Court Opinion

ID: 2745967
Source: CourtListenerOpinion
Date Created: 2014-10-28 14:05:33.432682+00
Date Added: 2024-06-11T10:13:22.750110
License: Public Domain

In the Missouri Court of Appeals
                      Eastern District
                                              DIVISION FOUR

BETTY MINOR,                                             )        No. ED101131
                                                         )
        Plaintiff,                                       )
                                                         )
JOSEPH McCARY and                                        )        Appeal from the Circuit Court
JOHN MICHEAL McCARY,                                     )        of St. Charles County
                                                         )        0911-CV11957
        Appellants,                                      )
                                                         )
        vs.                                              )        Honorable Nancy L. Schneider
                                                         )
DAVID W. TERRY, KATHLEEN                                 )
SCHILLER, JACQUELYN                                      )
HIGHFILL, and                                            )
FELLOWS, BLAKE & TERRY, L.L.C.,                          )
                                                         )
        Respondents.                                     )        Filed: October 28, 2014

        Joseph (“Joe”) McCary and John Micheal (“Mike”) McCary (collectively “Appellants”)

appeal the grant of summary judgment in favor of David W. Terry and Fellows, Blake & Terry,

L.L.C. (collectively “Terry”1) and the grant of summary judgment in favor of Kathleen Schiller

and Jacquelyn Highfill on Appellants‟ cross-claims. We affirm the grant of summary judgment

to Terry for Appellant‟s breach of fiduciary duty and legal malpractice claims, affirm the grant of

summary judgment to Schiller and Highfill for Appellants‟ negligence and conspiracy to defraud

1
 Terry was named as a defendant in this case in his individual capacity. His law firm, Fellows, Blake & Terry,
L.L.C. was also named as a defendant, but only through Terry‟s actions as its agent. As such, all references to
“Terry” collectively refer to Terry individually and his law firm Fellows, Blake & Terry, L.L.C.
claims, but reverse and remand the grant of summary judgment in favor of Schiller and Highfill

for Appellants‟ fraud claim.2

                                          I.       BACKGROUND

        This case has a complex factual and procedural history. Matilda McCary died in 2003

while in the care of a nursing home. Two of McCary‟s children, Schiller and Highfill, retained

Terry to pursue a wrongful death lawsuit against the nursing home. Schiller and Highfill are

Appellants‟ sisters and Matilda McCary was their mother. Appellants did not retain Terry and

never had a fee agreement with him.

        Terry filed a wrongful death lawsuit on behalf of Schiller and Highfill, styled Kathy

Schiller & Jacquelyn Highfill v. National Health Care Corp., et al, Case No. 0511-CV04821.

Appellants were not named parties in the suit and never sought legal advice from Terry regarding

the suit. The parties settled the wrongful death lawsuit. In August 2007, Terry sent Appellants

letters via certified mail notifying them of the settlement hearing:

        I represent your sisters, Kathy Schiller and Jackie Highfill in a wrongful death
        claim against several defendants . . . Pursuant to the Revised Statutes of Missouri
        §537.095, a plaintiff in such action must notify all those in the class of people
        eligible to participate in the lawsuit before the matter is finalized. Since you are a
        member of the class, you are eligible to be notified that this matter has been
        concluded. In Missouri, wrongful death cases must be approved by a judge
        during a settlement hearing. Members of the wrongful death class are entitled to
        be provided notice of when and where the settlement hearing will take place.

        If you wish to attend the settlement hearing and make a claim, you must do so
        prior to the time this hearing is finally concluded. We currently have set a hearing
        to conclude the matter for Monday, September 17, 2007 beginning at 9:00 a.m.
        If you plan on attending the hearing, you must report to Division 1 of the St.
        Charles County Circuit Court, 300 North Second Street, St. Charles,
        Missouri 63303 at that time. (Emphasis in original).

2
  Two motions were submitted with this case. Schiller and Highfill filed a motion for attorneys‟ fees and Appellants
filed a motion to strike Schiller and Highfill‟s Respondent‟s brief. Both motions are denied.

                                                         2
       The parties dispute what happened next. Mike McCary admits that he signed the letter‟s

receipt, but Joe McCary asserts by affidavit that someone else signed his name to the letter‟s

receipt. In any event, Appellants have presented no evidence to suggest that the letters were not

sent to their correct addresses or that Appellants were unaware of the scheduled hearing.

