Dave McNeill v. City of Kansas City, MO

In the Missouri Court of Appeals
Western District
DAVE McNEILL, )
Respondent, )
v. ) WD77732
)
CITY OF KANSAS CITY, MO, ) FILED: April 28, 2015
Appellant. )
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY
THE HONORABLE ROBERT M. SCHIEBER, JUDGE
BEFORE DIVISION TWO: LISA WHITE HARDWICK, PRESIDING JUDGE,
VICTOR C. HOWARD AND CYNTHIA L. MARTIN, JUDGES
The City of Kansas City ("City") appeals from the circuit court's judgment
awarding Dave McNeill damages and prejudgment interest for the wrongful
demolition of a building he owned. During the jury trial, the court excluded
evidence of the City's order to demolish the building after finding that the order
was legally insufficient and, therefore, irrelevant. The court also excluded the
demolition order as a discovery sanction against the City. On appeal, the City
contends that the circuit court lacked subject matter jurisdiction to find the
demolition order invalid. The City further argues that the court erred in excluding
the order because it was logically and legally relevant and its exclusion as a
discovery sanction was unjust. Lastly, the City asserts that the court erred in
awarding McNeill prejudgment interest. For reasons explained herein, we affirm.
FACTUAL AND PROCEDURAL HISTORY1
In the summer of 2008, McNeill purchased property containing a building
located at 3519-25 Paseo Boulevard in Kansas City. At the time of the purchase,
the building was on the City's dangerous buildings list and had been since August
2001, when an order to demolish the building was issued by the City's
Neighborhood and Community Services Department. Within the first few months
after purchasing the property, McNeill began to renovate the building as a multi-
tenant residential property. He obtained architectural plans, reframed the building,
installed new subfloors, re-decked the roof, and demolished the building's brick and
concrete front porch. After McNeill's bank backed out of a construction loan,
however, work on the building stopped while McNeill sought alternative financing.
In June 2009, the City sent a letter to McNeill instructing him to remove
debris and weeds on the property. On June 24, 2009, McNeill met with City
inspectors to inspect the property. During the meeting, McNeill showed the
inspectors his plans for the property, explained his financing difficulties, and
indicated that he was trying to obtain additional funding for the construction
project. The City inspectors directed McNeill to clean up a pile of debris from the
porch demolition and get rid of the tall weeds on the property. McNeill removed
the debris and weeds and graded the yard in July 2009. At that time, McNeill
1
We have adopted some of the factual information from a previous appeal in this matter, McNeill v.
City of Kansas City, 372 S.W.3d 906, 908-09 (Mo. App. 2012), without further citation.
2
received a preliminary commitment from a lender for a construction loan. On
August 8, 2009, the City demolished the building.
McNeill filed a petition for damages for wrongful demolition.2 In a 2011 jury
trial, the jury found in favor of McNeill and awarded him $150,000 plus costs.3
The City asked for a new trial on the basis that the wrongful demolition verdict-
directing instruction was a roving commission. See McNeill v. City of Kansas City,
372 S.W.3d 906, 909 (Mo. App. 2012). The circuit court granted a new trial, and
McNeill appealed. Id. After finding that the jury instruction was, in fact, a roving
commission, we affirmed the circuit court's grant of a new trial. Id. at 912.
When the case went back to the circuit court in September 2012, McNeill
submitted a request for production of documents in which he sought, among other
things, all orders to demolish dangerous buildings issued by the City between
August 24, 2001, and August 8, 2009. On October 5, 2012, the City objected to
the request as overly broad and burdensome but stated that, without waiving this
objection, it would produce a sampling of such documents for McNeill's review.
On April 4, 2013, McNeill's counsel sent a Golden Rule letter to the City
demanding that the City produce the documents as soon as possible. Seven days
later, on April 11, 2013, McNeill filed a motion to enforce discovery. In his motion,
McNeill stated that his counsel had become aware of the case of Woodson v. City
2
McNeill asserted other claims, but those claims were eventually abandoned or dismissed.
3
The City had filed a counterclaim seeking costs, interest, and fees associated with the demolition
of the building. The jury awarded the City no damages on its counterclaim, and the City did not
appeal.
