Case Title: Estate of Overbey v. Chad Franklin Nat'l Auto Sales N., LLC

Citation: 

Docket Number: SC91369

State: missouri

Court: Missouri Supreme Court

Date: 2012-01-31T00:00:00Z

Document:
SUPREME COURT OF MISSOURI 
en banc 
 
 
ESTATE OF MAX E. OVERBEY,  
 
) 
DECEASED, and GLENNA J.   
 
) 
OVERBEY,  
 
 
 
 
) 
 
 
 
 
 
 
 
) 
 
Appellants/Cross-Respondents,  
) 
 
 
 
 
 
 
 
) 
vs. 
 
 
 
 
 
 
) 
No. SC91369 
 
 
 
 
 
 
 
) 
CHAD FRANKLIN NATIONAL  
 
) 
AUTO SALES NORTH, LLC,  
 
) 
 
 
 
 
 
 
 
) 
 
Respondent,  
 
 
 
) 
 
 
 
 
 
 
 
) 
and 
 
 
 
 
 
 
) 
 
 
 
 
 
 
 
) 
CHAD FRANKLIN, 
 
 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent/Cross-Appellant. 
 
) 
 
Appeal from the Circuit Court of Clay County 
The Honorable Anthony Rex Gabbert, Judge 
 
Opinion issued January 31, 2012 
 
 
 
 
 
 
 
Max and Glenna Overbey recovered judgments against Chad Franklin National 
Auto Sales North, LLC (National), and Chad Franklin for fraudulent representations in 
violation of the Missouri Merchandising Practices Act (MMPA) made in connection with 
National’s sale of a vehicle to the Overbeys.1  Mr. Franklin appeals the judgment, and the 
                                             
 
1 §§ 407.010 to 407.1500 RSMo 2000.  All statutory references are to RSMo 2000 except 
those pertaining to section 510.265, which are to RSMo Supp. 2010. 
Overbeys appeal the trial court’s reduction of the punitive damage award.   
This Court rejects Mr. Franklin’s claims that a submissible case was not made 
against him and that the trial court erred in reducing the $1 million punitive damage 
verdict against him to $500,000 rather than to a lesser amount in light of the fact that the 
jury awarded only $4,500 against him in actual damages.  The award is fully supported 
by the evidence that he and National, which was wholly owned by him when the 
Overbeys purchased their SUV, committed fraud in falsely representing to the Overbeys 
(and making similar representations to others) that they would owe only $49 per month if 
they joined a membership program for $500, but in fact the contract they signed obligated 
them to pay more than $37,000 over six years.  
This Court also affirms the trial court’s reduction of the $1 million punitive 
damage verdict against Mr. Franklin to $500,000 as required by the statutory cap on 
punitive damages contained in section 510.265.  As the legislature created the MMPA 
cause of action under which the Overbeys sued, it had a right to set limits on the 
substantive remedies permitted under that statute, including the limit of punitive damages 
that could be recovered, without violating the Overbeys’ rights to trial by jury or the 
separation of powers doctrine.  For the reasons set forth below, this Court also rejects the 
claim that the statutory cap violates their rights to due process and equal protection or 
Missouri’s constitutional prohibition on special legislation.  The judgment is affirmed. 
I. 
FACTUAL AND PROCEDURAL BACKGROUND 
 
The evidence, taken in the light most favorable to the jury’s verdict, shows that 
National ran a number of television commercials for a “payment-for-life membership 
plan” for purchasing a vehicle from it.  One of those commercials, seen by the Overbeys 
and shown at the trial, stated: 
No matter how high car prices get in the future, you’ll lock in your low 
monthly payment for the rest of your life.  Here’s how.  Buy any pre-owned 
vehicle, at the end of one year bring it back and pick out another.  You’ll 
drive a different vehicle every single year forever … your initial monthly 
payment will never change and you can cancel your membership whenever 
you want. 
 
Chad Franklin himself did not appear personally in a commercial advertising National’s  
payment-for-life membership plan, but he did appear in one or more advertisements for 
his other wholly owned dealership, Chad Franklin Suzuki, that offered a similar low 
“instant reverse payment program.”    
After seeing these commercials, the Overbeys went to the National dealership in 
North Kansas City and said they wanted to buy a vehicle under the payment-for-life 
membership plan.  The Overbeys repeatedly sought and received assurances from the 
sales personnel at National that they were being given the deal specified in National’s 
commercials.  On this basis, the Overbeys agreed to purchase an SUV pursuant to a 
contract that required them to pay a total of $37,191.28 over 71 months.  But, they said, 
the salesperson at National told them that by paying $500 to join the payment-for-life 
membership plan, their actual monthly payment would only be $49.  And, in fact, once 
the Overbeys signed the contract, National paid them $3,253 to cover the difference 
between the $49 per month the salesman said was all they had to pay and the $719.52 the 
contract said they were required to pay per month, so that they would be paying a net of 
$49 per month for six months. 
 
3
  When the Overbeys returned to National six months later to trade in the SUV for 
another vehicle, they were told that the salesperson who sold them the SUV no longer 
worked there and that no current employees were aware of any provision in the 
Overbeys’ contract that allowed them to trade in the vehicle after six months.  To the 
contrary, the dealership claimed, the Overbeys had bought the vehicle for $37,191.28 and 
were obligated to pay $719.52 a month for the 65 months remaining on the contract.  
Michael Overbey, Max and Glenna’s grandson, who accompanied them to the dealership, 
testified that when the Overbeys demanded to speak to Mr. Franklin, the National 
salesperson purported to get Mr. Franklin on the telephone, after which the salesman said 
Mr. Franklin claimed he had no knowledge of any deal offered to the Overbeys.  National 
continued to insist the Overbeys were obligated to pay the full contract amount. 
 