However, both Appellants assert via affidavit that Schiller and Highfill told them “it would be

better if none of the family attended[,]” including Appellants. Appellants also assert in their

affidavits that Schiller and Highfill directed them to sign notarized statements to the court

allowing Schiller and Highfill to distribute the settlement as they saw fit, and that if Appellants

did not do so, Schiller and Highfill would take them out of the settlement entirely. Finally,

Appellants assert that Schiller and Highfill told Appellants they could not reveal the settlement

amount due to a nondisclosure agreement. In response, Schiller and Highfill presented their own

deposition testimony and deposition testimony from another sibling, Peggy Andrews, refuting

Appellants‟ assertions.

       Appellants did not attend the September 17, 2007 settlement hearing. At the hearing, the

court held that all members of the class of claimants received proper notice of the hearing. The

court also found that Appellants signed notarized documentation concurring with the

disbursement decisions made by Schiller and Highfill. Further, the court found that Betty Minor,

another McCary sibling, was estranged from her family, was specially excluded from her

mother‟s will, and therefore took nothing from the settlement. Finally, the court approved the

percentages of the settlement proceeds distribution to each member of the class after deducting

attorney‟s fees, expenses, and liens from the total amount. Schiller and Highfill each received

25% of the settlement after deductions, and Appellants each received 10%.

                                                  3
        Thereafter, in December 2009, Minor filed the present suit. Minor alleged Terry was

negligent and breached his fiduciary duty to her by failing to apprise her of the status of the

litigation, by failing to use reasonable efforts to locate her once a settlement was reached, by

allowing the settlement to be approved without her knowledge and consent, and by allowing the

disbursement to deny her recovery. Minor also alleged counts against Schiller and Highfill for

negligence, fraud, collusion, and injurious falsehood, claiming they intentionally provided Terry

with false contact information, made false statements about her relationship with her mother, and

allowed the settlement funds to be disbursed without her consent.

        Schiller and Highfill filed a cross-claim petition against Terry, alleging that as their

attorney, Terry failed to advise them of the statutory notice requirements. Terry also filed a

cross-claim petition against Schiller and Highfill for contribution, indemnification, and fraud.

        The parties mediated the dispute and reached a settlement.3 Appellants were not present

at the mediation, but Schiller and Highfill represented that they had authority to settle on behalf

of all members of the wrongful death class, including Appellants. All parties signed and

executed the settlement agreement except Appellants and their father, Jack McCary, each of

whom refused to sign. Terry filed motions to compel settlement and to join Appellants and their

father as cross-claim plaintiffs. The motion to join stated that Appellants and their father could

potentially seek to recover damages from Terry because the same questions of law and fact

asserted by Minor could potentially be asserted by Appellants and their father against Terry. The

trial court granted Terry‟s motion to join.

        Appellants then filed an amended petition asserting cross-claims against Terry, Schiller,

and Highfill. Appellants‟ cross-claims against Terry were for breach of fiduciary duty (Count I)

3
 Minor‟s claims against Terry, Schiller, and Highfill and the cross-claims between Schiller and Highfill and Terry
have been settled and are not the subject of this appeal.

                                                         4
and legal malpractice (Count II)4. Appellants alleged Terry represented all of Matilda McCary‟s

beneficiaries in the underlying litigation. Therefore, Appellants alleged Terry owed them a duty

to keep them apprised of the litigation and to ensure an equal and fair distribution of the

settlement proceeds. Appellants alleged Terry breached this duty, depriving Appellants of a

reasonable share of the settlement proceeds. Appellants alleged counts of negligence (Count I),

fraud (Count II), and conspiracy to defraud (Count III) against Schiller and Highfill for allegedly

misleading Appellants about their rights under the litigation and the amount of the settlement.

         Terry filed a motion for summary judgment on Appellants‟ breach of fiduciary duty and

legal malpractice claims. Schiller and Highfill also filed a motion for summary judgment for

Appellants‟ claims against them. The trial court granted both motions. This appeal followed.

                                              II.      DISCUSSION

         Appellants raise four points on appeal. First, Appellants assert the trial court erred in

granting summary judgment to Terry because Terry owed them a duty of care, and there were

unresolved genuine issues of material fact as to whether Terry breached that duty. Second,

Appellants contend the trial court erred in granting summary judgment to Terry because Terry

should have been judicially estopped from asserting that he did not owe them a duty of care or

that an attorney-client relationship did not exist. Third, Appellants argue the trial court erred in

granting summary judgment to Terry because Terry had a general duty to ensure that Missouri‟s

wrongful death statute was followed and that the distribution of the settlement proceeds

complied with the law. Fourth, Appellants maintain the trial court erred in granting summary

4
 In their amended cross-claim petition, Appellants styled Count II as “Negligence,” rather than legal malpractice.
However, Appellants appear to have intended to allege legal malpractice. Legal malpractice is a negligence-based
cause of action. Klemme v. Best, 941 S.W.2d 493, 495 (Mo. banc 1997). Appellants alleged in the amended cross-
claim petition that “[i]n [his] capacity as attorney for the beneficiaries of Ms. McCary, Attorney . . . owed a general
duty of care to [Appellants] . . .” Further, Appellants have briefed and argued this appeal based on a claim for legal
malpractice.

