Court of Appeals of Missouri, Southern District, First Division
THEODORE PULLEN, EDGAR PULLEN, FREDDIE PULLEN, and ELISHA PULLEN, Plaintiffs-Appellants,
TIMOTHY FLOWERS, KIMBERLY ANN FLOWERS, STANLEY C. FLOWERS, TRUSTEE OF THE STANLEY C. FLOWERS REVOCABLE TRUST DATED 12/09/2005, KENNETH R. BELL, DEBRA J. BELL, and THE BELL FAMILY PARTNERSHIP, Defendants-Respondents.
FROM THE CIRCUIT COURT OF STODDARD COUNTY Honorable Michael
E. Gardner AFFIRMED
W. SHEFFIELD, C.J.
Pullen, Edgar Pullen, Freddie Pullen, and Elisha Pullen
("Plaintiffs") appeal from the trial court's
dismissal of their petition. Plaintiffs' petition
included two claims involving the conveyance of a family farm
property owned by a closely held corporation to Timothy
Flowers, Kimberly Ann Flowers, and the Stanley C. Flowers
Revocable Trust ("the Flowers Defendants") who
subsequently transferred the farm to Kenneth R. Bell, Debra
J. Bell, and the Bell Family Partnership ("the Bell
Defendants"). The trial court's dismissal is
affirmed because Plaintiffs lack standing to maintain the
and Procedural Background
Review of a trial court's grant of a motion to dismiss is
de novo. White v. Bowman, 304 S.W.3d 141, 147 (Mo.
App. S.D. 2009). In conducting such review, the appellate
court must "accept all properly pleaded facts as true,
give them a liberal construction, and draw all reasonable
inferences which are fairly deducible from the pleaded
facts." Duvall v. Lawrence, 86 S.W.3d 74, 78
(Mo. App. E.D. 2002). So viewed, these facts control our
C. Pullen, Sr. ("Father") had nine children
("the children") and owned a 158-acre farm
("the property") in Stoddard County, Missouri.
Among Father's children were J.C. Pullen, Jr.
("J.C."), Norris T. Pullen, Sr.
("Norris"), Bertha Luster ("Bertha"), and
Everse Pullen ("Everse"). After Father died in 1972,
the children inherited the farm, created a corporation known
as Pullen Farm, Incorporated ("Pullen Farm"), and
conveyed the property to Pullen Farm.
time not apparent from the record, Plaintiffs, two of whom
are children of Norris and two of whom are children of J.C.,
became shareholders of Pullen Farm. By 2012, corporate
documents listed Everse as President of Pullen Farm and
Bertha as Secretary of Pullen Farm. On January 25, 2012,
Everse and Bertha executed a deed on behalf of Pullen Farm
conveying the property to the Flowers Defendants. Then, on
September 7, 2012, the Flowers Defendants conveyed the
property to the Bell Defendants.
March 11, 2013, Plaintiffs sued the Flowers Defendants, the
Bell Defendants, and Pullen Farm. That petition sought to set
aside each of the deeds involved in the transactions
described above and to quiet title to the property in Pullen
Farm. The petition claimed Everse and Bertha were not
officers of Pullen Farm because Pullen Farm had failed to
follow its articles of incorporation in selecting them. The
Flowers Defendants and the Bell Defendants moved to dismiss,
arguing that the petition failed to state a claim based on
applying Section 351.395 and that Plaintiffs lacked
standing. In response, Plaintiffs argued Section
351.400 applied to create a cause of action in their favor
because Everse and Bertha "emptied the corporation
out." The trial court dismissed the petition
without prejudice as it applied to the Flowers Defendants and
the Bell Defendants but allowed the lawsuit to proceed as to
Pullen Farm. The record is unclear as to the result of the
2013 lawsuit regarding Pullen Farm.
October 21, 2014, Plaintiffs filed this lawsuit that is the
subject of the present appeal against the Flowers Defendants
and the Bell Defendants. The petition was the same as the
2013 petition except it completely removed Pullen Farm as a
defendant and included three new paragraphs. On December 12,
2014, the Flowers Defendants and the Bell Defendants moved to
dismiss. They argued the petition should be dismissed on
seven grounds, among them that Plaintiffs lacked standing. On
October 29, 2015, the trial court dismissed the petition with
prejudice as to both the Flowers Defendants and the Bell
Defendants. Plaintiffs appeal.
trial court correctly dismissed Plaintiffs' petition
because Plaintiffs do not have standing to assert these
claims against the Flowers Defendants and the Bell
Defendants. "[S]tanding is a prerequisite to the
court's authority to address substantive issues and so
must be addressed before all other issues." Schweich
v. Nixon, 408 S.W.3d 769, 774 n.5 (Mo. banc 2013).
"Standing is the requisite interest that a person must
have in a controversy before the court." Cook v.
Cook, 143 S.W.3d 709, 711 (Mo. App. W.D. 2004) (quoting
State ex rel. Mink v. Wallace, 84 S.W.3d 127, 129
(Mo. App. E.D. 2002)). "A party establishes standing,
therefore, by showing that it has 'some legally
protectable interest in the litigation so as to be directly
and adversely affected by its outcome.'"
Schweich, 408 S.W.3d at 775 (quoting Mo. State
Med. Ass'n. v. State, 256 S.W.3d 85, 87 (Mo. banc
2008)). "Absent standing, the court lacks the power to
grant the relief requested." Cook, 143 S.W.3d
individual shareholder does not have standing to maintain a
personal action for recovery of corporate funds."
Bruner v. Workman Oil Co., 78 S.W.3d 801, 804 (Mo.
App. S.D. 2002). The reason for this rule is that "[a]ny
injury is to the corporation, not to individual
shareholders[.]" Id. (quoting Dawson v.
Dawson, 645 S.W.2d 120, 125 (Mo. App. W.D. 1982)).
Remedy in such situations should be had by way of a
shareholders' derivative action. Id.; see
also Cook, 143 S.W.3d at 711. "The courts have
adopted this rule because, since the wrong is against the
corporation, judgment in favor of one stockholder would be no
bar to the maintenance of additional actions for the same
wrong to the corporation by other shareholders or by a
creditor." Bruner, 78 S.W.3d at 804 (quoting
Centerre Bank of Kansas City Nat. Ass'n. v.
Angle, 976 S.W.2d 608, 613 (Mo. App. W.D. 1998)).
the property belonged to Pullen Farm before the challenged
transactions. Any interest in that property which Plaintiffs
had arose based on their status as shareholders of Pullen
Farm. They had no standing to sue third parties in their
individual capacities. See id.
attempt to avoid this conclusion by reference to Section
351.400. This reliance is misplaced because it overlooks the
specific remedies for violation of Section 351.400 provided
in Section 351.405. Section 351.400 provides procedures to be
followed when a corporation sells, leases, or disposes of all
or substantially all of its property and assets. As relevant
to the present case, Section 351.400 requires written notice
of the shareholders' meeting at which the decision is to
be made and, at that meeting, "the affirmative vote of
the holders of at least two-thirds of the outstanding shares
entitled to vote at such meeting[.]" § 351.400(3).
Under the ...