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Olofson v. Olofson

Court of Appeals of Missouri, Western District, First Division

June 18, 2019

JEANNE H. OLOFSON, Appellant,
v.
SCOTT W. OLOFSON, IN HIS CAPACITY AS PERSONAL REPRESENTATIVE OF THE ESTATE OF TOM W. OLOFSON, Respondent.

          Appeal from the Circuit Court of Jackson County, Missouri The Honorable Susan E. Long, Judge

          Before Victor C. Howard, Presiding Judge, Lisa White Hardwick, Judge and Gary D. Witt, Judge

          Gary D. Witt, Judge

         Jeanne Olofson ("Jeanne")[1] appeals from the trial court's judgment granting Tom Olofson's ("Tom") Motion for Judgment on the Pleadings finding that the trial court lacked jurisdiction and dismissed Jeanne's Motion to Set Aside the Judgment of Dissolution on the ground of alleged fraud pursuant to Rule 74.06(b)[2] ("Rule 74.06 Motion"). Jeanne argues that the trial court erred in granting Tom's Motion for Judgment on the Pleadings and dismissing her Rule 74.06 Motion because Tom's death does not moot or abate her Rule 74.06 Motion. We affirm.

         Statement of Facts

         On September 19, 2014, after 55 years of marriage, Jeanne filed a Petition for Dissolution of Marriage in the Circuit Court against Tom. At the time of filing, Tom was the Chairman and Chief Executive Officer of Epiq Systems, Inc. ("Epiq"), a publicly traded company based in Kansas City, Kansas.

         The parties entered into a settlement agreement regarding the division of property which was incorporated into the Judgment. The largest marital asset to be divided in the dissolution was the parties' Epiq stock and is the cause of the current dispute. Pursuant to the agreement Tom received 2, 159, 416 shares of Epiq stock valued at $13.50 per share totaling approximately $29 million. Jeanne received 1, 076, 639 shares of Epiq stock also valued at $13.50 per share totaling approximately $14.5 million. On the same day, the market price for Epiq stock closed at a price per share of $11.60. Other real estate, assets, and debts were used to balance the distribution of the assets.

         On March 1, 2016, the trial court entered its Judgment and Decree of Dissolution of Marriage ("Dissolution Judgment") incorporating the terms of the parties' settlement agreement.

         On June 26, 2016, Epiq received an offer from OMERS/DTI ("DTI") to buy the company at $16.50 per share. The DTI offer was subject to contingencies which were ultimately satisfied and the sale closed on September 30, 2016. Since DTI took Epiq private, upon the closing of the sale, all stock was liquidated and shareholders, including Jeanne and Tom, received a cash payment based on the $16.50 per share price. Further, due to the sale of Epiq, Tom also received a gross amount of over $16 million in cash and other benefits from the sale based on his employment contract as CEO of the company.

         On February 23, 2017, Jeanne filed a Motion to Set Aside the Judgment of Dissolution on the grounds of fraud pursuant to Rule 74.06(b), her Rule 74.06 Motion. In the Rule 74.06 Motion, Jeanne alleged that Tom made false statements during his deposition, claiming there was no new information regarding a potential sale of Epiq. Jeanne alleged that due to the nature of Tom's position with Epiq, he had a vast knowledge of the financial future of company, including negotiations for a potential sale, the impact on the stock price, and his payout from his employment contract upon a change in control. Jeanne further alleged that Tom failed to fully comply with discovery sought by Jeanne, including failing to provide non-public information regarding Epiq's strategic review process and offers made for the purchase of Epiq. Jeanne alleged that Tom also did not update representations he made throughout the discovery and settlement process to account for his acquisition of new information regarding the sale of Epiq.

         Jeanne alleged that she made multiple attempts to receive compliance with her discovery request, including copies of minutes of the meetings of the Board of Directors and any other agreements or directives, which establish any benefits for Tom on the sale or takeover of Epiq. Jeanne alleged that in a response to a Motion to Compel Discovery based on a subpoena served upon Epiq, Epiq refused to produce any documents responsive to the subpoena other than those documents already made public and argued against any further disclosure, citing to Securities and Exchange Commission ("SEC") regulations. Jeanne alleged that Epiq had received a non-binding preliminary bid to buy the company in the same timeframe when Tom and Jeanne were negotiating the final terms of their Separation Agreement. Jeanne alleged that Tom had substantial knowledge to which Jeanne was not privy regarding potential buyers for Epiq and pending bids, and the clear indication that a transaction for the sale of Epiq was imminent at a price above $13.50 per share. Jeanne alleges Tom's noncompliance with discovery requests and making of false statements during his deposition constituted fraud under Rule 74.06(b).

         On April 6, 2017, Tom filed his Memorandum in Opposition, arguing, among other things, that Jeanne's Rule 74.06 Motion had not been filed within a reasonable time as required by Rule 74.06(c). On April 8, 2017, Tom died. A motion to substitute his Estate as a party was granted on June 9, 2017.[3]

         On December 12, 2017, Tom moved for judgment on the pleadings on grounds that: (1) the court lacked subject matter jurisdiction because the proceeding abated upon Tom's death; (2) there is no longer any judiciable controversy before the court for which meaningful relief may be granted; and (3) because Jeanne's Rule 74.06 Motion is barred by the doctrines of res judicata and collateral estoppel ("Motion for Judgment on the Pleadings").

         The trial court found that the relief that Jeanne ultimately seeks, the reallocation of the marital property, is legally impossible. The trial court found that the only remedy it may provide under Rule 74.06(c) is to set aside the dissolution judgment, and there is no authority granting a trial court the ability to limit relief to the reallocation of a single marital asset. The trial court also found that it could not provide money damages under Rule 74.06. The trial court further found that setting aside the dissolution judgment would require the trial court to impermissibly adjudicate a moot controversy on hypothetical facts because one party is deceased and therefore the marital estate no longer exists. The trial court found that setting aside the dissolution judgment would put the parties in the same procedural posture as if Tom died prior to the entry of the final judgment, at which point the ...


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