Jeffrey Alan Heberlie v. Harriman Oil Company, LLC

In the Missouri Court of Appeals
Eastern Dist``rict
DIVISION FOUR
JEFFREY ALAN HEBERLIE, ) ED103702
)
Appellant, ) Appeal from the Circuit Court
) of the City of St. Louis
v. ) l322-CC09315
)
HARRIMAN OIL COMPANY, LLC, ) Honorable Joan L. Moriarty
)
Respondent. ) Filed: September 6, 2016
Introduction
Appellant Jeffery Heberlie (Heberlie) appeals the trial court’s summary judgment
in favor of Respondent Harriman Oil Company, LLC (Harriman Oil), on Heberlie’s claim
of maiicious prosecution The underlying suit prompting I-Ieberlie’s claim Was initiated by
Harriman Oil against Heberlie for collection cfa debt. Heberlie argued Harriman Oil knew
such debt had been discharged by bankruptcy proceedings, thus Heberlie filed the present
suit for malicious prosecution Because the undisputed facts established Heberlie could
not prevail on this claim, We affirm
Background
Heberlie was a member of a corporation called Corner Market Operating Team,
LLC (Corner Market LLC), With one other member, Thomas Baker (Baker). Corner
Market LLC operated a gas station and market called the Corner l\/Iarket (Corner Market).
On October 26, 2007, Corner Market LLC entered into a Petroleum Product Sales
Agreement (Sales Agreement) with Harriman Oil to purchase fuel. Heberlie and Baker
both signed the Sales Agreement as personal guarantors for Corner Market LLC under the
agreement
Over the period of time during which Corner Market LLC purchased fuel from
Harrirnan Oil, Harriman Oil would deliver the fuel and then electronically withdraw funds
for the fuel from Corner l\/larket LLC’s bank account at First State Community Bank.
Corner Market LLC maintained this bank account solely for the purpose of paying
Harriman Oil for fuel. No other vendors Withdrew funds from this account, and Corner
Market LLC did not use this account to pay for other services. Corner Market LLC used a
Second bank account at Bank Star of the Leadbelt for daily deposits and to pay other
vendors.
On Friday, May l6, 2008, Heberlie unilaterally decided to close the Corner Market
upon advice from his attorney. Heberiie did not inform Baker of this decision because he
believed Baker was planning to remove himself as a guarantor from the Sales Agreement
on Monday, May 19, 2008. Heberiie contacted local police to let them know he Would be
closing the Corner Market permanently on Sunday, May 18, 2008. I-Ieberlie decided to
liquidate all of Corner Market’s merchandise over the Weekend.
Additionally, Harrirnan Oil delivered multiple loads of fuel to the Corner Market
that weekend Heberlie had ordered more fuel than usual for the Weekend. Invoices from
May 15 and l6, 2008, totaled $34,660.77. Harrirnan Oil made an additional delivery on
May 17, 2008, and the invoice for that delivery was in the amount of $15,612.54. On
Sunday, May 18, 2008, sometime between 5 p.m. and 8 p.rn., Heberlie also lowered the
price of gasoline at least 50 cents lower than other gas stations in town, in order to sell as
much as possible. Heberlie knew that the gasoline had been provided via credit by
Harriman Oil and that Corner Market LLC would owe Harriman Oil payment for the
gasoline.
Wiien Heber]ie closed the Corner Market on Sunday, May 18, 2008, he took all of
the money from sales over the weekend home with him. On Monday, May 19, 2008,
Hebei'lie deposited all of the money in the bank account with Bank Star of the Leadbelt.
In doing so, Hebei‘lie knew there would not be sufficient funds in the First State
Conimunity Bank account to pay for the gasoline from the weekend When Harriman Oil
attempted to withdraw money from the bank account at First State Coinmunity Bank for
these invoices, the requests were returned due to insufficient funds in the account.
Heberlie used the money from the weekend to pay other vendors besides Harriman
Oil. He had considered the responsibilities he had regarding payment of vendors With the
closing of the Corner Market and decided he would “just do the best that he could.” He
did not pay any of the money owed to Harriman Oil. In October of 2008, Heberlie received
a letter from Hai'riinan Oil demanding payment regarding a check that was returned for
insufficient funds in the amount of $ l 9,83 l.48. Heberlie’s attorney responded to the letter,
stating that Heberlie had no individual liability for debts of the Corner Market. Heberlie
did not send payment.
