Ozark Employment Specialists v. Beeman

• Decision Date: 30 July 2002
• Docket Number: No. WD 59932.,No. WD 59993.,WD 59932.,WD 59993.
• Citation: 80 S.W.3d 882
• Parties: OZARK EMPLOYMENT SPECIALISTS, INC., Appellant-Respondent, v. Deborah BEEMAN d/b/a Beeman Technical Search, Respondent-Appellant.
• Court: Missouri Court of Appeals

80 S.W.3d 882

OZARK EMPLOYMENT SPECIALISTS, INC., Appellant-Respondent, v. Deborah BEEMAN d/b/a Beeman Technical Search, Respondent-Appellant.

No. WD 59932.

No. WD 59993.

Missouri Court of Appeals, Western District.

July 30, 2002.

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Rebecca M. Randles, Shawnee, KS, for Appellant-Respondent.

Max Von Erdmannsdorff, Kansas City, MO, for Respondent-Appellant.

Before BRECKENRIDGE, P.J., LOWENSTEIN and SMART, JJ.

HAROLD L. LOWENSTEIN, Judge.

Ozark Employment Specialists, Inc. (OES), an Arkansas corporation, sued Deborah Beeman d/b/a Beeman Technical Search (BTS), for breach of contract and for tortious interference with a contract. The trial court overruled Ms. Beeman's motions to dismiss, for directed verdict and for judgment notwithstanding the verdict, in which she argued that because OES did not obtain a certificate of authority to transact business in Missouri, it could not maintain its proceeding in court against BTS under § 351.574.1, RSMo 2000.¹ After the trial, the court sustained BTS's motion for directed verdict on the tort count and submitted the contract count to the jury. The jury returned a verdict of $16,800 for OES on the breach of contract claim. OES appealed and BTS has filed a cross-appeal.

OES claims the trial court erred in: 1) granting Ms. Beeman's motion for directed verdict regarding the tortious interference with a contract claim; 2) failing to submit the issue of future lost profits to the jury; 3) refusing to submit a punitive damages instruction; and 4) dismissing Patrick Beeman, Ms. Beeman's husband, from the case. Ms. Beeman argues in her cross-appeal that the trial court erred in overruling her motions to dismiss, for directed verdict and for judgment NOV in that OES lacked standing to maintain its suit because of its failure to obtain a certificate of authority to transact business in Missouri. This court finds: 1) OES's activities in Missouri were incidental to interstate commerce, thus not requiring it to obtain a certificate of authority to maintain this proceeding as required by § 351.574.1; 2) OES failed to make a submissible case of tortious interference with contract; 3) OES's claim of lost profits was too speculative to submit the issue to the jury; and 4) OES's points concerning punitive damages, special damages, and dismissal of Patrick Beeman from the suit need not be reviewed because a submissible case of tortious interference with contract was not made. The judgment of the trial court is affirmed.

Factual and Procedural Background

OES, is an Arkansas corporation that recruited Philippine computer programmers for jobs at companies in the United States. Ms. Beeman operated BTS out of her Liberty, Missouri, home. One of her clients was IBS Corporation (IBS), a Swedish company operating in California. Ms. Beeman recruited computer programmers for IBS. In January of 1998, Ms. Beeman placed an advertisement in the Kansas City Star seeking computer programmers for placement with IBS. David Waddell, the principal shareholder and recruiter for OES, saw Ms. Beeman's ad on the internet and thought he could recruit programmers from the Philippines for IBS. Waddell contacted Ms. Beeman, and after several conversations, Waddell, Ms. Beeman and her husband, Patrick Beeman, met at Mr. Beeman's law office in Liberty, Missouri. The parties agreed to enter into a business relationship in which OES would recruit Philippine programmers for IBS through its agent, Ms. Beeman.

Waddell explained to the Beemans that in order for him to be able to recruit programmers in the Philippines he had to work with a local Philippine agency and that the agency required a fee of between $1,500 and $2000 per recruited programmer.² The Philippine agency Waddell had a relationship with was Highway Manpower Services and Promotions, Inc. (Highway Manpower).

