In the Missouri Court of Appeals Eastern District DIVISION TWO
KITC HOMES, LLC, ) No. ED109814 ) Appellant, ) Appeal from the Circuit Court ) of St. Louis County vs. ) 19SL-CC05195 ) CITY OF RICHMOND HEIGHTS, MO, ) Honorable Virginia W. Lay ) Respondent. ) Filed: March 8, 2022
KITC Homes, LLC (“KITC”) appeals the judgment granting the City of Richmond
Heights, MO’s (“the City” or “the City of Richmond Heights”) motion to dismiss KITC’s second
amended petition alleging claims for tortious interference (Count I), negligence (Count II), and
impairment of contract pursuant to article I, section 10, clause 1 of the United States Constitution
(“the Contracts Clause”)1 for failure to state a claim upon which relief may be granted (Count
III). The trial court dismissed Counts I and II with prejudice on the grounds KITC’s petition
fails to plead sufficient facts giving rise to an exception to the general rule that municipalities do
not have liability for torts, i.e., the rule of sovereign immunity.2 The trial court dismissed Count
III with prejudice on the basis KITC’s petition fails to plead a recognizable cause of action. As
1 See State ex rel. Jones v. Nolte, 165 S.W.2d 632, 638 (Mo. banc 1942) (similarly referring to the clause relating to impairment of contract found in article I, section 10 of the United States Constitution as “the . . . contracts clause”); see also U.S. Const. art. I, sec. 10, cl. 1 (providing in relevant part that “[n]o [s]tate shall . . . pass any . . . [l]aw impairing the [o]bligation of [c]ontracts”). 2 See Vaughn v. Genasci, 323 S.W.3d 454, 456 (Mo. App. E.D. 2010); see also State ex rel. City of Kansas City v. Harrell, 575 S.W.3d 489, 492 (Mo. App. W.D. 2019); A.F. v. Hazelwood School District, 491 S.W.3d 628, 633-34 (Mo. App. E.D. 2016). explained in detail below, we reverse in part and remand for further proceedings consistent with
this opinion, and we affirm in part.3
KITC raises two points on appeal, alleging, (1) the trial court erred in dismissing Counts I
and II (claims for tortious inference and negligence, respectively); and (2) the trial court erred in
dismissing Count III (claim for impairment of contract under the Contracts Clause).
We hold KITC’s petition alleges sufficient facts giving rise to the proprietary-function
exception to the rule of sovereign immunity,4 and, therefore, the trial court erred in dismissing
Counts I and II with prejudice for failure to state a claim upon which relief may be granted.
Accordingly, this portion of the trial court’s judgment is reversed and remanded for further
proceedings consistent with this opinion.
Additionally, we hold, (1) KITC’s petition fails to plead a recognizable cause of action
for impairment of contract under the Contracts Clause; and (2) KITC has not proposed, much
less demonstrated, any new allegations it could make in an amended petition that would cure the
failure of its petition at issue in this case to state a cause of action. Therefore, the trial court did
not err in dismissing Count III with prejudice for failure to state a claim upon which relief may
be granted, and this portion of the trial court’s judgment is affirmed.
3 KITC has filed a motion to strike portions of the City’s respondent’s brief which cite to and rely upon a filing made by the City in connection with a motion for summary judgment that was not ruled upon by the trial court. KITC’s motion to strike, which was taken with the case, asserts these portions of the City’s respondent’s brief should be stricken because they contain matters outside of the pleadings at issue in this case, i.e., matters outside of KITC’s petition and the City’s motion to dismiss. See L.C. Development Co., Inc. v. Lincoln County, 26 S.W.3d 336, 339 (Mo. App. E.D. 2000) (appellate review of a motion to dismiss for failure to state a claim is limited to the pleadings at issue). Because we agree, we grant KITC’s motion to strike. 4 See Phelps v. City of Kansas City, 371 S.W.3d 909, 912-13 (Mo. App. W.D. 2012).
2 I. BACKGROUND
Because this appeal involves a dismissal by the trial court for failure to state a claim upon
which relief may be granted, we begin by setting out the general allegations of KITC’s second
amended petition.
KITC is a Missouri limited liability company with its principal place of business in St.
Louis County. The City of Richmond Heights is a municipality within St. Louis County.
KITC’s petition alleges that in April 2017, the City of Richmond Heights tore down the
improvements on real property located at 7068 Mitchell Avenue (“the Property”) by demolition
at a cost of $26,990.00. KITC alleges the City demolished the improvements on the Property to
“receiv[e] income.” The City purportedly did not submit any special assessment for the cost of
the demolition to St. Louis County until September 2018.
