STATE OF MISSOURI, ex rel. ATTORNEY GENERAL ERIC SCHMITT, Plaintiff-Respondent v. SCHIER COMPANY, INC., and GARY ALLEN SCHIER

Missouri Court of Appeals·Decided January 28, 2020·No. SD35829·Published

Opinion

STATE OF MISSOURI, ex rel. ) ATTORNEY GENERAL ERIC ) SCHMITT, )

)

Plaintiff-Respondent, )

)

v. ) No. SD35829 )

SCHIER COMPANY, INC., and ) Filed: January 28, 2020 GARY ALLEN SCHIER, )

)

Defendants-Appellants. )

APPEAL FROM THE CIRCUIT COURT OF WRIGHT COUNTY

Honorable Kenneth F. Thompson AFFIRMED

Schier Company, Inc. (“Schier Co.”) and Gary Allen Schier (“Schier”)

(collectively, “Defendants”) appeal the trial court’s judgment in favor of State of Missouri, ex rel. Attorney General Joshua Hawley,1 (“A.G.”) for violations of the Missouri Merchandising Practices Act (“MMPA”). Defendants claim the trial court erred in entering judgment in favor of A.G. under the MMPA and awarding “rescission”2 because: (1) A.G. failed to meet its burden of proof on the element of “misrepresentation or concealment, suppression or omission of a material fact”; (2) A.G. failed to meet its

1 While this appeal was pending, Attorney General Eric Schmitt was substituted for Joshua Hawley as the respondent pursuant to Rule 52.13(d). All rule references are to Missouri Court Rules (2019). 2 The judgment does not use the word “rescission”; it orders Defendants to “pay restitution of $79,400 to the State of Missouri pursuant to sec. 407.170.4 [sic] RSMo.” Unless otherwise indicated, all statutory references are to RSMo 2016.

burden of proof on the element of “ascertainable loss”; (3) rescission was not pled in the petition or requested any time prior to trial; (4) there was no “evidence of probative force showing that [Schier] had actual or constructive knowledge of actionable wrong and participated therein” to hold Schier individually liable; and (5) “application of the MMPA is unfair, unjust, and outside the scope intended by the legislature[.]”

Finding the last of these claims outside of our purview and no merit in the others, we affirm.

Standard of Review

We presume the judgment correct, and the appellant bears the burden of demonstrating reversible error. Houston v. Crider, 317 S.W.3d 178, 186 (Mo. App. S.D. 2010). Therefore, we must affirm the judgment unless the appellant demonstrates that there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo banc. 1976); Rule 84.13(d).

“Substantial evidence is evidence that, if believed, has some probative force on each fact that is necessary to sustain the [trial] court’s judgment.” Ivie v. Smith, 439 S.W.3d 189, 199 (Mo. banc 2014). “Evidence has probative force if it has any tendency to make a material fact more or less likely.” Id. at 199-200. To determine if the trial court’s judgment is supported by substantial evidence, we “view the evidence and the reasonable inferences drawn from the evidence in the light most favorable to the judgment, disregard all evidence and inferences contrary to the judgment, and defer to the trial court’s superior position to make credibility determinations.” Houston, 317 S.W.3d at 186. All fact issues upon which no specific finding is made must be considered to

have been made in accordance with the result reached. Ivie, 439 S.W.3d at 200; Rule 73.01(c).

A judgment is against the weight of the evidence only if the trial court could not have reasonably found, from the record at trial, the existence of a fact necessary to sustain the judgment. Id. at 206. This challenge differs from a challenge to the sufficiency of the evidence. It is a test of how much persuasive value evidence has—not simply whether sufficient evidence exists that tends to prove a necessary fact. Id. Like a substantial-evidence challenge, however, we defer to the trial court’s factual findings when those alleged facts are contested. Id. at 200, 206. The against-the-weight standard serves only as a check on a trial court’s potential abuse of power in weighing the evidence. Id. at 206.

The Evidence

Dairymen’s Best Creamery Cooperative, LLC (“Dairymen’s Best”) is a co-op of dairy farmers formed for the purpose of processing milk into marketable milk products.3 Dairymen’s Best hired David Cline (“Cline”) to manage and supervise the construction of the dairy-processing plant. Cline’s responsibilities included ordering the dairy- processing equipment necessary to get the plant operational.

