In the Missouri Court of Appeals
Eastern District
DIVISION FOUR
BETTY MINOR, ) No. ED101131
)
Plaintiff, )
)
JOSEPH McCARY and ) Appeal from the Circuit Court
JOHN MICHEAL McCARY, ) of St. Charles County
) 0911-CV11957
Appellants, )
)
vs. ) Honorable Nancy L. Schneider
)
DAVID W. TERRY, KATHLEEN )
SCHILLER, JACQUELYN )
HIGHFILL, and )
FELLOWS, BLAKE & TERRY, L.L.C., )
)
Respondents. ) Filed: October 28, 2014
Joseph (“Joe”) McCary and John Micheal (“Mike”) McCary (collectively “Appellants”)
appeal the grant of summary judgment in favor of David W. Terry and Fellows, Blake & Terry,
L.L.C. (collectively “Terry”1) and the grant of summary judgment in favor of Kathleen Schiller
and Jacquelyn Highfill on Appellants‟ cross-claims. We affirm the grant of summary judgment
to Terry for Appellant‟s breach of fiduciary duty and legal malpractice claims, affirm the grant of
summary judgment to Schiller and Highfill for Appellants‟ negligence and conspiracy to defraud
1
Terry was named as a defendant in this case in his individual capacity. His law firm, Fellows, Blake & Terry,
L.L.C. was also named as a defendant, but only through Terry‟s actions as its agent. As such, all references to
“Terry” collectively refer to Terry individually and his law firm Fellows, Blake & Terry, L.L.C.
claims, but reverse and remand the grant of summary judgment in favor of Schiller and Highfill
for Appellants‟ fraud claim.2
I. BACKGROUND
This case has a complex factual and procedural history. Matilda McCary died in 2003
while in the care of a nursing home. Two of McCary‟s children, Schiller and Highfill, retained
Terry to pursue a wrongful death lawsuit against the nursing home. Schiller and Highfill are
Appellants‟ sisters and Matilda McCary was their mother. Appellants did not retain Terry and
never had a fee agreement with him.
Terry filed a wrongful death lawsuit on behalf of Schiller and Highfill, styled Kathy
Schiller & Jacquelyn Highfill v. National Health Care Corp., et al, Case No. 0511-CV04821.
Appellants were not named parties in the suit and never sought legal advice from Terry regarding
the suit. The parties settled the wrongful death lawsuit. In August 2007, Terry sent Appellants
letters via certified mail notifying them of the settlement hearing:
I represent your sisters, Kathy Schiller and Jackie Highfill in a wrongful death
claim against several defendants . . . Pursuant to the Revised Statutes of Missouri
§537.095, a plaintiff in such action must notify all those in the class of people
eligible to participate in the lawsuit before the matter is finalized. Since you are a
member of the class, you are eligible to be notified that this matter has been
concluded. In Missouri, wrongful death cases must be approved by a judge
during a settlement hearing. Members of the wrongful death class are entitled to
be provided notice of when and where the settlement hearing will take place.
If you wish to attend the settlement hearing and make a claim, you must do so
prior to the time this hearing is finally concluded. We currently have set a hearing
to conclude the matter for Monday, September 17, 2007 beginning at 9:00 a.m.
If you plan on attending the hearing, you must report to Division 1 of the St.
Charles County Circuit Court, 300 North Second Street, St. Charles,
Missouri 63303 at that time. (Emphasis in original).
2
Two motions were submitted with this case. Schiller and Highfill filed a motion for attorneys‟ fees and Appellants
filed a motion to strike Schiller and Highfill‟s Respondent‟s brief. Both motions are denied.
2
The parties dispute what happened next. Mike McCary admits that he signed the letter‟s
receipt, but Joe McCary asserts by affidavit that someone else signed his name to the letter‟s
receipt. In any event, Appellants have presented no evidence to suggest that the letters were not
sent to their correct addresses or that Appellants were unaware of the scheduled hearing.
However, both Appellants assert via affidavit that Schiller and Highfill told them “it would be
better if none of the family attended[,]” including Appellants. Appellants also assert in their
affidavits that Schiller and Highfill directed them to sign notarized statements to the court
allowing Schiller and Highfill to distribute the settlement as they saw fit, and that if Appellants
did not do so, Schiller and Highfill would take them out of the settlement entirely. Finally,
Appellants assert that Schiller and Highfill told Appellants they could not reveal the settlement
amount due to a nondisclosure agreement. In response, Schiller and Highfill presented their own
deposition testimony and deposition testimony from another sibling, Peggy Andrews, refuting
Appellants‟ assertions.
