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Wagoner v. Conocophillips

Court of Appeals of Missouri, Southern District, Second Division

March 31, 2017

CORY WAGONER, [1] An individual and beneficiary of Missouri, Petroleum Storage Tank Insurance Fund trust, Plaintiff-Appellant,
v.
CONOCOPHILLIPS, a Delaware Corporation, DON MCNUTT, JIM FORD, HARRY BOZOIAN, SCHUYLER MARIEA, DANNY OPIE, MELVIN SCHEBAUM, RENEE SLUSHER, JOHN ALBERT, TOM KOLB, TOM PFEIFFER, and SOONER INSURANCE COMPANY, Defendants-Respondents.

         APPEAL FROM THE CIRCUIT COURT OF GREENE COUNTY Honorable Timothy W. Perigo, Special Judge

         AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

         Cory Wagoner ("Wagoner"), a contributor to, and beneficiary of the Missouri Petroleum Storage Tank Insurance Fund ("the Fund"), [2] appeals the amended judgment of the trial court granting summary judgment in favor of ConocoPhillips.[3] In three points on appeal, Wagoner asserts trial court error in granting summary judgment. We grant Wagoner's second point in part, reverse the judgment as to Count IV of Wagoner's petition and remand for further proceedings as to that count, but otherwise deny Wagoner's points and affirm the judgment.[4]

         Facts and Procedural History

         The history of this case is complex. We recite only those facts necessary for the resolution of the issues before us.[5]

         This matter arises out of allegations that ConocoPhillips failed to return money paid to it by the Fund, as reimbursements for taking corrective actions and cleaning up leaking underground storage tanks.

         In November 2012, Wagoner filed suit against ConocoPhillips in the Circuit Court of Greene County ("Wagoner I"). Wagoner alleged that, as a petroleum storage tank owner and taxpayer, as well as a contributor to and a beneficiary of the Fund, he was entitled to seek damages from ConocoPhillips due to money having been wrongfully obtained by ConocoPhillips from the Fund.

         On January 3, 2013, Wagoner filed a second amended petition. This petition added the Fund as "fiduciary and beneficiary, " included additional allegations about the Fund, and specified that "[r]elief and recovery sought herein by [Wagoner] is for the benefit of [Wagoner] as a participant, and the Fund as fiduciary and beneficiary of recovery of damages asserted."

         The Fund and ConocoPhillips moved to dismiss Wagoner's second amended petition on the grounds that Wagoner lacked standing. In March 2013, the trial granted the Fund's motion to dismiss, but denied that of ConocoPhillips. That same month, Wagoner filed a third amended petition to add a Racketeer Influenced and Corrupt Organizations ("RICO") claim against ConocoPhillips.

         In April 2013, ConocoPhillips removed the case to the U.S. District Court for the Western District of Missouri on the basis of the RICO claim. Wagoner filed a motion to remand. The district court denied Wagoner's motion for remand, reasoning: "[Wagoner] is not the right party to bring claims on behalf of the . . . Fund . . . against ConocoPhillips, a third party. Rather, that right belongs solely to the . . . Fund." Wagoner subsequently voluntarily dismissed his federal case.

         The Missouri Attorney General then brought suit in the Circuit Court of St. Louis City against ConocoPhillips, asserting similar allegations, in State of Missouri, ex rel. Koster v. ConocoPhillips Company, 1322-CC00929 (the "St. Louis lawsuit").

         On September 13, 2013, Wagoner also brought a new action in the Circuit Court of Greene County on behalf of the Fund ("Wagoner II") against ConocoPhillips and its insurer, Sooner Insurance Company, as well as the current board of trustees of the Fund (the "Board").

         Most of the claims in both Wagoner II and the St. Louis lawsuit rested upon the contention that ConocoPhillips defrauded the Fund by failing to disclose insurance that would have covered the remediation costs reimbursed by the Fund. Both suits claimed that alleged insurance coverage precluded ConocoPhillips from obtaining reimbursements from the Fund. However, the Wagoner II petition also sought, in Count IV, removal of the Fund's trustees for alleged breaches of fiduciary duty occurring both before and during litigation, a claim which was not asserted or even suggested in the St. Louis lawsuit.

         Wagoner attempted to intervene in the St. Louis lawsuit for the purpose of moving to dismiss it in favor of Wagoner II. The St. Louis court denied Wagoner's motion to intervene, stating:

The record does not support a finding that Wagoner has the requisite interest in the subject matter of this case to warrant intervention. Wagoner has paid into the PST Fund, but has not made any claim against it, nor has he been denied a claim, nor is there any evidence that the PST Fund will be unable to meet its statutory obligations to Fund participants in the future.
Wagoner does not have a private cause of action to seek reimbursements for the Fund. Section 319.127 relates to enforcement of the PST Fund statutes. The statute contains no express provision either establishing or prohibiting a private cause of action. There is, however, an express provision authorizing the Department of Natural Resources to "request either the attorney general or a prosecuting attorney to bring any action authorized in this section in the name of the people of the State of Missouri." RSMo § 319.127. See Johnson v. Kraft Gen. Foods, Inc., 885 S.W.2d 334, 336 (Mo. 1994). Our Supreme Court has said that, ."[w]hen the legislature has established other means of enforcement, we will not recognize a private civil action unless such appears by clear implication to have been the legislative intent." Id. . . . The Court concludes that Wagoner does not have an independent cause of action for the reimbursement of PST Fund monies.
Wagoner asserts that the PST Fund is a special statutory trust to which he is a beneficiary, giving him standing to sue for reimbursement from [ConocoPhillips] on behalf of the Fund. The argument is without merit, as Wagoner cannot assert a claim on behalf of the PST Fund against a third-party. . . . In Missouri, the property of the trust can only be recovered by the trustee, and the beneficiaries have no legal capacity to sue for [trust res] recovery. Baker v. Dale, 123 F.Supp. 364, 368 (W.D. Mo. 1954). In its order denying Wagoner's motion for remand [in Wagoner I], the Federal District Court correctly stated Missouri law on this issue:
Under [Missouri] statutes and Missouri case law, Wagoner is not the person to enforce remedies at law, such as declaratory judgment and fraud claims, against [ConocoPhillips]. . . . "As a general rule, a beneficiary may not bring an action at law on behalf of a trust against a third party. . . . The right to bring such an action belongs to the trustee." Intl Ass'n of Fire Fighters, Local 2665 v. City of Clayton, 320 F.3d 849, 851 (8th Cir. 2003) (citing Restatement (Second) of Trusts §§ 280, 281 (1) (1957)). This includes claims committed by a third party with respect to trust property of which the beneficiary is not in possession. See Restatement (Second) of Trusts ยง281 cmt. B (1959). Wagoner's participant status is similar to a trust ...

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