The Overbeys filed suit claiming that National and Mr. Franklin made fraudulent 
misrepresentations regarding the sale of the vehicle in violation of the MMPA, 
introducing testimony about the commercials, their experience with the dealership, the 
experience of four other persons who said they similarly were misled, and evidence of 
some 35 complaints filed with the attorney general that caused him to seek an injunction 
against the continued operation of the program. 
The jury found that both National and Mr. Franklin violated the MMPA.  It 
awarded the Overbeys $76,000 in actual damages and $250,000 in punitive damages 
against National.  The jury also awarded $4,500 in actual damages and $1 million in 
punitive damages against Mr. Franklin.  The trial court overruled Mr. Franklin’s motion 
for judgment notwithstanding the verdict, rejecting his claim that the Overbeys had failed 
 
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to adequately connect him with National’s fraudulent representations, and denied 
remittitur of the punitive damages as excessive.  Mr. Franklin appeals these rulings.2   
The trial court did, however, grant Mr. Franklin’s motion to reduce the punitive 
damage award against him pursuant to the damages cap contained in section 510.265, 
which states in relevant part: “No award of punitive damages against any defendant shall 
exceed the greater of (1) Five hundred thousand dollars; or (2) Five times the net amount 
of the judgment awarded to the plaintiff against the defendant” (emphasis added).  
  In reducing the punitive damage award to $500,000 as required by section 
510.265, the trial court rejected the Overbeys’ claims that a cap on punitive damages 
violates their rights to trial by jury, due process and equal protection, violates the 
separation of powers doctrine, and constitutes the kind of special law prohibited by the 
Missouri Constitution.  The Overbeys appeal these rulings.  
Because the parties challenge the constitutional validity of a statute, this Court has 
exclusive jurisdiction over their appeals.  Mo. Const. art. V, § 3.                
II. 
MR. FRANKLIN’S APPEAL  
 
Mr. Franklin argues that the Overbeys failed to make a submissible case against 
him and that the reduced amount of punitive damages awarded was excessive. 
 
                                             
 
2 National did not appeal the judgment against it, and the record does not reveal whether 
it has paid any part of that judgment.  Mr. Franklin also claims on appeal that the trial 
court abused its discretion by awarding the Overbeys an arbitrary amount of attorney’s 
fees.  To preserve an issue for appeal, it must be presented to the trial court.  Vance Bros., 
Inc. v. Obermiller Const. Servs. Inc., 181 S.W.3d 562, 564 (Mo. banc 2006); see also 
Rule 78.07.  Mr. Franklin did not contest the amount of attorney’s fees awarded to the 
Overbeys until he filed a cross-appeal with this Court.  As a result, any error in awarding 
attorney’s fees was not preserved, and this Court will not address it further.    
 
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A. 
Plaintiffs Made a Submissible Case Against Mr. Franklin 
A motion for judgment notwithstanding the verdict will be denied if the plaintiff 
made a submissible case.  Klotz v. St. Anthony’s Med. Ctr., 311 S.W.3d 752, 769 (Mo. 
banc 2010).  A case is submissible if “each and every fact essential to liability is 
predicated on legal and substantial evidence.”  Id.  “The Court takes the evidence in the 
light most favorable to the verdict, giving the prevailing party all reasonable inferences 
from the verdict and disregarding the unfavorable evidence.”  Hodges v. City of St. Louis, 
217 S.W.3d 278, 280 (Mo. banc 2007).  “This Court will reverse the jury’s verdict for 
insufficient evidence only where there is a complete absence of probative facts to support 
the jury’s conclusion.”  Klotz, 311 S.W.3d at 769. 
The Overbeys did not seek to hold Mr. Franklin liable for violating the MMPA 
under respondeat superior or by piercing the corporate veil but rather for his personal 
involvement in the fraud.  To hold him liable under the MMPA, they needed to prove his 
employment “of any deception, fraud, false pretense, false promise, misrepresentation, 
unfair practice or the concealment, suppression, or omission of any material fact in 
connection with the sale or advertisement of any merchandise in trade or commerce ….” 
§ 407.020.  A corporate officer may be held liable if it is “shown by evidence of 
probative force that he had actual or constructive knowledge of the actionable wrong and 
participated therein.”  Wolfersberger v. Miller, 39 S.W.2d 758, 764-65 (Mo. 1931).   
Direct evidence of fraud rarely exists, “[b]ut fraud, like any other fact, may be 
established by circumstantial evidence.”  Bank of New Cambria v. Briggs, 236 S.W.2d 
289, 291 (Mo. 1951).  This may include indirect evidence of knowledge of or 
 
6
involvement in the conduct, as well as evidence of “similar transactions in the course of a 
continuous, systematic course of dealing.”  Blakeley v. Bradley, 281 S.W.2d 835, 839 
(Mo. 1955); see also Chesus v. Watts, 967 S.W.2d 97, 113 (Mo. App. 1998).  
Mr. Franklin did not admit involvement in the fraud, but the Overbeys presented 
substantial circumstantial evidence supporting his involvement in the fraudulent conduct.   
First, they showed that National placed television commercials advertising the payment- 
for-life program, quoted earlier.  They showed that he was the sole owner of National and 
of Chad Franklin Suzuki.  They showed that Chad Franklin Suzuki made commercials 
offering a similar program and that Mr. Franklin personally appeared in at least one of 
these commercials.  They played these commercials – as well as commercials for 
National – for the jury.  The jurors could see the similarity of the programs, they could 
see Mr. Franklin’s personal involvement in the Suzuki program and they could see his 
relationship with both programs offered by his two wholly owned dealerships.   
Moreover, the Overbeys presented evidence that Mr. Franklin was involved in 
National’s sales process by showing that when they complained about the failure to honor 
the payment-for-life program, the salesperson called Mr. Franklin personally about how 
to proceed.  While, as Mr. Franklin notes, he then and now denied any knowledge of the 
fraudulent promises made to the Overbeys, the jury was free to find this denial incredible 
in light of the use of his name in National’s commercials advertising the payment-for-life 
program and in light of the other evidence noted above.  
Further, the jury’s finding that Mr. Franklin had personal knowledge of the 
fraudulent promises made to the Overbeys was supported by the testimony of four other 
 
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persons who claimed they similarly were defrauded by National, as well as evidence that 
the Missouri attorney general received at least 35 complaints of analogous conduct in 
regard to the payment-for-life membership plan and similar payment plans and is seeking 
a civil injunction.  This was not isolated conduct of a single errant salesperson. 
The Overbeys made a submissible case against Mr. Franklin, and the trial court 
properly overruled his motion for judgment notwithstanding the verdict.  
B. 
Excessive Punitive Damage Award   
 
This Court reviews constitutional challenges de novo.  Hodges, 217 S.W.3d at 279.  
“A statute is presumed to be valid and will not be declared unconstitutional unless it 
clearly contravenes some constitutional provision.”  Franklin Cnty. ex rel. Parks v. 
Franklin Cnty. Comm’n., 269 S.W.3d 26, 29 (Mo. banc 2008).  The challenger has the 
“burden of proving the [statute] clearly and undoubtedly violates the constitutional 
limitations.”  Id. 
 
