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Sansone Law, LLC v. J&M Securities, LLC

Court of Appeals of Missouri, Eastern District, Third Division

October 8, 2019

SANSONE LAW, LLC, Plaintiff/Respondent,
J&M SECURITIES, LLC, Defendant/Appellant.

          Appeal from the Circuit Court of St. Louis County Honorable Michael T. Jamison.

          SHERRI B. SULLIVAN, J.


         J&M Securities, LLC (Appellant) appeals from the trial court's judgment granting the Motion to Enforce Settlement and For Sanctions filed by Sansone Law, LLC (Respondent) and dismissing all claims with prejudice. We reverse and remand to the trial court to reinstate Appellant's and Respondent's claims for further proceedings.

         Factual and Procedural Background

         Respondent filed a three-count petition against Appellant alleging Respondent had represented Appellant and had, at Appellant's request, provided legal services to Appellant. Respondent further alleged Appellant received the legal services but failed to pay for them. The petition against Appellant alleged (1) quantum meruit, (2) fraudulent misrepresentation, and (3) slander/libel. Respondent requested relief in excess of $25, 000 in compensatory damages, as well as attorney's fees and costs.

         Appellant filed a partial answer, along with affirmative defenses, and eleven counterclaims. In the counterclaims, Appellant alleged Respondent (1) breached the legal services contract, (2) was unjustly enriched, (3) committed legal malpractice, (4) breached its fiduciary duty, (5) tortiously interfered with a business expectancy, (6) illegally evicted Appellant, (7) abused process in evicting Appellant, (8) failed to return Appellant's security deposit, (9) committed conversion of Appellant's office property, (10) was unjustly enriched by the office property, and (11) was unjustly enriched by joint legal services. Appellant also filed a motion to dismiss Respondent's prayer for attorney's fees, along with Count II of Respondent's petition, fraudulent misrepresentation, for failing to state a claim upon which relief could be granted.

         Following Appellant's answer, the trial court entered an order that stated:

On application of the parties, presented ex parte, by consent of the attorneys, by Talmage Newton, the Clerk is instructed to withdraw the partial answer, affirmative defenses and counterclaims filed by J&M Securities, LLC. Sansone Law has agreed not to default J&M Securities pending further discussions of the parties.

         A case management conference was held in January 2017. The trial court entered an order following the hearing that stated, "Discovery pending, parties discussing resolution of discovery issues. [Case management conference] reset for March 31, 2017 @ 11 am."

         On the day following the case management conference, Respondent filed a motion to compel Appellant to fully answer and respond to its interrogatories and request for production. The motion to compel was set for hearing. Prior to the scheduled hearing on the motion to compel, Appellant filed its revised partial answer, affirmative defenses, and counterclaims.

         Respondent filed a memorandum to cancel the hearing on the motion to compel, which the trial court judge signed.

         Following the cancellation of the motion to compel hearing, Respondent filed a motion to dismiss Appellant's counterclaims. The trial court set both Appellant's and Respondent's motions to dismiss for hearing. On the day of the hearing, the trial court entered an order that stated, "Both parties ordered to amend claims within 30 days or each parties [sic] motion to dismiss is granted."

         Appellant and Respondent did not amend their respective claims within 30 days, but instead jointly requested the trial court extend the deadline for filing amended pleadings for an additional 30 days. The trial court granted the parties' request.

         Thirty days later, Appellant and Respondent jointly requested a second extension of an additional seven days for filing the amended pleadings.

         Seven days later, Appellant filed its amended partial answer, affirmative defenses, and counterclaims alleging: (1) legal malpractice (Hefley case), (2) legal malpractice (Scharafinski case), (3) legal malpractice (case abandonment), (4) unjust enrichment (case abandonment), (5) breach of fiduciary duty, (6) unjust enrichment (joint legal services), (7) breach of contract (illegal eviction), (8) abuse of process (illegal eviction), (9) unjust enrichment (security deposit), (10) conversion (office property), and (11) unjust enrichment (office property).