                                                           5
judgment to Schiller and Highfill because they pleaded submissible cases of fraud, negligence,

and conspiracy to defraud, and there existed unresolved genuine issues of material fact.

A.      Standard of review

        Summary judgment is reviewed essentially de novo and affirmed only where there are no

genuine issues of material fact and the movant is entitled to judgment as a matter of law. ITT

Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.

banc 1993). A defendant may establish summary judgment is appropriate by showing: (1) facts

negating any one of the plaintiff‟s elements necessary for judgment, (2) that the plaintiff has not

produced evidence sufficient for the finder of fact to find the existence of one of the plaintiff‟s

elements, or (3) facts necessary to support a properly pleaded affirmative defense. Roberts v.

BJC Health System, 391 S.W.3d 433, 437 (Mo. banc 2013). We review the record in the light

most favorable to the party against whom judgment was entered. Id.

B.      Counts against Terry

        In their first, second, and third points on appeal, Appellants claim the trial court erred in

granting summary judgment to Terry on their breach of fiduciary duty and legal malpractice

claims. We disagree.

        1.      Duty of care

        Appellants first argue the trial court erred in granting summary judgment to Terry

because Terry owed Appellants a duty and there existed a genuine issue of material fact as to

whether that duty was breached. Appellants assert that Terry owed them a duty under two

different theories: (1) as clients and (2) as non-client beneficiaries.

                                                   6
                  a.       Clients

         To make a submissible case of either legal malpractice or of an attorney‟s breach of a

fiduciary duty, a plaintiff must first adduce substantial evidence of the existence of an attorney-

client relationship.5 Klemme v. Best, 941 S.W.2d 493, 495-96 (Mo. banc 1997). Like any

agency relationship, the attorney-client relationship arises out of contract, either express or

implied. World Resources, Ltd. v. Utterback, 943 S.W.2d 269, 270 (Mo. App. E.D. 1997). “It is

an agreement whereby one person, the agent, consents with another, the principal, to act on

behalf of the principal subject to the control of the principal.” Id. A party‟s mere belief in an

attorney-client relationship is insufficient to create such a relationship. Mid-Continent Cas. Co.

v. Daniel Clampett Powell & Cunningham, LLC, 196 S.W.3d 595, 599 (Mo. App. S.D. 2006).

Where no attorney-client relationship exists, no duty exists as a matter of law. Id. at 600.

         Schiller and Highfill retained Terry to litigate their wrongful death claims arising from

their mother‟s death. It is undisputed that Appellants did not have a fee agreement with Terry

and never entered into an oral agreement with Terry. Appellants never sought legal advice from

Terry and were not named parties in the wrongful death suit. Appellants contend, instead, that

they believed that Schiller and Highfill entered into an attorney-client relationship on their

behalf, but one party‟s mere belief in the existence of the attorney-client relationship is

insufficient to form the required contract. Id. at 599. Nor does Terry‟s letter to Appellants

notifying them of the hearing date create an attorney-client relationship. First, the letter

specifically identified Schiller and Highfill as Terry‟s clients. Second, an attorney-client

5
 Legal malpractice and breach of fiduciary duty are closely related claims. If the alleged breach can be
characterized as both a breach of the standard of care (negligence) and a breach of fiduciary duty, a plaintiff‟s sole
claim is for legal malpractice unless the fiduciary breach is independent of any legal malpractice. Klemme, 941
S.W.2d at 496. Because both claims require a showing of an attorney-client relationship, we address them together.

                                                          7
relationship is not created merely because an attorney discusses the subject-matter of the

litigation with a third party. Id. Terry did not owe Appellants a duty of care as clients.

                    b.       Non-clients

           Under certain circumstances, attorneys may owe a duty to non-clients. Donahue v.

Shughart, Thompson & Kilroy, P.C., 900 S.W.2d 624, 629 (Mo. banc 1995). We determine the

existence of such a duty through a balancing test, examining: (1) the client‟s specific intent that

the purpose of the attorney‟s services was to benefit the non-client; (2) the foreseeability of harm

to the non-client as a result of the attorney‟s negligence; (3) the degree of certainty that the non-

client will suffer injury from attorney misconduct; (4) the closeness of the connection between

the attorney‟s conduct and the injury; (5) the public policy interest in preventing future harm;

and (6) the burden on the legal profession that would result from recognizing liability under the

circumstances. Id.