Here, Mr. Franklin contends that the entry of a $500,000 judgment for punitive 
damages violated his due process rights because this award is grossly excessive in light of 
the nature of his conduct, even though reduced from the $1 million jury verdict.  The 14th 
Amendment to the United States Constitution prevents a state from depriving “any person 
of life, liberty, or property, without due process of law.”  Article I, section 10 of the 
Missouri Constitution is essentially identical, stating that “no person shall be deprived of 
life, liberty or property without due process of law.”  Mo. Const. art. I, § 10.  
In State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003), the 
Supreme Court held that due process “prohibits the imposition of grossly excessive or 
 
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arbitrary punishments on a tortfeasor” because “[t]o the extent an award is grossly 
excessive, it furthers no legitimate purpose and constitutes an arbitrary deprivation of 
property.”  Id.   
In applying these principles to determine whether the award of punitive damages 
was excessive based on State Farm’s improper refusal to settle or later pay a claim, the 
Supreme Court said it would consider: “(1) the degree of reprehensibility of the 
defendant’s conduct; (2) the disparity between the actual or potential harm suffered by 
the plaintiff and the punitive damages award; and (3) the difference between the punitive 
damages awarded by the jury and the civil penalties authorized or imposed in comparable 
cases.”  Id.  at 418.  Pursuant to these principles, it said, “few awards exceeding a single-
digit ratio between punitive and compensatory damages, to a significant degree, will 
satisfy due process.”  Id. at 425.  In the case before it, in particular, the Supreme Court 
found that the Utah Supreme Court had erred in approving a punitive damage award of 
$145 million, based on an actual damage award of $2.6 million, as the punitive damages 
had been based not on State Farm’s conduct regarding the individual plaintiff but rather 
on its unrelated conduct toward its customers across the nation.  Id. at 419-23.  “Due 
process does not permit courts, in the calculation of punitive damages, to adjudicate the 
merits of other parties’ hypothetical claims against a defendant under the guise of the 
reprehensibility analysis.”  Id. at 423.    
But due process does permit considering the wrongfulness of the conduct and 
whether it is part of a pattern and practice of misconduct.  Accordingly, State Farm also 
held that far greater ratios may “comport with due process where ‘a particularly 
 
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egregious act has resulted in only a small amount of economic damages.’” Id. at 423, 
quoting BMW of North America, Inc. v. Gore, 517 U.S. 559, 582 (1996). 
Ultimately, State Farm concluded, “[t]he precise award in any case … must be 
based upon the facts and circumstances of the defendant’s conduct and the harm to the 
plaintiff.”  Id. at 425, quoting Gore, 517 U.S. at 582.  In considering those circumstances, 
the most important factor is the degree of reprehensibility of the misconduct, including:  
the harm caused was physical as opposed to economic; the tortious conduct 
evinced an indifference to or a reckless disregard of the health or safety of 
others; the target of the conduct had financial vulnerability; the conduct 
involved repeated actions or was an insolated incident; and the harm was 
the result of intentional malice, trickery, or deceit, or mere accident.  
  
Id. at 419 (emphasis added).   
 
In State Farm, the Supreme Court found that the defendant’s conduct was not very 
reprehensible, for it caused limited economic harm, did not threaten health or safety, 
there was “scant evidence of repeated misconduct,” and unrelated conduct as to other 
insureds could not be considered.  Id. at 419-23.   
By contrast, here, consideration of these factors supports the large ratio between 
actual and punitive damages.  The actual damage award of $4,500 was small, in contrast 
to the large actual damage award in State Farm of $2.6 million, so that a single-digit ratio 
would be insufficient to punish and deter the defendant properly.  Id.  This reasoning is 
supported by the language of section 510.265 itself, in which the legislature provided that 
the ratio of punitive damages should not be more than five times actual damages in cases 
with damages of more than $100,000, but if the amount of actual damages was less than 
$100,000, then it authorized an award of up to $500,000 regardless of the size of the 
 
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actual damage verdict.  § 510.265.  
While this statutory framework of course cannot permit a punitive damage award 
larger than due process would allow, it is an additional indication that, in the case of 
small awards, due process does not prevent large ratios if necessary, given particular 
facts, to impose punishment and deter future misconduct. 
Here, while the harm caused was economic rather than a threat to health or safety, 
the target was financially vulnerable, the misconduct was part of a plan or scheme 
through which at least 35 people have alleged they were injured, and the harm was the 
result of intentional malice, trickery or deceit.  Unlike in State Farm, Mr. Franklin did not 
appear or testify at the trial or otherwise express remorse, nor did he make his victims 
whole, but instead he continued to deny his fault through his counsel, who appeared for 
him at trial.  A jury would be within its discretion in determining that, in these 
circumstances, in which “a particularly egregious act has resulted in only a small amount 
of economic damages,” the usual single-digit ratio may not be an appropriate measure of 
the limits of due process.  Id. at 419. 
Other cases from Missouri and elsewhere have approved ratios of the size awarded 
here when the actual damage award was small and the conduct was egregious.  See, e.g., 
Smith v. New Plaza Pontiac Co., 677 S.W.2d 941 (Mo. App. 1984) ($400 in actual and 
$30,000 in punitive damages, a 75-to-1 ratio, for making misrepresentations about the 
condition of a used car); TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443 (1993) 
($19,000 in actual damages and $10 million in punitive damages, a 526-to-1 ratio, for 
slander of title); Kemp v. Am. Tel. & Tel. Co., 393 F.3d. 1354 (11th Cir. 2004) ($115 in 
 
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compensatory damages and $250,000 in punitive damages, a 2,172-to-1 ratio, for 
fraudulent billing practices);  Parrott v. Carr Chevrolet, Inc., 17 P.3d 473 (Or. 2001) 
($11,496 in compensatory damages and $1 million in punitive damages, an 86-to-1 ratio, 
for misrepresentations related to the sale of a vehicle).  
Here, as in these cases, this Court holds that, on these facts, the amount of punitive 
damages was reasonable and proportionate to the harm inflicted by Mr. Franklin and did 
not violate due process. 
III. 
 THE OVERBEYS’ APPEAL OF THE PUNITIVE DAMAGES CAP 
 
Section 510.265 states: 
1. No award of punitive damages against any defendant shall exceed the 
greater of:  
 
(1) Five hundred thousand dollars; or  
(2) Five times the net amount of the judgment awarded to the 
plaintiff against the defendant.  
 