3
of Kansas City, 80 S.W.3d 6 (Mo. App. 2002). In Woodson, this court found that
the demolition order in that case, which was identical to the demolition order in this
case, did not contain findings that were mandated by the City's Property
Maintenance Code ("PMC"). Id. at 13. Therefore, we reversed and remanded the
case for the City's Neighborhood and Community Services Department to make the
required findings of fact. Id. McNeill contended in his motion to enforce that the
City changed its demolition order forms to address the deficiencies found in
Woodson but "made a conscious decision not to halt demolitions based on Orders
to Demolish which the City knew were invalid, including the August 24, 2001
Order to Demolish in this case." McNeill asserted that he needed the City to
produce the Woodson demolition order and other demolition orders issued between
August 24, 2001, and August 8, 2009, to prove this contention.
The City opposed McNeill's motion to enforce on the grounds that discovery
was closed; McNeill had not allowed a reasonable amount of time after filing the
Golden Rule letter for the City to respond before he filed the motion to enforce; and
the City had offered McNeill the opportunity to inspect the requested documents,
but he did not arrange a time to do so. On May 14, 2013, the circuit court denied
McNeill's motion to enforce "for the reasons set forth in [the City]'s Suggestions in
Opposition."
After the court denied his motion to enforce, McNeill continued to ask the
City to respond to his request for documents, interrogatories, and requests to
provide deposition times for City officials. The City responded to McNeill's
4
requests by telling him that it would not produce any witnesses for deposition or
facilitate the viewing or production of further documents because the court had
"ruled that discovery in this case is closed."
McNeill filed a motion to exclude the demolition order or, alternatively, to
reconsider the order denying his motion to enforce discovery. In that motion,
McNeill asked the court to exclude the demolition order as a discovery sanction
against the City for failing to produce the other requested demolition orders.
McNeill also filed a motion in limine to exclude the demolition order on the basis
that it was a legally invalid order under Woodson and, therefore, irrelevant. The
City filed suggestions in opposition to both motions.
The court entered an order granting McNeill's motion in limine to exclude the
demolition order from trial. The court found that McNeill's motion to exclude the
order as a discovery sanction was "well taken" because of the City's failure to
produce documents showing the changes in its forms after the Woodson decision.
The court further found that, because the demolition order in this case was
identical to the form found legally insufficient in Woodson, it was also legally
insufficient. Therefore, the court found that the order was "not relevant and would
mislead and confuse the jury."
A second jury trial in this case was held in April 2014. After opening
statements but before the presentation of evidence, the parties stipulated that the
exclusion of the demolition order was sufficient to allow McNeill to make a
submissible case for wrongful demolition. Without waiving its right to appeal the
5
exclusion of the demolition order, the City agreed to admit that it was liable for
failing to follow the regulatory procedures established for demolishing a building.
The jury was advised of the City's admission of liability, and trial proceeded
on the issue of damages only. The jury returned a verdict awarding McNeill
damages of $55,000 for personal injuries and $151,000 for property damage. The
court granted McNeill's request for prejudgment interest on the property damage
award. Consequently, the court entered its judgment in favor of McNeill and
against the City for a total of $206,000 in compensatory damages, $1,900.65 in
court costs, and prejudgment interest on the $151,000 property damage award in
the amount of 9% per annum from September 2, 2010 to June 2, 2014. The City
appeals.
ANALYSIS
The City's first two points on appeal concern the propriety of the circuit
court's decision to exclude the demolition order after finding that the order was
legally insufficient and, therefore, irrelevant. In Point I, the City contends the court
lacked subject matter jurisdiction to consider the validity of the order because it
was a final administrative order that was not subject to collateral attack. In Point
II, the City argues that the court erred in excluding the order as irrelevant because
it was a legally valid order and, furthermore, that excluding it as a discovery
sanction was unjust. Because it is dispositive of both points, we will begin by
addressing the validity of the demolition order and the circuit court's ability to
consider its validity in the context of McNeill's wrongful demolition case.
6
In discussing judicial review of administrative actions in Woodson, 80
S.W.3d at 9, we observed that, "[a]ctions, which are delegated by a municipality
to a board . . . are administrative, and, thus, are reviewable under the Missouri
Administrative Procedure Act, codified in Chapter 536, RSMo." Therefore, we held
that determinations by the City's Property Maintenance Appeals Board of the
Neighborhood and Community Services Department are subject to judicial review
pursuant to Section 536.100, RSMo.4 Id.
Here, McNeill's action was not filed pursuant to Section 536.100. Instead,
it was a separate action for wrongful demolition. Notwithstanding, Section
536.100 is still relevant. Section 536.100 states, in pertinent part:
Any person who has exhausted all administrative remedies provided
by law and who is aggrieved by a final decision in a contested
case . . . shall be entitled to judicial review thereof . . . provided,
however, that nothing in this chapter contained shall prevent any
person from attacking any void order of an agency at any time or in
any manner that would be proper in the absence of this section.