           The first factor, the client‟s specific intent to benefit the non-client, is the “ultimate

factual issue . . .. A benefit that is merely incidental or indirect will not satisfy this factor.” Id. at

628. Here, there is no evidence that Schiller and Highfill retained Terry with the specific intent

to benefit Appellants, rather than themselves. Missouri‟s wrongful death statute, section 537.095

RSMo 2000,6 allows for one member of the class to settle the claims and damages for the rest of

the class. Any benefit the entire class stems from the class-based nature of the statute, not from

Schiller and Highfill‟s intent to benefit Appellants.

           In Donahue, an attorney‟s client directed the attorney to pay cash from a trust account

and deed his home to his heirs upon his death. 900 S.W.2d at 625. The attorney did not

correctly effectuate the transfers, and after the client‟s death, the transfers were held to be

invalid. Id. The non-client heirs brought a legal malpractice action against the attorney, alleging
6
    All further references to section 537.095 are to RSMo 2000.

                                                           8
breach of fiduciary duty. Id. at 626. The Missouri Supreme Court held that the non-client heirs

stated a claim for breach of fiduciary duty. Id. at 629. The Court applied the six factor test, and

with respect to the specific intent element, found that the non-client heirs were the direct and

exclusive beneficiaries of the attorney‟s services. Id. The Court reasoned that the client‟s

primary purpose was to benefit the non-client heirs, and the client himself received no apparent

benefit, other than the satisfaction that his property be distributed according to his wishes after

his death. Id.

       Here, Schiller and Highfill retained Terry in order to benefit themselves, as opposed to

the client in Donahue, who received no benefit from the transaction. Schiller and Highfill hired

Terry to pursue a wrongful death suit, and they served as the named plaintiffs in that suit.

Appellants were unnamed class member plaintiffs to the suit. Any benefit conferred on

Appellants, therefore, derived entirely from the benefit secured by Schiller and Highfill, pursuant

to section 537.095. Because Appellants were not the direct and exclusive beneficiaries of the

representation, Donahue is distinguishable. Schiller and Highfill did not retain Terry with the

specific purpose of benefitting Appellants.

       The second, third, and fourth factors are closely related. The alleged harm must be

foreseeable, certain, and caused by the attorney‟s misconduct. The alleged harm and injury in

this case was that Appellants did not get the same settlement percentages as Schiller and Highfill.

This is not a legally cognizable injury. Missouri does not have a common law cause of action for

wrongful death. Sullivan v. Carlisle, 851 S.W.2d 510, 516 (Mo. banc 1993). The extent of

Appellants‟ rights, therefore, flows exclusively from the wrongful death statute. Id. at 512.

“There is no minimum amount that must be awarded to any party designated as a taker under

section 537.095.4. The trial court is not bound by a set percentage or a minimum; rather, the trial

                                                  9
court must exercise its discretion and, as instructed by the statute, distribute the proceeds in

proportion to the losses suffered by each as determined by the court.” Parr v. Parr, 16 S.W.3d
332, 337 (Mo. banc 2000) (quotations omitted). Appellants did not have a right to any specified

percentage of the recovery, either by common law, or by statute. Appellants did not suffer an

injury.

          The fifth and sixth factors (the policy of preventing future harm and the burden on the

profession of recognizing liability under the circumstances) weigh strongly against extending a

duty to an attorney under these circumstances. There would be no deterrent to future harm

because Appellants did not suffer an injury. And, as noted by the trial court, to hold that an

attorney representing the named plaintiff in a wrongful death class has a duty to the other class

members to ensure an equal settlement amount, to make them appear at the hearing, and to

ensure they are represented, would put a huge burden on the legal profession in litigating future

wrongful death actions, particularly those with large classes of beneficiaries.

          Therefore, Terry did not owe Appellants a duty either as clients or non-client

beneficiaries.

          2.     Judicial estoppel

          In their second point on appeal, Appellants assert the trial court erred in granting

summary judgment to Terry on their breach of fiduciary duty and legal malpractice claims

because Terry should have been judicially estopped from denying his attorney-client relationship

with Appellants due to Terry‟s motion to join Appellants to the lawsuit.

