Sophian Plaza Ass'n v. City of Kan. City

• Decision Date: 15 October 2019
• Docket Number: No. SC 97626,SC 97626
• Citation: 584 S.W.3d 784
• Parties: SOPHIAN PLAZA ASSOCIATION, et al., Respondents, v. CITY OF KANSAS CITY, Missouri, Appellant.
• Court: Missouri Supreme Court

584 S.W.3d 784

SOPHIAN PLAZA ASSOCIATION, et al., Respondents,

v.CITY OF KANSAS CITY, Missouri, Appellant.

No. SC 97626

Supreme Court of Missouri, en banc.

Opinion issued October 15, 2019

Zel M. Fischer, Judge

I. Introduction

The City of Kansas City appeals a judgment in favor of Sophian Plaza Association and a class of similarly situated plaintiffs on claims of breach of injunction, breach of contract, specific performance and civil contempt in connection with City's termination of its trash rebate program. The breach of contract claim is not viable because the underlying contract was merged into the 1976 Modified Judgment at the request of the parties. Neither Sophian Plaza nor the class of similarly situated plaintiffs may bring a contempt action to enforce the 1976 Modified Judgment because they were not parties to the litigation nor were the 1976 plaintiffs certified as a class under Rule 52.08. The circuit court's judgment is reversed.

II. Background

In 1971, City enacted an ordinance, § 16.20(a), providing for trash collection for all residences except "trailer parks or buildings containing seven or more dwelling units." In 1975, three lawsuits filed by owners of residences excluded from the trash collection service were consolidated in one suit challenging the constitutional validity of the ordinance. In its April 1976 judgment, the circuit court held the exclusion of trailer parks and buildings with seven or more dwelling units was unconstitutional and entered a mandatory injunction requiring City to provide trash collection services to Graham¹ "unless and until City enacts a valid ordinance which establishes a reasonable and justifiable classification for those persons who are not entitled to refuse collection by City." Both Graham and City filed timely notices of appeal of the April 1976 order.

On August 31, 1976, City and Graham filed a Stipulation and Agreement ("the Agreement") with the circuit court. The Agreement was signed by Graham's attorney as well as by the assistant city attorney on City's behalf. The Agreement required City to either provide trash services to owners of apartment buildings containing seven or more dwelling units and owners of trailer parks within Kansas City, Missouri, or pay each owner $1.15 per occupied unit per year in lieu of trash services. The Agreement provided the cash payment would be increased or decreased each year by "the same percentage as the increase or decrease in the average cost of providing services" to those dwelling units receiving trash service under the city ordinance. The Agreement also provided City's obligations to provide the trash rebate program would terminate only upon City's termination of its entire trash collection service. Following termination of the trash collection service, City's obligation to provide the trash rebate program would renew should City ever then restore its city-wide trash collection service.

Before the record on appeal was filed in the court of appeals, and upon the joint request of the parties through the Agreement, the circuit court entered a modified judgment (the "1976 Modified Judgment") declaring § 16.20(a) unconstitutional, adopting and incorporating the Agreement into its judgment at the request of the parties, and entering a mandatory injunction directing City to comply with the terms and conditions of the Agreement.² In 1976, City amended its trash collection ordinances in adherence with the 1976 Modified Judgment by formally adopting the trash rebate program into the city code.

City continued providing the trash rebate program until the city council approved a proposed budget eliminating the program in 2008. In 2010, City effectively eliminated the program by repealing City Code §§ 62-41(a3) and 62-42.

The class plaintiffs, Sophian Plaza Association, Townsend Place Condominium Association, Inc., and Stadium View Apartments filed a class action petition in 2015, alleging City's elimination of the trash rebate program was a breach of the modified judgment and a breach of the Agreement. The circuit court certified a class consisting of:

All managers and owners of trailer parks, condominiums, apartments and buildings containing seven or more dwelling units located in Kansas City Missouri during the class period May 1, 2010 to the present. Excluded from the class are members of the Heartland Apartment Association as of February 27, 2015.