         Respondent did not file its amended petition, but rather filed a motion for extension, as well as its Motion to Enforce Settlement and For Sanctions. Respondent's motion for extension requested the trial court extend the deadline for filing its amended petition until after the motion to enforce settlement was heard. The request stated in part:

The parties agreed to an extended deadline of 7.17.2017 to file amended petitions that had been previously ordered as settlement had been reached. However, on July 17, 2017 counsel for Defendant abruptly claimed no settlement and offered only a dismissal without prejudice of all claims.

         Respondent's Motion to Enforce Settlement and For Sanctions claimed the parties previously agreed to settle all pending claims and counterclaims by mutual release of all parties for all pending claims. The motion further requested attorney's fees be awarded to Respondent for the time spent on enforcing the settlement.

         Respondent filed a notice of hearing stating the motion to enforce settlement would be called for hearing on August 8, 2017. On July 26, 2017, Respondent filed an amended notice of hearing stating the motion would be heard on August 16, 2017. On August 16, 2017, the trial court entered an order stating, "By consent, the parties pass hearing on plaintiff's motion to compel/enforce settlement from today to 8-25-2017 @ 10:30 AM."

         On August 24, 2017, Respondent filed a memorandum regarding the hearing scheduled for the following day, which stated, "Plaintiff hereby passes its hearing on Plaintiff's Motion to Enforce Settlement set for 8.25.2017 at 10:30 am."

         On August 29, 2017, Appellant filed a motion for default judgment against Respondent. Appellant's motion stated while it had agreed to stay the filing deadline for Respondent for any responsive pleadings to the counterclaims until hearing on the motion to enforce settlement, it agreed to do so with the expectation that the motion would be heard in a timely fashion as agreed to by the parties. Appellant's motion went on to state Respondent unilaterally cancelled the August 25, 2017 hearing, which had not been rescheduled, and further that Respondent's counsel had not responded to a request to reset the pending motion.

         Respondent filed a motion to strike Appellant's default judgment motion and for sanctions. Along with its motion, Respondent filed an amended notice of hearing that set the motions to enforce settlement, strike the default motion, and for issuance of sanctions for hearing on September 12, 2017.

         On September 12, 2017, the court entered an order that denied Appellant's motion for default judgment and reset the hearing on Respondent's motion to enforce settlement to September 27, 2017.

         Motion to Enforce Settlement

         On September 27, 2017, the hearing on Respondent's Motion to Enforce Settlement and For Sanctions began with the following discussion:

The Court: [I]n a previous discussion here, we decided that the case will be presented as follows. I think the parties are in agreement that for the most part, this case is one where the evidence is based upon the exchange of emails. So the emails, I believe, will be submitted and offered as evidence in this case, and then we'll hear the arguments of the respective parties. Then we'll set a date for the filing of findings of fact, conclusions of law and proposed order. So with that, I believe we are ready to proceed. So, Mr. Pedroli.[1]
Pedroli: Your Honor, if you don't mind, I think it might be a good idea to memorialize, also, sort of what happened this morning. We came here intending for this to be an evidentiary hearing where the lawyers would all testify as to the emails, the telephone conversations, and even some in-person discussions with regard to the settlement agreement. That's what we thought we were doing.
At the last minute, Mr. Newton[2] cited Ethical Rule 4.37 - or 4-37, saying that he feels as if he can't, without an opinion, testify in this case and act as counsel.
Is that correct?
Newton: That is correct, Your Honor. I believe that the Ethical Rule 4-3.7 prohibits me in this proceeding from both being lead advocate for Mr. Metzger and his companies as well as a key witness to the facts that are intended to be put on.
The Court: Thank you.
Pedroli: And although we disagree with that, we have agreed to proceed with the emails and the telephone conversation as our primary evidence in the motion to enforce settlement. So at this point do you want to just --
Newton: Your Honor, for purposes of making the record complete on this point, I would note that plaintiff has been offered by defense counsel the opportunity, subject to the Court's discretion, to reschedule this matter if they felt the need to do so, and have declined that opportunity and elected to proceed on the documentary record.
The Court: Okay. Well, that being the case, but I understand - Mr. Sansone, Mr. Pedroli, correct me if I'm wrong, but you are proceeding because this matter has been scheduled any number of times, and I believe it's your position that it's time to have this matter heard and the Court to make some decisions.
Pedroli: We are proceeding because my client's opinion is that these last minute changes and continuances are vexatious, and it demonstrates their inability to settle a case that they have already settled and agreed to before. We want to get it over with. We believe this case was settled a long time ago, and we believe the documentary evidence should be enough for Your Honor to make that decision that a settlement was agreed to. So that being the case, we are going to admit the emails and the telephone transcript at this time.