          “Judicial estoppel applies to prevent litigants from taking a position in one judicial

proceeding, thereby obtaining benefits from that position in that instance and later, in a second

proceeding, taking a contrary position in order to obtain benefits from such a contrary position at

                                                   10
that time.” Vinson v. Vinson, 243 S.W.3d 418, 422 (Mo. App. E.D. 2007) (quotations omitted).

Judicial estoppel applies where: (1) a party‟s later position was clearly inconsistent with its

earlier position, (2) the party succeeded in persuading a court to accept the earlier position, and

(3) where the party asserting inconsistent positions would derive an unfair advantage or impose

an unfair detriment on the opposing party. Id.

       Terry‟s position on summary judgment, denying an attorney-client relationship with

Appellants, was not clearly inconsistent with his motion to join. In his motion to join, Terry

stated that Appellants had an interest in the outcome of the suit and that if Appellants filed a

separate lawsuit against Terry, it would involve the exact same questions of law and fact.

Nowhere in the motion to join does Terry state that he had an attorney-client relationship with

Appellants.

       The mere joinder of an additional plaintiff to a lawsuit does not function as an admission

of liability as to any element of the plaintiff‟s potential cause of action. Therefore, simply stating

that Appellants‟ claim would involve the same exact questions of law and fact is not admitting

that an attorney-client relationship existed. The two positions are not clearly inconsistent.

       3.      Duty to ensure compliance with the wrongful death statute

       In their third point on appeal, Appellants argue the trial court erred in granting summary

judgment to Terry on their breach of fiduciary duty and legal malpractice claims because Terry

had a duty to Appellants to ensure that distribution of the settlement proceeds complied with

section 537.095.

               a.      Notice

       Section 537.095.1 requires the named plaintiff in a wrongful death action “satisfy the

court that he has diligently attempted to notify all parties having a cause of action[.]” A certified

                                                 11
letter sent by the named plaintiff‟s attorney to the beneficiary‟s last known address fulfills the

notice requirement. Walkenhorst-Newman v. Montgomery Elevator, 37 S.W.3d 283, 285-86

(Mo. App. E.D. 2000).

        In August 2007, Terry sent Appellants letters via certified mail notifying them of the

settlement hearing:

        I represent your sisters, Kathy Schiller and Jackie Highfill in a wrongful death
        claim against several defendants . . . Pursuant to the Revised Statutes of Missouri
        §537.095, a plaintiff in such action must notify all those in the class of people
        eligible to participate in the lawsuit before the matter is finalized. Since you are a
        member of the class, you are eligible to be notified that this matter has been
        concluded. In Missouri, wrongful death cases must be approved by a judge
        during a settlement hearing. Members of the wrongful death class are entitled to
        be provided notice of when and where the settlement hearing will take place.

        If you wish to attend the settlement hearing and make a claim, you must do so
        prior to the time this hearing is finally concluded. We currently have set a hearing
        to conclude the matter for Monday, September 17, 2007 beginning at 9:00 a.m.
        If you plan on attending the hearing, you must report to Division 1 of the St.
        Charles County Circuit Court, 300 North Second Street, St. Charles,
        Missouri 63303 at that time. (Emphasis in original).

        Joe McCary asserted by affidavit that he did not sign for the certified letter and does not

know who signed his name. However, Terry was not obligated under the statute to ensure actual

notice of the letter or its contents. Cf. id. at 286-87 (finding that a certified letter was sufficient

to put an ordinarily prudent person on notice of a wrongful death suit, even where beneficiary

chose not to read the letter). Further, Appellants have presented no evidence to suggest that the

letters were not sent to their correct addresses or that Appellants were unaware of the scheduled

hearing. Terry fulfilled the notice requirements of section 537.095.1.

                b.      Settlement amounts

        As noted above, there is no minimum amount or set percentage a trial court must award

to each beneficiary under section 537.095.4. Parr, 16 S.W.3d at 337. Terry did not represent

                                                   12
Appellants. He had no duty to ensure Appellants received a specific amount of the total

settlement, let alone equal shares to Schiller and Highfill, their clients. In fact, pursuing equal

shares for Appellants at the expense of his clients‟ shares would have violated Terry‟s ethical

duty to zealously represent only his clients‟ interests. C.f. Rule 4.17(a)(1)7 (preventing a lawyer

from representing one client where it will be directly adverse to the interests of another).