The parties entered into a contract, written by Ms. Beeman, which specified, with regard to fees, "50/50 split of twenty percent of annual salary; Philippine agency fee of $1,500-$2,000 per applicant to be paid before split (if not covered by Company)."³

After the contract was signed, Waddell began recruiting programmers in the Philippines. After IBS interviewed the candidates recruited by Waddell, it offered employment contracts to fifteen programmers. Fourteen accepted a contract with IBS. Twelve of the programmers came to the United States to work for IBS. After the twelve programmers completed their first month of work at IBS, IBS paid Ms. Beeman. Ms. Beeman then sent OES its portion of the proceeds. Upon receipt of the proceeds, Waddell claims to have realized that although Ms. Beeman paid Highway Manpower directly the $500 per recruit Philippines Overseas Employment Administration (POEA) fee, the $1,500 per recruit agency fee (totaling $18,000) had not been paid to Highway Manpower. Mr. Waddell then claims to have paid $9,000 of his commission to Highway Manpower. He contacted Ms. Beeman and requested her to pay the other $9,000. After attempting to call Ms. Beeman several times, Waddell sent Ms. Beeman a letter requesting her to send $9,000 to Highway Manpower so as to not jeopardize his relationship with them. When he did not receive a response, Waddell sent Ms. Beeman a second letter explaining the consequences of not paying Highway Manpower its fee. Ms. Beeman responded to Waddell's letter stating that she did not intend to pay the fee. Waddell then sent Ms. Beeman a "desperate" e-mail claiming that if Highway Manpower did not receive its fees, the programmers that had yet to arrive in the United States would not be allowed to make the trip, and that action could be taken against the programmers already in the United States.

Mr. Beeman sent a letter to Waddell requesting an invoice from Highway Manpower reflecting the fees owed. Waddell sent Mr. Beeman an outstanding invoice from Highway Manpower showing a $9,0000 debt. (Waddell testified at trial that he could prove he was billed for $9,000, but could not prove that he paid it.)

After the Beemans received the invoice, Mr. Beeman sent a letter to Highway Manpower informing them that Waddell threatened IBS and the recruited programmers, by claiming that sanctions and penalties could be assessed against them if BTS did not pay $9,000 to Highway Manpower. The letter also stated that Waddell had received the monies owed him by BTS and that any additional fees owed to Highway Manpower was the sole responsibility of Waddell.

Waddell contends that because of this letter, Highway Manpower refused to have further dealings with OES, resulting in him being unable to do business in the Philippines. Waddell claims he paid the $9,000 to Highway Manpower with a loan from his mother. Waddell also claims that since Highway Manpower terminated their relationship, the two programmers who had not yet come to the United States were barred from doing so — costing OES and Ms. Beeman $9,300 each in commissions.

Waddell subsequently filed a two-count petition against Deborah and Patrick Beeman and BTS for breach of contract and tortious interference with contract. Prior to trial, Mr. Beeman was dismissed from the case. After the evidence was heard at trial, the trial judge granted Ms. Beeman's motion for directed verdict regarding the issue of tortious interference with a contract and did not submit the issue to the jury. The court entered judgment on the verdict on the breach of contract claim. The jury verdict in favor of Waddell on the breach of contract claim for $16,800 appears to include $7,800 (the amount the parties would have received in recruitment fees, $9,300, for the two programmers who were not allowed to come to the U.S. minus half of the agency fees to be paid by each party equals $7,800) and $9,000 (the agency fees BTS refused to pay). Other facts will be more fully developed infra.

I.

This court will first take up Ms. Beeman's cross-appeal. Ms. Beeman argues that the trial court erred in overruling her motion to dismiss, motion for directed verdict, and motion for judgment NOV concerning OES's failure to obtain a certificate of authority to transact business in Missouri.

The standard of review for the denial of a motion for judgment notwithstanding the verdict is essentially the same as that for the denial of a motion for directed verdict. Poloski v. Wal-Mart Stores, Inc., 68 S.W.3d 445, 448 (Mo.App. 2001). Judgment notwithstanding the verdict for the defendant is only appropriate if the plaintiff fails to make a submissible case. Id. When reviewing the denial of a motion for directed verdict or judgment notwithstanding the verdict, this court views the evidence and reasonable inferences therefrom in the light most favorable to the verdict. Bari v. Lindell Trust Co., 996 S.W.2d 655, 658 (Mo.App.1999). If the grant or denial of a directed verdict or judgment notwithstanding the verdict is based upon a conclusion of law, this court reviews the trial court's decision de novo. Kinetic Energy Dev. Corp. v. Trigen Energy Corp., 22 S.W.3d 691, 697 (Mo.App. 1999).

OES is an Arkansas corporation which did not obtain a certificate of authority to transact business in Missouri. Section 351.572.1 states that "[a] foreign corporation may not transact business in this state until it obtains a certificate of authority from the secretary of state." Under § 351.574.1, "[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority." Thus, Beeman filed a motion to dismiss arguing that OES did not have a certificate of authority to transact business in Missouri, and pursuant to § 351.574.1, it could not maintain its action. Beeman's motion to dismiss contended that filing a lawsuit in Missouri constituted doing business in Missouri. Beeman's motion to dismiss was taken up prior to trial;...