Appeal from the Circuit Court of St. Louis County. Hon. Michael Godfrey, Senior Judge.
Albert J. Stephan, Jr., Judge, Gaertner, Gary, C.j., Smith, Gerald, J., concur
The opinion of the court was delivered by: Stephan
This is an appeal from a jury award in favor of plaintiff, Patricia A. Holtmeier, (Holtmeier) in the amount of $950,000.00 in a civil action for two counts of breach of contract against defendants John Dayani, Elizabeth Dayani, American Nursing Resources, Inc., American Nursing Resources Home Health Care, Inc. and Medifax, Inc. All defendants appeal. Additionally, Holtmeier cross-appeals the trial court's denial of her motion for additur.
On appeal defendants' allege the trial court erred in the following manner: (1) in failing to direct a verdict for defendants at the close of all the evidence in that Holtmeier failed to prove the existence of a contract for the purchase of her stock; (2) in admitting certain evidence in violation of the parole evidence rule; (3) in failing to direct a verdict for defendants on their defense of the statute of frauds; (4) in failing to direct a verdict for Elizabeth Dayani and the corporate defendants in that Holtmeier failed to prove that John Dayani was acting as the agent for Elizabeth Dayani and the corporate defendants; (5) in admitting certain evidence relating to payments made by Dayani on an installment note; (6) in admitting evidence relating to the asset sale of the corporate defendants; (7) in failing to enter judgment in favor of the Dayanis' on their counterclaim for specific performance of the Stock Transfer and Shareholder Agreement. Holtmeier alleges the trial court erred in failing to grant her request for additur. We affirm in part, reverse in part and remand with instructions and modify in part.
The record reveals the following facts which we view in a light most favorable to the verdict, considering only that which supports it, and disregarding contrary evidence and inferences. Lane v. Cape Mutual Insurance Company, 674 S.W.2d 644, 645 (Mo. App. 1984). Holtmeier is a registered nurse. In 1979, while residing in San Antonio, Texas, Holtmeier began working for Kimberly Nurses, Inc., as a nurse and later as the Director of Kimberly Nurses' San Antonio office. John Dayani was a vice president of Kimberly Nurses in charge of the region that included Holtmeier's San Antonio office. Holtmeier and John Dayani became friends in addition to working together at Kimberly Nurses. In April, 1981, Kimberly Dayani, the brother of John Dayani and president and founder of Kimberly Nurses, died unexpectedly of a massive heart attack. Sometime thereafter, John Dayani told Holtmeier that he was resigning from Kimberly Nurses. He resigned in the fall of 1981. Holtmeier testified that John Dayani began to talk with her about starting a national company similar to Kimberly Nurses that would be nurse owned and operated. Holtmeier resigned from Kimberly Nurses in December, 1981. In 1982, Holtmeier and John Dayani started a secretarial service in San Antonio, Texas, called American Temporary Resources. John Dayani was also president and chief executive officer of three other companies called Medifax, Inc. (Medifax), American Nursing Resources, Inc. (ANR) and American Nursing Resources Home Health Agency, Inc. (ANRHHA). (At times hereinafter ANR, ANRHHA and Medifax are collectively referred to as "the companies" or as "the corporate defendants.") Holtmeier was paid by Medifax for her employment at American Temporary Resources. At this time, John Dayani began talking to Holtmeier about moving to St. Louis, Missouri, to open an ANR office there.
In September, 1982, Holtmeier moved from San Antonio to St. Louis, Missouri, to open an ANR office. Holtmeier testified that John Dayani promised her in return for her move to St. Louis and her efforts to open and work at an ANR office in St. Louis, she would own twenty percent of ANR. Holtmeier also testified that John Dayani promised her twenty percent of two other companies, Medifax and ANRHHA. He promised her that her total interest in the companies would at least be one million dollars.
In 1983, Holtmeier asked John Dayani for written documentation of her twenty percent ownership in ANR, ANRHHA and Medifax. Thereafter, a dispute arose as to the percentage of stock John Dayani promised to Holtmeier and the total value of the stock. On January 1, 1984, Holtmeier recieved a document entitiled "Stock Transfer and Shareholder Agreement." The document transfers stock shares in ANR, ANRHHA and Medifax from John and Elizabeth Dayani to Holtmeier. However, after recieving the stock shares, Holtmeier worried that the shares she recieved from them did not reflect the interest John Dayani had promised her. After unsuccessfully attempting to resolve the dispute, Holtmeier resigned from ANR and ANRHHA in November, 1989. In December, 1989, Holtmeier demanded payment, in the amount of one million dollars, for her interest in the stock. Defendants refused and, upon learning of Holtmeier's resignation, John Dayani and his wife, Elizabeth, informed Holtmeier of their option to purchase Holtmeier's stock. Holtmeier testified she was not willing to tender her stock certificates to defendants unless they were willing to pay her one million dollars for her interest.
