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Wagner v. Thomson

Court of Appeals of Missouri, Western District, Third Division

August 6, 2019

JOSEPH F. WAGNER, JR. REVOCABLE TRUST U/A, Respondent,
v.
CAMERON COLBY THOMSON AND HONEST POLICY, INC., Appellants.

          Appeal from the Circuit Court of Jackson County, Missouri The Honorable Jennifer M. Phillips, Judge

          Before: Thomas H. Newton, Presiding Judge, Anthony Rex Gabbert, Judge, Edward R. Ardini, Jr., Judge

          Anthony Rex Gabbert, Judge

         Cameron Colby Thomson and Honest Policy, Inc. ("Appellants" collectively) appeal from a judgment entered upon a jury verdict finding in favor of Joseph F. Wagner, Jr. Revocable Trust U/A Dated 11/11/2002 ("Respondent Trust") on its Petition for Damages alleging breach of contract, unjust enrichment, and quantum meruit.[1] Appellants contend the circuit court erred in, 1) giving verdict directing instructions regarding both breach of contract and unjust enrichment because the instructions submitted mutually exclusive and inconsistent theories of recovery thereby misstating applicable law, misdirecting the jury, and resulting in prejudicial error, 2) giving verdict directing instructions regarding both breach of contract and unjust enrichment because such directed the jury to find for Respondent Trust if it found there was a contract, and also if it found there was no contract, thereby submitting both theories of recovery in the conjunctive in violation of MAI 1.02, and 3) submitting conjunctive instructions prohibited by MAI 1.02 in one verdict form thereby forcing the jury to find a verdict in favor of Respondent Trust on two separate claims and making it impossible to determine what the jury did in fact find. We affirm.

         Factual Background and Procedural History

         Joseph Wagner, Jr. established Respondent Trust on November 11, 2002. On March 15, 2009, Joseph Wagner, Jr. died and his son, Stephen Wagner, became trustee of Respondent Trust and executor of his father's estate. Respondent Trust was the sole beneficiary of Joseph Wagner's estate; beneficiaries under the trust were Stephen and Stephen's four children. Stephen was retired and had relatively few assets other than the money in Respondent Trust; Stephen could only distribute money to himself from Respondent Trust if it was for Stephen's health, welfare, maintenance, or education. Consequently, Stephen had a "maintenance" account set up for himself which received Respondent Trust transfers to pay living expenses.

         Honest Policy, Inc. is a Delaware corporation registered to do business in Nebraska; Cameron Colby Thomson ("Colby")[2] is a founder and shareholder of Honest Policy, Inc. In 2007, Stephen Wagner married Colby's mother, Deborah Thomson. In 2012, Deborah came to Stephen and told him that Colby was in urgent need of money; Honest Policy needed funds to make its payroll obligations. Stephen told Deborah that he thought taking money from the trust might be unethical. Deborah had Stephen talk to Colby directly and Stephen initially told Colby that he did not think he could loan the money. Stephen had a good relationship with Colby and testified that "after some very upsetting lobbying on the part of his mother, I agreed."

         Stephen testified that he and Colby reached an agreement over the telephone for Respondent Trust to loan money to Honest Policy and Colby jointly. The consideration for the loan was that Respondent Trust would earn interest on the loan. Colby offered a rate of interest between seven to eight percent, with repayment not to exceed four years. A single, lump sum repayment of the principal and interest would be made to Respondent Trust. Stephen did not agree for the loan to be repaid to anyone other than Respondent Trust.

         Stephen testified that, as trustee of Respondent Trust, Stephen authorized a $100, 000 loan from Respondent Trust to Colby and Honest Policy. The transfer of $100, 000 occurred on May 4, 2012. Stephen had the money deposited into Stephen's maintenance account and then transferred the funds to Honest Policy. The $100, 000 came from liquidating Edward Jones stocks that were required under Joseph Wagner, Jr.'s will to be placed in Respondent Trust upon liquidation.

         Colby agreed to provide paperwork to memorialize the loan but provided nothing until 2015. In February 2016, Stephen sent a written inquiry to Colby asking if he would be able to make payment of the obligation by the May 9, 2016, maturation date. By that time, Stephen and Deborah were in the middle of a divorce (filed by Stephen in 2015). Colby responded that he was obligated to pay for his mother's full expenses and, therefore, would "probably have expended approximately the balance of the loan to her by May anyhow. If you count that, then, yes."

         Colby testified at trial that he believed the $100, 000 originated from Stephen and Deborah, not Respondent Trust. Colby testified, "There's no reason I would pay the trust. They've never been involved in this issue. And my agreement with Steve was to pay my mother." (Colby stated that repayment was to be a "nest egg" for Deborah because she had no money.) Although Appellants admitted in answer to Respondent Trust's petition that they had agreed to repay $100, 000 with accrued interest within four years, Colby testified the arrangement was not initially a loan and gave several explanations as to what he believed the arrangement was. At one point Colby testified that Honest Policy owed no one $100, 000 because the money was a twenty-four-month loan that converted to equity at the end of twenty-four months. Regardless, Colby ultimately contended the money had been repaid through direct transfers from Colby to Deborah's individual bank account, a payment on Deborah's mortgage, and payment of approximately half of the cost of a boat lift at Deborah's home.

         Deborah testified that she and Stephen had an agreement during the pendency of their divorce proceedings that the $100, 000 would be repaid to her. She later admitted, however, that she had stated in a divorce deposition that any money Colby had given her was a loan and that she and Stephen were not speaking during the pendency of their divorce proceedings.

         Respondent Trust filed its Petition for Damages against Appellants September 9, 2016. On December 15, 2017, the jury reached a verdict in favor of Respondent Trust on their claims against Appellants for breach of contract and unjust enrichment. This appeal follows.

         Standard of Review

         "[W]hether the jury was properly instructed is a question of law that is reviewed de novo." Chavez v. Cedar Fair, LP, 450 S.W.3d 291, 294 (Mo. banc 2014). We review the record in the light most favorable to submission of the instruction. Hayes v. Price, 313 S.W.3d 646, 650 (Mo. banc 2010). "Any issue submitted to the jury in an instruction must be supported by substantial evidence from which the jury could reasonably find such issue." Id. We will only vacate a judgment on the basis of instructional error if the error materially affected the merits of the action. Chavez, 450 S.W.3d at 294. The party challenging the instruction has the burden of showing the instruction misdirected, misled, or confused the jury, thereby resulting in prejudice. Id.

         Point I - Mutually Exclusive Inconsistent Theories of Recovery

         In their first point on appeal, Appellants contend the circuit court erred in giving verdict directing Instructions No. 6 and No. 8 (breach of contract), and Instructions No. 10 and No. 11 (unjust enrichment), [3] arguing the instructions submitted mutually exclusive and inconsistent theories of recovery thereby misstating applicable law, misdirecting the jury, and resulting in prejudicial error.

         At the instruction conference, the court advised the parties it would be submitting Instruction No. 6 and No. 8 patterned from MAI 26.06 regarding breach of bilateral contracts. Appellants objected on the grounds there was insufficient evidence of breach of contract or any other claim made by Plaintiff, and that breach of contract instructions should not be packaged with unjust enrichment instructions (No. 10 and No. 11) as the two claims were inconsistent. Appellants argued that, because Respondent Trust took the position that a contract was breached, Respondent had an adequate remedy at law with its breach of contract claim, and an equitable, unjust enrichment instruction should not also be presented to ...


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