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08/16/83 CHUBB GROUP INSURANCE COMPANIES v. C. F.

August 16, 1983

CHUBB GROUP OF INSURANCE COMPANIES, AND RINGLING BROTHERS -BARNUM & BAILEY COMBINED SHOWS, INC., ICE FOLLIES & HOLIDAY ON ICE, INC., SELLS-FLOTO, INC., APPELLANTS
v.
C. F. MURPHY & ASSOCIATES, INC., AND J. E. DUNN CONSTRUCTION CO., AND KANSAS CITY STRUCTURAL STEEL CO., AND BETHLEHEM STEEL CORP., AND BOB D. CAMPBELL, AND IVAN L. ROENIGK, AND DON H. LUELLEN, AND MICHAEL F. QUINLAN, AND RALPH KEITH, AND CITY OF KANSAS CITY, MISSOURI, RESPONDENTS



From the Circuit Court of Jackson County; Civil Appeal; Judge Paul E. Vardeman; Reversed in Part and Remanded for Further Proceedings

Before Nugent, P.j., Wasserstrom, Kennedy, JJ.

The opinion of the court was delivered by: Nugent

Plaintiffs appeal from the trial court's dismissal of counts one through five of their nine-count petition for failure to state a cause of action for damages arising from the collapse of the roof of the R. Crosby Kemper Memorial Center (hereinafter Kemper Arena). All five of the dismissed counts relate to all defendants except the city of Kansas City. Counts I and II allege negligence in the construction and design of Kemper Arena and seek recovery for the plaintiffs' loss of their right to use and occupy the arena. Count III seeks to hold the defendants strictly liable for plaintiffs' loss. Count IV alleges breach of an implied warranty of usefulness for business and entertainment, and Count V alleges that defendants negligently and recklessly misrepresented that Kemper Arena was properly designed and constructed. Counts VI through IX are solely against the city, alleging breach of contract to rent the arena, detrimental reliance on the contract, wrongful representation that the arena was free of defects, and negligent maintenance and operation of the arena. In addition to the primary issue of whether plaintiffs' petition states a cause of action, we are first faced with the question of whether the trial court's order was final and appealable. We reverse in part the trial court's dismissal and remand for further proceedings consistent with this opinion.

On review of the trial court's dismissal of a petition, our duty is to determine if the facts pleaded and reasonable inferences to be drawn from the allegations, when viewed in the light most favorable to the plaintiffs, demonstrate any ground for relief. DeMaranville v. Fee Fee Trunk Sewer, Inc., 573 S.W.2d 674, 676 (Mo. App. 1978). Even if the petition is imperfectly or defectively stated, we must accept as true all facts it avers, construe all averments liberally and favorably to the plaintiffs and determine whether they invoke principles of substantive law upon which relief may be granted. City of Kansas City v. Mary Don Co., 606 S.W.2d 411, 413-14 (Mo. App. 1980).

Doing so, we accept as true the following facts which appear in plaintiffs' first amended petition dated October 13, 1980.

Plaintiff Chubb Group of Insurance Companies is the insurer of the other plaintiffs and is subrogated to the rights of those parties in the amount of $967,934.44. Plaintiffs Ringling Brothers-Barnum & Bailey Combined Shows Inc., Ice Follies & Holiday on Ice, Inc., and Sells-Floto, Inc. entered into an agreement with the city of Kansas City to use, possess, and occupy Kemper Arena exclusively for definite periods for the purpose of operating traveling entertainment revues and selling souvenirs and concessions.

Defendant C. F. Murphy and Associates, Inc., is an architectural firm. Defendant J. E. Dunn Construction Co. is a construction firm. Defendant Kansas City Structural Steel Co. is engaged in the erection of steel beams and frames. Defendant Bethlehem Steel Corp. manufactures and fabricates steel products, including steel bolts. Individual defendants Campbell, Roenigk, Luellen, Quinlan, and Keith comprised the last board of directors of the Bob D. Campbell Corp. and continue to do business as consulting structural engineers. These defendants (referred to collectively as the non-city defendants) all participated in the design and construction of Kemper Arena.

Defendant city of Kansas City owns and operates the arena.

On June 4, 1979, the roof of the arena collapsed.

