Bunting v. McDonnell Aircraft Corp.

• Decision Date: 14 April 1975
• Docket Number: No. 58783,58783
• Citation: 522 S.W.2d 161
• Parties: Russell C. BUNTING, Plaintiff-Appellant, v. McDONNELL AIRCRAFT CORPORATION, now McDonnell-Douglas Corporation, Defendant-Respondent.
• Court: Missouri Supreme Court

Page 161

522 S.W.2d 161

185 U.S.P.Q. 698

Russell C. BUNTING, Plaintiff-Appellant, v. McDONNELL AIRCRAFT CORPORATION, now McDonnell-Douglas Corporation, Defendant-Respondent.

No. 58783.

Supreme Court of Missouri, En Banc.

April 14, 1975.

Mogab, Hughes & Green, Richard L. Hughes, St. Louis, Mo. and James F. Hespen, St. Louis, Mo., for plaintiff-appellant.

Robert G. Brady, Robert F. Scoular, Michael B. McKinnis, St. Louis, Mo., for respondent; Bryan, Cave, McPheeters & McRoberts, St. Louis, Mo., of counsel.

PER CURIAM:

Upon application of defendant-respondent, this cause was transferred to this court from the Court of Appeals, St. Louis District, after the filing of an opinion therein. The same has been re-argued and submitted in this court, and we approve and adopt as our own the opinion heretofore written by Simeone, J., which, without the use of quotation marks, is as follows and identified as Part I hereof.

Part I

This is an appeal by plaintiff-appellant, Russell C. Bunting, from an order of the circuit court of the City of St. Louis entered December 11, 1972, sustaining defendant-respondent's 'motion to dismiss for want of subject matter jurisdiction,' filed October 12, 1972.

This litigation has had a long and complex history. It began by the filing of a petition by Bunting on December 23, 1966, in which he sought damages for an alleged breach of contract. Innumerable sets of interrogatories and answers thereto were filed by both parties, requests for admissions of fact were filed and answered, numerous motions, pleadings, amended petitions and answers thereto were filed. Finally on January 18, 1971, Bunting filed what is denominated his 'Third Amended Petition' (actually it is the fifth amended petition) seeking damages for an alleged breach of contract against McDonnell.

The 'Third Amended Petition' was in three counts. The petition alleged in the first count that Bunting was employed by McDonnell on or about March 1, 1955, and that as a condition of his employment, signed an 'employment contract' ¹ which provided any invention made by him would 'become the property of MAC.' That as a part of the employment contract, Bunting had the benefit of a 'patent compensation plan' which provided that '(a)ll inventions conceived by me . . . during the term of my employment and within six months thereafter . . . shall be disclosed to and become the property of the company, and I shall assist in vesting good title in McDonnell Aircraft Corporation in obtaining patents. . . .' One of the provisions of the compensation plan provided for compensation to the employee from the 'sale or licensing' by MAC. The compensation plan provided that initially all gross revenue derived from 'sale or licensing of assigned patents' shall first be applied to reimburse MAC for its costs in connection with the invention, and thereafter the employee 'will be granted a percentage of the remaining net income on the following scale: . . . in excess of $2,000. . . . 10%.' The plan also provided that if 'MAC does not sell or license the patent, so that there is no ascertainable net income: An award up to $1,000 . . . may be granted on approval by the President of MAC' and 'A larger award may be granted on approval of the Board of Directors.'

Bunting alleged that under the plan he 'was to receive ten percent (10%) of all net income received by the defendant in excess of Two Thousand Dollars ($2,000.00) from the use, slae (sale?) or licensing of said patents.'

On or about April, 1960, while employed by McDonnell, Bunting conceived and reduced to practice 'an optical viewing system with polarized beam-splitting element' used in high range data recording cameras and direct radar scope cameras which is standard equipment in airplanes manufactured by McDonnell. Application for patent on the invention was filed with the United States Patent Office on August 14, 1961, and a patent, No. 3,252,375, was issued to 'Russell C. Bunting . . . assignor to McDonnell Aircraft Corporation. . . .' on May 24, 1966.

On July 28, 1961, prior to the issuance of the patent, Bunting assigned and transferred 'unto the said McDonnell Aircraft Corporation the whole right, title and interest in and to the said invention . . .' and, 'I do hereby authorize and request the Commissioner of Patents to issue the said Letters Patent to the said McDonnell Aircraft Corporation as the assignee of my entire right, title and interest in and to the same, for the sole use and behoof (sic) of the said McDonnell Aircraft Corporation.'

