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State, ex rel. Attorney General Hawley v. Pilot Travel Centers, LLC

Court of Appeals of Missouri, Western District, Fourth Division

November 21, 2017


         Appeal from the Circuit Court of Cole County, Missouri The Honorable Jon E. Beetem, Judge.

          Before: Mark D. Pfeiffer, Chief Judge, Presiding, Gary D. Witt, Judge and Edward R. Ardini, Jr., Judge.


          Gary D. Witt, Judge.

         The Board of Trustees of the Missouri Petroleum Storage Tank Insurance Fund ("Board"), represented by the Missouri Attorney General (collectively "State"), appeals from the trial court's Amended Judgment ("Judgment") dismissing the State's Second Amended Petition for Breach of Contract, Unjust Enrichment, and Damages ("Petition"). The Judgment dismissed the Petition for lack of standing. The State argues that the trial court erred in dismissing the Petition because the Attorney General has authority to bring suit on behalf of the Board, the Board has standing to sue, the Board has authority to enter into contracts, and the State can maintain an alternative claim for unjust enrichment. We affirm in part, reverse in part, and remand the case for further proceedings.

         Factual Background[1]

         Pilot Travel Centers, LLC ("Pilot") was a participant in the Missouri Petroleum Storage Tank Insurance Fund ("Fund"). The Fund is a special trust fund created by the Missouri legislature pursuant to Section 319.129 et. seq.[2], to provide insurance, as relevant to this action, to service station owners for the cleanup costs associated with spills and leaks from underground petroleum storage tanks. To become a participant in the Fund and have coverage for these types of damages, service station owners must apply for membership and pay annual fees based on the number and size of the underground petroleum storage tanks that it owns.

         In 2003 Pilot purchased a service station ("service station") located in Higginsville, Missouri from Williams Travel Centers, Inc. ("Williams"). During Williams's ownership of the service station, Williams became a participant in the Fund and was issued a Participation Agreement[3] from the Board covering the petroleum storage tanks at the service station. Williams remained a participant in the Fund with coverage for the service station until the service station was purchased by Pilot and the Participation Agreement was assigned to Pilot. Pilot maintained this coverage at all relevant times hereto. Under the terms of the Participation Agreement, if Pilot made a claim for coverage and it was determined by the Board that a third party may be partially or totally liable for causing the covered damages, Pilot was required to "cooperate" and "assist" the Board in the enforcement of any right against any person or organization that may be liable to Pilot. The Participation Agreement required Pilot, at the Board's request, to bring suit in its own name for the benefit of the Board or transfer any rights it had to bring such a claim against a third party to the Board.

         In June 2007, there was a petroleum spill at Pilot's Higginsville service station. After the spill, pursuant to the Participation Agreement, Pilot remediated the spill and filed twenty-four reimbursement requests for the cost of cleaning up the spill, totaling $723, 932.20. The Board paid all of these claims from the Fund. As a result of an investigation following the spill, the Board determined the spill was caused by a defective pipe produced by Environ Products, Inc. ("Environ"). In August 2007, the Board's private counsel contacted Pilot requesting Pilot's participation in an anticipated lawsuit against Environ. Pilot failed to respond to all communications from the Board's representatives to representatives of Pilot. In February 2012, the Board advised Pilot that the five-year statute of limitation for the would-be action against Environ was about to expire. The Board received no response to this communication.

         Immediately before the statute of limitation would have expired, the Board filed a product liability lawsuit in Pilot's name against Environ and other defendants in the Circuit Court of Lafayette County. After filing the action, the Board requested assistance, cooperation, and contact from Pilot. The Board also requested Pilot to sign a Standstill Agreement.[4] Pilot failed to respond to these requests for cooperation. The Board then dismissed the lawsuit against Environ and did not re-file it due to Pilot's failure to assist.

         The Attorney General on behalf of the Board then filed a Petition against Pilot, alleging "breach of contract and, in the alternative, for unjust enrichment arising from Pilot's refusal to cooperate and assist in the lawsuit against Environ." The Board sought $723, 932.20 for the amount paid to Pilot for reimbursement, $31, 585.05 for litigation expenses, and $12, 962.61 for the cost of employing a third party administrator in its attempts to subrogate the claim. Pilot filed separate motions to dismiss the Petition[5] for lack of standing and failure to state a claim on which relief can be granted. On June 22, 2016, the trial court granted Pilot's motion to dismiss for lack of standing ("Prior Judgment"). The trial court found that the Attorney General does not have authority to bring suit on behalf of the Board, the Board does not have standing to sue Pilot, and the Board does not have authority to enter into contracts with Fund participants and therefore could not bring a breach of contract action. The trial court also held that a claim of unjust enrichment cannot be maintained if there is an "express contract" and that the State did not allege an "unjust" act sufficient to support a claim of unjust enrichment.

         On July 22, 2016, the State filed a motion to Amend the Judgment based on the Missouri Supreme Court's recent decisions in State ex rel. Koster v. ConocoPhillips Co., 493 S.W.3d 397 (Mo. banc 2016) and City of Harrisonville v. McCall Serv. Stations, 495 S.W.3d 738 (Mo. banc 2016). The trial court held a hearing on the motion, and on October 11, 2016 set aside its Prior Judgment. On January 24, 2017, the trial court entered the Judgment, dismissing the Petition for the same reasons as provided for in the Prior Judgment. The trial court did however address the recent Missouri Supreme Court cases, adding that the language in City of Harrisonville stands for the proposition that the Board could be sued for certain claims but does not authorize the converse, and that the language in ConocoPhillips is not controlling because it is dicta and does not address the issues that had been argued by the parties. This appeal followed.

         Pilot's Argument Regarding Untimeliness of Appeal

         Before we address the merits of the State's appeal, we will first address Pilot's argument that the State's appeal is untimely. Pilot argues in its brief that the State's appeal is untimely because the trial court did not rule on the motion to amend within ninety days, as prescribed by Rule 81.05(a)(2)[6], [7]. Pilot alleges that the trial court's order to set aside the Prior Judgment was not alone a "ruling on the motion" as defined under Ferguson v. Curators, 498 S.W.3d 481, 495 (Mo. App. W.D. 2016), and since the trial court did not file the Judgment until after the ninety day period had expired, the motion was denied by operation of law due to the passage of time. Pilot argues that therefore the Prior Judgment became the final judgment on October 20, 2016, ninety days following the State's Motion to Amend, making this appeal untimely.

         "A motion to amend the judgment is not 'ruled on' for purposes of Rule 81.05 unless, within ninety days of its filing: (1) the motion is explicitly denied; (2) the trial court takes no action on it; or (3) an amended judgment is actually executed and filed." Ferguson, 498 S.W.3d at 495 (citing In re Marriage of Noles, 343 S.W.3d 2, 9 (Mo. App. S.D. 2011)). In Ferguson, this Court held that a motion to amend was not ruled on for purposes of Rule 81.05 when the trial court issued an order sustaining the motion but was ruled on only after an amended judgment was also issued. Id. at 495-496. However, here the trial court was not required to issue a judgment within ninety days because the trial court ordered that the Prior Judgment be set aside, which vacated the Prior Judgment, and this occurred within the ninety day period as allowed by Rule 75.01. "During this 90-day period created by Rule 81.05, the court retains the same power under Rule 75.01 and may vacate, reopen, correct, amend or modify the judgment." Steiferman v. K-Mart Corp., 746 S.W.2d 145, 147 (Mo. App. W.D. 1988). Therefore, the Prior Judgment did not become final and the trial court retained control until the new Judgment was filed and the time for post-trial motions had passed. See Klaus v. Shelby, 4 S.W.3d 635, 639 (Mo. App. E.D. 1999). We find the State's appeal to be timely.

         Standard of Review

Our review of a dismissal for failure to state a claim or for lack of standing is de novo. When reviewing for failure to state a claim, we treat the facts contained in the petition as true and construe them liberally in favor of the plaintiffs. The petition states a cause of action if it sets forth any set of facts that, if proven, would entitle the plaintiffs to relief. Similarly, this court determines standing as a matter of law on the basis of the petition, along with any other noncontested facts accepted as true by the ...

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