Robinson v. Riverside Concrete, Inc.
| Decision Date | 29 November 1976 |
| Docket Number | No. KCD,KCD |
| Parties | John A. ROBINSON et al., Respondents, v. RIVERSIDE CONCRETE, INC., et al., Appellants. 27013. |
| Court | Missouri Court of Appeals |
Howard W. Bevins, Michael J. Drape, Knowlton & Drape, Kansas City, for appellants.
Stoup & Bohm, Arthur H. Stoup, Thomas E. Thompson, Kansas City, for respondents.
Before PRITCHARD, C.J., and SHANGLER, DIXON, SWOFFORD, WASSERSTROM, SOMERVILLE and TURNAGE, JJ.
This appeal presents the question of the sufficiency of the jury's verdict to support a judgment for actual and punitive damages. John Robinson and his wife brought suit against Riverside Concrete, Inc., Ernest Mountjoy, Mary Mountjoy, Frank Sambol, Lake Ozark Concrete, Inc., and Ted Mountjoy for accounting, fraud, conversion and replevin. The jury returned a verdict for 'damages' in the amount of $43,300, interest of $17,350, and attorney fees of $21,000, being the total sum of $81,650, against Riverside, Ernest, Mary and Sambol. The jury also returned a verdict against the same defendants for punitive damages in the sum of $75,000. Judgment was entered according to the verdict, and Ernest Mountjoy, Mary Mountjoy and Riverside Concrete, Inc., have appealed therefrom. The dispositive issue raised on this appeal is the insufficiency of the verdict to support the judgment. Reversed and remanded.
Ernest and Mary Mountjoy were the sole stockholders of Riverside Concrete, Inc. Feeling the need for capital with which to operate such business, the Mountjoys arranged to borrow $50,000 from the Robinsons. A promissory note in that amount was executed by the Mountjoys in their corporate officer capacities. The Mountjoys simultaneously executed a loan agreement in their corporate capacities and in their individual capacities by which the undertaking of Riverside was guaranteed and by which they agreed to indemnify the Robinsons against any loss. The agreement provided a security agreement was to be executed to convey a security interest in certain equipment and vehicles used in the concrete business to Robinson. Such agreement was in fact executed.
It was further agreed Riverside would not declare or pay any dividend, increase its capital stock or retire or exchange any of its capital stock without the written consent of Robinson. Ernest was also to receive $250. per week for services to Riverside and such salary was not to be increased nor was he to be paid any other remuneration without the written consent of Robinson.
In addition to interest on the note, Robinson was to receive 43% of the annual net profits of Riverside, less agreed upon deductions, and he and his agents were to have the right to examine Riverside's books and income tax returns at any time. Riverside was to pay all of Robinson's expenses including legal expenses incurred in connection with the enforcement of the loan agreement.
Robinson and his wife filed suit following default on the note and following the failure of Riverside to pay the 43% of net income. In Count I of such suit the execution of the $50,000 note and loan agreement was alleged, together with the provisions of such agreement, together with the allegation no payment had been made and no accounting had been provided. Count I prayed for an accounting and that Riverside be required to pay Robinson such amount as determined to be 43% of net income. Such count further pleaded fraudulent and malicious conduct on the part of the Mountjoys to deplete the assets and profits of Riverside and alleged they took the items covered by the security agreement and devoted them to their own use. It was alleged such actions were for the sole purpose of defrauding Robinson and by reason therefor, Robinson was entitled to punitive damages in the sum of $500,000.
Count II was based upon the security agreement executed by Riverside and alleged the property covered thereby was in danger of being lost to Robinson unless taken from the possession of Riverside. The prayer was for recovery of the property and $5,000 damages for its return.
Count III was against Frank Sambol, brother-in-law of Ernest Mountjoy, and alleged Sambol was acting in concert with the Mountjoys to convert the property covered by the security agreement to such use as to deffeat the rights of Robinson in the same. The prayer was for $50,000 plus interest and costs.
Count IV was against Lake Ozark Concrete, Inc., and Ted Mountjoy, the owner of Lake Ozark. Ted is the son of Ernest and Mary. This Count alleged certain of the property covered by the security agreement given by Riverside was through the conspiracy and acts of the three Mountjoys placed in the possession of Lake Ozark which converted the same to its own use. Damages in the amount of $50,000 were prayed.
