KMS, Inc. v. Wilson

857 S.W.2d 525, 1993 Mo. App. LEXIS 1067, 1993 WL 265119
CourtMissouri Court of Appeals
DecidedJuly 13, 1993
DocketNo. WD 46739
StatusPublished
Cited by5 cases

This text of 857 S.W.2d 525 (KMS, Inc. v. Wilson) 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
KMS, Inc. v. Wilson, 857 S.W.2d 525, 1993 Mo. App. LEXIS 1067, 1993 WL 265119 (Mo. Ct. App. 1993).

Opinion

HANNA, Judge.

This is a Chapter 517 case. Plaintiff, KMS, Inc. (“KMS”), is a Kansas corporation in the business of reselling closed out stock purchased from manufacturers. The dispute in this case arose over which defendant is liable for payment of 644 cases of coffee, which KMS sold on credit at the price of $8.00 per case, for a total of $5,152. The issue on appeal is whether the defendants, in order to raise the defense, were obligated to plead the lack of plaintiffs capacity to bring its lawsuit.

The order for coffee was placed with plaintiffs Wichita, Kansas office and was picked up by defendant, Richard Compton, at a public warehouse in Memphis, Tennessee. Defendant Compton maintains that he was authorized by defendants, Clyde and Doris Wilson, to pick up the coffee, which had been ordered by the Wilsons. He claims that the Wilsons were liable for the debt. Defendants, Clyde and Doris Wilson, each claimed no knowledge of this business transaction.

KMS filed its “Petition on Account” and averred its Kansas corporation status. The Wilsons denied all allegations except admitted they were residents of Morgan County, Missouri. Defendant Compton plead a lack of knowledge to admit or deny the plaintiffs corporate status and, therefore, denied the allegation of the plaintiffs corporate status. Although both defendants denied plaintiffs corporate status, neither plead a special negative averment denying plaintiffs capacity to sue.

At trial, plaintiffs witness testified that KMS was a Kansas corporation. Following the direct examination of plaintiffs first witness, both of the attorneys for defendants moved to dismiss plaintiffs cause of action on the grounds that plaintiff failed to prove its corporate existence. Defense counsel also argued that the corporation did not have authority to do business in the state of Missouri because it was a foreign corporation and did not prove it had a certificate of authority to conduct business in this state.1 The trial court dismissed plaintiffs cause of action against both defendants on the grounds that: (1) KMS did not prove its corporate existence and, therefore, did not have capacity to sue; and (2) KMS did not prove that it was authorized to do business in the state of Missouri, and therefore, could not maintain a lawsuit in the state of Missouri without having registered to do business in Missouri.

Plaintiff maintains the trial court erred by dismissing the case because plaintiff had averred the ultimate fact of its corporate existence and defendants did not contest the issue by pleading the special negative averment as required by Rule 55.13. Plaintiff further argues that it was engaged in interstate commerce and was not required to have a certificate to do business in this state and that the burden of proof did not rest with plaintiff. The Wil-sons counter that their denial was sufficient to raise the issue of plaintiffs corporate status and authority to do business in this state and, therefore, the burden of proving these issues was placed on plaintiff.

The Wilsons direct us to Rule 41.01(b) arguing that it excepts Rule 55 from associate circuit judge practice unless specified otherwise by court order. Plaintiff responds that Rule 4.2, a local court rule of the 26th Judicial Circuit, specifies that Rule 55 is applicable to associate circuit judge matters.2 Our issue is whether, under these facts, Rule 41.01(b) controls the decision in the case.

Rule 55.13 directs the pleader to set forth its special negative averment. This rule has been interpreted to require a defendant that wishes to challenge plaintiffs corporate existence to plead more than a mere denial. Kayser Roth Co. v. Holmes, 693 S.W.2d 907, 909 (Mo.App. [527]*5271985). An allegation that the pleader lacks knowledge, information, or belief to either admit or deny plaintiffs corporate existence is also not sufficient. See Petry Roofing Supply, Inc. v. Sutton, 839 S.W.2d 337 (Mo.App.1992). A complete discussion of the pleading requirements necessary to challenge a plaintiff’s corporate status may be found in Berkel & Co. Contractors, Inc. v. JEM Dev. Corp., 740 S.W.2d 683 (Mo.App.1987).

The record here reflects that one defendant simply denied the allegation of plaintiff’s petition and the other defendant stated he did not have sufficient evidence to form a belief as to the truth of the allegations. Under the authorities reviewed, neither answer was sufficient to raise the issue of plaintiff’s corporate capacity to bring its lawsuit.

This brings us to the primary issue in the case; whether Rule 55.13 is applicable to the practice and procedures before the associate circuit division. This case originated before the associate circuit judge in Morgan County and was heard by the judge in her capacity as an associate circuit judge. If Rule 55 is applicable, the order of dismissal was in error and the case must be remanded. We conclude that the trial court erroneously dismissed plaintiff’s case.

It is defendants’ position that Rule 41.-01(b) specifically excepts the pleading practice of Rule 55 from civil actions before an associate circuit judge. The rule in relevant part states:

Civil actions originating before an associate circuit ... but which are pending in the Supreme Court, Court of Appeals, or before a circuit judge, ... shall be governed by Rules 41 through 101, except that Rule 55 shall not apply unless the court orders the application of Rule 55....

Rule 41.01(b) (emphasis added).

Rule 41.01(b)3 was adopted by the Supreme Court in basically its present form to be effective September 1, 1972, but, at that time, made reference to “magistrate courts” instead of associate circuit judges. The 1972 Committee Note to Rule 41.01(b) described the new paragraph to mean that all procedural rules applied except Rule 55 to “cases originating in the magistrate court ... but which are pending in the circuit court regardless of how the case reached that court.” Also, important to our determination, is Rule 41.01(f). This subparagraph was first adopted effective March 1, 1980, and made applicable Rules 74, 76, 77, 85, 90, 91, 92, 95, and 99 to civil actions pending before, or heard by, an associate judge. Effective August 1, 1987, subparagraph (f) took its present form. Rule 41.01(f) states: “Civil actions pending in the associate circuit division shall be governed by Rules 41 through 101 except where otherwise provided by law.”4 The obvious difference between subparagraphs (b) and (f) is that the latter does not specifically exclude Rule 55 from practice in the associate circuit judge division.

The application of Rule 41.01(b) to these facts is aided by the analysis in Rahman v. Matador Villa Assoc., 821 S.W.2d 102 (Mo. banc 1991). Judgment had previously been entered for rent and possession against the plaintiff who had not filed an answer or plead a counterclaim. The plaintiff then sued the landlord for personal injuries and the issue was whether Rahman was obligated to file a counterclaim to the rent and possession action.

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Bluebook (online)
857 S.W.2d 525, 1993 Mo. App. LEXIS 1067, 1993 WL 265119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kms-inc-v-wilson-moctapp-1993.