Holtmeier filed a four count petition against all defendants. The case went to trial on two counts of breach of contract. A jury returned a verdict in favor of Holtmeier in the amount of $950,000.00.
Defendants' allege the trial court erred in failing to direct a verdict for defendants because Holtmeier's petition set forth a different version of the agreement between defendants and Holtmeier than that which was submitted in Instrucions 4, 5, 6, 7 and 8, and, in any event, defendants contend the record contains no evidence from which a jury could find an agreement as hypothesized in Instructions 4, 5, 6, 7 and 8.
The standard of review for the direction of a verdict is that it is inappropriate unless, viewing the evidence in a light most favorable to the plaintiff, reasonable minds could only find in favor of defendants. SAB Harmon Ind. v. All State Bldg. Syst., 733 S.W.2d 476, 485 (Mo.App. 1987).
In Count I, paragraphs 4, 5 and 6, of Holtmeier's amended petition she alleges that in September, 1982, John Dayani on behalf of himself and acting as an officer for ANR, ANRHHA and Medifax, asked Holtmeier to come to St. Louis to open ANR, ANRHHA and Medifax offices in St. Louis. In return for Holtmeier terminating her employment and relocating to St. Louis, John Dayani promised her, on behalf of himself and all other defendants, a twenty percent ownership in each of the three companies - ANR, ANRHHA and Medifax. John Dayani further promised to Holtmeier that her interest would always be worth at least one million dollars. Holtmeier thereafter terminated her employment in Texas and moved to St. Louis where she opened an ANR office in Clayton, Missouri and an ANRHHA office in Washington, Missouri.
Holtmeier further alleges in Count I, paragraphs 8, 9 and 10 that John Dayani continued to represent to Holtmeier that her interest in the companies would be minimally one million dollars but then began discussing with her different percentages her stock represented, changing the interest figure from twenty percent to three percent. In March, 1985, John Dayani gave stock certificates to Holtmeier which represented the following shares: 12 shares of ANR, 12 shares of ANRHHA and 300 shares of Medifax.
In Count I, paragraph 11, Holtmeier alleges she was concerned that she had not received the compensation she and John Dayani had agreed upon, a minimum of a one million dollar interest in the corporations. In a letter dated December 11, 1986, John Dayani wrote to Holtmeier guaranteeing her that her shares of stock would be worth one million dollars minimally. Thereafter, John Dayani agreed to execute a note guaranteeing her payment of $500,000.00 together with a further promise of another $500,000.00 at a later date. One note was executed with first payment due on January 1, 1989, and last payment due on January 1, 1994.
Holtmeier further alleges in Count I, paragraph 12 and 13, that in early 1988 she learned that her shares of the companies represented less than one percent of the issued and outstanding stock. She made demand upon all defendants to purchase her stock for one million dollars.
In Count IV, paragraph 4 and 5, Holtmeier alleges that on or about March 1, 1987, all defendants executed a note payable to Holtmeier in the amount of $500,000.00. This note provided that defendants were to pay Holtmeier $5,000.00 on or before the first of each month beginning January 1, 1989, and continuing until January 1, 1994, when the entire amount would be due. Holtmeier further alleges in Count IV, paragraph 6, 7, 8, 9 and 10, that she performed all of her obligations under the note. She received ten payments on the note. However, she received no payments after October, 1989. By letter dated November 22, 1989, she advised defendants of their default and exercised her option to accelerate the payments due, declaring the entire amount due and payable no later than December 8, 1989. She alleges in her amended petition defendants have failed to make payment on such note.
The question defendants' issue presents is whether Holtmeier's amended petition, Counts I and IV, and the evidence presented at trial is reflected in Instructions 4, 5, 6, 7 and 8 as submitted. Initially, we note that defendants failed to object to any instructional error at trial. Missouri Supreme Court Rule 70.03 gives counsel the right not to object at trial to an instructional error as long as the specific objection is raised in the motion for new trial. This preserves the matter for appellate review. Nakata v. Platte County R-3 School District, 750 S.W.2d 669, 674 (Mo.App. 1988). Because, defendants did raise the point in their motion for new trial, we will review.
The evidence revealed that from some time in 1981 through June, 1984, John Dayani represented to Holtmeier that she would have an ownership interest in ANR, ANRHHA and Medifax. The evidence also revealed that John Dayani represented to Holtmeier that her interest would be worth at least one million dollars.
Holtmeier testified that John Dayani had promised her she would have one million dollars or more before she was 40 years old. Holtmeier testified that she met with John Dayani in St. Louis, at Barnes Hospital, to discuss the letter she had received. At that meeting, Holtmeier testified that John Dayani assured her that her interest would be worth a minimum of one million dollars. He further told her that she was like a sister to him and that he would do for her what his brother had done for him. John Dayani testified that he told Holtmeier at that meeting "if we do our job right as I did with my brother I would not be surprised that the share in the stocks could be worth [a million dollars], because that's what happened to me."