Schier Co. is a company that buys and sells used dairy-processing equipment to dairy operations. Schier Co. does not itself refurbish or manufacture dairy equipment or parts; it obtains all such equipment and parts from third parties. Schier is the founder, sole owner, and president of Schier Co. In his role as president, Schier is “responsible for

3 Dairymen’s Marketing Cooperative, Inc. (“DMCI”) is the parent company of Dairymen’s Best. DMCI operates by obtaining raw milk from its members and then markets that milk to dairy processors. DMCI began exploring ways to process DMCI’s milk into milk products to avoid the costs associated with transporting the milk to a processor. Dairymen’s Best was the entity created to carry out that mission.

everything that the company does[,]” including approving the contents of the company’s website.4 Schier Co.’s website states “[w]e inspect each one of our new and used, reconditioned pieces for the highest quality and efficiency to ensure that all our equipment is long-lasting and reliable.” While the website guaranteed Schier Co.’s reconditioned equipment to be “free from defects[,]” it excluded equipment and pieces obtained from third-party vendors.

Cline, on behalf of Dairymen’s Best, began looking for dairy-processing equipment to order for the plant. He reviewed Schier Co.’s website and recommended to the board of Dairymen’s Best that the necessary processing equipment be ordered from Schier Co. Dairymen’s Best followed that recommendation and ordered a milk pasteurizer5 from Schier Co.

When the pasteurizer arrived, it appeared that all of its valuable parts had been removed. The parts that remained were not usable. When inspectors from the State Milk Board came to inspect the pasteurizer, it failed the inspection. When contacted after that failed inspection, Schier agreed to take the machine back and provide a $20,000 credit toward the purchase of a new machine with an upgraded capacity to 1,000 gallon per hour.

Schier told Cline that the second pasteurizer would be built from the frame of a used pasteurizer with new components that would make the machine “like new[.]” Schier personally spoke with Cline and promised that the second pasteurizer would be

4 According to the Schier Co. website, Schier is “involved in locating and providing equipment to the people that are going to build their plant or change equipment in the plant or add a piece of equipment to the plant.” Schier has never manufactured dairy products. Schier “deal[s] with people purchasing equipment from all over the world[.]” 5 The evidence was that a milk pasteurizer is a piece of equipment that “heats the milk to kill any pathogens that are in the milk that might be harmful to . . . a consumer” and thus is “vital to dairy manufacturing.”

“PMO [Pasteurized Milk Ordinance] compliant.”6 The written invoice for the second pasteurizer (the “HTST pasteurizer”) stated it would be a “PMO legal 1,000-gallon-per- hour HTST pasteurizer system[.]”7 Dairymen’s Best ordered the HTST pasteurizer on January 5, 2015, and remitted the down payment on January 21, 2015.8 Dairymen’s Best paid the remaining balance on the HTST pasteurizer before delivery was made. Dairymen’s Best paid for all equipment it received from Schier Co. in full. The total amount paid by Dairymen’s Best for the HTST pasteurizer was $79,400.

After delivery, Dairymen’s Best discovered that the HTST pasteurizer had been refurbished in Mexico. Dairymen’s Best did not know that the equipment would be coming from Mexico, and it would not have purchased a piece of equipment that did not have nearby factory support. Defendants did not inspect the HTST pasteurizer prior to delivery.

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STATE OF MISSOURI, ex rel. ATTORNEY GENERAL ERIC SCHMITT, Plaintiff-Respondent v. SCHIER COMPANY, INC., and GARY ALLEN SCHIER, (Mo. Ct. App. 2020).

STATE OF MISSOURI, ex rel. ATTORNEY GENERAL ERIC SCHMITT, Plaintiff-Respondent v. SCHIER COMPANY, INC., and GARY ALLEN SCHIER (STATE OF MISSOURI, ex rel. ATTORNEY GENERAL ERIC SCHMITT, Plaintiff-Respondent v. SCHIER COMPANY, INC., and GARY ALLEN SCHIER) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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