louis, MO, for defendants/appellants/cross-respondents.

KATHIANNE KNAUP CRANE, Presiding Judge.

Plaintiff, the owner and lessor of an office building, filed a lawsuit seeking relief from its tenant, its tenant's parent, and its tenant's subsidiaries under the Missouri Uniform Fraudulent Transfer Act (MUFTA), sections 428.005 to 428.059 RSMo (2000)¹, claiming that its tenant, by means of a stock sale, had transferred its assets for inadequate consideration to the tenant's parent, which rendered tenant unable to pay its indebtedness to plaintiff.² It also sought relief from the same parties and two individuals for civil conspiracy. The trial court found a wrongful transfer, set aside the transfer as void, and awarded plaintiff $2,000,000 in damages against the tenant's parent and $79,760.50 in attorney's fees against the tenant and its parent. The trial court entered judgment in favor of the individual defendants on plaintiff's civil conspiracy claim.

The tenant and its parent appeal. They primarily challenge the admissibility of plaintiff's expert's testimony on the value of the transferred assets. They contend that if the expert's testimony was inadmissible, then the trial court's findings and the damages awarded to plaintiff were not supported by substantial evidence. They further claim that the trial court gave plaintiff a double recovery. Plaintiff also appeals. It challenges the denial of its civil conspiracy claim against the individual defendants. We have consolidated these appeals and affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

We begin our chronology in December 2001. At that time plaintiff, 8000 Maryland, LLC, was the owner and lessor of an office building at 8000 Maryland Avenue, in Clayton, Missouri. Defendant, Huntleigh Financial Services, Inc., (HFS) was the lessee of office space in that building under a 1997 lease.

HFS was owned by defendant, Longrow Holdings, Inc. The individual defendants, James A. Winkelmann and Don C. Weir, Jr., owned Longrow. HFS owned four subsidiaries, which are also defendants: Huntleigh Capital Management, Inc.; HFI

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Securities, Inc.; Longrow Insurance Agency, Inc.; and Moses.com Securities, Inc. (Moses.com) (the subsidiaries). Mr. Weir and Mr. Winkelmann were officers and directors of each of these corporations.

HFS subleased approximately 95% of its leased space in the building to Huntleigh Securities Corporation (Huntleigh Securities), which was not owned by defendants. The remaining leased space was utilized by all of the defendants.

The subsidiaries made monthly payments to HFS in the form of management fees. These management fees were used by HFS to pay for technology-related expenses, employee expenses, and research. HFS paid a portion of the fees to Longrow, which Longrow used to pay the salaries of Mr. Weir and Mr. Winkelmann, as well as its debts. In addition, HFS used a portion of the fees, as well as the sublease payments from Huntleigh Securities, to make its lease payments to plaintiff.

In December 2001, Huntleigh Securities notified HFS that it was exercising its termination clause and would be moving out in June 2002. Subsequently, Mr. Winkelmann informed plaintiff that HFS was having financial problems that were affecting its ability to pay rent. On July 26, 2002, plaintiff sent Mr. Winkelmann a letter informing him that it would exercise its rights and remedies under the lease in the event HFS defaulted in the payment of rent.

On August 15, 2002, HFS sold all of its interest in the subsidiaries to Longrow by means of a written Stock Purchase Agreement. In exchange, Longrow issued an interest-bearing promissory note in the amount of $118,995 to HFS. This amount, which was based on the value of the physical assets owned by the subsidiaries, was set by Mr. Winkelmann. After the stock transfer, the subsidiaries continued to make monthly payments of management fees; however, they paid those fees to Longrow.

Also in August 2002, HFS stopped making lease payments to plaintiff, and plaintiff filed a lawsuit against HFS for breach of lease to recover the amount of rent due under the lease.³ The lawsuit resulted in a settlement. In July 2006, HFS signed a consent judgment in plaintiff's favor in the amount of $2,200,000, which represented the amount HFS owed to plaintiff under the lease. Plaintiff was unable to collect on the consent judgment. As a result, plaintiff filed this lawsuit in August 2006.

