author: BARBER, Judge. JOHNSON, Judge,

text:
    Danny D. BENNINGFIELD, Appellant, v. PETTIT ENVIRONMENTAL, INC., Appellee.
    No. 2004-CA-001632-MR.
    Court of Appeals of Kentucky.
    Sept. 16, 2005.
    Discretionary Review Denied by Supreme Court Feb. 15, 2006.

      Kenneth L. Sales, Joseph D. Satterley, Jesse A. Mudd, D. Matthew Kannaday, Louisville, KY, for Appellant.
    Donna King Perry, Wendy C. Hyland, Louisville, KY, for Appellee.
    Before BARBER and JOHNSON, Judges; MILLER, Senior Judge.

      . Senior Judge John D. Miller sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.

   OPINION

BARBER, Judge.

Appellant, Danny D. Benningfield (Ben-ningfield), appeals from an order issued by Jefferson Circuit Court which granted a motion to dismiss Benningfield’s wrongful discharge claim and granted summary judgment on Benningfield’s intentional infliction of emotional distress (IIED) claim in favor of the Appellee, Pettit Environmental, Inc., (Pettit). We affirm.

In March of 2000, Benningfield was hired by Pettit as an Environmental Technician. As a condition of his employment Benningfield was required to complete certain certifications. These certifications required Benningfield to complete training courses. In a letter dated July 25, 2002, Benningfield informed Pettit that he did not believe that he had received the training for which he was credited. Because Benningfield believed that Pettit was not providing proper training, he notified the Occupational Safety and Health Administration (OSHA) about his concerns. OSHA consequently performed an on-site inspection. Subsequently, in December 2002 Benningfield and two other Environmental Technicians were laid off. Pettit’s General Manager, Rich Zachgo, informed Benningfield that he and the two other Environmental Technicians were chosen for the lay-off because they did not hold commercial driver’s licenses (CDL).

Benningfield later filed an administrative discrimination charge based upon KRS 338.121 with the Kentucky Labor Cabinet. That charge was investigated and dismissed. Benningfield then filed suit in Jefferson Circuit Court alleging wrongful discharge and IIED. In an order dated July 16, 2004, the trial court granted Pettit’s motion to dismiss the wrongful discharge claim, and also granted summary judgment in favor of Pettit on Ben-ningfield’s IIED claim. This appeal followed.

First, we consider whether the trial court’s granting of Pettit’s motion to dismiss Benningfield’s wrongful discharge claim was proper. A motion to dismiss should only be granted if “it appears the pleading party would not be entitled to relief under any set of facts which could be proved in support of his claim.” Pari-Mutuel Clerks’ Union v. Kentucky Jockey Club, 551 S.W.2d 801, 803 (Ky.1977). When ruling on the motion, the allegations in “the pleadings should be liberally construed in a light most favorable to the plaintiff and all allegations taken in the complaint to be true.” Gall v. Scroggy, 725 S.W.2d 867, 868 (Ky.App.1987). In making this decision, the trial court is not required to make any factual findings. James v. Wilson, 95 S.W.3d 875, 884 (Ky.App.2002). Therefore, “the question is purely a matter of law.” Id. Accordingly, the trial court’s decision will be reviewed de novo. Revenue Cabinet v. Hubbard, 37 S.W.3d 717, 719 (Ky.2000).

Employment relations in Kentucky are generally terminable at will. Firestone Textile Co. v. Meadows, 666 S.W.2d 730 (Ky.1984). As such, “[a]n employer may discharge his at-will employee for good cause, for no cause, or for a cause that some might view as morally indefensible.” Id. at 731. However, “[a]n employee has a cause of action for wrongful discharge when the discharge is contrary to a fundamental and well-defined public policy as evidenced by existing law....” Id. (quoting Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834, 840 (1983)). Thus, an employee may file a wrongful discharge claim if he or she was terminated in violation of a well-defined public policy. But, this exception only applies when the statute creating the public policy exception does not provide a structure for pursuing a claim. Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky.1985).

