Buemi v. Kerckhoff

• Decision Date: 02 August 2011
• Docket Number: No. SC91132,SC91132
• Parties: DENNIS BUEMI, et al., Respondents, v. ARTHUR KERCKHOFF, JR., et al., Appellants.
• Court: Missouri Supreme Court

DENNIS BUEMI, et al., Respondents,

v.ARTHUR KERCKHOFF, JR., et al., Appellants.

No. SC91132

SUPREME COURT OF MISSOURI en banc

Opinion issued August 2, 2011

Appeal from the Circuit Court of St. Louis County

Honorable Barbara Wallace, Judge

Arthur Kerckhoff Jr., Arthur Kerckhoff III, Arthur Kerckhoff IV, and the Arthur Kerckhoff Trust (Kerckhoff defendants) appeal the trial court's order imposing sanctions on them for acting in bad faith in a mediated settlement meeting. Because an order imposing monetary sanctions does not dispose of a "claim for relief as required by Rule 74.01(b) and does not satisfy the requirement in section 512.020(5)¹ that allows appeals only of final judgments, the trial court certification of its order for immediate appeal is without effect. Accordingly, the appeal is dismissed.

Factual and Procedural Background

The underlying dispute involves a contract and tort action brought by Dennis Buemi and other homeowners in the Pevely Farms subdivision (homeowners) against certain homebuilders, including the Kerckhoff defendants. PF Development, LLC and Fischer & Frichtel Inc. also were joined as defendants. In their action, the homeowners alleged that the subdivision water system did not provide an adequate water supply for the entire development, despite a representation that there was an adequate supply.

In July 2008, the trial court ordered that the case be referred to mediation. Thereafter, a representative group of the homeowners, as well as two of the three individual Kerckhoff defendants,² along with the other defendants, met to mediate the case. During the mediation, certain terms were reduced to writing in papers referred to as term sheets one and two. At the close of the mediation, all terms had not been agreed to by the parties present at the meeting. Upon the request of one of the parties, the mediator obtained a pre-printed form titled "mediated settlement agreement." In the space where conditions were to be set out, the mediator wrote, "Case settled in principle - proposed settlement to be reduced to writing by 12-31-08. . . . Plaintiffs to recommend settlement to property owners." The statement was signed by some, but not all, of the defendants.³ After the statement was signed, an additional term sheet was prepared by some of the plaintiffs. Neither the new term sheet nor the two earlier term sheets were attached or incorporated into the form.

Ultimately, the parties were unable to agree to terms in a written settlement agreement. In response, the homeowners and PF Development filed motions to enforce settlement in the underlying action. The trial court scheduled an evidentiary hearing on the motions. During the hearing, the mediator testified that no settlement was reached by the parties. At the conclusion of the evidentiary hearing, the trial court indicated that it would entertain motions for sanctions regarding the costs incurred by the parties during the mediation and costs associated with responding to the Kerckhoff defendants' failure to settle the case. The homeowners, PF Development and Fischer & Frichtel subsequently filed motions for sanctions against the Kerckhoff defendants seeking awards of attorney's fees. The motions alleged that the Kerckhoff defendants acted in bad faith by signing the mediation form and not advising the homeowners and other defendants that they did not consider themselves legally bound.⁴

Thereafter, the trial court entered an order denying the motions to enforce settlement agreement, but granted the motions for sanctions. The court found that the parties had reached a settlement in principle but that, due to the failure to attach the three term sheets to the settlement, the court was unable to enforce the agreement. The court further ruled that the Kerckhoff defendants had executed the mediated settlement agreement form with the intent that it was not binding on them; that they concealed that intent; and that they eventually submitted a settlement proposal that varied significantlyfrom the terms agreed to at the mediation. On that basis, the trial court concluded that the Kerckhoff defendants acted in bad faith and ordered them to pay attorney fees totaling $122,425 to the various parties as a sanction for their conduct.

Thereafter, the Kerckhoff defendants filed a motion with the trial court requesting that its order be certified as final and appealable pursuant to Rule 74.01(b). In response to the motion, the trial court entered an order finding that its prior ruling imposing sanctions was final for purposes of appeal and that there was no just reason for delay. The Kerckhoff defendants appealed to the court of appeals, which dismissed the appeal for lack of a final judgment. This Court granted transfer. Mo. CONST. art. V, sec. 10.