In the meantime, in August 2018, the St. Louis County Collector of Revenue conducted a
tax foreclosure sale of the Property, and the Collector’s opening bid was $12,811.00. KITC bid
$12,811.00, was the highest bidder, and acquired a tax sale certificate of purchase for the
Property.
The August 2018 tax sale certificate of purchase for the Property specifically states KITC
purchased the Property for $12,811.00, which purportedly represented “the total amount of taxes,
special assessments, interests, penalties and costs” “due and unpaid thereon for the years 2014,
2015, 2016, and 2017[.]” (emphasis omitted). At the time of KITC’s purchase of the Property in
August 2018, KITC had no notice the City had incurred a cost of $26,990.00 for the demolition
on the Property in April 2017.
Then, in September 2018 (approximately seventeen months after the cost for demolition
was incurred by the City and one month after KITC believed it was purchasing the Property for
$12,811.00, an amount which the tax of sale certificate of purchase allegedly represented, inter
3 alia, “the total amount of . . . special assessments . . . and costs” “due and unpaid [on the
Property] for the year[ ] . . . 2017[.]”), the City submitted a special assessment for demolition to
St. Louis County in the amount of $26,990.00. (emphasis omitted). KITC alleges the City
submitted the special assessment to the County to “receiv[e] income.”
Subsequently, St. Louis County returned KITC’s $12,811.00 winning bid on the Property
to KITC, and KITC no longer had a tax sale certificate of purchase for the Property.
KITC then filed the petition at issue in this case, raising claims against the City for
tortious interference (Count I), negligence (Count II), and impairment of contract under the
Contracts Clause (Count III).5 Taking KITC’s allegations as true and viewing all reasonable
inferences therefrom in its favor,6 KITC’s petition avers it was indirectly injured by the City’s
demolition of the improvements on the Property and was directly injured by the City’s delayed
submission of the special assessment for the cost of the demolition. KITC alleges its damages
total “$94,986.40, [which purportedly is] the St. Louis County Appraised Value ($111,000.00)
less [KITC’s] winning bid on the Property ($12,811.00) and 2018-2019 property taxes
($3,202.60), plus interest.”
After KITC filed its petition, the City filed a motion to dismiss alleging the petition fails
to state a claim upon which relief may be granted. The City’s motion specifically asserts Counts
I and II (tortious interference and negligence, respectively) should be dismissed because KITC
fails to plead sufficient, specific facts giving rise to an exception to the rule of sovereign
immunity, and that Count III (impairment of contract under the Contracts Clause) should be
5 To avoid unnecessary repetition, specific allegations in KITC’s petition with respect to Count III will be set forth in relevant part in Section II.C. of this opinion. 6 See Amalaco, LLC v. Butero, 593 S.W.3d 647, 650-51 (Mo. App. E.D. 2019) (in reviewing a motion to dismiss for failure to state a claim upon which relief may be granted, we assume all of the plaintiff’s allegations in the petition are true and view all reasonable inferences therefrom in favor of the plaintiff); see also Phelps, 371 S.W.3d at 912- 13 (similarly holding in the context of reviewing a motion to dismiss for failure to state a claim upon which relief may be granted based on sovereign immunity).
4 dismissed because KITC fails to plead a recognizable cause of action. The trial court entered a
judgment granting the City’s motion and dismissing Counts I-III of KITC’s petition with
prejudice. This appeal followed.
II. DISCUSSION
KITC raises two points on appeal, alleging, respectively, (1) the trial court erred in
dismissing Counts I and II; and (2) the trial court erred in dismissing Count III.
A. General Standard of Review Applying to the Trial Court’s Dismissal of all Counts
This Court reviews de novo the trial court’s grant of a motion to dismiss. Amalaco, LLC
v. Butero, 593 S.W.3d 647, 650 (Mo. App. E.D. 2019); see also State ex rel. City of Lee’s
Summit v. Garrett, 568 S.W.3d 515, 518 (Mo. App. W.D. 2019) (similarly holding in the context
of reviewing a motion to dismiss for failure to state a claim upon which relief may be granted
based on sovereign immunity).7 We review a motion to dismiss for failure to state a claim upon
which relief may be granted solely to determine the adequacy of the plaintiff’s petition.
Amalaco, LLC, 593 S.W.3d at 650-51; see also Vaughn v. Genasci, 323 S.W.3d 454, 456 (Mo.