In the present case Benningfield asserts that he was terminated in violation of the well-defined public policy in KRS 338.121, which states in pertinent part:

(3)(a) No person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter or has testified or is about to testify in any such proceeding or because of the exercise by such employee on behalf of himself or others of any right afforded by this chapter; and
(b) Any employee who believes that he has been discharged or otherwise discriminated against by any person in violation of this subsection may, within a reasonable time after such violation occurs, file a complaint with the commissioner alleging such discrimination. Upon receipt of such complaint, the commissioner shall cause such investigation to be made as deemed appropriate. If upon such investigation, the commissioner determines that the provisions of this subsection have been violated, he shall issue a citation to the employer which may be challenged or contested in accordance with the provisions of this chapter and the review commission may order all appropriate relief including rehiring and reinstatement of the employee to his former position with back pay. Upon an initial determination by the commissioner that an employee has been discharged by an employer in violation of subsection (3)(a) of this section, the secretary may order reinstatement of the employee pending a final determination and order of the review commission.

Pettit argues that this statute both defines the wrongful act and specifies the civil remedy available and as such preempts Benningfield’s wrongful discharge claim. In support of this position Pettit cites Hines v. Elf Atochem North America, Inc., 813 F.Supp. 550 (W.D.Ky.1993), aff'd, 47 F.3d 1169 (6th Cir.1995) which applied the holding in Grzyb to KRS 338.121. Benningfield responds by stating that we are not bound by this decision, as Hines was a federal case, and that the Court in Hines did not engage in “any substantive analysis” as to whether KRS 338.121 preempts wrongful discharge claims brought under it. While it is true that we are not bound by the decision in Hines, we deem that authority to be persuasive. When KRS 338.121 is read, it is clear that it forbids the firing of an employee for filing a complaint with OSHA. Also, it specifies that any employee “who believes that he has been discharged or otherwise discriminated against by any person in violation of this subsection may ... file a complaint with the commissioner alleging such discrimination.” Therefore, we find that KRS 338.121 provides both the public policy exception and provides the remedy for its violation.

Next, Benningfield argues that the statute in Grzyb is “significantly different” than the statute at issue here and therefore, the holding in Grzyb does not apply to this case. However, the Court in Grzyb did not limit its decision to KRS 344.270, which was the statute at issue in that case, or to statutes similar in nature to KRS 344.270. In fact, that Court stated that “[w]here the statute both declares the unlawful act and specifies the civil remedy available to the aggrieved party, the aggrieved party is limited to the remedy provided by the statute.” Grzyb v. Evans, supra, at 401. Thus, the holding clearly applies to all statutes that specify the unlawful act and provide the remedy available to aggrieved parties, not just to KRS 334.370.

Also, Benningfield asserts that because KRS 338.121 states that an employee “may” file a complaint with the commissioner, it merely gives a possible course of action and is therefore not an exclusive remedy. However, Grzyb does not require the statute to specify that the remedy provided is exclusive. Grzyb only requires that the statute “speciffy] the civil remedy available,” Id. and KRS 338.121 specifies the remedy available by directing an aggrieved employee that he or she may file a complaint with the commissioner.

In keeping with the holding in Grzyb, we hold that the Benningfield’s wrongful discharge claim, under KRS 338.121, is preempted because the statute provides both the unlawful act and specifies the civil remedy available to aggrieved parties.

Now, we turn to Benningfield’s IIED claim. We must determine whether the trial court properly granted summary judgment in favor of Pettit on the IIED claim. “The ... purpose of ... summary judgment is to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant.” Roberson v. Lampton, 516 S.W.2d 838, 840 (Ky.App.1974). Summary judgment should only be granted “where the movant shows that the adverse party could not prevail under any circumstances.” Paintsville Hospital Company v. Rose, 683 S.W.2d 255, 256 (Ky.1985). “The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law.” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App.1996). In making this determination, “[t]he record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.” Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky.1991). Since factual findings are not at issue, Scifres v. Kraft, supra at 781, the decision shall be reviewed de novo. Revenue Cabinet v. Hubbard, supra at 719.