Trial Court Order Imposing Sanctions Not a Final Judgment

Although none of the parties here questions whether the trial court properly certified its order for immediate appeal pursuant to Rule 74.01(b), this Court is required to raise that issue sua sponte. Gibson v. Brewer, 952 S.W.2d 239, 244 (Mo. banc 1997). "'The right to appeal is purely statutory and, where a statute does not give a right to appeal, no right exists.'" State ex rel. Coca-Cola Co. v. Nixon, 249 S.W.3d 855, 859 (Mo. banc 2008) (internal citations omitted). Other than statutorily recognized exceptions not applicable to the present case, section 512.020 requires that there be a "final judgment" as a prerequisite to appellate review. State ex rel. Hilburn v. Staeden, 62 S.W.3d 58, 60 (Mo. banc 2001). That section states, in relevant part:

Any party to a suit aggrieved by any judgment of any trial court in any civil cause from which an appeal is not prohibited by the constitution, nor clearly limited in special statutory proceedings, may take his or her appeal to a courthaving appellate jurisdiction from any . . . (5) Final judgment in the case or from any special order after final judgment in the cause . . . .

Section 512.020.

Generally, a final judgment is defined as one that resolves "'all issues in a case, leaving nothing for future determination.'" Transit Cas. Co. ex rel. Pulitzer Publishing Co. v. Transit Cas. Co. ex rel. Intervening Employees, 43 S.W.3d 293, 298 (Mo. banc 2001) (internal citation omitted). The converse of a final judgment is an interlocutory order, which is an order that is not final and decides some point or matter between the commencement and the end of a suit but does not resolve the entire controversy. Id. Here, the trial court's order imposing sanctions was interlocutory in nature as it is undisputed that the order decides a matter between the commencement and the end of the suit and that the homeowners' underlying claims for damages and injunctive relief still are pending. Nevertheless, the Kerckhoff defendants assert that Rule 74.01(b) gives this Court jurisdiction over their appeal of the interlocutory order imposing sanctions.

Rule 74.01(b) promotes judicial economy by permitting interlocutory appeals in cases involving multiple claims or parties. The rule authorizes the trial court to enter an appealable final judgment as to fewer than all claims or parties in the case and to certify that there is no just reason to delay the appeal of that judgment. Rule 74.01(b) reads, in relevant part:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may enter a judgment as to one or more butfewer than all of the claims or parties only upon an express determination that there is no just reason for delay . . . .

(Emphasis added).

This Court is constrained by the language of Rule 74.01(b) when construing it and may not find a meaning that is not supported by the language of the rule. This Court interprets its rules by applying the same principles used for interpreting statutes. State ex. rel. Vee-Jay Contracting Co. v. Neill, 89 S.W.3d 470, 471-72 (Mo. banc 2002). Consequently, "[t]his Court's intent is determined by considering the plain and ordinary meaning of the words in the Rule." Id. at 472. To determine the plain and ordinary meaning of a term or phrase, this Court utilizes the definition found in the dictionary. State ex rel. Proctor v. Messina, 320 S.W.3d 145, 156 (Mo. banc 2010).

As relevant to this case, Rule 74.01(b) is applicable "[w]hen more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim." Black's Law Dictionary defines a "claim," also termed a "claim for relief," as "[a] demand for money, property, or a legal remedy to which one asserts a right; esp., the part of a complaint in a civil action specifying what relief the plaintiff asks for." Black's Law Dictionary 281-82 (Bryan A. Garner, 9th ed. 2009). A "claim" is also defined as "[t]he aggregate of operative facts giving rise to a right enforceable by a court plaintiffs short, plain statement about the crash established the claim>." Id. The above definitions indicate that a "claim for relief encompasses only those legal claims asserted in a party's pleadings. However, even if the above definitions can be read more broadly, the conclusion that the rule only applies to claimsasserted in a party's pleadings is confirmed by the language in Rule 74.01(b) that modifies the phrase "claim for relief," which speaks of those claims being asserted "in an action" by "a claim, counterclaim, cross-claim, or third-party claim." The language in Rule 74.01(b) reflects the Court's recognition that, under section 512.020.5, only final judgments may be appealed. The effect of Rule 74.01(b) is to permit severance of any unrelated substantive claim for relief of the parties and to allow appeal of a final judgment on those severed claims.

Because a motion for sanctions is not a legal claim filed "in an action" by way of a petition, counterclaim, cross-claim, or third-party claim, it...