In Count I, the plaintiffs allege that the non-city defendants negligently designed and constructed Kemper Arena, and list thirteen specific failures of design and construction, including failure to design and construct the roof to withstand stress caused by normal weather conditions; failure to design and construct devices to drain water from the roof; failure to design, construct, inspect, and test adequate roof supports; failure to provide a warning system for stress build-up; failure to design and manufacture parts that could withstand normal and foreseeable pressures; and failure to warn that the parts provided were not capable of withstanding such pressures. The defects were said to be concealed so that a reasonable inspection by plaintiffs would not have revealed them. Plaintiffs assert that as a direct and proximate result of defendants' negligence, the arena was unusable from June 4, 1979, to February 20, 1980, preventing plaintiffs from staging performances and selling souvenirs, thereby damaging Ringling Brothers in the amount of $203,342.58 plus costs; damaging Ice Follies in the amount of $450,000.00 plus costs; and damaging Sells-Floto in the amount of $314,591.86 plus costs.

In Count II, plaintiffs allege that the negligence of the non-city defendants "rendered the structure essentially and imminently dangerous to plaintiffs, other users of the building and the general public," damaging plaintiffs in the same amounts sought in Count I.

In Count III, plaintiffs allege that each of the non-city defendants participated in the design and construction of Kemper Arena, and that at the time plaintiffs obtained the rights to use the arena, it "was in a defective condition unreasonably dangerous", damaging them in the amounts shown above.

In Count IV, plaintiffs allege that the non-city defendants knew that the plaintiffs as well as the general public would use the Kemper Arena for business and entertainment and impliedly warranted that the arena was designed and constructed so as to be free of defects in design, workmanship and material. As a result of a breach of that implied warranty, plaintiffs were damaged in the amounts shown above.

In Count V, plaintiffs allege that the non-city defendants negligently and recklessly misrepresented that the Kemper Arena was properly designed and constructed, that defendants knew or should have known that those representations were not true, that in reliance on them, plaintiffs obtained the rights to use Kemper Arena, and that as a direct and proximate result, the plaintiffs were damaged in the amounts shown above.

The remaining four counts relate solely to the defendant city of Kansas City. In Count VI, plaintiffs assert that they entered into an agreement with the city for the use of Kemper Arena, that the city refused to make the arena available, and that as a result of that breach, plaintiffs were damaged in the amounts shown above.

In Count VII, plaintiffs assert that in reliance on the contract with the city, they scheduled performances in Kansas City and "materially altered their position". As a "direct, proximate and foreseeable" result of the city's refusal to be bound by the lease, plaintiffs were damaged in the amount of $967,934.44 plus costs.

In Count VIII, plaintiffs assert that the defendant city "negligently maintained and operated Kemper Arena in that its roof and supporting structure were dangerous and defective as fully described" in Count I. Further, the city was negligent by "wrongfully representing and certifying that Kemper Arena was free from defects . . . where defendant knew or should have known . . . that Kemper Arena was in a dangerous and defective condition" and that the arena was in violation of city ordinances pertaining to the maintenance of foundations, walls and roofs. As a result of the city's negligence, plaintiffs were damaged in the amounts shown in Count I.

In Count IX, the plaintiffs again assert that the city negligently maintained and operated Kemper Arena and that the defects listed in Count I "rendered Kemper Arena essentially and imminently dangerous to plaintiffs, other users thereof and the general public." As a result of this negligence, plaintiffs were damaged in the amounts shown in Count I.

Following the filing of the petition, the non-city defendants filed motions to dismiss Counts I through V. On February 24, 1981, the trial court sustained those motions for failure to state a claim on which relief can be granted. On March 2, 1981, plaintiffs requested that the court designate its order as final for purposes of appeal. On July 9, 1981, the court ruled on that motion, denying the request. On July 17, 1981, plaintiffs filed a notice of appeal from both the February 24 and the July 9 order. On August 26, 1981, the court designated the order of February 24, 1981, as final. On September 2, 1981, plaintiffs again filed a notice of appeal from the February 24 order dismissing Counts I and V. (That appeal was consolidated with the earlier appeal on September 9, 1981.)

