N. Farms, Inc. v. Jenkins

• Decision Date: 13 October 2015
• Docket Number: WD 77053
• Parties: Northern Farms, Inc., Respondent, v. W.K. Jenkins and M. Earlene Jenkins d/b/a Green Acres Farms, Appellants.
• Court: Missouri Court of Appeals

472 S.W.3d 617

Northern Farms, Inc., Respondent,

v.W.K. Jenkins and M. Earlene Jenkins d/b/a Green Acres Farms, Appellants.

WD 77053

Missouri Court of Appeals, Western District.

OPINION FILED: October 13, 2015

Mark C. Owens, Overland Park, KS, Nathan D. Leadstrom and Mary E. Christopher, Topeka, KS, for Respondent.

Jonathan Sternberg, Kansas City, MO, Richard A. Koehler, Butler, MO, for Appellants.

Before Division Three: Karen King Mitchell, Presiding Judge, and Lisa White Hardwick and Anthony Rex Gabbert, Judges

Karen King Mitchell, Presiding Judge

W.K. and M. Earlene Jenkins (referred to respectively as "Father" and "Mother" and collectively as "the Jenkinses") appeal the trial court's judgment in favor of Northern Farms on its claims of fraud and unjust enrichment against Father and Mother stemming from the period of time when Father was the president of Northern Farms. Finding no reversible error, we affirm.

Facts

Northern Farms is a corporation founded in 1982 by Father, Mother, and some of their sons. Father served as Northern Farms' president from 1984 until 2002, when, following a number of disputes, the family shareholders removed Father as an officer.¹

This litigation was initiated in December of 2005, when Gary and Judy Guilford, who owed substantial sums on three promissory notes, filed an interpleader action in which they sought to determine who owned the notes. The interpleader action erupted into years of litigation over decades of alleged wrongdoing, fraud, and mismanagement of the Jenkins family's farming business. It is but one case in a series of litigation involving the family members. See Wilson v. Jenkins, 237 P.3d 1272 (Kan. Ct. App. 2010) ; Jenkins v. Jenkins, 448 S.W.3d 834 (Mo. App. W.D. 2014). A full recitation of the unfortunate history is not required, but a brief overview follows.²

In the 1990s, the Guilfords purchased 460 acres of Kansas farmland from Northern Farms, signing promissory notes to Northern Farms. The promissory notes were later allegedly assigned to the Jenkinses. In response to the Guilfords' interpleader action, both Northern Farms and the Jenkinses claimed ownership of the Guilford notes. The Jenkinses also filed a cross-claim against Northern Farms, asserting ownership of a separate $500,000 note from Northern Farms that they claim was signed over to them. In turn, Northern Farms counterclaimed, alleging various breaches of fiduciary duty, fraud, and self-dealing by Father when he was president of the company, and further alleging Mother's enjoyment of the ill-gotten gains. Northern Farms' counterclaim sought both legal and equitable remedies.

Following years of litigation, all of the Jenkinses' claims were dismissed. At the time of trial, the ownership of the Guilford notes, as well as Northern Farms' various claims of fraud and breach of fiduciary duty against Father, and unjust enrichment against Mother, remained. The court held a bifurcated trial, in which the parties' legal claims were tried to a jury, and Northern Farms' equitable claims were to be addressed later by the court.

At trial, the court entered a directed verdict in favor of Northern Farms on the Guilford notes. Following trial, the jury returned verdicts for Northern Farms on all counts, in an amount totaling $1,356,253.53. Following the jury trial, Northern Farms dismissed all of its equitable claims, avoiding the need for a bench trial of the equitable issues, after which the trial court entered judgment in the amount of the verdicts, plus interest, for a total of $2,412,601.36.

The Jenkinses timely appealed.

Analysis

In their four points, the Jenkinses challenge various actions of the trial court, which they argue constitute reversible error: (1) entering judgment against Mother on a count alleging unjust enrichment, which they claim Northern Farms had voluntarily dismissed following trial; (2) allowing Northern Farms to amend its pleadings at trial to state a new cause of action for unjust enrichment; and (3) refusing to dismiss claims of Northern Farms' claims that were allegedly barred by the statute of limitations. For clarity, we will address the points out of order, and combine some into a single discussion.