App. E.D. 2010). The petition must allege facts that, if true, meet the elements of any
recognizable cause of action. See Amalaco, LLC, 593 S.W.3d at 651; see also Vaughn, 323
S.W.3d at 456.
We assume all of the plaintiff’s allegations in the petition are true and view all reasonable
inferences therefrom in favor of the plaintiff. Amalaco, LLC, 593 S.W.3d at 651; see also
Phelps v. City of Kansas City, 371 S.W.3d 909, 912-13 (Mo. App. W.D. 2012). Therefore, if the
petition alleges any set of facts that, if proven, would entitle the plaintiff to relief, then the
7 All further “see also” citations in this section of the opinion cite to cases which similarly hold the proposition at issue in the context of a motion to dismiss for failure to state a claim upon which relief may be granted based on sovereign immunity.
5 plaintiff’s petition is adequate. Brewer v. Cosgrove, 498 S.W.3d 837, 843 (Mo. App. E.D.
2016); see also A.F. v. Hazelwood School District, 491 S.W.3d 628, 633 (Mo. App. E.D. 2016).
However, we disregard conclusory allegations that are not supported by the facts. Dibrill v.
Normandy Associates, Inc., 383 S.W.3d 77, 90 (Mo. App. E.D. 2012); see also A.F., 491 S.W.3d
at 632.
B. The Trial Court’s Dismissal of KITC’s Tortious Inference and Negligence Claims
In KITC’s first point on appeal, KITC argues the trial court erred in dismissing Counts I
and II (tortious interference and negligence, respectively) with prejudice on the grounds KITC
fails to plead sufficient, specific facts giving rise to an exception to the rule of sovereign
immunity.
1. The Rule of Sovereign Immunity and the Proprietary-Function Exception
“Under the rule of sovereign immunity, municipalities are generally not liable for torts.”
Vaughn, 323 S.W.3d at 456. Sovereign immunity is not an affirmative defense; instead, when
suing a municipality, the burden is on the plaintiff to plead sufficient, specific facts that give rise
to an exception to the rule of sovereign immunity. State ex rel. City of Kansas City v. Harrell,
575 S.W.3d 489, 492 (Mo. App. W.D. 2019); A.F., 491 S.W.3d at 633-34.
As relevant to this case, one exception to the rule of sovereign immunity is “where the
injury is caused by the municipality performing a proprietary function as opposed to a
governmental function” (“the proprietary-function exception”).8 Phelps, 371 S.W.3d at 912. In
8 There are a total of four exceptions to the rule of sovereign immunity for municipalities: (1) where a plaintiff’s injury arises from a public employee’s negligent operation of a motor vehicle in the course of his employment . . . ; (2) where the injury is caused by the dangerous condition of the municipality’s property . . . ; (3) where the injury is caused by the municipality performing a proprietary function as opposed to a governmental function; and (4) to the extent the municipality has procured insurance, thereby waiving sovereign immunity up to but not beyond the policy limit and only for acts covered by the policy. Phelps, 371 S.W.3d at 912. On appeal, KITC only contends exception (3) – the propriety-function exception – applies. See id.
6 other words, a municipality has immunity from liability for actions it undertakes as part of the
entity’s governmental functions, but a municipality does not have immunity from liability for
actions it undertakes as part of the entity’s proprietary functions. Kunzie v. City of Olivette, 184
S.W.3d 570, 573-74 (Mo. banc 2006).
In general, a governmental function is performed by a public entity for the common good,
whereas a proprietary function is performed for the benefit of the entity in its corporate capacity.
A.F., 491 S.W.3d at 634. “The distinction between governmental functions and proprietary ones
is often obscure, however, and many municipal actions have a dual function.” Bennartz v. City
of Columbia, 300 S.W.3d 251, 259 (Mo. App. W.D. 2009). Furthermore, when a municipal
action has a dual function, whether a particular action is undertaken as part of the entity’s
governmental or proprietary function depends on the nature of the activity. See id.; see also
A.F., 491 S.W.3d at 634 (assigning importance to “the generic nature of the activity” in
determining whether a particular action is performed as part of a public entity’s governmental or
proprietary function).
For example, a municipality’s operation of a water plant has a dual function. Bennartz,
300 S.W.3d at 259. When the nature of the activity is providing water for preventing or fighting
fires or for keeping the municipality’s water sanitary and healthy, the public entity performs a
governmental function and has immunity from liability for any resulting damages. Id.; see also
Kunzie, 184 S.W.3d at 573-74. However, when the nature of the activity is selling water to its
citizens for a profit which benefits the municipality in its corporate capacity, the entity is
performing a proprietary function and may have liability for any resulting damages. Id.; see also
A.F., 491 S.W.3d at 634.