On June 18, 2010, Heberlie filed for personal bankruptcy under Chapter 7 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern
District of Missouri. Heberlie did not list Harrirnan Oil as a creditor, and Heberlie did not
apprise Harriman Oil of the bankruptcy filing at that time. The case was designated a “no
asset” case. On September 28, 201(), the Bankruptcy Court entered its Order Discharging
Debtoi' (Bankruptcy Order).
On August 3, 2011, Harriman Oil filed a complaint in the United States District
Court for the Eastern District of Missouri against both Baker and Heberlie, alleging
breaches of personal guaranty against each of thein. The complaint alleged that Corner
Market LLC had failed to pay Harriman Oil for gasoline under the Sales Agi‘eenient in the
amount of $ l 38,583 .01. Shortly after Harriman Oil filed suit, Heberlie’s attorney informed
Harriman Oil of Heberlie’s Bankruptcy Oi‘der and requested that Harriman Oil dismiss the
count against Heberlie.
On March 3, 2012, Harriman Oil filed an amended complaint, adding a claim of
fraud against Heberlie. Harriman Oil alleged that Heberlie purposely incurred debt with
Harriman Oil, never intending to pay it, for the purpose of benefiting himself and deceiving
and harming Harriman Oil. Heberlie subsequently moved to dismiss Harriman Oil’s claims
with prejudice Harriman Oil failed to file a timely response, and the court granted
Heberlie’s inotion, dismissing Harriman Oil’s claims against Heberlie with prejudicel
On October 24, 20l2, Heberlie filed the lawsuit that is the subject of this appeal.
Heberlie’s petition in the circuit court contained a single claim of malicious prosecution,
alleging that Harriman Oil’s action against Heberlie for breach of personal guaranty lacked
probable cause because Harriman Oil failed to give Heberlie notice of the failure to perform
under the Sales Agi'eement, Additionally, Heberlie alleged that Harriman Oil lacked
l Harriman Oil did obtain a judgment against Baker in the amount of $217,582.48.
4
probable cause to continue its prosecution of its claims against Heberlie after Heberlie
informed Harriman Oil of his Bankruptcy Ordei'.
Harriman Oil moved for summary judgment, The trial court found that there was
no factual dispute, and that the undisputed facts established Harriman Oil had probable
cause to bring its claim of fi‘aud. Thus, the trial court granted summary judgment in favor
of Harriman Oil. This appeal follows
Standard of Review
Our review of summary judgment is essentially de novo. ITT Coinmercial Fin.
Corp. v. Mid-Am. Mai‘ine Supplv Co., 854 S.W.Zd 371, 376 (Mo. Banc 1993). We review
the record in the light most favorable to the party against whom judgment was entered lg.
We take all facts set forth by affidavit or otherwise in support of the motion as true unless
contradicted by the non-moving party’s response, and we accord the non-movant the
benefit of all reasonable inferences from the record Ld. The propriety of summary
judgment is purely an issue of law. §
Discussion
Heberlie raises four related points on appeal, all arguing the trial court’s summary
judgment was improper.2 Because of the nature of our review of a claim for malicious
prosecution in the context of summary judgment, we address them together as we review
the propriety of the trial court’s judgment here. We find the trial coui't’s summary judgment
was pi'oper.
2 Specifica|ly, Heberlie argues in Point I that the trial court erred iii granting summary judgment because his
debt was discharged by the Bankruptcy Ordei'. In Point lI, Hebei'lie argues that the trial court erred in granting
summary judgment because Harriman Oil failed to seek a judicial determination that Heberlie’s debt to
Harriman Oil was not discharged In Point Ill, Hebei'lie argues summaryjudgment was improper because
there were no undisputed facts that Heberlie committed fraud. Finally, Heberlie argues in Point lV that the
trial court erred in granting summary judgment because Harriman Oil failed to notify Heberlie of Corner
Market LLC’s defaulted payments
Undei‘ Rule 74.04(0),3 where a “defending pai'ty” moves for summary judgment,
one of the ways he or she may establish a right to judgment is “by showing . . . that the
non-movant, after an adequate period of discovery, has not been able to produce, and Will
not be able to produce, evidence sufficient to allow the trier of fact to find the existence of
53
any one of the claimant’s elements l’i``T Commei'cial Fin. Corp., 854 S.W.Zd at 381.