Appellants did not attend the September 17, 2007 settlement hearing. At the hearing, the
court held that all members of the class of claimants received proper notice of the hearing. The
court also found that Appellants signed notarized documentation concurring with the
disbursement decisions made by Schiller and Highfill. Further, the court found that Betty Minor,
another McCary sibling, was estranged from her family, was specially excluded from her
mother‟s will, and therefore took nothing from the settlement. Finally, the court approved the
percentages of the settlement proceeds distribution to each member of the class after deducting
attorney‟s fees, expenses, and liens from the total amount. Schiller and Highfill each received
25% of the settlement after deductions, and Appellants each received 10%.
3
Thereafter, in December 2009, Minor filed the present suit. Minor alleged Terry was
negligent and breached his fiduciary duty to her by failing to apprise her of the status of the
litigation, by failing to use reasonable efforts to locate her once a settlement was reached, by
allowing the settlement to be approved without her knowledge and consent, and by allowing the
disbursement to deny her recovery. Minor also alleged counts against Schiller and Highfill for
negligence, fraud, collusion, and injurious falsehood, claiming they intentionally provided Terry
with false contact information, made false statements about her relationship with her mother, and
allowed the settlement funds to be disbursed without her consent.
Schiller and Highfill filed a cross-claim petition against Terry, alleging that as their
attorney, Terry failed to advise them of the statutory notice requirements. Terry also filed a
cross-claim petition against Schiller and Highfill for contribution, indemnification, and fraud.
The parties mediated the dispute and reached a settlement.3 Appellants were not present
at the mediation, but Schiller and Highfill represented that they had authority to settle on behalf
of all members of the wrongful death class, including Appellants. All parties signed and
executed the settlement agreement except Appellants and their father, Jack McCary, each of
whom refused to sign. Terry filed motions to compel settlement and to join Appellants and their
father as cross-claim plaintiffs. The motion to join stated that Appellants and their father could
potentially seek to recover damages from Terry because the same questions of law and fact
asserted by Minor could potentially be asserted by Appellants and their father against Terry. The
trial court granted Terry‟s motion to join.
Appellants then filed an amended petition asserting cross-claims against Terry, Schiller,
and Highfill. Appellants‟ cross-claims against Terry were for breach of fiduciary duty (Count I)
3
Minor‟s claims against Terry, Schiller, and Highfill and the cross-claims between Schiller and Highfill and Terry
have been settled and are not the subject of this appeal.
4
and legal malpractice (Count II)4. Appellants alleged Terry represented all of Matilda McCary‟s
beneficiaries in the underlying litigation. Therefore, Appellants alleged Terry owed them a duty
to keep them apprised of the litigation and to ensure an equal and fair distribution of the
settlement proceeds. Appellants alleged Terry breached this duty, depriving Appellants of a
reasonable share of the settlement proceeds. Appellants alleged counts of negligence (Count I),
fraud (Count II), and conspiracy to defraud (Count III) against Schiller and Highfill for allegedly
misleading Appellants about their rights under the litigation and the amount of the settlement.
Terry filed a motion for summary judgment on Appellants‟ breach of fiduciary duty and
legal malpractice claims. Schiller and Highfill also filed a motion for summary judgment for
Appellants‟ claims against them. The trial court granted both motions. This appeal followed.
II. DISCUSSION
Appellants raise four points on appeal. First, Appellants assert the trial court erred in
granting summary judgment to Terry because Terry owed them a duty of care, and there were
unresolved genuine issues of material fact as to whether Terry breached that duty. Second,
Appellants contend the trial court erred in granting summary judgment to Terry because Terry
should have been judicially estopped from asserting that he did not owe them a duty of care or
that an attorney-client relationship did not exist. Third, Appellants argue the trial court erred in
granting summary judgment to Terry because Terry had a general duty to ensure that Missouri‟s
wrongful death statute was followed and that the distribution of the settlement proceeds
complied with the law. Fourth, Appellants maintain the trial court erred in granting summary
4
In their amended cross-claim petition, Appellants styled Count II as “Negligence,” rather than legal malpractice.
However, Appellants appear to have intended to allege legal malpractice. Legal malpractice is a negligence-based
cause of action. Klemme v. Best, 941 S.W.2d 493, 495 (Mo. banc 1997). Appellants alleged in the amended cross-
claim petition that “[i]n [his] capacity as attorney for the beneficiaries of Ms. McCary, Attorney . . . owed a general
duty of care to [Appellants] . . .” Further, Appellants have briefed and argued this appeal based on a claim for legal
malpractice.