Such limitations shall not apply if the state of Missouri is the plaintiff 
requesting the award of punitive damages, or the defendant pleads guilty to 
or is convicted of a felony arising out of the acts or omissions pled by the 
plaintiff.  
 
2. The provisions of this section shall not apply to civil actions brought 
under section 213.111 that allege a violation of section 213.040, 213.045, 
213.050, or 213.070, to the extent that the alleged violation of section 
213.070 relates to or involves a violation of section 213.040, 213.045, or 
213.050, or subdivision (3) of section 213.070 as it relates to housing.  
 
§ 510.265 (emphasis added). 
The Overbeys claim that the trial court’s application of the $500,000 punitive 
damages cap contained in section 510.265 violates the separation of powers doctrine, 
violates their right to jury trial, violates equal protection and due process principles, and 
 
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constitutes a special law prohibited by the Missouri Constitution.  As explained above, 
this Court reviews such constitutional challenges de novo. 
 
A. 
Right to Trial by Jury 
 
The Seventh Amendment to the United States Constitution provides that “the right 
of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise 
reexamined in any Court of the United States, than according to the rules of the common 
law.”  As this Court noted in State ex rel. Diehl v. O’Malley, 95 S.W.3d 82, 84 (Mo. banc 
2003), while the Seventh Amendment does not apply to the states, article I, section 22(a) 
of the Missouri Constitution provides an even more emphatic guarantee of the right to 
jury trial by providing that “the right of trial by jury as heretofore enjoyed shall remain 
inviolate.” Id. at 84-85.  The use of the phrase “heretofore enjoyed” clarifies that the right 
to jury trial protected by article I, section 22(a) “is that which existed at common law 
before the adoption of the first constitution” in 1820.  Id.   
The issue in Diehl was whether a plaintiff who sued under the Missouri Human 
Rights Act, sections 213.010 to 213.137 (MHRA), had a right to a jury trial when the 
MHRA was silent about that issue.  95 S.W.3d at 84-85.  While this Court reaffirmed that 
there is no right to jury trial for claims for injunctive or other equitable relief, it noted that 
Ms. Diehl sought damages, not injunctive relief.  Id. at 85-86.  Such a claim is one at law 
and is analogous to claims for damages under the common law at the time article I, 
section 22(a) of the Missouri Constitution was adopted.  Id. 
As such, Diehl noted that Ms. Diehl’s action for damages sounded in tort and that 
she was entitled to a jury trial regarding these claims because under article I, section 
 
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22(a), “[t]he right to trial by jury, where it applies, is a constitutional right, [that] applies 
‘regardless of any statutory provision’ and is ‘beyond the reach of hostile litigation.’” Id. 
at 92, quoting Lee v. Conran, 111 S.W. 1151, 1153 (Mo. 1908).  Had Ms. Diehl brought 
her claim in federal court, she similarly would have been entitled to a jury trial under the 
Seventh Amendment because her claim is analogous to claims for which jury trials were 
allowed at the time the Seventh Amendment was adopted.  Id. at 91.  
In Scott v. Blue Springs Ford Sales, Inc., 176 S.W.3d 140 (Mo. banc 2005), this 
Court made it clear that the right recognized in Diehl to have a jury determine damages is 
not limited to claims brought pursuant to the MHRA or only to actual damages.  Both 
punitive and actual damages could be recovered in 1820, so if a statute, such as the 
MMPA, permits the recovery of punitive damages, then the plaintiff is entitled to have 
the jury determine her entitlement to them.  Id. at 142.  
In other words, the legislature has the authority to choose what remedies will be 
permitted under a statutorily created cause of action such as the MMPA or the MHRA. 
For example, when the legislature first enacted the MHRA, it did not allow for the 
recovery of damages by private parties but instead permitted only injunctive relief by the 
attorney general.  State ex rel. Martin-Erb v. Missouri Comm’n on Human Rights, 77 
S.W.3d 600, 606-607 (Mo. banc 2002).  The legislature later amended the MHRA to 
permit recovery of damages by injured parties, thereby changing the substantive rights of 
plaintiffs under that statute.  Id.  Having provided that such damages were available, the 
legislature could not then take from a plaintiff the right to have them determined by a 
jury.  Scott said that the defendant’s argument to the contrary: 
 
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Confuses the judicial process by which claims are determined with the 
substance of the claims themselves.  Though, in general, the legislature is 
free to establish the substance of a claim, as, for instance, to allow or 
disallow punitive damages, it is not free to establish a procedure for 
adjudicating that substantive claim if the procedure contravenes the 
constitution.  In short, a statute is not valid that provides for punitive 
damages but precludes a jury trial to determine those damages.   
  
