STEVEN CHADWICK v. ROBERT HUNTOON and GEORGE SWEARENGIN ( 2021 )

STEVEN CHADWICK, )
)
Respondent )
) No. SD36850
vs. )
) FILED: September 16, 2021
ROBERT HUNTOON, and )
GEORGE SWEARENGIN, )
)
Appellants. )
APPEAL FROM THE CIRCUIT COURT OF GREENE COUNTY
Honorable Michael J. Cordonnier
AFFIRMED
This case requires us to decide whether a member of a limited liability company
("LLC") expelled without cause is entitled to compensation for his member's interest
under the company's operating agreement. Robert Huntoon and George Swearengin
("Appellants") expelled Steven Chadwick ("Respondent") without cause from Liberty
Home Solutions, LLC (the "Company"). Following his expulsion from the Company,
Respondent filed a petition against the remaining members of the Company alleging he
was entitled to be compensated for his member's interest. The trial court entered
judgment in Respondent's favor, awarding him actual damages, punitive damages, and
attorney's fees. Appellants appeal the trial court judgment, raising eight points
challenging: the trial court's interpretation of the operating agreement (points 1, 2, 3,
and 5); the trial court's determination of the value of the Company (point 4); the denial
of Appellants' affirmative defense of accord and satisfaction (point 6); and the trial
court's award of punitive damages (point 7) and attorney's fees (point 8). Finding no
merit in Appellants' points, we affirm.
Factual and Procedural Background
In March 2007, Respondent and Appellants entered into a contract ("operating
agreement") for the operation of the Company, which was in the business of home
remodeling and repairs. The operating agreement gave each member a one-third
interest in the Company. From 2013 to 2017, the Company's yearly total membership
distributions averaged over $170,000 and its total income exceeded $2.5 million.
In May 2018, Appellants expelled Respondent without cause pursuant to section
7.4(A) of the operating agreement, which states, in pertinent part, that Appellants would
assume all indebtedness and would indemnify Respondent from liability on the
company's debts. "In addition, the remaining Members and the Company shall pay the
expelled Member the sum of $1,000 per week for twelve (12) weeks commencing not
later than two (2) weeks after the expulsion." Respondent was given a check in the
amount of $1,000 and a letter informing him he had been expelled as a member
"without cause[.]" The letter stated Respondent would receive 12 payments of $1,000 as
required by section 7.4(A) of the operating agreement and that Appellants would
assume all indebtedness and would indemnify him from liability on the company's
2
debts.1 Respondent received and cashed 11 more payments of $1,000. Following
Respondent's expulsion, Appellants continued operating the business.
Respondent filed a petition against Appellants seeking compensation for his
member's interest.2 Appellants filed an answer and asserted the affirmative defense of
accord and satisfaction based on Respondent's acceptance of the 12 payments of $1,000.
The case was tried to the trial court, which ruled in Respondent's favor. The trial
court determined a Company member had two sets of interests: (1) participation rights
and (2) distribution rights. The trial court found the 12 payments of $1,000 following
Respondent's expulsion were payments for "participation rights" under section 7.4(A) of
the operating agreement and were not intended to compensate the member for his
distribution rights. The trial court found Appellants' testimony about the intent of
section 7.4(A) of the operating agreement to be not credible. The trial court also
determined the expulsion of Respondent was a "Dissociation Event" described in Article
VIII of the operating agreement. Further, since Appellants did not purchase
Respondent's member's interest, the trial court found Respondent retained the interest
and was entitled to distributions from the Company in the amount of $4,500 per month
for 23 months following his expulsion, totaling the sum of $103,500. The trial court
further found Respondent's expulsion constituted a dissociation event triggering a "Buy-
out Default" under section 8.3(A) of the operating agreement and awarded Respondent
damages for breach of contract in the amount of $300,000 (1/3 of $900,000, which the
1 The letter also advised that Respondent would receive a portion of a recent member's distribution upon
the return of a Company vehicle.
2 Respondent's petition stated claims for: declaratory judgment declaring a right to withdrawal (Count 1);
breach of the operating agreement (Count 2); breach of the duty of good faith and fair dealing (Count 3);
breach of fiduciary duties (Count 4); and conversion (Count 5). Counts 4 and 5 sought actual and punitive
damages.
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trial court found to be the "value" of the Company). The trial court determined
Appellants breached a fiduciary duty owed to Respondent and awarded punitive
damages in the amount of $25,000. Respondent was also awarded attorney's fees in the
amount of $44,000. This appeal follows.