           The trial court allowed Terry to apportion his fees among the total settlement amount, not

just from the recovery of Schiller and Highfill, his clients. Section 537.095.4(2) requires a trial

court to order the claimants to pay the “attorneys' fees as contracted.” And, as here, “if the party

sharing in the proceeds has no attorney representing him before the rendition of any judgment or

settlement, then the court may award the attorney who represents the original plaintiff such fee

for his services, from such persons sharing in the proceeds, as the court deems fair and equitable

under the circumstances[.]” Id. Here, Appellants were not represented by counsel in the

wrongful death proceeding. Therefore, pursuant to statute, the trial court had the discretion to

award attorney‟s fees from Appellants‟ share, and Terry did not violate the terms of the statute

by apportioning their fees in accordance with the trial court‟s order.

           Appellants have presented no evidence that Terry did not fulfill his statutory obligations.

           4.       Conclusion

           Based on the foregoing, the trial court did not err in granting summary judgment in favor

of Terry on Appellants‟ breach of fiduciary duty and legal malpractice claims. Points one, two,

and three are denied.

C.         Counts against Schiller and Highfill

           In their fourth and final point on appeal, Appellants assert that the trial court erred in

granting summary judgment in favor of Schiller and Highfill because Appellants pleaded
7
    All references to Rules are to Missouri Supreme Court Rules (2014).

                                                          13
submissible cases of negligence, fraud, and conspiracy to defraud, and there existed genuine

issues of material fact.

        1.      Negligence

        Appellants‟ negligence count asserts that Schiller and Highfill owed them a “general duty

of care” and were negligent in that (1) Schiller and Highfill failed to keep Appellants‟ reasonably

apprised of the status of the wrongful death suit, and (2) Schiller and Highfill allowed the trial

court to approve an unequal settlement. This “general duty of care” is overbroad.

        A legal duty to another may arise where it is prescribed by the legislature. Hackmann v.

Missouri American Water Company, 308 S.W.3d 237, 239 (Mo. App. E.D. 2009). Here, section

537.095.1 imposes a duty on the named plaintiff in a wrongful death action to “diligently

attempt[] to notify” all beneficiaries before settling the suit. A certified letter sent by the named

plaintiff‟s attorney to the beneficiaries‟ last known address fulfills the notice requirement.

Walkenhorst-Newman, 37 S.W.3d at 285-86.

        Schiller and Highfill‟s retained counsel sent certified letters to Appellants, notifying them

of the settlement hearing. This was the extent of Schiller and Highfill‟s statutory notice duty,

and they met their obligations. Appellants have presented no evidence to suggest that the letters

were not sent to their correct addresses or that Appellants were unaware of the scheduled

hearing.

        Also, Schiller and Highfill had no duty to ensure equal settlement amounts. Section

537.095.2 explicitly contemplates that each beneficiary may receive unequal amounts. It allows

the trial court to apportion the settlement according to each beneficiary‟s respective losses. Id.

There is no minimum amount or set percentage a trial court must award to each beneficiary.

Parr, 16 S.W.3d at 337. Schiller and Highfill had no duty to ensure that Appellants received any

                                                  14
recovery, let alone equal shares. The trial court did not err in granting summary judgment in

favor of Schiller and Highfill on Appellants‟ negligence count. Point four denied in part.

         2.     Fraud

         Appellants‟ fraud count asserts that Schiller and Highfill acted to deprive Appellants‟ of

their reasonable share of the settlement proceeds by (1) lying to Terry and the court regarding

Appellants‟ knowledge of and desire to participate in the litigation, (2) lying to Terry and the

court regarding their authority to act on behalf of Appellants, and (3) lying to Appellants

regarding aspects of the litigation and the amount of the settlement.

         The elements of a fraudulent misrepresentation are: (1) a representation, (2) its falsity, (3)

its materiality, (4) the speaker‟s knowledge of its falsity or her ignorance of the truth, (5) the

speaker‟s intent that the representation should be acted upon by the hearer in a manner

reasonably contemplated, (6) the hearer‟s ignorance of the representation‟s falsity, (7) the

hearer‟s reliance on the representation‟s truth, (8) the hearer‟s right to rely on the representation,

and (9) injury to the hearer proximately caused by his reliance. Professional Laundry

Management Systems, Inc. v. Aquatic Technologies, Inc., 109 S.W.3d 200, 205 (Mo. App. E.D.

2003).

                a.      The trial court’s judgment

         The trial court granted summary judgment because it found that Appellants failed to

plead the circumstances of the alleged fraud with particularity and that Appellants had no right to

rely on Schiller and Highfill‟s allegedly fraudulent statements. This ruling was in error.

         All claims for fraud must state with particularity the circumstances constituting the fraud.

