Smith v. Great Am. Assurance Co.

• Decision Date: 19 August 2014
• Docket Number: No. SD 32604.,SD 32604.
• Citation: 436 S.W.3d 700
• Court: Missouri Court of Appeals
• Parties: Carl E. SMITH and Margarita Smith, Appellants, v. GREAT AMERICAN ASSURANCE COMPANY, Gregory Herkert, and The Stolar Partnership, LLP, Respondents.

436 S.W.3d 700

Carl E. SMITH and Margarita Smith, Appellants,

v.GREAT AMERICAN ASSURANCE COMPANY, Gregory Herkert, and The Stolar Partnership, LLP, Respondents.

No. SD 32604.

Missouri Court of Appeals,

Southern District,

Division One.

June 3, 2014.

Application for Transfer to Supreme Court Denied June 23, 2014.

Application for Transfer Denied Aug. 19, 2014.

Paul Hasty, Jr., Overland Park, KS, for Appellants.

James S. Kreamer & Angela M. Higgins, Kansas City, MO, for Respondent, Great American Assurance Co.

Rodney E. Loomer & Ben K. Upp, Springfield, MO, for Respondents Herkert & Stolar Partnership.

DANIEL E. SCOTT, J.

Carl and Margarita Smith owned motel property subject to a mortgage that Respondents purported to foreclose over the Smiths' objection. The Smiths sued. The parties' lawyers quickly explored settlement, reached agreement, and circulated settlement documents which the Smiths refused to sign.

Respondents moved to enforce the settlement. After an evidentiary hearing, the court granted the motion and entered judgment accordingly.

The Smiths appeal, raising three points. We affirm.

Background ¹

Paul Hasty represented the Smiths at all times; Rod Loomer facilitated negotiations on Respondents' behalf. To quote the judgment, the settlement terms “are not in dispute,” but

a general understanding of those terms is important for further consideration of the issues. The settlement agreement contemplated a “walk away” deal. The substance of the agreement was set forth in Attorney Hasty's letter of August 22, 2012, addressed to Attorney Loomer, which proposed, inter alia,

... Great American can consider the loan paid and release the mortgage on the property thereby vesting title in the Smiths free and clear of any interest of the bank or Great American.

These terms were accepted by Defendants, as was communicated by Attorney Loomer in his letter dated August 24, 2012, to Attorney Hasty. The settlement terms were again confirmed by Attorney Hasty's letter to Attorney Loomer dated August 30, 2012, referencing recent telephone conversations. No money was going to be exchanged as part of the settlement.

Hasty later testified that he had discussed settlement with Carl Smith, and the August 22 letter “was my understanding of my authority from Mr. Smith.” ² Hasty did not discuss settlement directly with Mrs. Smith, who from Ukraine, was not a native English speaker, and would direct Hasty to “talk to Carl” when Hasty would call her about the case. “So,” as Hasty explained, “rather than Mrs. Smith telling [Hasty] or speaking with [Hasty] about the case, it was her direction for [Hasty] to go to Carl Smith.”

Sometime in September, after Hasty had copied the Smiths on the August 22 offer letter and his August 29 and 30 letters confirming settlement, Mrs. Smith returned to Ukraine and stayed there until late October.

A week after Loomer circulated formal settlement documents for execution, Hasty reluctantly reported that his clients were “no longer willing to settle the case on the terms previously agreed.” Seven weeks post-settlement, after Respondents moved to enforce, Carl Smith suggested for the first time that his wife never agreed to settle and he “had no authority to speak for her on the issue.” Hasty then sent Loomer two mid-October letters, reiterating that Hasty “thought a settlement agreement was reached” and “I've made it very clear to you that I thought we had the case settled,” but his clients were “taking the position that counsel did not have authority to enter the agreement that was entered. I certainly thought I did, but that was based on an assumption that Mr. Smith was speaking for Margarita Smith.”

Hasty, Loomer, and both Smiths testified at the November 19 enforcement hearing. That a settlement had been reached was “not in dispute,” to quote the Smiths' post-hearing brief. Yet they denied being bound, arguing that Mrs. Smith was not consulted and had not agreed to settle the case. Secondarily, they argued the statute of frauds, a non-pleaded defense first mentioned after all testimony and evidence had been admitted at the hearing.

The court rejected both arguments. As indicated above and not challenged on appeal, the court observed that the Smiths “squarely admit that their attorney indeed reached an agreement to settle the dispute.” The court then found that Hasty had authority to represent both of the Smiths and negotiate a binding settlement on their behalf. Finally, the court found that the statute of frauds did not bar enforcement. After entry of a final judgment, the Smiths brought this appeal.

