Schubiner v. Oppenheimer Industries, Inc.

675 S.W.2d 63, 1984 Mo. App. LEXIS 3943
CourtMissouri Court of Appeals
DecidedMay 22, 1984
DocketNo. WD 34439
StatusPublished
Cited by8 cases

This text of 675 S.W.2d 63 (Schubiner v. Oppenheimer Industries, Inc.) 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
Schubiner v. Oppenheimer Industries, Inc., 675 S.W.2d 63, 1984 Mo. App. LEXIS 3943 (Mo. Ct. App. 1984).

Opinion

MANFORD, Judge.

This is a civil action seeking damages for breach of contract. The jury entered its verdict in the sum of $58,000.00. Judgment was entered in accordance with a jury verdict. The judgment is reversed.

Four points are presented, charging that the trial court erred in failing to grant a motion for directed verdict or judgment N.O.Y. because (a) the evidence, as a matter of law, failed to establish a breach of duty to act with reasonable care, (b) the evidence, as a matter of law, failed to establish that management was the direct and proximate cause of the alleged damages, (c) the evidence, as a matter of law, failed to establish any damages, and (d) the submission of a verdict-directing instruction was erroneous because it submitted multiple theories of recovery in the conjunctive, there was no definition of terms used, and the evidence failed to establish all the separate factors enumerated in the instruction.

At the outset, a brief summary of the pertinent facts suffices. Any additional and applicable facts are set forth within the dispositive portion of this opinion.

Appellant, Oppenheimer Industries, Inc., (hereinafter Oppenheimer) is a corporation organized pursuant to the laws of the state of Delaware, with its home office and principal business locus in Kansas City, Jackson County, Missouri. Oppenheimer was the original defendant at trial. Respondent, J.M. Schubiner (hereinafter Schubiner) d/b/a KCJ Cattle Company, is an individual and resident businessman whose residence is Franklin, Michigan. Schubiner was the original plaintiff at trial.

Oppenheimer is in the business of providing various agricultural services to investor clients, including farm/ranch management and cattle herds. The instant proceedings involves a dispute with Schubiner relative to a contract between the parties involving breeding cattle.1 The parties entered into an agreement on or about December 15, 1972 captioned, “Breeder Cattle Agency Agreement.” Schubiner is a prominent and successful businessman whose net annual income was shown to be in the upper six figures and who was in the 70% income tax bracket. At the time of the execution of the agreement, Oppenheimer was managing some 200,000 cattle on behalf of owners/investors such as Schubiner on various ranch locations throughout the United States.

Oppenheimer does not operate the ranches where their owners/investors have cattle, but rather, it contracts with local ranchers to provide the day-to-day operation relative to the cattle. By this agreement, the owner/investor provides the cattle (by initial purchase) and the feed while, in turn, the labor is furnished by the rancher. Agreement with the rancher is on an incentive basis, whereby the rancher is paid on a bonus/penalty formula. The rancher is compensated relative to higher weight gain and better calf crop. In turn, the rancher endeavors to protect the owner/investor from adverse factors such as disease, infertility, weather injury, and death of the animals.

Oppenheimer derives its fee in two ways. At the outset, when the owner/investor initiates the cattle purchase and enters into the agreement with Oppenheimer, the latter is paid a fee. In addition, Oppenheimer collects a fee of 8⅜⅛% to 10% of its expenses for the supervision of the ranchers. The solicitation for the investment plan is subject to the authority and requirements of the federal Securities and Exchange Commission. The prospectus is filed of record with the S.E.C.

[65]*65As the record discloses, the incentive or purpose of such investment by the owner/investor is two-fold. First, such owners/investors seek a tax shelter and secondly, economic gain from their investment. To qualify, owners/investors are required to either have a net worth (exclusive of residence and home furnishings) of at least $500,000, or have such net worth of $100,000 and also come within a federal-state income tax bracket of at least 50%.

The agreement herein was entered into at the suggestion of Schubiner’s accountants for the purpose of providing Schubiner with a tax shelter for 1972 and future years. The parties agree that Schubiner knew nothing about raising cattle or ranch management. Schubiner stated that he knew nothing about cattle investment, except he understood that he would be able to take a tax deduction greater than his actual cash outlay and therefore would save money. At trial, Schubiner testified that his goal was a tax shelter and economic gain. By deposition introduced by appellant, Schubiner testified that the point of the plan was a tax shelter. During the life of the- agreement, Schubiner “sheltered” some $70,000 of other income.

At the inception of the agreement, Schu-biner’s investment purchased 225 head of cattle for a price of $62,495.00. Schubiner paid 10% down and executed a note for 90% on the remaining purchase price balance. The agreement and cattle purchase occurred after the 1972 fall cattle trading season.

The length of the prospectus and the agreement prohibit setting forth both documents in detail, but particular portions pertinent to the dispute herein are, and must at various times be, set forth herein.

“Prospectus

‘Agent

Agency services in connection with the management of specifically owned breeder cattle or feeder cattle or both. Oppenheimer Industries, Inc., considers the acquisition of breeder cattle or feeder cattle or both hereunder suitable only for persons in a tax bracket with a minimum income tax rate of 50% or higher.

Oppenheimer recommends a breeder cattle program be maintained for a minimum of four to five years. Feeder cattle are purchased for a single contract period which is usually less than one year or they may be purchased on a cyclical basis for fattening to slaughter during a contract period or successive contract periods at the request of purchasers hereunder. Oppenheimer makes no guarantee that a breeder cattle owner or a feeder cattle owner will realize economic gain or tax profits. The relationship between the duration of a breeder cattle or feeder cattle program and economic gain or loss is set forth herein. See “High Risk Factors — General” and “Sample Breeder and Feeder Programs”.

The agency services cover all acts necessary for the absentee ownership of cattle and relate to selection, assistance in the negotiation of cattle purchases and cattle maintenance and the financing thereof, inspection, and the keeping of books and records pertaining to each prospective owner’s cattle. These services are offered for all or part of a contract year. Timing of payments during the course of the contract year will be individually negotiated. See “Livestock Industry”, “Contract Services Rendered by Agent” and “Additional Service Rendered by Agent”.

The agency services connected with the purchase and maintenance of these livestock herds are being offered only by Agent. See “Description of Agent” and “Plan of Distribution”.

Payments on livestock maintenance, care and feeding, financing if required, and agency fees will be paid in amounts and on schedules to be individually negotiated after cattle and operators satisfactory to the prospective owner are located.

The purchase of breeder cattle or feeder cattle or both hereunder is subject only to the acceptance by Oppenheimer Industries, Inc. of employment and availability of breeder cattle or feeder cattle or both....

[66]*66INTRODUCTORY STATEMENT

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Bluebook (online)
675 S.W.2d 63, 1984 Mo. App. LEXIS 3943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schubiner-v-oppenheimer-industries-inc-moctapp-1984.