5
judgment to Schiller and Highfill because they pleaded submissible cases of fraud, negligence,
and conspiracy to defraud, and there existed unresolved genuine issues of material fact.
A. Standard of review
Summary judgment is reviewed essentially de novo and affirmed only where there are no
genuine issues of material fact and the movant is entitled to judgment as a matter of law. ITT
Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.
banc 1993). A defendant may establish summary judgment is appropriate by showing: (1) facts
negating any one of the plaintiff‟s elements necessary for judgment, (2) that the plaintiff has not
produced evidence sufficient for the finder of fact to find the existence of one of the plaintiff‟s
elements, or (3) facts necessary to support a properly pleaded affirmative defense. Roberts v.
BJC Health System, 391 S.W.3d 433, 437 (Mo. banc 2013). We review the record in the light
most favorable to the party against whom judgment was entered. Id.
B. Counts against Terry
In their first, second, and third points on appeal, Appellants claim the trial court erred in
granting summary judgment to Terry on their breach of fiduciary duty and legal malpractice
claims. We disagree.
1. Duty of care
Appellants first argue the trial court erred in granting summary judgment to Terry
because Terry owed Appellants a duty and there existed a genuine issue of material fact as to
whether that duty was breached. Appellants assert that Terry owed them a duty under two
different theories: (1) as clients and (2) as non-client beneficiaries.
6
a. Clients
To make a submissible case of either legal malpractice or of an attorney‟s breach of a
fiduciary duty, a plaintiff must first adduce substantial evidence of the existence of an attorney-
client relationship.5 Klemme v. Best, 941 S.W.2d 493, 495-96 (Mo. banc 1997). Like any
agency relationship, the attorney-client relationship arises out of contract, either express or
implied. World Resources, Ltd. v. Utterback, 943 S.W.2d 269, 270 (Mo. App. E.D. 1997). “It is
an agreement whereby one person, the agent, consents with another, the principal, to act on
behalf of the principal subject to the control of the principal.” Id. A party‟s mere belief in an
attorney-client relationship is insufficient to create such a relationship. Mid-Continent Cas. Co.
v. Daniel Clampett Powell & Cunningham, LLC, 196 S.W.3d 595, 599 (Mo. App. S.D. 2006).
Where no attorney-client relationship exists, no duty exists as a matter of law. Id. at 600.
Schiller and Highfill retained Terry to litigate their wrongful death claims arising from
their mother‟s death. It is undisputed that Appellants did not have a fee agreement with Terry
and never entered into an oral agreement with Terry. Appellants never sought legal advice from
Terry and were not named parties in the wrongful death suit. Appellants contend, instead, that
they believed that Schiller and Highfill entered into an attorney-client relationship on their
behalf, but one party‟s mere belief in the existence of the attorney-client relationship is
insufficient to form the required contract. Id. at 599. Nor does Terry‟s letter to Appellants
notifying them of the hearing date create an attorney-client relationship. First, the letter
specifically identified Schiller and Highfill as Terry‟s clients. Second, an attorney-client
5
Legal malpractice and breach of fiduciary duty are closely related claims. If the alleged breach can be
characterized as both a breach of the standard of care (negligence) and a breach of fiduciary duty, a plaintiff‟s sole
claim is for legal malpractice unless the fiduciary breach is independent of any legal malpractice. Klemme, 941
S.W.2d at 496. Because both claims require a showing of an attorney-client relationship, we address them together.
7
relationship is not created merely because an attorney discusses the subject-matter of the
litigation with a third party. Id. Terry did not owe Appellants a duty of care as clients.
b. Non-clients
Under certain circumstances, attorneys may owe a duty to non-clients. Donahue v.
Shughart, Thompson & Kilroy, P.C., 900 S.W.2d 624, 629 (Mo. banc 1995). We determine the
existence of such a duty through a balancing test, examining: (1) the client‟s specific intent that
the purpose of the attorney‟s services was to benefit the non-client; (2) the foreseeability of harm
to the non-client as a result of the attorney‟s negligence; (3) the degree of certainty that the non-
client will suffer injury from attorney misconduct; (4) the closeness of the connection between
the attorney‟s conduct and the injury; (5) the public policy interest in preventing future harm;
and (6) the burden on the legal profession that would result from recognizing liability under the
circumstances. Id.