Kentucky has long recognized the tort of intentional infliction of emotional distress (IIED). See Craft v. Rice, 671 S.W.2d 247 (Ky.1984). In Kentucky, a party can recover under IIED if it is shown that: (1) the wrongdoer’s conduct was intentional or reckless, (2) the wrongdoer’s conduct was outrageous and intolerable, (3) there is a causal connection between the conduct and the emotional distress, and (4) the emotional distress suffered is severe. Wilson v. Lowe’s Home Center, 75 S.W.3d 229, 238 (Ky.App.2001).

Benningfield contends that all four elements are met and that he produced sufficient evidence of such to survive summary judgment. Pettit counters by stating that summary judgment was proper because there was no “extreme and outrageous” conduct and that Benningfield did not suffer “severe emotional distress.” Since Pettit only raises issues regarding two of the elements of IIED, we will limit our analysis to those elements.

First, in order for conduct to be considered “extreme and outrageous” it must be “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency....” Humana of Kentucky, Inc. v. Seitz, 796 S.W.2d 1, 3 (Ky.1990). In the present case, Benning-field only alleges his termination as grounds for his IIED claim. Mere termination clearly does not rise to the level of outrageous conduct required to support an IIED claim. Other jurisdictions which follow the Restatement (Second) of Torts § 46, as Kentucky does, have held that termination does not rise to the level of outrageous conduct required for an IIED claim. Craft v. Rice, supra at 251. In fact, the Sixth Circuit, applying Ohio law, held that “an employee’s termination, even if based upon discrimination, does not rise to the level of ‘extreme and outrageous conduct’.” Godfredson v. Hess & Clark, Inc., 173 F.3d 365, 376 (6th Cir.1999). Therefore, Pettit’s act of terminating Benningfield does not rise to the level of “extreme and outrageous” conduct that is required to sustain an IIED claim.

Second, to meet the standard of severe emotional distress the injured party must suffer distress that is “substantially more than mere sorrow.” Gilbert v. Barkes, 987 S.W.2d 772, 777 (Ky.1999). In the present case, Benningfield alleges that the embarrassment he suffered as a result of losing his job satisfies this element. However, mere embarrassment does not rise to the level required to meet the “substantially more than mere sorrow” standard, as set out in Gilbert. Thus, the “severe emotional distress” element has not been met.

Because Benningfield has failed to show that Pettit engaged in “extreme or. outrageous” conduct or that he suffered “severe emotional distress,” we hold that Benning-field’s IIED claim cannot be maintained. As such, the granting of summary judgment was proper.

Also, Benningfield asserts that summary judgment was not proper because he had not completed discovery at the time the judgment was entered. When reviewing a motion for summary judgment “[t]he inquiry should be whether, from the evidence of record, facts exist which would make it possible for the non-moving party to prevail. In the analysis, the focus should be on what is of record rather than what might be presented at trial.” Welch v. American Publishing Co. of Kentucky, 3 S.W.3d 724, 730 (Ky.1999). “When the moving party has presented evidence showing that despite the allegations of the pleadings there is no genuine issue of any material fact, it becomes incumbent upon the adverse party to counter that evidentiary showing by some form of evidentiary material reflecting that there is a genuine issue pertaining to a material fact.” Neal v. Welker, Ky., 426 S.W.2d 476, 479 (1968). However, “[t]he hope or bare belief ... that something will ‘turn up,’ cannot be made basis for showing that a genuine issue as to a material fact exists.” Id. at 479-80. In the present case, Benningfleld has not alleged anything that would support his IIED claim, and the hope that something will come to light in additional discovery is not enough to create a genuine issue of material fact. Therefore, the timing of summary judgment was also proper.

For the foregoing reasons, the findings of the Jefferson Circuit Court are affirmed.