Scott, 176 S.W.3d at 142. 
Applying these principles here, the Overbeys chose to bring a statutory claim 
under the MMPA rather than a common law fraud claim.  The substance of their claim, 
therefore, must be determined by reference to the MMPA rather than by reference to the 
common law.  Scott teaches that the legislature could not take from the Overbeys their 
right to have the jury rather than a judge determine whether they had met their burden of 
proof as to actual or punitive damages once the legislature had provided that plaintiffs are 
permitted to recover such damages under the MMPA.  Id.  But the legislature did not 
permit unlimited recovery of such damages under the MMPA or under any statute.  It 
chose instead to enact section 510.265, which limits the substantive right of recovery of 
punitive damages to a maximum of $500,000 or five times actual damages, whichever is 
greater.  See § 510.265.   
The legislature, in so doing, at least in regard to a statutorily created cause of 
action such as the MMPA, did not “intervene in the judicial process” or “establish a 
procedure for adjudicating a substantive claim” in the manner prohibited by Scott but 
rather limited “the substance of the claims themselves,” Scott, 176 S.W.3d at 141-42, as it 
has a right to do in setting out the parameters of a statutory cause of action.  Indeed, it 
could have precluded recovery of punitive damages altogether.  For this reason, 
 
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application of the limits in section 510.265 to the Overbeys’ recovery of punitive 
damages under the MMPA does not violate their right to jury trial under article I, section 
22(a) of the Missouri Constitution.3 
This result is in accord with federal decisions addressing similar issues under the 
Seventh Amendment.  For instance, Madison v. IBP, Inc., 257 F.3d 780, 804 (8th Cir. 
2001), vacated on other grounds, 536 U.S. 919 (2002), upheld a cap on punitive damages 
for suits brought under Title VII of the Civil Rights Act of 1964.  In rejecting the 
plaintiff’s claim that the cap violated her right to trial by jury, the court stated: 
Congress created the Title VII cause of action and has the power to set 
limits for recovery under it.  The statute does not violate the Seventh 
Amendment because it does not impinge upon the jury’s fact finding 
function.  In applying a provision, a court does not ‘reexamine’ the jury’s 
verdict or impose its own factual determination as to what a proper award 
might be.  Rather, it implements the legislative policy decision by reducing 
the amount recoverable to that deemed to be a reasonable maximum by 
Congress. 
 
Id.  Hemmings v. Tidyman’s Inc., 285 F.3d 1174, 1200-04 (9th Cir. 2002), cited Madison 
                                             
 
3 Section 510.265 purports to limit the amount of punitive damages available in all causes 
of action, including those brought under the common law.  National argues this is within 
its power, analogizing to the United States Supreme Court’s holding in Cooper Indust., 
Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 437 (2001).  Cooper said that a court’s 
remittitur of punitive damages to comply with due process did not violate the Seventh  
Amendment right to jury trial because “[a] jury’s assessment of the extent of a plaintiff’s 
injury is essentially a factual determination, whereas, its imposition of punitive damages 
is an expression of its moral condemnation.”  Id.  Therefore, unlike compensatory 
damages, “which present a question of historical or predictive fact, the level of punitive 
damages is not really a ‘fact’ ‘tried’ by the jury.”  Id. at 437, quoting Gasperini v. Ctr. for 
Humanities, Inc. 518 U.S. 415, 459 (1996) (Scalia, J., dissenting).  Cooper dealt with the 
reduction of punitive damages by a court rather than a legislatively imposed reduction in 
the form of a statutory cap.  Whether its reasoning has any application to a legislative cap 
on punitive damages, and whether such a cap would be constitutional as applied to a 
common law cause of action, is not before this Court in this case. 
 
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with approval and succinctly restated its reasoning: “what Congress can create, Congress 
can define.  Title VII’s damages cap … does [not] offend the Seventh Amendment.”  
Hemmings, 285 F.3d at 1200-04.  This rationale applies here.4 
B. 
Separation of Powers 
 
The Overbeys argue that even if the imposition of a substantive limit on the 
amount of punitive damages that may be recovered under the MMPA does not violate 
their right to jury trial under article I, section 22(a), it does violate the separation of 
powers doctrine set out in article II, section 1 of the Missouri Constitution, which states:  
The powers of government shall be divided into three distinct 
departments—the legislative, executive and judicial—each of which shall 
be confided to a separate magistracy, and no person, or collection of 
persons, charged with the exercise of powers properly belonging to one of 
those departments, shall exercise any power properly belonging to either of 
the others, except in the instances in this constitution expressly directed or 
permitted.   
 
(emphasis added).   
This Court has recognized that the separation of powers doctrine is fundamental to 
our democratic system because it “prevent[s] the abuses that flow from [the] 
centralization [of] power.”  State Tax Comm’n v. Admin. Hearing Comm’n, 641 S.W.2d 
69, 73-74 (Mo. banc 1982).  For this reason, each branch of government “ought to be 
kept as separate from and independent from[] each other as the nature of free government 
                                             
 
4 While this Court agrees with the statement in the dissent that a plaintiff under the 
MMPA is entitled to have a jury determine the amount of damages, for the reasons noted 
above the jury can do so only up to the substantive limit of recovery set out in the statutes 
themselves in a statutory cause of action such as this, for that sets the limits of the right, 
not merely the limits of recovery as might be the case in a common law action.  That is 
 
17
will admit, or as is consistent with that chain of connection which binds the whole fabric 
of the Constitution in one indissoluble bond of union and amity.”  Mo. Coal. for the Env’t 
v. Joint Comm. on Admin. Rules, 948 S.W.2d 125, 132-33 (Mo. banc 1997), quoting 
Rhodes v. Bell, 130 S.W. 465, 468 (Mo. 1910) (citations omitted).   
The Overbeys claim that section 510.265 violates the separation of powers 
doctrine by restraining the judiciary’s power to grant remittitur of judgments.  Section 
510.265 does not affect a court’s ability to impose remittitur.   
Remittitur allows a court to 
reduce the damages awarded to the plaintiff if, “after reviewing the evidence in support 
of the jury’s verdict, the court finds that the jury’s verdict is excessive because the 
amount of the verdict exceeds fair and reasonable compensation for plaintiff’s injuries 
and damages.”  Gomez v. Constr. Design Inc., 126 S.W.3d 366, 375 (Mo. banc 2004), 
quoting § 537.068.  Here, the reduction is not based on a finding that the damages are 
excessive but rather on a legislatively created limitation on punitive damages.  “When 
[the legislature] creates a statutory right, it clearly has the discretion, in defining that 
right, to create presumptions, or assign burdens of proof, or prescribe remedies ….  Such 
provisions do, in a sense, affect the exercise of judicial power, but they are incidental to 
[the legislature’s] power to define the right that it has created.”  N. Pipeline Constr. Co. v. 
Marathon Pipe line Co., 458 U.S. 50, 83 (1982) (emphasis added).5  Section 510.265 
                                                                                                                                                 
 
why the federal courts, and this Court, hold that, in the case of a statutory cause of action, 
a cap on damages does not impact the right to jury trial. 
5 The Overbeys’ reliance on Best v. Taylor Machine Works, 689 N.E.2d 1057, 1080-81 
(Ill. 1997), to support their contrary argument is unavailing.  Best specifically dealt only 
with whether a legislative limitation on compensatory damages violated the separation of 
powers, as the purpose of compensatory damages is to make the plaintiff whole and it is a 
 