On October 8, 1981, the non-city defendants jointly filed a motion to dismiss plaintiffs' appeal, arguing that the appeal was not timely. Although the motion was overruled, this court granted permission to the parties to brief the issues, and they have done so. Accordingly, we reach this issue before considering the substance of plaintiffs' appeal.

Timeliness of Appeal

Section 512.020 *fn1 governs the right to appeal and provides that an appeal may generally be made only from a final judgment. To be final and appealable, a judgment must dispose of all parties and all issues in the case, leaving nothing for future determination, unless the trial court has ordered a separate trial of any claim or issue or has specifically designated the particular judgment as a final judgment for purposes of appeal. State ex rel. Schweitzer v. Greene, 438 S.W.2d 229 (Mo. 1969) (en banc); Dalton v. Borger, 562 S.W.2d 802 (Mo. App. 1978). See also Bolin v. Farmers Alliance Mut. Ins. Co., 549 S.W.2d 886 (Mo. 1977) (en banc) (holding that a summary judgment in favor of a defendant insurance company was interlocutory because it did not dispose of plaintiff's rights against an individual defendant), and Spires v. Edgar, 513 S.W.2d 372 (Mo. 1974) (en banc) (discussing the decisions on this point in depth and concluding that an order sustaining one defendant's motion to dismiss plaintiff's claim was final because so designated by the trial court even though other defendants and issues remained).

Rule 81.06 governs the requirement of designation of a judgment as final, and provides in part as follows:

When a separate trial is had before the court without a jury *fn2 of claims arising out of the same transactions, occurrences or subject matter as the other claims stated or joined in the case the judgment entered shall not be deemed a final judgment for purposes of appeal . . . unless specifically so designated by the court in the judgment entered. However, when a separate trial is had before the court without a jury of an entirely separate and independent claim unrelated to any other claims stated or joined in the case, then the judgment entered shall be deemed a final judgment for purposes of appeal . . . unless the court orders it entered as an interlocutory judgment. . . [Emphasis added.]

When claims arise out of the same transaction or occurrences, then, a non-jury judgment entered on only some of those claims is not final, unless so designated. When the claims are entirely separate and independent, the judgment entered is final, unless designated as interlocutory. See State ex rel. Axtell v. Marsh, 624 S.W.2d 874 (Mo. App. 1981); Schumacher v. Sheahan Inv. Co., 424 S.W.2d 84, 86 (Mo. App. 1968). Here, then, where the trial court did not designate its order of February 24, 1981, as final until six months after the order was entered, we must determine whether the claims on which that order was based (Counts I through V) were entirely separate, independent, and unrelated to the undisposed of claims (Counts VI through IX), making that order final without designation thirty days after its entry as provided in Rule 81.05 (March 26, 1981), and requiring appeal within ten days of that date as provided in Rule 81.04(a) (April 6, 1981). If so, plaintiffs' appeal is too late. By contrast, if the claims arose out of the same transactions or occurrences, the order of February 24, 1981, was not final until it was so designated on August 26, 1981, making plaintiffs' appeal on September 2, 1981, timely as within the ten days provided in Rule 81.04(a).

Here, all of plaintiffs' claims arise out of the collapse of the roof of the Kemper Arena and to that degree, obviously arise out of the same occurrence. Defendants argue, nevertheless, first, that the first five counts are severable because they are tortious in nature and concern a distinct group of defendants not named in the remaining four counts, all of which are contractual in nature. *fn3 Defendants characterize Counts VI through IX as a "separate, unconnected, contractual dispute with another defendant that was totally unrelated" to the tort claims brought against them in Counts I through V. However convenient such a characterization might be, we cannot accept it here where an examination of two of the counts against the city, Counts VIII and IX, reveals that they are not contractual in nature, but instead, sound in tort, alleging that, as evidenced by the very defects listed in Count I, the city negligently maintained and operated Kemper Arena in violation of city ordinances and wrongfully misrepresented that the arena was free of defects. Accordingly, proof of the averments in Counts VIII and IX depends at least in part on whether the defects listed in Count I did in fact exist and cause the collapse of the roof. Moreover, the city's role as a party to a contract is not the basis for recovery in these counts (as it is in Counts VI and VIII). Instead, its role is as a tortfeasor whose negligence interfered with plaintiffs' leasehold estate, the same role played by the non-city defendants in Counts I through V.