Standard of Review / Points on Appeal

As the Smiths repeatedly acknowledge, we can reverse this bench-tried judgment only if no substantial evidence supports it, or it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). It thus seems self-evident that the Smiths should identify the specific Murphy claim they assert as to each of their points, preferably within the point itself. See Rule 84.04(d)(1)(A) & (B) (points shall identify the challenged actions and “the legal reasons for the appellant's claim of reversible error ...”).

Why? Because each Murphy ground is a separate, distinct legal claim. That is, “an ‘against-the-weight-of-the-evidence’analysis which is distinctly different than a claim that a judgment is not supported by substantial evidence,” J.A.R. v. D.G.R., 426 S.W.3d 624, 630 (Mo. banc 2014), obviously differs also from claims that the trial court erroneously declared or applied the law. In turn, this means each Murphy ground is proved differently from the others and is subject to different principles and procedures of appellate review.³

None of the Smiths' points expressly identify a Murphy ground. This is no real problem as to Points II and III (plainly complaints that the trial court misapplied the law), but the Murphy claim is less obvious in Point I:

The trial court erred in finding that Plaintiffs' attorney had either actual or apparent authority to negotiate a settlement of the claim on Plaintiffs' behalf because Plaintiffs' attorney did not have such authority in that Plaintiffs did not authorize their attorney to do so, nor did Plaintiffs themselves agree to the purported settlement.

To reiterate, we can reverse only on a Murphy ground, each of which differs from the others both as to proof and appellate review. Ultimately, we read Point I to assert that no substantial evidence supported the trial court's fact findings, necessary to the judgment, as to Hasty's authority. Our interpretation rescues the point so we can review it,⁴ but the underlying complaint still fails for several independent reasons next summarized.

Point I—Authority

The Smiths' first and fundamental problem is their failure to effectively assert a “no substantial evidence” claim. SeeJ.A.R., 426 S.W.3d at 631 n. 12; Houston, 317 S.W.3d at 186–88.⁵ Instead, their “argument on this point ignores the testimony and evidence favorable to the circuit court's findings and conclusions and merely recites evidence and purported inferences favorable to [their] position.” J.A.R., 426 S.W.3d at 632. “Not only does [this] argument ignore our standard of review, it ignores the law that the circuit court can believe all, part, or none of the testimony of any witness.” Id. at 631 (footnote omitted). “It seems obvious, from the findings and conclusions contained in the judgment, that the circuit court put little or no stock in various factual assertions made by [the Smiths],” id. at 632 n. 14, who now fail “to identify favorable evidence in the record or explain why that evidence and its reasonable inferences are such that the court could not reasonably decide that [Hasty had authority]. Without any of this analysis, [the] argument lacks any analytical or persuasive value.” Id. at 631 n. 12.

In summary, Point I initially fails because its argument “ignores the testimony and evidence favorable to the circuit court's findings and conclusions and merely recites evidence and purported inferences favorable to [its] position,” disregards our standard of review, and is “of no analytical or persuasive value.” Id. at 632.

To support a favorable decision for [the Smiths] on this point would require this Court to devise and articulate its own demonstration of how the omitted favorable evidence, either by itself or considered along with the partial favorable evidence included by [the Smiths] in their argument, is not substantial evidence.... Such action on our part would thrust us into becoming an advocate on [the Smiths'] behalf; a role we are prohibited from assuming.

Houston, 317 S.W.3d at 189.

We often see the error addressed in J.A.R. and Houston and repeated here by the Smiths. It may aid future appellants if we try to restate certain principles in simplest terms.

We are one-sided when we check the record for sufficiency of evidence. We ignore everything that could help the appellant, seeing only what might help the respondent. The resulting slant can be so severe that we rarely follow this particular rule (even when we cite it) strictly when we write our statement of facts. Outside readers require more context to understand a case, so our opinions often cite facts that we cannot consider in deciding if any evidence supports the judgment.

Our tunnel vision is driven, not by credibility per se, but relevance. Consider a shopping analogy. If we need a red shirt, we ignore other colors. Nothing is wrong with other shirts, but they do not fit our need. They are not relevant to our search. Salespersons who show us other shirts, not appreciating our specific need, waste their time and ours.

Likewise, in seeing if any evidence supports a judgment, contrary proof is irrelevant. And if evidence does support the judgment, no amount of counter-proof erases it. This is why a “no substantial evidence” argument focused on proof and inferences that...