Davis v. Carmichael, 53773

• Decision Date: 19 July 1988
• Docket Number: No. 53773,53773
• Citation: 755 S.W.2d 679
• Parties: Marlou DAVIS, Plaintiff-Appellant, v. Ronald L. CARMICHAEL, et al., Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 679

755 S.W.2d 679

Marlou DAVIS, Plaintiff-Appellant, v. Ronald L. CARMICHAEL, et al., Defendants-Respondents.

No. 53773.

Missouri Court of Appeals,

Eastern District,

Division Four.

July 19, 1988.

Motion for Rehearing and/or Transfer to Supreme Court Denied

Aug. 24, 1988.

Amelung, Wulff & Willenbrock, Robert A. Wulff, St. Louis, for plaintiff-appellant.

David A. McMahon, St. Louis, for Carmichael.

Veryl L. Riddle, St. Louis, for Kennametal.

Merle L. Silverstein, Clayton, for ITL.

SIMON, Presiding Judge.

Plaintiff, Marlou Davis, appeals from the sustaining of motions to dismiss Counts II and III of his three count amended petition for misrepresentation against Ronald L. Carmichael, Kennametal, Inc. (Kennametal) and Industrial Testing Laboratories, Inc. (ITL). The trial court sustained Kennametal's motion to dismiss Count II and ITL's motion to dismiss Count III. The orders sustaining the motions were designated as final, but did not state the reason for sustaining the motions. Carmichael's motion to dismiss Count I was denied.

On appeal, plaintiff contends that the trial court erred in: (1) sustaining Kennametal's motion to dismiss Count II of plaintiff's amended petition because it states a claim for relief against Kennametal and plaintiff does have legal capacity to sue, and (2) sustaining ITL's motion to dismiss Count III of plaintiff's amended petition because it states a claim for relief against ITL. We affirm in part and reverse in part.

Our standard of review as to the sustaining of a motion to dismiss is well established. The sufficiency of the petition is construed liberally and all facts properly pleaded are taken as true and are accorded every reasonable intendment as a valid statement of a claim. Greening v. Klamen, 652 S.W.2d 730, 732[1, 2] (Mo.App.1983).

In addition to plaintiff's amended petition, we also review any attached exhibits in making our determination. Exhibits attached to the amended petition are a part thereof for all purposes. Missouri Supreme Court Rule 55.12; Travelers Indemnity Co. v. Chumbley, 394 S.W.2d 418, 419 (Mo.App.1965).

Since the trial court did not specify in its ruling the basis for the dismissal of Counts II and III, we will presume it was on the grounds stated in Kennametal's and ITL's motions to dismiss. Further, plaintiff's points on appeal recite certain grounds set forth in the motions to dismiss, therefore, we shall confine our review to the grounds contained in plaintiff's points on appeal.

In all counts of plaintiff's amended petition, he alleges that on October 1, 1984, Strategic Earth Resources Corporation, Inc. (SERC) was incorporated in the State of Colorado for the purposes of mining, engineering, and medical purposes. On February 16, 1985, the stock of SERC was issued at the first corporate meeting; 51% of the issued stock went to Daniel Kinsley, president of SERC, and 49% of the issued stock went to plaintiff, secretary of SERC. Plaintiff is a resident of Missouri. Kennametal is a foreign corporation presently doing business in Pennsylvania and lawfully registered in the State of Missouri. ITL is a corporation presently doing business in Missouri.

In Count II, plaintiff alleges that: 1) on November 28, 1984, SERC and Kennametal entered into an agreement whereby Kennametal was to purchase and take delivery from SERC certain amounts of tungsten concentrate produced from deposits at Rocky Mountain Mineral Claims Number One to Number Twenty-One. A copy of the agreement is attached as Exhibit B to the petition; 2) through said agreement, Kennametal represented to plaintiff that the claim would produce quantities of tungsten in excess of three thousand short ton units per month and the claim failed to produce such quantities; 3) said representation was material to plaintiff entering into the agreement and to plaintiff investing large sums of money in the claim and SERC; 4) Kennametal knew or should have known plaintiff would act on said representations; 5) plaintiff was ignorant of the amount of tungsten which said claim would produce and this information was undiscoverable by him; 6) plaintiff relied on said representation; 7) plaintiff had a right to rely upon Kennametal's representations in that Kennametal had a duty to speak based upon its superior knowledge as to the amount of tungsten which could reasonably be foreseen to be produced from said claim; 8) plaintiff was thereby damaged by investing large sums of money in developing said claim and in SERC. Further, plaintiff alleges that he would not have invested large sums of money in the development of that claim but for the misrepresentation made by Kennametal by entering into said agreement.

In Count III plaintiff alleges that: 1) on April 1, 1985, ITL provided a test report to plaintiff containing information as to the relative amounts of tungsten present in the claim. The test report is attached to the petition as Exhibit C; 2) on April 9, 1985, ITL provided plaintiff with a second test report containing information as to the relative amounts of gold and silver present in the claim. The test report is attached to the petition as Exhibit D; 3) both test reports represented quantities of tungsten, gold, and silver present in the claim; 4) the test reports represented to plaintiff that said claim would produce quantities of tungsten, gold, and silver as listed in said reports as a percentage; 5) said claim failed to produce such quantities; 6) said reports were material to plaintiff investing large sums of money in said claim and in SERC. Plaintiff further alleges that ITL had a duty to speak based on its superior knowledge as to the amounts of tungsten, gold, and silver which could reasonably be foreseen to be produced by the claim. Plaintiff was damaged by relying upon ITL's representations made in the test reports in that he thereafter invested large sums of money in the claim and in SERC.

In his first point, plaintiff argues that the trial court erred in sustaining Kennametal's motion to dismiss Count II. Plaintiff contends he has standing to sue in that the agreement between Kennametal and SERC represented to plaintiff that the claim was capable of producing those quantities of tungsten set forth in the agreement. Plaintiff, relying upon the amounts represented in the agreement, invested large sums of money in the claim and in SERC.

The agreement, attached as Exhibit B of plaintiff's amended petition, sets forth the following terms:

Seller agrees to deliver and Buyer agrees to purchase a minimum of 3,000 and a maximum of 4,000 short ton units (stu's) per calendar month for 60 consecutive months. It is anticipated that deliveries will commence in March of 1985. The quantity to be delivered and accepted prior to 7/1/85 should not exceed 9,000 stu's. Buyer will also have the option to take delivery of any quantity or part of such quantity produced which exceeds the monthly quantity due under this contract and at the same terms. If, for reasons beyond the control of the Seller, a scheduled delivery should be delayed or be less than the minimum quantity due for that particular month, the Buyer shall have the option to call for delivery of the unshipped quantity during the following month; but the price for the material so delayed shall be that pertaining to the originally scheduled month delivery.

The agreement is between SERC and Kennametal. It was signed by Daniel K. Kinsley, president of SERC, and by Richard C. Hendricks, vice president and general manager of Kennametal. Plaintiff also signed the agreement as follows: "Signing for Strategic Earth Resources, Inc., Dr. Marlou D. Davis, Secretary of Strategic Earth Resources,...