Points 1, 2, and 5
Because our analysis of points 1, 2, and 5 rely on the same principles of law, we
address them together. In point 1, Appellants argue the trial court erred in determining
Respondent was entitled to compensation "not specifically provided for within section
7.4(A) because the operating agreement . . . did not provide for payments to be made to
an expelled member other than the $1,000.00 payments for a period of twelve (12)
weeks." Appellants' point 5 follows the same logic as point 1, arguing the operating
agreement did not entitle an expelled member to distributions after the date of his
expulsion. In point 2, Appellants argue the trial court erred in determining the
operating agreement provided members with two types of property interests,
"participation rights" and "distribution rights." Each of these points assume that
Section 7.4(A) limits compensation to a member expelled without cause to 12 payments
of $1,000 and that a member becomes divested of his member's interest upon
expulsion.
Standard of Review
We will affirm the trial court's judgment unless there is no substantial evidence to
support it, it is against the weight of the evidence, or it erroneously declares or applies
the law. Nicolazzi v. Bone, 564 S.W.3d 364, 370 (Mo. App. E.D. 2018). The
interpretation of an LLC's operating agreement is a question of law, which we review de
novo. CB3 Enters. LLC v. Damas, 415 S.W.3d 163, 166 (Mo. App. W.D. 2013).
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Discussion
Appellants argue that Section 7.4(A) limits compensation to a member expelled
without cause to 12 payments of $1,000. The trial court, in rejecting Appellants'
argument, determined that the 12 payments referenced in Section 7.4(A) were intended
as compensation for the loss of Respondent's right to participate in the management of
the Company but did not extinguish his rights to distributions. Whether this
determination was in error turns on the effect expulsion without cause has on a
member's rights to distributions under the operating agreement. In answering this
question, we look to the Limited Liability Act ("the Act")3 and the operating agreement
signed by the parties. See Urban Hotel Dev. Co., Inc. v. President Dev. Grp.,
L.C., 535 F.3d 874, 878 (8th Cir.2008) (interpreting Missouri law).
LLCs are creatures of statute and their "corresponding rights and obligations are
derived from statute." Hibbs v. Berger, 430 S.W.3d 296, 313-14 (Mo. App. E.D. 2014)
(quoting Pitman Place Dev., LLC v. Howard Inv., LLC, 330 S.W.3d 519, 530 (Mo.
App. E.D. 2010). These rights and obligations are set out in the Act. See id. The Act,
however, gives members significant flexibility in overriding statutory provisions which
would otherwise prevail if the members fail to incorporate such provisions in their
operating agreements.4 See Phillip G. Louis, Jr., 25 Mo. Prac., Business Organizations
§ 8.19 (2d ed. 2021). Because the Act supplies default terms which can be overridden in
the operating agreement when authorized by the Act, our analysis follows a two-step
framework: (1) determine what effect expulsion without cause has on the member's
3 The Act is located in Chapter 347, RSMo. All references are to RSMo. (2000) unless otherwise indicated.
4 "Throughout [the Act], phrases such as 'except as otherwise provided in the operating agreement' or
'unless the articles of organization provide otherwise' appear. Therefore, if an overriding provision is not
incorporated into the relevant document, one is 'defaulted' to the statutory provision which will control."
See Phillip G. Louis, Jr., 25 Mo. Prac., Business Organizations § 8.19 (2d ed. 2021).
5
interest under the Act (the "default terms"); and (2) determine whether the operating
agreement contains a provision overriding the Act's default terms.
Since the question before us is what effect expulsion without cause has on a
member's interest under the operating agreement, we must clarify what we mean by a
"member's interest." The Act defines a "member's interest" as a "member's share of the
profits and losses of [the LLC] and the right to receive distributions of [the LLC]
assets[.]" § 347.015(12). The operating agreement does not define a "member's
interest", therefore, the Act's definition applies. The operating agreement does,
however, define "profits and losses" as "[t]he Company's income, gains, losses,
deductions, and credits . . . for each fiscal year of the Company" and those "shall be
allocated among the Members (for both book and tax purposes) in proportion to their
respective Distribution Percentages." A "Distribution Percentage" for each member
under the operating agreement is "thirty-three and one-third percent (33 1/3%)."
Accordingly, each member of the Company has a member's interest in one-third of the
Company's profits and losses and distribution of assets.
Having determined what a member's interest is, we proceed to the Act to
determine what effect expulsion without cause has on that interest. Section 347.121
addresses the consequences of withdrawal of a member. Under section 347.123(3) a
member expelled in accordance with the operating agreement is a withdrawn member.
