Court of Appeals of Missouri, Eastern District, Fourth Division
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Appeal from the Circuit Court of St. Charles County. 0911-CV11957. Honorable Nancy L. Schneider.
FOR APPELLANT: Jane C. Hogan, Adam A. Karp, St. Louis, MO.
FOR RESPONDENT: Richard C. Wuestling IV, Susan M. Dimond, St. Louis, MO; Frank Conard, St. Charles, MO.
Patricia L. Cohen, P.J., and Roy L. Richter, J., concur.
ROBERT M. CLAYTON III,
Joseph (" Joe" ) McCary and John Micheal (" Mike" ) McCary (collectively " Appellants" ) appeal the grant of summary judgment in favor of David W. Terry and Fellows, Blake & Terry, L.L.C. (collectively " Terry"  and the grant of summary judgment in favor of Kathleen Schiller and Jacquelyn Highfill on Appellants' cross-claims. We affirm the grant of summary judgment to Terry for Appellant's breach of fiduciary duty and legal malpractice claims, affirm the grant of summary judgment to Schiller and Highfill for Appellants' negligence and conspiracy to defraud claims, but reverse and remand the grant of summary judgment in favor of Schiller and Highfill for Appellants' fraud claim.
This case has a complex factual and procedural history. Matilda McCary died in 2003 while in the care of a nursing home. Two of McCary's children, Schiller and Highfill, retained Terry to pursue a wrongful death lawsuit against the nursing home. Schiller and Highfill are Appellants' sisters and Matilda McCary was their mother. Appellants did not retain Terry and never had a fee agreement with him.
Terry filed a wrongful death lawsuit on behalf of Schiller and Highfill, styled Kathy Schiller & Jacquelyn Highfill v. National Health Care Corp., et al, Case No. 0511-CV04821. Appellants were not named parties in the suit and never sought legal advice from Terry regarding the suit. The parties settled the wrongful death lawsuit. In August 2007, Terry sent Appellants letters via certified mail notifying them of the settlement hearing:
I represent your sisters, Kathy Schiller and Jackie Highfill in a wrongful death claim against several defendants . . . Pursuant to the Revised Statutes of Missouri § 537.095, a plaintiff in such action must notify all those in the class of people eligible to participate in the lawsuit before the matter is finalized. Since you are a member of the class, you are eligible to be notified that this matter has been concluded. In Missouri, wrongful death cases must be approved by a judge during a settlement hearing. Members of the wrongful death class are entitled to be provided notice of
when and where the settlement hearing will take place.
If you wish to attend the settlement hearing and make a claim, you must do so prior to the time this hearing is finally concluded. We currently have set a hearing to conclude the matter for Monday, September 17, 2007 beginning at 9:00 a.m. If you plan on attending the hearing, you must report to Division 1 of the St. Charles County Circuit Court, 300 North Second Street, St. Charles, Missouri 63303 at that time. (Emphasis in original).
The parties dispute what happened next. Mike McCary admits that he signed the letter's receipt, but Joe McCary asserts by affidavit that someone else signed his name to the letter's receipt. In any event, Appellants have presented no evidence to suggest that the letters were not sent to their correct addresses or that Appellants were unaware of the scheduled hearing. However, both Appellants assert via affidavit that Schiller and Highfill told them " it would be better if none of the family attended[,]" including Appellants. Appellants also assert in their affidavits that Schiller and Highfill directed them to sign notarized statements to the court allowing Schiller and Highfill to distribute the settlement as they saw fit, and that if Appellants did not do so, Schiller and Highfill would take them out of the settlement entirely. Finally, Appellants assert that Schiller and Highfill told Appellants they could not reveal the settlement amount due to a nondisclosure agreement. In response, Schiller and Highfill presented their own deposition testimony and deposition testimony from another sibling, Peggy Andrews, refuting Appellants' assertions.
