Saidawi v. Giovanni's Little Place, Inc.

• Decision Date: 09 March 1999
• Docket Number: No. 73861,73861
• Citation: 987 S.W.2d 501
• Parties: Muneer SAIDAWI, Plaintiff-Appellant, v. GIOVANNI'S LITTLE PLACE, INC., Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 501

987 S.W.2d 501

Muneer SAIDAWI, Plaintiff-Appellant, v. GIOVANNI'S LITTLE PLACE, INC., Defendant-Respondent.

No. 73861.

Missouri Court of Appeals,

Eastern District,

Division Three.

March 9, 1999.

John J. Allan, Clayton, for appellant.

Frank Susman, Clayton, for respondent.

LAWRENCE E. MOONEY, Judge.

Muneer Saidawi ("Plaintiff") appeals from the trial court's dismissal of his petition with prejudice. We affirm in part and reverse in part.

FACTS

On December 6, 1988, Plaintiff was injured in the course of his employment at Giovanni's Little Place, Inc., a Missouri corporation owned by the Gabriele family ("Defendant Restaurant"). Consequently, Plaintiff filed a Claim for Compensation with the Division of Workers' Compensation against Defendant Restaurant. Defendant Restaurant, which had no Workers' Compensation insurance, contested the claim.

On July 16, 1991, John Gabriele, president and a stockholder of Defendant Restaurant, made a loan of $10,000.00 to Defendant Restaurant secured by the assets of Defendant Restaurant. A Security Agreement memorializing Gabriele's security interest in Defendant Restaurant's assets was properly recorded on July 22, 1991. On August 19, 1992, Mr. Gabriele foreclosed on the Security Agreement. That same day, Defendant Restaurant transferred its assets to Mr. Gabriele, who then transferred them to Manwin Restaurant, Inc. ("Manwin"), which had been incorporated on June 19, 1992. Manwin subsequently took over operations of the business, filing a Registration of Fictitious Name listing itself as sole owner of Giovanni's Little Place. Plaintiff alleges that members of the Gabriele family also own and control Manwin.

Plaintiff's Workers' Compensation Claim was heard on June 16, 1993. The Administrative Law Judge awarded Plaintiff permanent partial disability and approximately $129,000.00 in medical expenses. Defendant Restaurant appealed the award to the Labor and Industrial Relations Commission ("the Commission"). On March 17, 1994, the Commission affirmed Plaintiff's award. Defendant Restaurant appealed the Commission's affirmance of the award to the Missouri Court of Appeals, but voluntarily dismissed its appeal on July 18, 1994. On August 4, 1994, Plaintiff's Workers' Compensation award was entered as a judgment.

On August 8, 1994, Plaintiff filed a lawsuit attempting to hold various officers, directors and stockholders of Defendant Restaurant personally liable for the Judgment. The trial court, on September 15, 1994, dismissed the petition for failure to state a cause of action, and granted Plaintiff thirty days in which to file an amended petition. Plaintiff did so on October 14, 1994, but the amended petition was also dismissed for failure to state a cause of action. The trial court refused to grant plaintiff leave to amend his amended Petition.

Subsequently, Plaintiff filed a motion to reopen the Workers' Compensation proceeding to add additional defendants. The Commission denied the motion.

On December 22, 1994, Plaintiff attempted to execute his Judgment, but the Judgment was returned unsatisfied due to the fact that all of Defendant Restaurant's assets had been transferred to Manwin pursuant to the foreclosure of the Security Agreement. To date, Plaintiff has been unable to collect on his workers' compensation judgment.

On June 18, 1997, Plaintiff filed a lawsuit in St. Louis City against Defendant Restaurant, Carmello Gabriele, Frank P. Gabriele, Serafina Gabriele, John Gabriele, Manwin, and Giovanni's Restaurant, Inc. (These individuals and corporations are collectively referred to as "the Defendants" throughout this opinion.) Plaintiff's petition asserted four counts. In Count I, Plaintiff sought to pierce the corporate veil of Defendant Restaurant and have the judgment previously entered against Defendant Restaurant also entered against John Gabriele. In Count II, he sought to pierce the corporate veil and have the defendant individual shareholders held jointly liable for the previously entered judgment. In Count III, he sought damages against all defendants for fraudulent transfer of the assets of Defendant Restaurant to Manwin. In Count IV, Plaintiff sought alternatively to Counts I, II and III to recover Pursuant to a motion, venue was transferred to St. Louis County on September 15, 1997. Giovanni's Restaurant, Inc. was dismissed from the lawsuit at this time. On December 11, 1997, the trial court dismissed Counts I, II, and IV of Plaintiff's Petition with prejudice. The trial court did not state the grounds on which it was dismissing these counts. One week later, the trial court dismissed the remaining Count, Count III, as barred by the four-year period of limitations under Section 428.049 RSMo. (1994).

damages for prima facie tort if he was unsuccessful in proving any illegality.

