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Dennis v. Riezman Berger, P.C.

Court of Appeals of Missouri, Eastern District, Third Division

September 20, 2016

THOMAS DENNIS and SONYA CHERRY, Appellants,
v.
RIEZMAN BERGER, P.C. and MERCY HOSPITAL JEFFERSON, Respondents.

         Appeal from the Circuit Court of St. Louis County Hon. Robert S. Cohen

          ROBERT G. DOWD, JR., Judge

         Thomas Dennis and Sonya Cherry ("Appellants") each sued Riezman Berger, P.C. ("Riezman") and Mercy Hospital Jefferson ("Mercy") alleging violations of the Fair Debt Collection Practices Act ("FDCPA") and the Missouri Merchandising Practices Act ("MMPA"). Cherry made an additional claim against Riezman and Mercy for wrongful garnishment. The cases were consolidated, and Riezman and Mercy both moved to dismiss Appellants' petitions. The motions were heard, and the trial court entered judgment dismissing both petitions with prejudice at Appellants' cost. Appellants now appeal from that judgment. We reverse and remand.

         In their petitions, Thomas Dennis and Sonya Cherry both alleged the following: Mercy, by and through its collection attorneys, Riezman, filed collection suits against them alleging that they owed outstanding balances for unpaid medical services. In Dennis's petition, he alleged that he and Mercy agreed to enter into a consent judgment whereby Dennis agreed to incrementally pay Mercy the balance owed. Riezman mailed Dennis the proposed consent judgment, which he signed and returned. Riezman then had the judgment entered. The judgment did not provide for recovery of post-judgment interest. In Cherry's petition, she alleged that Mercy and Riezman took a default judgment against her at their first opportunity, and it did not provide for the recovery of post-judgment interest.

         In both petitions, Dennis and Cherry further alleged post-judgment interest is only recoverable if it is expressly awarded in the judgment. They further alleged that the thirty-day deadline to file a motion to modify the judgments and request the court to award post-judgment interest had expired, that Mercy had not filed post-judgment motions requesting that post-judgment interest accrue on the judgments, and that as of the date of the petitions, no party had ever made a request for post-judgment interest to accrue on the judgments. In Dennis's case, he alleged the following: over the several months following the entry of the consent judgment, he made several payments to Mercy, in care of its collection attorneys, Riezman. Thereafter, Riezman filed an Execution/Garnishment/Sequestration application directed to Dennis's bank. Within their garnishment, Mercy and Riezman claimed that the amount Dennis owed included post-judgment interest and did not properly credit Dennis for the payment he had made. The entire amount of the garnishment was applied to Dennis's bank account, which was insufficient to cover it. His bank assessed a fee for his failure to maintain funds in his account. Had Mercy and Reizman only issued a garnishment for the amount Dennis claims he actually owed, Dennis would have had enough funds in his account to cover the garnishment and would not have been assessed the bank fee. Cherry alleged that in her case, three garnishments were issued which sought, inter alia, post-judgment interest.

         Dennis further alleged that Mercy and Riezman attempted to excuse their unlawful seizure of funds and unilaterally sent him a check, which constituted an admission of liability that they had unlawfully garnished Dennis over the amount he owed on the judgment but did not provide full restitution for the amount of the illicit garnishment. He further alleged the check did not compensate him for the bank fee, the stress and anxiety of having his bank account depleted to a zero balance or the three-month dispossession and lack of use of his funds.

         Dennis and Cherry both claimed Riezman's actions violated the FDCPA. Dennis alleged Riezman violated the FDCPA by: (1) falsely representing the character, amount, and legal status of the debt; (2) threatening to take action that cannot legally be taken; and (3) collecting an amount that is not permitted by law. Cherry claimed that Riezman violated the FDCA by: (1) collecting an amount not authorized by law or agreement between Cherry and Mercy and Riezman; (2) falsely representing the amount of the debt; and (3) taking Cherry's money by making misrepresentations about the amount and content of the judgment. Both Dennis and Cherry sought judgment that Riezman's conduct violated the FDCPA as well as actual damages, statutory damages, costs and reasonable attorney's fees and further relief the court deemed proper.

         Dennis and Cherry also claimed that Mercy and Riezman's actions violated the MMPA. They both alleged that Mercy and Riezman used "deception, false pretenses, false promises, misrepresentation, factual omissions and unfair business practices when they garnished funds" from them, which they did not owe and which were not awarded by the underlying judgments. They alleged Mercy and Riezman drafted the judgments, which did not provide for post-judgment interest, and had access to them at all times relevant to their collection activity and knew they did not award post-judgment interest. Both Dennis and Cherry alleged that Mercy and Riezman's actions caused them ascertainable loss, and they prayed for actual damages, punitive damages, reasonable attorney's fees, and further relief the court deemed proper.

