Source: http://missouri-k.com/?cat=8&paged=2
Timestamp: 2019-04-18 14:59:23+00:00

Document:
Category Archives: Copyright (c) 2013 Royce Barondes.
Here we have another not-very-thoughtful analysis of multiple documents executed at the same time. Midland Property Partners, LLC v. Watkins, 2013 WL 5904617 (Mo.App. W.D. 2013).
For reasons the opinion does not clarify, a maker of notes also issued a separate guaranty. The guaranty contains a waiver of a right to a jury trial. The notes do not.
This kind of express incorporation as a result of having provided multiple writings is a common mistake made by courts. The parties have expressly chosen to provide separate documents. If they wanted each to be read into the other, why would there not be a single instrument? Or, then, why would the notes not expressly incorporate the guaranties?
We agree with the trial court that the deed of trust/note and the lease are separate documents and each must be interpreted and enforced according to its own terms. The provisions of one are not to be impliedly incorporated into the other. However, these documents, along with others, constituted one complicated interdependent transaction. The documents contain references to each other, and obviously are closely related. The intent of the parties and the meaning of those documents must be determined from the entire transaction and not simply from isolated portions of a particular document.
Norcomo Corp. v. Franchi Construction Co., 587 S.W.2d 311, 317 (Mo. App. 1979) (emphasis added).
This author has previously examined these issues at some length. See Royce de R. Barondes, Side Letters, Incorporation by Reference and Construction of Contractual Relationships Memorialized in Multiple Writings, 64 Baylor Law Review 651-720 (2012). Link to SSRN version.
This entry was posted in Copyright (c) 2013 Royce Barondes. and tagged guaranty, incorporation by reference, multiple writings, waiver of jury trial on November 11, 2013 by Royce Barondes.
Has Someone Been Severed from an Understanding of Contracts?
Section 14.11, “Severability of Provisions,” of SpearTip’s Operating Agreement, Exhibit 1, provides that: “Each provision of this Agreement is severable… .” SLF039. Appellant’s contention that Wren forfeited his right to redeem his equity interest pursuant to Operating Agreement Section 11.6 because he breached the provisions of Section 12.1 is without merit in light of the express provision that all provisions of the operating agreement are severable or divisible.
“Severable or divisible contracts are, in legal effect, independent agreements about different subjects though made at the same time.” Grease Monkey Intern, Inc. v. Godat, 916 S.W.2d 257,261 (Mo. App. E. Dist. 1995); Sanfillipo v. Oehler, 869 S.W.2d 159, 161 (Mo. App. E.D. 1994). The question of divisibility is primarily a question of the intent of the parties determined by the language used and the subject matter of the agreements. Grease Monkey Intern, 916 S.W.2d at 261. SpearTip’s operating agreement is a severable contract that embraces separate distinct promises that admit to separate execution, Id, and the alleged breach of the non-compete clause has no effect on the enforceability of the redemption clause.
Brief of Respondent/Cross-Appellant David Wren, STT Holdings, LLC v. Wren, No. ED99763 (Mo. Ct. App., E.D. 12-13.
Why is this analysis of concern? It is certainly possible that an employment agreement, including an associated non-compete, could end up being an entirely separate agreement from the arrangements governing ownership of an entity. Rudman v. Cowles Communications, 280 N.E.2d 867 (N.Y. 1972) is a somewhat analogous case, where an employer’s breach of an employment agreement with an executive of an acquired firm is treated as a separate agreement from the acquisition agreement itself. So, there may be a severable pair of undertakings, but, if so, the brief’s author will have stumbled into the correct conclusion.
“Severable” can be used in multiple ways. For one of the contracts folks, It can be used to direct a court that, if the court finds some provision in a contract unenforceable, that provision can be severed. One might also use that language in connection with describing the consequences of a determination that a contract involves multiple pairs of performance where “the parts of each pair are properly regarded as agreed equivalents”. Restatement 2d § 240. So, for example, Allstate Indem. Co. v. Rice, 2013 WL 1314195 (W.D. Mo. 2013) (annotating prior authority as “discussing the general rule when a policy may be divisible and severable where it covers several different kinds of risks or property at different locations).
What, do we suppose, is the intent of the contractual language quoted, albeit only in part? It is implausible that an operating agreement is drafted so as to make each duty severable in the sense of giving rise to a divisible obligation. It simply does not make sense. To be severable in the form of divisible requires pairs of performance that are viewed as equivalents. It cannot be the case that each promise in an operating agreement has some other paired equivalent.
This entry was posted in Copyright (c) 2013 Royce Barondes., Pending and tagged buy-back, contract, divisible, LLC, operating agreement, repurchase, severable on November 8, 2013 by Royce Barondes.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 240
 v.