Meyer v. Purcell

• Decision Date: 16 July 2013
• Docket Number: No. ED 97630.,ED 97630.
• Parties: Gerald E. MEYER, Personal Representative of the Estate of Anna Holtz, et al., Plaintiffs/Respondents, v. David S. PURCELL and Purcell and Amen, LLC, Defendants/Appellants.
• Court: Missouri Court of Appeals

405 S.W.3d 572

Gerald E. MEYER, Personal Representative of the Estate of Anna Holtz, et al., Plaintiffs/Respondents,

v.David S. PURCELL and Purcell and Amen, LLC, Defendants/Appellants.

No. ED 97630.

Missouri Court of Appeals,

Eastern District,

Division Two.

July 16, 2013.

Thomas Hayek, Jason Kinser (Co–Counsel), Brandon Dewitt (Co–Counsel), St. Louis, MO, for Appellant.

David Butsch, David Damick (Co–Counsel), St. Louis, MO, James Simeri (Co–Counsel), Clayton, MO, for Respondent.

LISA S. VAN AMBURG, Judge.

INTRODUCTION

David S. Purcell and the law firm of Purcell & Amen LLC (collectively “Attorneys”), appeal from the judgment entered following a jury verdict in favor of the estates and trusts of Steve Boliance and Anna Holtz (“Estates”) on claims for legal malpractice. Attorneys contend the trial court erred in: submitting to the jury the issue of punitive damages, jury instructions regarding punitive damages, submitting Estates' legal malpractice claims, excluding and admitting certain evidence, entering judgment against Attorneys for legal malpractice and denying their motion for new trial. We reverse the award of punitive damages and affirm in all other respects.

FACTUAL AND PROCEDURAL BACKGROUND

In November 2000, Boliance and Holtz created estate plans that included wills, trusts, and powers of attorney. In these estate plans, Boliance and Holtz designated how they intended their property to be distributed upon their deaths, choosing each other as their first personal representative, trustee, and attorney-in-fact, and selecting successor representatives, trustees, and attorneys-in-fact.

In the fall of 2007, Boliance and Holtz executed powers of attorney and medical directives prepared by Purcell. These new powers designated their great niece, Susan Zehnle, (“Niece”) as their primary attorney-in-fact.

Following execution of these powers of attorney, Niece consolidated Boliance and Holtz's respective assets into two separate bank accounts and designated herself as a joint account holder on each account. Niece also retitled the house owned by Boliance and Holtz, adding herself as joint tenant, pursuant to the advice and counsel of Attorneys. Soon thereafter, Boliance died on December 4, 2007, and Holtz died on December 7, 2007. Upon their deaths, as a result of the retitling, Niece held sole title to and possession of substantially all of Boliance's and Holtz's property.

After retitling the property, Niece discovered Boliance's and Holtz's prior estate plans while searching the house for suitable burial clothing. She turned these documents over to Purcell on December 8, 2007. Purcell then contacted Estates' personal representatives and trustees in a letter dated December 10, 2007, informing that Niece had retitled Boliance's and Holtz's assets to include herself in joint capacity to avoid probate. Thereafter, Estates' representatives and trustees contacted Purcell in a letter dated December 21, 2007, and demanded an accounting and return of all Boliance's and Holtz's assets held by Niece. Over the course of the next two months, neither Purcell nor Niece provided an accounting or returned Boliance's and Holtz's assets to Estates, despite Estates' repeated demands.

In March 2008, Estates filed a petition against Niece in probate court for discovery of assets. In May 2008, following the initiation of litigation by Estates solely against Niece for accounting and discovery of assets, Niece provided an accounting and returned assets totaling $860,689.96 to Estates. In the effort to recover these assets, Estates paid $256,896 in litigation fees to their attorney pursuant to a contingency fee agreement.

Thereafter, Estates sued Attorneys for legal malpractice, alleging Purcell was negligent for causing the transfer of Boliance's and Holtz's assets to Niece without regard to their estate plans and for failing to advise or assist Niece in providing an accounting or returning such assets to Estates. Following trial, the jury returned a verdict in favor of Estates finding Attorneys jointly and severally liable and awarding Estates $256,896, in compensatory and $600,000, in punitive damages. Attorneys subsequently filed a motion for judgment notwithstanding the verdict and a motion for new trial. The trial court denied these motions. Attorneys appeal.¹

DISCUSSION

In their first point, Attorneys contend the trial court erred in submitting the case to the jury on the issue of punitive damages because the evidence was insufficient to support an award of punitive damages. Specifically, Attorneys claim Estates failed to present the required clear and convincing evidence that Purcell acted with the requisite evil intent sufficient to support an award of punitive damages. We agree.

