All Star Awards & Ad Specialties, Inc. v. Halo Branded Solutions

• Docket Number: WD 85491
• Decision Date: 18 July 2023
• Citation: 675 S.W.3d 548
• Parties: ALL STAR AWARDS & AD SPECIALTIES, INC., Appellant, v. HALO BRANDED SOLUTIONS, et al., Respondent.
• Court: Missouri Court of Appeals

675 S.W.3d 548

ALL STAR AWARDS & AD SPECIALTIES, INC., Appellant,

v.HALO BRANDED SOLUTIONS, et al., Respondent.

WD 85491

Missouri Court of Appeals, Western District.

Filed: July 18, 2023

Application for Transfer to Supreme Court Denied August 29, 2023

Application for Transfer to Supreme Court Denied October 24, 2023

Brent N. Coverdale, Paula L. Brown, Andrew J. Gerard Lewis, Kansas City, MO, for Appellant.

Douglas M. Weems, Patrick J. McAndrews, Sara A. Fevurly, Kansas City, MO; Lowell D. Pearson, Jefferson City, MO, for Respondent.

Before Division Two: Alok Ahuja, P.J., and Anthony Rex Gabbert and Thomas N. Chapman, JJ.

Alok Ahuja, Judge

In 2019, the Circuit Court of Jackson County entered a $3.1 million judgment in favor of AppellantAll Star Awards & Ad Specialities, Inc., reflecting approximately $525,000 in actual damages, and $2.6 million in punitive damages.The punitive damages awarded in the judgment were less than half of the $5.5 million awarded by a jury.In an earlier appeal, All Star challenged the reduction of the punitive damages award; the Missouri Supreme Court rejected All Star's arguments and affirmed the circuit court's judgment.Following the Supreme Court's affirmance, the circuit court held that All Star had forfeited its right to recover post-judgment interest when it unsuccessfully appealed the adequacy of the punitive damages awarded in the original judgment.All Star again appeals.We affirm.

Factual Background

Both All Star and the Respondent, HALO Branded Solutions, Inc., are in the business of selling branded promotional products to their clients.All Star is a small, family-operated business located in Kansas City, while HALO has approximately 2,000 employees and locations across the United States.

In 2018, HALO hired Doug Ford, who had worked for All Star since 1994, as a salesperson.All Star contended that, before leaving All Star, Ford surreptitiously began working to promote HALO's interests, in coordination with HALO management and staff.Ford's covert activities included transferring customer orders from All Star to HALO, and sharing confidential information concerning All Star's business and customers with HALO employees.

After it discovered Ford's actions, All Star sued HALO and Ford in the Circuit Court of Jackson County.All Star alleged claims for tortious interference with business expectancies, for breach of Ford's duty of loyalty, and for HALO's participation in a civil conspiracy with Ford to breach his duty of loyalty.A jury awarded All Star actual damages of $25,541.88 for breach of Ford's duty of loyalty (and for HALO's participation in that breach as a conspirator).The jury also awarded All Star actual damages of $500,000 for tortious interference.Finally, the jury awarded All Star $5.5 million in punitive damages against HALO, as well as $12,000 in punitive damages against Ford.

On October 29, 2019, the circuit court entered an Amended Final Judgment and Order.Consistent with the jury's verdict, the Amended Final Judgment awarded All Star actual damages of $525,541.88, and $12,000 in punitive damages against Ford.The Amended Final Judgment reduced the punitive damages award against HALO to $2,627,709.40 (five times the jury's award of actual damages), by operation of the limitation on punitive damages found in § 510.265.1, RSMo.The Amended Final Judgment awarded All Star its costs jointly and severally against Ford and HALO.The Amended Final Judgment also specified that, "in accordance with RSMo. § 408.040, interest shall accrue on this judgment at the rate of 7.50% per annum until satisfaction is made."

HALO filed a notice of appeal to this Court on November 8, 2019, and All Star filed a cross-appeal on November 18, 2019.(Ford did not participate in the prior appeal, or in the present appeal.)The appeals were consolidated.In its appeal, HALO argued several errors relating to evidentiary rulings, jury instructions, and the submissibility of All Star's claims for actual and punitive damages.In its cross-appeal, All Star argued that the circuit court should not have reduced the jury's award of punitive damages against HALO.All Star argued that the punitive damages award was not excessive under constitutional due process standards or common-law remittitur principles, and that the punitive damages cap in § 510.265.1, RSMo unconstitutionally infringed on All Star's right to a jury trial under the Missouri Constitution.

