Husch & Eppenberger, LLC v. Eisenberg

• Decision Date: 12 December 2006
• Docket Number: No. ED 87712.,ED 87712.
• Citation: 213 S.W.3d 124
• Court: Missouri Court of Appeals
• Parties: HUSCH & EPPENBERGER, LLC, Plaintiff/Respondent, v. Elizabeth EISENBERG, Defendant/Appellant.

213 S.W.3d 124

HUSCH & EPPENBERGER, LLC, Plaintiff/Respondent, v. Elizabeth EISENBERG, Defendant/Appellant.

No. ED 87712.

Missouri Court of Appeals, Eastern District, Division One.

December 12, 2006.

Application for Transfer to Supreme Court Denied January 18, 2007.

Application for Transfer Denied February 27, 2007.

Richard W. Fischer, O'Fallon, John T. Ahlquist, Clayton, MO, for appellant.

Jeffrey D. Sigmund, St. Louis, MO, for respondent.

CLIFFORD H. AHRENS, Presiding Judge.

Elizabeth Eisenberg appeals from the judgment of the trial court reforming the Agreement and Mutual Release ("Release") entered into between Eisenberg and the law firm of Husch & Eppenberger on June 15, 1994. Finding no error, we affirm.

In 1992, the law firm of Husch & Eppenberger, then a partnership, represented Eisenberg regarding the estate of Eisenberg's mother. Eisenberg was primarily represented by two attorneys at Husch & Eppenberger, Brad Goss and Barnett McKee. Following the conclusion of Husch & Eppenberger's representation of Eisenberg, she disputed the amount of legal fees owed to the law firm, asserting that she was not satisfied with services provided and did not receive value for the services billed. Husch & Eppenberger settled the dispute by reducing Eisenberg's fee somewhat, and in exchange she executed the Release, which was signed on June 15, 1994. The Release provided that:

The Law Firm [Husch & Eppenberger] and Elizabeth Eisenberg hereby fully and forever release, acquit, and discharge the other and all of the other's successors and assigns from any and all actions, causes of action, claims and demands of whatsoever nature or kind arising out of any rights accruing to either of the parties hereto by virtue of the Law Firm's representation of Elizabeth Eisenberg at any time prior to the date of this Agreement.

The Release was signed by Eisenberg and by McKee, who was designated as a partner below the signature line. Neither McKee nor Goss was specifically named in the Release. Goss had resigned from the firm on April 15, 1994, and McKee was actually of counsel on June 15, 1994.

In 1998, Eisenberg sued Charles Redd, McKee, and Goss for legal malpractice. They filed a motion for summary judgment on the basis that the Release absolved them individually from liability. The trial court entered summary judgment in favor of Redd, McKee, and Goss. In Eisenberg v. Redd, 38 S.W.3d 409 (Mo. banc 2001), the Missouri Supreme Court reversed the grant of summary judgment and remanded the case, stating that "law firm" as used in the Release meant the partnership as it existed on June 15, 1994, and included only those lawyers who were actually partners of the firm at that time.

The case was remanded to the trial court for further proceedings. Eisenberg voluntarily dismissed her lawsuit and refiled a petition for legal malpractice against McKee and Goss in 2002. McKee and Goss separately filed motions for reformation of the Release prior to May 2004. The trial court denied these motions in October 2004 on the basis that neither McKee nor Goss was a party to the Release. On January 28, 2005, Husch & Eppenberger, LLC ("Husch-LLC"), filed an action for reformation of the Release. Husch-LLC alleged that it was the intent of Eisenberg and Husch & Eppenberger that McKee and Goss be covered by the terms of the Release, and that the Release failed to reflect the true intent of the parties, and failed due to mutual mistake. McKee filed a motion to intervene, which was granted.

The trial court issued findings of fact and conclusions of law in its judgment on January 26, 2006. It found, among other things, that the Release was drafted by Eisenberg's attorney, and was executed on June 15, 1994 by McKee on behalf of Husch & Eppenberger. The trial court found that it was the intent of Husch & Eppenberger and Eisenberg in executing the Release to release all persons associated with the law firm during the period when it provided legal services to Eisenberg. Among its conclusions, the trial court stated that:

3. When, by mutual mistake, a contract or other instrument is not expressed in such terms as to have the force and effect that the parties intended, it is the clear duty of the court to correct the mistake.

4. Due to mutual mistake in the description of the parties to be released, the terms of the Release do not accurately reflect the true intent of Husch & Eppenberger and Eisenberg.

5. There is no language in the opinion of the Missouri Supreme Court in the case of Eisenberg v. Redd, 38 S.W.3d 409 (Mo. banc 2001) that bars this action for reformation of the Release. Neither is there any principle of law that bars the bringing of this action....