(Emphasis added.) In discussing the effect of the emphasized provision on the res
judicata and/or collateral estoppel effect of administrative decisions, the Missouri
Practice Series provides:
The MAPA, however, contains a provision which may have the effect
of negating traditional principles of res judicata. Section 536.100
concerns the circumstances which entitle one to judicial review of
adjudication of a contested case and provides in part that "nothing in
this chapter contained shall prevent any person from attacking any
void order of an agency at any time or in any manner that would be
proper in the absence of this section." This presents the prospect of
4
All statutory references are to the Revised Statutes of Missouri 2000, as updated by the 2013
Cumulative Supplement.
7
relitigation, if the order in a contested case is so defective as to be
"void." It has been noted that "[a] void judgment is one which is
rendered by a tribunal acting without competency to render it, due to
a lack of jurisdiction over the parties, the subject matter or the remedy
ordered by that tribunal." Importantly, an erroneous determination in
the prior adjudication alone is not sufficient to render an order void.
"An erroneous judgment has the same effect as to res judicata as a
correct one." This limits the reach of the proviso in § 536.100 to
cases in which there was no jurisdiction, or a judgment so vague and
indefinite that it is void and considered unenforceable; if so, principles
which normally preclude collateral attack will be put aside.
20A ALFRED S. NEELY IV, MISSOURI PRACTICE SERIES, ADMINISTRATIVE PRACTICE &
PROCEDURE, § 13.8 (4th ed. 2006) (emphasis added) (footnotes omitted). The
question thus framed, then, is whether the demolition order issued in connection
with the property now owned by McNeill was void, or whether it was merely
erroneous. Woodson provides guidance on that question.
In Woodson, we noted that Section 67.400 affords the City the power to
"'enact orders or ordinances to provide for vacation and the mandatory demolition
of buildings and structures.'" 80 S.W.3d at 10 (quoting § 67.400). Pursuant to
the authority of Section 67.400, the City enacted Article V of the PMC, which
concerns "Dangerous Buildings or Structures." Id. Because Section 56-535(1) of
the PMC requires that any order to demolish "contain the written findings of fact
that caused the building to be determined to be a dangerous building" and Section
56-532(a) of the PMC describes the "twenty types or categories of defects that
cause a building to be dangerous and subject to demolition," we concluded that:
[A] demolition order, such as the one ordering the demolition of [this]
garage, must include written findings of fact setting forth the specific
conditions or defects complained of and the extent to which they are
8
"detrimental to the life, health, property, safety or welfare of the
public, or its occupants are endangered."
Id. at 11-12.
Though Woodson did not expressly so state, our holding makes it clear that
the demolition order in that case was entered in excess of the City's delegated
authority pursuant to its own duly-enacted ordinances. This holding implicates the
City's subject matter jurisdiction or its power to enter and enforce the demolition
order -- thereby rendering the demolition order void, and not merely erroneous or
voidable. In State ex rel. Johnson v. Merchants' & Miners' Bank, 213 S.W. 815,
818 (Mo. banc 1919), the Supreme Court observed that, where "'a board of
special and limited powers . . . steps outside of its jurisdiction[,] its acts are void.'"
(quoting State ex rel. Wyatt v. Vaile, 26 S.W. 672, 675 (Mo. 1894)). In Wyatt,
the Supreme Court held that taxes assessed pursuant to a void order (that is, an
order that was entered in excess of the board of equalization's powers) constituted
an assessment without jurisdiction. 26 S.W. at 675. Such an "action is void, and
there is a good defense pro tanto in a suit to recover the taxes." Id. Johnson did
clarify that the lack of jurisdiction must be plain from the face of the record in order
to render an order or judgment in excess of an agency's jurisdiction void, and not
merely voidable:
If attacked for want of jurisdiction, the fact must appear on the
face of the record. So appearing, the judgment is void, and a void
judgment may be attacked collaterally. But if the judgment is only
voidable and not void, it can only be attacked in a direct proceeding.
This is hornbook law.
9
Johnson, 213 S.W. at 818. In our case, as in Woodson, the demolition order was
facially in excess of the City's subject matter jurisdiction. Hence, the demolition
order was void and, therefore, subject to collateral attack.