Rule 55.15. Here, however, Schiller and Highfill failed to file a Motion for More Definite

Statement pursuant to Rule 55.27(d) and, consequently, they waived the particularity

                                                  15
requirement. Rule 55.27(f); Clark v. Olson, 726 S.W.2d 718, 719 (Mo. banc 1987). Therefore,

the trial court erred in granting summary judgment on the ground that Appellants failed to plead

the circumstances of the alleged fraud with particularity.

       The trial court also found that Appellants had no right to rely on Schiller and Highfill‟s

representations. It stated:

       On the claim for fraud, [Appellants] allege without particularity that [Schiller and
       Highfill] made false and misleading statements[] to them „about the nature of the
       litigation, their participation in the litigation and the amount of the settlement for
       the purpose of preventing . . . [Appellants] from attempting to participate in the
       litigation and obtain their fair and equitable share of the settlement.‟ This
       generalized conclusion is insufficient as a matter of law to support a fraud claim.
       Further, [Appellants] have not alleged and cannot show reasonable reliance on
       these generalized statements.
       A trial court must make its decision to grant summary judgment based on the law,

pleadings, and the record submitted. Central Trust and Inv. Co. v. Signalpoint Asset

Management, LLC, 422 S.W.3d 312, 319 (Mo. banc 2014). Summary judgment is only

appropriate where “pleadings, depositions, answers to interrogatories, and admissions on file,

together with the supporting affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.” Hayward v.

Arnold, 779 S.W.2d 342, 344 (Mo. App. W.D. 1989) (quotations omitted).

       Here, the trial court only evaluated the statements alleged in Appellant‟s amended

petition, not the statements evidenced in the summary judgment record. Appellants attached

several exhibits to their joint response to Schiller and Highfill‟s motion for summary judgment,

including affidavits from each Appellant. Specifically, the affidavits stated that Schiller and

Highfill told Appellants they could not reveal the amount of the settlement agreement due to a

non-disclosure agreement and that Appellants should not attend the settlement hearing. There

remain genuine issues of material fact around these statements – whether they were indeed made,

                                                 16
whether Appellants relied on them in choosing not to attend the settlement hearing, and whether

Appellants suffered injury from that reliance in the form of lower settlement portions. Schiller

and Highfill submitted their own deposition testimony and deposition testimony from another

sibling, Peggy Andrews, supporting their assertion that they never made such representations,

but this is a factual dispute, and a trial court does not have authority to resolve conflicting

testimony on summary judgment. North Cent. County Fire Alarm System, Inc. v. Maryland

Heights Fire Protection Dist., 945 S.W.2d 17, 21 (Mo. App. E.D. 1997).

       Further, the fact that Appellants received letters from Terry informing them of the

hearing does not negate their right to rely on the alleged misrepresentation. “When distinct and

specific representations have been made and are to be acted upon, the representee has the right to

rely on the representation even if the parties stand on equal footing or have equal knowledge or

means of information relating to the subject matter of the representation.” Iota Management

Corp. v. Boulevard Inv. Co., 731 S.W.2d 399, 413 (Mo. App. E.D. 1987).

       Iota Management Corp. involved the sale of a hotel. Id. at 403. The sales contract

represented that the hotel would be sold “as is,” but that the seller had no actual notice of any

substantial defects in its structure or utility systems. Id. at 404. The buyer was entitled to an

inspection period with the option to terminate the contract before closing if the hotel was

determined to be in adverse condition. Id. The buyer‟s engineer inspected the hotel during the

inspection period, but did not find any major defects. Id. at 404-05. After closing, the buyer

discovered major defects in the hotel‟s heating and cooling system. Id. at 405-06. The buyer

sued the seller, alleging a fraud count. Id. at 403. At trial, evidence was presented that the seller

had actual notice of the heating and cooling system defects. Id. at 405-08.

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       The seller argued that the buyer had no right to rely on its representation in the sales

contract that it had no actual notice of substantial defects because the buyer conducted its own

independent investigation. Id. at 412-13. This Court disagreed, holding that the buyer had the

right to rely on the seller‟s statement. Id. at 412-14. We reasoned that when a speaker makes

distinct and specific representations, the hearer has the right to rely on the representations, even

if the parties have equal knowledge or equal means of information relating to the subject matter.

Id. at 413. Therefore, the buyer had the right to rely on the seller‟s statement, because the seller

made specific representations about its notice of the heating and cooling system‟s condition. Id.

       The circumstances are similar here. Appellants had letters informing them of their right

to attend the settlement hearing, where they could learn the settlement amount and the respective

percentages each beneficiary would receive. They therefore had the means to conduct the

equivalent of an “independent investigation” into their entitlements under the settlement.

