Tiffany Traweek v. Timothy Smith and Davis & Bell Auction Service, L.L.C. ( 2020 )

In the Missouri Court of Appeals
Western District
TIFFANY TRAWEEK, )
Appellant, ) WD83291
v. )
)
TIMOTHY SMITH and DAVIS & BELL ) FILED: September 8, 2020
AUCTION SERVICE, L.L.C., )
Respondents. )
APPEAL FROM THE CIRCUIT COURT OF JOHNSON COUNTY
THE HONORABLE MIKE WAGNER, JUDGE
BEFORE DIVISION THREE: GARY D. WITT, PRESIDING JUDGE,
LISA WHITE HARDWICK AND THOMAS N. CHAPMAN, JUDGES
Tiffany Traweek appeals from the summary judgment granted in favor of
Timothy Smith and Davis & Bell Auction Service, LLC (collectively,
“Respondents”) on her amended petition for damages. Traweek contends that
summary judgment was premature because the circuit court did not allow her
sufficient time to conduct discovery on her reformation claim. She also argues
that the court’s summary judgment did not address her reformation claim.
Because the court abused its discretion by not allowing Traweek an adequate
period of discovery on her reformation claim, summary judgment is reversed, and
the cause is remanded to the circuit court for further proceedings.
FACTUAL AND PROCEDURAL HISTORY
On June 30, 2016, Traweek was a passenger in the back seat of a car driven
by her friend, Erika Johnson. Johnson’s car collided with the rear of a trailer
attached to a vehicle, which was owned by Davis & Bell Auction Service, LLC, and
driven by Smith. As a result of this accident, Traweek was rendered unconscious,
was in a coma for two months, and suffered severe head trauma and loss of
memory and cognitive skills.
Prior to retaining counsel, Traweek received an offer from Johnson’s
insurance carrier, Missouri Farm Bureau Insurance Company (“Farm Bureau”), to
settle her claims against Johnson for the full policy limits. Traweek retained
counsel. Traweek’s counsel contacted Respondents’ insurance carrier, State Farm
Insurance Company (“State Farm”), and demanded to settle Traweek’s claims
against Respondents for the full policy limits. State Farm denied this demand. On
October 25, 2017, Traweek filed a petition against Respondents seeking damages
for the injuries she suffered in the accident.
On November 1, 2017, Traweek executed a release prepared by Farm
Bureau. The language of the release stated, in pertinent part:
For the Sole Consideration of Fifty Thousand & 00/100 Dollars
($50,000.00), the receipt and sufficiency whereof is hereby
acknowledged, the undersigned hereby releases and forever
discharges Tonya Schoen & Erica Johnson & John Lamar[,]1 heirs,
1
John Lamar is Johnson’s grandfather. Tonya Schoen lives with John Lamar and is dating his
son. The record indicates that Lamar and Schoen were the owners of Johnson’s vehicle and were
insured under the policy with Johnson.
2
executors, administrators, personal representatives, estates, agents,
insurers, successors and assigns, and all other persons, firms or
corporations liable, or who might be claimed to be liable, none of
whom admit any liability to the undersigned but all expressly deny
any liability, from any and all claims, demands, damages, costs,
expenses, future medical expenses, property damage or damage of
any kind sustained or that I may hereafter sustain, known and
unknown, both to person and to property, which have resulted or
may in the future develop from an accident which occurred on or
about the 30th day of June, 2016 at or near Johnson County,
Missouri.
(Emphasis added in italics.) Traweek is the only party who signed the release.
Traweek’s mother and father signed the release as witnesses on the same day and
at the same time as Traweek. Traweek recalled reading the portion of the release
quoted above but did not realize that she was signing a document that said she
was releasing all other persons from liability for the accident. Before Traweek
signed the release, Traweek’s counsel advised her that she was releasing only
Johnson and not Respondents.2 After Traweek signed the release, Farm Bureau
paid her the $50,000 policy limits.
Traweek produced the release to Respondents during the course of
discovery on August 8, 2018. Shortly thereafter, on August 20, 2018, Respondents
filed a motion for leave to file an amended answer to assert the affirmative
defense that Traweek’s claims in her petition were barred because she had
2
The record is unclear as to whether counsel had reviewed the release at the time he advised
Traweek.
3
already released Respondents for any claims arising out of the accident. The
court granted Respondents leave to file their amended answer.