Section 347.121(3), states that "[e]xcept as otherwise provided in the operating
agreement, upon the withdrawal of a member, the withdrawn member shall have no
further right to participate in the management and affairs" of the company and "shall
have only the rights of an assignee of the withdrawn member's interest." So, unless an
operating agreement provides otherwise, an expelled member cannot participate in the
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management of the company but retains his rights to his member's interest—the right to
share in the profits and losses and distribution of assets—as an assignee.
While section 347.121(1) describes the effect a withdrawal event has on a
member's interest, (which includes expulsion in accordance with the operating
agreement), section 347.103(2) describes the process for determining the amount of the
expelled member's distribution if the business is continued. This section states, in
relevant part:
except as otherwise provided in the operating agreement, such member
shall have the rights of an assignee of the withdrawn member's interest in
the limited liability company. The withdrawn member shall be entitled to
receive any distributions to which he is entitled upon such event of
withdrawal under the provisions of the operating agreement. If the
operating agreement does not provide for the amount of or a method for
determining the distribution, if any, to which a withdrawn member is
entitled, the withdrawn member shall be entitled . . . to receive from
the limited liability company, upon demand for such distribution made by
or on behalf of such withdrawn member within one hundred eighty days
after such event of withdrawal and subject to the limitation set forth in
section 347.109, the fair value of such withdrawn member's interest in
the limited liability company as of the date of withdrawal based upon such
withdrawn member's right to share in distributions from the limited
liability company as an ongoing operation.
§ 347.103 (emphasis added). Thus, under the default terms of the Act, a member
expelled without cause is entitled to "the fair value" of his member's interest if the
business continues.
Having established what effect expulsion without cause has on a member's
interest under the Act, we turn to the operating agreement to see if the parties included
any overriding provisions. In interpreting an LLC's operating agreement, we apply the
ordinary rules of contract law. Nicolazzi, 564 S.W.3d at 370. The cardinal rule in
interpreting a contract is to ascertain the intent of the parties and give effect to that
intent. McGuire v. Lindsay, 496 S.W.3d 599, 607 (Mo. App. E.D. 2016). In doing so,
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"[w]e rely on the plain and ordinary meaning of the words in the contract and consider
the document as a whole." Id. "The clauses must be read in the context of the
entire contract, and interpretations that render provisions meaningless should be
avoided." Id. If a contract's terms are clear and unambiguous, we enforce the
agreement as written and will not supply additional terms.5 Nicolazzi, 564 S.W.3d at
371.
Section 7.4 provides:
(A) A majority of the Members may vote to expel another
Member, with or without cause. Unless the expulsion is for cause, the
remaining Members shall assume all the indebtedness of the Company
and indemnify the expelled Member from any liability on account of
the Company's debts. In addition, the remaining Members shall
exercise their best efforts to secure a release of the expelled Member
from any Company debts that the expelled Member may have
personally guaranteed. In addition, the remaining Members and the
Company shall pay the expelled Member the sum of $1,000 per week
for twelve (12) weeks commencing not later than two (2) weeks after
the expulsion.
(B) If a Member is expelled for cause, the Member shall receive
an amount equal to one-third (1/3) of the fair market value of all the
assets of the Company plus one-third (1/3) of the retained earnings less
one-third (1/3) of the Company's aggregate indebtedness, less damages
caused to the Company as a result of the cause for which the Member
was expelled. "Cause" shall include but not be limited to any act of
fraud, misappropriation or personal dishonesty relating to or involving
Company in any material way, the gross negligence of Member in
connection with the performance of his duties under this Agreement or
in his duties in furtherance of the Company's business, a continuing
material breach of this Agreement which is failed to be cured within ten
(10) days after written notice thereof, or a Member's taking actions that
are clearly contrary to the best interest of Company.
5 Mere disagreement over the meaning of terms in a contract does not create an ambiguity. Mendota
Ins. Co. v. Lawson, 456 S.W.3d 898, 903 (Mo. App. W.D. 2015). However, a contract containing
language reasonably susceptible of two interpretations is ambiguous. Patterson v. Rough Rd.
Rescue, Inc., 529 S.W.3d 887, 894 (Mo. App. E.D. 2017).
