VBM Corp., Inc. v. Marvel Enterprises, Inc.

• Decision Date: 17 November 1992
• Citation: 842 S.W.2d 176
• Parties: VBM CORPORATION, INC., Respondent, v. MARVEL ENTERPRISES, INC., d/b/a Marvel Equipment Company, Inc., Appellant. WD 45328.
• Court: Missouri Court of Appeals

Page 176

842 S.W.2d 176

VBM CORPORATION, INC., Respondent, v. MARVEL ENTERPRISES, INC., d/b/a Marvel Equipment Company Inc., Appellant.

WD 45328.

Missouri Court of Appeals Western District.

Nov. 17, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied

Dec. 22, 1992.

Charles E. Hammond, Overland Park, KS, for appellant.

Stanley M. Wilkins, Kansas City, for respondent.

BEFORE ULRICH, P.J., and SHANGLER and FENNER, JJ.

SHANGLER, Judge.

The defendant Marvel Enterprises, Inc. [Marvel] appeals from a judgment entered by the trial court in favor of the plaintiff VBM Corporation, Inc. [VBM] for money owed on an account. The award was $24,977.48 for the principal amount due and interest of $2,557.35, for a total judgment of $27,534.83. The money judgment was preceded by an order of summary judgment that concluded Marvel's liability to VBM on the account. The amount of the liability was determined at a separate hearing, and entered as the judgment.

Marvel contends on appeal that the summary judgment was adjudicated before Marvel completed discovery and hence was an abuse of discretion. Marvel contends also that there remained a genuine issue of material fact as to whether VBM, a foreign corporation, was doing business in Missouri without the certificate of authority required by § 351.570, RSMo 1986 [now § 351.572], and so whether the trial court had subject matter jurisdiction of VBM's claim. § 351.635, RSMo 1986 [now § 351.574.1].

We affirm the order of summary judgment as to liability and the consequent money judgment.

VBM is a corporation organized under the laws of Kentucky with its offices located in that state. VBM did not obtain a certificate of authority from the secretary of state to transact business in Missouri. Marvel is a corporation organized under the laws of Missouri with its principal place of business in this state.

VBM manufactures and distributes hydraulic automotive lifts. VBM and Marvel contracted whereby Marvel acted as distributor of VBM automotive lifts and accessories. In addition, Marvel purchased from VBM lifts and accessories for its own inventory, which were resold to its customers within the area of its distribution agreement. The automobile lifts in the Marvel inventory were also used to fill orders by VBM sales personnel to national accounts concluded in Marvel's territory.

In August 1990, VBM brought suit against Marvel for automotive lifts purchased but not paid for. In the course of preparation of the litigation for trial, the parties conducted discovery. Marvel presented its first request for discovery to VBM in January 1991. It was a set of interrogatories and a request for production of documents. The purpose of the discovery was to establish that VBM was transacting business in Missouri without the certificate of authority required of a foreign corporation, and so could not maintain a proceeding in a court of this state. §§ 351.572, 351.574. Numerous among the interrogatories and the documents requested of VBM related to business activity in Missouri with distributors other than Marvel. VBM objected to most of the discovery, and responded to the rest. Marvel presented its second series of discovery in May 1991, and VBM objected and responded as before.

VBM moved for summary judgment against Marvel in July 1991. After that motion was brought, Marvel moved to compel compliance with the second request for discovery, that the court order VBM to answer the interrogatories and make production of documents, and also for sanctions. In August 1991, the court denied sanctions and entered its order of summary judgment on the issue of liability. The amount of the liability was then adjudicated on a hearing and rendered as a judgment.

The first point contends that it was error to order summary judgment before Marvel completed its discovery. Marvel argues that despite its "vigorous" initiatives for discovery, VBM made evasive objections and never fully responded. The information sought related to the sale of automotive lifts and other business activities in VBM's territory in Missouri, and so was relevant on the issue of the jurisdiction of the court to hear the suit, and "also on whether the account of appellant [Marvel] has been properly credited with the commissions that were earned from such sales."