MILLER, Senior Judge, Concurs.

JOHNSON, Judge, Concurs in Part, Dissents in Part, and Files Separate Opinion.

JOHNSON, Judge,

Concurring in Part and Dissenting in Part.

I concur with the Majority Opinion’s affirming of the trial court’s summary judgment on Benningfield’s claim for intentional infliction of emotional distress. However, I respectfully dissent as to the dismissal of his claim for wrongful discharge.

The result of the Majority Opinion turns on its conclusion that Grzyb, supra, “does not require the statute to specify that the remedy provided is exclusive.” This reading of Grzyb totally ignores the following critical language:

KRS 344.040 provides that it is “unlawful practice for an employer ... to discharge any individual ... because of such individual’s race, color, religion, national origin, sex, or age between forty (40) and seventy (70).” The Kentucky Commission on Human Rights is structured in KRS Chapter 344 to adjudicate complaints of discrimination on these grounds. Thus, the same statute which would provide the necessary underpinning for a wrongful discharge suit where there is sufficient evidence to prove sex discrimination in employment practices also structures the remedy. The statute not only creates the public policy but preempts the field of its application [emphasis added].

Thus, the holding of Grzyb clearly turns on the exclusivity of the remedies provided in Chapter 344 which preempt any other action.

KRS 344.270 provides as follows:

The provisions of KRS 13B.140 notwithstanding, commission shall not take jurisdiction over any claim of an unlawful practice under this chapter while a claim of the same person seeking relief for the same grievance under KRS 344.450 is pending. A state court shall not take jurisdiction over any claim of an unlawful practice under this chapter while a claim of the same person seeking relief for the same grievance is pending before the commission. A final determination by a state court or a final order of the commission of a claim alleging an unlawful practice under KRS 344.450 shall exclude any other administrative action or proceeding brought in aecor-dance with KRS Chapter 13B by the same person based on the same grievance.

KRS 344.450 provides as follows:

Any person injured by any act in violation of the provisions of this chapter shall have a civil cause of action in Circuit Court to enjoin further violations and to recover the actual damages sustained, together with the costs of the law suit. The court’s order or judgment shall include a reasonable fee for the plaintiffs attorney of record and any other remedies contained in this chapter.

A remedy selected under these statutes becomes the exclusive remedy.

Conversely, KRS 388.121 fails to limit redress in the circuit court following the determination by the Commissioner of the Kentucky Department of Workplace Standards. I am convinced that if the Legislature had chosen to enact an exclusive remedy for a work safety violation, it would clearly have done so as it did for civil rights violations.

Further, I find nothing persuasive in the holding in Hines, since the U.S. District Court merely stated its holding without providing any analysis concerning the preemption language in the civil rights statutes. The Court merely stated that it was applying “the teachings of Grzyb [to] the wrongful discharge claims pertaining to OSHA” without recognizing that Grzyb turned on the exclusivity provisions in KRS 344.270 and 344.450.

I do find Gutierrez v. Sundancer Indian Jewelry, Inc., to be persuasive. This New Mexico case is analogous to the case before us because the employee alleged that he had been wrongfully discharged by his employer in retaliation for requesting a safety investigation. The employee first pursued an administrative action against his employer, and then filed a civil lawsuit which was dismissed by the trial court. The Court of Appeals of New Mexico concluded that in New Mexico the common law requires an employer to exercise reasonable care to provide an employee with a safe workplace, a public policy exception has been recognized to the common law employment-at-will doctrine, and nothing in the safety act indicates the Legislature intended to preempt common law remedies. Accordingly, the Court held that New Mexico’s safety act was not intended to preempt common law remedies for an employee alleging wrongful discharge in retaliation for reporting safety violations and it reversed the summary judgment dismissing the employee’s action.

Similarly, I would reverse the Jefferson Circuit Court and reinstate Benningfield’s claim for wrongful discharge.

      . Op. at 571.

      . Grzyb, 700 S.W.2d at 401.

