Michael F. Shanahan, Jr., Appellant, vs. Spencer Fane, LLP, Respondent.

MICHAEL F. SHANAHAN, JR., ) No. ED112983 ) Appellant, ) Appeal from the Circuit Court ) of St. Louis County vs. ) ) Honorable John N. Borbonus SPENCER FANE, LLP, ) ) Respondent. ) FILED: December 9, 2025

This case stems from Michael F. Shanahan, Jr.'s investment in a GM-affiliated car dealership pursuant to agreements drafted by Spencer Fane LLP. Shanahan alleged that Spencer Fane misrepresented that his interest in the dealership had been approved by GM and that it failed to disclose he had not been approved as a GM owner. He asserted claims for legal malpractice, fraudulent misrepresentation, fraudulent inducement, negligent misrepresentation, and fraudulent nondisclosure. Shanahan appeals the summary judgment in favor of Spencer Fane on those claims. Summary judgment was proper because Shanahan was unable to produce evidence (a) of an attorney-client relationship with Spencer Fane to support the legal malpractice claim; (b) that Spencer Fane made any affirmative representation that Shanahan was GM-approved to support the fraudulent and negligent misrepresentation and fraudulent inducement claims; and (c) that Spencer Fane had a duty to speak to support the fraudulent nondisclosure claim. We affirm.

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Background Gateway Buick GMC was a GM-affiliated car dealership. In 2009, the operator of the dealership, Ken Behlmann, and two other investors, Donald Davis and Richard Lehman, formed Automotive Investments, LLC ("the investment company"). The investment company acquired an ownership interest in the dealership, and GM required that any change in ownership be approved by GM. The investment company's original operating agreement provided that any transfer of ownership interest in the company must be approved by GM. In 2013, Davis approached Shanahan about investing in the dealership. Behlmann left the company, and Shanahan entered into an agreement with Davis and Lehman under which Shanahan acquired an interest in the investment company in exchange for his investment, which resulted "in an indirect percentage ownership by Shanahan (through direct ownership by [the investment company]) of 15% of the issued and outstanding common stock of [the dealership]." The 2013 operating agreement deleted the provision in the original operating agreement pertaining to GM approval. In 2015, the dealership, the investment company, Davis, Lehman, and Shanahan entered into an agreement under which Lehman's interest was redeemed and Shanahan's ownership percentage increased. The 2015 redemption agreement included a provision requiring GM approval of ownership transfers. Spencer Fane drafted both the 2013 operating agreement and the 2015 redemption agreement. Robert Epstein, an attorney at Spencer Fane, had been providing legal services to the dealership for decades and was involved in both the 2013 and 2015 transactions with Shanahan.

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At the time of those transactions, Shanahan believed that GM had approved his ownership interest in the dealership, but he learned in 2017 that it had not. The dealership filed for bankruptcy and ceased operations in 2018. In 2020, Shanahan filed this lawsuit. In his third amended petition, Shanahan alleged, among other things, that Spencer Fane misrepresented that Shanahan's ownership interest had been approved by GM and failed to disclose that he had not been approved as a GM owner. Shanahan asserted claims for legal malpractice, breach of fiduciary duty, fraudulent misrepresentation, fraudulent inducement, negligent misrepresentation, and fraudulent nondisclosure. In 2024, Spencer Fane moved for summary judgment, contending that, after an adequate period of discovery, Shanahan could not produce evidence that (a) he had an attorney-client relationship with Spencer Fane to support the legal malpractice and breach of fiduciary duty claims; (b) Spencer Fane made any false representation to Shanahan to support the fraudulent misrepresentation, negligent misrepresentation, and fraudulent inducement claims; (c) Spencer Fane owed Shanahan a duty to speak for purposes of the fraudulent nondisclosure claim; and (d) Spencer Fane's alleged actions caused Shanahan's damages on any of the claims. The circuit court granted the motion and entered summary judgment on all claims in favor of Spencer Fane. Shanahan appeals. Standard of Review This Court reviews a summary judgment de novo, using the same standards as the circuit court for determining if the movant is entitled to judgment as a matter of law. Green v. Fotoohighiam, 606 S.W.3d 113, 115 (Mo. banc 2020). A defending party may establish a right to summary judgment if it can show that, after an adequate period of discovery, the plaintiff has not been able to, and will not be able to, produce evidence sufficient to allow a trier of fact to find the