8. Eisenberg's affirmative defenses of statute of limitations and laches fail, because Husch & Eppenberger did not discover until February 30, 2001 — the date of the decision in Eisenberg v. Redd, 38 S.W.3d 409 (Mo.2001) — that, as written, the Release did not effect a release of Goss and McKee. It was not until Eisenberg's deposition on November 5-6, 2003 that Husch & Eppenberger realized the existence of a mutual mistake, upon which a cause of action for reformation could thereafter be maintained.

The trial court's judgment ordered that the Release be reformed "so as to reflect the true intent of the parties[,]" and attached and incorporated the reformed Agreement and Mutual Release as Exhibit 1. Eisenberg now appeals from this judgment.

In her first point relied on, Eisenberg contends that the trial court erred in failing to dismiss the cause of action as barred by the statute of limitations because the statute of limitations for an action of reformation is ten years and it accrues on the date that the mistake is made. Eisenberg argues that the mistake in the present case was made on the date that the Release was executed, June 15, 1994, and the present cause was not filed until January 28, 2005, more than ten years after the cause of action accrued.

Whether or not the statute of limitations applies to an action is a question of law that this Court reviews de novo. Branstad v. Kinstler, 166 S.W.3d 134, 135 (Mo.App.2005). The party asserting the affirmative defense of the statute of limitations has the burden of establishing it. Id. at 137.

There is no dispute that the statute of limitations for a contract reformation action is ten years. Section 516.110 RSMo 2000¹; Nuspl v. Missouri Medical Insurance Company, 842 S.W.2d 920, 923 (Mo. App.1992). Section 516.100 specifically provides that for purposes of sections 516.100 to 516.370, a cause of action is deemed to accrue "when the damage resulting therefrom is sustained and is capable of ascertainment." The Missouri Supreme Court has recently articulated the test for when damages are capable of ascertainment: "The statute of limitations begins to run when the `evidence was such to place a reasonably prudent person on notice of a potentially actionable injury.'" Powel v. Chaminade College Preparatory, Inc., 197 S.W.3d 576, 582 (Mo. banc 2006) (emphasis in original) (quoting Business Men's Assurance Co. v. Graham, 984 S.W.2d 501, 507 (Mo.1999)). There is no question that the Release was entered into on June 15, 1994, and the suit in the present case was filed on January 28, 2005. The issue is when did the statute of limitations begin to run.

In the present case, the fact of damage became capable of ascertainment and the cause of action for reformation of the Release accrued when the Missouri Supreme Court's opinion in Eisenberg became final in 2001. At that point the evidence was such that a reasonably prudent person would have been placed on notice of the meaning of the term "law firm" as used in the Release, and that "law firm" did not include Goss and McKee, and accordingly that a cause of action for reformation of the Release had accrued.² Prior to that time, a reasonably prudent person would not have been placed on notice. We note that Eisenberg in her video deposition in 2003, portions of which were played at trial and admitted into evidence, testified that she intended that the Release would include Goss and McKee, and that she had discussed the Release with her attorneys before she signed it. There were the following exchanges:

Ms. Miller: It was your intent, at the time, to release Brad Goss, was it not?

Eisenberg: That's what this [the Release] says.

...

Miller: Okay. So the people you thought you were really talking about here were Brad Goss and Mike McKee, is that right?

Eisenberg: Correct, that's what I thought.

...

Miller: Okay. So you got your benefit of the bargain, correct?

Eisenberg: Yes; correct.

Miller: Okay. And in return for that deal, you were releasing Mike McKee and Brad Goss for any claims you might make due to their representation of you up until this point in time, June 15, 1994, isn't that right? That was your understanding at the time.

Eisenberg: Yes.

Several years later in the trial of this case, Eisenberg again testified that it was her intent in executing the Release to include Goss and McKee.³ The following exchange took place:

Dowd: Okay. Now, to you the law firm meant and included everybody that worked at Husch Eppenberger, is that correct?

Eisenberg: Yes.

Dowd: Okay. And you understood that McKee and Goss worked at Husch Eppenberger when they represented you, correct?

Eisenberg: Yes.

It is apparent from Eisenberg's testimony that she intended to include Goss and McKee in "law firm" as it was used in the Release drafted by her legal counsel, with whom she discussed the Release. Charles Merrill, the chief executive officer of Husch-LLC at the time of the trial and a partner at the law firm since 1984, testified that it was the intent of the law firm when it executed the Release that all attorneys and employees of the firm, including Goss and McKee, would be included in the Release. The evidence was not such as to place a reasonably prudent person on notice of a potentially...