      . See Brown v. Diversified Decorative Plastics, 103 S.W.3d 108, 113 (Ky.App.2003).

      . Hines, 813 F.Supp. at 552.

      . 117 N.M. 41, 868 P.2d 1266, 1274 (App.1993).

        . Gutierrez, 868 P.2d at 1272-75.

      . See also Skillsky v. Lucky Stores, Inc., 893 F.2d 1088, 1093-94 (9th Cir.1990); Lepore v. National Tool & Mfg. Co., 224 N.J.Super. 463, 540 A.2d 1296, 1298-99 (App.Div.1988); and Reed v. Municipality of Anchorage, 782 P.2d 1155 (Alaska 1989).


source: Caselaw Access Project

author: STEPHEN N. LIMBAUGH, JR., Judge.

license: Public Domain

text:
    STATE ex rel. ALMA TELEPHONE COMPANY, et al., Respondents, v. PUBLIC SERVICE COMMISSION OF THE STATE of Missouri, Appellant, State ex rel. BPS Telephone Company, et al., Respondents, AT & T Wireless Services, Inc., et al., Appellants.
    No. SC 86529.
    Supreme Court of Missouri, En Banc.
    Jan. 10, 2006.
    Rehearing and Modification Denied Jan. 31, 2006.
    Marc D. Postom, Public Service Com’n, Jefferson City, for Appellant.
    Alok Ahuja, Paul DeFord, Kurt Schae-fer, Kansas City, Joseph D. Murphy, Champaign, IL, Charles W. McKee, Overland Park, Kansas, Paul G. Lane, Leo J. Bub, St. Louis, MO, for Appellees.
    Craig S. Johnson, Lisa Cole Chase, W.R. England, III, Brian T. McCartney, Jefferson City, MO, for Respondents.
   STEPHEN N. LIMBAUGH, JR., Judge.

In these two consolidated cases, the Missouri Public Service Commission disallowed a proposal by certain rural telephone companies to amend “access tariffs” to be imposed on several wireless telephone service providers. On petition for writ of review, the circuit court reversed the PSC’s decision, and thereafter, the PSC and the wireless service providers appealed. After opinion by the Court of Appeals, Western District, this Court granted transfer. Mo. Const, art. V, sec. 10. The judgment of the trial court is reversed, and the PSC’s decision is affirmed.

I. Facts and Procedural History

This litigation involves a dispute concerning the method by which the rural telephone companies should be compensated for delivering calls that originated from wireless telephones and terminated in’ the rural companies’ local exchanges during February 1998 through January 2001. The telephone traffic at issue involves wireless calls that occurred within one of Missouri’s two “Major Trading Areas” (MTA) for telecommunications. Thus, the traffic was intrastate, as well as intraMTA.

Prior to 1998, Southwestern Bell Telephone Company (SBTC), operating as a large interexchange carrier, transported and terminated calls for wireless carriers, or commercial mobile radio service providers (CMRS providers). SBTC charged the CMRS providers a tariff for this service. However, this tariff did not compensate rural local exchange carriers (LECs) — the respondents herein — for completing wireless calls that terminated on their systems. During the early 1990s, the PSC found SBTC liable to the LECs under the LECs’ own existing access tariffs. Then in 1998, SBTC was permitted to revise its wireless termination tariffs to eliminate its obligation to pay the LECs, and instead the CMRS providers were to compensate the LECs directly. In this regard, the PSC ordered the CMRS providers to seek reciprocal compensation arrangements with the LECs for the termination of the wireless traffic or, otherwise, to cease delivering wireless traffic to the LECs. Despite this order, few reciprocal arrangements were entered, and CMRS providers continued to transmit wireless originated traffic to the LECs, which were unable to block the wireless calls. In an effort to obtain compensation, the LECs then billed the CMRS providers under existing access tariffs, which established the rates that the LECs could charge for completing long distance or toll calls on their local exchanges. However, the CMRS providers refused to pay on the ground that the tariffs did not apply to wireless originated traffic, which the Federal Communications Commission (FCC) deemed to be intraM-TA, or local traffic. During that time, though, the LECs did not seek enforcement of the PSC’s order requiring the CMRS providers to enter reciprocal compensation arrangements or cease delivering traffic to the LECs.

