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May v. Williams

Court of Appeals of Missouri, Western District, First Division

August 1, 2017

JOSEPH A. MAY, Respondent,
v.
JAMES WILLIAMS, WENDY WILLIAMS, AND J. WILLIAMS TRUCKING, Appellants.

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

          Before: James Edward Welsh, P.J., Lisa White Hardwick, and Gary D. Witt, JJ.

          James Edward Welsh, Presiding Judge

         James Williams, Wendy Williams, and J. Williams Trucking[1] appeal the circuit court's judgment awarding Joseph A. May actual damages in the amount of $116, 516.57, finding that All-Type Construction, Excavation, and Trucking, L.L.C, and the Williamses were jointly and severally liable on May's claims for breaches of contracts and violations of the Missouri Uniform Fraudulent Transfer Act. The circuit court also awarded $5, 000 in punitive damages, $33, 200 in attorney's fees, and interest on all of these amounts. On appeal, the Williamses assert that the circuit court: (1) erred in finding that a contract for the use of a trailer existed between May and

          All-Type Construction; (2) erred in finding actual damages in the amount of $116, 516.57 for breaches of contracts by All-Type Construction; (3) erred in ruling that the Williamses violated the Missouri Uniform Fraudulent Transfer Act by making unauthorized distributions and transfers with actual intent to hinder, delay or defraud May as a creditor; (4) abused its discretion in awarding punitive damages; (5) abused its discretion in awarding attorney's fees; and (6) erred in awarding interest on the awards of punitive damages and attorney's fees. We affirm in part and reverse in part.

         All-Type Construction was a Missouri limited liability company organized on April 26, 2004. Trent W. Quinn and James Williams were the only members. Quinn was All-Type Construction's president, and James Williams was its secretary and treasurer. All-Type Construction was in the business of hauling asphalt and other construction materials. The business required the use of heavy duty trucks.

         At its inception, All-Type Construction needed to obtain a loan to purchase two dump trucks and contacted Central Trust Bank in Jefferson City, Missouri, for a loan. To obtain a loan from the bank, All-Type Construction needed to show a certain amount of capital on hand. Thus, in April 2004, Quinn and James Williams each deposited $25, 000 in All-Type Construction's checking account. James Williams borrowed the $25, 000 from his parents to deposit in All-Type Construction's account. Central Trust Bank loaned All-Type Construction $131, 000 to purchase two Mack dump trucks that were collateral for the loan. Quinn and his wife and James Williams and Wendy Williams were personally liable as guarantors for the loan.

         With the loan money, All-Type Construction purchased a blue 1998 Mack truck for $67, 750 and purchased a 1999 white Mack truck.[2] James Williams drove the blue truck, and Quinn drove the white truck. In the fall of 2004, All-Type Construction sold the white Mack truck, leaving a balance of $61, 124.52 on the loan from Central Bank. According to Quinn, he began having problems with the white truck, so he leased a new truck but used a different lender.

         To more effectively compete in the business, James Williams and Quinn believed that another dump truck would allow the company to haul more material. They also thought having a pickup truck with All-Type Construction's advertising on it would both give Quinn some personal transportation and would impress business prospects. Both Quinn and James Williams knew of Dr. Joseph May, a dental specialist from Jefferson City, Missouri, and viewed May as a financial resource, along with the bank.

         On or about October 2, 2004, All-Type Construction, by and through Quinn, entered into a two-year lease agreement to use a 2002 Ford F250 Super Crew pickup truck owned by May. Quinn entered this lease for the pickup truck with James Williams's knowledge and approval. The lease agreement required a $600 monthly payment and required All-Type Construction to pay maintenance and insurance, together with sales taxes, licensing, and registration of $3, 000. The lease agreement also provided that mileage of 500 miles per month average was allowed on the pickup truck and that mileage in excess of that would be charged at 20 cents a mile. The pickup truck started out with 20, 000 miles on it, but it had close to 80, 000 miles on it when May got the truck back about a year later. All-Type Construction made no lease payments on the truck and never paid the $3, 000 for sales taxes, licensing, and registration.

          In the fall of 2004, Quinn discussed with May about getting May's son involved in All-Type Construction's business and suggested that May invest in a Mack dump truck for All-Type Construction's use. Thereafter, May purchased a 2005 Mack dump truck for $140, 000. In August 2005, All-Type Construction, by and through Quinn, entered into two written lease agreements with May for use of the Mack dump truck. Quinn entered these agreements with James Williams's knowledge and approval. The "lease with option to purchase agreement" for the Mack dump truck was executed on August 20, 2005, and carried a term from September 1, 2005, to December 31, 2006. The monthly payment was set at $2, 500, which covered May's bank loan payments and insurance cost. The agreement also provided that All-Type Construction would pay May "50% of the profits that the truck earns over the cost of maintenance, fuel and driver for the period of this lease." The "equipment lease agreement" for the Mack dump truck was executed on August 27, 2005, and carried a term from September 1, 2005, to December 31, 2009. The monthly payment was set at $2, 500, and All-Type Construction was to pay for maintenance and insurance. The equipment lease agreement did not mention the lease with option to purchase agreement. All-Type Construction made only four payments on May's Mack dump truck, totaling $10, 000. Shortly after acquiring May's Mack dump truck, Quinn and James Williams began discussions about taking their trucks and working in New Orleans, Louisiana, to help with the ongoing hurricane clean-up.

