Court Opinion

ID: 9611135
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:52:43.927197+00
Date Added: 2024-06-11T14:56:08.682465
License: Public Domain

STEPHEN N. LIMBAUGH, JR., Judge.
I respectfully dissent. The contracts entered into between the Director of the Missouri Department of Health and the Planned Parenthood defendants were illegal and void. Therefore, the state is entitled to the return of the funds expended. It is no defense that the contracts were fully performed, because suit was filed before any funds were expended and any services were performed so that defendants were put on notice that the contracts were suspect from the start.
The family planning appropriations for the four years in question were conditioned on the following requirements:
To ensure that the state does not lend its imprimatur to abortion services, and to ensure that an organization that provides abortion services does not receive a direct or indirect economic or marketing benefit from these funds, an organization that receives these funds and its independent affiliate that provides abortion services may not share any of the following:
(a) The same or similar name;
(b) Medical or non-medical facilities, including but not limited to business offices, treatment, consultation, examination and waiting rooms;
(c) Expenses;
(d) Employee wages or salaries; or
(e) Equipment or supplies, including but not limited to computers, telephone systems, telecommunications equipment and office supplies.
1999 Mo. Laws 127-30 (sec. 10.705); 2002 Mo. Laws 168-72 (sec. 10.710).
The trial court correctly held that the contracts entered into violated this statute because the Planned Parenthood defendants shared similar names, facilities, expenses, employee wages and salaries, and equipment and supplies with their affiliated abortion providers. The names are certainly similar: The abortion provider for Planned Parenthood of Kansas and Mid-Missouri (PPKMM) is Comprehensive Health of Planned Parenthood of Kansas and Mid-Missouri, and the abortion provider for Planned Parenthood of the St. Louis Region (PPSLR) is Reproductive Health Services of Planned Parenthood of the St. Louis Region. Regarding the other categories, both defendants concede that they have a business relationship with their respective abortion providers that includes, among other things, operating in the same buildings, having a single management team, and having the same phone number. The trial court found as to PPSLR, in particular, that “Staff and patrons of PPSLR and Reproductive Health both use the same entrance, lobby, waiting area, security area, lunch room, restroom, locker room and conference room [and that] PPSLR’s own lease agreement with its affiliated abortion provider describes these areas as ‘shared spaces.’ ” Additionally, the trial court found that both defendants share expenses with their abortion providers for utilities services and certain employee wages and salaries, and that they share equipment and supplies as well. The trial court noted, for example, that “PPKMM shares a computer server with Comprehensive Health and PPSLR shares *538a telephone system with Reproductive Health.” The trial court also determined that the situation at PPSLR was especially egregious in that “employees of PPSLR perform the actual abortion services claimed to be provided by Reproductive Health.... In fact, women seeking and obtaining abortions from Reproductive Health deal exclusively with PPSLR employees through every step of the process, since Reproductive Health has no employees.” Given these facts, the trial court rightly concluded that the Planned Parenthood defendants were ineligible to receive state funds and that the contracts entered into were unlawful.
The defense to this conclusion is that the relationships and arrangements with the abortion providers were proper under the Director’s interpretation of the appropriations statutes, an interpretation that the Director included in the invitation for bids and in the contracts themselves. The Director’s interpretation, however, does not comport with the appropriation statutes. First, the Director took it on herself to specifically define the term “same or similar name” by reference to section 351.110(3), RSMo Supp.2005, the statute that regulates the names that can be given to new Missouri corporations. That statute provides that “The corporate name ... shall be distinguishable from the name of any domestic corporation existing under any law of this state ... [and][i]f the name is the same, a word shall be added to make such name distinguishable from the name of such other corporation .... ” Although this statute prohibits corporations from having the same names, it does not, unlike the appropriations statute, prohibit corporations from having similar names. Thus, under the Director’s interpretation, a proposed name of a new corporation is acceptable if merely one word is added to a name belonging to an existing corporation. In this way, the Director effectively eliminated the word “similar” from the appropriations statute. That erroneous interpretation in turn allowed the Director to conclude that the Planned Parenthood defendants were eligible to enter into the contracts even though their names were similar to their respective abortion providers.