In 1999, the LECs filed proposed amended access tariffs with the PSC to clarify the tariffs’ applicability to wireless originated traffic. Under the proposal, each tariff would be amended as follows:

The provisions of this tariff apply to all traffic regardless of type or origin, transmitted to or from the facilities of the Telephone Company, by another carrier, directly or indirectly, until and unless superseded by an agreement approved pursuant to 47 U.S.C. 252, as may be amended.

The CMRS providers and SBTC intervened and objected to the tariffs, and after a hearing, the PSC rejected the proposed amended tariffs. The LECs then filed a writ of review with the circuit court, which reversed the decision of the PSC. After an initial appeal to the court of appeals, which reversed and remanded for failure of the PSC to make adequate findings of fact, the PSC again ruled against the LECs, relying on federal regulatory rulings in determining that intraMTA calls are local calls and not subject to access tariffs. The LECs again sought a writ of review in the circuit court, the court again reversed the PSC, and the PSC and CMRS providers then appealed. Both sides agree that the facts are not in dispute and only a question of law remains to be resolved.

II. Analysis

This case is controlled by the Federal Telecommunications Act of 1996 (FTA), 47 U.S.C. sec. 251 et seq. (2000). The FCC is charged with implementing and enforcing the provisions of the FTA, 47 U.S.C. sec. 201(b) (2000), and FCC regulations and decisions are binding on the industry and state commissions, AT&T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 377-79, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999).

The FTA requires interconnection, directly or indirectly, between telecommunications carriers. 47 U.S.C. at sec. 251(a). To allow for the recapture of costs for interconnection, the FTA provides for “reciprocal compensation arrangements for the transport and termination of telecommunications,” id. at sec. 251(b)(5), and implementing regulations place a duty on LECs and wireless carriers to negotiate and enter in to those arrangements, 47 C.F.R. 51.301. In this case, as noted, no such arrangements were completed.

The FCC has recently confirmed that in the absence of a reciprocal compensation arrangement, “CMRS providers accept the terms of otherwise applicable state tariffs.” In the Matter of Developing a Unified Intercarrier Compensation Regime; T-Mobile et al. Petition for Declaratory Ruling Regarding Incumbent LEC Wireless Termination Tariffs, 2005 FCC LEXIS 1212, para. 12 (2005). The access tariffs that the LECs now seek, however, are not “otherwise applicable state tariffs.” That question was settled in a FCC ruling known as the “Local Competition Order,” issued when the FTA first became effective. In the Matter of Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, First Report and Order, 11 F.C.C.R. 15299 (1996). In pertinent part, the Order first makes a critical distinction between transport and termination tariffs, which are applicable to local traffic, and access tariffs, which are applicable to long-distance traffic. Specifically, the Order states: “Transport and termination of local traffic are different services than access service for long-distance telecommunications,” and “The Act preserves the legal distinctions between charges for transport and termination of local traffic and interstate and intrastate charges for terminating long-distance traffic.” Id. at para. 1033. To then distinguish between local calls and long-distance calls, the Order provides that the “local service area” for wireless calls is the same as the Major Trading Area. Id. at paras. 1035-1036. The import is that wireless calls made within the MTA are local, and wireless calls made outside of the MTA are long-distance. Id. at para. 1036. The Order then concludes that “traffic to or from a CMRS network that originates and terminates within the same MTA is subject to transport and termination rates under section 251(b)(5), rather than interstate and intrastate access charges.” Id. Because in this case all parties agree that the traffic in question originates and terminates within the same MTA, only tariffs pertaining to transport and termination rates may be imposed, and conversely, tariffs pertaining to interstate and intrastate access charges may not be imposed. Thus, the proposed tariffs, which the LECs concede are interstate and intrastate access charges, are unlawful, and the PSC was correct in disallowing them.