18
does not violate the separation of powers doctrine. 
C. 
Exclusions from Punitive Damages Cap Do Not Violate Equal Protection  
 
 
Section 510.265 provides that three types of claims are exempt from its cap on 
punitive damages: (1) claims brought by the State of Missouri; (2) claims in which the 
“defendant pleads guilty to or is convicted of a felony arising out of the acts or omissions 
pled by the plaintiff;” and (3) claims brought for housing discrimination under the 
MHRA.  § 510.265. 
The Overbeys claim that these three exemptions have no rational basis and that 
their presence violates the Overbeys’ right to equal protection under both the Fourteenth 
Amendment and article I, section 2 of the Missouri Constitution.  As the Overbeys 
recognize, these guarantees of equal protection do not mean that the legislature must 
make all laws equally applicable to all persons.  Rather, “equal protection of the laws 
must coexist with the practical necessity that most legislation classifies for one purpose 
or another, with resulting disadvantage to various groups or persons.”  Romer v. Evans, 
517 U.S. 620, 631 (1996).  As a result, the state may treat individuals and groups 
differently as long as the disparate treatment is adequately justified.  Doe v. Phillips, 194 
S.W.3d 833, 845 (Mo. banc 2006).   
When the law does not disadvantage a suspect class or affect a fundamental right, 
it “is properly analyzed under a rational basis test.”  Id.  Under rational basis review, this 
                                                                                                                                                 
 
judicial function to determine whether specific circumstances justify a particular award.  
It did not hold that such a limit could not be placed on punitive damages in statutory 
causes of action, the only issue reached by this Court here.  Cf. Lebron v. Gottlieb Mem’l 
 
19
Court will uphold a statute if it finds a “reasonably conceivable state of facts that ... 
provide a rational basis for the classification[s].”  Kansas City Premier Apartments, Inc. 
v. Mo. Real Estate Comm’n, 344 S.W.3d 160, 170 (Mo. banc 2011), quoting FCC v. 
Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993).  Rational basis review is “highly 
deferential,” and courts do not question “the wisdom, social desirability or economic 
policy underlying a statute.”  Comm. for Ed. Equal. v. State, 294 S.W.3d 477, 491 (Mo. 
banc 2009).  “Instead, all that is required is that this Court find a plausible reason for the 
classification[s] in question.”  Kansas City Premier Apartments, 344 S.W.3d at 170. 6     
 
A rational basis exists for each of the exceptions enacted by the legislature. 
 
 
1. 
State plaintiff   
The reason the State should not be subject to the cap is self-evident.  It sues under 
the MMPA not for individual damages to itself but in its parens patrie role on behalf of 
its citizens.  The legislature rationally could conclude that, because the State represents 
the interests of all citizens in seeking relief, an exemption from the punitive damages cap 
would help ensure that the State could obtain an award of sufficient size to punish and 
deter defendants for their conduct as to the many Missouri citizens the attorney general 
                                                                                                                                                 
 
Hosp., 930 N.E.2d 895, 912 (Ill. 2010), quoting Smith v. Hill, 147 N.E.2d 321, 327 (Ill. 
1958) (permitting a limit on punitive damages in circumstances not at issue here). 
6 This Court rejects the Overbeys’ alternative argument that the law should be subject to 
strict scrutiny even though they are not in a protected class on the ground that their right 
to trial by jury is a fundamental one and, therefore, that any burden on it must be subject 
to strict scrutiny.  For the reasons already noted, this Court finds that the punitive damage 
limitation does not violate their right to jury trial, so this argument is inapplicable.  See 
also Fust v. Attorney Gen. for the State of Missouri, 947 S.W.2d 431, 431 (Mo. banc 
1997) (holding that requiring 50 percent of a punitive damage judgment to go to state 
“does not employ suspect classifications or impinge on fundamental rights …”). 
 
20
filed suit to protect.  By contrast, the Overbeys are sue only on their own behalf and are 
not entitled to recover punitive damages based on alleged wrongs done to others.  See 
State Farm, 538 U.S. at 419-23; Phillip Morris USA v. Williams, 549 U.S. 346, 356-57 
(2007).7  Accordingly, the legislature had a rational basis for this exception. 
2. 
Defendant convicted of a felony   
Section 510.265 also exempts from the punitive damages cap cases in which the 
defendant “pleads guilty to or is convicted of a felony arising out of the acts or omissions 
pled by the plaintiff.”  § 510.265.  Plaintiffs of course recognize that those whose conduct 
was sufficiently egregious to constitute a felony are especially culpable and that a higher 
punitive damage award may be justified.  Their argument is that this exemption is too 
narrow, as there may be others who could have been convicted of a felony but simply 
were not prosecuted.  Plaintiffs believe that Mr. Franklin’s conduct could fall into that 
category and that there is no rational basis to differentiate among such defendants. 
The legislature rationally could conclude that the state has limited resources and 
                                             
 
7 The Overbeys claim that, in bringing suit against Mr. Franklin pursuant to the MMPA, 
they were advancing the State’s interest in protecting consumers, therefore were acting as 
“private attorney generals” and consequently should be allowed unlimited punitive 
damages under the “state of Missouri” exception to the punitive damages cap in section 
510.265.  The plain language of section 510.265, however, clearly limits the exception to 
cases in which “the state of Missouri is the plaintiff,” and this Court will “look beyond 
the plain meaning of the statute only when the language is ambiguous or would lead to an 
absurd or illogical result.” Akins v. Dir. of Revenue, 303 S.W.3d 563, 565 (Mo. banc 
2010).   
This Court also rejects the Overbeys’ contention that it would further the MMPA’s 
purpose of protecting consumers to allow the Overbeys to stand in the shoes of the State 
here.  They are suing solely for their own injury and damages, not to vindicate the rights 
of others.  Indeed, the State itself has brought a civil suit for injunctive relief against 
National and Mr. Franklin on behalf of other injured parties.  
 