Upon learning of the language in the original release that could be
construed to release Traweek’s claims against Respondents, Traweek’s counsel
contacted the Farm Bureau insurance adjuster and requested an affidavit to set
forth the intent of Farm Bureau with regard to whether any other parties besides
its insureds were to be released. According to the sworn affidavit of Traweek’s
counsel, the adjuster admitted that the release was intended to release only
Johnson, but the adjuster was not willing to assist Traweek’s counsel “in
correcting this situation.”
On September 24, 2018, Traweek executed a corrected partial release,
which was similar to the original release in that it released Johnson, Schoen,
Lamar, and their heirs, executors, administrators, personal representatives,
estates, agents, insurers, successors, and assigns, but it did not contain the
language releasing “all other persons, firms or corporations liable, or who might
be claimed to be liable.” Again, Traweek was the only party who executed the
corrected partial release, and her father and her aunt signed as witnesses.
Traweek’s counsel mailed the corrected partial release to Farm Bureau in October
2018 and did not receive any response from Farm Bureau. In January 2019,
Traweek’s counsel hand-delivered the corrected partial release to Respondents’
counsel.
4
Respondents filed a motion for summary judgment on February 26, 2019,
arguing that the undisputed facts demonstrated that Traweek executed a release
that released any claims she may have arising out of the June 30, 2016 accident,
including the claim asserted against Respondents in her petition. Respondents
further argued that the corrected partial release did not reflect a mutual mistake
that would support reformation of the original release. This was the sole ground
upon which Respondents sought summary judgment.
On April 9, 2019, Traweek filed a motion for leave to file an amended
petition to add a second count in equity seeking reformation of the original
release. In the reformation claim in her proposed amended petition, Traweek
alleged that she never intended to release anyone but Johnson and the owners of
Johnson’s vehicle, and that this intent was “clearly indicated by her filing of a
lawsuit against [Respondents] prior to her execution of [the original release], and
her execution of [the original release] clearly constitutes a mistake.” Traweek
alleged that the corrected partial release “correctly sets forth the intent of the
parties to the Johnson claim and should be used to reform the original Release . .
. to conform to the intent of the parties.” She contended that reformation of the
original release was justified based upon a mutual mistake because there was
never an agreement to release any person other than Johnson and the owners of
Johnson’s vehicle. Respondents did not file any pleading objecting to or
opposing Traweek’s motion for leave to amend her petition to add the reformation
claim.
5
Traweek also filed suggestions in opposition to Respondents’ summary
judgment motion. In her suggestions, she again asserted her argument that there
was a mutual mistake that justified reformation of the original release. Traweek
argued that summary judgment would be premature at that time and invoked
Rule 74.04(f), which provides that the court can order the continuance of a
summary judgment motion under certain circumstances. To support her
contention that summary judgment would be premature at that time, she attached
her counsel’s affidavit explaining that the Farm Bureau adjuster admitted to him
that the release was intended to release only Johnson but that Farm Bureau was
unwilling to help counsel correct it. Traweek stated that, if the court granted her
leave to amend her petition to include a count for reformation, she intended to
depose Farm Bureau and would need time to do so.
In their reply, Respondents noted that Traweek was represented by counsel
when she executed the original release and that both of her parents were with her
and signed the release as witnesses. Respondents argued that, under Missouri
law, they, as non-settling tortfeasors, fell under the scope of the original release
and, therefore, were intended beneficiaries of the original release. As for
Traweek’s intention to depose Farm Bureau to establish a mutual mistake,
Respondents asserted that Farm Bureau did not sign the original release and was
not a party to this case. Respondent argued that Traweek could demonstrate, at
most, unilateral mistake and not mutual mistake, which is necessary to support
reformation of the original release.
6
The court held a hearing on Respondents’ summary judgment motion on
July 2, 2019. At the start of the hearing, the court took up Traweek’s motion for
leave to file her first amended petition to add a reformation claim. Respondents
stated that they did not object to the motion because their motion for summary
judgment encompassed the reformation argument as set forth in the pleadings,
and they intended to argue that the undisputed evidence would show that there
was no evidence to support a reformation claim. The court granted Traweek’s
motion for leave to file her amended petition.
The court then heard arguments from both parties concerning the
enforceability of the original release and whether the corrected partial release
constituted a reformation of the original release. Traweek argued that it was too
early to grant Respondents’ motion for summary judgment considering that she
had just been granted leave during the hearing to file an amended petition to raise
her reformation claim. She explained that she needed time to conduct discovery
on her reformation claim to determine if Farm Bureau was mistaken as to the
nature and extent of the original release, because it appeared that Farm Bureau
had accepted the corrected partial release that she had executed.
