Thieret Family, LLC v. Delta Plains Servs., LLC

• Decision Date: 16 November 2021
• Docket Number: No. ED 109440,ED 109440
• Citation: 637 S.W.3d 595
• Parties: THIERET FAMILY, LLC, et al., Appellants, v. DELTA PLAINS SERVICES, LLC, and Justin A. Brown, Adam Horton and Mike Still, Respondents/Defendants.
• Court: Missouri Court of Appeals

637 S.W.3d 595

THIERET FAMILY, LLC, et al., Appellants,

v.DELTA PLAINS SERVICES, LLC, and Justin A. Brown, Adam Horton and Mike Still, Respondents/Defendants.

No. ED 109440

Missouri Court of Appeals, Eastern District, DIVISION ONE.

Filed: November 16, 2021

FOR APPELLANT: David L. Antognoli, Thomas C. Horscroft, Kevin P. Green, Goldenberg, Heller & Antognoli, P.C., 2227 South State Route 157, Edwardsville, IL 62025.

FOR RESPONDENT: John M. Reynolds, Tueth, Keeney, Cooper, Nohan & Jackstadt, P.C., 34 North Meramec Avenue, Suite 600, St. Louis, MO 63105.

Kelly C. Broniec, Judge

Thieret Family, LLC ("Family") and Dennis A. Thieret, Trustee of the Dennis A. Thieret Revocable Trust dated January 27, 1998 ("Trustee") (Family and Trustee are hereinafter collectively "Appellants") appeal from the judgment of the Circuit Court of Perry County, which dismissed the claims they had brought against Delta Plains Services, LLC ("Delta"), Justin Brown ("Brown"), Adam Horton ("Horton"), and Mike Still ("Still") (Brown, Horton, and Still are hereinafter collectively the "Individual Defendants," while Delta and the Individual Defendants are hereinafter collectively "Respondents"). In their Petition, Appellants alleged fraud in the inducement in connection with their execution of two "finance agreements" with Respondents. Appellants also alleged that Delta issued two bad checks in connection with the transaction that were dishonored for insufficient funds, in violation of Missouri law.

Appellants raise three points on appeal. In their first point, Appellants argue that the circuit court erred in granting Respondents’ motion to dismiss their fraudulent inducement claims against the Individual Defendants because they could not invoke the outbound forum selection clauses contained in the finance agreements (which designated venue in Dallas County, Texas) in that they are neither parties to nor third-party beneficiaries of the finance agreements. In their second point, Appellants argue that the circuit court erred in granting Respondents’ motion to dismiss with respect to their fraudulent inducement claims because the forum selection clauses in the finance agreements lack precise language requiring the litigation of those claims in Dallas County, Texas, and the resolution of those claims does not involve the interpretation of the finance agreements. In their third point, Appellants argue that the circuit court erred in granting Respondents’ motion to dismiss their fraudulent inducement claims because enforcement of the forum selection clauses would not be fair and reasonable in that they were procured by fraud, and enforcement would result in the duplication of effort and the risk of collateral estoppel, res judicata , or inconsistent adjudications.

We affirm in part and reverse and remand in part.

I. Factual and Procedural Background

The following factual background is drawn from Appellants’ petition and other pleadings where appropriate. The facts pleaded in the petition are assumed to be true for purposes of reviewing the dismissal. Scott v. Tutor Time Child Care Sys., Inc. , 33 S.W.3d 679, 680 (Mo. App. W.D. 2000) ; Duvall v. Lawrence , 86 S.W.3d 74, 78 (Mo. App. E.D. 2002).

On December 16, 2019, Appellants filed their four-count Petition in this matter in the Circuit Court of Perry County (the "Petition"). In Counts I and II of their Petition, Family and Trustee respectively alleged that, in May of 2018, they entered into separate "finance agreements" with Delta (individually a "Finance Agreement" or collectively the "Finance Agreements") whereby they each agreed to pay Delta $150,000 (the "Financed Amount") and in exchange Delta would acquire a "working interest" in certain real property owned by Appellants in Louisiana, as well as be required to repay the Financed Amount, plus an interest payment of $15,000, within ninety (90) days of each transaction, for a total repayment amount of $165,000 to each Appellant upon the maturity date of the Finance Agreements. Copies of the fully-executed Finance Agreements were attached to the Petition as exhibits.

The Petition also alleged that the Respondents, "acting in concert," represented that Delta was "ready, willing[,] and able" to perform under the Finance Agreements, but those representations were false when made because Delta "had no intention of performing" the Finance Agreements. Furthermore, Respondents knew that these representations were false when they made them because "they knew Delta ... would not and had no intention to perform the ... Finance Agreement[s]." In reliance on these false representations, each Appellant paid Delta $150,000. In addition to other standard allegations supporting a fraud claim, the Petition alleges that Family and Trustee were damaged in an amount in excess of $150,000.

