Thomas E. Howard, Jr., Janice K. Howard and Howard Investments, LLC v. The Frost National Bank and TD Ameritrade, Inc.

In the Missouri Court of Appeals
Eastern District
DIVISION FOUR
THOMAS E. HOWARD, JR., ) No. ED101669
JANICE K. HOWARD and )
HOWARD INVESTMENTS, LLC, )
)
Appellants, ) Appeal from the Circuit Court
) of St. Louis County
vs. ) 13SL-CC03317
)
THE FROST NATIONAL BANK and ) Honorable Tommy W. DePriest, Jr.
TD AMERITRADE, INC., )
)
Respondents. ) Filed: March 24, 2015
Thomas E. Howard, Jr., Janice K. Howard, and Howard Investments, LLC (collectively
“Appellants”) appeal the trial court’s grant of a motion to dismiss Appellants’ amended petition
for failure to state a claim in favor of TD Ameritrade, Inc. (“Respondent”). Appellants’ amended
petition alleged claims for negligence, wrongful garnishment, and wrongful disclosure arising
out of Respondent’s disclosure of Appellants’ account information and freezing of Appellants’
accounts. We affirm in part and reverse and remand in part.
I. BACKGROUND
Thomas Howard and Janice Howard are a married couple, and they are the sole members
and joint owners of Howard Investments, LLC, a Missouri LLC. The Howards are also the
owners of certain brokerage accounts maintained by Respondent.
In a prior lawsuit, the Frost National Bank (“Frost Bank”) obtained a judgment against
Thomas Howard individually,1 but not against Janice Howard or Howard Investments, LLC.
Subsequently, on May 31, 2013, Frost Bank filed a garnishment action to collect the judgment,
naming Respondent as the garnishee. In the garnishment, Frost Bank gave the following
instructions to Respondent: “ATTACH ALL ACCOUNTS OF DEBTOR, INCLUDING BUT
NOT LIMITED TO ACCOUNT NO. 789-045389” (emphasis in original). The garnishment
listed Thomas Howard as the debtor. In the garnishment, Frost Bank also instructed Respondent
to freeze any accounts associated with the debtor.
In response to the garnishment action, Respondent filed an interrogatory answer with the
garnishment court that identified four separate accounts. The four accounts identified by
Respondent disclosed the account name, account number, and the account “liquidation value”
(the cash balance presently in the account). Simultaneously, Respondent also froze the four
accounts as instructed by Frost Bank, thereby cutting off Appellants’ use and access to the
accounts.
Of the four accounts that were identified and frozen by Respondent, one was owned by
Thomas Howard individually, one by Thomas Howard and Janice Howard jointly, one by
Howard Investments, LLC, and one by Thomas Howard and Janice Howard in their capacity as
joint owners of Howard Investments, LLC (the three accounts not owned by Thomas Howard
individually will be collectively referred to as “the three accounts”). Respondent froze the three
accounts for approximately ten days. The value of the three accounts at the time of freezing was
in excess of $3 million.
1
There were technically two judgment debtors in the underlying lawsuit, Thomas Howard and a trust of which
Thomas Howard was a beneficiary. Because the distinction between the two debtors is not relevant to the issues of
this appeal, we refer only to Thomas Howard individually.
2
Appellants notified Frost Bank and Respondent that they considered the freezing of the
three accounts and their disclosure to the trial court in the garnishment action improper, because
Frost Bank’s judgment was only against Thomas Howard individually. Soon thereafter,
Appellants filed a petition against Frost Bank and Respondent, alleging claims for negligence,
wrongful garnishment, and wrongful disclosure. Appellants settled their claims against Frost
Bank, which is no longer a party to this action. On May 15, 2014, the trial court granted
Respondent’s motion to dismiss Appellants’ amended petition for failure to state a claim upon
which relief can be granted. This appeal followed.
II. DISCUSSION
Appellants present three points on appeal. For points one, two, and three, Appellants
assert that the amended petition adequately stated claims for negligence, wrongful garnishment,
and wrongful disclosure, respectively.
