Rheem Manufacturing Co. v. Progressive Wholesale Supply Co.

Decision Date01 August 2000
Citation28 S.W.3d 333
Parties(Mo.App. E.D. 2000) . Rheem Manufacturing Company, Plaintiff/Respondent/Cross-Appellant, v. Progressive Wholesale Supply Company, Douglas Guardian Services Corporation, James Michael Decker, Mary Beth Decker, Defendants, and Judith Burket, Defendant/Appellant/Cross-Respondents. Case Number: ED76255 Missouri Court of Appeals Eastern District Handdown Date: 0
CourtMissouri Court of Appeals

Appeal From: Circuit Court of St. Louis County, Hon. Maura Bridget McShane

Counsel for Appellant: James P. Krupp

Counsel for Respondent: Christopher Martin Hohn

Opinion Summary: Judith Burket the trial court's final judgment and its order denying her post-trial motion for judgment notwithstanding the verdict. Rheem Manufacturing Company cross-appeals from the trial court's final judgment and its order denying its post-trial motion for judgment notwithstanding the verdict or alternatively for additur.

AFFIRMED IN PART AND REVERSED IN PART.

Division Two holds: (1) Missouri law, as law of forum state, is applicable to procedural issues concerning motion for judgment notwithstanding the verdict and directed verdict. (2) New York law governs substantive claims where the continuing guaranty so unambiguously provides. (3) Under New York law, (a) modifications in a continuing guaranty agreement are not material modifications, where the agreement was drafted to encompass any and all indebtedness, whether incurred in the present or future, (b) consideration supporting the underlying obligation may support a continuing guaranty, or consideration may be expressed on the face of a continuing guaranty. A contemporaneous written agreement is not necessary, and (c) a successful claimant in a breach of contract action is entitled to an award of prejudgment interest computed from the earliest ascertainable date the cause of action existed, regardless of whether damages are liquidated or unliquidated. (4) A judgment, order or decree of the trial court is final and appealable only when it disposes of all the issues for all parties in the case and leaves nothing for future determination.

Opinion Author: Sherri B. Sullivan, Judge

Opinion Vote: AFFIRMED IN PART AND REVERSED IN PART. Crane, P.J. and Dowd, Jr. J. concur.

Opinion:

Judith Burket (Appellant) appeals from the final judgment of the trial court and its order denying her post-trial motion for judgment notwithstanding the verdict. Rheem Manufacturing Company (Rheem or Cross-Appellant) appeals from the final judgment of the trial court and its order denying its post-trial motion for judgment notwithstanding the verdict or alternatively for additur. We affirm in part and reverse in part.

Facts

Rheem, a Delaware corporation, manufactures heating units, air conditioners, and water heaters. Rheem sells its products to independent distributors, who then re-sell those products. Progressive Wholesale Supply Company (Progressive) was a Missouri corporation located in St. Louis County that distributed heating units, air conditioners, and other products. Beginning in 1981, Progressive became an independent distributor of Rheem products. James Decker owned one-third of the shares of Progressive, and was the vice-president of Progressive. Mary Beth Decker is the wife of James Decker. Richard Burket owned two-thirds of the shares of Progressive, and was the president of Progressive. Appellant was the wife of Richard Burket.

On June 2, 1981, in conjunction with the beginning of the distributor relationship between Rheem and Progressive, the owners of Progressive and their spouses, including Appellant, signed a Continuing Guaranty Agreement (Continuing Guaranty). Rheem obtained continuing guaranty agreements from individual owners of distributors to induce Rheem to extend credit to distributors. If a distributor could not pay its debts to Rheem, then Rheem could attempt to collect for any debts of the distributor from the guarantors. No other documents specifically addressing the terms and conditions of the distributorship arrangement between Rheem and Progressive were executed at the time the parties signed the Continuing Guaranty.

On June 9, 1981, Rheem extended a $200,000 line of credit to Progressive. On June 30, 1981, Rheem increased its line of credit to Progressive to $300,000.

On January 4, 1983, Rheem and Progressive entered into their first written Distributorship Agreement. On May 19, 1983, Rheem and Progressive entered into a written "Warehouse Agreement -- Number Two." The credit limit allowed to Progressive by Rheem was increased to $750,000.00.

In 1986, Progressive entered into a bonded warehouse agreement with Rheem, providing that Douglas-Guardian Services Corporation (Douglas-Guardian) would safeguard the inventory shipped by Rheem to Progressive's warehouse and would inventory products that entered and left the warehouse. As Rheem shipped products to the Progressive warehouse, Douglas-Guardian representatives would receive those products into the warehouse. When Progressive sold one of the Rheem products in the warehouse, a representative of Douglas-Guardian would document and release the product from the warehouse. After a product was released from the warehouse, Progressive would have to pay Rheem for that product in two installments in the month following the month it was released.

Richard Burket died on February 6, 1990, after which time his shares of Progressive were transferred to a trust, of which Appellant was a beneficiary and a trustee. After Richard Burket's death, James Decker became acting President and continued with the day-to-day operation of the company. In 1993, Progressive repurchased Appellant's shares in Progressive from the trust in exchange for a promissory note for the approximate amount of $650,000.00, on which Progressive made monthly payments to the trust of approximately $8,000 for almost two years. Progressive made payments until November 1996, when Progressive ceased operations.