Plaintiff's petition was framed in six counts, two of which are relevant to this appeal. Count I was directed to the corporate defendants only and sought relief under MUFTA for the fraudulent conveyance of the subsidiaries to Longrow. Count III sought to hold all defendants, including the individual defendants, jointly and severally liable on a theory of civil conspiracy. The individual defendants raised as one of their affirmative defenses that they were acting at all times solely in their respective capacities as officers and directors of Longrow, HFS, and the subsidiaries.

After a bench trial, the trial court entered its Findings of Fact, Conclusions, and Judgment finding that the subsidiaries had been wrongfully transferred and setting aside the transfer as void. It left the remaining issues open for future determination. After a second hearing, the trial court entered its Findings of Fact, Conclusions, and Amended Final Judgment. It again set aside the stock sale as void, and it entered judgment against Longrow in the amount of $2,000,000, which amount it found to be the minimum value of the

292 S.W.3d 445

assets transferred. The trial court concluded that the judgment against Longrow was derivative of the underlying consent judgment against HFS and that any sums received by plaintiff should be credited toward the consent judgment. It also entered judgment against HFS and Longrow for plaintiff's attorney's fees in the amount of $79,760.50. The trial court subsequently entered its Second Amended Findings of Fact, Conclusions, and Final Judgment in which the trial court concluded that it was not necessary to enter judgment against any defendant other than HFS and Longrow.

Plaintiff responded to the second amended judgment with two motions to amend the judgment. One of the grounds raised was that the trial court did not rule on plaintiff's civil conspiracy claim directed at Mr. Weir and Mr. Winkelmann. The trial court thereafter entered its Third Amended Final Judgment, which incorporated its prior findings, and concluded that plaintiff had failed to prove its remaining claims, which included its claim against Mr. Winkelmann and Mr. Weir based on civil conspiracy.

DISCUSSION

Standard of Review

On appeal from a court-tried case, we will affirm the trial court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We accept all evidence and inferences therefrom in the light most favorable to the judgment, and we disregard all contrary evidence. Sheppard v. East, 192 S.W.3d 518, 522 (Mo.App.2006). We defer to the trial court on factual issues "`because it is in a better position not only to judge the credibility of witnesses and the persons directly, but also their sincerity and character and other trial intangibles which may not be completely revealed by the record.'" Essex Contracting, Inc. v. Jefferson County, 277 S.W.3d 647, 652 (Mo. banc 2009) (quoting In re Adoption of W.B.L., 681 S.W.2d 452, 455 (Mo. banc 1984)). In determining the credibility of the witnesses and the weight to be given to their testimony, a trial court is free to believe all, part, or none of the testimony of any witness. Missouri Land Dev. Spec. v. Concord Exca., 269 S.W.3d 489, 496 (Mo. App.2008).

Rule 84.04(e) limits the argument portion of a brief to those claims of error that appear in a point relied on. See Hutchings ex rel. Hutchings v. Roling, 193 S.W.3d 334, 346 (Mo.App.2006). As a result, our review is likewise limited to those errors. Hutchings, 193 S.W.3d at 346. We do not consider grounds for reversal that appear solely in the argument portion of the brief. Id.; Russ v. Russ, 39 S.W.3d 895, 899 n. 5 (Mo.App.2001). Conversely, we deem abandoned any issues identified in the point relied on that are not supported by argument in the argument portion of the brief. Luft v. Schoenhoff, 935 S.W.2d 685, 687 (Mo.App.1996). Therefore, if an argument is narrower than a point relied on, our review is limited to that argument.

DEFENDANTS' APPEAL⁴

Defendants raise four points on appeal. Their first point challenges the admissibility of plaintiff's expert's testimony. Their second and fourth points assert that, if the expert testimony was not admissible, the

292 S.W.3d 446

trial court's findings and the amount of the money judgment...