Whether there is sufficient evidence to support the submission of a punitive damages instruction is a question of law which we review de novo. Scott Salvage Yard, LLC v. Gifford, 382 S.W.3d 134, 137 (Mo.App. E.D.2012). In reviewing the submissibility of punitive damages, we view the evidence and all reasonable inferences drawn therefrom in the light most favorable to the plaintiff and disregard all contrary inferences. Kaplan v. U.S. Bank, N.A., 166 S.W.3d 60, 73 (Mo.App. E.D.2003).

Punitive damages are ordinarily not recoverable in actions for negligence “because negligence, a mere omission of the duty to exercise care, is the antitheses of willful or intentional conduct.” Hoover's Dairy, Inc. v. Mid–America Dairymen, Inc./Special Products, Inc., 700 S.W.2d 426, 435 (Mo. banc 1985). However, if a defendant intentionally commits a wrongful act and knows at the time that it is wrongful, evil motive may be implied if he acted with reckless indifference to the rights or interests of others. Hoyt v. GE Capital Mortg. Servs., Inc., 193 S.W.3d 315, 322 (Mo.App. E.D.2006); Burnett v. Griffith, 769 S.W.2d 780, 788 (Mo. banc 1989).

The standard for determining whether Estates made a submissible case depends upon whether a reasonable juror could have found Attorneys' conduct showed complete indifference to or a conscious disregard for Estates' rights. Kaplan, 166 S.W.3d at 73. A submissible case “requires clear and convincing proof that the defendant intentionally acted ‘either by a wanton, willful or outrageous act, or reckless disregard for an act's consequences (from which evil motive is inferred).” Howard v. City of Kansas City, 332 S.W.3d 772, 788 (Mo. banc 2011) (quoting Werremeyer v. K.C. Auto Salvage Co., 134 S.W.3d 633, 635 (Mo. banc 2004)). “To satisfy the ‘clear and convincing’ standard of proof, evidence must show that the defendant either knew or had reason to know that there was a high degree of probability that the defendant's conduct would result in injury.” Peters v. General Motors Corp., 200 S.W.3d 1, 25 (Mo.App. W.D.2006); See Kaplan, 166 S.W.3d at 73 (“[T]here must be a judicial determination that the conduct was so egregious that it was ‘tantamount to intentional wrongdoing’ and such that injury is the ‘natural and probable consequence’ of the conduct.”); see also Bross v. Denny, 791 S.W.2d 416, 422 (Mo.App. W.D.1990) (finding absence of evidence that attorney intentionally disregarded his client's interest highly probative of whether attorney consciously disregarded client's rights); see also Arana v. Koerner, 735 S.W.2d 729, 737 (Mo.App. W.D.1987) (finding punitive damages instruction submissible where evidence shows attorneys knew or had reason to know settlement of lawsuit without consent or knowledge of client was highly likely to injure client's interests), overruled on other grounds by Klemme v. Best, 941 S.W.2d 493 (Mo. banc 1997).

Here, Niece initially approached Purcell to discuss how she could assist Boliance and Holtz in managing their finances due to their deteriorating health. Boliance and Holtz, both in their nineties, were in advanced stages of physical and mental decline. At the time they each executed the powers of attorney prepared by Purcell, Boliance had suffered an injury to his hip and a stroke, leaving him severely debilitated and Holtz was residing in an Alzheimer's unit.

During their initial meeting, Purcell suggested Niece and he visit Boliance and Holtz to find out more information about their conditions and discuss obtaining their signatures on powers of attorney and medical directives that would designate Niece as their attorney-in-fact. Soon thereafter, Purcell met with Boliance and Holtz and obtained their signatures on powers of attorney documents.

Purcell and Niece were unaware of Boliance's and Holtz's estate plans when they met with them and obtained their signatures on the powers of attorney documents. Purcell did not consult with either Boliance or Holtz prior to drafting the powers of attorney or inquire whether they had already executed estate plans or powers of attorney prior to obtaining their signatures. Purcell did not review with them any of the specific powers granted to Niece, nor did he provide them with copies of these documents.

Thereafter, Niece, under the advice and counsel of Purcell and his staff, retitled Boliance's and Holtz's assets and property to add herself to the titles in joint capacity. On December 4, 2007, Niece completed the retitling by executing, pursuant to her powers of attorney, a deed to Boliance's and Holtz's real property from Boliance and Holtz to herself, Boliance, and Holtz as joint tenants. Later that day, Holtz passed away. Niece then informed Boliance she had retitled Boliance's and Holtz's real property to include herself on the title and Boliance responded, “Good, no court.” Boliance died three days later.

Upon discovery of Boliance's and Holtz's estate plans, Niece informed Purcell of their existence. Purcell then contacted Estates' representatives by letter dated December 10, 2007. Estates responded in a letter dated December 21, 2007, demanding an accounting and the return of all assets.

Jury instruction 9 permitted an award of punitive...