Toobaroo, LLC v. W. Robidoux, Inc.

• Decision Date: 22 September 2020
• Docket Number: WD 83169 (,C/w WD 83182)
• Citation: 614 S.W.3d 29
• Parties: TOOBAROO, LLC, Respondent, v. WESTERN ROBIDOUX, INC., Appellant.
• Court: Missouri Court of Appeals

614 S.W.3d 29

TOOBAROO, LLC, Respondent,

v.WESTERN ROBIDOUX, INC., Appellant.

WD 83169 (

C/w WD 83182)

Missouri Court of Appeals, Western District.

OPINION FILED: September 22, 2020

Motion for Rehearing and/or Application for Transfer to Supreme Court Denied October 27, 2020

Application for Transfer Denied January 26, 2021

Paul A. Maddock, St. Louis, Missouri, Joseph K. Eischens, N. Kansas City, MO, and Martin M. Meyers and Leonard Stephens, Kansas City, MO, Attorneys for Respondent.

Daniel E. Blegen and Breanna R. Spackler, Kansas City, MO, Attorneys for Appellant.

Before Division One: Thomas H. Newton, Presiding Judge, and Mark D. Pfeiffer and Edward R. Ardini, Jr., Judges

Mark D. Pfeiffer, Judge

Western Robidoux, Inc. ("WRI") appeals the judgment of the Circuit Court of Jackson County, Missouri ("trial court"), following a jury verdict in favor of TooBaRoo, LLC ("Toobaroo") on Toobaroo's claim that WRI breached a joint venture agreement, awarding damages of $1,134,372. On appeal, WRI raises sufficiency of the evidence, evidentiary error, and instructional error challenges to the judgment. We affirm.

Factual and Procedural Background¹

In 1979, Roger and Connie Burri purchased WRI, a commercial printing and fulfillment company. The couple had three sons, Breht,² Peter, and Brian, who all grew up working for WRI. Brian married Cindy in 1997, and she began working for WRI also. Roger and Connie owned all shares of WRI until May of 2009, when Roger passed away, at which point Connie controlled all of the stock in WRI. Connie began gifting shares equally to her sons in December 2009. Following Roger's death, Connie elected herself and Breht, Brian, and Peter to WRI's Board of Directors, and the Board elected Connie as WRI's President. Connie remained President and majority shareholder of WRI through trial.

Brian acted as the Chief Financial Officer of WRI, was in charge of entering the payroll, and was the point of contact with WRI's payroll vendor CBIZ. Brian's wife, Cindy, was promoted from production manager to Chief Executive Officer of WRI in April of 2014. Peter handled maintenance issues and considered himself the plant manager.

Breht started, exclusively owned, and controlled multiple technology companies in the 1990s, including Toobaroo. Toobaroo is a company that created and licensed software, internet or web-based software, databases, and other types of information technology. Around 1996 or 1997, Breht negotiated a business relationship between Toobaroo and individuals at Boehringer Ingelheim Vetmedica, Inc. ("BI") to provide software services. BI had also been a client of WRI since 1989 for printing and bulk mailing services. Toobaroo went from designing one website for one division of BI to designing all of the divisions’ websites, including hosting these websites and performing other computer-related work.

In 2002, Breht adapted software he had previously created to form the BI Literature Store ("Lit Store"). The Lit Store software interacted with users like an online store, through which the BI salesperson selected which marketing materials to order and then checked out, and the software electronically conveyed the orders to a fulfillment company where the materials were then pulled, packed, and shipped. The initial version of the Lit Store served about sixteen BI salespeople, and over the following two years it was modified to serve three additional BI divisions. In short, the Lit Store software was a very successful software creation by Toobaroo.

When Breht began working with BI, it did not use WRI for fulfillment; but when a division manager told Breht that BI wanted a new fulfillment house, Breht referred the opportunity to WRI and, by 2006, WRI was BI's only fulfillment provider. As more BI personnel used the Lit Store, more fulfillment and printing business was created for WRI, and by the end of 2008, all of BI's divisions used the Lit Store.

In 2009, an analyst employed by BI named Chris Curtiss told Breht he was no longer to "engage in business development activity [at BI] without my involvement" according to certain "rules of engagement" he provided. Because Mr. Curtiss and his demands were a threat to Toobaroo's business, as well as indirectly to WRI due to its reliance on the Lit Store for BI's business, and because Breht anticipated that Mr. Curtiss's actions toward Toobaroo foreshadowed actions he may take toward WRI, Toobaroo and WRI entered into a joint venture agreement in order to protect their mutually successful business relationships.

