Major Hammett, II v. Michael D. Atcheson Michael D. Atcheson, Trustee of the Michael Dean Atcheson Trust

438 S.W.3d 452, 2014 WL 3906145, 2014 Mo. App. LEXIS 848
CourtMissouri Court of Appeals
DecidedAugust 12, 2014
DocketWD75551 and WD75586
StatusPublished
Cited by12 cases

This text of 438 S.W.3d 452 (Major Hammett, II v. Michael D. Atcheson Michael D. Atcheson, Trustee of the Michael Dean Atcheson Trust) 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
Major Hammett, II v. Michael D. Atcheson Michael D. Atcheson, Trustee of the Michael Dean Atcheson Trust, 438 S.W.3d 452, 2014 WL 3906145, 2014 Mo. App. LEXIS 848 (Mo. Ct. App. 2014).

Opinion

THOMAS H. NEWTON, Judge.

Mr. Major Hammett, II, appeals the denial of the motion to amend the judgment for an award of attorney fees. Mr. Michael D. Atcheson, as an individual and a trustee of the Michael D. Atcheson Trust (Atcheson Parties), cross-appeals the denial of the motions for a directed verdict and judgment notwithstanding the verdict. We affirm in part, reverse in part, and remand for a new trial solely on the issue of damages.

*457 Factual and Procedural History

The following facts were adduced at trial. In 2005, Mr. Hammett began working with the City of Bolivar and the Tax Increment Financing Commission (TIF Commission) on a real estate development and investment opportunity known as the Simon Square Development Project (Simon Square). Mr. Hammett then entered into a “50-50 partnership” on the project with Mr. Atcheson, a prominent local developer.

In February 2006, Simon Square was organized as “Simon Square Development, LLC,” with Messrs. Hammett and Atche-son as the organizers. On the day Simon Square was organized, Mr. Hammett and Mr. Atcheson (as trustee of the Atcheson Trust) also executed an Operating Agreement, which listed them each as members with á 50% ownership interest. Mr. Hammett and the Atcheson Trust were to vote equally in all Simon Square matters. The development project, which included space allocations for retail and office space, lodging, and single-family residences, was estimated to cost more than $89 million to complete.

Mr. Hammett testified that, later in 2006, Mr. Atcheson advised him that another partner would need to be added for access to additional funding. Mr. Atche-son recommended adding his business partner, Mr. Larry Haas, to the partnership. Mr. Haas was added, and the trio entered into a Restated Operating Agreement (ROA), wherein Messrs. Hammett and Haas and the Atcheson Trust were listed as equal members with a one-third ownership interest. Mr. Hammett testified that he was not provided an advance copy of the ROA before the meeting to sign it. He testified that, except for the addition of Mr. Haas, he did not know the terms of the agreement had changed.

Under the ROA, Mr. Atcheson was designated Simon Square’s “first Manager,” which granted him “full and complete authority, power[,] and discretion to manage and control the business.” Mr. Haas was designated the company’s “Tax Matters Member,” thereby serving as its accountant, tax preparer, Secretary, and Treasurer. Additionally, the ROA included a provision that permitted members to contribute additional capital “deemed necessary for the operation of the company,” and, for members who did not provide additional capital in proportion, their ownership interest would be diluted. 1 The three men also executed a Buy-Sell Agreement, which, among other terms, required thirty days’ written notice to all members before company shares could be transferred.

In 2008, Mr. Haas transferred his shares to the Atcheson Trust without providing the requisite notice to Mr. Hammett. The Atcheson Trust then held a majority interest in Simon Square. As First Manager of Simon Square and trustee of the Atcheson Trust, Mr. Atcheson purportedly began to wield his authority for personal benefit. According to Mr. Hammett, Mr. Atche-son’s actions included: paying himself a developer fee of $500,000 against Mr. Hammett’s objection; using his own construction, landscaping, and realty companies for company business and paying them in excess of fair market value for *458 services rendered; paying Mr. Atcheson’s personal legal fees; and making political campaign contributions.

Mr. Hammett filed suit against the Atcheson Parties, 2 asserting five claims. First, he sued Mr. Atcheson as a trustee for breach of the Buy-Sell Agreement. Second, he asserted a claim against Mr. Atcheson as an individual for breach of the Restated Operating Agreement. Third, he asserted a claim against Mr. Atcheson as an individual for breach of fiduciary duty. Fourth, he asserted a claim against Mr. Atcheson as an individual for fraud. Lastly, Mr. Hammett sued Mr. Atcheson as a trustee for fraud.

A jury trial was held in 2012. The jury unanimously found in favor of Mr. Hammett on all five counts and assessed damages of $280,650. The damages were not apportioned to each count, but instead comprised a general award. The jury found that the Atcheson Parties were not liable for punitive damages. In the judgment, the trial court assessed damages and costs to the Atcheson Parties, but did not award attorney fees.

Mr. Hammett filed a post-trial motion to amend the judgment to include attorney fees, court costs, and restoration of himself as a 50% owner of Simon Square. He requested that the award be increased to $574,837.41 to include attorney fees totaling $293,895.41. 3 The Atcheson Parties filed post-trial motions for JNOV and a new trial. The trial court allowed ninety days to lapse without ruling on the motions, and they are deemed denied. 4 Mr. Hammett appeals, and the Atcheson Parties cross-appeal.

Standard of Review

Issues of contractual interpretation are reviewed de novo. Brown v. Brown-Thill, 437 S.W.3d 344, 348 (Mo. App. W.D.2014) (internal quotation marks and citation omitted). “The standard for reviewing a denied motion for JNOV is essentially the same as for reviewing the denial of a motion for directed verdict.” Peel v. Credit Acceptance Corp., 408 S.W.3d 191, 204 (MoApp. W.D.2013) (internal quotation marks and citation omitted). “[Granting a motion for JNOV is a drastic action and should only be granted when reasonable persons could not differ on the correct disposition of the case.” Id. To be submissible, there must be “legal and substantial evidence [that] supports each fact essential to liability.” Id. Whether a case is submissible is a question of law that we review de novo. Id. In our determination pf whether evidence sufficiently supports the jury’s verdict, we view it “in the light most favorable to the verdict and the plaintiff is given the benefit of all reasonable inferences.” Id.

*459 Whether a jury was instructed properly is a question of law that we review de novo. Kopp v. Home Furnishing Ctr., LLQ 210 S.W.3d 319, 328 (Mo.App. W.D.2006). We are “only obliged to determine whether there was evidence from which such verdict could have been reached by a jury composed of reasonable men and women.” Envtl. Energy Partners, Inc. v. Siemens Bldg. Technologies, Inc., 178 S.W.3d 691, 698 (Mo.App. S.D. 2005) (internal citations omitted).

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438 S.W.3d 452, 2014 WL 3906145, 2014 Mo. App. LEXIS 848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/major-hammett-ii-v-michael-d-atcheson-michael-d-atcheson-trustee-of-moctapp-2014.