Each Finance Agreement also contains the following choice of law and forum selection clause (the "Forum Selection Clause"):

This Agreement shall be governed by and construed under the laws of the State of Texas. Any lawsuit or litigation arising under, out of, in connection with, or in relation to this Agreement, any amendment hereof, or the breach hereof, shall be brought in the courts of Dallas County, Texas[,] which courts shall have exclusive jurisdiction over any such lawsuit or litigation.

Although Brown signed each Finance Agreement on behalf of Delta in his capacity as the "Managing Member" thereof, he also separately signed each Financing Agreement as a personal guarantor of Delta's obligations thereunder.¹ Although Horton and Still are also named as defendants in Counts I and II of the Petition, neither of them signed the Finance Agreements in any capacity; rather, it appears that their involvement in these transactions was limited to participating in the "solicitation" or inducement of Appellants to enter into the Finance Agreements with Delta. Counts I and II of the Petition each sought damages from Delta and the Individual Defendants, jointly and severally, in excess of $150,000, as well as punitive damages. In Counts III and IV of the Petition, Appellants alleged that in August of 2019, Delta executed two checks in the amount of $165,000 each, which were made payable to Family and Trustee (collectively the "Checks"). Although not expressly alleged, the context clearly suggests that the Checks were in repayment of the amounts due under the Finance Agreements. Regardless, when Appellants presented the Checks for payment in Perry County, Missouri, they were both dishonored because Delta lacked sufficient funds in its account at the time of presentment. Although Appellants made demand on Delta for payment of the Checks, Delta failed to make payment thereon. Counts III and IV of the Petition each sought damages from Delta in excess of $150,000, plus pre-judgment interest.

In March of 2020, Respondents filed a motion to dismiss the Petition on the basis of the Forum Selection Clause (the "Motion to Dismiss"), arguing that Appellants’ claims in this matter "fall squarely within the terms of the Finance Agreement[s] and Plaintiffs’ Petition relies on th[e] Finance Agreement[s] as the basis for Counts I and II." In the Motion to Dismiss, Respondents further argued that, "the claims in Counts I and II are claims ‘arising under, out of, in connection with, or in relation to th[e Finance Agreements],’ " and thus, these claims "must be litigated in Texas, not Missouri." Although the Motion to Dismiss requested the dismissal of the entire Petition, which also included the bad check claims in Counts III and IV, the Motion to Dismiss did not squarely address how or why the bad check claims were also subject to the Forum Selection Clause.

By "Judgment and Order" entered on August 14, 2020 (the "August 2020 Judgment"), the circuit court dismissed Counts I and II of the Petition, reasoning, in part, as follows: "[Appellants] consistently allege that [Respondents] were all intertwined and a part of the transactions around the [Financing Agreements]. It is clear that [Appellants] intended that all of the [Respondents] were intertwined and were involved in some way or another with the [Financing Agreements]." However, regarding Counts III and IV, the circuit court further stated: "It is clear from all of the arguments of the parties and from the Pleadings that the claims of Counts III and IV were not involved or subject to the [Financing Agreements]." Thus, Counts III and IV were not dismissed on the basis of the Forum Selection Clause.

By "Final Order and Judgment" entered on January 19, 2021 (the "January 2021 Judgment"), the circuit court denied Appellants’ motion for reconsideration of the decision to dismiss Counts I and II of the Petition, which essentially repeated the arguments originally raised in the Motion to Dismiss, but added the argument that enforcement of the Forum Selection Clause would be "unfair and unreasonable" pursuant to a case not previously cited. In the January 2021 Judgment, the circuit court also granted Appellants’ motion for summary judgment with respect to Counts III and IV of the Petition, and entered two separate judgments against Delta and in favor of each Appellant in the amount of $172,568.30 each, plus post-judgment interest in the amount of 9% per annum. Thus, by entry of the January 2021 Judgment, all claims in the Petition were resolved by the circuit court and the matter was thereby ripe for appeal.

Following the entry of the January 2021 Judgment, Appellants timely filed their notice of appeal with respect to the dismissal of Counts I and II of the Petition, and this appeal followed.²

II. Standard of Review

"Review of a circuit court's order granting a motion to dismiss is de novo. " Reed v. Reilly Co., LLC , 534 S.W.3d 809, 811 (Mo. banc 2017) (quoting Gibbons v. J. Nuckolls, Inc. , 216 S.W.3d 667, 669 (Mo. banc 2007) ). "In reviewing the court's grant of a motion to dismiss, we accept all properly pleaded facts as true, give them a liberal construction,...