Wally & Co., LC v. Briarcliff Development Co.
Reversing the trial court, the Missouri Court of Appeals, Western District held that a real estate broker’s commission was earned when the landlord and tenant entered a binding agreement setting out a resolution process for determining price, although the process wasn’t completed until after expiration of the broker agreement.
Teasdale & Associates v. Richmond Heights Church of God in Christ
The Missouri Court of Appeals, Eastern District affirmed a judgment awarding Teasdale & Associates damages in an action on account. Teasdale, a law firm, had represented the church in a suit against the church and its pastor, James Hunt, in which certain of the church’s parishioners sought to enjoin Hunt from selling real property owned by the church. The church prevailed in the suit but refused to pay Teasdale’s legal fees under a fee agreement signed by Hunt individually and on behalf of the church as its president.
The church refused to pay Teasdale and Teasdale brought an action on account. The church argued on appeal that Hunt didn’t have the requisite authority to bind the church on a contract for legal services, that Teasdale’s fees weren’t reasonable, and that Teasdale failed to make a demand for payment.
In order to prevail on an action on account, the plaintiff must show that (1) the defendant requested that the plaintiff furnish the services at issue, (2) the plaintiff accepted the defendant’s offer by furnishing the services, and (3) the charges were reasonable. The appellate court found that there was sufficient evidence to uphold the trial court’s finding that Hunt had authority to bind the church and that Teasdale’s fees were reasonable.
In addition, demand for payment isn’t an element of an action on account. The court stated, “It is well established under Missouri law that plaintiffs are not required to produce evidence of a rejected demand for payment to make a prima facie case in an action on account. … Rather, payment of the debt at issue is an affirmative defense that a defendant must plead and prove.”
Vinstickers, LLC v. Stinson Morrison Hecker
The Missouri Court of Appeals, Western District affirmed the dismissal of a legal malpractice claim, because the claim had been assigned and “the public policy of Missouri does not allow this Court to enforce an assignment of a legal malpractice claim.” The appellate court quoted a prior Missouri Court of Appeals decision that articulated the rationale underpinning the policy:
The Goodley court feared that assignment could lead to the acquisition of malpractice actions by economic bidders who have never had a professional relationship with the attorney and to whom the attorney has never owed a legal duty, and that this could place an undue burden on not only the legal profession but the already overburdened judicial system, restrict the availability of competent legal services, embarrass the attorney-client relationship and imperil the sanctity of the highly confidential and fiduciary relationship existing between the attorney and client.
. . .
A fundamental policy concern is the undesirable risk of tempering an attorney’s zeal with concern that a present adversary may become the holder of the client’s alleged legal malpractice claim if the client suffers an unsatisfactory result. As a prospective judgment creditor, the former adversary may view the attorney as a source of collection. Moreover, just as adverse parties have sued their opponent’s lawyer for malicious prosecution, there are some who seek an assignment against their former adversary’s counsel for retaliation. These concerns can directly or subjectively detract from an attorney’s loyalty, dedication and zeal in pursuing the client’s claim. . . . Another policy concern is the risk of eroding the confidence within the attorney-client relationship. Although the risk of an attorney disclosing confidences necessary to the defense exists in any legal malpractice action, . . . allowing an assignment could result in restraining some clients from full disclosure if they know they might offer a claim against their lawyers as part of the consideration to discharge liability. A corollary of that concern is that a nonclient has no concern for whether prosecution of a malpractice claim injures the defendant’s former client.
Golden Rule Insurance Co. v. R.S.
The Missouri Court of Appeals, Western District determined that a coordination of benefits provision in an insurance policy that encouraged the insured to obtain additional coverage created an ambiguity when read together with a provision in the policy that prohibited other coverage. The ambiguity didn’t help the insured’s case for coverage, however, as neither of the reasonable interpretations of the policy would have provided coverage.
The case is interesting in that it states the rationale for certain rules of construction of insurance contracts. Here are some quotes from the case:
The cardinal rule for the courts in interpreting a contract, including an insurance policy, is to effectuate the parties’ intent at the time of contracting. Generally we do this by giving the language in the policy its plain and ordinary meaning. The plain meaning of the various terms in an insurance policy is not determined by viewing the terms in isolation but by viewing them in reference to the whole policy. When the words and phrases in the policy, viewed as a whole, are ambiguous, we must resort to the rules of contract construction applicable to insurance policies.
We construe ambiguities in favor of the insured for two principal reasons:
(1) insurance is designed to furnish protection to the insured, not defeat it; ambiguous provisions of a policy designed to cut down, restrict, or limit insurance coverage already granted, or which introduce exceptions or exemptions, must be strictly construed against the insurer; and (2) as the drafter of the policy, the insurance company is in the better position to remove the ambiguity from the contract.
To test whether an insurance policy is ambiguous, appellate courts consider the language in the light in which it would normally be understood by the lay person who bought and paid for the policy. Where a policy promises the insured something at one point but then takes it away at another, there is an ambiguity. An ambiguity follows when the insurance policy contains two clauses that irreconcilably contradict one another, and, consequently, the ambiguity will be resolved in favor of the insured. [citations and internal quotations omitted]
A direct, irreconcilable conflict between two insurance provisions creates an ambiguity. The existence of an ambiguity, however, does not automatically mandate a decision on behalf of the insureds. In order for the insured to prevail, an ambiguous clause in an insurance policy must allow for alternative reasonable readings, one of which supports the coverage the insured actually seeks. [citations omitted]
[I]n resolving an ambiguity, we do not throw the baby out with the bath water. A void part of … [a] contract (absent elements of fraud …) does not necessarily make the whole void …. Rather, the question is whether the void part can be extracted from the whole while leaving the remainder intact:
If the void part is so interwoven with other provisions as to make them all interdependent or enough of them interdependent to spoil the symmetry and perfection — the one resting on the other or furnishing a motive for the other — then the void provision strikes down the whole, but where the void part stands as an independent clause segregated from the main body and where, if eliminated by judicial construction, a perfect … contract would remain, … the void part might be pruned away as a dead limb and leave the … contract intact as live and enforceable. [citations and internal quotations omitted]
As noted above, ambiguous provisions of a policy designed to cut down, restrict, or limit insurance coverage already granted, or which introduce exceptions or exemptions, must be strictly construed against the insurer. In this case the [coordination of benefits] provision does not cut down, restrict, or limit coverage already granted, nor does it introduce exceptions or exemptions; rather, it purports to allow other insurance that would have resulted in termination of coverage under the existing insurance prohibition clause in the application. Further, while the insurance company was in a better position to remove the ambiguity, its removal would not have aided [the plaintiffs].