Count V incorporated by reference the allegations of the first four counts and further alleged that all the defendants did unlawfully and fraudulently conspire together to cheat and defraud the Robinsons and pursuant to such scheme, the property covered by the security agreement would be turned over to Sambol, Lake Ozark and Ted and such property would be used, converted and sold and the proceeds derived from the sale would be divided among the defendants. This count concluded with a prayer for $50,000 actual damages and $500,000 for punitive and exemplary damages.
Following a lengthy trial, which covers some 840 pages of transcript, the court gave the jury its instructions. The following verdict directing instructions were given:
INSTRUCTION NO. 3 authorized a verdict against Riverside on the principal amount of the note.
INSTRUCTION NO. 6 authorized a verdict against Ernest and Mary on the guarantee agreement and the loan agreement.
INSTRUCTION NO. 8 authorized a verdict against Riverside for transferring and conveying some or all of the secured concrete equipment to Lake Ozark.
INSTRUCTION NO. 10 authorized a verdict against Ernest for conversion of secured property or for transfer of the secured property to delay or hinder his creditors.
INSTRUCTION NO. 12 authorized a verdict against Mary for aiding and abetting Ernest in the transfer of secured property or for her intentional participation in transfer of the secured property to hinder or delay creditors.
INSTRUCTION NO. 14 authorized a verdict against Sambol for intentionally aiding and abetting the transfer of secured property for the purpose of hindering, delaying and defrauding Robinson.
INSTRUCTION NO. 16 authorized a verdict against Lake Ozark for knowingly participating in the conversion of secured property.
INSTRUCTION NO. 19 authorized a verdict against Ted for knowingly participating in the conversion of secured property.
INSTRUCTION NO. 21 was MAI 4.01, the measure of damages.
INSTRUCTION NO. 22 was MAI 10.03 authorizing the award of exemplary damages.
Instruction No. 25 was the form of verdict instruction and is set out in full hereafter:
You are instructed that nine or more jurors may return a verdict for either party in this case. If all of you agree upon a verdict, your foreman alone will sign it, but if your verdict is returned by nine, or more, and less than twelve jurors, your verdict must be signed by all of the jurors who agree to it.
If all of you agree upon a verdict in favor of the plaintiffs for the principal amount on the note and guarantee agreement, and against defendants Ernest W. Mountjoy, Mary Mountjoy and Riverside Concrete, Inc., it may be in the following form:
'We, the jury, find the issues in favor of the plaintiffs and against defendants (here insert the names of defendants against whom you find) and assess their damages at $_ _ ( the amount.)
_ _ Foreman.'
If all of you agree upon a verdict in favor of the plaintiffs for both principal amount and interest on the note and guarantee agreement, and against defendants Ernest Mountjoy, Mary Mountjoy and Riverside Concrete, Inc., it may be in the following form:
'We, the jury, find the issues in favor of the plaintiffs and against defendants (here insert the names of defendants against who you find) and assess their damages at $_ _, and assess interest at $_ _, being the total sum of $_ _ ( the amount).
_ _ Foreman.'
If all of you agree upon a verdict in favor of the plaintiffs for principal amount, interest and attorney's fees on the note and guarantee agreement, and against defendants Ernest Mountjoy, Mary Mountjoy and Riverside Concrete, Inc., it may be in the following form:
'We, the jury, find the issues in favor of the plaintiffs and against defendants (here insert the names of defendants against whom you find) and assess their damages at $_ _, and assess interest at $_ _, and assess attorney's fees at $_ _, being the total sum of $_ _ ( the amount).
_ _ Foreman.'
If you find the issues in favor of plaintiffs under Instructions numbered 8, 10, 12, 14, 16, 19, and find that plaintiffs are entitled to actual damages only, your verdict may be in the following form:
'We, the jury, find the issues in favor of plaintiffs and against defendants (here insert the names of defendants against whom you find) and we assess plaintiffs' damage at $_ _ ( the amount).
_ _ Foreman.'
If you find for plaintiffs and against one or more defendants and if you further find that plaintiffs are also entitled to punitive damages, then your award of punitive damages shall be in the following form:
'We, the jury, find the issues in favor of plaintiffs and we find that plaintiffs are entitled to punitive damages against the following defendants (here insert the names of defendants against whom you find), in the following amount $_ _ ( the amount).
_ _ Foreman.'
YOU MAY NOT AWARD PUNITIVE DAMAGES AGAINST ANY DEFENDANT UNLESS YOU HAVE ALSO AWARDED ACTUAL DAMAGES AGAINST THAT SAME DEFENDANT.
If you find the issues against the plaintiffs and in favor of all defenda...
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