After trial, the circuit court entered judgment in favor of the class on its claims for breach of injunction, breach of contract, specific performance, and civil contempt.³ The circuit court assessed $10,274,704 in compensatory damages, required City to "pay $2,846 per day until it complies with its trash collection obligations[,]" and ordered City to pay class counsel $1,362,562.50 in fees and $59,035.56 in expenses. The court of appeals affirmed the judgment, and this Court granted transfer.⁴

III. Analysis

The circuit court determined members of the class fell within the definition of "Owners" provided in the Agreement.⁵ In accord with this determination, the circuit court concluded City breached the Agreement and the class could recover for breach of contract and could receive specific performance of the Agreement. A fatal flaw in the circuit court's conclusion in this regard is that, at the request of Graham and City, the circuit court merged the Agreement into the 1976 Modified Judgment. "[M]erger is the substitution of rights and duties under the judgment or the decree for those under the agreement[.]"

46 Am. Jur. 2d Judgments § 430 (2017).

The law of merger by judgment is one closely related to res judicata. See , e.g. , Chesterfield Village, Inc. v. City of Chesterfield , 64 S.W.3d 315, 318 n.5 (Mo. banc 2002). The most common method by which it operates is "[w]hen a claim on a contract is reduced to judgment[.]" 46 Am. Jur. 2d Judgments § 438 (2017). This Court has recognized the law of merger by judgment in this context. See Ballard v. Standard Printing Co. , 356 Mo. 552, 202 S.W.2d 780, 782 (Mo. 1947) ("Generally a cause of action merges in the judgment entered thereon and any further action must be upon the judgment."); State ex rel. Noe v. Cox , 323 Mo. 520, 19 S.W.2d 695, 699 (Mo. 1929) ("[A] valid judgment upon a promissory note merges the cause of action which previously existed upon the note, and, after a valid judgment has been rendered upon the note, recovery must be had upon such judgment and not upon the note."). However, merger by judgment may also occur at the election of the parties to the contract, so long as the parties intend the agreement to become decretal through its requested merger with the judgment. School Dist. of Kansas City, Mo. v. Mo. Bd. of Fund Comm'rs , 384 S.W.3d 238, 261 n.21 (Mo. App. 2012).⁶

The parties' intention for the Agreement to become decretal by operation of merger is clear from the Agreement's plain language. In paragraph seven, the Agreement reads: "The parties jointly request the Court to incorporate this Stipulation and Agreement in a judgment herein and to make compliance with the provisions hereof mandatory ." (Emphasis added). The language of the resulting 1976 Modified Judgment equally evinces the parties' intent for the Agreement to become decretal.⁷

When Graham and City jointly requested the 1976 circuit court to merge the Agreement "in a judgment herein and to make compliance with the provisions hereof mandatory[,]" and the circuit court complied with the request, they voluntarily surrendered their future right to make a separate claim on the Agreement itself. Instead, the rights established in the Agreement can only be enforced through a contempt proceeding brought pursuant to the 1976 Modified Judgment.

The circuit court concluded that since May 1, 2010, "City has failed to meet its obligation under the Modified Judgment and Mandatory Injunction[,]" and accordingly held City in civil contempt of the Modified Judgment and Mandatory Injunction and entered judgment for the class. However, no members of the class were parties to the 1976 Modified Judgment.

"Civil contempt is for the protection of a party to the litigation , the party for whose benefit the order, judgment or decree was entered. Its function is to provide a coercive means to compel the other party to the litigation to comply with relief granted to his adversary ." Teefey v. Teefey , 533 S.W.2d 563, 566 (Mo. banc 1976) (emphasis added). It necessarily follows, then, that to bring a civil contempt action, one must have been a party for whose benefit the original judgment was entered. No one in this class falls into that category.

The class argues that, despite no formal class certification in the 1976 proceedings, the 1976 Modified Judgment was clearly intended to "afford relief to all owners of relevant properties" and "treated all such owners as members of a class for whom the Modified Judgment provided a specific pecuniary benefit." (Emphasis omitted). Therefore, the class argues, it should be entitled to enforce the 1976 Modified Judgment because its members qualify as "others similarly situated" under the judgment's terms. Supra , n.7. However, that argument ignores that the requirements imposed by Rule 52.08 "are not merely technical or directory, but mandatory." Beatty v. Metro. St. Louis Sewer Dist. , 914 S.W.2d 791, 795 (Mo. banc 1995), overruled on other grounds by Zweig v. Metro. St. Louis Sewer Dist. , 412 S.W. 3d 223, 248 n.17 (Mo. banc 2013). The reason, Beatty provides, is:

The impact of certification of a lawsuit as a class action is readily apparent. Individuals who did not initiate the litigation and who will have little or no practical control over the litigation nonetheless will be bound by its result. The potential increase in exposure to the defendant and the additional

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