8
Section 7.4 says nothing about an expelled member's rights to distributions
following expulsion without cause. While the operating agreement obligates the
Company to pay a member expelled without cause $1,000 per week for 12 successive
weeks, there is no language that states this compensation is in lieu of a member's
interest or that an expelled member waives, forfeits, or is otherwise divested of that
interest. Likewise, there is no language that transfers the member's interest, which is
the member's personal property, to the remaining members upon expulsion. The
operating agreement is silent as to the effect of expulsion on that member's interest.6 As
such, we must apply the default terms of the Act, sections 347.121 and 347.103, which
give Respondent the right to receive his distribution percentage (i.e., his member's
interest) as an assignee but eliminate his right to participate in the management and
affairs of the Company.
For these reasons, points 1, 2, and 5 fail. Upon expulsion without cause,
Respondent retained the right to receive distribution of his member's interest as an
assignee but lost his right to participate in the management and affairs of the Company
under the Act. Points 1, 2, and 5 are denied.
Point 3
In point 3, Appellants argue:
The trial court erred in determining, as a matter of law, that the
unambiguous operating agreement of [the Company], providing for
6 To interpret the clause in the same manner as Appellants, we would be required to insert "for his
membership interest" into the clause. "An interpretation that inserts language into a contract is
forbidden." Nicolazzi, 564 S.W.3d at 373 (internal citation and quotations omitted). Additionally,
Appellants' interpretation of section 7.4 of the operating agreement would lead to an absurdity since it
would allow any member for any reason to oust another member and acquire his membership interest in
the Company for just 12 payments of $1,000 even though that member would have been entitled to the
fair market value of his membership interest if expelled with cause. Had the parties intended for a
member expelled without cause to be completely divested of his member's interest and for that interest to
transfer to the remaining members upon expulsion, the drafters would have included such language.
9
expulsion of a member without cause pursuant to section 7.4(A),
required application of other provisions in Article VIII of the
operating agreement, dealing with dissolution or dissociation events and
rights resulting from the same, because, the unambiguous operating
agreement of [the Company] did not require consideration of rights,
procedures or remedies under Article VIII of the operating agreement in
that the procedures for expulsion without cause do not implicate or
require consideration of procedures or remedies provided by reason of a
dissolution or dissociation as set forth within Article VIII of the operating
agreement.
(Emphasis added, underlined as in original).
Stated more succinctly, Appellants argue the trial court erred in considering
Article VIII of the operating agreement because section 7.4(A) did not require the trial
court to consider procedures or remedies contained in Article VIII regarding dissolution
or dissociation. Appellants' point tells us nothing about the specific way the trial court
misapplied any "other provisions in Article VIII" but broadly contends it was an error
for the trial court to even consider Article VIII at all. For context, Article VIII is a very
lengthy provision dealing with liquidation, dissociation events, and dissolution.
Without identifying a specific ruling or finding that the trial court made as to Article
VIII, it is difficult for us to understand Appellants' argument.7 Nevertheless, we
interpret Appellants' argument to be that it was an error for the trial court to consider
Article VIII because the expulsion of a member did not trigger a dissociation event.
7Because Appellants' point fails to identify the specific way the trial court misapplied Article VIII—other
than considering it at all—we could end our analysis there since it is never an error for the trial court to
consider a contract as a whole in interpreting a contract. Words or phrases in a contract must be
interpreted by the court in the context of the contract as a whole and are not to be considered in isolation.
Mendota, 456 S.W.3d at 903. Nevertheless, we indulge Appellants by addressing whether the trial court
erred in determining the expulsion of Respondent triggered a "Dissociation Event" under Article VIII.
However, we do not consider whether or not the trial court's application of the buy-out default provisions
in Article VIII was in error. "An appellate court need not consider issues raised in the argument portion
of a brief that are not raised in the point relied on." Law Offices of Gary Green, P.C. v. Morrissey,
210 S.W.3d 421, 426 (Mo. App. S.D. 2006) (quoting Alberswerth v. Alberswerth, 184 S.W.3d 81, 96
(Mo. App. W.D.2006)).
10
Article VIII, Section 8.1 defines "Dissociation Event" as any event "described in
Section 347.123 of the Act occurring with respect to a Member" (other than death of a
Member).8 Section 347.123(3) includes expulsion of a member in accordance with the
operating agreement as an event of withdrawal. Accordingly, Respondent's expulsion
without cause is a "Dissociation Event" under the operating agreement, and it was,
therefore, appropriate for the trial court to determine a "Dissociation Event" had
occurred. The trial court did not err in determining that Respondent's expulsion
required it to consider the provisions of Article VIII. Point 3 is denied.
