McMillan v. First State Bank of Joplin, s. 20463

• Decision Date: 21 October 1996
• Docket Number: Nos. 20463,20464,s. 20463
• Citation: 935 S.W.2d 329
• Parties: Shirley A. McMILLAN, Plaintiff-Appellant/Cross-Respondent, v. FIRST STATE BANK OF JOPLIN, Defendant-Respondent/Cross-Appellant.
• Court: Missouri Court of Appeals

Page 329

935 S.W.2d 329

Shirley A. McMILLAN, Plaintiff-Appellant/Cross-Respondent, v. FIRST STATE BANK OF JOPLIN, Defendant-Respondent/Cross-Appellant.

Nos. 20463, 20464.

Missouri Court of Appeals,

Southern District,

Division One.

Oct. 21, 1996.

Motion for Rehearing or Transfer

Denied Nov. 12, 1996.

Application to Transfer Denied

Dec. 17, 1996.

David R. Mitchell, Christopher J. Carpenter, Blue Springs, for plaintiff-appellant/cross-respondent.

Karl Blanchard, Jr., John Mollenkamp, Blanchard, Robertson, Mitchell & Carter, P.C., Joplin, for defendant-respondent/cross-appellant.

GARRISON, Judge.

A jury awarded Shirley A. McMillan (Plaintiff) $300,000 on her claim against First State Bank of Joplin (Bank), and denied relief to the Bank on its counterclaim. The trial court granted the Bank's motion for judgment notwithstanding the verdict (j.n.o.v.) on its counterclaim, and entered a $300,000 judgment in its favor. Both Plaintiff and the Bank appeal. Plaintiff contends the trial court erred in sustaining the Bank's motion for j.n.o.v., and the Bank alleges instructional error in Plaintiff's verdict director. We reverse in part and affirm in part.

Henry Doss (Henry), to whom Plaintiff was married at the time, sold a business entity in May, 1986, receiving $600,000 cash and a promissory note. Plaintiff and Henry used the cash to purchase six twelve-month $100,000 CD's from the Bank. Four of the CD's were in Plaintiff's name, either alone or jointly with children or her mother (Plaintiff's CD's). The other two were issued in Henry's name together with children.

At the same time, Plaintiff and Henry borrowed $500,000 and signed a one-year note, which provided for a single payment due on May 22, 1987. The note, introduced at trial, also stated that it was secured by five of the CD's, three of which were Plaintiff's. Plaintiff testified that when she signed the note, it did not list the CD's as security, and that she took the CD's with her when she left the Bank. She also testified that she and Henry signed an assignment in conjunction with the note, which stated that its purpose was to assign accounts as security for the note. Contrary to the one introduced at trial, however, Plaintiff testified that the assignment she signed did not include a designation of the CD's listed on the note. Rather, she said the assignment was blank, and she understood that it was to assign their interest in a savings account into which they intended to place the payments on the note from the sale of the business.

Plaintiff and Henry also borrowed $95,000 from the Bank on August 20, 1986, signing a note which also called for a single payment one year later. Plaintiff testified that another of her CD's was given as security for this note.

The record indicates that after Plaintiff and Henry separated in January, 1987, Henry asked the Bank to waive the penalties for cashing the CD's early and to apply them to the $500,000 and $95,000 notes because interest on the notes was 2% more than was being paid on the CD's. The Bank apparently agreed to do that, and stopped paying interest on the CD's in January, 1987. ¹ According to Plaintiff, when this happened, she called the Bank and was told that the CD's had been cashed. She denied being told that the CD's had been applied to the notes. A Bank officer testified that it waived interest on both notes between January and April 7, 1987 when it actually applied the CD's to the notes. The officer testified that this delay was caused by the fact that there was a "shortfall" between the amount of the CD's and the payoff of the notes which required the Bank to obtain a secured note to cover that amount. There was evidence that the Bank took a security interest in a boat in connection with the note to cover the "shortfall," but there was no evidence about who signed it. On April 9 or 10, 1987, Henry filed a petition seeking a dissolution of marriage which was later finalized.

Plaintiff's claim against the Bank was based on the failure to pay her interest on the CD's after January, 1987, and the cashing or redemption of them without her consent or knowledge. Her petition was in multiple counts, but her claim was submitted to the jury on a breach of contract theory. The Bank filed a counterclaim seeking a judgment in the amount of the notes, in the event it was determined that the CD's were not used to pay them. The jury returned a verdict in favor of Plaintiff on both her claim and the Bank's counterclaim, assessing her damage at $300,000.