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existence of one of the elements of the plaintiff's claim. Switzer Living Tr., U/A Dated Feb. 5, 2019 by & Through Switzer v. Lake Lotawana Ass'n, Inc., 687 S.W.3d 476, 482 (Mo. App. W.D. 2024). "When reviewing the entry of summary judgment, we view the record in the light most favorable to the party against whom the judgment was entered and accord the non-movant all reasonable inferences from the record." Id. (internal quotation marks and citations omitted). Discussion Shanahan raises fifteen points on appeal, challenging all of the grounds Spencer Fane raised for summary judgment on each of his claims, except for breach of fiduciary duty. We find that summary judgment was proper for the following reasons. Point I—Legal Malpractice The first element of a legal malpractice claim is the existence of an attorney-client relationship. Donahue v. Shughart, Thomson & Kilroy, P.C., 900 S.W.2d 624, 626 (Mo. banc 1995). A plaintiff may satisfy this element by establishing "either that an attorney-client relationship exists between the plaintiff and defendant or an attorney-client relationship existed in which the attorney-defendant performed services specifically intended by the client to benefit plaintiffs." Id. at 628-29. On appeal, Shanahan focuses exclusively on the intended beneficiary doctrine to establish the relationship element of his legal malpractice claim against Spencer Fane. 1 He contends the summary judgment record shows that Spencer Fane's work on the initial investment he made in 2013 and the redemption agreement in 2015 was intended to benefit him. He does not, however, cite to any facts in the summary judgment record relating to the 2015 transaction. Therefore,

1 Shanahan has abandoned the argument he made in the circuit court that he and Spencer Fane had an attorney-client relationship. See Yes Chancellor Farms, LLC v. Merkel, 670 S.W.3d 214, 223 n.6 (Mo. App. E.D. 2023) (finding that argument raised in response to summary judgment motion, but not maintained on appeal, was abandoned).

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Shanahan's argument for reversing summary judgment based on what happened during that transaction is disconnected from the facts and "analytically useless to our review." See Switzer, 687 S.W.3d at 485 (internal quotation marks and citation omitted). Rather, Shanahan cites only to facts relating to the 2013 transaction. But he did not rely on any of those facts to establish the relationship element of this claim in the circuit court; therefore, he has waived that argument on appeal. See City of Kansas City v. Occupational Health Ctrs. of the Sw., P.C., 676 S.W.3d 426, 436 (Mo. App. W.D. 2023) (stating that appellant cannot raise argument for reversal of summary judgment based on facts not cited to and relied upon to defeat summary judgment in the circuit court). Even if Shanahan had made that argument in the circuit court, none of the facts he cites about the 2013 transaction bring this case within the intended beneficiary doctrine. The doctrine requires the plaintiff to show that the client intended the plaintiff to "be the beneficiar[y]" of the attorney's services. Multilist Serv. of Cape Girardeau, Missouri, Inc. v. Wilson, 14 S.W.3d 110, 114 (Mo. App. E.D. 2000) (emphasis in original) (finding that individual members of a corporation were not intended beneficiaries of the attorney's representation of corporation). If there is no evidence that the client retained the defendant-attorney with the specific purpose of benefitting the plaintiff—rather than the client himself—then the plaintiff is "not the direct and exclusive beneficiar[y] of the representation" and the intended beneficiary doctrine does not apply. Minor v. Terry, 475 S.W.3d 124, 132-33 (Mo. App. E.D. 2014) (emphasis added), overruled on other grounds by Vacca v. Missouri Dep't of Lab. & Indus. Rels., 575 S.W.3d 223 (Mo. banc 2019). Shanahan cites to evidence showing that Davis (on behalf of the investment company and the dealership) emailed Shanahan in 2013 regarding a potential investment in the dealership, expressing that the business had "turned the corner" and was making a profit. Shanahan also cites

