Central Bank of Kansas City v. Costanzo

• Decision Date: 12 April 1994
• Docket Number: No. WD,WD
• Parties: CENTRAL BANK OF KANSAS CITY, Respondent, v. Donald V. COSTANZO, Respondent, Douglas Adams, Appellant, Carl Artese, Respondent, Kian Shafe, Respondent. 47952.
• Court: Missouri Court of Appeals

Page 672

873 S.W.2d 672

CENTRAL BANK OF KANSAS CITY, Respondent, v. Donald V. COSTANZO, Respondent, Douglas Adams, Appellant, Carl Artese, Respondent, Kian Shafe, Respondent.

No. WD 47952.

Missouri Court of Appeals,

Western District.

April 12, 1994.

James Franklin Ralls, Jr., Kansas City, for appellant.

Eugene J. Twellman and Rebecca L. Jackson, Kansas City, for Central Bank of Kansas City.

Marvin Ferguson, North Kansas City, for Donald V. Costanzo.

Floyd A. White, Jr., Kansas City, for Carl Artese.

Michael Patrick Keleher, North Kansas City, for Kian Shafe.

Before BERREY, P.J., and KENNEDY and ELLIS, JJ.

ELLIS, Judge.

Douglas Adams appeals from the trial court's judgment entered in favor of Central Bank of Kansas City (Central Bank) in this action on a promissory note. The sole issue on appeal is whether the trial court erred in entering a judgment based upon evidence adduced at a hearing held before another judge. The judgment is reversed and the cause remanded.

On June 6, 1988, Adams, Donald Costanzo, Carl Artese and Kian Shafe executed a promissory note in the amount of $186,022.55, with eleven per cent annual interest, payable to Central Bank. After Central Bank was given a security interest in certain real estate in Arizona, the proceeds of the note were provided to Costanzo. Thereafter, the obligations on the note were extended on three separate occasions. According to the terms of the last extension, the entire balance of the note became due on February 15, 1991 and the interest rate was changed to twelve per cent. Adams and his colleagues failed to pay the note on time, and Central Bank filed suit against all four makers on May 13, 1991.

Adams did not file a timely answer to the petition, and Central Bank filed a motion for default judgment. On August 14, 1991, Adams filed a motion for leave to file an answer out of time and a motion requesting that the trial court deny Central Bank's motion for default judgment. On August 23, 1991, Jackson County Circuit Judge Donald L. Mason granted Adams' motion to file out of time and denied Central Bank's motion for default judgment. On September 19, 1991, Central Bank filed a motion for summary judgment on the issue of liability, which on January 24, 1992, the court sustained upon submission of an appropriate judgment entry. On February 3, 1992, the court entered summary judgment as to liability only against Adams and in favor of Central Bank.

Next, an evidentiary hearing was scheduled for February 18, 1992 to determine the issue of damages. Counsel for Adams appeared and filed a motion to set aside the summary judgment on the issue of liability. The basis for the motion, at least in part, was Adams' allegation that Central Bank and Costanzo had entered into a settlement agreement which eliminated Adams' liability in the pending action. The court suspended the hearing pending its review of the motion and granted the parties leave to file briefs on the issue, which they did. On April 8, 1992, the court entered an order overruling Adams' motion and rescheduled the evidentiary hearing on the issue of damages.

That hearing was held on June 3, 1992. At the conclusion of the hearing, during which witnesses were called and cross-examined and other evidence was produced, ¹ Central Bank submitted a proposed form of judgment. Judge Mason then took the matter under advisement and gave the parties one additional "opportunity to submit briefs on Mr. Adams' possible change of liability since entry of [partial] summary judgment" against him. On July 1, 1992, Adams filed suggestions in support of modifying the February 3, 1992 order imposing liability on him, and nine days later, Central Bank filed suggestions in opposition.

In March 1993, after Judge Mason had been assigned to the criminal docket, the case was transferred to another Jackson County Circuit Judge, the Honorable William M. Ely. While the case was assigned to him, Judge Mason never entered a final judgment or made a ruling on the issue briefed by the parties in July, 1992: whether the interlocutory order of default against Adams should be modified.

On March 30, 1993, Judge Ely scheduled a pre-trial conference for May 13, 1993 and set trial for June 1, 1993. Meanwhile, on April 21, 1993, Central Bank filed a request for ruling on Adams' pending motion and attached the proposed form of judgment previously submitted to Judge Mason, attesting to its continuing accuracy.

There were two pre-trial conferences. During the first one, which occurred on May 13, 1993, the parties and Judge Ely discussed the general background of the case and its current status. During the second pre-trial conference on May 21, 1993, Judge Ely told the parties he believed a trial was unnecessary and he could enter judgment based on the pleadings and the legal file since the issue of liability had already been determined and a hearing on damages had already been held by Judge Mason. Adams then asked Judge Ely to transfer the case back to Judge Mason so the same judge who heard all the evidence and requested the briefs on Adams' pending motion could enter an appropriate order, but Judge Ely expressly declined to do so, apparently in the interest of judicial economy. ²

On June 1, 1993, Judge Ely entered final judgment against Adams and in favor of Central Bank in the amount of $129,767.17 (plus accrued interest and attorney's fees), using the unmodified proposed form of judgment originally submitted to Judge Mason on June 3, 1992. This appeal followed.

The standard of review in this case is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976): "[T]he decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law." In his sole point on appeal, Adams contends Judge Ely erred in entering final judgment against him without having heard the evidence presented before Judge Mason at the June 3, 1992 evidentiary hearing on the issue of damages. We agree.

Under Missouri law, a successor judge is without power to render a judgment based on testimony and evidence heard by his predecessor absent a stipulation by the parties. Helton Constr. Co. v. Thrift, 865 S.W.2d 419, 422-23 (Mo.App.1993); Lansing v. Lansing, 736 S.W.2d 554, 558 (Mo.App.1987); Smith v. Smith, 558 S.W.2d 785, 790 (Mo.App.1977). ³ But cf. Rule 79.01 (discussed below). This point of law has been adopted in the vast majority of jurisdictions which have considered the question. See J.R. Kemper, Annotation, Power of Successor or Substituted Judge, in Civil Case, to Render Decision or Enter Judgment on Testimony Heard by Predecessor, 22 A.L.R.3d 922, § 3(b) (1968 & Supp.1993).

It is uncontroverted there was no such stipulation in this case. Judge Ely did not personally hear the testimony and evidence received by Judge Mason at the damages hearing on June 3, 1992. In addition, he did not have a transcript to assist him in making his June 1, 1993 ruling assessing damages against Adams, because a transcript of that hearing was not prepared by the court reporter until August 24, 1993. ⁴

Thus Judge Ely signed an entry of judgment prepared by Central Bank without having personally heard or even reviewed any of the evidence presented to Judge Mason on June 3, 1992 concerning the amount actually owed by Adams to Central Bank. Since there was no stipulation by the parties permitting him to pass on the evidence relating to damages heard by Judge Mason, under Helton, Lansing, and Smith, Judge Ely had no authority to enter final judgment in this case and the cause must be reversed and remanded for final disposition.

Central Bank, citing Fields v. Gibson, 840 S.W.2d 884, 886 (Mo.App.1992), argues that because Adams "inexcusably fail[ed] to timely appear for trial" on June 1, 1993, Judge Ely properly heard evidence and rendered judgment against him "as...