         By December 2005, however, James Williams and Quinn had a falling out, and James Williams stopped working and refused to return any of Quinn's telephone calls. In that same month, Central Trust Bank began calling James Williams about All-Type Construction's being behind in its payments on the loan for the blue Mack truck. The bank told James Williams that, if the payments were not made, the bank would repossess the truck and that the guarantors of the loan would be liable for any deficiency. The payoff amount on the loan was $49, 195.84. The bank did not call Quinn, and Quinn did not know that the bank was calling James Williams about the status of the loan.

         James Williams and his wife, Wendy, then formed their own corporation, J. Williams Trucking, Inc., in December for the purpose of performing work similar to All-Type Construction. James Williams did not inform Quinn about forming the new company. To equip J. Williams Trucking for business, James Williams applied for a new title for All-Type Construction's blue 1998 Mack truck. James Williams stated on the application that the owner of the truck was J. Williams Trucking and did not mention All-Type Construction anywhere on the application. James Williams certified in the affidavit that accompanied the title application that the reason for the new title was "Changing Company name & lienholder[.] No change in ownership.[.]" James Williams did not tell Quinn anything about the intended re-titling of the truck. In addition to re-titling the blue Mack dump truck, James Williams obtained a $50, 000 personal loan from Commerce Bank and paid off the $49, 195.84 that All-Type Construction still owed Central Trust Bank for the loan it had obtained to purchase the blue Mack truck. James Williams did not tell Quinn anything about paying off the loan with Central Trust Bank. In addition to taking the blue Mack truck, Williams took $20, 000 worth of tools used in All-Type Construction's business.

         In early spring of 2006, Quinn and other employees of All-Type Construction traveled to New Orleans with Quinn's and May's Mack dump trucks to pursue hurricane cleanup work. Quinn, on behalf of All-Type Construction, asked May to purchase a trailer for the employees to have a place to sleep while in Louisiana. May agreed to purchase the trailer, and the trailer was purchased in Louisiana for $4, 000. All-Type Construction never made any payments to May for use of the trailer. While in Louisiana, May's Mack truck and trailer were stolen.

         Between May 2005 and June 2006, May gave checks totaling $9, 100 to All-Type Construction and Quinn for things such as repairs and to pay other bills. May also paid for the truck's insurance in the amount of $17, 843.62 and allowed All-Type Construction to use a credit card and amass $12, 698.39 in credit card debt. May also lost his $4, 000 trailer that he allowed All-Type Construction to use, and May paid for new tires and repairs for his Mack dump truck, which totaled $17, 374.56. All-Type Construction owed May at least $52, 500[3] for unpaid lease payments on the Mack dump truck and the Ford pickup truck and $3, 000 for the pickup truck's taxes, licensing, and registration.

         Between May 2004 and October 2005, checks totaling $42, 400 were written on All-Type Construction's checking account and were made out to "Jim Williams, " except for a check for $25, 000, which was made out to James Williams's parents, "John L. & Rosemary Williams." All of the checks were allegedly signed by Trent Quinn. James Williams admitted to filling out each of the checks and also admitted to signing Quinn's name as the check signer "a few times." Quinn testified at trial that he did not sign any of these checks.

         On January 3, 2008, Quinn, as president of All-Type Construction, assigned "all personal property of [All-Type Construction] and unauthorized distributions by James L. Williams to Joseph A. May for collection by any legal means available." Quinn also assigned "all interest and personal property of James L. Williams in [All-Type Construction] as allowed by law to be collected, prosecuted and enforced against James L. Williams (and this LLC) including the unauthorized distributions[.]" On September 15, 2008, May filed a petition with the circuit court seeking damages for breaches of contracts and for violations of the Missouri Uniform Fraudulent Transfer Act. May also sought punitive damages and attorney's fees and costs.

         After a one day trial before the circuit court on April 3, 2015, the circuit court entered its judgment on December 30, 2015. The circuit court found that May and All-Type Construction had valid written contracts for May's pickup truck and Mack dump truck and had a valid oral contract for the trailer. The court concluded that All-Type Construction breached its contracts with May by failing to pay May for the pickup truck, Mack dump truck, ...


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