Court of Appeals of Missouri, Western District, First Division
STATE OF MISSOURI EX REL CHRIS KOSTER, ATTORNEY GENERAL, Respondent,
KANSAS CITY BOARD OF POLICE COMMISSIONERS, Appellant.
from the Circuit Court of Jackson County, Missouri The
Honorable Joel P. Fahnestock, Judge
James Edward Welsh, P.J., Lisa White Hardwick, and Gary D.
Edward Welsh, Presiding Judge.
Kansas City Board of Police Commissioners ("the
Board") appeals the circuit court's judgment in
favor of the Attorney General of the State of Missouri
("the State"), on the State's claims for
declaratory judgment as to the parties' respective rights
under section 105.726.4 RSMo,  of Missouri's Legal Expense
Fund statutes. We affirm.
Kansas City Board of Police Commissioners ("Board")
is an entity created by the Missouri Legislature
(§§ 84.350-.860) to manage and operate the Kansas
City Missouri Police Department. The Missouri Attorney
General has a long history of providing the Board with legal
representation under the Legal Expense Fund statutes, and,
until 2013, did so without requesting attorney's fees.
February 11, 2013, the State notified the Board that it would
be unable to continue to provide legal representation without
payment "of the reasonable expenses and charges that
will fairly compensate [the State] for the costs of the
representation, " pursuant to section 105.726.4. Citing
changes in its budget and fiscal position, reduction in
office attorneys, and increased caseload, the State advised
that, on April 1, 2013, it would begin billing the Board $125
per hour for the Attorney General's representation.
2013, the Board responded via email that it would not pay
$125 per hour, but offered to pay an amount equal to the base
salaries of the assistant attorneys general representing the
Board. The State then informed the Board, in a letter dated
September 24, 2013, that it would begin billing the Board at
the rate of $125 per hour on October 1, 2013, but would not
charge for certain incidentals. That letter recounted that
the State and the Board "[had] had some discussions
concerning the matter and manner of billing for services
provided by Assistant Attorney Generals over several months
and [had] been unable to come to a complete agreement."
February 2014, the State began sending quarterly invoices to
the Board requesting payment for legal services the Attorney
General had provided since October 1, 2013. At a meeting in
September 2014, the Board discussed the State's request
for payment but did not approve payment of the amount
requested (or any other amount). Throughout this dispute, the
Attorney General has continued to provide legal
representation upon the Board's request, as mandated by
December 11, 2014, the State filed a petition against the
Board alleging action on account and quantum meruit, in
Counts I and II, arising out of attorney's fees owed by
the Board under section 105.726. The State later amended its
petition to add Counts III and IV, in which it sought a
declaration of the parties' respective rights under
section 105.726.4 and ancillary relief.
parties filed stipulated facts and exhibits, which reflected
the foregoing facts. The parties also stipulated that, since
October 2013, the Attorney General had provided over 8, 000
hours of legal representation to the Board. The parties
agreed that the number of hours spent to represent the Board
was reasonable and necessary; they did not stipulate as to
the reasonableness of the requested hourly rate.
parties thereafter filed cross motions for judgment. On June
27, 2016, the circuit court entered judgment for the Board on
the State's Counts I and II, but found in favor of the
State on Counts III and IV (the declaratory judgment counts),
finding that section 105.726.4 obligated the Board to pay
attorney's fees for the Attorney General's legal
September 2016, the circuit court held a hearing as to the
reasonableness of the Attorney General's $125 hourly rate
for attorney's fees. The State presented the testimony of
the special counsel to the Attorney General and its deputy
chief of staff in support of its claim that that rate is
reasonable. On October 7, 2016, the circuit court entered
judgment holding that the rate of $125 per hour for
attorney's fees is reasonable. The Board appeals.
Framework and Background
1983, the Missouri Legislature enacted
§§105.711-.726, creating the State Legal Expense
Fund ("Fund"), to replace the "Tort Defense
Fund." P.L.S. ex rel. Shelton v. Koster, 360
S.W.3d 805, 809 (Mo. App. 2011). The Fund has been described
as "a voluntary assumption of defense and payment [of
claims] against State employee[s] sued for their conduct
arising out of and performed in connection with official
duties on behalf of the state." Dixon v.
Holden, 923 S.W.2d 370, 379 (Mo. App. 1996). The
fundamental purpose of the Fund is
to protect the covered employees from the burden and expense
of civil litigation relating to the performance of their
duties. The purposes are apparent. A competent employee, who
is in demand elsewhere, may be unwilling to work for the
state without protection. Those who do serve may be unwilling
to take necessary risks for fear of litigation.
Kershaw v. City of Kansas City, 440 S.W.3d 448, 458
(Mo. App. 2014).
Fund "consists of sums appropriated by the General
Assembly and any funds otherwise credited to the Fund by
certain departments pursuant to section 105.716."
P.L.S., 360 S.W.3d at 809; §105.711.1. The
assets in the Fund are intended "for the payment of any
claim, or any amount required by any final judgment"
against (1) "the State, or any agency of the State"
(to the extent that the claim against the State is authorized
pursuant to § 537.600, the sovereign immunity statute),
and (2) "any officer or employee of the State or any
agency of the State, " as provided and as limited in the
statute. P.L.S., 360 S.W.3d at 809; §
105.711.2. Pursuant to the statutory scheme,
"the attorney general is directed to investigate,
defend, negotiate, and compromise any claims against state
officers and employees covered by the statute."
Vasic v. State, 943 S.W.2d 757, 759 (Mo.
App. 1997) (citing § 105.716.1). Payments from the Fund
are made by the commissioner of administration with the
attorney general's approval. § 105.711.5.
2005, in Smith v. State, 152 S.W.3d 275, 278-80 (Mo.
banc 2005), the Supreme Court examined the applicable
statutes and held that the St. Louis Board of Police
Commissioners and its police officers were entitled to
coverage under the Fund, in that the Board was an
"agency of the state, " and its officers were
"officers of the state, " within the meaning of
section 105.711.2.The Court based its ruling on the fact
that, in creating the Board, the legislature intended for it
to operate entirely independently of the City of St. Louis.
Id. at 278. By extrapolation, that ruling also
applied to the Kansas City Board of Police Commissioners,
which was established by the legislature in an almost
identical fashion to the St. Louis Board. See Sherf v.
Koster, 371 S.W.3d 903, 906 (Mo. App. 2012) (citing
same year, in explicit response to Smith, the
Missouri Legislature amended section 105.726 to limit (but
not entirely eliminate) the Fund's obligations to the St.
Louis and Kansas City Boards. Id.; see 2005
Mo. Laws S.B. Nos. 420 & 344, § A. Pertinent to this