This Court rejected HALO's appellate arguments; we agreed with All Star, however, that the circuit court had erred in reducing the punitive damages award against HALO under § 510.265.1, RSMo, because application of that statute denied All Star its constitutional right to have the jury determine its damages.AllStar Awards & Ad Specialties Inc. v. HALO Branded Sols., Inc. , No. WD83327, 2021 WL 96073(Mo. App. W.D.Jan. 12, 2021).We remanded the case to the circuit court"to determine whether the jury's $5.5-million punitive-damages award must be reduced as a matter of due process or remittitur."2021 WL 96073, at *11.

The Missouri Supreme Court granted HALO's transfer application.The Court issued its opinion on April 5, 2022.AllStar Awards & Ad Specialties, Inc. v. HALO Branded Sols., Inc. , 642 S.W.3d 281(Mo.2022)(" All Star I ").The Court's opinion refused to consider HALO's appellate arguments due to defects in the Points Relied On in HALO's substitute brief.Id. at 294-95.On All Star's cross-appeal, the Court concluded that reducing the punitive damages award against HALO under § 510.265.1, RSMo did not deprive All Star of its right to a jury trial.The Court explained that the right to a jury trial contained in Article I, § 22(a) of the Missouri Constitution only preserved to litigants "the right to a jury trial ... they would have enjoyed ... at common law when the Missouri Constitution was first adopted in 1820."Id. at 286(citation omitted).According to the Court, the jury-trial right did not attach to All Star's claims for tortious interference or breach of a duty of loyalty, because "All Star's common law causes of action against HALO and Ford either did not exist prior to 1820 or are not analogous to claims existing before 1820 for which juries could have awarded punitive damages."Id. at 294(citation omitted).

The Supreme Court's opinion in All Star I concluded: "[b]ecause the circuit court did not err in applying the punitive damages cap in section 510.265 to reduce All Star's award of punitive damages and the reduced award is well within the constitutional parameters of due process, the circuit court's judgment is affirmed."642 S.W.3d at 298.The Court's mandate, issue on April 21, 2022, specified that the circuit court's judgment should "be in all things affirmed, and stand in full force and effect in conformity with the opinion of this Court herein delivered."

During the pendency of the appeal which culminated in All Star I , HALO had posted a supersedeas bond with the circuit court in the amount of $6.8 million.The bond amount represented the total amount of the jury's verdict (prior to the reduction of the punitive damages award), as well as approximately eighteen months of post-judgment interest.Following the Missouri Supreme Court's decision in All Star I , HALO filed a motion with the circuit court on April 24, 2022, to substitute a cash bond of $3,153,251.28 for the supersedeas bond.In its motion, HALO argued that the amount of required security should reflect only the amount of All Star's actual damages, together with the reduced punitive damage award which the Supreme Court had affirmed.HALO also argued that All Star was not entitled to any post-judgment interest, because under Missouri law, "[a] judgment creditor is not entitled to postjudgment interest if: (1) the judgment creditor appeals the adequacy of the judgment; and, (2) the judgment creditor loses the appeal."

HALO's Motion to Substitute alleged that, although HALO's counsel had contacted All Star's counsel"to make arrangements for HALO to satisfy the Amended Judgment," All Star's counsel had "refused to accept $3,153,251.28 in satisfaction of the Amended Judgment."HALO's Motion prayed that the circuit court

enter an order: (1) releasing the surety bond in the amount of $6,800,000.00 by Liberty Mutual Insurance Company; (2) order Plaintiff to return physical custody of the bond instrument to HALO within five (5) days of any order, both of which is [sic ] conditioned upon HALO posting a $3,153,251.28 cash bond paid into a Court account to be held while the issue of post-judgment interest is resolved.

On April 28, 2022, the circuit court granted HALO's Motion to Substitute in part.The court permitted HALO to withdraw the supersedeas bond and substitute a cash deposit in the registry of the court; however, the court ordered that the cash deposit should be $3,764,875.75 – an amount which included post-judgment interest.HALO subsequently deposited that amount with the court.

Following further briefing, the circuit court entered a ruling which it denominated a "Final Judgment After Remand from the Supreme Court of Missouri" on May 27, 2022.The Final Judgment After Remand agreed with HALO that, because All Star had unsuccessfully cross-appealed the sufficiency of the punitive damages awarded in the court's original October 2019 judgment, All Star was not entitled to post-judgment interest under Missouri law.The circuit court's Final Judgment After Remand concluded:

IT IS THEREFORE ORDERED that Plaintiff's request for post-judgment interest is DENIED.Plaintiff shall have judgment against Halo Branded Solutions, Inc. in the original amount of $3,153,251.20 without post-judgment interest.The Court Administrator is hereby ordered to pay out to counsel for Plaintiff the total sum of $3,153,251.20 ($525,541.88 in actual damages and $2,627,709.40 in punitive damages).^[1]Plaintiff shall file a Satisfaction of Judgment upon the transfer of the funds as

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