The first factor, the client‟s specific intent to benefit the non-client, is the “ultimate
factual issue . . .. A benefit that is merely incidental or indirect will not satisfy this factor.” Id. at
628. Here, there is no evidence that Schiller and Highfill retained Terry with the specific intent
to benefit Appellants, rather than themselves. Missouri‟s wrongful death statute, section 537.095
RSMo 2000,6 allows for one member of the class to settle the claims and damages for the rest of
the class. Any benefit the entire class stems from the class-based nature of the statute, not from
Schiller and Highfill‟s intent to benefit Appellants.
In Donahue, an attorney‟s client directed the attorney to pay cash from a trust account
and deed his home to his heirs upon his death. 900 S.W.2d at 625. The attorney did not
correctly effectuate the transfers, and after the client‟s death, the transfers were held to be
invalid. Id. The non-client heirs brought a legal malpractice action against the attorney, alleging
6
All further references to section 537.095 are to RSMo 2000.
8
breach of fiduciary duty. Id. at 626. The Missouri Supreme Court held that the non-client heirs
stated a claim for breach of fiduciary duty. Id. at 629. The Court applied the six factor test, and
with respect to the specific intent element, found that the non-client heirs were the direct and
exclusive beneficiaries of the attorney‟s services. Id. The Court reasoned that the client‟s
primary purpose was to benefit the non-client heirs, and the client himself received no apparent
benefit, other than the satisfaction that his property be distributed according to his wishes after
his death. Id.
Here, Schiller and Highfill retained Terry in order to benefit themselves, as opposed to
the client in Donahue, who received no benefit from the transaction. Schiller and Highfill hired
Terry to pursue a wrongful death suit, and they served as the named plaintiffs in that suit.
Appellants were unnamed class member plaintiffs to the suit. Any benefit conferred on
Appellants, therefore, derived entirely from the benefit secured by Schiller and Highfill, pursuant
to section 537.095. Because Appellants were not the direct and exclusive beneficiaries of the
representation, Donahue is distinguishable. Schiller and Highfill did not retain Terry with the
specific purpose of benefitting Appellants.
The second, third, and fourth factors are closely related. The alleged harm must be
foreseeable, certain, and caused by the attorney‟s misconduct. The alleged harm and injury in
this case was that Appellants did not get the same settlement percentages as Schiller and Highfill.
This is not a legally cognizable injury. Missouri does not have a common law cause of action for
wrongful death. Sullivan v. Carlisle, 851 S.W.2d 510, 516 (Mo. banc 1993). The extent of
Appellants‟ rights, therefore, flows exclusively from the wrongful death statute. Id. at 512.
“There is no minimum amount that must be awarded to any party designated as a taker under
section 537.095.4. The trial court is not bound by a set percentage or a minimum; rather, the trial
9
court must exercise its discretion and, as instructed by the statute, distribute the proceeds in
proportion to the losses suffered by each as determined by the court.” Parr v. Parr, 16 S.W.3d
332, 337 (Mo. banc 2000) (quotations omitted). Appellants did not have a right to any specified
percentage of the recovery, either by common law, or by statute. Appellants did not suffer an
injury.
The fifth and sixth factors (the policy of preventing future harm and the burden on the
profession of recognizing liability under the circumstances) weigh strongly against extending a
duty to an attorney under these circumstances. There would be no deterrent to future harm
because Appellants did not suffer an injury. And, as noted by the trial court, to hold that an
attorney representing the named plaintiff in a wrongful death class has a duty to the other class
members to ensure an equal settlement amount, to make them appear at the hearing, and to
ensure they are represented, would put a huge burden on the legal profession in litigating future
wrongful death actions, particularly those with large classes of beneficiaries.
Therefore, Terry did not owe Appellants a duty either as clients or non-client
beneficiaries.
2. Judicial estoppel
In their second point on appeal, Appellants assert the trial court erred in granting
summary judgment to Terry on their breach of fiduciary duty and legal malpractice claims
because Terry should have been judicially estopped from denying his attorney-client relationship
with Appellants due to Terry‟s motion to join Appellants to the lawsuit.
“Judicial estoppel applies to prevent litigants from taking a position in one judicial
proceeding, thereby obtaining benefits from that position in that instance and later, in a second
proceeding, taking a contrary position in order to obtain benefits from such a contrary position at
10
that time.” Vinson v. Vinson, 243 S.W.3d 418, 422 (Mo. App. E.D. 2007) (quotations omitted).