In J.C.W. ex rel. Webb v. Wyciskalla, 275 S.W.3d 249, 253-54 (Mo. banc
2009), the Supreme Court clarified the distinction between a circuit court's subject
matter jurisdiction, which stems from the Missouri Constitution, and its authority to
grant relief in a particular case, which comes from statutory or common law. We
recognize that the applicability of Webb to administrative agency actions is
somewhat unsettled. See, e.g., Peer v. Mo. Bd. of Pharmacy, 453 S.W.3d 798,
803 n.3 (Mo. App. 2014); cf. M.A.H. v. Mo. Dep't of Soc. Servs., 447 S.W.3d
694, 697 n.1 (Mo. App. 2014). However, it is immaterial whether we characterize
an act in excess of an agency's statutory powers as an act in excess of the
agency's subject matter jurisdiction (as our cases routinely did pre-Webb), or simply
as an act in excess of the agency's authority. In either case, the act is a legal
nullity, as an agency has no power to act except as authorized. Because an
agency has no inherent authority derived from the constitution (as courts do), it is
illogical to conclude that Webb operated to convert acts in excess of an agency's
powers to be merely erroneous, and not void. We acknowledged the rationale for
such a conclusion (without discussing Webb, of course) in Woodson. We observed
that "a city is strictly a creature of the state, it has no inherent police power, but
only the power expressly conferred by the state" through the state constitution and
statutes. Woodson, 80 S.W.3d at 10.
10
Moreover, even if Woodson cannot be read to hold that the City acted in
excess of its subject matter jurisdiction or its authority, Woodson must, at a
minimum, be read to hold that the demolition order was invalid because it was
vague and non-specific. Specifically, we held in Woodson that "the[ ] findings of
the [Neighborhood and Community Services Department] do not comply with the
written-findings mandate of § 56-535(1) in that they are merely conclusory and do
not set forth the specific conditions or defects found by the [Neighborhood and
Community Services Department] to exist in [this] garage making it dangerous and
requiring its demolition." Id. at 13. In Brown v. Color Coating, Inc., 867 S.W.2d
242, 244 (Mo. App. 1993), the court held that "[a] judgment which is indefinite is
void and unenforceable" and, consequently, subject to collateral attack or
impeachment at any time.
Here, the demolition order was virtually indistinguishable from the demolition
order in Woodson. The demolition order was facially void on the record because it
exceeded the City's police powers as set forth in the PMC and was indefinite in
light of the PMC's findings requirement. Therefore, the demolition order was
subject to collateral attack. The court did not err in considering the validity of the
demolition order in McNeill's wrongful demolition proceeding.
Because the demolition order was void, it was not logically relevant to the
wrongful demolition proceeding. "'Evidence is logically relevant if it tends to prove
or disprove a fact in issue or corroborates other evidence.'" Eagle Star Group, Inc.
v. Marcus, 334 S.W.3d 548, 557 (Mo. App. 2010) (citation omitted). The void
11
demolition order had no probative value on the issue of the City's adherence to the
demolition procedures required by statute and ordinance. Indeed, the void order
had no probative value on any issue in the case. Hence, the court did not abuse its
discretion in excluding the demolition as irrelevant. Having found that the
demolition order was properly excluded on this basis, we need not address the
City's claim that the court erred in excluding the order as a discovery sanction.
Points I and II are denied.
In Point III, the City contends the court erred in awarding McNeill
prejudgment interest on the $151,000 property damage award pursuant to Section
408.020. The City argues that the provisions of Section 408.020 apply only to
contract or other liquidated claims and not to McNeill's wrongful demolition claim.
The City asserts that McNeill's claim was a statutory tort and, therefore, he had to
meet the requirements of Section 408.040 to be entitled to prejudgment interest,
which he failed to do.
Whether a party is entitled to prejudgment interest under Section 408.020 is
a question of law, which we review de novo. Mitchell v. Residential Funding
Corp., 334 S.W.3d 477, 508 (Mo. App. 2010). "'Determination of the right to
prejudgment interest is reviewed de novo because it is primarily a question of
statutory interpretation and its application to undisputed facts.'" Id. at 508-09
(quoting Children Int'l v. Ammon Painting Co., 215 S.W.3d 194, 202 (Mo. App.
2006)).
12
Section 408.020 provides that creditors are allowed to receive interest for,
among other things, all moneys "on accounts after they become due and demand
of payment is made." As used in this statute, the word "account" is not limited to
its traditional meaning but is considered equivalent to a "claim" or a "demand."
