Manzer v. Sanchez, 74548
| Decision Date | 09 February 1999 |
| Docket Number | No. 74548,74548 |
| Court | Missouri Court of Appeals |
| Parties | Vince E. MANZER and Margaret F. Manzer, Plaintiffs/Appellants, v. Jorge M. SANCHEZ, Manzer, Sanchez & Associates, Inc., Dan Ising and Robert McIntntyre, Defendants/Respondents. |
Michael A. Becker, St. Louis, for appellants.
Warren W. Friedman, Kenneth B. Newman, St. Louis, Garry McCubbin, Creve Coeur, for respondents.
Vince E. Manzer and Margaret F. Manzer (collectively Appellants) appeal from the judgment of the trial court granting Jorge M. Sanchez (Sanchez), Manzer, Sanchez & Associates, Inc. (MSA), Dan Ising (Ising), and Appellants filed a nine-count petition against Respondents. The petition was captioned "Verified Petition for Injunctive and Other Relief" and was brought by Vince E. Manzer, "individually and derivatively," and by Margaret F. Manzer, "as Trustee of the Paul V. Manzer Trust dated May 15, 1992." The petition stated that Vince E. Manzer was the President, shareholder and a director of M.S.A. § at all times relevant to the action and that Margaret F. Manzer is the trustee of the Paul V. Manzer trust and in that capacity was a shareholder of M.S.A. § at all times relevant to the action.
Robert McIntyre's (McIntyre) (collectively referred to as Respondents) motions to dismiss and dismissing Appellants' petition with prejudice. Appellants contend the trial court erred in (1) not ruling on Appellants' Motion for Leave to File First Amended Petition, and (2) treating MSA's Verified Motion to Dismiss as a motion for summary judgment without proper notice to the parties. We reverse and remand.
Respondents filed motions to dismiss for failure to state a claim. MSA filed a Verified Motion to Dismiss for failure to state a claim because Appellants, as individual shareholders, lacked standing to bring an action in their own right for the recovery of corporate funds and property; specifically stating that the right to maintain such an action belongs to the corporation, MSA, and the action must be brought derivatively. The motion further explained that the 3,000 shares of M.S.A. § stock issued to Paul V. Manzer had been recalled and/or retired. MSA's motion alternatively stated that the 3,000 shares of stock was void ab initio, inasmuch as the shares could never have been validly issued as collateral for a loan consistent with the language of Section 351.160, RSMo 1994, governing the issuance of stock certificates. MSA's motion to dismiss also stated that Vince E. Manzer lacked standing to bring a claim as a shareholder because there was no valid consideration paid for his shares.
Ising and McIntyre filed a motion to dismiss the petition for failure to state a cause of action because the mere allegation that they worked for Sanchez did not establish a violation of a duty. Ising and McIntyre's motion to dismiss incorporated and adopted by reference MSA's Verified Motion to Dismiss.
Sanchez filed a separate motion to dismiss for failure to state a claim upon which relief could be granted. Sanchez attacked each count of Appellants' petition pointing to specific defects. The motion to dismiss further stated Appellants lacked standing to sue as individual shareholders and that any such action must be brought derivatively in the name of MSA. Sanchez also joined in the dismissal motion filed by MSA.
Appellants filed a Motion for Leave to File an Amended Petition and a proposed First Amended Petition. The proposed amended petition was again brought by Vince E. Manzer acting "individually and derivatively" and by Margaret F. Manzer as trustee. The proposed amended petition contained six counts: Count I for an accounting, Count II for fraud, Count III for conversion, Count IV for fraud committed by aiders and abettors, Count V for injunctive relief, and Count VI for declaratory judgment.
Shortly after Appellants filed the motion for leave, Appellants' counsel moved for leave to withdraw. Appellants' new counsel filed an entry of appearance thereafter. After a hearing, the trial court granted each of Respondents' motions to dismiss.
Appellants filed a Motion to Reconsider the Dismissal or, in the Alternative, to Clarify Judgment. The trial court issued an order clarifying that the dismissals were with prejudice and that Appellants' motion to reconsider was overruled and denied in all other respects. Appellants appealed, but the appeal was dismissed on the ground that the appeal had not been taken from a final judgment. Appellants filed a request for a Nunc Pro Tunc Amendment requesting that the order dismissing the cause be denominated a "judgment." The trial court then signed a judgment stating the following:
JUDGEMENT
I. Verified Motion of Defendants Manzer, Sanchez & Associates, Inc., to dismiss Plaintiff's Petition dated July 3, 1996 heard and granted.
II. Motion of Defendants Daniel Ising and Robert McIntyre to dismiss filed July 9, 1996 heard and granted.
III. Separate Defendant Jorge Sanchez's Motion to Dismiss filed July 9, 1996 heard and granted.
IV. This Court's prior rulings on November 4, 1996 were with prejudice. Plaintiffs have no responsibility for Defendants' attorneys fees. Plaintiffs' post-trial motion overruled and denied in all other aspects.
Appellants appeal from this judgment.
First, we must determine whether the trial court's order constitutes a dismissal or a summary judgment, and therefore we address Appellants' second point first. In that point, Appellants argue the trial court treated MSA's Verified Motion to Dismiss as a motion for summary judgment without giving the proper notice to the parties as required by Rule 55.27(a). MSA presented to the court exhibits and documents outside the pleadings along with its motion to dismiss. Appellants contend that under Rule 55.27(a), when information outside the pleadings is presented to and not excluded by the court, a motion to dismiss is to be treated as one for summary judgment.
Before a trial court may treat a motion to dismiss as one for summary judgment, when matters outside the pleadings are presented and not excluded, it must first notify the parties that it is going to do so, and give the parties the opportunity to present all materials pertinent to a motion for summary judgment. Rule 55.27(a); City of Chesterfield v. Deshetler Homes, Inc., 938 S.W.2d 671, 673 (Mo.App. E.D.1997). Here, there is no evidence in the record that the court notified the parties that it intended to review the pleadings and documents as a summary judgment or that it considered matters outside the pleadings. Therefore, the court did not improperly treat MSA's motion to dismiss as a motion for summary judgment. We deny Appellants' point.
In their first point, Appellants argue the trial court abused its discretion in not ruling on Appellants' motion for leave to amend. Appellants contend allowing counsel to withdraw at the same time the motion to amend was filed resulted in prejudicial error. Appellants further argue the trial court erred in dismissing the case with prejudice while the motion to amend was pending.
Rule 55.33 provides that leave to amend a petition "shall be freely given when justice requires." The decision whether to allow a party to amend a pleading is a matter within the discretion of the trial court which we do not disturb unless there is an obvious and palpable abuse of discretion. City of Wellston v. Jackson, 965 S.W.2d 867, 871 (Mo.App. E.D.1998). In reviewing the decision of the trial court, we are concerned with whether justice is furthered or subverted by the trial court's decision. Id. Factors that should be considered in deciding whether to allow leave for an amendment are hardship to the moving party if leave to amend is not granted, the reasons for failure to include any new matter in earlier pleadings, timeliness of the application, whether the amendment could cure the inadequacy of the moving party's pleading, and the injustice resulting to the party opposing the motion should it be granted. Curnutt v. Scott Melvin Transport, Inc., 903 S.W.2d 184, 193 (Mo.App. W.D.1995).
Appellants argue after considering these factors, the trial court's failure to grant leave to amend the petition was an abuse of discretion and prejudicial. We agree. Appellants suffered a severe hardship in that their original petition was dismissed with prejudice and therefore, Appellants are...
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