Judicial estoppel applies where: (1) a party‟s later position was clearly inconsistent with its
earlier position, (2) the party succeeded in persuading a court to accept the earlier position, and
(3) where the party asserting inconsistent positions would derive an unfair advantage or impose
an unfair detriment on the opposing party. Id.
Terry‟s position on summary judgment, denying an attorney-client relationship with
Appellants, was not clearly inconsistent with his motion to join. In his motion to join, Terry
stated that Appellants had an interest in the outcome of the suit and that if Appellants filed a
separate lawsuit against Terry, it would involve the exact same questions of law and fact.
Nowhere in the motion to join does Terry state that he had an attorney-client relationship with
Appellants.
The mere joinder of an additional plaintiff to a lawsuit does not function as an admission
of liability as to any element of the plaintiff‟s potential cause of action. Therefore, simply stating
that Appellants‟ claim would involve the same exact questions of law and fact is not admitting
that an attorney-client relationship existed. The two positions are not clearly inconsistent.
3. Duty to ensure compliance with the wrongful death statute
In their third point on appeal, Appellants argue the trial court erred in granting summary
judgment to Terry on their breach of fiduciary duty and legal malpractice claims because Terry
had a duty to Appellants to ensure that distribution of the settlement proceeds complied with
section 537.095.
a. Notice
Section 537.095.1 requires the named plaintiff in a wrongful death action “satisfy the
court that he has diligently attempted to notify all parties having a cause of action[.]” A certified
11
letter sent by the named plaintiff‟s attorney to the beneficiary‟s last known address fulfills the
notice requirement. Walkenhorst-Newman v. Montgomery Elevator, 37 S.W.3d 283, 285-86
(Mo. App. E.D. 2000).
In August 2007, Terry sent Appellants letters via certified mail notifying them of the
settlement hearing:
I represent your sisters, Kathy Schiller and Jackie Highfill in a wrongful death
claim against several defendants . . . Pursuant to the Revised Statutes of Missouri
§537.095, a plaintiff in such action must notify all those in the class of people
eligible to participate in the lawsuit before the matter is finalized. Since you are a
member of the class, you are eligible to be notified that this matter has been
concluded. In Missouri, wrongful death cases must be approved by a judge
during a settlement hearing. Members of the wrongful death class are entitled to
be provided notice of when and where the settlement hearing will take place.
If you wish to attend the settlement hearing and make a claim, you must do so
prior to the time this hearing is finally concluded. We currently have set a hearing
to conclude the matter for Monday, September 17, 2007 beginning at 9:00 a.m.
If you plan on attending the hearing, you must report to Division 1 of the St.
Charles County Circuit Court, 300 North Second Street, St. Charles,
Missouri 63303 at that time. (Emphasis in original).
Joe McCary asserted by affidavit that he did not sign for the certified letter and does not
know who signed his name. However, Terry was not obligated under the statute to ensure actual
notice of the letter or its contents. Cf. id. at 286-87 (finding that a certified letter was sufficient
to put an ordinarily prudent person on notice of a wrongful death suit, even where beneficiary
chose not to read the letter). Further, Appellants have presented no evidence to suggest that the
letters were not sent to their correct addresses or that Appellants were unaware of the scheduled
hearing. Terry fulfilled the notice requirements of section 537.095.1.
b. Settlement amounts
As noted above, there is no minimum amount or set percentage a trial court must award
to each beneficiary under section 537.095.4. Parr, 16 S.W.3d at 337. Terry did not represent
12
Appellants. He had no duty to ensure Appellants received a specific amount of the total
settlement, let alone equal shares to Schiller and Highfill, their clients. In fact, pursuing equal
shares for Appellants at the expense of his clients‟ shares would have violated Terry‟s ethical
duty to zealously represent only his clients‟ interests. C.f. Rule 4.17(a)(1)7 (preventing a lawyer
from representing one client where it will be directly adverse to the interests of another).
The trial court allowed Terry to apportion his fees among the total settlement amount, not
just from the recovery of Schiller and Highfill, his clients. Section 537.095.4(2) requires a trial
court to order the claimants to pay the “attorneys' fees as contracted.” And, as here, “if the party
sharing in the proceeds has no attorney representing him before the rendition of any judgment or
settlement, then the court may award the attorney who represents the original plaintiff such fee
for his services, from such persons sharing in the proceeds, as the court deems fair and equitable
under the circumstances[.]” Id. Here, Appellants were not represented by counsel in the
wrongful death proceeding. Therefore, pursuant to statute, the trial court had the discretion to
award attorney‟s fees from Appellants‟ share, and Terry did not violate the terms of the statute
by apportioning their fees in accordance with the trial court‟s order.