Children Int'l, 215 S.W.3d at 202 n.11.
In his motion for prejudgment interest, McNeill argued that he was entitled to
prejudgment interest because the wrongful demolition was similar to an inverse
condemnation or indirect taking, "where the government takes or damages land,
sometimes unintentionally, without going through an official process." Akers v.
City of Oak Grove, 246 S.W.3d 916, 919 (Mo. banc 2008). In Akers, an overload
in the city's sewer system damaged the plaintiffs' apartment building. Id. After
the court awarded the plaintiffs damages and prejudgment interest, the city
appealed the prejudgment interest award. Id. On appeal, the Supreme Court
stated that the city's actions constituted an indirect taking under article I, section
26 of the Missouri Constitution. Id. Therefore, the Court found that an award of
prejudgment interest was appropriate, as the plaintiffs were "'entitled to be put in
as good a position pecuniarily as if [their] property had not been taken.'" Id.
(quoting Olson v. United States, 292 U.S. 246, 255 (1934)).
The City contends that its wrongful demolition of McNeill's building cannot
be characterized as an indirect taking because this court considered and rejected
such a characterization in City of Kansas City v. Jordan, 174 S.W.3d 25, 48-49
(Mo. App. 2005). We disagree. While it is true that, in Jordan, this court found
13
that the plaintiff's reliance on takings cases to support his wrongful demolition
claim was misplaced, this finding was based on our determination that the city had
properly exercised its police power in demolishing the plaintiff's building. Id. at 48.
In so holding, we noted that "'[a] valid exercise of the police power is not a taking
of private property for public use.'" Id. (emphasis added) (citations omitted). Here,
the City acted in excess of its jurisdiction or authority. Thus, the demolition of
McNeill's building was not a valid exercise of police power. McNeill's wrongful
demolition claim can be properly characterized as an indirect taking for purposes of
awarding prejudgment interest.
The City argues that, even if we find, as we have, that Section 408.020 and
not Section 408.040 applied to McNeill's wrongful demolition claim, he was still
not entitled to prejudgment interest because his claim was not liquidated. "For a
claim to be liquidated, it must be fixed and determined or readily determinable, but
it is sufficient if the amount due is ascertainable by computation or by a recognized
standard." Hawk Isolutions Group, Inc. v. Morris, 288 S.W.3d 758, 762 (Mo.
App. 2009). "When the parties dispute the measure of damages, the claim is not
liquidated and prejudgment interest is not appropriate." Comens v. SSM St.
Charles Clinic Med. Group, Inc., 335 S.W.3d 76, 81 (Mo. App. 2011).
The record indicates that, with regard to McNeill's claim for property
damages, the parties agreed that the measure of damages was the building's fair
market value. Although the parties disagreed about the amount of the building's
value, "[a]n exact calculation of damages need not be presented in order for the
14
claim to be considered liquidated" for purposes of awarding prejudgment interest.
Id. at 82. "Damages may still be ascertainable, even in the face of 'a dispute over
monetary value or the parties' experts compute different estimates of the loss.'"
Id. (citation omitted). The circuit court did not err in awarding McNeill prejudgment
interest on the property damage award.5 Point III is denied.
CONCLUSION
We affirm the circuit court's judgment.
____________________________________
LISA WHITE HARDWICK, JUDGE
ALL CONCUR.
5
The City further challenges the prejudgment interest award on the basis that it afforded McNeill a
double recovery, because the jury had already compensated him for the lost use of his building in its
damages award. The City did not raise this argument in the circuit court. Therefore, it is not
preserved for appeal, and any review would be only for plain error. Realty Res., Inc. v. True
Docugraphics, Inc., 312 S.W.3d 393, 400 (Mo. App. 2010). Plain error review is rarely granted in
civil cases. Goltz v. Masten, 333 S.W.3d 522, 524 (Mo. App. 2011). When deciding whether to
exercise our discretion to provide plain error review, we look to "whether there facially appears
substantial grounds for believing that the trial court committed error that is evident, obvious and
clear, which resulted in manifest injustice or a miscarriage of justice." Cohen v. Express Fin. Servs.,
Inc., 145 S.W.3d 857, 864 (Mo. App. 2004). The City has not requested plain error review, and it
has not demonstrated "an evident, obvious, or clear error . . . so as to justify plain error review."
Hogan v. Bd. of Police Comm'rs of Kansas City, 337 S.W.3d 124, 135 (Mo. App. 2011).
15