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Rocking H. Trucking, LLC v. H.B.I.C., LLC

Court of Appeals of Missouri, Western District, Second Division

April 14, 2015


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Appeal from the Circuit Court of Boone County, Missouri. The Honorable Jodie C. Asel, Judge.

David L. Knight, Columbia, MO, Counsel for Appellants.

Ronald Salvatore ribaudo, Ballwin, MO, Counsel for Respondents.

Before Division Two: Anthony Rex Gabbert, PJ., Karen King Mitchell, J. and Mary Rhodes Russell, Special Judge. All concur.


Anthony Rex Gabbert, Judge.

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H.B.I.C., LLC (HBIC), Michelle Alderson (Alderson), and David Fenton (Fenton)[1] appeal the circuit court's judgment finding Rocking H. Trucking, LLC (Rocking) and John Payne Harrison IV (Harrison)[2] entitled to immediate possession of certain trucks and trailers held by Appellants, damages for a truck and trailer that had been destroyed while in the possession of Appellants, and lost income that Respondents could have generated if Appellants had not denied them possession of the trucks and trailers. Appellants assert three points on appeal. First, Appellants contend that the circuit court erred in entering judgment for replevin because it was against the weight of the evidence and misapplied the law in that plaintiff Harrison's testimony was not credible with regard to being sole owner of Rocking and plaintiff Rocking did not establish its right to possession because the trucks and trailers were titled in the name of HBIC. Second,[3] Appellants contend that the circuit court erred in: (a) entering judgment against Fenton and Alderson as individuals in Count I, (b) entering judgment for plaintiffs in Count II generally, and (c) failing to name who the judgment was against in Count II. Appellants claim there was no substantial evidence to support the judgment, it was against the weight of the evidence, and misapplied the law because the trucks in question were

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originally titled to Rocking and transferred and titled to HBIC, the plaintiffs did not ask the court to pierce the corporate veil, the plaintiffs made no allegations against Fenton with respect to ownership of HBIC, and it was uncontroverted that Alderson was the sole member of HBIC. Third, Appellants contend that the circuit court erred in awarding Harrison individual damages and lost income because the court erroneously applied the law of corporations in that Rocking was a limited liability company in good standing, the court found Rocking to be the rightful owner of the disputed property, and a limited liability company is a separate entity. We affirm.

On March 19, 2012, Respondents filed a First Amended Petition for Replevin and Damages or in the Alternative Promissory Estoppel and Fraud. Therein, Respondents sought the return of various trucks and trailers that had been transferred from Rocking to HBIC, as well as damages and lost income. Alderson filed a counterclaim against Harrison for unpaid earnings associated with an alleged promise to share with her the proceeds of a settlement. Alderson claimed that she assisted Harrison in obtaining a settlement for a bad cattle vaccine and Harrison had promised to pay her half of any settlement in excess of $100,000.

Evidence Supporting the Trial Court's Judgment

In the light most favorable to the court's judgment, the evidence at trial showed that Harrison met Fenton in 2002 or 2003 when both he and Fenton were involved in " backgrounding" cattle. Harrison testified that " backgrounding" is a business that " takes lightweight cattle, heals them up, doctors them, and tries to get them straightened out and make loads" to either sell or send to feed. When Harrison and Fenton met, Fenton was retiring as a veterinarian for the Columbia Livestock Market but owned a backgrounding lot in Columbia. Harrison and his father owned a livestock market called Callaway Livestock. Harrison and Fenton decided to start backgrounding cattle together. Their business arrangement involved Fenton's lot receiving the backgrounding fees, and Harrison paying for the medicine, the feed, and Fenton's yardage. Harrison described " yardage" as " a certain amount per head per day." Fenton received yardage and Harrison sold the cattle at his livestock market and received a percentage of what the cattle brought at sale.

Harrison and Fenton backgrounded cattle together for several years and, during that time, they developed a close friendship. At one point, Harrison loaned Fenton $100,000 for a piece of property in Columbia that Fenton desired to purchase but was unable to obtain a loan for. Fenton never repaid Harrison. With regard to the backgrounding business, Harrison lost approximately $350,000. He testified that the loss was no one's fault, " [w]e just hit a bad cattle market, a decline for four years, and cattle just all lost its money." Nevertheless, he and Fenton remained close friends. Harrison testified that he was holding all of the debt on the cattle and at some point it became obvious that there was no way to earn back the money he had lost backgrounding. He and Fenton then began transporting cattle as a way to recoup the money. Harrison had a truck and Fenton had a trailer and drivers were paid to transport the cattle. Harrison testified that, because he was in the livestock market in Kingdom City, he had an " in" with regard to the business of hauling cattle. He testified: " That's kind of why we got in the trucking business, because I always had kind of an inside on who was going to need a truck that night, and I would kind of get them started."

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Harrison testified that the trucking operation was important to Fenton as well because he had a half interest on the loss on the cattle.

In the first year of trucking cattle, Harrison dispatched and Fenton had very little involvement. Over time, the operation grew and Fenton took over dispatching and Harrison took care of accounting. Harrison created Rocking H. Trucking, LLC, for the business in 2008. Harrison was the sole member of the LLC. Money earned from the business was used to purchase additional trucks and trailers for expansion of the business. Neither Harrison nor Fenton took a salary from the business. Harrison testified that, as sole member of Rocking, he legally owned the trucks and trailers that were titled under that LLC.

In late 2010, Harrison hired attorney Sue Crane to represent him with regard to a Department of Transportation (DOT) case where Rocking was facing large fines for regulatory issues. Crane testified at trial that she, alone, was instrumental in resolving the situation with the DOT and the fines against Rocking were ultimately dropped. Meanwhile, however, Crane learned from Harrison that appellant Alderson, Fenton's daughter, had convinced Harrison that Rocking had been " red flagged" by the DOT and that, to help alleviate the DOT's scrutiny Harrison should create a new company for himself with a new name and move the trucks into the new company.

With regard to Alderson's involvement, Harrison testified that, around the time the issues with the DOT came about, Alderson took over as Rocking's bookkeeper. He testified that Alderson was very smart and had a college education and Fenton wanted something for her to work into to have a company down the road. Harrison considered Alderson a very good friend. Harrison put Alderson in charge of DOT compliance and trusted her recommendations in that regard. When Alderson suggested that the Rocking name be changed to avoid DOT scrutiny, Harrison did what she asked and signed what she asked him to sign. ...

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