Appellants have presented no evidence that Terry did not fulfill his statutory obligations.
4. Conclusion
Based on the foregoing, the trial court did not err in granting summary judgment in favor
of Terry on Appellants‟ breach of fiduciary duty and legal malpractice claims. Points one, two,
and three are denied.
C. Counts against Schiller and Highfill
In their fourth and final point on appeal, Appellants assert that the trial court erred in
granting summary judgment in favor of Schiller and Highfill because Appellants pleaded
7
All references to Rules are to Missouri Supreme Court Rules (2014).
13
submissible cases of negligence, fraud, and conspiracy to defraud, and there existed genuine
issues of material fact.
1. Negligence
Appellants‟ negligence count asserts that Schiller and Highfill owed them a “general duty
of care” and were negligent in that (1) Schiller and Highfill failed to keep Appellants‟ reasonably
apprised of the status of the wrongful death suit, and (2) Schiller and Highfill allowed the trial
court to approve an unequal settlement. This “general duty of care” is overbroad.
A legal duty to another may arise where it is prescribed by the legislature. Hackmann v.
Missouri American Water Company, 308 S.W.3d 237, 239 (Mo. App. E.D. 2009). Here, section
537.095.1 imposes a duty on the named plaintiff in a wrongful death action to “diligently
attempt[] to notify” all beneficiaries before settling the suit. A certified letter sent by the named
plaintiff‟s attorney to the beneficiaries‟ last known address fulfills the notice requirement.
Walkenhorst-Newman, 37 S.W.3d at 285-86.
Schiller and Highfill‟s retained counsel sent certified letters to Appellants, notifying them
of the settlement hearing. This was the extent of Schiller and Highfill‟s statutory notice duty,
and they met their obligations. Appellants have presented no evidence to suggest that the letters
were not sent to their correct addresses or that Appellants were unaware of the scheduled
hearing.
Also, Schiller and Highfill had no duty to ensure equal settlement amounts. Section
537.095.2 explicitly contemplates that each beneficiary may receive unequal amounts. It allows
the trial court to apportion the settlement according to each beneficiary‟s respective losses. Id.
There is no minimum amount or set percentage a trial court must award to each beneficiary.
Parr, 16 S.W.3d at 337. Schiller and Highfill had no duty to ensure that Appellants received any
14
recovery, let alone equal shares. The trial court did not err in granting summary judgment in
favor of Schiller and Highfill on Appellants‟ negligence count. Point four denied in part.
2. Fraud
Appellants‟ fraud count asserts that Schiller and Highfill acted to deprive Appellants‟ of
their reasonable share of the settlement proceeds by (1) lying to Terry and the court regarding
Appellants‟ knowledge of and desire to participate in the litigation, (2) lying to Terry and the
court regarding their authority to act on behalf of Appellants, and (3) lying to Appellants
regarding aspects of the litigation and the amount of the settlement.
The elements of a fraudulent misrepresentation are: (1) a representation, (2) its falsity, (3)
its materiality, (4) the speaker‟s knowledge of its falsity or her ignorance of the truth, (5) the
speaker‟s intent that the representation should be acted upon by the hearer in a manner
reasonably contemplated, (6) the hearer‟s ignorance of the representation‟s falsity, (7) the
hearer‟s reliance on the representation‟s truth, (8) the hearer‟s right to rely on the representation,
and (9) injury to the hearer proximately caused by his reliance. Professional Laundry
Management Systems, Inc. v. Aquatic Technologies, Inc., 109 S.W.3d 200, 205 (Mo. App. E.D.
2003).
a. The trial court’s judgment
The trial court granted summary judgment because it found that Appellants failed to
plead the circumstances of the alleged fraud with particularity and that Appellants had no right to
rely on Schiller and Highfill‟s allegedly fraudulent statements. This ruling was in error.
All claims for fraud must state with particularity the circumstances constituting the fraud.
Rule 55.15. Here, however, Schiller and Highfill failed to file a Motion for More Definite
Statement pursuant to Rule 55.27(d) and, consequently, they waived the particularity
15
requirement. Rule 55.27(f); Clark v. Olson, 726 S.W.2d 718, 719 (Mo. banc 1987). Therefore,
the trial court erred in granting summary judgment on the ground that Appellants failed to plead
the circumstances of the alleged fraud with particularity.