Where there is no genuine dispute as to the facts underlying this right to judgment,
summary judgment is proper. I_d.
Here, Heberlie’s claim was for malicious prosecutionl The elements of this claim
are: “(l) the commencement of a judicial proceeding against the plaintiff; (2) the instigation
of the suit by the defendant; (3) the termination of the proceeding in [the] plaintiff s favor;
(4) the absence of probable cause for the suit; (5) malice by the defendant in instituting the
suit; and (6) resulting damage to the plaintiff.” Joseph H. Held & Associates, Inc. v. Wolff.
39 S.W.3d 59, 62~63 (Mo. App. E.D. 2001) (citing Stafford v. Muster, 582 S.W.Zd 670,
675 (Mo. banc 1979)). Because actions for malicious prosecution are not favoi'ed, a
plaintiff must provide “strict and clear proof ’ of each of these elements Holley v.
Caulfield, 49 S.W.3d 747, 750-51 (Mo. App. E.D. 2001).
Thus, as the defending party moving for summary judgment, Harriman Oil could
establish a right to judgment as a matter of law by showing that Heberlie would be unable
to produce evidence sufficient to allow the trier of fact to find the existence of any one of
the elements of malicious prosecution by strict and clear proof. @ § at 62 (quoting §
Cornrnercial Fin. Corp., 854 S.W.Zd at 381). The trial court focused on the fourth element,
the absence of probable cause, finding that the undisputed facts established that Harriman
3 All rule references are to Mo. R. Civ. P. (2016) unless otherwise indicated
6
Oil had probable cause to bring its claim of fi'aud, and therefore Heberlie Would not be able
to establish the absence of probable cause,4 §eg M, 39 S.W.3d at 63-64 (undisputed
facts demonstrated plaintiffs could not show lack of probable cause for entire proceeding).
Thus, the trial court determined summary judgment in favor of Harriman Oil was proper.
We agree.
j First, the underlying proceeding may give rise to only one claim of malicious
prosecution id at 63. Thus, regarding the element of lack of probable cause, “the plaintiff
must prove lack of probable cause for the entire proceeding.” _de., The burden is not met
by showing a lack of probable cause for one claim where others are Supported by probable
cause. lud“._ Rather, to satisfy this element, the plaintiff must show a lack of probable cause
for each claim. I_d.
Accordingly, to satisfy the element of lack of probable cause here, Heberlie would
have to establish that Harriman Oil lacked probable cause to bring both its claim of breach
of personal guaranty and its claim of fraud. Heberlie argued extensively that, once
informed of Heberlie’s Bankruptcy Ordei' and the discharge of his debts, Harriman Oil no
longer had probable cause to continue its suit for collection of the debt. I~Iowever,
Harriman Oil added a claim of fraud against Heberlie. Thus, even assuming m'gz.iendo that
this extinguished probable cause regarding Harriman Oil’s claim of breach of personal
guaranty,5 Heberlie still would have to show Harriman Oil lacked probable cause to bring
its fraud claim.
4 Harriman Oil also argued Heberlie would be unable to produce evidence sufficient for the trier of fact to
find the element of malice, but we need not discuss it here in light of our conclusion regarding the element
of lack of probable cause.
5 Harriman Oil does not concede that it lacked probable cause to continue its claim of breach of personal
guaranty, arguing that had it prevailed on the fraud claim, Heberlie’s debt would not have been discharged
by the bankruptcy proceeding under ll U.SLC. § 523(a)(3)(B), for fraud. However, we need not determine
this issue because Harriman Oil’s probable cause regarding its fraud claim alone defeats Heberlie’s claim of
7
Heberlie’s sole argument regarding the fraud claim is that Harriman Oil failed to
show uncontroverted facts that Heberlie committed fraud. However, this was not Harriman
Oil’s bui'den. As stated above, in order to be entitled to summaryjudgment, Harriman Oil
needed only to show by undisputed facts that Heberlie would be unable to establish a lack
of probable cause regarding Harriman Oil’s claim of fraud.