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to the fact that he was interested in investing in the dealership so he could have a representative of his insurance company at the dealership selling insurance products. While these facts demonstrate that Shanahan was expected to benefit from investing in the dealership, they do not remotely show that he was intended to be the exclusive beneficiary of such an investment. To the contrary, as Shanahan himself characterizes it in his reply brief, his investment in the dealership in 2013 was "for the collective benefit of [the dealership and the investment company] and the new member they had recruited" and they all "stood to benefit from" Shanahan's initial cash infusion and ongoing presence in the business as a financial resource. Shanahan has failed to demonstrate that summary judgment was improper on the legal malpractice claim based on his inability to produce evidence of an attorney-client relationship. Point I is denied, and Points II and III—challenging alternative grounds for summary judgment on this claim—are denied as moot. See Missouri Emps. Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 622 (Mo. App. W.D. 2004). Points IV, V, and VI—Fraudulent Misrepresentation, Fraudulent Inducement, and Negligent Misrepresentation Based on Affirmative Misrepresentation

An essential element of a claim for fraudulent misrepresentation, fraudulent inducement, or negligent misrepresentation is the existence of a representation by the defendant. See Joel Bianco Kawasaki Plus v. Meramec Valley Bank, 81 S.W.3d 528, 536 (Mo. banc 2002) (fraudulent misrepresentation); Big A LLC v. Vogel, 561 S.W.3d 28, 35 (Mo. App. W.D. 2018) (fraudulent inducement); Renaissance Leasing, LLC v. Vermeer Mfg. Co., 322 S.W.3d 112, 134 (Mo. banc 2010) (negligent misrepresentation). Shanahan contends that Spencer Fane represented to him in writing that he was a GM- approved owner, citing to the 2013 operating agreement that was drafted by Spencer Fane. He

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also claims that Spencer Fane attorneys made other statements that caused him to believe he was a GM-approved owner of the dealership, citing to his deposition testimony. We disagree that any of the cited portions of the summary judgment record—even when construed in the light most favorable to Shanahan and affording him all reasonable inferences to be drawn from that evidence—demonstrate that Spencer Fane made any affirmative representation that GM had approved Shanahan as an owner of the dealership. First, even if the terms of an agreement could be considered the representations of the lawyer who drafted it, the terms of the 2013 operating agreement on which Shanahan relies say nothing about GM approval of his ownership interest. Rather, the cited provisions simply state that, by acquiring an ownership interest in the investment company, Shanahan acquired an "indirect percentage ownership" interest in the dealership. Second, Shanahan's cited deposition testimony does not demonstrate that Spencer Fane or anyone else made an affirmative representation regarding GM approval. Rather, Shanahan repeatedly testified that his basis for believing that he had a GM-approved ownership interest in the dealership was that "[n]obody told me I didn't." When Shanahan was asked if he had "any conversations with [] Epstein about whether [he] had approval from GM" after his initial investment in 2013, Shanahan responded, "I don't—I don't recall if I asked—if I asked anybody— I know nobody told me I didn't." When asked to identify what "false or inaccurate" statements Spencer Fane attorneys made to him, Shanahan answered, "Well, for one, I mentioned that the— not being an owner of GM, was led to believe I was." But he did not identify any affirmative statement that led to such a belief. Rather, Shanahan confirmed that it was the absence of any such statement to the contrary that led him to that belief:

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Q. It's your assertion that you believed you were a GM—you previously testified that you believed you were a GM owner because no one told you you were not a GM owner, is that correct?

