Richard Brewer v. David B. Cosgrove and Cosgrove Law Group, LLC v. Denise Lunsford, Respondent/Cross-Appellant.

In the Missouri Court of Appeals
Eastern District
DIVISION THREE
RICHARD BREWER, ) No. ED103503
)
Appellant, )
)
vs. ) Appeal from the Circuit Court
) of St. Louis County
DAVID B. COSGROVE and COSGROVE ) 14SL-CC00522
LAW GROUP, LLC, )
)
Respondents/Appellants, )
)
vs. ) Honorable Michael T. Jamison
)
DENISE LUNSFORD, )
)
Respondent/Cross-Appellant. ) Filed: August 2, 2016
OPINION
In 2013, Denise Lunsford sued David B. Cosgrove in the circuit court of St. Louis County.
In November 2013, that lawsuit was resolved upon the execution of a confidential settlement
agreement by Lunsford, Cosgrove, Cosgrove Law Group, LLC ("Cosgrove Law"), and Richard
Brewer, Lunsford's boyfriend. Then, in February 2014, Brewer sued Cosgrove and Cosgrove Law
for breach of contract claiming that Cosgrove and Cosgrove Law had breached the terms of the
settlement agreement. Lunsford did not join in Brewer's suit. In July 2014, Cosgrove and
Cosgrove Law filed a counterclaim against Lunsford also alleging the breach of the settlement
agreement.
Lunsford filed a motion to dismiss Cosgrove and Cosgrove Law's counterclaim, asserting
that the court lacked personal jurisdiction over her. The court agreed and granted Lunsford's
motion to dismiss and awarded Lunsford $25,000 in attorney's fees jointly and severally against
Cosgrove and Cosgrove Law pursuant to the provision in the settlement agreement that allowed
for such an award to the prevailing party in a lawsuit arising out of the breach of the settlement
agreement.
For its part, Cosgrove Law filed a motion to dismiss Brewer's breach of contract claim
against Cosgrove Law for the failure to state a claim, asserting that while Cosgrove may have
agreed to refrain from the conduct alleged to be in breach of the settlement agreement, Cosgrove
Law had not. The court agreed and dismissed Brewer's claim against Cosgrove Law and awarded
Cosgrove Law $25,000 in attorney's fees against Brewer. Since only Brewer's claim against
Cosgrove remained pending, the court entered its finding that there was no just reason to delay the
entry of judgment, and pursuant to Rule 74.01(b), 1 entered its judgment in accordance with the
aforementioned rulings.
Brewer has appealed the dismissal of Cosgrove Law and the attorney's fees award against
him. We reverse that judgment and remand for further proceedings consistent with this opinion
because we find that Brewer has stated a cause of action against Cosgrove Law.
Cosgrove and Cosgrove Law have filed a cross-appeal of the dismissal of Lunsford and the
attorney's fees award in her favor. Lunsford cross-appeals as to the amount of attorney’s fees she
was awarded. We also reverse and remand the judgment in Lunsford’s favor because we find that
the court has personal jurisdiction over Lunsford.
1
All references to rules are to the Missouri Supreme Court Rules (2016) unless otherwise
indicated.
2
Standard of Review
We review the trial court's decision to grant a motion to dismiss de novo. Lynch v. Lynch,
260 S.W.3d 834, 836 (Mo.banc 2008). While we generally review an award of attorney's fees for
an abuse of discretion, if a contract provides for the payment of attorney's fees to the prevailing
party, the trial court must award those fees. Brown v. Brown-Thill, 437 S.W.3d 344, 348
(Mo.App.W.D. 2014). Contract interpretation and questions of contractual ambiguity are issues
of law subject to de novo review. Monsanto Co. v. Syngenta Seeds, Inc., 226 S.W.3d 227, 230
(Mo.App.E.D. 2007). Whether a trial court may exercise personal jurisdiction over a party is a
question of law that is reviewed de novo. Bryant v. Smith Interior Design Grp., Inc., 310 S.W.3d
227, 231 (Mo.banc 2010).