The trial court also found that Appellants had no right to rely on Schiller and Highfill‟s
representations. It stated:
On the claim for fraud, [Appellants] allege without particularity that [Schiller and
Highfill] made false and misleading statements[] to them „about the nature of the
litigation, their participation in the litigation and the amount of the settlement for
the purpose of preventing . . . [Appellants] from attempting to participate in the
litigation and obtain their fair and equitable share of the settlement.‟ This
generalized conclusion is insufficient as a matter of law to support a fraud claim.
Further, [Appellants] have not alleged and cannot show reasonable reliance on
these generalized statements.
A trial court must make its decision to grant summary judgment based on the law,
pleadings, and the record submitted. Central Trust and Inv. Co. v. Signalpoint Asset
Management, LLC, 422 S.W.3d 312, 319 (Mo. banc 2014). Summary judgment is only
appropriate where “pleadings, depositions, answers to interrogatories, and admissions on file,
together with the supporting affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of law.” Hayward v.
Arnold, 779 S.W.2d 342, 344 (Mo. App. W.D. 1989) (quotations omitted).
Here, the trial court only evaluated the statements alleged in Appellant‟s amended
petition, not the statements evidenced in the summary judgment record. Appellants attached
several exhibits to their joint response to Schiller and Highfill‟s motion for summary judgment,
including affidavits from each Appellant. Specifically, the affidavits stated that Schiller and
Highfill told Appellants they could not reveal the amount of the settlement agreement due to a
non-disclosure agreement and that Appellants should not attend the settlement hearing. There
remain genuine issues of material fact around these statements – whether they were indeed made,
16
whether Appellants relied on them in choosing not to attend the settlement hearing, and whether
Appellants suffered injury from that reliance in the form of lower settlement portions. Schiller
and Highfill submitted their own deposition testimony and deposition testimony from another
sibling, Peggy Andrews, supporting their assertion that they never made such representations,
but this is a factual dispute, and a trial court does not have authority to resolve conflicting
testimony on summary judgment. North Cent. County Fire Alarm System, Inc. v. Maryland
Heights Fire Protection Dist., 945 S.W.2d 17, 21 (Mo. App. E.D. 1997).
Further, the fact that Appellants received letters from Terry informing them of the
hearing does not negate their right to rely on the alleged misrepresentation. “When distinct and
specific representations have been made and are to be acted upon, the representee has the right to
rely on the representation even if the parties stand on equal footing or have equal knowledge or
means of information relating to the subject matter of the representation.” Iota Management
Corp. v. Boulevard Inv. Co., 731 S.W.2d 399, 413 (Mo. App. E.D. 1987).
Iota Management Corp. involved the sale of a hotel. Id. at 403. The sales contract
represented that the hotel would be sold “as is,” but that the seller had no actual notice of any
substantial defects in its structure or utility systems. Id. at 404. The buyer was entitled to an
inspection period with the option to terminate the contract before closing if the hotel was
determined to be in adverse condition. Id. The buyer‟s engineer inspected the hotel during the
inspection period, but did not find any major defects. Id. at 404-05. After closing, the buyer
discovered major defects in the hotel‟s heating and cooling system. Id. at 405-06. The buyer
sued the seller, alleging a fraud count. Id. at 403. At trial, evidence was presented that the seller
had actual notice of the heating and cooling system defects. Id. at 405-08.
17
The seller argued that the buyer had no right to rely on its representation in the sales
contract that it had no actual notice of substantial defects because the buyer conducted its own
independent investigation. Id. at 412-13. This Court disagreed, holding that the buyer had the
right to rely on the seller‟s statement. Id. at 412-14. We reasoned that when a speaker makes
distinct and specific representations, the hearer has the right to rely on the representations, even
if the parties have equal knowledge or equal means of information relating to the subject matter.
Id. at 413. Therefore, the buyer had the right to rely on the seller‟s statement, because the seller
made specific representations about its notice of the heating and cooling system‟s condition. Id.
The circumstances are similar here. Appellants had letters informing them of their right
to attend the settlement hearing, where they could learn the settlement amount and the respective
percentages each beneficiary would receive. They therefore had the means to conduct the
equivalent of an “independent investigation” into their entitlements under the settlement.