A. Correct.

Shanahan's testimony is, at best, evidence that Spencer Fane did not disclose to Shanahan that he was not a GM-approved owner of the dealership. A nondisclosure can only amount to a misrepresentation if Spencer Fane had a duty to speak, which it did not, as explained below. Shanahan has failed to demonstrate that summary judgment was improper on the fraudulent misrepresentation, fraudulent inducement, and negligent misrepresentation claims based on his inability to produce evidence of a representation by Spencer Fane. Points IV, V, and VI are denied, and Points VII, IX, X, XI, XIII, and XIV—challenging alternative grounds for summary judgment on these claims—are denied as moot. See Missouri Emps. Mut. Ins. Co., 149 S.W.3d at 622. Point XV—Fraudulent Misrepresentation Based on Nondisclosure

There is no separate tort of "fraudulent nondisclosure," but "silence in the face of a legal duty to speak" can satisfy the representation element of a fraudulent misrepresentation claim. Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 765 (Mo. banc 2007). "[A] party's silence amounts to a representation where the law imposes a duty to speak[,]" which is determined on the particular facts of the case. Id. "This duty arises either where there is a relation of trust and confidence between the parties or where one party has superior knowledge or information not within the fair and reasonable reach of the other party." Andes v. Albano, 853 S.W.2d 936, 943 (Mo. banc 1993).

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On appeal, Shanahan focuses solely on Spencer Fane's superior knowledge to establish its duty to speak. 2 He argues that Spencer Fane had superior knowledge of the fact that GM had never approved his ownership—information that he claims was not reasonably available to him. 3 He cites to evidence showing that Spencer Fane was familiar with GM's requirement that it approve ownership changes as set forth in the dealership agreement. Shanahan also relies on evidence that Spencer Fane drafted the 2015 redemption agreement, which included the provision regarding GM approval that had been removed from the 2013 operating agreement. Shanahan contends that, because Spencer Fane added the approval provision into the 2015 redemption agreement, it is reasonable to infer that Spencer Fane was aware that GM had never actually approved Shanahan's ownership interest. That may be so, but by that logic, inclusion of the approval provision would have alerted anyone reading the 2015 redemption agreement that Shanahan was not already a GM- approved owner, including Shanahan himself. In other words, the only evidence cited for the proposition that Spencer Fane knew Shanahan had not been GM-approved is evidence to which Shanahan had equal access—i.e., the terms of the 2015 redemption agreement. Thus, the facts of this case do not establish that Spencer Fane had superior information outside of Shanahan's reach that gave rise to a duty to tell Shanahan about it. See id.; see also Nat'l Alfalfa Dehydrating & Milling Co. v. 4010 Washington, Inc., 434 S.W.2d 757, 765 (Mo. App. 1968) (finding there was

2 Shanahan has abandoned the argument he made in the circuit court that Spencer Fane's duty to speak arose from an attorney-client relationship of trust and confidence with Shanahan. See Yes Chancellor Farms, 670 S.W.3d at 223 n.6. 3 Shanahan asserts that Spencer Fane did not address this particular nondisclosure in its motion—discussing only Shanahan's allegation that other information had been withheld—and therefore failed to meet its burden of establishing a prima facie right to judgment. Shanahan did not make any such contention in the circuit court. Rather, he argued only that there were "numerous fact issues" concerning whether Spencer Fane had a duty to speak, an argument that presupposes the movant has made a prima facie showing of a right to summary judgment. See Schnurbusch v. W. Plains Reg'l Animal Shelter, 571 S.W.3d 191, 199, 202 n.6 (Mo. App. S.D. 2019). Shanahan cannot argue for reversal of the summary judgment on a basis that he did not raise in the circuit court. See Occupational Health Ctrs., 676 S.W.3d at 435-36.

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no duty to speak about the terms of lease where the plaintiff had "as much knowledge" about those terms as did the defendant). Shanahan has failed to demonstrate that summary judgment was improper on the fraudulent nondisclosure claim based on his inability to produce evidence that Spencer Fane had a duty to speak. Point XV is denied, and Points VIII and XII—challenging alternative grounds for summary judgment on this claim—are denied as moot. See Missouri Emps. Mut. Ins. Co., 149 S.W.3d at

Conclusion For the foregoing reasons, the summary judgment is affirmed.

_______________________________ MICHAEL E. GARDNER, Judge

Robert M. Clayton III, P.J., concurs. Lisa P. Page, J., concurs.