Kaplan v. U.S. Bank, N.A.

166 S.W.3d 60, 2003 WL 1204937
CourtMissouri Court of Appeals
DecidedNovember 10, 2003
DocketED 80671
StatusPublished
Cited by23 cases

This text of 166 S.W.3d 60 (Kaplan v. U.S. Bank, N.A.) 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
Kaplan v. U.S. Bank, N.A., 166 S.W.3d 60, 2003 WL 1204937 (Mo. Ct. App. 2003).

Opinion

GLENN A. NORTON, Judge.

This case involves the disposal of contaminated concrete from a remediation site onto plaintiffs’ property. A jury found the Bank and Southern Contractors liable for actual and punitive damages on the plaintiffs’ trespass and negligence claims. The Bank appeals the finding that it could be held vicariously liable for Southern’s conduct under the doctrine of respondeat superior and the finding that it owed a duty to the plaintiffs under the remediation work plan. Southern appeals the damages instruction, the refusal to award all of its attorney fees and the assessment of costs against it. Both defendants appeal the punitive damages awards. We affirm in part and reverse in part.

I. BACKGROUND

Mercantile Bank, now known as U.S. Bank, held a security interest in a site contaminated with high levels of polychlo-rinated biphenyls, or PCBs. The corporation that owned the site defaulted on its loan with the Bank and shut down operations at-the site. At all relevant times thereafter, that corporation existed only as a shell, and the Bank acted as the true owner of-the site. In 1994, the Bank, the shell corporation and the former owners of the site reached an agreement to remediate, under which the Bank was responsible for removing materials with PCB levels of less than 10 parts per million (“ppm”). *65 The former owners drafted a work plan describing the method for completing the remediation. The work plan mandated that the parties adhere to certain procedures to prevent “illegal or inappropriate disposal” of materials. All materials with less than 10 ppm of PCB were to be disposed of at permitted landfills or used on-site as backfill.

By late 1995, only materials with less than 10 ppm of PCB remained on the site. In January 1996, the Bank entered into a contract with Southern to remove and dispose of these and other materials. Under the contract, the Bank had the right to decide which materials would be taken off site and where they would be taken. The Bank decided to remove all materials from the site, including stockpiles of concrete. The parties executed a change order in June, under which Southern was to dispose of PCB-contaminated materials at one of two specified landfills. All clean fill was to- be removed from the site, and the Bank was to be notified of its destination in advance. The stockpiles of concrete were not tested for contamination before they were removed.

Southern was approached by several homeowners who saw the concrete stockpiled at the site and wanted to use it to fill a ditch behind their homes. Southern told them that the concrete was clean. During the summer of 1996, Southern filled the ditch with 5900 tons of concrete removed from the site. Part of the ditch was actually owned by a mobile home park located across the ditch from the homeowners. The owners, Robert Kaplan and Cloverleaf Properties (collectively “the plaintiffs”), had not given Southern permission to dump the concrete on their property.

Southern did not tell the Bank it was taking the concrete to this ditch, and the Bank never asked where the concrete had been taken. The Bank claimed not to have known about the concrete’s disposal until December of 1996 when the plaintiffs discovered that the ditch had been filled and had caused the mobile home park to flood. For the first few months of 1997, Southern and the plaintiffs discussed testing and removal of the concrete. The concrete tested positive for PCBs. That spring, the Bank became involved in the discussions, which by the end of the summer had devolved to the point that the plaintiffs concluded the Bank was never going to agree to their demands for removing the concrete and settling their claims. In November of 1997, the plaintiffs filed suit in federal court, which was voluntarily dismissed, and in October of 1998, this lawsuit was filed.

The plaintiffs asserted claims against Southern and its president for trespass, negligence and ordinance violations. The plaintiffs claimed that the Bank was vicariously liable for Southern’s trespass and negligence under the doctrine of responde-at superior and that the Bank also was directly liable based on its duty under the work plan to properly dispose of the concrete.

After a three week trial, the jury found for the plaintiffs on the trespass and negligence counts and found that the Bank was responsible for Southern’s conduct. The jury found that Southern and its president did not violate any ordinances. The jury assessed 80% of the fault to the Bank and 20% to Southern. The plaintiffs were awarded $650,000 in compensatory damages; $7,000,000 in punitive damages was assessed against the Bank and $225,000 against Southern. The court entered judgment on the verdicts and awarded Southern and its president $1,000 of its attorney fees as the prevailing parties on the ordinance violation claim. The Bank and Southern were ordered to pay all of plaintiffs’ costs.

*66 II. DISCUSSION

A. Liability Issues

1. The Bank’s Vicarious Liability for Southern’s Conduct

In its first point, the Bank claims that the trial court erred by entering judgment on the jury’s verdict against it because the plaintiffs did not make a submissible case of respondeat superior. The Bank claims that it did not have the right to control Southern’s physical conduct and, therefore, cannot be held vicariously liable for Southern’s conduct under the doctrine of respon-deat superior. We agree.

Respondeat superior is inapplicable unless a master-servant relationship exists. Trinity Lutheran Church v. Lipps, 68 S.W.3d 552, 557 (Mo.App. E.D.2001); see also Hougland v. Pulitzer Publishing Co., Inc., 939 S.W.2d 31, 33 (Mo.App. E.D. 1997). If it applies, then the master is liable for damages resulting from the servant’s negligent acts committed within the scope of employment. Lipps, 68 S.W.3d at 557.

A master-servant relationship exists when “the person sought to be charged as master had the right or power to control and direct the physical conduct of the other while working.” Hougland, 939 S.W.2d at 33. “If there is no right to control, there is no liability; ■ those rendering services but retaining control over their • own movements are not servants.” Lee v. Pulitzer Publishing Co., 81 S.W.3d 625, 631 (Mo.App. E.D.2002). A master-servant relationship is not necessarily established because the purported master controls the outcome of the work:

[Stipulations which entitle the employer to exercise a certain measure, of control over the work, but go no further than to enable him to secure that it shall be properly performed, do not affect the quality of contracts which, apart from those stipulations, would be construed as independent.

Williamson v. Southwestern Bell Telephone Co., 265 S.W.2d 354, 358 (Mo.1954).

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Bluebook (online)
166 S.W.3d 60, 2003 WL 1204937, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kaplan-v-us-bank-na-moctapp-2003.