Missouri Law Governing the Sealing of Court Files
This lawsuit has been litigated under seal at trial and thus far on appeal, but we find no
compelling justification for this entire case to have been litigated in secret or for this opinion to
be filed under seal. See In re Transit Cas. Co. ex rel. Pulitzer Publ'g Co. v. Transit Cas. Co. ex
rel. Intervening Emps., 43 S.W.3d 293 (Mo.banc 2001). There is a presumption in favor of court
records being open to the public because justice is best served when it is done within full view of
those to whom all courts are ultimately responsible: the public. Id. at 301. Indeed, Article I,
section 14 of the Missouri Constitution states that the courts of justice shall be open to every
person, section 476.170 2 provides that the sitting of every court shall be public and every person
may freely attend the same, and section 510.200 states that all trials upon the merits shall be
conducted in open court. This authority further demonstrates the presumption in favor of public
court proceedings and records.
2
All references to statutes are to RSMo (2000) unless otherwise indicated.
3
The presumption in favor of openness is recognized by Supreme Court Operating Rule 2,
which provides exceptions to the general rule of openness, including as is relevant here an
exception for records that are confidential pursuant to court order. In re Transit Cas. Co. ex rel.
Pulitzer Publ'g Co., 43 S.W.3d at 301. Moreover, Supreme Court Operating Rule 4.24 sets forth
what records are deemed confidential, and a number of exceptions to the presumption of open
records have been set forth by the legislature and in the decisions of our courts. Id. at 301-02.
But the presumption of openness cannot be overcome absent a compelling justification that the
records should be closed. Id. at 301. And while there may be justification for sealing part or all
of a file, to do so a court must identify specific and tangible threats to important values in order
to override the importance of the public right of access. Id. at 302.
We acknowledge that the parties here may consider the matters giving rise to this
litigation to be embarrassing, but parties are not entitled to litigate in private even if both agree
with the request to do so. Nevertheless, our courts have long been adept at handling sensitive
matters such as trade secrets, the identity of juvenile crime victims or certain juvenile
perpetrators, illicit photographs, and medical records of non-parties. See Rule 4.24; In re Transit
Cas. Co. ex rel. Pulitzer Publ'g Co., 43 S.W.3d at 302 (recognizing a number of exceptions to
the presumption of open records, including, among others, trade or business secrets, certain
juvenile records, victim’s names, scandalous material, and certain medical records of non-
parties). Trade secrets are routinely kept from the public eye through protective orders. See
Rule 56.01(c); § 417.459. Yet, the entire case is not sealed or even all of the company’s
sensitive information if it does not rise to the level of being confidential, and courts can issue
protective orders that limit the dissemination of confidential information to only those persons
involved in the litigation. In re Marriage of Mangus, 227 S.W.3d 510, 513 (Mo.App.S.D. 2007).
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The balance courts must strike between the public’s compelling interest in open courts
with a party’s request to seal materials is limited to sealing that and only that material which the
litigant has demonstrated through compelling proof should be closed to the public eye. In re
Transit Cas. Co. ex rel. Pulitzer Publ'g Co., 43 S.W.3d at 304. Therefore, upon remand, we
direct the trial court to reconsider its wholesale sealing of the file in accordance with the
aforementioned principles and to make a record setting forth the specific compelling reasons that
justify sealing any portion of the file with the understanding that sealing the entire file will
almost never be justified.
Analysis
I. The trial court erred in dismissing Brewer's claim for breach of contract against
Cosgrove Law and in awarding Cosgrove Law attorney's fees.
Brewer raises three points on appeal: (1) the trial court erred by denying his motion for
leave to amend; (2) the trial court erred in dismissing his breach of contract claim against Cosgrove
Law; and (3) the trial court erred in awarding Cosgrove Law $25,000 in attorney's fees as a
prevailing party under the settlement agreement. Because we find that the trial court erred in
dismissing Brewer's breach of contract claim against Cosgrove Law, we reverse the trial court's
dismissal of Cosgrove Law and its award of $25,000 in attorney's fees in Cosgrove Law's favor as
the prevailing party. Our reversal and remand allowing Brewer's breach of contract claim against
Cosgrove Law to proceed renders Brewer's point I moot as Brewer will have a new opportunity to
seek leave to amend on remand if he chooses. See Hargis v. JLB Corp., 357 S.W.3d 574, 587 n.12
(Mo.banc 2011).
