Foster v. Kohm

661 S.W.2d 628, 1983 Mo. App. LEXIS 3688
CourtMissouri Court of Appeals
DecidedOctober 18, 1983
DocketNo. 45924
StatusPublished
Cited by16 cases

This text of 661 S.W.2d 628 (Foster v. Kohm) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster v. Kohm, 661 S.W.2d 628, 1983 Mo. App. LEXIS 3688 (Mo. Ct. App. 1983).

Opinion

SNYDER, Presiding Judge.

This is an appeal from a judgment on a motion to enforce a settlement agreement provision requiring an accounting between two corporations. The Circuit Court of the City of St. Louis granted the motion and entered a judgment of $78,580.78 against plaintiff C. Tom Foster, individually, and Nite Sign, Inc. They now appeal. The judgment is reversed and remanded for a new trial.

Appellants assert the trial court erred in: (1) entering a personal judgment against C. Tom Foster; (2) failing to grant appellants’ oral motion for a continuance or to strike respondent’s pleadings; (3) refusing to admit testimony and exhibits based on documents already received in evidence; and (4) in imposing sanctions against appellants for failure to comply with a court order. Only points (3) and (4) need be discussed.

This case began with a simple accounting between two corporations, but through a myriad of legal faux pas, maneuvers and apparent misunderstandings, it soon erupted into a bitter and somewhat confusing conflict. Appellant C. Tom Foster and respondent Richard C. Rohm are the joint owners of a patent on electronic, computer-driven signs which flash messages by means of electric light bulbs. In 1977, they entered into an oral agreement whereby Rohm would incorporate a company to manufacture the signs (respondent Nite Sign Manufacturing Co.) and Foster would incorporate a separate and distinct company to market, distribute and sell those signs (appellant Nite Sign, Inc.). The parties also agreed to share certain profits and losses from those businesses.

Appellant Foster subsequently filed suit, individually and on behalf of Nite Sign, Inc., on August 17, 1979, alleging that respondent Rohm, individually and through Nite Sign Manufacturing Co., and his wife, Linda Rohm, were fraudulently selling the signs without accounting to Nite Sign, Inc. The appellants requested injunctive relief and an accounting.

[630]*630No responsive pleading was filed, but an attorney entered his appearance for the defendant-respondents and continued the hearing on the trial court’s order to show cause. The parties subsequently, on August 30, 1979, entered into a settlement agreement. All of the terms and conditions stipulated to were performed or excused except paragraph ten of the agreement, which provided for an accounting between the two corporations.

Respondents filed a motion to enforce paragraph ten of the agreement on July 20, 1981. On August 7, 1981, the matter was continued until September 4,1981, at which time the parties agreed to an accounting within 30 days. The accounting was not accomplished and the trial court set aside its September 4 order and ruled that the cause was to be reset on application of the petitioners.

Respondents then called up their motion to enforce paragraph ten of the settlement agreement on March 26, 1982 at a Friday motion docket. The trial judge and the parties conferred in an attempt to resolve some of the problems in connection with the accounting. The cause was then set by the parties for an evidentiary hearing on April 28, 1982. The trial judge issued a court memorandum on March 26, 1982 that read:

Pre-trial conference held. Parties appear by attorneys. Parties directed, prior to trial, to furnish the Court with a written stipulation of all uncontested facts, a written stipulation as to which exhibits may be introduced in evidence without objection or preliminary identification and to file written objections to all other exhibits, to show their exhibits to all other parties, to have their exhibits marked prior to trial, and to submit a trial brief prior to trial, citing authorities in support of their legal theories.

On April 2, 1982, appellants’ counsel served a motion on respondents’ counsel to produce a lengthy list of documents deemed necessary to perform the accounting between the two corporations. The motion requested the documents by April 16, 1982. Some documents were delivered to appellants, but the request for the others was objected to in a response to the motion to produce filed April 26, 1982, two days before the evidentiary hearing was to be held. Appellants averred that respondents nonetheless agreed to produce the objected to documents, including personal records of respondent Richard C. Kohm, on April 27, 1982, the day before the trial, but that respondents failed to do so.

Respondents followed the direction of the trial court by filing a stipulation of uncontested facts, list of exhibits and trial brief on the morning of the trial. Appellants’ counsel was given copies of these filings, also on the morning of the trial.

Appellants failed to file a written stipulation of uncontested facts or agreed to exhibits, a list of exhibits or a trial brief, purportedly because they were not shown the anticipated exhibits of respondents or their proposed stipulation of facts before the morning of the trial. Appellants did not believe any facts were uncontested until the morning of the trial. The appellants claimed they did not submit a trial brief because there were no legal issues involved, only factual issues relating to the accounting.

Appellants moved orally for a continuance, or in the alternative, to strike respondents’ pleadings because respondents had failed to produce the documents requested by appellants, which were necessary to a full accounting. The motion was denied, but the trial court refused to state its reason for the denial.

After considerable colloquy between the trial judge and counsel for the parties concerning the pre-trial order of the court, the compliance or noncompliance of the parties, and appellants’ reasons for not complying, evidence was taken. The trial court rendered judgment against appellants in the sum of $78,580.78.

In its judgment, the trial court imposed sanctions against appellants by striking plaintiffs’ Exhibit 2 and all testimony pertaining to the exhibit, but stated that the exhibit was, in addition, inadmissible on [631]*631substantive grounds. Therefore, said the trial court, the plaintiffs were not penalized because of the court’s sanction.

If the Exhibit 2 evidence were inadmissible on substantive grounds, it would be unnecessary to consider whether the sanctions imposed on appellants by the trial court were justified. The trial court, however, erred in finding that Exhibit 2 and related testimony were inadmissible.

The court’s substantive reason for refusing to admit the exhibit and the testimony was that it was based on bank statements which were not in evidence. All of the bank statements upon which the summary in plaintiffs’ Exhibit 2 was based had already been admitted into evidence in respondents’ Exhibit L, prior to appellants’ offer of evidence relating to their Exhibit 2. Having been admitted as an exhibit for the respondents, the bank statements could be used by the appellants in their case. Bolhofner v. Jones, 482 S.W.2d 80, 85[5, 6] (Mo.App.1972). Therefore, Exhibit 2 and related testimony should have been admitted unless the sanctions were justified.

Did the trial court err in imposing sanctions? This court finds that it did.

Both parties agree that the March 26, 1982 memorandum of the trial court, which the court in its judgment styled a “Pretrial Discovery Order,” was issued pursuant to Rule 62.01 which reads:

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Bluebook (online)
661 S.W.2d 628, 1983 Mo. App. LEXIS 3688, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-kohm-moctapp-1983.