21
that prosecutors, therefore, will choose to bring felony charges in the most serious cases.  
While there may be some additional cases in which such charges could have been 
brought, relying on the choice of public authorities to bring charges and the finding of a 
jury beyond a reasonable doubt or the admission of a defendant in pleading guilty that the 
defendant, in fact, has committed the alleged egregious conduct is a rational basis on 
which the legislature could have chosen to categorize degrees of reprehensibility.  The 
choice of the prosecutor to bring an action does not bar a plaintiff from coming into court 
but merely determines which cases are so reprehensible that they may justify an award 
greater than that the legislators otherwise believe to be the limit available to comport with 
due process.  The reprehensibility of the defendant’s conduct is a key factor in 
determining the amount of punitive damages to which a plaintiff is entitled.  See State 
Farm, 538 U.S. at 419.  The legislature rationally could conclude that civil suits based on 
felonious criminal conduct warrant an exemption from the punitive cap because of the 
exceptional reprehensibility of the defendant’s conduct. 
3. 
Violations of MHRA bar on discrimination in housing against 
protected classes 
   
The final exception to the damages cap is for civil actions alleging violations of 
the MHRA provisions barring discrimination in selling, leasing, renting or lending based 
on “race, color, religion, national origin, sex, ancestry, age, … disability, or familial 
status” as it relates to fair housing.  Our country has a long and unfortunate history of 
discrimination in housing.  The legislature rationally could conclude that extra steps are 
necessary to eradicate such discrimination and to deter future misconduct when the 
 
22
victims fall into the traditionally suspect or vulnerable classes protected by the MHRA.  
State Farm and other cases recognize that additional punitive damages may comport with 
due process when conduct is directed at those who are particularly vulnerable and may 
have difficulty protecting themselves and whose individual damages may be small.  538 
U.S. at 419-22.  The legislature had a rational basis for exempting housing discrimination 
claims brought under the MMPA.8  
D. Prohibition on Special Laws  
The Overbeys also claim that the existence of these three exemptions violates the 
prohibition against special laws contained in article III, section 40 of the Missouri 
Constitution, which states in relevant part: “[t]he general assembly shall not pass any 
local or special law … where a general law can be made applicable, and whether a 
general law could have been made applicable is a judicial question to be judicially 
determined without regard to any legislative assertion on that subject.”  Mo. Const. art. 
III § 40.   
“A law [that] includes less than all who are similarly situated is special, but a law 
is not special if it applies to all of a given class alike and the classification is made on a 
reasonable basis.”  Ross v. Kansas City Gen. Hosp. and Med. Ctr., 608 S.W.2d 397, 400 
                                             
 
8 The Overbeys assert that other types of claims may involve gross misconduct that 
causes relatively small actual damages and that, therefore, there is no rational reason to 
exempt housing discrimination from the punitive damages cap but not other similar 
claims.  The Overbeys argument fails because the United States Supreme Court long has 
held that “it is no requirement of equal protection that all evils of the same genus be 
[addressed] or none at all.”  Railway Exp. Agency, Inc. v. New York, 336 U.S. 106, 110 
(1949).  The simple fact that other types of claims also may involve particularly bad 
 
23
(Mo. banc 1980).   The applicable test for whether a statute is a special law because there 
is no reasonable basis for its classifications in this context is similar to the rational basis 
test used in equal protection analyses.  Jefferson Cnty. Fire Protection Dists. Ass’n v. 
Blunt, 205 S.W.3d 866, 868 (Mo. banc 2006).  “The burden is on the party challenging 
the constitutionality of the statute to show that the statutory classification is arbitrary and 
without a rational relationship to a legislative purpose.”  Id.  For the reasons stated earlier 
in rejecting the argument that these exemptions violate equal protection, this Court finds 
that they do not violate the special law prohibition. 
E. 
Due Process Property Rights  
Finally, the Overbeys claim that section 510.265 violates their due process rights 
by arbitrarily taking what they believe is their property right to the full $1 million in 
punitive damages the jury awarded them.  The Overbeys’ argument is based on the 
flawed premise that they had a property right in the full $1 million in punitive damages.  
As noted earlier, here the cause of action was statutory.  The Overbeys’ substantive right 
to recover under that statute was limited by section 510.275, both when they bought their 
SUV and at trial.  They never had a right to recover more than the amount set out in the 
statute, so they had no property right that was limited or denied.9 
                                                                                                                                                 
 
conduct and minimal actual damages does not render the legislature’s creation of an 
exception for housing discrimination irrational. 
9 The Overbeys also allege that the punitive damages cap violates the open courts 
provision contained in article I, section 14 of the Missouri Constitution, which states “the 
courts of justice shall be open to every person, and certain remedy afforded for every 
injury to person, property or character, and that right and justice shall be administered 
without sale, denial or delay.”  As stated above, a party must raise an issue in the trial 
court to preserve it for appeal.  See note 2; Vance Bros., Inc. v. Obermiller Const. Servs. 
 
24
 
25
                                                                                                                                                 
IV. 
CONCLUSION 
 
For the reasons stated above the judgment is affirmed. 
 
 
 
 
 
 
 
 
_________________________________  
 
 
 
 
 
 
 
     LAURA DENVIR STITH, JUDGE 
 
Russell, Breckenridge, Fischer and Price, JJ., concur;  
Teitelman, C.J., dissents in separate opinion filed;  
Draper, J., concurs in opinion of Teitelman, C.J. 
 
Inc., 181 S.W.3d 562, 564 (Mo. banc 2006).  The Overbeys failed to raise this issue in the 
trial court, the issue was not preserved for appeal and this Court does not find that justice 
requires it to grant plain error review.   
 
SUPREME COURT OF MISSOURI 
en banc 
 
ESTATE OF MAX E. OVERBEY,   
 
) 
DECEASED, and GLENNA J.  
 