I. Northern Farms was not allowed to amend its pleadings at trial to state a new cause of action.

The Jenkinses argue that the trial court erred in allowing "for the first time at trial," Northern Farms to amend its Count VIII—initially denominated a count for "accounting"—to a count for "unjust enrichment for money had and received."³ The Jenkinses claim that "[n]ot until Northern Farms' opening statement did the terms ‘unjust enrichment’ and ‘money had and received’ first come up," leaving the Jenkinses "surprised and puzzled," and without "opportunity to respond to such allegations." The Jenkinses argue that allowing this sort of amendment at the time of trial is prejudicial and barred by Nichols v. Mama Stuffeati's, 965 S.W.2d 171, 176 (Mo. App. W.D. 1997), overruled on other grounds by

Hampton v. Big Boy Steel Erection, 121 S.W.3d 220, 223 (Mo. banc 2003), because it is a misapplication of "the rule allowing pleadings to be amended at trial to conform to the evidence." Because the Jenkinses misrepresent the record, and have not challenged the relevant ruling, their argument fails.

Approximately one month before trial, the trial court held a pre-trial conference, where the court took up various issues. The conference was off the record, but the court issued an order, purportedly memorializing the results of the pre-trial conference. Therein, the trial court ordered that "Northern Farms, Inc. will separate its legal and equitable claims by renaming certain of its counts," and that all legal claims "will be tried first to the jury" with the equitable claims being tried later to the court.

At a subsequent hearing one week later, counsel for Northern Farms argued that Count VIII, denominated as a claim for "accounting," included both legal and equitable claims. Northern Farms specifically stated its belief that "the legal side" of Count VIII was "money had and received for unjust enrichment," and that the parties had previously agreed that the count would be "rename[d] for the jury," to which the trial court responded "[t]hat's right."⁴ Northern Farms also indicated its belief that "accounting issues" would remain to be determined by the court when addressing equitable claims. The trial court responded, "[t]hat's my understanding," and indicated that it would not be necessary for Northern Farms to present the accounting case "in its entirety" to the jury, but that whatever evidence was presented to the jury that applied to "the accounting" would be "take[n] into account [by the court] in the court-tried portion of the matter regarding the accounting." The Jenkinses did not object at the pre-trial conference to this proposed bifurcation of Count VIII or disagree that the parties had, in fact, agreed to such bifurcation.

The court held a final hearing on the Friday before the trial, scheduled for the following Monday, to take up last-minute matters and allow the parties to submit jury instructions. At that hearing, counsel for Northern Farms reiterated that "the last claim for relief ... is unjust enrichment for money had and received," which was "[t]he only claim against" Mother. While counsel for the Jenkinses expressed some concerns over having separate trials, and specifically with the order in which matters would be tried, he again did not object to the "renaming" of Count VIII or the submission of the unjust enrichment claim to the jury and, in fact, ultimately acknowledged that there was a claim for unjust enrichment.⁵

The record demonstrates that the trial court believed Count VIII stated both a legal claim for unjust enrichment and an equitable claim for accounting, and, as part of its bifurcation of issues for trial,⁶ the trial court granted Northern Farms' request to try the legal claims in Count VIII to the jury and rename the legal claims in Count VIII as claims for "money had and received for unjust enrichment." All of this happened well in advance of trial and not—as challenged in the point relied on—"for the first time at trial." Thus, the case does not present, as the Jenkinses claim, the misapplication of Rule 55.33,⁷ "the rule allowing pleadings to be amended at trial to conform to the evidence." Rather, the trial court indicated its belief that Count VIII stated an equitable claim for accounting and a legal claim for unjust enrichment, allowed bifurcation of this count, and issued an order authorizing the renaming of the legal claim for purposes of the jury trial.⁸

The Jenkinses attempt on appeal to recast the trial court's actions by arguing that the second amended petition did not state a claim for unjust enrichment; thus, the trial court could not have allowed Northern Farms to rename Count VIII and proceed to try unjust enrichment to the jury. They argue that, to state a claim for unjust enrichment, Northern Farms had to file an amended petition, and because it did not do so before trial, the presentation of unjust enrichment to the jury must be treated as an amendment at trial to conform to the evidence. We will neither recast what the trial court did nor allow the Jenkinses to indirectly make a challenge they did not timely make below: arguing that Count VIII did not state a claim for unjust enrichment or that, even if it did, claims for unjust enrichment and accounting must be made in separate counts, and thus, unjust enrichment could not be presented to the jury. The Jenkinses never challenged the trial court's pre-trial bifurcation of claims and authorization of Northern Farms to proceed with the claims of unjust enrichment at trial. The Jenkinses' "point fails to state the ruling being challenged ..., and thus preserves nothing for review." Greenwich Condo. Ass'n v. Clayton Inv. Corp., 918 S.W.2d 410, 417 (Mo. App. E.D. 1996) ; Rule 84.04(d)(1)(A) (indicating that...