Thirteen days later, on July 15, 2019, the court made a docket entry
granting summary judgment in favor of Respondents and directing them to
provide the court with a proposed judgment. On July 18, 2019, the court entered
summary judgment in favor of Respondents. Traweek filed a motion to
reconsider, which the court denied. Traweek appeals.
7
STANDARD OF REVIEW
Appellate review of summary judgment is essentially de novo. ITT
Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.
banc 1993). We view the record in the light most favorable to the party against
whom the judgment was entered and accord the non-movant all reasonable
inferences from the record. Wills v. Whitlock, 139 S.W.3d 643, 646 (Mo. App.
2004).
Summary judgment is appropriate when there is no genuine issue of
material fact and the movant is entitled to judgment as a matter of law. Id.
Respondents sought summary judgment based upon the affirmative defense of
release. Consequently, “to obtain summary judgment, it was necessary for them
to present undisputed facts which established that they were entitled to the
defense as a matter of law.” Lunceford v. Houghtlin, 170 S.W.3d 453, 459 (Mo.
App. 2005) (“Lunceford I”). “If any of the facts necessary to that affirmative
defense were subject to genuine dispute, however, summary judgment would be
inappropriate.” Id.
ANALYSIS
In Point I, Traweek contends the circuit court erred in granting summary
judgment in favor of Respondents because summary judgment was premature, in
that the court did not allow her sufficient time to conduct discovery on her
reformation claim. Specifically, she argues that she should have been given time
to depose Farm Bureau representatives regarding Farm Bureau’s intent as to the
8
scope of the original release to support her assertion of mutual mistake, which is
necessary to justify reformation.
In her suggestions in opposition to Respondents’ motion for summary
judgment, Traweek stated that she needed additional time for discovery before
the court ruled on the summary judgment motion and invoked Rule 74.04(f),
which provides:
(f) When Affidavits Are Unavailable. Should it appear from
the affidavits of a party opposing the motion that for reasons stated
in the affidavits facts essential to justify opposition to the motion
cannot be presented in the affidavits, the court may refuse the
application for judgment or may order a continuance to permit
affidavits to be obtained or depositions to be taken or discovery to be
had or may make such other order as is just.
The circuit court “has discretion to grant or deny additional time to conduct
discovery before ruling on a pending summary judgment.” Matysyuk v.
Pantyukhin, 595 S.W.3d 543, 547 (Mo. App. 2020) (citation omitted). An abuse of
discretion occurs only when a ruling “is clearly against the logic of the
circumstances then before the court and is so arbitrary and unreasonable as to
shock the sense of justice and indicate a lack of careful consideration.” Id.
(citation omitted).
“A party seeking a continuance under Rule 74.04(f) must file an affidavit
supporting its motion and must specify what additional evidence supporting the
existence of a factual dispute the movant would have presented to the court if the
court had continued the hearing.” Duncan v. Dempsey, 547 S.W.3d 815, 821-22
9
(Mo. App. 2018) (internal quotation marks and citation omitted). The affidavit
must “(1) set out the evidence that the sought-after discovery would adduce; and
(2) show that evidence would create a genuine issue of material fact.” Id. at 822
(quoting Nigro v. St. Joseph Med. Ctr., 371 S.W.3d 808, 816 (Mo. App. 2012)). “It
is insufficient to merely allege further discovery might provide the necessary
evidence; rather, [the affidavit] must describe the evidence.” Id. (internal
quotation marks and citation omitted).
In the affidavit attached to Traweek’s suggestions in opposition to
Respondents’ summary judgment motion, her counsel explained that he
contacted the Farm Bureau adjuster and that the adjuster admitted to him that the
original release was intended by Farm Bureau to release only Johnson, but the
adjuster was unwilling to assist him in “correcting this situation.” Traweek’s
counsel stated that, if the court granted Traweek leave to amend her petition to
include a reformation claim, he intended to depose the Farm Bureau adjuster to
elicit this information. The affidavit from Traweek’s counsel sufficiently described
the evidence that the sought-after discovery would adduce.3
3
Respondents contend that Farm Bureau was not a party to the release because it did not sign it;
therefore, its intent regarding the scope of the release is irrelevant. We disagree. “[A]lthough a
written document is not signed, when one party accept the other party’s performance, it gives
validity to the instrument and imposes on the accepting party the obligations provided by the
agreement.” R.L. Hulett & Co. v. Barth, 884 S.W.2d 309, 310 (Mo. App. 1994). Here, Farm Bureau
presented the original release to Traweek, Traweek signed the release, and, pursuant to the
release’s terms, Farm Bureau paid her the $50,000 policy limits as consideration. While Farm
Bureau may not have signed the release, it is clear that it was a party to the agreement
memorialized in the release.