Thus, our final question is whether Harriman Oil did so by establishing that it in
fact had probable cause to bring its claim of fraud against Heberlie. “The Missouri
Supreme Court has defined probable cause for the institution of a civil action to consist of:
(l) the plaintiffs belief in the facts alleged, (2) based on sufficient circumstances to
reasonably induce such belief by a person of ordinary prudence in the same situation, plus
(3) a reasonable belief that under the facts the claim may be valid under the applicable
law.” Ho_l_ley, 49 S.W.3d at 751. Simply put, probable cause is “a reasonable belief in the
facts alleged, plus a reasonable belief that the claim may be valid.” kl~.
In its complaint in federal court, Harriman Oil claimed that “Heberlie made the
calculated and purposeful decision to incur additional debt with Harriman [Oil], liquidate
Corner Market[ LLC]’s assets, and shield the proceeds of that liquidation from Harriman
[Oil] for personal gain.” The complaint also alleged that when Heberlie ordered the fuel
for the weekend that he closed the Corner Market, “Heberlie made fraudulent
representations that he intended to pay for the fuel ordei'ed, but in fact, he never intended
to pay Harriman [Oil] the amounts owed under the [Sales] Agreement.” Harriman Oil
claimed that Heberlie’s actions were meant to deceive and harm Harriman Oil for
Heberlie’s benefit, and that Harriman Oil was directly harmed thereby.
malicious prosecution Additionally, this renders the issue of which party had a duty to reopen the bankruptcy
proceeding to determine whether Heberlie’s debt was discharged irrelevant
8
fn its motion for summary judgment, Harriman Oil made substantially similar
allegations of fact, and supported these allegations with exhibits, affidavits, and
depositions Heberlie disputed several of these factual assertions, which Heberlie
supported by his own affidavit However, the trial court rejected this affidavit because it
contained inadmissible hearsay and thus did not meet the requirements of Rule 74.04(e).
Heberlie admitted the following facts, howevei':
0 Heberlie lowered gas prices in order to get rid of as much gas as
possible.
¢ Heberlie knew, at the time of his reduction of gas prices, that
their past practice was that Harriman Oil would be paid for the
fuel it provided subsequent to it being delivered and that the fuel
was being provided via credit.
0 Heberlie knew that by getting rid of the gas, [Corner Market
LLC] would owe Harriman Oil for tire fuel that was being sold.
0 By depositing the weekend funds into the Bank Star of the
Leadbelt account, . . . Heberlie immediately knew that Harriman
Oil would be drafting from an insufficiently funded account.
The trial court determined that the undisputed facts would warrant a reasonable
person to have an honest belief that pursuing a claim of fraud would be proper. Essentially,
these facts could lead a trier of fact to conclude that Heberlie intentionally misrepresented
that he would pay for the gasoline by ordering the fuel consistent with past practices of the
pai'ties, and that Harriman Oil justifiably relied on this misrepresentation and was injured
thereby. W Renaissance Leasing. LLC v. Vermeei' Mfg. Co., 322 S.W.3d 112, 131-32
(listing elements of fraud claim). This does not mean that Harriman Oil would have been
able to successfully prove each of the elements of fraud, but Harriman Oil did not have to
make that showing. The facts here are sufficient to show that Harriman Oil had a
reasonable belief in the validity of its fraud claim. W Holley, 49 S.W.3d at 751. Thus,
9
the undisputed facts in the record show Harriman Oil had probable cause to pursue its claim
of fraud against Heberlie.
Harriman Oil met its burden on summary judgment to show by undisputed facts
that Heberlie would be unable to produce sufficient evidence to establish one of the
elements of malicious prosecution; namely, lack of probable cause. W lTT Commercial
Fin. Coi‘p., 854 S.W.Zd at 381. Thus, the trial court did not err in granting summary
judgment in favor of Harriman Oil.
,C_