         The hearing proceeded, and both Appellant and Respondent submitted exhibits into evidence and made legal arguments regarding whether a settlement was agreed to on June 9, 2017. The evidence admitted at the hearing consisted of the following:

         June 9, 2017 - Voicemail

         On June 9, 2017, Appellant's counsel, Newton, called Respondent's counsel, Ben Sansone (Sansone), and left a voicemail. A transcription of the voicemail was submitted into evidence by Respondent. The voice message stated:

Bennett's [sic] Talmage would you [give] me a call when you a chance it's noon on Friday I think I have a proposal that's going to get this thing worked out So we may be able to get this thing wrapped up give me a call when you can obviously we've got a pending deadline so sooner the better.

         June 9, 2017 - Recorded Telephone Conversation

         Sansone returned the call to Newton on June 9, 2017, and without Newton's knowledge, recorded the phone conversation. Respondent submitted a transcript of that phone call into evidence at the hearing, which stated:

Reception: Good morning NewtonBarth, this is Claire speaking, how may I assist you?
Sansone: Hi, Ben Sansone calling for Talmage.
Reception: Sure, Ben, give me one moment.
Sansone: Thanks.
Newton: Talmage.
Sansone: Talmage, Ben, what's going on?
Newton: Okay. I think I have kind of gotten everybody to come around on our side. Here's what I would propose doing. I would say that we continue out whatever deadline for whatever period you are convenient with to give me time to put together a written settlement agreement for your review. It would more or less be this. There would be no money changing hands on either side. It would be more or less a mutual walk-away, but it would have some things in there that I think you would not have a hard time agreeing to from our conversation at - at court last month, some of them just an agreement that you are not going to provide people Shannon [Metzger]'s home address, and then the big one being more or less a, you know, an agreement resolving all of these disputes with the exception saying that if this judgment issue comes up, it's more of [sic] less cut out of the settlement agreement, that in the event it ever is brought up, you two are going to have to deal with that. That means if you are sued you can bring him in, if he is sued he can bring you it. It's the one cutout provision here.
Sansone: We will figure that out. But I mean, that's not a dispute that's between us, either one of our filings so I don't know how -
Newton: That is correct, yeah.
Sansone: It wouldn't be addressed by just us resolving this anyway, so I don't know why we have to specifically drop that out, but I will keep an open mind.
Newton: You know why. Just because it -
Sansone: No, I mean if you are just - Actually, I think I know why. You know why because is Shannon is Shannon or is there a reason for -
Newton: Yeah, that's more [or] less. I still maintain that this is in both your best interest which is why I am working so hard to get this done. But I want to have language in there that you are comfortable with, that he is, but I've got to craft it. Are you comfortable with that as far as the pending deadline. I will confirm that with you in writing, that I'm drafting a settlement agreement, we will push out this kind of artificial deadline that we created, whatever period you are comfortable with.
Sansone: No, that's fine. I mean, listen, what I don't want to have happen, and I don't think it would be your fault, but it might be on your client. I do not want - If we are going to get this thing ...

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