Appellants did not attend the September 17, 2007 settlement hearing. At the hearing, the court held that all members of the class of claimants received proper notice of the hearing. The court also found that Appellants signed notarized documentation concurring with the disbursement decisions made by Schiller and Highfill. Further, the court found that Betty Minor, another McCary sibling, was estranged from her family, was specially excluded from her mother's will, and therefore took nothing from the settlement. Finally, the court approved the percentages of the settlement proceeds distribution to each member of the class after deducting attorney's fees, expenses, and liens from the total amount. Schiller and Highfill each received 25% of the settlement after deductions, and Appellants each received 10%.
Thereafter, in December 2009, Minor filed the present suit. Minor alleged Terry was negligent and breached his fiduciary duty to her by failing to apprise her of the status of the litigation, by failing to use reasonable efforts to locate her once a settlement was reached, by allowing the settlement to be approved without her knowledge and consent, and by allowing the disbursement to deny her recovery. Minor also alleged counts against Schiller and Highfill for negligence, fraud, collusion, and injurious falsehood, claiming they intentionally provided Terry with false contact information, made false statements about her relationship with her mother, and allowed the settlement funds to be disbursed without her consent.
Schiller and Highfill filed a cross-claim petition against Terry, alleging that as their attorney, Terry failed to advise them of the statutory notice requirements. Terry also filed a cross-claim petition against Schiller and Highfill for contribution, indemnification, and fraud.
The parties mediated the dispute and
reached a settlement. Appellants were not present at the mediation, but Schiller and Highfill represented that they had authority to settle on behalf of all members of the wrongful death class, including Appellants. All parties signed and executed the settlement agreement except Appellants and their father, Jack McCary, each of whom refused to sign. Terry filed motions to compel settlement and to join Appellants and their father as cross-claim plaintiffs. The motion to join stated that Appellants and their father could potentially seek to recover damages from Terry because the same questions of law and fact asserted by Minor could potentially be asserted by Appellants and their father against Terry. The trial court granted Terry's motion to join.
Appellants then filed an amended petition asserting cross-claims against Terry, Schiller, and Highfill. Appellants' cross-claims against Terry were for breach of fiduciary duty (Count I) and legal malpractice (Count II). Appellants alleged Terry represented all of Matilda McCary's beneficiaries in the underlying litigation. Therefore, Appellants alleged Terry owed them a duty to keep them apprised of the litigation and to ensure an equal and fair distribution of the settlement proceeds. Appellants alleged Terry breached this duty, depriving Appellants of a reasonable share of the settlement proceeds. Appellants alleged counts of negligence (Count I), fraud (Count II), and conspiracy to defraud (Count III) against Schiller and Highfill for allegedly misleading Appellants about their rights under the litigation and the amount of the settlement.
Terry filed a motion for summary judgment on Appellants' breach of fiduciary duty and legal malpractice claims. Schiller and Highfill also filed a motion for summary judgment for Appellants' claims against them. The trial court granted both motions. This appeal followed.
Appellants raise four points on appeal. First, Appellants assert the trial court erred in granting summary judgment to Terry because Terry owed them a duty of care, and there were unresolved genuine issues of material fact as to whether Terry breached that duty. Second, Appellants contend the trial court erred in granting summary judgment to Terry because Terry should have been judicially estopped from asserting that he did not owe them a duty of care or that an attorney-client relationship did not exist. Third, Appellants argue the trial court erred in granting summary judgment to Terry because Terry had a general duty to ensure that Missouri's wrongful death statute was followed and that the distribution of the settlement proceeds complied with the law. Fourth, Appellants maintain the trial court erred in granting summary judgment to Schiller and Highfill because they pleaded submissible cases of fraud, negligence, and conspiracy to defraud, and there existed unresolved genuine issues of material fact.
A. Standard of review
Summary judgment is reviewed essentially de novo and affirmed only where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). A defendant may establish summary judgment is appropriate by showing: (1) facts negating any one of the plaintiff's elements necessary for judgment, (2) that the plaintiff has not produced evidence sufficient for the finder of fact to find the existence of one of the plaintiff's elements, or (3) facts necessary to support a properly pleaded affirmative defense. Rob ...