WESTERN DISTRICT
DAVID AND DIANA HECKADON, ) ) Respondents, ) ) v. ) WD74288 ) CFS ENTERPRISES, INC. AND ) Opinion filed: March 19, 2013 CHAD FRANKLIN, ) ) Appellants. )
APPEAL FROM THE CIRCUIT COURT OF CLAY COUNTY, MISSOURI The Honorable Anthony Rex Gabbert, Judge
Before Division One: Thomas H. Newton, Presiding Judge, Joseph M. Ellis, Judge and Gary D. Witt, Judge
Appellants CFS Enterprises, Inc. ("CFS") and Chad Franklin ("Franklin") appeal from a judgment entered by the Circuit Court of Clay County in favor of Respondents David and Diana Lynn Heckadon on Respondents' claims that Appellants violated the Missouri Merchandising Practices Act ("MMPA") by misrepresenting or omitting material facts about a vehicle Respondents purchased from Appellants. For the following reasons, the judgment is affirmed in part and reversed and remanded in part. The evidence viewed in the light most favorable to the verdict reflects the following. Respondents wanted to purchase a more reliable vehicle with low monthly
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payments because they were living on a fixed income. In September of 2007, Respondents saw a television advertisement for CFS promising car payments as low as $43 a month. Respondents scheduled an appointment with CFS and drove to the dealership to discuss the advertisement. Once there, CFS employees told Respondents that the deal described in the advertisement was real and that they could get low monthly payments of $43 by participating in CFS's promotional program. The promotional program, which would last up to four years, allowed Respondents to purchase a Suzuki vehicle, drive it for a certain period of time, return the vehicle to CFS, and select a new Suzuki vehicle. CFS employees told Respondents that their payments would remain $43 per month for the four-year promotional period. CFS employees further explained that they were offering the promotional program in order to ensure Appellants had low-mileage vehicles to sell on their used car lot. Respondents decided to participate in the program and selected a vehicle ("the 2007 vehicle"). After filling out a credit application, Respondents spoke with CFS's finance manager. The manager gave Respondents paperwork to sign, including a loan application. The manager told Respondents not to worry about the terms of the loan application because it was merely a formality. Respondents were subsequently approved for a loan. Respondents later received a check in the mail from CFS to cover
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the difference between the $43 per month payment they were promised and the amount that appeared on their monthly loan statement. 1
In February of 2008, Respondents received a phone call from CFS informing them it was time to return the 2007 vehicle. Appellants faxed Respondents a new credit application, which Respondents filled out and faxed back to the dealership. Without Respondents' knowledge, Appellants changed the amount of monthly income Respondents listed on their credit application, increasing it by $2,000. When Respondents returned the 2007 vehicle to CFS, they selected another Suzuki vehicle ("the 2008 vehicle"). In purchasing the 2008 vehicle, Respondents paid $1,112 for a warranty, $540 for gap insurance, and $499.95 for an administrative fee to participate in the promotional program. Respondents also paid $427.58 in Missouri sales tax as well as a fee of $5.50 to transfer their license plates. Respondents purchased the 2008 vehicle for $19,495. Respondents later discovered that the window sticker listed the price of the 2008 vehicle as $17,495; thus Appellants marked up the price of the 2008 vehicle by $2,000. Appellants were approved for a loan on the 2008 vehicle. CFS's finance manager again told Respondents not to worry about the loan paperwork. Respondents subsequently received a $2,619 check from CFS to cover the portion of their monthly car payment that exceeded $43. Respondents' monthly statement from its lender
1 Of the $1,609 check Respondents received from CFS, $300 was allocated to the purchase of gas, leaving $1,309 for making car payments. Respondents' monthly loan statement showed that Respondents owed $391.25 per month. Respondents made four payments to the lender, totaling $1,565.
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showed Respondents owed $649.37 per month. Respondents made four payments to the lender on the 2008 vehicle. In July, Respondents saw a news report indicating that CFS's promotional deal was a scam. Respondents called CFS to inquire about the news report and see if they could return the 2008 vehicle. CFS stated it did not know about any promotional program and suggested that if Respondents had a problem, Respondents should seek arbitration. Respondents, however, contacted an attorney, who told them to stop making payments on the 2008 vehicle. After the attorney negotiated a deal with the lender, Respondents surrendered the 2008 vehicle to the lender, and the lender forgave the loan. Respondents paid the attorney $200 to negotiate with the lender. In December of 2009, Respondents filed a petition for damages against CFS, CFS's president and owner, Chad Franklin, and American Suzuki Motors Corporation ("ASMC"). 2 The petition alleged five counts: (1) fraudulent misrepresentation, (2) MMPA violations, (3) negligent misrepresentation, (4) piercing the corporate veil, and (5) civil conspiracy. Respondents alleged all counts, except for the piercing the corporate veil claim, against CFS, Franklin, and ASMC. Respondents alleged the piercing the corporate veil claim solely against Franklin. Prior to trial, Respondents entered into a confidential settlement agreement with ASMC. ASMC was subsequently dismissed from the suit, with prejudice. More facts regarding Respondents' settlement with ASMC will be discussed infra as needed.