However, Appellants have alleged and presented evidence by affidavit that Schiller and Highfill
made distinct and specific representations that Appellants should not attend the hearing and that
the settlement amount could not be disclosed. Therefore, as in Iota Management Corp.,
Appellants had the right to rely on their sisters‟ representations, despite the fact that they could
have found out the relevant information on their own.
b. Other fraud elements
We examine next whether Appellants presented evidence to support a prima facie claim
for fraud as to the other eight elements. Although the trial court did not address these elements
in its decision, we will affirm a grant of summary judgment if it can be sustained on any theory
as a matter of law. Guy v. City of St. Louis, 829 S.W.2d 66, 69 (Mo. App. E.D. 1992). “We will
not reverse a correct result even where granted for the wrong reasons, and will sustain the trial
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court's entry of summary judgment even if the theory on which we dispose of this case was not
presented to the court.” Id. Therefore, we must examine the other elements of fraud to ensure
the trial court‟s judgment cannot be affirmed on other grounds.
As noted above, the elements of a claim for fraud are: (1) a representation, (2) its falsity,
(3) its materiality, (4) the speaker‟s knowledge of its falsity or her ignorance of the truth, (5) the
speaker‟s intent that the representation should be acted upon by the hearer in a manner
reasonably contemplated, (6) the hearer‟s ignorance of the representation‟s falsity, (7) the
hearer‟s reliance on the representation‟s truth, (8) the hearer‟s right to rely on the representation,
and (9) injury to the hearer proximately caused by his reliance. Professional Laundry
Management Systems, Inc., 109 S.W.3d at 205. Direct evidence of fraud rarely exists, but it may
be established by circumstantial evidence. Hammett v. Atcheson, 438 S.W.3d 452, 461 (Mo.
App. W.D. 2014).
Appellants have presented evidence supporting every element. Each Appellant presents
affidavit testimony that Schiller and Highfill falsely stated that Appellants should not attend the
settlement hearing and that Schiller and Highfill could not disclose the settlement amount. These
representations were material because they prevented Appellants from attending the hearing to
assert their rights and from questioning the amounts they received. Appellants presented
evidence of Schiller and Highfill‟s knowledge of the representations‟ falsity through Terry‟s
deposition testimony, which states that the settlement amount was not confidential and that
Schiller and Highfill told him Appellants were aware of the settlement percentages before the
hearing. The affidavits also present evidence of Appellants‟ ignorance of the representations‟
falsity and their reliance on the representations. Appellants state they did not know Schiller and
Highfill‟s alleged statements were untrue, but that they believed them to be true. Their right to
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rely on the representations was established above. Finally, Appellants presented evidence that
they suffered injury as a result of the representations – Schiller and Highfill each received two
and one half times the settlement amount Appellants did.
Schiller and Highfill dispute all of this evidence, relying on their own deposition
testimony and that of Peggy Andrews. But the factual disputes related to all of the elements of
fraud may not be resolved as a matter of law. Because there exist unresolved issues of material
fact and Appellants had the right to rely on Schiller and Highfill‟s alleged misrepresentations, the
trial court erred in granting summary judgment in favor of Schiller and Highfill on Appellants‟
fraud count. Point four granted in part.
3. Conspiracy to defraud
Appellants‟ allegations in their conspiracy to commit fraud count are substantially the
same as the fraud count, with the additional allegation that Schiller and Highfill conspired and
agreed to commit the fraudulent acts.
A “civil conspiracy” is an agreement or understanding between two people to perform an
unlawful act or to perform a lawful act through unlawful means. State ex rel. Missouri Highways
and Transp. Com’n v. Westgrove Corp., 364 S.W.3d 695, 702 (Mo. App. E.D. 2012). Here,
Appellants alleged that Schiller and Highfill entered an agreement to defraud Appellants, but
they have presented no evidence of the alleged agreement. There are no issues of material fact as
to this count. The trial court‟s grant of summary judgment for the conspiracy to defraud count
was not in error. Point four is denied in part.
III. CONCLUSION
The trial court‟s grant of summary judgment in favor of Terry on Appellants‟ breach of
fiduciary duty and legal malpractice claims is affirmed. The trial court‟s grant of summary
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judgment in favor of Schiller and Highfill on Appellants‟ negligence and conspiracy to defraud
claims is affirmed. The trial court‟s grant of summary judgment in favor of Schiller and Highfill
on Appellants‟ fraud claim is reversed and remanded for proceedings consistent with this
opinion.
ROBERT M. CLAYTON III, Judge
Patricia L. Cohen, P.J., and
Roy L. Richter, J., concur.
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