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Holmes v. Nelson

Court of Appeals of Missouri, Eastern District, First Division

May 14, 2019

DOUG NELSON, ET AL., Appellants.

          Appeal from the Circuit Court of the City of St. Louis Honorable Joan L. Moriarty

          ROY L. RICHTER, JUDGE.

         Doug Nelson, Commissioner of the Missouri Office of Administration, ("Appellant") appeals from the trial court's entry of summary judgment in favor of Michael Holmes ("Respondent") in Respondent's action for a declaratory judgment to determine whether the State of Missouri ("State") or the City of St. Louis must pay the $2.5 million in damages awarded in his federal civil suit against two St. Louis police officers, Shell Sharp ("Sharp") and Bobby Garrett ("Garrett"). We affirm.

         I. Background

         This case began in December 2003, when Respondent was arrested in St. Louis by City of St. Louis police officers Sharp and Garrett. Respondent was then convicted of federal drug crimes in June 2006, and because he had previously been convicted on separate drug charges several years earlier, he was sentenced to twenty years in prison. But that was not the end of the story. After Respondent's conviction, Sharp and Garrett were investigated for multiple alleged instances of misconduct.[1] Eventually Garrett was federally prosecuted for numerous crimes, convicted, and sentenced to 28 months in prison. Sharp resigned from the St. Louis Metropolitan Police Department ("SLMPD").

         After Sharp and Garrett's misconduct was discovered, Respondent moved to vacate, set aside, or correct his sentence under 28 U.S.C § 2255. In 2011, the Federal District court for the Eastern District of Missouri ("District Court") granted this motion because Sharp and Garrett, who testified at Respondent's trial, had been discredited and the government would have failed to meet its burden of proof with the remaining evidence. In December 2012, Respondent sought a certificate of innocence under 28 U.S.C § 2513, which the District Court denied because of his failure to show actual innocence. Simultaneously but separately, Respondent filed a civil rights action under 42 U.S.C. § 1983 against the mayor of St. Louis, the St. Louis Board of Police Commissioners ("the Board"), and Sharp and Garrett. The District Court granted summary judgment for all defendants except Sharp and Garrett, and sent the case to trial where Sharp and Garrett were represented by the Missouri Attorney General's Office. On March 4, 2016, the jury found in favor of Respondent and awarded him $2.5 million ("the Award").

         Before discussing Respondent's declaratory judgment action that is the subject of this appeal, it is important to note some of the legislative developments setting the background to this case. The State Legal Expense Fund ("SLEF") statute was enacted by the Missouri Legislature ("Legislature") to replace the Tort Defense Fund. The statute has been amended multiple times since it was enacted, but the most important amendment for purposes of this case came in 2005, in response to the Missouri Supreme Court's decision in Smith v. State, 152 S.W.3d 275, 278-80 (Mo. banc 2005). In Smith, the court found the Board and its police officers were entitled to coverage under the SLEF because the Board was an agency of the state and its officers were officers of the state. Smith, 152 S.W.3d 275 at 280 Under the amended version from 2005, the SLEF was only liable to reimburse the Board for claims, and only up to $1 million. Section 105.726.3. On November 6, 2012, Missouri voters passed Initiative Proposition A ("Proposition A") which led to the enactment of Section 84.344 allowing the City of St. Louis ("the City") the right to establish its own police force free from state control. State ex rel. Hawley v. City of St. Louis, 531 S.W.3d 602, 604 (Mo. App. E.D. 2017). Before Proposition A was passed, the SLMPD was under state control. Id. Section 84.344 also directed the state-controlled Board to transfer title and ownership of all its indebtedness and assets to the City. Id. Proposition A also resulted in the amendment of Section 105.726, stating that only the Board's successor-in-interest, the City, was entitled to reimbursement through the SLEF. Id. All of these developments occurred after Respondent's arrest in 2003.

         On March 10, 2016, Respondent requested payment of the Award from the State through the SLEF, which the State denied, leading to his filing the declaratory judgment at issue in this appeal. After limited discovery in the declaratory action, both parties filed motions for summary judgment. The trial court found the issue to be determined was whether "the [SLEF] covers [the Award] that was entered in 2016, after the SLMPD was no longer under state control, but arose from police officer conduct that occurred in 2003 while the SLMPD was under state control." On May 3, 2018, the trial court granted Respondent's motion for summary judgment, finding the State is required to indemnify Sharp and Garrett through the SLEF. This appeal follows.

         II. Discussion

         Appellant raises two points on appeal. First Appellant argues the trial court erred when it found that the 2005 amendment to the SLEF statute (1) did not exclude officers and (2) did not apply to exclude payment of the Award against Sharp and Garrett because the claims against them did not accrue until 2011, well after the SLEF statute was amended.

         Appellant's second point argues the trial court erred in finding that the State was required to provide reimbursement in the amount of $2.5 million dollars through the SLEF for Respondent's claims because (1) reimbursement is not applicable to this situation, and (2) reimbursement is contrary to the clear and unambiguous terms of the statute, in that there is no evidence that the Board made a payment to Respondent in satisfaction of his claims or that the SLEF is required to reimburse the Board that amount.

         A. Standard of Review

         We review the grant of summary judgment de novo. Crawford v. Distrib. Operations, Inc., 561 S.W.3d 463, 466 (Mo. App. E.D. 2018) (citing ITT Commercial Fin. Corp. v. Mid-Am. Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The record is viewed "in the light most favorable to the party against whom judgment was entered," and we "accord [that party] all reasonable inferences from the record." Stoesz v. Wright, 541 S.W.3d 718, 722 (Mo. App. E.D. 2018). A party is entitled to summary judgment where there is "no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law. . . ." Rule 74.04(c); ITT Commercial Fin. Corp., 854 S.W.2d at 378.

         B.Analy ...

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