The petition filed by Bunting alleged that 'although plaintiff has performed all of the conditions precedent (sic)' McDonnell has breached the contract with plaintiff by manufacturing, using and 'allowing' Conductron Corporation of Missouri (a division of McDonnell) among others, to use, practice and sell the invention without charging a reasonable licensing fee and without paying Bunting ten percent of such reasonable licensing fee. McDonnell, it is alleged, refuses to pay all or any part of any reasonable licensing fee; that a reasonable value of license fees amounts to $1,400,000.00, and that Bunting is entitled to ten percent thereof.

Count II alleged at the time Bunting assigned his invention to McDonnell in July, 1961, a contract existed between McDonnell and the United States wherein McDonnell allegedly agreed to allow the Government to use and practice the invention without payment of a license fee which McDonnell asserts as a bar to Bunting's right to receive income. Although McDonnell was aware of the existence of this contract with the United States, and allegedly had a duty to disclose the existence of such contract to Bunting, it failed to do so and its failure 'in this regard was fraudulent and done with the intent to deceive plaintiff. . . .' ²

Bunting alleged therefore that as a result of McDonnell's failure to disclose te pre-existence of its agreement with the United States, the United States has not paid any fee for the use of the patent all to the damage of Bunting.

Count III alleged unjust enrichment on the part of McDonnell at the expense of Bunting by the use of the patent without paying or receiving a reasonable licensing fee.

The gist of Bunting's petition therefore is that while Bunting is entitled to ten percent of a reasonable licensing fee for the use of his invention under the 'Patent Compensation Plan,' and although McDonnell under its agreement with the United States that the Government may use the invention without fee, and although no sale or license fees have been received by McDonnell for the practice of the invention, nevertheless Bunting is entitled to ten percent of a reasonable license fee.

After answer to this petition was filed generally denying the allegations, McDonnell, on October 12, 1972, filed its motion to dismiss for want of subject matter jurisidction. This motion alleged that 'pursuant to Rule 55.31(55.27), Missouri Rules of Civil Procedure (V.A.M.R.), defendant respectfully moves that the Court dismiss this action on the ground that this Court has no jurisdiction over the subject matter of the action because exclusive jurisdiction is in the Court of Claims pursuant to 28 U.S.C. § 1498.' On December 11, 1972, the court sustained this motion to dismiss. Bunting then filed his motion to vacate and set aside the order of dismissal and his alternative motion for leave to file an amended petition. This motion was overruled on March 1, 1973, and Bunting duly and properly appealed to this court.

Appellant Bunting, in his brief and in oral argument, urges three points: (1) that the court erred in holding that the dispute was cognizable in the Court of Claims since that court has jurisdiction only where ownership interests in patents are disputed; (2) the court erred in 'directing a verdict' (sic) because the Court of Claims does not have jurisdiction since Bunting has never been the owner of any interest in the patent, and (3) Bunting is entitled to a 'directed verdict' on the issue that under the Patent Compensation Plan Bunting is entitled to receive a percentage of 'a Licensing Fee.'

McDonnell, on the other hand, urges that the trial court correctly found that it did not possess jurisdiction over the subject matter of this action because exclusive jurisdiction is vested in the Court of Claims pursuant to 28 U.S.C. § 1498, and because this cause of action is actually a suit against the United States which is authorized by § 1498; and (2) Bunting is not entitled to a 'directed verdict' on the issue that he is entitled to receive a percentage of a licensing fee because that question was not presented to the trial court.

At the outset it would be helpful to determine what is and what is not before us. While the parties have raised a number of oblique issues, we believe that in the present posture of this appeal there is only one issue that must be determined. McDonnell filed its motion to dismiss the petition for want of subject-matter jurisdiction; the trial court sustained that motion; therefore, the sole issue for our determination is whether the circuit court has jurisdiction to determine this action filed by Bunting or whether it lacks jurisdiction because exclusive jurisdiction lies in the United States Court of Claims. The parties have raised other issues: (1) whether the petition states a claim for relief under the facts alleged for breach of contract although McDonnell receives no licensing fees for the use of the invention, (2) whether the contract entered into between McDonnell and the United States in 1959, 60--0134--r, and the granting of a royalty-free license to the United States is a defense to the action filed for the alleged breach of contract so that a reasonable license fee is due Bunting regardless whether McDonnell received compensation from the sale or licensing of the patent, (3) whether McDonnell owed a duty to disclose the provisions of the contract with the...