A. Standard of review
We review a trial court’s grant of a motion to dismiss de novo. Lynch v. Lynch, 260
S.W.3d 834, 836 (Mo. banc 2008). The facts contained in the petition are treated as true and
they are construed liberally in favor of the plaintiffs. Id. The petition states a claim if it sets
forth any set of facts that, if proven, would entitle the plaintiffs to relief. Id. “Missouri is a fact-
pleading state.” Whipple v. Allen, 324 S.W.3d 447, 449 (Mo. App. E.D. 2010). Accordingly,
though a “petition need not plead evidentiary or operative facts showing an entitlement to the
relief sought, it must plead ultimate facts demonstrating such an entitlement.” Id. (quotations
omitted). We disregard conclusions not supported by facts in the context of assessing a motion
to dismiss. Id. at 449-50.
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B. Negligence
In their first point on appeal, Appellants assert that the trial court erred in dismissing their
negligence count, because the amended petition pleaded all the essential elements of a
negligence claim. We agree.
To state a claim for negligence, a plaintiff must allege, (1) the existence of a duty to
conform to a certain standard of conduct to protect others against unreasonable risks; (2) breach
of the duty; (3) proximate causation; and (4) actual damages. Hoover’s Dairy, Inc. v. Mid-
America Dairymen, Inc./Special Products, Inc., 700 S.W.2d 426, 431 (Mo. banc 1985).
On appeal, as in its motion to dismiss, Respondent only asserts that Appellants did not
adequately plead actual damages. This argument must fail. The amended petition included
multiple allegations of damages proximately caused by Respondent’s disclosure and freezing of
Appellants’ accounts. Specifically, the amended petition alleged that, (1) Appellants’ private
financial information was disclosed to the public; (2) when Appellants repeatedly attempted to
use their accounts, they were barred from accessing over $3 million in assets specifically held for
investment purposes for a period of ten days, and as a result were prohibited from making any
investment trades during that time; and (3) Respondent disclosed that Appellants had assets in
excess of $3 million to Appellants’ opponent in the underlying lawsuit, Frost Bank, at a time
when Appellants and Frost Bank were negotiating a settlement and the disclosure affected the
settlement value of that case.
Appellants need not quantify the exact amount of their damages in their amended petition
in order to survive a motion to dismiss. In fact, Missouri Supreme Court Rule 55.19 (2014)
specifically prevents a petition based on an alleged tort2 from including a dollar amount in the
2
A claim for negligence sounds in tort. See Murphy v. Missouri Power & Light Co., 214 S.W.2d 742, 743 (Mo.
App. 1948).
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demand. Appellants pleaded that the freezing of the accounts prevented them from making stock
trades they attempted to make. The specific nature of these trades and any financial loss caused
by the inability to make them must be investigated in the discovery portion of the lawsuit. This
is also true of the disclosure’s effect on the settlement value of the underlying lawsuit; discovery
is required to determine the extent of the damages. In each instance, the allegation of harm,
along with the other elements of the cause of action which are not contested, is sufficient to
survive a motion to dismiss. We treat the facts alleged in the petition as true and construe them
liberally in favor of the plaintiffs. Lynch, 260 S.W.3d at 836. The amended petition has stated a
claim, because if Appellants prove the facts it sets forth, they would be entitled to relief. See id.
The trial court erred in dismissing the amended petition’s negligence claim, because it
stated all the elements of the cause of action. Point one is granted.
C. Wrongful garnishment
In their second point on appeal, Appellants assert that the trial court erred in dismissing
their wrongful garnishment count, because the amended petition pleaded all the essential
elements of a wrongful garnishment claim. We disagree.
The parties disagree as to whether wrongful garnishment is a cognizable cause of action
in Missouri. Respondent contends that wrongful garnishment must be pleaded as a malicious
prosecution or an abuse of process claim. However, as Appellants indicate, multiple Missouri
cases have allowed the cause of action in the past. See Boone v. Lou Budke’s Arrow Finance
Co., Inc., 98 S.W.3d 555, 557 (Mo. App. E.D. 2002); Thomas Berkeley Consulting Engineer,
Inc. v. Zerman, 911 S.W.2d 692, 697 (Mo. App. E.D. 1995); Pinkstaff v. Hill, 827 S.W.2d 747,
749, 753 (Mo. App. W.D. 1992).