10
As to the second requirement for a continuance, Traweek asserted that
deposition testimony from Farm Bureau’s adjuster as to the intent of the scope of
the release would create a genuine issue of material fact on her reformation claim.
In particular, she contended that evidence that Farm Bureau did not intend for the
original release to extinguish Traweek’s potential claims against anyone other
than its insureds would support her contention that a mutual mistake of fact
existed that justified reformation of the original release.
Section 537.060, RSMo 2016, provides that executing a release with regard
to one tortfeasor does not “automatically operate to release claims against other
joint tortfeasors, in the absence of any language expressly releasing claims
against other persons.” Lunceford I, 170 S.W.3d at 459. If, however, “a release
states that it releases ‘all claims’ against ‘any and all persons,’ or similar
language, it may operate as a general release, and effectively extinguish claims
against all tortfeasors, even those who were not parties to the release.” Id. at 460.
The original release that Traweek signed contained such language; therefore, it
appeared to release from liability not only Johnson, Schoen, and Lamar, but also
Respondents.
Because a release is a type of contract, it is subject to reformation. Id. at
464. Reformation is an equitable remedy “by which a party to a contract
(including an intended beneficiary) may obtain modification of the terms of the
contract such that those terms reflect the parties’ original intent in forming the
11
contract.” Id.4 “The party seeking reformation must show by clear, cogent, and
convincing evidence: (1) the existence of an actual, preexisting agreement and (2)
a mutual mistake made by the parties to the agreement.” Hunter v. Moore, 486
S.W.3d 919, 925 (Mo. banc 2016). The mutual mistake must be “such that both
parties ‘have done what neither intended.’” Id. at 925 (citation omitted).
Generally, whether a mutual mistake has occurred is a question of fact. Id.
at 926. Reformation can be proven by circumstantial evidence “provided that the
natural and reasonable inferences drawn from it clearly and decidedly prove the
alleged mistake.” Lunceford v. Houghtlin, 326 S.W.3d 53, 64 (Mo. App. 2010)
(“Lunceford II”) (citation omitted). “It is enough to show that both parties, at the
time of the contract, shared a misconception about a basic assumption upon
which they based their bargain.” Id. Factors the circuit court may consider in
determining whether reformation of an instrument is appropriate include “the
wording of the contract as signed by the parties, the relationship of the parties,
the subject matter of the contract, the usages of the business, the circumstances
surrounding the execution of the contract, and its interpretation by the parties.”
Hunter, 486 S.W.3d at 926 (citation omitted).
4
As we explained in Lunceford I, while reformation is an equitable remedy that “may not be
available in situations where reformation would unfairly affect the rights of third parties,”
reformation of the release would not unfairly affect the non-settling tortfeasors because “[t]hey
were not party to the prior settlement and neither contributed funds to that settlement nor
otherwise compensated the [plaintiffs] for their injuries. There is no showing that [the non-settling
tortfeasors] relied to their detriment upon the original release.” Lunceford I, 170 S.W.3d at 464 n.4.
“Moreover, the effect of the language of the original release would be to grant [the non-settling
tortfeasors] a windfall, by absolving them of potential liability for those injuries without any action
or contribution on their part.” Id.
12
 In the Lunceford cases, the plaintiffs, like Traweek, signed a general release
releasing claims against a settling tortfeasor and “all other persons, firms,
associations, and corporations of and from . . . all actions, claims and demands . . .
existing or which may hereafter arise out of” the occurrence. Lunceford I, 170
S.W.3d at 458. After non-settling tortfeasors raised the affirmative defense of
release in the plaintiffs’ lawsuit against them, the plaintiffs argued that neither
they nor the settling tortfeasor’s insurer intended to release anyone who was not
a party to the settlement. Id. In support of their claim of mutual mistake
supporting reformation of the initial release, the plaintiffs presented a corrected
release, which released only the settling tortfeasor and his insurer, and affidavits
from the settling tortfeasor and his insurer’s representative as to their intent
concerning the scope of the initial release. Id. The circuit court granted summary
judgment in favor of the non-settling tortfeasors. Id.
We reversed on appeal, finding that there was a genuine issue of material
fact on the plaintiffs’ reformation claim. Id. at 465. Specifically, we found that,
through the affidavits, the plaintiffs presented facts suggesting that the initial
release “mistakenly and incorrectly memorialized the settling parties’ intent” and
that the corrected release was “the correct articulation of their intent.” Id. We
explained that, “[i[f those facts would subsequently be proven at trial, they would
form a valid basis upon which the trial court could deem the [initial] release
reformed in accordance with the . . . corrected partial release.” Id. Moreover, we
noted that, if reformed, “the release would leave reserved claims against [the non-
13
settling tortfeasors], and they could not prevail upon the affirmative defense of
release.” Id.