However, Appellants have alleged and presented evidence by affidavit that Schiller and Highfill

made distinct and specific representations that Appellants should not attend the hearing and that

the settlement amount could not be disclosed. Therefore, as in Iota Management Corp.,

Appellants had the right to rely on their sisters‟ representations, despite the fact that they could

have found out the relevant information on their own.

               b.      Other fraud elements

       We examine next whether Appellants presented evidence to support a prima facie claim

for fraud as to the other eight elements. Although the trial court did not address these elements

in its decision, we will affirm a grant of summary judgment if it can be sustained on any theory

as a matter of law. Guy v. City of St. Louis, 829 S.W.2d 66, 69 (Mo. App. E.D. 1992). “We will

not reverse a correct result even where granted for the wrong reasons, and will sustain the trial

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court's entry of summary judgment even if the theory on which we dispose of this case was not

presented to the court.” Id. Therefore, we must examine the other elements of fraud to ensure

the trial court‟s judgment cannot be affirmed on other grounds.

       As noted above, the elements of a claim for fraud are: (1) a representation, (2) its falsity,

(3) its materiality, (4) the speaker‟s knowledge of its falsity or her ignorance of the truth, (5) the

speaker‟s intent that the representation should be acted upon by the hearer in a manner

reasonably contemplated, (6) the hearer‟s ignorance of the representation‟s falsity, (7) the

hearer‟s reliance on the representation‟s truth, (8) the hearer‟s right to rely on the representation,

and (9) injury to the hearer proximately caused by his reliance. Professional Laundry

Management Systems, Inc., 109 S.W.3d at 205. Direct evidence of fraud rarely exists, but it may

be established by circumstantial evidence. Hammett v. Atcheson, 438 S.W.3d 452, 461 (Mo.

App. W.D. 2014).

       Appellants have presented evidence supporting every element. Each Appellant presents

affidavit testimony that Schiller and Highfill falsely stated that Appellants should not attend the

settlement hearing and that Schiller and Highfill could not disclose the settlement amount. These

representations were material because they prevented Appellants from attending the hearing to

assert their rights and from questioning the amounts they received. Appellants presented

evidence of Schiller and Highfill‟s knowledge of the representations‟ falsity through Terry‟s

deposition testimony, which states that the settlement amount was not confidential and that

Schiller and Highfill told him Appellants were aware of the settlement percentages before the

hearing. The affidavits also present evidence of Appellants‟ ignorance of the representations‟

falsity and their reliance on the representations. Appellants state they did not know Schiller and

Highfill‟s alleged statements were untrue, but that they believed them to be true. Their right to

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rely on the representations was established above. Finally, Appellants presented evidence that

they suffered injury as a result of the representations – Schiller and Highfill each received two

and one half times the settlement amount Appellants did.

       Schiller and Highfill dispute all of this evidence, relying on their own deposition

testimony and that of Peggy Andrews. But the factual disputes related to all of the elements of

fraud may not be resolved as a matter of law. Because there exist unresolved issues of material

fact and Appellants had the right to rely on Schiller and Highfill‟s alleged misrepresentations, the

trial court erred in granting summary judgment in favor of Schiller and Highfill on Appellants‟

fraud count. Point four granted in part.

       3.      Conspiracy to defraud

       Appellants‟ allegations in their conspiracy to commit fraud count are substantially the

same as the fraud count, with the additional allegation that Schiller and Highfill conspired and

agreed to commit the fraudulent acts.

       A “civil conspiracy” is an agreement or understanding between two people to perform an

unlawful act or to perform a lawful act through unlawful means. State ex rel. Missouri Highways

and Transp. Com’n v. Westgrove Corp., 364 S.W.3d 695, 702 (Mo. App. E.D. 2012). Here,

Appellants alleged that Schiller and Highfill entered an agreement to defraud Appellants, but

they have presented no evidence of the alleged agreement. There are no issues of material fact as

to this count. The trial court‟s grant of summary judgment for the conspiracy to defraud count

was not in error. Point four is denied in part.

                                      III.    CONCLUSION

       The trial court‟s grant of summary judgment in favor of Terry on Appellants‟ breach of

fiduciary duty and legal malpractice claims is affirmed. The trial court‟s grant of summary

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judgment in favor of Schiller and Highfill on Appellants‟ negligence and conspiracy to defraud

claims is affirmed. The trial court‟s grant of summary judgment in favor of Schiller and Highfill

on Appellants‟ fraud claim is reversed and remanded for proceedings consistent with this

opinion.

                                                    ROBERT M. CLAYTON III, Judge

Patricia L. Cohen, P.J., and
Roy L. Richter, J., concur.

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