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In order to state a claim for wrongful garnishment, a plaintiff must allege that the
garnished property is his property and also must allege abuse or misuse of the garnishment
statute. Linsin v. Transportation Ins. Co., 691 S.W.2d 393, 394-95 (Mo. App. E.D. 1985).
Appellants have not alleged any abuse or misuse of the garnishment statute by Respondent.
Under the facts alleged, Frost Bank, not Respondent, filed the garnishment action, and
Respondent has not initiated any legal action against Appellants. In each case cited by
Appellants, the creditor, as the originator of the garnishment, served as the defendant. See
Boone, 98 S.W.3d at 556; Zerman, 911 S.W.2d at 694; Pinkstaff, 827 S.W.2d at 749. Appellants
identify no controlling case law allowing a claim for wrongful garnishment against the garnishee
rather than the creditor.
Because Respondent did not file a garnishment against Appellants, the trial court did not
err in dismissing Appellants’ wrongful garnishment claim. Point two is denied.
D. Wrongful disclosure
In their third and final point on appeal, Appellants assert that the trial court erred in
dismissing their wrongful disclosure claim, because the amended petition pleaded all the
essential elements of a wrongful disclosure cause of action. Specifically, Appellants contend
that the amended petition stated a claim for relief under the Gramm-Leach-Bliley Act, 15 U.S.C.
section 6801 (2010), et seq. (“GLBA”), which prevents financial institutions from releasing
private customer information. Further, Appellants argue that the amended petition stated a claim
for invasion of privacy. We disagree.
First, the privacy provisions of the GLBA do not establish a private cause of action for
consumers. Dunmire v. Morgan Stanley DW, Inc., 475 F.3d 956, 960 (8th Cir. 2007). As such,
Appellants may not state a claim for relief pursuant to this statute as a matter of law.
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We next turn to Appellants assertion that their amended petition stated a claim for
common law invasion of privacy. The tort of invasion of privacy actually consists of four
separate causes of action, (1) intrusion on the plaintiff’s seclusion or private affairs; (2) public
disclosure of embarrassing private facts; (3) publically placing plaintiff in a false light; and (4)
the appropriation of plaintiff’s name or likeness. St. Anthony’s Medical Center v. H.S.H., 974
S.W.2d 606, 609 (Mo. App. E.D. 1998). The first and second causes of action, intrusion on
seclusion and public disclosure of embarrassing private facts, are the only causes of action
relevant in this case.
Intrusion on seclusion requires that the defendant obtain the information in question by
unreasonable means. Id. at 609-10. Under the facts as alleged, Appellants have not pleaded that
Respondent obtained their financial information through such unreasonable means, as Appellants
themselves disclosed it to Respondent in the context of their financial relationship.
Similarly, pleading public disclosure of embarrassing private facts requires that the
defendant have acted “so as to bring shame or humiliation to a person of ordinary sensibilities.”
See Y.G. v. Jewish Hosp. of St. Louis, 795 S.W.2d 488, 498-99 (Mo. App. E.D. 1990).
Respondent disclosed that Appellants had over $3 million in assets available to them in their
investment accounts. Nowhere in their amended petition do Appellants allege that such
disclosure would bring shame or humiliation to a person of ordinary sensibilities, nor could they
reasonably do so.
Appellants have not stated a claim for wrongful disclosure under the GLBA, for intrusion
on seclusion, or for public disclosure of embarrassing private facts. Point three is denied.
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III. CONCLUSION
The portion of the trial court’s judgment granting Respondent’s motion to dismiss
Appellants’ negligence claim is reversed and remanded for proceedings consistent with this
opinion. The portion of the trial court’s judgment granting Respondent’s motion to dismiss
Appellants’ wrongful garnishment and wrongful disclosure claims is affirmed.
ROBERT M. CLAYTON III, Judge
Patricia L. Cohen, P.J., and
Roy L. Richter, J., concur.
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