Point 4
In point 4, Appellants argue the trial court erred in determining the Company
had a value of $900,000 because such determination was against the weight of the
evidence in that "all documentary evidence of economic activity presented, without
objection, by both plaintiff's counsel and defendant's counsel, established a net worth of
[the Company] for six years preceding the trial that averaged just under $186,000.00[.]"
Appellants' argument mistakenly conflates "net worth" with value and ignores the
credibility determinations of the trial court.
8 Article VIII section 8.2 reads in pertinent part:
(A) No act, thing, occurrence, event, or circumstance shall cause or result in the
dissolution of the Company except that the earliest to occur of any of the
following events (a "Liquidation Event") shall work an immediate dissolution of
the Company:
....
(3) Subject to Section 8.2 below, any event (each a "Dissociation Event") other than
death of a Member, described in Section 347.123 of the Act occurring with
respect to a Member; PROVIDED, HOWEVER, that the Members hereby agree
that, upon the occurrence of (a) a Buy-out Default (defined hereafter), or (b) a
voluntary withdrawal of a Member in violation of the terms of this Agreement,
the business and affairs of the Company shall be automatically continued by the
Company and such event shall not constitute a Dissociation Event for purposes
of this Agreement. "
11
Standard of Review
"A circuit court's judgment is against the weight of the evidence only if the circuit
court could not have reasonably found, from the record at trial, the existence of a fact
that is necessary to sustain the judgment." Nicolazzi, 564 S.W.3d at 372 (quoting
S.S.S. v. C.V.S., 529 S.W.3d 811, 816 (Mo. banc 2017)). Even if evidence poses two
reasonable but different conclusions, this Court must defer to the circuit court's
assessment of that evidence. Interest of C.E.B., 565 S.W.3d 207, 217-18 (Mo. App.
S.D. 2018). The trial court is in a superior position to assess credibility, therefore, we
defer to the factual findings of the trial court. McGuire, 496 S.W.3d at 606. Further,
An against-the-weight-of-the-evidence challenge does not grant an
appellant license to ignore such deference and argue witness credibility
issues on appeal.[9] Appellants taking such license deprive their argument
of any persuasive or analytical value and doom their challenge to defeat,
Ivie [v. Smith], 439 S.W.3d [189,] 202 [(Mo. banc 2014)].
In re Marriage of Scrivens, 489 S.W.3d 361, 367-68 (Mo. App. S.D. 2016).
Discussion
Appellants argue that because the undisputed business records showed the
Company had an average net worth of under $186,000, the trial court's determination
that the Company had a value of $900,000 was against the weight of the evidence.
Appellants argument fails because they make no attempt to explain why a company's
"net worth" determines its value.
9 The circuit court is able to judge directly not only the demeanor of witnesses, but also
their sincerity and character and other trial intangibles that the record may not
completely reveal. Accordingly, this standard of review takes into consideration which
party has the burden of proof and that the circuit court is free to believe all, some, or
none of the evidence offered to prove a contested fact, and the appellate court will not re-
find facts based on credibility determinations through its own perspective.
In re Marriage of Schubert v. Schubert, 561 S.W.3d 787, 795-96 (Mo. App. S.D. 2018).
12
The concepts of value and net worth might be related but they are distinct. "Net
worth," as defined by Appellants, is simply the value of the Company's assets minus its
liabilities as shown in the business records. In contrast,
[f]air market value is the price which the property in question
would bring when offered for sale by one willing, but not obliged to sell it,
and it is bought by one willing to purchase it, but who is not compelled to
do so. No one formula or method of determining value is binding or
conclusive. . . . Hence, the trial court can accept the opinion of one expert
as to the value over another and can prefer one method of valuation over
competing methods based on the particular facts of the case and the
circumstances of the corporate entity involved.
Nelson v. Nelson, 195 S.W.3d 502, 507 (Mo. App. W.D. 2006) (internal citations and
quotations omitted). By failing to explain why the trial court was obligated to rely solely
on the Company's "net worth" in determining the Company's value, Appellants have
failed to present a persuasive argument.
Appellants' argument is doomed for a second reason. Appellants completely
ignore our standard of review, which requires us to defer to the credibility
determinations of the trial court.10 The evidence related to the Company's value was
10Appellants also ignore the four-step analytical sequence for presenting an against-the-weight-of-the-
evidence challenge. These four steps are:
(1) identify a challenged factual proposition, the existence of which is necessary to sustain
the judgment;
(2) identify all of the favorable evidence in the record supporting the existence of that
proposition;
(3) identify the evidence in the record contrary to the belief of that proposition, resolving
all conflicts in testimony in accordance with the trial court's credibility determinations,
whether explicit or implicit; and,
(4) demonstrate why the favorable evidence, along with the reasonable inferences drawn
from that evidence, is so lacking in probative value, when considered in the context of the
totality of the evidence, that it fails to induce belief in that proposition.