7 2. Whether KITC Pleaded Sufficient, Specific Facts Giving Rise to the Proprietary-Function Exception to the Rule of Sovereign Immunity
In this case, taking KITC’s allegations as true and viewing all reasonable inferences
therefrom in its favor, KITC’s petition avers it was indirectly injured by the City’s demolition of
the improvements on the Property and was directly injured by the City’s delayed submission of
the special assessment for the cost of the demolition. See Amalaco, LLC, 593 S.W.3d at 651; see
also Phelps, 371 S.W.3d at 912-13. The issue in this case is whether KITC’s allegations with
respect to the City’s purported demolition of the improvements on the Property and the City’s
purported delayed submission of the special assessment for the cost of the demolition constitute
sufficient, specific facts giving rise to the proprietary-function exception to the rule of sovereign
immunity. See Harrell, 575 S.W.3d at 492; A.F., 491 S.W.3d at 633-34; see also Kunzie, 184
S.W.3d at 573-74; Phelps, 371 S.W.3d at 912.
KITC’s petition alleges that in April 2017, the City demolished the improvements on the
Property at a cost of $26,990.00, but did not submit a special assessment for the cost of
demolition to the County until September 2018, which was after KITC’s purchase of the
Property at a tax foreclosure sale in August 2018. KITC alleges the City demolished the
improvements on the Property and submitted the special assessment for the cost of the
demolition to “receiv[e] income.”
a. The City’s Alleged Demolition of the Improvements on the Property
Similar to how a municipality’s operation of a water plant has a dual function, see
Bennartz, 300 S.W.3d 259 and Section II.B.1. of this opinion, a municipality’s demolition of
private property has a dual function. See Larabee v. City of Kansas City, 697 S.W.2d 177, 179-
80 (Mo. App. W.D. 1985) (similarly suggesting). When the nature of the activity is demolishing
private property because it is necessary to do so due to an emergency or a public danger, the
8 public entity performs a governmental function and has immunity from liability for any resulting
damages. See id.; see also Rothenhoefer v. City of St. Louis, 410 S.W.2d 73, 75 (Mo. 1966)
(indicating a public entity should not be liable when property is destroyed because it is in fact
dangerous to the public); A.F., 491 S.W.3d at 634 (generally, a governmental function is
performed by a public entity for the common good); see generally Kunzie, 184 S.W.3d at 573-
74.
In contrast, when the nature of the activity is demolishing private property not because it
is necessary to do so due to an emergency or a public danger, but only because it benefits the
municipality in its corporate capacity, the public entity performs a proprietary function and may
have liability for any resulting damages. See Larabee, 697 S.W.2d at 179-80 (similarly holding);
see also Rothenhoefer, 410 S.W.2d at 75 (“[w]hile property may be destroyed because it is
dangerous to the public, a destruction of particular property on this ground without necessity, and
where the property is not in fact dangerous, may be at the peril of the municipality”) (citation
omitted); see generally Kunzie, 184 S.W.3d at 573-74; A.F., 491 S.W.3d at 634.
In this case, KITC’s petition alleges the City demolished the improvements on the
Property to “receiv[e] income.” Taking this allegation as true and viewing all reasonable
inferences in favor of KITC, we hold KITC sufficiently alleged the nature of the City’s
demolition of the improvements was not because it was necessary to do so due to an emergency
or a public danger, but only because it benefitted the City in its corporate capacity. In other
words, KITC sufficiently, specifically alleged that when the City demolished the improvements
on the Property, the City was performing a proprietary function, and therefore, the City may have
liability for any resulting damages. See id.; see also Schulz Through Schulz v. City of
Brentwood, 725 S.W.2d 157, 159-60 (Mo. App. E.D. 1987) (holding “[a] [petition’s] allegations
that [a] city owned and operated [a] preschool and day care center for a fee sufficiently set forth
9 a proprietary . . . function for which the municipality may be liable [for injuries to a child which
occurred at the center]”); but see Richardson v. City of St. Louis, 293 S.W.3d 133, 138 (Mo.