Holtmeier produced a letter from John Dayani to her, dated October 10, 1983, stating "This is to reaffirm to you what I [John Dayani] previous told you back in June of 1982. It is still my intention...to transfer to you a total of 3% of some form of stock ownership of Medifax, American Nursing Resources and Home Health Agency. This of course assumes that...you will continue your loyal employment with the Company, not competing with it and maintaining confidential all of its confidential and propietary information." This letter is signed by John Dayani as president of Medifax.
Holtmeier testified she was very upset by this letter because John Dayani had changed the represented stock interest he had promised her from twenty percent to three percent. She testified that, in her previous Discussions with John Dayani, he had promised her that her interest in the companies would be worth a minimum of one million dollars. Holteier testified she was particularly concerned about the amount the stock represented because she had considered starting her own company. She testified she felt she would have made a profit for herself of at least one million dollars if she started her own company, but instead agreed to help John Dayani in his endeavors based on his promise.
On January 1, 1984, Holtmeier received a letter from John Dayani signed as President of Medifax on Medifax letterhead, advising her that he had arranged "to transfer...an ownership interest in [Medifax, ANR and ANRHHA]..." to Holtmeier. Attached to the cover letter was a document titled "Stock Transfer and Shareholder Agreement." The document is between Holtmeier and John and Elizabeth Dayani. The document states in part, "in September of 1981, [John Dayani], grateful of the loyalty, friendship, love and devotion that his close friend and acquaintance, Holtmeier, had always given to him and that Holtmeier had agreed to work with him in his medical transcription and nursing endeavors, promised and became legally bound to transfer to Holtmeier an ownership interest in such business endeavors of [John Dayani]". The document, effective January 1, 1984, transfers from John and Elizabeth Dayani to Holtmeier 300 shares of stock in Medifax, 12 shares of stock in ANR and 12 shares of stock in ANRHHA. It also provides for the companies to exercise a first option to purchase the stock from Holtmeier if Holtmeier would die, become disabled, retire from employment or participate in activities that are in competition with Medifax, ANR, or ANRHHA. John and Elizabeth Dayani had the second option to purchase the stock once the companies' option had expired. The document is signed by John Dayani, as president of the three defendant companies. Holtmeier also signed and returned the agreement to John Dayani. Elizabeth Dayani did not sign the document.
Holtmeier did not receive the actual stock certificates until March, 1985. After receiving the stock certificates, Holtmeier complained to John Dayani that the stock certificates did not set forth the dollar amount of her interest and requested that John Dayani state in a letter that Holtmeier's interest would be guaranteed at one million dollars. Holtmeier testified that John Dayani told her in March, 1986, that he would purchase her stock for a million dollars in two years. Holtmeier received a handwritten letter not on company letterhead dated May 25, 1986, from John Dayani stating, in part, "You as an owner have the opportunity to be able to withdraw money from the company against your ownership of up to one million dollars, which would be due as the company is mergered or sold upon receipt of your ownership value. I will make certain that the value of your ownership is at minimum worth one million and more, if less I will personally purchase your shares at a million dollar value."
Shortly after the receipt of the letter dated May 25, 1986, Holtmeier told John Dayani that she was beginning to think about resigning from the company for personal reasons. However, at this point, John Dayani began to dispute that he had told Holtmeier that she had a twenty percent interest in each of the three companies. John Dayani suggested that he and Holtmeier meet with Dr. Francis Winter to mediate their differences. Elizabeth Dayani also attended this metting. After the meeting, John Dayani stated he would draft a letter outlining what they had discussed in the meeting. In a letter dated December 11, 1986, from John Dayani to Holtmeier, John Dayani stated, in part:
I will start to put together a promissory note for you with the specific implementation date of no later than December 31, 1988. This promissory note will have three phases.
Phase 1 Sell of your stock independently at a reasonable value with remainder of the one million due you at the sell or merger of the company no later than December 31, 1988.
Phase 2 If your stock or the company are not sold before December, 1988, I or the company will purchase your stock at that time at a responsible multiple of the asset of the company, up to one million dollars.
Phase 3 If phase 1 or 2 did not materialize, I will personally liquidate assets where possible to put together a sum of $500,000 cash and 5% interest on the remaining $500,000 after the first twelve months until such time the company has been mergered , sold or gone public.
This letter also made reference to a life insurance policy that John Dayani intended to purchase naming Holtmeier as beneficiary. He stated in the letter, "If I die before all these goals are met, I will have a million dollar insurance policy purchased by me with you as beneficiary so that your needs will be met." At trial, Holtmeier produced a Jackson National Life Insurance policy purchased by John Dayani with a face amount of $1,100,000.00 naming Holtmeier as the ...