2 ASMC is a distributor of new Suzuki motor vehicles to authorized dealers in Kansas and Missouri.
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On May 23, 2011, a bifurcated jury trial commenced against Appellants CFS and Franklin. Respondents as well as four other individuals testified to the misrepresentations Appellants made while selling them Suzuki vehicles. Respondents also introduced evidence from both the Missouri and Kansas attorney general regarding the number of complaints made against Appellants. Franklin also testified in both his individual capacity and capacity as a representative of CFS. At the conclusion of the first stage, Respondents submitted only the MMPA claims to the jury. The jury returned verdicts in favor of Respondents and awarded $2,144.87 in actual damages against CFS and $2,144.87 in actual damages against Franklin. The jury also determined Respondents were entitled to punitive damages. In the second stage, the jury awarded $100,000 in punitive damages against CFS and $400,000 in punitive damages against Franklin. The trial court entered its judgment accordingly. Respondents and Appellants both filed post-trial motions. Respondents filed a motion requesting the judgment be amended to include attorney's fees. Appellants filed two joint motions. Their first motion was to amend the judgment by (1) reducing the judgment by the amount of Respondents' settlement with ASMC pursuant to § 537.060 and (2) merging the awards of actual damages entered against CFS and Franklin. Appellants' second joint motion was a motion for remittitur or, in the alternative, a motion for new trial. The motion for remittitur asserted that the amount of punitive damages awarded was grossly excessive and, thereby, violated Appellants' constitutional due
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process rights under the Fourteenth Amendment. The court held a hearing on the post- trial motions and took them under advisement. On August 15, 2011, the trial court entered its amended judgment, which awarded Respondents the attorney's fees they requested and denied Appellants' motions to amend the judgment and remit the punitive damages awards. Appellants now assert three points on appeal regarding the denial of their post-trial motions. 3
In their first point, Appellants assert that the trial court erred by failing to amend its judgment to reduce the actual damages awards against Franklin and CFS in an amount equal to Respondents' prior settlement with ASMC because Appellants were entitled to a reduction under § 537.060. We review the denial of a motion to reduce a judgment pursuant to § 537.060 de novo. 4 McGuire v. Kenoma, LLC, 375 S.W.3d
3 Neither party addresses the issue of whether we have jurisdiction over this appeal since both the judgment and the record are silent regarding the other four counts of the petition, but we have a duty to do so sua sponte. Melson v. Traxler, 356 S.W.3d 264, 268 n.9 (Mo. App. W.D. 2011). We note that "theories of liability . . . pleaded and proved but not submitted [to the jury] are abandoned." Keller v. Int'l Harvesters Corp., 648 S.W.2d 584, 590 (Mo. App. W.D. 1983); see also Young ex rel. Young v. Davis, 726 S.W.2d 836, 838 (Mo. App. S.D. 1987). By not submitting the other four causes of action to the jury, Respondents abandoned those theories of liability against Appellants. Therefore, the judgment is final and appealable. See Unnerstall Contracting Co., Ltd. v. City of Salem, 962 S.W.2d 1, 5-6 (Mo. App. S.D. 1997); Murray v. Ray, 862 S.W.2d 931, 932 n.1 (Mo. App. S.D. 1993). 4 The parties disagree as to the proper standard of review in this case. Recently, we noted in Wagner v. Bondex International, Inc., 368 S.W.3d 340, 359 n.6 (Mo. App. W.D. 2012), that Missouri appellate courts have used the standard of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), when there are factual issues decided below regarding such factual matters as whether a certain payment was attributable to a settlement, or about the amount of a settlement payment. See Stevenson v. Aquila Foreign Qualifications Corp., 326 S.W.3d 920, 925 (Mo. App. W.D. 2010) (finding that the Murphy v. Carron standard applied where there was dispute as to whether the predicate condition to application of § 537.060 – "multiple tortfeasors being liable for the same injury – is established"). Because there were factual issues involved, we likewise applied the Murphy v. Carron standard in Wagner. Wagner, 368 S.W.3d at 359 n.6. However, if there are no such factual disputes, the trial court rules as a matter of law, and appellate review is de novo. Gibson, 349 S.W.3d at 465. In this case, there is no indication that the trial court's decision was dependent upon factual determinations, and the arguments made by the parties on appeal address legal, as opposed to factual, issues. Thus, the appropriate standard of review is de novo.
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157, 179 (Mo. App. W.D. 2012); see also Gibson v. City of St. Louis, 349 S.W.3d 460, 465 (Mo. App