On remand, the plaintiffs amended their petition to expressly assert a
reformation claim. Lunceford II, 326 S.W.3d at 60. Following a trial in equity on
the plaintiffs’ reformation claim, the circuit court found that the corrected release
accurately articulated the intent of the plaintiffs and the settling tortfeasor’s
insurer and found that the initial release was reformed in accordance with the
corrected release. Id. Therefore, the circuit court ruled that the plaintiffs’ personal
injury claims against the non-settling tortfeasors could proceed. Id. We affirmed
the circuit court’s decision on appeal, finding that the evidence, which included
affidavits and testimony from representatives of the settling tortfeasor’s insurer
along with the corrected release, was sufficient to support the court’s finding of
mutual mistake justifying reformation. Id. at 64-68.
The difference between Lunceford I and this case is that the settling
tortfeasor’s insurer in Lunceford I was willing to provide affidavits stating that the
initial release mistakenly and incorrectly memorialized its intent because the
insurer never intended to require the plaintiffs to release their claims against
anyone but its insured. Lunceford I, 170 S.W.3d at 458. The plaintiffs were then
able to use those affidavits in their response to the summary judgment motion.
Id. Here, while Farm Bureau admitted to Traweek’s counsel that it did not intend
for the release to release from liability anyone other than its insureds, Farm
Bureau was unwilling to provide affidavits stating as much. Because Farm Bureau
14
was unwilling to cooperate with Traweek, Traweek sought leave to amend her
petition to add a formal claim for reformation so that she could secure deposition
testimony from Farm Bureau’s representatives.
Thus, while Respondents may be correct that reformation had been an
issue in the case for “over ten months” when the court ruled on their summary
judgment motion, Farm Bureau’s lack of cooperation necessitated Traweek’s
seeking leave to amend her petition to add reformation as a formal claim.
Compare Lunceford II, 326 S.W.3d at 60 n.4 (noting that, although the plaintiffs
amended their petition to include a formal reformation claim, they were not
required to do so, as the settling tortfeasor’s insurer had demonstrated an intent
to reform the release and had cooperated in the plaintiffs’ presentation of
evidence on the issue of reformation). The court did not grant Traweek’s motion
for leave to file her amended petition until July 2, 2019, which was the same day
the court heard arguments on Respondents’ summary judgment motion.
Affording Traweek only two weeks after granting her leave to amend her petition
to add the reformation claim before granting summary judgment did not allow her
an adequate period of discovery on this claim. “[A]s a general matter, ‘a motion
for summary judgment should be denied, or at least deferred, if the adverse party
has not yet had an opportunity to conduct adequate discovery in opposition to the
motion.’” VBM Corp. v. Marvel Enters., Inc., 842 S.W.2d 176, 178 (Mo. App. 1992)
(citation omitted).
15
Traweek met 74.04(f)’s requirements for a continuance of the court’s ruling
on Respondents’ summary judgment motion. Her counsel’s affidavit sufficiently
described that the discovery she was seeking would show that the original release
was intended by Farm Bureau to release only Johnson and the owners of
Johnson’s vehicle. Furthermore, this evidence, when combined with (1)
Traweek’s deposition testimony that she did not realize she was releasing all other
persons when she signed the original release, (2) the indisputable fact that
Traweek filed a petition for damages against Respondents one week before
signing the release that appeared to release Respondents from all liability, and (3)
Farm Bureau’s apparent acceptance of the corrected release, would create a
genuine issue of fact on the existence of a mutual mistake justifying reformation.
Under these circumstances, the court’s denying Traweek’s request for a
continuance to obtain the described discovery and ruling on Respondents’
summary judgment motion only two weeks after granting Traweek leave to
amend her petition to add her reformation claim constituted an abuse of
discretion.5 Point I is granted.6
CONCLUSION
Summary judgment in favor of Respondents is reversed, and the cause is
remanded to the circuit court to allow Traweek an adequate period of discovery
5
We express no opinion regarding the ultimate viability of the reformation claim or whether the
proper parties are before the trial court on that claim.
6
Because we are reversing the court’s entry of summary judgment, we need not address
Traweek’s claim in Point II that the summary judgment failed to dispose of her reformation claim.
16
on her reformation claim before ruling on Respondents’ motion for summary
judgment.
____________________________________
LISA WHITE HARDWICK, JUDGE
ALL CONCUR.
17