Schubert, 561 S.W.3d at 796 (quoting Houston v. Crider, 317 S.W.3d 178, 187 (Mo. App. S.D. 2010)).
13
contested.11 The evidence produced at trial showed the Company had retained earnings
of $1,617,661 in 2017 and the Company's total member distributions averaged over
$170,000 per year between 2013 and 2017. Additionally, the Company's total income
exceeded $2.5 million between 2013 and 2017.
Respondent testified he believed the Company had a value of approximately
$900,000.00.12 Appellant Huntoon testified the Company had about $10,000 worth of
assets in vehicles and about $70,000 in total assets, but that he "[didn't] think [the
Company] was worth anything."13 The trial court found Appellants' testimony about the
value of the Company "not credible" and Respondent's testimony "more closely
supported by the evidence presented."14
Given the conflicting testimony regarding the value of the Company, we defer to
the trial court's credibility determination. We cannot say the trial court could not have
11 Neither party offered expert testimony by any third party on the issue of the Company's value.
However, Appellants do not challenge Respondent's qualifications for providing such testimony.
12 For ease of readability, we have created the following table using information from Appellants' Trial
Exhibits 2-7 and Respondent's Trial Exhibit 2.
Year Total Net Distributions Taxable (Ordinary Assets Liabilities
Equity of to Members Business Income)
Members
2013 $213,165.03 $166,605.00 $274,572.00 $373,906.88 $160,741.85
2014 $196,796.78 $184,260.00 $122,759.00 $335,345.27 $138,548.49
2015 $313,643.10 $187,020.00 $209,167.00 $461,456.05 $147,812.95
2016 $183,332.74 $148,500.00 $100,970.00 $300,511.99 $117,179.25
2017 $142,116.22 $188,425.00 $127,139.00 $365, 504.92 $223,388.70
13 At the time of Respondent's expulsion, the Company had three outstanding loans totaling the sum of
$184,564.19.
14 The trial court made a finding that Appellants' testimony "that in 2018 the Company was worth about
$10,000 is not credible."
14
reasonably found the Company had a fair market value of $900,000 since a former
member of the Company testified to that amount. See S.M.S. v. J.B.S., 588 S.W.3d
473, 512 (Mo. App. E.D. 2019) ("[A]lthough the evidence adduced at trial may have
posed multiple reasonable, although different conclusions, our standard of review
requires us to defer to the trial court's assessment of the evidence and credibility
determinations with respect to the contested factual issues regarding the valuations of
[company] stock."). Appellants' argument would require us to assume the role of fact-
finder and supplant the trial court's credibility determinations with our own. That we
cannot do. Point 4 is denied.
Point 6
In point 6, Appellants claim the trial court erred in determining they failed to
establish the affirmative defense of accord and satisfaction because Respondent
accepted 12 successive payments of $1,000 and there was written confirmation that he
received those payments. Appellants' argument assumes that the 12 payments were
made to compensate the expelled-without-cause member for his member's interest.
Appellants point us to nothing demonstrating that Respondent accepted the 12
payments in full satisfaction of his member's interest. The letter Respondent received
from Appellants merely stated the payments were being made in accordance with
section 7.4 of the operating agreement. Neither the letter nor the operating agreement
contained language indicating Respondent was waiving, forfeiting, or otherwise
divesting himself of his member's interest in the Company by accepting such payments.
See Weltmer v. Signature Health Servs. Inc., 417 S.W.3d 856, 865 (Mo. App. E.D.
2014) ("The language of this letter was insufficient to create a contract for
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an accord and satisfaction, because there was no express communication that the
payment was intended as satisfaction in full."). Point 6 is denied.
Points 7 and 8
In their final two points, Appellants claim the trial court erred in assessing
punitive damages (point 7) and attorney's fees (point 8) because Respondent can only
be awarded punitive damages and attorney's fees if actual damages are properly
awarded. As previously discussed, the trial court did not err in finding in favor of
Respondent and awarding him actual damages. Points 7 and 8 are denied.
Conclusion
The trial court's judgment is affirmed.
MARY W. SHEFFIELD, P.J. – OPINION AUTHOR
GARY W. LYNCH, C.J. – CONCURS
DON E. BURRELL, J. – CONCURS
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