We do not disagree with the principle Marvel cites from 6 MOORE'S FEDERAL PRACTICE § 56.02 that, as a general matter, "a motion for summary judgment should be denied, or at least deferred, if the adverse party has not yet had an opportunity to conduct adequate discovery in opposition to the motion." We do disagree that Marvel was without such opportunity, and, in the full circumstances, regard the complaint of unfair discovery administration as disingenuous. The record of the litigation is a chronicle of inattention by Marvel to timely procedures and heedlessness to legitimate requests for discovery by VBM.

Virtually at the outset of the litigation, Marvel was sanctioned with $300 in costs for untimely responsive pleading. It made no initiative for discovery from VBM until January 1991, six months after the commencement of suit, and no motion to compel discovery until another six months later, after being confronted with the motion for summary judgment. In that interim, and before the motion for summary judgment, VBM had made requests for production of documents and for the deposition of Marvel president, Howard Finke, both of which were not honored. The court ordered a sanction of $500 against Marvel for failure to give the requested discovery. Finke then appeared for deposition, but asserted his right under the Fifth Amendment to refuse answers. ¹

The order of summary judgment adjudicated the fact of liability by Marvel to VBM, and not its extent. It is evident from both the record and the points on appeal, that the complaint of unfair administration of discovery relates not to the fact of liability, as such, but to its extent. ² It relates also to the gathering of information as to the nature and extent of VBM's business activity in Missouri, and hence to the jurisdiction of the court to hear the case. The answer to the petition does, indeed, plead the affirmative defense of accord and satisfaction, in that VBM accepted, executed and negotiated checks with a restrictive endorsement, without taking reservation to them, after a controversy as to the liability of the maker had arisen. Marvel also asserted in response to the motion for summary judgment that the liability by Marvel to VBM was the subject of the accord and satisfaction, so that a genuine issue of material fact remained as to liability.

The burden to prove accord and satisfaction was on Marvel as proponent of the affirmative defense. Sturmville Lumber Co. v. Davis, 416 S.W.2d 49, 50-51[1-5] (Mo.App.1967). The point on appeal, however, does not assert that the entry of summary judgment prior to the opportunity to complete discovery impaired Marvel in the proof of accord and satisfaction, nor does the argument of the point. How the stunted discovery may have prejudiced the proof of that issue, therefore, is not a subject of the appeal before us. Rule 84.04(d), (e).

What remains of the point relied on is that the order of summary judgment prematurely curtailed the opportunity for Marvel to complete discovery on the issue of the jurisdiction of the court to entertain suit by VBM. Marvel means that it was an abuse of discretion by the court to order summary judgment when the interrogatories and the request for documents to VBM remained unanswered. Marvel argues that the responses would have demonstrated "a continuing involvement with its products after they ha[d] come to rest in interstate commerce," as to become the transaction of intrastate business and so subject VBM to the certification requirement of [then] § 351.570. The completed discovery, Marvel argues, would have elicited responses of sales of automotive lifts by VBM to national accounts after they had "come to rest in the State of Missouri" and of warranty services for automotive lifts sold in Missouri. Moreover, the deposition of Scott Pollock, VBM regional manager, which was requested of counsel but never accommodated, would have disclosed that VBM was transacting business in Missouri. This collated discovery information, Marvel concludes, would have proven that the certificate of authority requirement of [then] § 351.570 was applicable to VBM and that the lack of compliance denied VBM the right to maintain a proceeding in our courts under [then] § 351.635. ³

Marvel argues also that the unfairness of the adjudication of summary judgment while discovery still pended was compounded by its heedlessness of Marvel's efforts to resolve VBM's objections without the intervention of the trial court. There are letters by Marvel to VBM after its objections to the first request of discovery and the second request for discovery indicating that Marvel attempted to understand the bases of VBM's objections and to modify the discovery requests accordingly.

It was no mark of diligence for discovery, however, to seek the ground of VBM's last objections only after being confronted with a motion for summary judgment. Nor was it a mark of diligence by Marvel to seek the order of the court that VBM comply with the discovery requests and for sanctions only after being confronted with a motion for summary judgment.

That is not to say, however, that even as modified the discovery requests were not objectionable. The validity of the order of the court denying the pending Marvel motions to compel compliance by VBM to the Marvel requests for discovery and for sanctions is not contested. It stands as if adjudicated that the Marvel motions were without merit. Nor does the informal intention by Marvel to take the deposition of VBM regional sales manager Pollock, but only after confronted with the motion for summary judgment, either prove diligent discovery or...