Second, the Director unilaterally redefined the statutory term, “share,” as: “services, employees, or equipment that are provided or paid for by the family planning contractor on behalf of the independent affiliate that provides abortion services without payment or financial reimbursement from the independent affiliate who provides abortion services.” Under this definition, there would be no impermissible “sharing” if (as was the case) the Planned Parenthood defendants were reimbursed by their affiliated abortion providers for their “share” of the services, employees, or equipment. But this definition, like the Director’s definition of the words “same or similar,” does not reflect the plain and ordinary meaning of the words used. To “share” is “to partake of, use, experience, or enjoy with others.” WebsteR’s ThiRD New INTERNATIONAL DICTIONARY 2087 (1986). The word has nothing to do with a requirement for payment or financial reimbursement. And when used in its plain meaning, to “share” includes all of the various activities that the trial court found were shared in fact.
In short, the Director had no authority to enter into the contracts with the Planned Parenthood defendants because the defendants were too intertwined with their abortion providers, and consequently, they were not eligible for funding under the appropriations statute. Indeed, the statute prohibited, the Director from entering in such contracts. The majority writes, “A contract is void where the public official did not have constitutional or statu*539tory authority to enter into the contract,” citing Aetna Ins. Co. v. O’Malley, 343 Mo. 1232, 124 S.W.2d 1164 (1939); County of St. Francois v. Brookshire, 302 S.W.2d 1 (Mo.1957). And, according to Williston, “[A]n act declared to be void by statute which is malum in se or against public policy is utterly void and incapable of ratification.” 15 Williston on Contracts sec. 1762 (3d ed.1972). Thus, the contracts here were void.
As again the majority duly notes, restitution is the remedy for government payments under a void contract, even where the void contract was fully executed. County of St. Francois, 302 S.W.2d at 3. In his seminal work, The Law of Restitution, Professor Palmer states the simple rationale: “Restitution serves to effectuate the objectives of the prohibition.” 2 George E. Palmer, The Law of Restitution 225 (1978). Furthermore, a defendant’s ignorance that a government transaction is unlawful is no defense. To borrow once more from the majority opinion, “All persons dealing with [government] officers are charged with knowledge of the extent of their authority and are bound, at their peril, to ascertain whether the contemplated contract is within the power conferred.” Aetna, 124 S.W.2d at 1166. Moreover, “a state is not bound by contracts made in its behalf by its officers or agents without previous authority conferred by statute or the constitution, unless such authorized contracts have been afterward ratified by the legislature.” Id. Nor does a government officer’s own misinterpretation of the law afford defendants any relief, through estoppel or otherwise. State v. Leggett, 359 S.W.2d 790, 799 (Mo.1962); County of St. Francois, 302 S.W.2d at 3.
The majority comes to the conclusion that the contracts were not void, and avoids the consequence that restitution is the remedy, by claiming that plaintiff “has not challenged the Director’s legal authority to contract with third parties for the provision of family planning services ... [and that] the appropriations statutes specifically provided such authorization .... ” But this critically mischaracterizes the issue presented. Plaintiffs challenge is not to the Director’s legal authority to contract with third parties for the provision of family planning services, the challenge is to the Director’s legal authority to contract with third parties for the provision of family planning services that are in any way tied to abortion services.
This mischaracterization of the plaintiffs claim pervades the balance of the majority’s analysis, which, in sum, is that “the contracts were fully performed ... the family planning services were provided ... [and the state] cannot accept the benefits of the contracts and retain those benefits while also recovering the consideration paid.” The state, however, received no benefit from the performance of these contracts, at least no legal benefit. The contracts performed did not provide family planning services, they provided family planning services tied to abortion services. In other words, to the extent the state received a “benefit,” it was the benefit of family planning services tied to abortion services, which was a benefit that was neither requested nor authorized, and in fact the state’s payment for that benefit was prohibited by law. As such, there was no benefit at all.