         Cherry's petition also included a wrongful garnishment claim as to Mercy and Riezman, alleging they abused and/or misused garnishment rules and intentionally caused a garnishment to take funds they knew she did not owe, namely illicit post-judgment interest. Cherry sought actual and punitive damages as well as any further relief the court deemed proper.

         Riezman filed motions to dismiss in both cases arguing that Appellants' petitions were premised on the same allegations, i.e., that the underlying judgments entered against Appellants for nontort debt did not specifically provide for the collection of post-judgment interest on the judgment and that the subsequent collection of such interest violated the FDCPA and MMPA, and in the case of Cherry, established a wrongful garnishment claim. Riezman claimed that Missouri law does not require a judgment to expressly allow for the collection of post-judgment interest in order for it to be collected from the judgment debtor and that, therefore, Appellants failed to state a cause of action upon which relief could be granted. Mercy filed a one sentence motion to dismiss in both cases praying that the petitions be dismissed for failure to state a cause of action upon which relief can be granted without citing any more specific grounds for the motions.[1] Thereafter, the cases were consolidated, and the motions to dismiss were heard and granted. The cases were dismissed with prejudice at plaintiff's cost. The trial court's order of judgment does not indicate any specific basis for the dismissal. This appeal follows.

         We review a trial court's grant of a motion to dismiss de novo. In re Estate of Austin, 389 S.W.3d 168, 171 (Mo. banc 2013). "A motion to dismiss for failure to state a cause of action is solely a test of the adequacy of the plaintiff's petition." State ex rel. Henley v. Bickel, 285 S.W.3d 327, 329 (Mo. banc 2009) (internal quotations omitted). The plaintiff's averments are assumed to be true, and all reasonable inferences therefrom are liberally granted in the plaintiff's favor. Id. "[T]he petition is reviewed in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case." Id. In order to survive the motion, "the petition must invoke substantive principles of law entitling plaintiff to relief and . . . ultimate facts informing the defendant of that which plaintiff will attempt to establish at trial." Id. (internal quotation omitted). In making our determination, we do not address the merits of the case or consider evidence outside the pleadings. Brennan By and Through Brennan v. Curators of the Univ. of Mo., 942 S.W.2d 432, 434 (Mo. App. W.D. 1997).

         Where, as here, the trial court did not state a basis for its dismissal, "we presume that dismissal was based on the grounds stated in the motions to dismiss and will affirm if dismissal was appropriate on any ground supported by the motions." Duvall v. Lawrence, 86 S.W.3d 74, 78 (Mo. App. E.D. 2002). "If the motion to dismiss cannot be sustained on any ground alleged in the motion, the trial court's ruling will be reversed." Austin, 389 S.W.3d at 171. However, we will not affirm "the grant of a motion to dismiss on grounds that are not stated in the motion." Breeden v. Hueser, 273 S.W.3d 1, 6 (Mo. App. W.D. 2008). Here, the only grounds effectively stated in Mercy and Riezman's motions to dismiss were that Appellants fail to state a cause of action upon which relief can be granted since their petitions are premised on the allegation that the underlying judgments did not specifically provide for the collection of post-judgment interest. Riezman argued in its motion to dismiss that Missouri law does not require a judgment to expressly allow for the collection of post-judgment interest in order for it to be collected from the judgment debtor. While Mercy filed a one-sentence motion making the very basic allegation that Appellants failed to state a cause of action upon which relief can be granted, it did not provide any specific grounds for the motion which this Court can review, much less affirm. Moreover, the parties conceded that the only issue before the trial court was whether the petitions should be dismissed based upon the argument that the underlying judgments were not required to expressly provide for the collection of post-judgment interest. Accordingly, this is the only issue we will address.[2] Because we find that post-judgment interest is not an automatic award and must be included in the judgment, we find that the petitions were improperly dismissed, and we reverse and remand.

         Mercy and Riezman argue that Section 408.040.2 does not require a judgment to expressly allow for collection of post-judgment interest in order for it to be collected from a judgment. We disagree. Specifically, the relevant subsections of Section 408.040 state:

2. In all nontort actions, interest shall be allowed on all money due upon any judgment or order of any court from the date judgment is entered by the trial court until satisfaction be made by payment, accord or sale of property; all such judgments and orders for money upon contracts bearing more than nine percent interest shall bear the same interest borne by such contracts, and all other judgments and orders for money shall bear nine percent per annum until satisfaction made as aforesaid.
3. Notwithstanding the provisions of subsection 2 of this section, in tort actions, interest shall be allowed on all money due upon any judgment or order of any court from the date judgment is entered by the trial court until full satisfaction. All such judgments and orders for money shall bear a per annum interest rate equal to the intended Federal Funds Rate, as established by the Federal Reserve Board, plus five percent, until full ...

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