Layton v. Pendleton

864 S.W.2d 937, 1993 Mo. App. LEXIS 1707, 1993 WL 439479
CourtMissouri Court of Appeals
DecidedNovember 2, 1993
DocketWD 47043, WD 47176
StatusPublished
Cited by10 cases

This text of 864 S.W.2d 937 (Layton v. Pendleton) 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
Layton v. Pendleton, 864 S.W.2d 937, 1993 Mo. App. LEXIS 1707, 1993 WL 439479 (Mo. Ct. App. 1993).

Opinion

BERREY, Judge.

George Layton, plaintiff, filed an action for damages in the Circuit Court of Clay County against Roxanne Pendleton, an attorney alleging professional negligence in regard to services she allegedly rendered to the plaintiff regarding a contract for the sale of his business in August of 1984. 1 The matter was tried before a jury. The jury entered a verdict assessing plaintiffs damages in the sum of $20,500.00 but equally assessing the fault as to both plaintiff and defendant. The court therefore entered a net judgment in favor of plaintiff and against the defendant in the sum of $10,250.00. Plaintiff filed a motion for additur and new trial. The trial *939 court did not rule on any of the pending post trial motions. Thereafter, defendant filed a notice of appeal and plaintiff filed a notice of cross appeal.

Appellant Pendleton alleges the trial court committed the following points of error: (1) in allowing jury instruction 7 as it presented both specific and general allegations of negligence; (2) in allowing Layton’s references to the Uniform Commercial Code where the U.C.C. was not set out in the petition; (3) in submitting the ease to the jury where there was a lack of evidence to prove damages, and; (4) in overruling her jury instruction defining attorney-client relationship. Cross-appellant Layton alleges in his cross-appeal the trial court erred in submitting comparative fault to the jury.

George Layton opened a private chiropractic practice in Platte County, Missouri in the spring of 1981. To establish his practice he borrowed $20,000.00 from Laurel Bank to purchase equipment and provide operating capital. The bank required collateral which Layton did not have and as a result his parents mortgaged their home to secure the loan. The business did not do well and by the spring of 1984 Layton had decided to sell his practice. His asking price for the sale of the business was the payoff of the loan with Laurel Bank, approximately $20,000.00. Layton was put in contact with Dr. Edward Mernan, who was in the business of buying and reselling chiropractic practices. Mernan and Layton agreed on Layton’s asking price and the two entered into an oral agreement. Mernan would make monthly payments in the amount of Layton’s obligation to Laurel Bank until he resold the practice, at which time he would pay the balance of the purchase price. No money was to be paid up front by Mernan.

Layton testified he met Pendleton when she spoke at a chiropractic luncheon. He called her when he agreed to sell his practice and told her he needed a contract drafted. Layton testified that he expected the defendant would draw a contract to provide some form of protection for him. A meeting was held in early August of 1984 between Layton, Pendleton and Mernan. A contract was drafted by Pendleton and subsequently signed by the parties.

Pendleton testified that she simply drafted the contract Layton and Mernan brought her in legal terms, choosing the words of the agreement, but claimed she was not acting as an attorney for either party to the contract. The defendant testified that she was not hired as a lawyer but as an “intermediary” or “scrivener.” She described the difference in roles as that an attorney would look out for a client’s interest in drafting a contract whereas an intermediary would simply take the parties’ agreement and draft it in the form of a written contract.

After August of 1984 Mernan began making monthly payments to Layton as per the contract. In early 1985, Layton heard that Mernan had sold the practice to another chiropractor. Mernan had in fact sold the practice to Dr. June Buskirk for $22,000. Layton called Mernan and asked for the balance of the purchase price. Mernan said he was not obligated under the contract to pay the balance of the purchase price. Lay-ton then called Pendleton who told him the only thing he could do was to hope for regular monthly payments from Mernan.

Mernan continued to make monthly payments until March of 1986 when all payments ceased. Layton testified he called Pendleton who told him he could only sue for payments missed because it was not provided for in the contract to sue for the remaining balance in the event of default of a monthly payment. In the fall of 1986 the defendant sued Dr. Mernan on behalf of Layton. Mernan then filed for bankruptcy in Louisiana. Layton continued making a total of 75 payments of $347.60 until the loan to Laurel Bank was paid in full and the mortgage released on his parent’s home.

Although Pendleton claimed she did not represent either party to the contract and was not acting as an attorney she did not tell either Layton or Mernan that she would not be representing either of them. Pendleton testified that if she had been acting as an attorney, part of her job would have been to anticipate issues and problems that might occur in a contract for sale of a business. She testified that among the issues an attor *940 ney would consider would be how to secure and obtain payment of future installments and be able to obtain return of the property sold if no payment was made. Because she did not believe she was acting as an attorney Pendleton did not advise Layton that he might want to think of either of those issues. She did not tell Layton he would not be able to repossess the property in the event of default under the contract by Mernan. Neither did she advise Layton that Mernan would not be obligated to pay the balance of the sales price when he resold the practice. Pendleton admitted there was no due on sale clause in the contract but said this was because the parties had not requested one. This testimony was contradicted by Layton. Pendleton also testified she didn’t raise the issue as to whether Layton should consider obtaining a security interest in the property being sold to Mernan.

An attorney expert witness testified on behalf of Layton and opined that an attorney has an obligation to tell a person of the risks and exposures in a contract for sale of a business and then let them make up their mind as to what terms and provisions they desire. He testified that in a transaction such as occurred between Layton and Mer-nan the contract should have had a due on sale clause and a security interest provided for or at least Layton should have been given an opportunity to decline those protections.

An attorney expert testified on behalf of the defendant and described the role of a scrivener. He testified that he did not see anything negligent in Pendleton’s work with regard to the contract because she was not acting as an attorney. Pendleton’s expert did admit that if an attorney-client relationship existed between Layton and Pendleton that it would be negligent if Pendleton did not at least discuss issues of the due on sale clause and a security interest with her client.

Pendleton in her first point asserts that the trial court erred in overruling her objection to jury Instruction 7 claiming the instruction presented the jury with both specific and general allegations of negligence. Instruction 7 states:

In your verdict you must assess a percentage of fault to defendant whether or not plaintiff was partly at fault if you believe:
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Second, either:

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Bluebook (online)
864 S.W.2d 937, 1993 Mo. App. LEXIS 1707, 1993 WL 439479, Counsel Stack Legal Research, https://law.counselstack.com/opinion/layton-v-pendleton-moctapp-1993.