In each of the cases relied on by the majority, this Court made clear that the government body had accepted the benefits of lawful services as opposed to services that were prohibited by statute or the constitution. In Bride v. City of Slater, 263 S.W.2d 22, 27 (Mo.1953), this Court observed that “the contract, though void, pertained to a subject matter concerning which the City had the power to *540contract ... in Polk Tp., Sullivan County v. Spencer, 364 Mo. 97, 259 S.W.2d 804, 807 (1953), this Court observed that “The thing contracted for, Spencer’s work and labor, was not itself illegal ...”; and in Sparks v. Jasper County, 213 Mo. 218, 112 S.W. 265, 271 (1908), this Court stated, “Jasper county was not prohibited by statute from building bridges; but, upon the other hand, the statute expressly grants to the county that power.”
A more pertinent case is County of St. Francois, in which the county filed suit seeking to recover $600 from the defendant attorney on the theory that state law was violated by using county funds to pay the defendant for legal services rendered. This Court, after concluding that the payment did violate state law, held that the county was entitled to restitution even though, obviously, the legal services could not be returned. Id. at 3. Moreover, this Court ordered restitution after making it clear that defendant “was paid under the honest though mistaken belief by all concerned that the county court was authorized” to make the payment. Id. at 5. The Court then explained that “the authorities are uniform in holding that recovery may be had if the purported contract was completely beyond the power of the public body to make and where the contract was absolutely void ....” Id.
Finally, in balancing the equities as is required in all cases involving equitable remedies, the Planned Parenthood defendants must be charged with knowledge that the contracts at issue were of questionable legality and that they performed the contracts at their peril. In June of 1999, before any services were rendered and before any money was paid, a lawsuit was filed against the state and both defendants to prevent the implementation of the contracts. See State v. Planned Parenthood of Kansas and Mid-Missouri and Planned Parenthood of the St. Louis Region, 37 S.W.3d 222, 224 (Mo. banc 2001). The suit was brought by a special assistant attorney general, and the grounds raised were the same as those today. Ever since that time, the litigation challenging the contracts has been constant. Although the first suit was not decided until late in the first year, the trial court entered injunctions prohibiting the performance of the contracts for the second and third years. And although the majority makes much of the fact that on appeal, the judgments in the first cases were vacated, the grounds for vacating the judgments were wholly procedural, and the appellate courts never addressed the merits of the cases. Planned Parenthood of Kansas and Mid-Missouri, 37 S.W.3d at 222; State ex rel. Planned Parenthood of Kansas and Mid-Missouri v. Kinder, 79 S.W.3d 905 (Mo. banc 2002). In any event, the Supreme Court sums up the applicable rule as follows:
The conclusion to be drawn from all the cases is that after a defendant has been notified of the pendency of a suit seeking an injunction against him, even though a temporary injunction be not granted, he acts at his peril and subject to the power of the court to restore the status, wholly irrespective of the merits as they may be ultimately decided.
Jones v. S.E.C., 298 U.S. 1, 17-18, 56 S.Ct. 654, 80 L.Ed. 1015 (1936). Such is the case here.
Indeed, the Planned Parenthood defendants conceded the point early on. In their written opposition to the temporary restraining order sought in the first case filed, the Planned Parenthood defendants expressly acknowledged they would have to repay the money if the courts determined that the contracts were unlawful. To quote from their memorandum to the court:
*541There is nothing more basic in law than the proposition that there is neither irreparable injury nor lack of an adequate remedy at law when the only harm would be the payment of money, which clearly can be recovered if, in fact, the plaintiff succeeds on the merits of its claims .... [I]f plaintiff were to prevail, it would have a legal remedy that would allow it to recover any funds that, ar-guendo, were paid wrongfully.
Although the Planned Parenthood defendants mischaracterized their repayment of the money as a “remedy at law” for which damages are awarded, as opposed to the equitable remedy of restitution, they knew that, one way or another, they would have to repay the money.
For the foregoing reasons, I would affirm the judgment of the trial court.