Plaintiff timely filed this appeal, arguing that the trial court erred in dismissing Counts I, II and IV of his Petition; that the trial court erred in dismissing Count III as time-barred under Section 428.049; and finally that the trial court abused its discretion in dismissing his Petition with prejudice.

ANALYSIS

Defendants raise several procedural arguments that must be addressed at the outset.

First, Defendants argue that Plaintiff's brief is defective under Rule 84.04 in that the Points Relied On are deficient. We have the discretion under Rule 84.08 to dismiss appeals in civil cases for failure to comply with Rule 84.04. However, we will not exercise our discretion even where the brief is technically deficient in the respects charged unless the deficiency impedes disposition on the merits. Wilkerson v. Prelutsky, 943 S.W.2d 643, 647 (Mo. banc 1997). We decline to dismiss this appeal. Although Plaintiff's brief is hardly a model of clarity, we can ascertain Plaintiff's arguments without difficulty.

Defendants also argue that because Plaintiff failed to present these arguments to the trial court, none of the allegations of error contained in Plaintiff's brief have been preserved for review. We disagree. On a motion to dismiss for failure to state a claim, defendant bears the burden of establishing that the elements pled by plaintiff fail to state a cause of action. Nisbet v. Bucher, 949 S.W.2d 111, 113 (Mo.App. E.D.1997). Plaintiff has no duty to respond to defendant's motion to dismiss. Id. Appellate review of a trial court's grant of a motion to dismiss:

...is solely a test of the adequacy of the plaintiff's petition. It assumes that all of plaintiff's averments are true, and liberally grants to plaintiff all reasonable inferences therefrom. (Citation omitted.) No attempt is made to weigh any facts alleged as to whether they are credible or persuasive. Instead, the petition is reviewed in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case.

Nazeri v. Missouri Valley College, 860 S.W.2d 303, 306 (Mo. banc 1993). With that standard of review in mind, we now turn to Plaintiff's points on appeal.

In Points I and III, Plaintiff contends that the trial court erred in dismissing Counts I, II and IV of his Petition for failure to state a claim, and further that the trial court abused its discretion in dismissing these Counts with prejudice. The trial court ordered dismissal of these Counts without stating the grounds upon which the dismissal was granted. Because the trial court stated no grounds, we presume the dismissal was based upon the grounds raised in defendant's motion to dismiss and will affirm if any such grounds can sustain the trial court's dismissal. Wenthe v. Willis Corroon Corp., 932 S.W.2d 791, 793, 794 (Mo.App. E.D.1996).

In their motion to dismiss, Defendants, citing no law, contend that Counts I and II fail to state a cause of action inasmuch as "piercing the corporate veil" and "disregard of the corporate entity," are not independent causes of action under Missouri law. We disagree.

In Counts I and II, Plaintiff sought to pierce the corporate veil and have his judgment against Defendant Restaurant entered against Defendants on the grounds that Defendant Restaurant was the alter ego of John Gabriele and the restaurant shareholders. The alter ego theory is a separate and distinct cause of action under Missouri law. Irwin v. Bertelsmeyer, 730 S.W.2d 302, 304 (Mo.App. E.D.1987). "Under the alter ego rule, when a corporation is so dominated by a person as to be a mere instrument of that person and is indistinct from the person controlling it, then the court will disregard the corporate form if to retain it would result in injustice." Edward D. Gevers Heating & Air Conditioning Co. v. R. Webbe Corp., 885 S.W.2d 771, 773 (Mo.App. E.D.1994). "To pierce the corporate veil, a plaintiff must meet a two-part test: first, the corporation must be controlled and influenced by persons or another corporation; second, evidence must establish that the corporate cloak was used as a subterfuge to defeat public convenience, to justify a wrong, or to perpetrate a fraud." Id. at 773, 774.

In Irwin, this court reversed the trial court's dismissal of an action seeking to pierce the corporate veil. Plaintiff alleged in his petition that the defendants were the corporation's sole shareholders, officers and directors. He further alleged that through their dominion and control over the corporation, the defendants used the corporation to avoid their judgment debt to the plaintiff. We found those allegations sufficient to sustain a cause of action against the defendants on the alter ego theory. 730 S.W.2d at 304. We applied Irwin under similar circumstances in Edward D. Gevers Heating & Air Conditioning Co. v. R. Webbe Corp., supra, (reversing the dismissal of a count alleging a cause of action for piercing the corporate veil on an alter ego theory).

In Count I, Plaintiff alleged that John Gabriele was the majority stockholder as well as the treasurer and...