The joint venture agreement was reached in October 2009 between Connie, on behalf of WRI, and Breht, on behalf of Toobaroo. Pursuant to the joint venture agreement, Breht agreed to contribute his software and services through his solely-owned corporate entity, Toobaroo, to WRI and WRI agreed to compensate Toobaroo the identical amount it paid to Breht's brothers, Brian and Peter, such that each Burri brother (Breht's share via Toobaroo) would receive the identical WRI compensation on an annual basis.

Pursuant to the agreement, Toobaroo or its designee³ would invoice WRI and be paid weekly the amount of Breht's brothers’ compensation plus an additional sum to offset self-employment tax. Further, Toobaroo was also entitled to identical bonuses that were paid to Breht's brothers, which historically, was a significant amount of annual compensation for the brothers. The joint venture agreement was a change from the prior business relationship between Toobaroo, WRI, and BI, which consisted of Toobaroo billing BI for providing its programming and web hosting services and separately billing WRI for programming services for maintaining and upgrading WRI's end of the Lit Store, and WRI billing BI separately for its fulfillment services. Under the joint venture agreement, by contrast, Breht worked as many hours as necessary with WRI and contributed his time and Toobaroo's software at no additional charge.

The joint venture was immediately successful for all parties and grew in profitability. From 2009 through 2013, WRI's total revenue went from just under three and a half million dollars to over seven million dollars. In 2009 when the joint venture began, Toobaroo had about five hundred Lit Store users at BI. Thereafter, Breht (via Toobaroo) created a new software version called the distributor Lit Store and roughly three thousand additional distributor users began utilizing the new deployment in 2010. That year, BI merged with another animal health company, which led to more users, more sales representatives, and a huge demand for new marketing materials, resulting in greater business for the joint venture. In January 2010, Brian increased his weekly compensation, and in October of that year his and Peter's pay increased to $2,885 weekly. Brian and Peter also received over $85,000 in bonus payments in 2010. These payments were surreptitiously made without Breht or Toobaroo's knowledge.

Conversely, Breht remained committed to WRI's success and was instrumental in evaluating, choosing, and teaching WRI employees to use a new variable data printing press for printing projects of the joint venture. Toobaroo also did a lot of variable data project work with bar codes and QR codes for improved efficiency and automation of the processes used with joint venture client services. This work served as a precursor to one of the joint venture's most lucrative subsequent projects for a new client, CEVA. Toobaroo's day-to-day joint venture work also included making improvements to the Lit Store, adding and changing users, user lists, and products, generating reports for a particular product or for sales for clients, and assisting WRI employees with questions as to the Lit Store.

In January 2011, Brian and Peter began taking higher weekly pay, again without notifying Breht. Breht inadvertently discovered some of Brian and Peter's deceit in July 2011, and requested Connie to bring the pay to Toobaroo to parity with Brian and Peter pursuant to the joint venture agreement. Toobaroo's invoice was then increased accordingly at Connie's direction. Also in 2011, a BI marketing sales executive left BI and went to work at CEVA, and asked Breht to be involved in discussions that led to the beginning of a business relationship between WRI and CEVA. Breht's contacts with CEVA were being pressured by other parts of their company to use a CEVA software system and integrate it with WRI's fulfillment, but, having compared the two systems, Breht's CEVA contacts wanted to use Toobaroo's Lit Store, and ultimately CEVA chose to use Toobaroo's system. Hence, once again, Breht and Toobaroo's value to WRI was demonstrated and Breht remained loyal to the commitment he made to WRI in the joint venture agreement.

Around the end of 2011 and beginning of 2012, fulfillment business from BI had outgrown the space WRI had, and Breht (Toobaroo) developed a database system and software for a temporary warehouse space initially, and then a new WRI warehouse that was used to map, catalog, track materials, and coordinate with allotting client billing for each item and each space in the building. The new warehouse was built due to the growth of the BI fulfillment business as well as in anticipation of CEVA becoming a fulfillment client through the joint venture. All of this business was developed as a direct result of Breht's contacts with CEVA and his software creation expertise.

In March 2012, Breht again noticed discrepancies in compensation contrary to the joint venture agreement and raised his concerns with Connie, following which $20,000 was paid to Toobaroo. In the fall of 2012, the joint venture began discussions with CEVA that led to their collaboration on the Vectra Rebate marketing program. The program relied on a system Breht created in conjunction with the Lit Store that generated variable data allowing the materials, products, sales representatives, clients, territory, and coupon group involved to be tracked....