The Bank filed post-trial motions, including its motion for a j.n.o.v. on its counterclaim. One of its theories was that "once the jury found that some portion of the [CD's] ... had been misapplied to the extent of such misapplication, plaintiff is liable to the extent of such misapplication on the [notes]." The trial court entered judgment for Plaintiff in the amount of $300,000, and then sustained the Bank's motion for j.n.o.v. and entered a $300,000 judgment in its favor on its counterclaim.

On this appeal, Plaintiff claims that the trial court erred in granting the j.n.o.v. In reviewing a trial court's grant of a j.n.o.v., we consider the evidence and reasonable inferences supporting the verdict and disregard evidence to the contrary. Int'l Minerals & Chem. Corp. v. Avon Products, Inc., 889 S.W.2d 111, 117 (Mo.App.E.D.1994). A j.n.o.v. is affirmed only if, upon such a review of the evidence, reasonable minds could not differ as to the verdict. Id. at 118.

In her first point, Plaintiff contends that the trial court erred in sustaining the Bank's motion for a j.n.o.v. on its counterclaim because the Bank had the burden of proof on that claim.

The basis for a j.n.o.v. is the same as that for a directed verdict. Id. at 119; Friend v. Yokohama Tire Corp., 904 S.W.2d 575, 576 (Mo.App.S.D.1995) (entering a j.n.o.v. is the equivalent of directing a verdict at the close of the evidence); Kincaid Enterprises, Inc. v. Porter, 812 S.W.2d 892, 894 (Mo.App.W.D.1991) (motion for j.n.o.v. presents the same issue as a motion for directed verdict at the close of all the evidence).

The Missouri Supreme Court has recognized the general rule that verdicts may not be directed in favor of the party having the burden of proof. Coleman v. Jackson County, 349 Mo. 255, 160 S.W.2d 691, 693 (1942). The court acknowledged an exception to that general rule in saying There is, however, a well-recognized exception to the rule. If the opponent, that is the party not having the burden of proof, admits either in his pleadings or by counsel in open court or in his individual testimony on the trial the truth of the basic facts upon which the claim of the proponent rests, a verdict may be directed against him, and if the proof is altogether of a documentary nature and the authenticity and correctness of the documents are unquestioned, and if such proof establishes beyond all doubt the truth of facts which as a matter of law entitled the proponent to the relief sought, and such proof is unimpeached and uncontradicted, the proponent will be entitled to a peremptory instruction. This is upon the theory that there is no question of fact left in the case and that upon the questions of law involved the jury has no right to pass.

Id. This rule, and the exceptions, were reaffirmed in Brandt v. Pelican, 856 S.W.2d 658, 664 (Mo.banc 1993). In Brandt, the court said:

Except for the part of the Coleman rule concerning undisputed documentary proof, a directed verdict is not given in favor of the party having the burden of proof no matter how overwhelming that party's evidence may be or how minuscule the other party's evidence may be; a directed verdict in favor of the party having the burden of proof (usually the plaintiff) is never based upon the plaintiff's evidence. This is in recognition of the fact that the defendant, who has the benefit of the burden of proof, is entitled to try the case with no evidence at all and to rely solely upon the jury disbelieving the plaintiff's evidence. This strategy may result in a loss for the defendant, but it will not be on a directed verdict; the defendant is entitled to have the case go to the jury.

Id. at 664-65. Some courts have characterized directed verdicts in favor of the party with the burden of proof as "drastic." Lee v. Hartwig, 848 S.W.2d 496, 500 (Mo.App.W.D.1992).

Under the general rule, the Bank, having the burden of proof, would not be entitled to a j.n.o.v. on its counterclaim. To be entitled to such relief, therefore, the Bank must demonstrate that Plaintiff admitted the basic facts upon which the Bank's claims rested, either in her pleadings, by counsel in open court, or in her own testimony. ²

The Bank alleged in its counterclaim that the CD's were assigned to it as collateral on the notes; that the amounts due under the notes were paid by the proceeds of the CD's; but "[i]f the proceeds of CD's ... were not used to pay [the note], which Defendant Bank denies, then [the note] remains unpaid...." The prayer of...