On November 21, 1996, James Decker telephoned Rheem personnel and informed them that Progressive's bank had cancelled its line of credit and that Progressive was ceasing operations. Rheem dispatched personnel to the Progressive warehouse to take an inventory of the Rheem products there. According to Douglas-Guardian records, there should have been $1.3 million in inventory at the Progressive warehouse, for which Progressive had not yet paid Rheem. On November 22, 1996, Rheem's investigation revealed that there was only approximately $300,000 in inventory at the Progressive warehouse. Thus, there was approximately $1 million in missing inventory.

When Progressive ceased operations, its account with Rheem was approximately $2.1 million. This amount represented the total amount for products shipped to Progressive, for which Progressive had not yet paid. Subtracting the amount of the inventory at the Progressive warehouse (approximately $300,000), and the amount of the missing inventory (approximately $1 million), Progressive owed $775,625.60 on its account with Rheem. Rheem made a demand in writing upon Progressive for the payment of this sum, but Progressive failed to pay.

Rheem settled and compromised its claims against Douglas-Guardian in exchange for a payment to Rheem in the amount of $999,999. This amount represented the settlement of Rheem's claim against Douglas-Guardian for the loss of certain inventory that had been improperly removed from the Progressive warehouse. Pursuant to the terms of the Continuing Guaranty, Rheem sent Appellant a demand letter for $775, 625.60.

Proceedings Below

Rheem filed this lawsuit against Douglas-Guardian, Progressive, James and Mary Beth Decker, and Appellant. Rheem settled with Douglas-Guardian and dismissed its claims against Douglas-Guardian with prejudice. Rheem took default judgments against Progressive, James Decker, and Mary Beth Decker. According to Kenneth McKinney (McKinney), former credit manager for Rheem, Rheem has not received any payments on Progressive's outstanding account with Rheem, and there is a current balance of $775,625.60 (exclusive of attorneys' fees, costs, and interest).

The case proceeded to trial against the only remaining defendant, Appellant, and the jury returned its verdict in favor of Rheem in the amount of $135,000. The jury attempted to amend the verdict form by adding language indicating that Rheem should bear its own attorneys' fees; however, the trial court struck that language from the verdict form.

The trial court entered judgment on the jury verdict. Appellant filed a motion for judgment notwithstanding the verdict. Rheem filed a motion for judgment notwithstanding the verdict or alternatively for additur and a motion to alter or amend the judgment to include awards of attorneys' fees, costs, and prejudgment interest. Neither party filed a motion for new trial.

The trial court heard the parties' post-trial motions on May 21, 1999. The trial court denied Rheem's motion for judgment notwithstanding the verdict and denied Appellant's motion for judgment notwithstanding the verdict from the bench on that date. Counsel for Appellant conducted a testimonial hearing on the record to factually inquire about Rheem's request for attorneys' fees and costs. The trial court then took Rheem's post-trial motion to alter or amend the judgment to add attorneys' fees, costs, and prejudgment interest under submission.

Based upon the evidence adduced at the hearing on counsel fees, the trial court entered an amended judgment on June 16, 1999, awarding Rheem $21,000 in attorneys' fees and costs, for a total amended judgment of $156,000. The trial court denied Rheem's request for prejudgment interest.

Appellant filed her notice of appeal on May 21, 1999. Rheem filed its notice of appeal on June 25, 1999, within 10 days of the entry of the amended judgment.

Applicable Law

This court applies the law...

To continue reading

Request your trial
13 cases
  • Ferguson v. Curators of Lincoln Univ.
    • United States
    • Missouri Court of Appeals
    • 31 de maio de 2016
    ...of whether an unresolved request for attorneys' fees precludes finality of a judgment. Compare Rheem Mfg. Co. v. Progressive Wholesale Supply Co., 28 S.W.3d 333, 343 (Mo.App.E.D. 2000) (determining that a judgment was not final because it failed to address the issues of attorneys' fees and ......
  • Corizon, Inc. v. Wexford Health Sources, Inc.
    • United States
    • U.S. District Court — Eastern District of Missouri
    • 4 de março de 2013
    ...of law issues. See e.g., Accurso v. Amco Ins. Co., 295 S.W.3d 548, 553 (Mo. Ct. App. 2009); Rheem Mfg. Co. v. Progressive Wholesale Supply Co., 28 S.W.3d 333, 344 (Mo. Ct. App. 2000); Superior Equip. Co., Inc. v. Maryland Cas. Co., 986 S.W.2d 477, 481 (Mo. Ct. App. 1998). Regarding the firs......
  • Cupit v. Dry Basement, Inc.
    • United States
    • Missouri Court of Appeals
    • 28 de janeiro de 2020
    ...675 (Mo. App. W.D. 2003) ; L.R. Oth, Inc. v. Albritton , 90 S.W.3d 242, 243 (Mo. App. S.D. 2002) ; Rheem Mfg. Co. v. Progressive Wholesale Supply Co. , 28 S.W.3d 333, 343 (Mo. App. E.D. 2000) ). See also Fid. Real Estate Co. v. Norman , 586 S.W.3d 873, 879 (Mo. App. W.D. 2019) ; Maly Commer......
  • H&R Block Tax Servs., LLC v. Cardenas
    • United States
    • U.S. District Court — Western District of Missouri
    • 3 de março de 2020
    ...provisions are enforced. PVI, Inc. v. Ratiopharm GmbH, 253 F.3d 320, 326 (8th Cir. 2001) (citing Rheem Mfg. Co. v. Progressive Wholesale Supply Co., 28 S.W.3d 333, 339 (Mo. App. E.D. 2000)). Paragraph 27 of the Franchise License Agreement ("FLA") between the parties, attached as Exhibit 1 t......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT