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Heifetz v. Apex Clayton, Inc.

Supreme Court of Missouri, En Banc

July 17, 2018

GARY S. HEIFETZ, JEFFREY S. GERSHMAN, STEVEN B. SPEWAK, JEAN MAYLACK, FALLON MAYLACK, STEVEN M. STONE, individually and as personal representative of the ESTATE of SIDNEY L. STONE, and SIDNEY M. STONE, Respondents,
v.
APEX CLAYTON, INC., Appellant.

          APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY The Honorable Robert S. Cohen, Judge

          PATRICIA BRECKENRIDGE, JUDGE

         Apex Clayton, Inc., appeals from an amended judgment entered in favor of Gary S. Heifetz, Jeffrey S. Gershman, Steven B. Spewak, Jean Maylack, Fallon Maylack, Steven M. Stone, [1] and Sidney M. Stone (collectively, "the limited partners") on their claims of breach of contract and breach of fiduciary duty. The limited partners were awarded punitive damages. Apex asserts the trial court erred in overruling its motion for judgment notwithstanding the verdict (JNOV) because the limited partners failed to make a submissible case as to a breach of fiduciary duty and punitive damages. The limited partners contend this Court lacks appellate jurisdiction because Apex filed an untimely notice of appeal.

         First, Apex timely filed its notice of appeal. Within the 30 days prescribed by Rule 75.01, the limited partners filed a motion for attorney fees. Although the limited partners now contend the motion for attorney fees was not an authorized after-trial motion extending the trial court's jurisdiction under Rule 81.05, that is contrary to the position they took at trial that the motion for attorney fees was a motion to amend the judgment. Because a motion to amend is an authorized after-trial motion, the trial court had 90 days in which to amend the judgment to include attorney fees. When the trial court entered the amended judgment, it became a new judgment for all purposes and permitted Apex to again file a motion for JNOV. Apex then timely filed its notice of appeal within 10 days after its JNOV motion was deemed overruled.

         Second, Apex failed to preserve for appellate review its claims that the trial court erred in overruling its motion for JNOV. Although Apex raised the claims it now raises on appeal in a motion for JNOV, it did not make such arguments regarding the submissibility of the limited partners' breach of fiduciary duty claim or request for punitive damages in either a written or an oral motion for directed verdict at the close of all evidence. Apex's failure to do so prevents this Court from reviewing such submissibility issues on appeal. Accordingly, the trial court's judgment is affirmed.

         Facts and Procedural Background

         The 8182 Maryland Associates Limited Partnership was created in 1984. The purpose of the partnership was to acquire, construct, lease, and operate various structures, including an office building and parking garage in the downtown Clayton business district. The partnership agreement listed Apex as the general partner along with several limited partnerships, including PS Maryland Avenue Associates ("PSMI") and PS Maryland Avenue Associates II ("PSMII"). Some of the limited partners were partners in PSMI and PSMII.

         The partnership agreement included a provision requiring Apex to distribute "available cash flow" at "reasonable intervals during the fiscal year." The partnership agreement also included a forced sale clause, which required Apex, as the general partner, to purchase the limited partners' interests if the limited partners collectively desired to liquidate the partnership and sell the project.

         In 1993, PSMI and PSMII were dissolved, and the partnership agreement was amended. Mr. Heifetz, Mr. Chervitz, and Mr. Stone were substituted in place of PSMI, and Mr. Heifetz, Mr. Chervitz, Ronald Lurie, Nancy Lurie, and the Stones were substituted in place of PSMII. In July 1993, the partnership agreement was further amended to include Mr. Gershman, Mr. Spewak, the Maylacks, and Jeffrey Michelman as substituted limited partners. The amendments to the partnership agreement provided the substituted limited partners would be "subject to and bound by all provisions of the Partnership Agreement as if he were originally a party to the Partnership Agreement."

         In 2005, Mr. Heifetz, Mr. Gershman, Mr. Michelman, Mr. Spewak, and the Stones advised Apex of their intent to exercise the partnership agreement's forced-sale clause. When Apex declined, they filed suit, alleging Apex breached the partnership agreement and its fiduciary duty to them by not carrying out the forced-sale clause. The circuit court entered summary judgment in favor of Apex, and the court of appeals affirmed the judgment, finding not all of the limited partners to the partnership agreement expressed a desire to invoke the forced-sale clause. See Heifetz v. Novelly, 309 S.W.3d 333 (Mo. App. 2010).

         In 2010, the limited partners again informed Apex of their desire to exercise the forced-sale clause. Apex declined, and the limited partners filed the current underlying lawsuit alleging Apex breached the partnership agreement when it refused to comply with the forced-sale clause and breached its fiduciary duties by failing to make the required cash flow distributions under the partnership agreement.[2]

         In 2015, the case proceeded to trial. The jury found in favor of the limited partners and awarded them $2, 804, 689 on the breach of contract claim, nominal damages of $1, 000 to each partner on the breach of fiduciary duty claim, and $2.8 million in punitive damages. The trial court entered its judgment consistent with the jury's verdict on June 26, 2015.

         On July 24, 2015, the limited partners filed a motion for attorney fees. On July 27, 2015, Apex filed its timely motion for JNOV in which it challenged the submissibility of the limited partners' breach of fiduciary duty claim and whether the limited partners made a submissible case for punitive damages. On October 26, 2015, the trial court overruled Apex's motion for JNOV. On the same date, however, it sustained the limited partners' motion for attorney fees and entered an amended judgment including several additional paragraphs regarding awards of attorney fees.

         On November 10, 2015, Apex filed a motion for JNOV with respect to the amended judgment, including a challenge to the award of attorney fees. Because the trial court did not rule on the JNOV motion within 90 days, it was deemed overruled February 8, 2016. Apex filed its notice of appeal February 17, 2016.[3] After an opinion by the court of appeals, the case was transferred to this Court. Mo. Const. art. V, sec. 10.

         Timely Notice of Appeal

         This Court must first address the limited partners' assertion this appeal should be dismissed for lack of appellate jurisdiction because Apex failed to timely file its notice of appeal. Rule 81.04(a) requires the notice of appeal to be filed no later than 10 days "after the judgment, ...


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