Missouri is a fact-pleading state. Gibson v. Brewer, 952 S.W.2d 239, 245 (Mo.banc 1997).
Pleadings must contain a short and plain statement of the facts showing that the pleader is entitled
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to relief. Id. When reviewing the dismissal of a petition for the failure to state a claim, the facts
contained in the petition are treated as true and they are construed liberally in favor of the plaintiff.
Lynch, 260 S.W.3d at 836. If the petition sets forth any set of facts that, if proven, would entitle
plaintiff to relief, then the petition states a claim. Id. An exhibit to a pleading is a part therefor for
all purposes. Section 509.130; Rule 55.12.
A settlement agreement is governed by contract law. Neiswonger v. Margulis, 203 S.W.3d
754, 760 (Mo.App.E.D. 2006). To establish a breach of contract, a plaintiff must plead and prove
the following elements: (1) the existence of a valid contract; (2) the rights and obligations of the
respective parties; (3) a breach; and (4) damages. Id.
In Brewer's breach of contract claim against Cosgrove Law, Brewer alleged (1) that he,
Lunsford, Cosgrove, and Cosgrove Law were parties to the November 2013 settlement agreement
that Brewer attached and incorporated into his petition; (2) that there were certain specific rights
and obligations of the parties to the settlement agreement; (3) that Cosgrove Law breached one or
more of its obligations under the settlement agreement; and (4) that Brewer was damaged as a
result. We find that Brewer’s allegations properly pled a claim for breach of contract against
Cosgrove Law. Moreover, our review of the settlement agreement, which was incorporated into
the petition, fails to contradict Brewer's cause of action. We observe that Cosgrove Law was a
party to the settlement agreement and there is no language that eliminates Cosgrove Law as a
viable defendant for the breach of the settlement agreement when construing the facts pled as true
and liberally in favor of Brewer as we must on a motion to dismiss.
Thus, the trial court erred in dismissing Brewer's breach of contract claim against Cosgrove
Law and likewise erred in awarding Cosgrove Law attorney's fees under the settlement agreement
as the prevailing party. Points II and III are granted, and point I is denied as moot.
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II. The trial court erred in dismissing Lunsford for lack of personal jurisdiction and in
awarding Lunsford attorney's fees.
Cosgrove and Cosgrove Law allege three points of error: (1) the trial court erred in
dismissing Lunsford as a defendant to their counterclaim for lack of personal jurisdiction because
Lunsford purposely availed herself of the laws of the State of Missouri; (2) the trial court erred in
dismissing Lunsford as a defendant to their counterclaim for lack of personal jurisdiction because
Lunsford waived any challenge to personal jurisdiction; and (3) the trial court abused its discretion
in awarding Lunsford attorney's fees.
Lunsford cross-appeals contending that the trial court erred in awarding her only partial
attorney's fees because the settlement agreement provided that she was entitled to recover all her
fees and costs as the prevailing party.
Because we find that the trial court had personal jurisdiction over Lunsford, we reverse the
trial court's dismissal of Lunsford as a party and the award of attorney's fees to Lunsford as a
prevailing party. Lunsford's cross-appeal is denied as moot.
When personal jurisdiction is contested, it is the plaintiff's burden to establish that
defendant's contacts with the forum state are sufficient to establish personal jurisdiction. Bryant,
310 S.W.3d at 231. On appeal, we evaluate personal jurisdiction by considering the allegations
contained in the pleadings to determine whether, if taken as a true, they establish facts adequate to
invoke Missouri's long-arm statute and support a finding of minimum contacts with Missouri
sufficient to satisfy due process. Id.
