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Grillo v. Global Patent Group LLC

Court of Appeals of Missouri, Eastern District, Fourth Division

June 30, 2015

SALVATOR J. GRILLO, Appellant,
v.
GLOBAL PATENT GROUP LLC and DENNIS BENNETT, Respondents

Appeal from Missouri Circuit Court of St. Louis County. Honorable Richard C. Bresnahan, Judge.

Michael P. Downey, St. Louis, MO, for appellant.

Gary A. Growe, Clayton, MO, for respondents.

OPINION

Patricia L. Cohen, Presiding Judge

Page 352

Introduction

Plaintiffs Salvator Grillo and Global Pharma, L.L.C. (Pharma) (collectively, Plaintiffs) appeal the Circuit Court of St. Louis County's grant of summary judgment to defendants Dennis Bennett and Global Patent Group, L.L.C. (Patent) (collectively, Defendants) on their claims of breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and action for an accounting. Plaintiffs contend that the trial court erred in granting Defendants summary judgment because: (1) section 484.150 of the Missouri Revised Statutes permits a nonlawyer to receive a share of law firm profits; and (2) equity requires Defendants to pay Plaintiffs all promised compensation. We affirm.

Factual and Procedural Background

Mr. Grillo is a nonlawyer Missouri resident and the sole owner of Pharma. Mr. Bennett is a lawyer licensed to practice law in Missouri and the sole owner of Patent, a law firm organized in Missouri in 2007. Mr. Grillo worked for Patent as a

Page 353

business manager from 2007 until his termination in October 2009.

On May 3, 2012, Plaintiffs filed a petition against Defendants for breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and action for an accounting. In their petition, Plaintiffs alleged the following facts: From 2004 to 2007, Mr. Grillo and Mr. Bennett were partners in a pharmaceutical patent business located in Washington, D.C. In 2007, Mr. Grillo and Mr. Bennett dissolved the business " with the intent of reforming a partnership." Mr. Bennett insisted that Mr. Grillo " transfer the new partnership" to St. Louis. " [R]elying on legal advice from his partner, [Mr. Bennett,]" Mr. Grillo incorporated Patent " on behalf of the partnership" in Missouri in 2007.[1] At that time, Mr. Bennett and Mr. Grillo " agreed and intended to operate [Patent] in accordance with the previous terms of their [Washington, D.C.] partnership." Mr. Grillo and Mr. Bennett further agreed that Mr. Grillo would advance start-up expenses and costs and Mr. Grillo and Mr. Bennett would share management responsibilities and " profits and losses equally." In 2007, Patent reimbursed Mr. Grillo for the start-up costs and expenses, and from 2007 to 2009, Mr. Bennett and Mr. Grillo shared equally in Patent's profits. From October 2009 through 2010, Mr. Grillo received less than half of Patent's profits, and in 2011, Mr. Grillo stopped receiving any share of Patent's profits. Mr. Grillo alleged that he " has not been compensated for his 50% ownership interest in [Patent.]"

Based on the above factual allegations, Plaintiffs raised two claims against Defendants and two claims against Mr. Bennett individually. In Plaintiffs' Count I for breach of contract against Defendants, they asserted that Mr. Grillo and Mr. Bennett " agreed and intended to share [Patent's] profits and losses equally" and Defendants breached the agreement by failing to pay Mr. Grillo's share of the profits. In Count II for breach of the covenant of good faith and fair dealing against Mr. Bennett, Plaintiffs alleged that Mr. Bennett and Mr. Grillo had an attorney-client relationship, Mr. Bennett " promised to act in good faith and fair dealing with [Mr.] Grillo," and Mr. Bennett " breached the covenant of good faith and fair dealing" by renouncing the parties' agreement. In Count III for breach of fiduciary duty against Mr. Bennett, Plaintiffs claimed that Mr. Bennett breached his fiduciary duties to Mr. Grillo as a principal member of Patent and a licensed attorney because he did not intend to comply with the terms of the parties' agreement. In Count IV against Defendants for action in accounting, Plaintiffs alleged that Mr. Grillo was entitled to an accounting " because he is [Mr. Bennett's] partner" and Mr. Bennett purposefully and fraudulently misallocated Patent's expenses and profits and refused to pay Mr. Grillo his portion of Patent's profits.

Defendants filed their answer denying the petition's allegations and, subsequently, filed a motion for summary judgment on all counts. In their motion, Defendants asserted twenty-nine uncontroverted material facts, including the following: Mr. Bennett is a Missouri-licensed attorney, Mr. Grillo is not a lawyer, and Patent ...


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