App. E.D. 2009) (indicating “[t]he fact that a municipality charges a fee for its services is not
determinative of whether it is performing a proprietary or governmental function for purposes of
sovereign immunity” where, unlike in this case, the city’s alleged activity at issue was “clearly a
governmental function”).
b. The City’s Alleged Delayed Submission of the Special Assessment for the Cost of Demolition
Similar to KITC’s allegations with respect to the City’s demolition of the improvements
on the Property, KITC alleges the City submitted the special assessment for the cost of the
demolition to “receiv[e] income.” Taking this allegation as true and viewing all reasonable
inferences in favor of KITC, we hold KITC sufficiently alleged the nature of the City’s
submission of the special assessment for the cost of demolition was done to benefit the City in its
corporate capacity. In other words, KITC sufficiently, specifically alleged that when the City
submitted the special assessment, the City was performing a proprietary function, and therefore,
the City may have liability for any resulting damages. See id.
c. Conclusion
Based on the foregoing, we hold KITC’s allegations with respect to the City’s two
distinct actions of purported demolition of the improvements on the Property and the City’s
purported delayed submission of the special assessment for the cost of the demolition constitute
sufficient, specific facts giving rise to the proprietary-function exception to the rule of sovereign
immunity.9 See Harrell, 575 S.W.3d at 492; A.F., 491 S.W.3d at 633-34; see also Kunzie, 184
9 Because the City’s two purported actions are distinct, we note for purposes of further proceedings that any finding as to whether there is sufficient proof of performance of a proprietary function relating to one of the alleged actions (for example, demolition) would not be dispositive as to whether there is sufficient proof of performance of a proprietary function relating to the other alleged action (for example, submission of the special assessment).
10 S.W.3d at 573-74; Phelps, 371 S.W.3d at 912. Therefore, the trial court erred in dismissing
Counts I and II (tortious interference and negligence, respectively) for failure to state a claim
upon which relief may be granted. Point one is granted.
C. The Trial Court’s Dismissal of KITC’s Claim of Impairment of Contract Under the Contracts Clause
In KITC’s second and final point on appeal, it asserts the trial court erred in dismissing
its claim of impairment of contract under the Contracts Clause (Count III) on the basis KITC’s
petition fails to plead a recognizable cause of action.
The Contracts Clause of the U.S. Constitution provides that “[n]o [s]tate shall . . . pass
any . . . [l]aw impairing the [o]bligation of [c]ontracts”. U.S. Const. art. I, sec. 10, cl. 1. In
order to state a claim for impairment of contract under the Contracts Clause, a plaintiff must
allege “[a] change in state law has operated as a substantial impairment of a contractual
relationship.” General Motors Corp. v. Romein, 503 U.S. 181, 186 (U.S. 1992) (citation and
internal quotations omitted). In other words, a plaintiff must allege three elements: (1) a
contractual relationship; (2) a change in state law that impairs the alleged contractual
relationship; and (3) the impairment is substantial. Id.
In this case, Count III of KITC’s petition alleges in relevant part that the tax sale
certificate of purchase for the Property that it acquired in August 2018 “established a contractual
relationship between [KITC] and St. Louis County”; the City issued a “[s]pecial [t]ax [b]ill”
“under the color of law” in September 2018 which substantially impaired KITC’s alleged
contractual relationship with the County; and “[KITC] was entitled under its [alleged] [c]ontract
with St. Louis County to have the [P]roperty valued as of August [ ] 2018 and [the City], acting
under the color of law, materially altered the value of the Property in September 2018, thus
frustrating the purpose of the [alleged] [c]ontract.”
11 The City’s motion to dismiss alleges Count III fails to state a recognizable cause of action
because KITC fails to allege any facts or cite any law which indicates a municipality’s issuance
of an alleged “[s]pecial [t]ax [b]ill” may be regarded as a law of the state or change in state law
for purposes of the Contracts Clause. We agree. Furthermore, because KITC has not proposed,
much less demonstrated, any new allegations it could make in an amended petition that would
cure the failure of its petition at issue in this case to state a cause of action, the trial court did not
err in dismissing Count III with prejudice for failure to state a claim upon which relief may be
granted. See Miles ex rel. Miles v. Rich, 347 S.W.3d 477, 486 (Mo. App. E.D. 2011) (similarly
holding); see also Amalaco, LLC, 593 S.W.3d at 650-51 (in order to survive a motion to dismiss
for failure to state a claim, the petition must allege facts that, if true, meet the elements of any
recognizable cause of action). Point three is denied.
III. CONCLUSION
Based upon the foregoing, the portion of trial court’s judgment dismissing KITC’s claims
for tortious inference and negligence with prejudice is reversed and remanded for further
proceedings consistent with this opinion. The portion of the trial court’s judgment dismissing
KITC’s claim for impairment of contract under the Contracts Clause with prejudice is affirmed.
ROBERT M. CLAYTON III, Presiding Judge
Gary M. Gaertner, Jr., J., and Thomas C. Clark II, J., concur.