 
) 
OVERBEY,  
 
 
 
 
) 
 
 
 
 
 
 
 
) 
 
Appellants/Cross-Respondents, 
 
) 
 
 
 
 
 
 
 
) 
vs. 
 
 
 
 
 
 
) 
No. SC91369 
 
 
 
 
 
 
 
) 
CHAD FRANKLIN NATIONAL  
 
 
) 
AUTO SALES NORTH, LLC, 
 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent,  
 
 
 
) 
 
 
 
 
 
 
 
) 
and 
 
 
 
 
 
 
) 
 
 
 
 
 
 
 
) 
CHAD FRANKLIN,  
 
 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent/Cross-Appellant.  
 
)  
 
Dissenting Opinion  
The principal opinion recognizes that the state constitutional right to a trial by jury 
applies to the Overbeys’ claim for punitive damages under the Missouri Merchandising 
Practices Act.  However, the principal opinion then holds the statutory cap on punitive 
damages does not violate the Overbeys’ right to a jury trial because the legislature could 
have precluded recovery of punitive damages altogether.  The “inviolate” state 
constitutional right to a trial by jury is not contingent on hypothetical legislative 
prerogative.  Instead, the constitutional right to a trial by jury attaches to claims that 
actually are prosecuted under existing law.  Having given the Overbeys the option to 
exercise their constitutional right to a jury trial, the legislature cannot limit that right 
statutorily.  Therefore, I respectfully dissent from the principal opinion to the extent it 
holds that statutory limits on a jury’s award of punitive damages do not violate the 
“inviolate” state constitutional right to a trial by jury.   
Article I, section 22(a) is one of the fundamental guarantees of the Missouri 
Constitution, providing “the right of trial by jury as heretofore enjoyed shall remain 
inviolate ….”  The word “inviolate” has a simple definition.  It means “free from change 
or blemish, pure or unbroken.”  WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 
1190 (1993).  This simple definition frames the issue.  Does the right to a trial by jury 
“remain inviolate” when a statutory limit requires courts to reduce the jury’s verdict?   
The special constitutional significance of the jury’s role in determining damages is 
reflected in the analytical basis for determining whether the right to trial by jury attaches.  
If the action is a civil action for damages, then the right to a jury trial attaches and must 
“remain inviolate.”  State ex rel. Diehl v. O’Malley, 95 S.W.3d. 82, 84 (Mo. banc 2003).  
Because the constitutional right to a civil jury trial is contingent on there being an action 
for damages, statutory limits on those damages directly curtails one of the most 
significant constitutional roles performed by the jury.   Under these circumstances, the 
right to trial by jury does not “remain inviolate.”  It plainly and clearly is violated. 
As the principal opinion acknowledges, this Court held that plaintiffs have a 
constitutional right to have a jury determine both punitive and actual damages in a 
statutory cause of action such as the Missouri Human Rights Act or the MMPA.  See 
Scott v. Blue Springs Ford Sales, Inc., 176 S.W.3d 140, 142 (Mo. banc 2005).  Whether 
 
2
an action is based on the common law or a statutory cause of action, the jury’s role in a 
civil case is to determine the facts relating to both liability and damages and to enter a 
verdict accordingly.  These functions are what must “remain inviolate” under article I, 
section 22(a).  Once the right to a trial by jury attaches, as it does in this case, the plaintiff 
has the full benefit of that right free from the reach of hostile legislation.  While it is true 
that the legislature could decline to provide for punitive damages under the MMPA, the 
legislature instead chose to allow punitive damages.  Having provided the right to pursue 
punitive damages, the legislature also invoked the attendant constitutional guarantee of a 
trial by jury.  That right cannot be curtailed by statute.   
The analytical framework established by the principal opinion leaves the 
legislature free to limit punitive damages at $1 in even the most egregious cases.  
Although the plaintiff still would receive the benefit of the jury’s factual findings 
regarding actual damages and the reprehensibility of the defendant’s conduct, the benefit 
would be hollow from both a practical and constitutional perspective.   
Practically, the purpose of punitive damages is to punish civil wrongdoing and to 
serve as a deterrent to others who may be tempted to engage in similar conduct.  
Arbitrarily limiting punitive damages without reference to the facts found by the jury or 
the limits of due process is inconsistent with the intended purpose of punitive damages. 
Constitutionally, the “inviolate” right to trial by jury preserves the role of citizens 
in resolving disputes and provides the people with a voice in the application of the law to 
problems of the day.  By setting substantive limits on recovery regardless of the evidence, 
statutes such as section 510.265, RSMo, unavoidably limit the constitutional role of the 
 
3
 
4
jury.  As with any other fundamental constitutional right guaranteed in the bill of rights, 
the right to trial by jury applies “regardless of any statutory provision” and is “beyond the 
reach of hostile legislation.”  Diehl, 95 S.W.3d. at 92 (citations omitted).  If legislative 
limits on this constitutional right are permitted in statutory causes of action, the right to 
trial by jury is defined not by the text and history of our constitution but instead by the 
whim of legislative prerogative.   
Similarly, the scope of the state constitutional guarantee of a right to trial by jury 
is not informed by the federal courts’ interpretation of the Seventh Amendment.  The 
Seventh Amendment provides that “the right of trial by jury shall be preserved.”  Article 
I, section 22(a) does more than simply “preserve” the right to a trial by jury; it requires 
that the right “remain inviolate.”  The phrase “remain inviolate” is a “more emphatic 
statement of the right” than that provided by the Seventh Amendment.  Diehl, 95 S.W.3d 
at 84.   The textual differences require a different analysis.  The fact that the federal 
constitution authorizes limits on the jury’s constitutional role in awarding damages has 
limited relevance to the interpretation of Missouri’s “more emphatic statement” of the 
right to trial by jury.   
Section 510.265 directly limits the jury’s constitutional role in determining and 
awarding damages.   Consequently, I would hold that the limits on punitive damages 
imposed by section 510.265 violate article I, section 22(a) of the Missouri Constitution.  
 
 
 
 
 
 
 
_________________________________  
 
 
 
 
 
 
Richard B. Teitelman, Chief Justice