Missouri courts employ a two-step analysis to determine personal jurisdiction: (1) does
defendant's conduct satisfy Missouri's long-arm statute; and (2) if so, does the defendant have
sufficient minimum contacts with Missouri such that asserting personal jurisdiction over the
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defendant comports with due process. Id. Missouri's long-arm statute provides in relevant part
that any person, whether or not a citizen or resident of this state, submits to the jurisdiction of the
courts of this state as to any cause of action arising from the doing of any of the acts set forth in
this section, including: "(2) The making of any contract within this state[.]" § 506.500.1(2).
Missouri's long-arm statute is construed to extend the jurisdiction of Missouri courts over
nonresident defendants to the extent permissible under the Due Process clause. Bryant, 310
S.W.3d at 232. When evaluating minimum contacts, the focus is on whether the defendant
purposefully availed itself of the privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its law. Id. One factor is whether the defendant's conduct
and connection with the forum state are such that he should reasonably anticipate being haled into
court there. Strobehn v. Mason, 397 S.W.3d 487, 499 (Mo.App.W.D. 2013). A court has "general
jurisdiction" over an out-of-state defendant if the defendant's connections with the state are
systematic, continuous, and substantial enough to furnish personal jurisdiction over the defendant
based on any cause of action. Bryant, 310 S.W.3d at 232. By contrast, a court acquires "specific
jurisdiction" over an out-of-state defendant when the court exercises personal jurisdiction over a
defendant in a suit arising out of or related to the defendant's contacts with the forum. Id. at 232-
33. In some cases, a single or isolated acts, because of their nature and quality and the
circumstances of their commission, provide sufficient minimum contacts to support jurisdiction
for liability arising from those acts. Id. at 233.
Entering into a contract with a Missouri resident does not, by itself, support the exercise of
personal jurisdiction, but rather each case requires a multifaceted, fact-specific inquiry considering
all of the circumstances surrounding the contract, including prior negotiations, contemplated future
8
consequences, the terms of the contract, and the parties' actual course of dealing. Strobehn, 397
S.W.3d at 499.
Here, there is no question that Lunsford's act of entering into the settlement agreement in
the State of Missouri satisfies Missouri's long-arm statute. See § 506.500.1(2). Thus, the only
question is whether Lunsford has sufficient minimum contacts with Missouri such that asserting
personal jurisdiction over her comports with due process. We find that it does.
The pleadings reveal that Lunsford is a resident of Virginia and was a party to the
confidential settlement agreement that was entered into to resolve a lawsuit she filed against
Cosgrove in St. Louis County. The agreement set forth a number of covenants agreed to by the
parties and Cosgrove and Cosgrove Law alleged that Lunsford violated the terms of the agreement.
The agreement is signed by Lunsford and her attorney and Lunsford agreed to dismiss her lawsuit
against Cosgrove with prejudice as a result of the settlement agreement. The agreement provided
liquidated damages and attorney's fees and costs to the prevailing party should any litigation arise
from or related to any breach of the settlement agreement or should any litigation arise to enforce
the settlement agreement.
Not only did Lunsford purposefully avail herself of the laws of Missouri by filing her
lawsuit in St. Louis County and subsequently entering into a settlement agreement to resolve that
suit, but this litigation arose directly as result of that settlement agreement. Lunsford reasonably
should have anticipated that by filing a lawsuit in Missouri and entering into a settlement
agreement contemplating further litigation if that agreement was breached or sought to be enforced
that she may be made to answer in a Missouri court. Thus, we find that the trial court erred in
finding that it lacked personal jurisdiction over Lunsford and hold that the trial court had "specific
jurisdiction" over Lunsford arising out of the parties' settlement agreement. Cosgrove and
9
Cosgrove Law's points I and III are granted, and point II is denied as moot. Lunsford's cross-
appeal is denied as moot as well.
Conclusion
For the reasons stated above, we reverse and remand for proceedings consistent with this
opinion.
______________________________
James M. Dowd, Judge
Lawrence E. Mooney, P.J., and
Lisa P. Page, J., concur.
10