Defendants argue as well that in addition to the criteria for finality of separate judgment enumerated in Rule 81.06, the Eastern District case of Crenshaw v. Great Central Ins. Co., 527 S.W.2d 1 (Mo. App. 1975), has added the element of dependency. There, in Count I of their petition, Mr. and Mrs. Crenshaw sought recovery for the wrongful death of their son, killed in an automobile accident. In Count II, the boy's sister, Gretchen, sought recovery for her personal injuries resulting from the same accident, and in Count III, the father sought recovery for Gretchen's medical expenses. The trial court dismissed Count I as being barred by the statute of limitations, and plaintiffs appealed. The appellate court held that although all three counts arose from the same accident, all three affected members of the same family, and all three presented common questions of law and fact, including negligence and causation, "Rule 81.06, however, does not speak to these kinds of similarities. The rule speaks to a situation where the several claims, counts, etc. are dependent on each other." (Court's emphasis.) Count I was deemed not to be dependent on the remaining counts because it was separate and apart from any relief that might be given on those counts and was, therefore, held to be final and appealable.

We interpret Crenshaw to clarify the "entirely separate and independent claim" language of Rule 81.06 to mean that claims dependent in some respect on the outcome of the causes of action remaining on other counts cannot be independent. See also State ex rel. Ashcroft v. Gibbar, 575 S.W.2d 924, 927 (Mo. App. 1978). We would agree that, as in Crenshaw where one count has been dismissed on a statute of limitations basis, dismissal can have no effect whatsoever on other counts against the same defendant with different statutes of limitations. Where, as here, however, certain counts are dismissed for failure to state a cause of action, and remaining counts raise clearly related issues, the dismissal cannot be said to be without effect on the remaining counts. In this situation at least, the counts remain dependent on each other and hence, not final unless so designated.

This is distinguishable from Hauser v. Hill, 510 S.W.2d 765 (Mo. App. 1974), also cited by defendants, which held that Count I, a declaratory judgment determining which of defendant's insurance companies provided coverage for plaintiff's injuries, was final and appealable even though it arose from the same occurrence (an automobile accident) on which the other counts were based. The court held that because the first count did not involve the liability of the defendant tortfeasor, the issues in that count were "entirely different from those in the remaining counts and the determination of Count I has no effect upon the determination of the other counts . . ." The same cannot be said here. The issues, as we have seen, are not entirely different and in fact, common questions of fact and law abound. We are dealing directly in each of Counts I, II, III, IV, V, VIII and IX with the question of what party, if any, should be held liable for the defects, if any, which caused the collapse of the roof and the injury to plaintiffs' leasehold. Obviously, viewed in this light, the dismissal of Counts I through V for failure to state a cause of action does affect determination of Counts VIII and IX which are based on related theories. The counts cannot, by any stretch of the imagination, be said to be independent. We need not decide whether, if the remaining counts consisted only of the contractual claims in Counts VI and VII, the "tried" and "untried" claims would be sufficiently dependent to be final without designation. The existence of any undetermined, dependent claim precludes such finality.

Accordingly, we hold that Counts I through V are not entirely separate and independent from the petition's remaining counts, and therefore, under the dictates of Rule 81.06, the order dismissing those counts was not final and appealable until so designated by the trial court on August 26, 1981. Plaintiffs' appeal on September 2, 1981, was, therefore, timely.

We now proceed to the merits of this appeal.

Counts I and II -- Negligence

Plaintiffs allege that the trial court erred in dismissing Counts I and II for negligence because they properly pleaded the elements of actionable negligence as presented in Scheibel v. Hillis, 531 S.W.2d 285, 288 (Mo. 1976) (en banc): (1) the existence of a duty; (2) breach of that duty; and (3) injury resulting from that breach.

None of the parties seriously disputes that plaintiffs have pleaded both breach and injury. At issue is whether as the designers, supervisors, contractors, sub-contractors, and manufacturers of the elements used in the roof supports, the non-city defendants were under any duty to third parties to exercise due care. We hold that they were.

As to architects and contractors, the court in Aetna Ins. Co. v. Hellmuth, Obata & Kassabaum, Inc., 392 F.2d 472 (8th ...


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