The LECs contention that the FTA does not prohibit state access tariffs in the absence of a reciprocal compensation arrangement flies in the face of the FCC’s Local Competition Order, and it appears that the LECs are simply unwilling to acknowledge the clear distinction made between intraMTA calls and all other calls. They also rely on State ex rel. Sprint Spectrum, L.P., et al. v. Missouri Public Service Comm’n, 112 S.W.3d 20 (Mo.App.2003), for the proposition that access tariffs are lawful even as applied to intraMTA traffic. However, the tariffs in question in Sprint were not access tariffs but were instead intraMTA transportation and termination tariffs — tariffs that are explicitly approved under the Local Competition Order. Finally, the LECs argue that the access tariffs are allowable under the FTA’s “safe harbor” provision in sec. 251(g), which states that until reciprocal compensation agreements are entered in to, LECs are to be afforded the same state táriffs that applied to wireless traffic before the FTA was enacted. The access tariffs available to the LECs at that time, however, did not purport to cover intraM-TA wireless traffic, and it was for that reason that the LECs sought to enlarge the scope of those access tariffs in the first place. The safe harbor, in other words, applies only to the existing access tariffs on long-distance calls, rather than calls placed within the MTA.

III. Conclusion

The PSC was correct in holding that the proposed access tariffs are unlawful. Accordingly, the judgment of the circuit court is reversed, and the decision of the PSC is affirmed.

WOLFF, C.J., STITH, RUSSELL and WHITE, JJ, and ROMINES, Sp.J., ' concur.

PRICE, J., not participating.

      . In the first case, the rural telephone companies are: Alma Telephone Company, MoKan Dial Inc., Mid-Missouri Telephone Company, Choctaw Telephone Company, Chariton Telephone Company, Peace Valley Telephone Company, Mid-Missouri Telephone Group, and Small Telephone Exchange Group.
      In the second case, the rural telephone companies are: BPS Telephone Company, Citizens Telephone Company of Higginsville, Mo., Inc., Craw-Kan Telephone Cooperative, Inc., Elington Telephone Company, Farber Telephone Company, Goodman Telephone Company, Granby Telephone Company, Grand River Mutual Telephone Corporation, Green Hills Telephone Corporation, Holway Telephone Company, lamo Telephone Company, Kingdom Telephone Company, KLM Telephone Company, Lathrop Telephone Company, Le-Ru Telephone Company, McDonald County Telephone Company, Mark Twain Rural Telephone Company, Miller Telephone Company, New London Telephone Company, Orchard Farm Telephone Company, Oregon Farmers Mutual Telephone Company, Ozark Telephone Company, Seneca Telephone Company, Steelville Telephone Exchange, Inc., and Stoutland Telephone Company.
      In both cases, the wireless services providers are: AT & T Wireless Services, Inc., GTE Midwest Incorporated, Southwestern Bell Telephone Company, Southwestern Bell Wireless, Inc., and Sprint Spectrum L.P. d/b/a Sprint PCS.

      . However, during oral argument, counsel for the LECs advised the Court that "complaint proceedings” against the CMRS providers for failure to enter into the reciprocal compensation arrangements are now pending before the PSC.


author: MARY R. RUSSELL, Judge.

text:
    MIDWEST ACCEPTANCE CORPORATION, Appellant, v. DIRECTOR OF REVENUE, Respondent.
    No. SC 86932.
    Supreme Court of Missouri, En Banc.
    Feb. 14, 2006.
    Daniel J. Cook, Scott R. Riley, St. Louis, for Appellant.
    Jeremiah W. (Jay) Nixon, Atty. Gen., James R. Layton, State Solicitor, Jefferson City, for Respondent.
   MARY R. RUSSELL, Judge.

Midwest Acceptance Corporation seeks review of the Administrative Hearing Commission’s (“AHC”) decision finding that it was not entitled to a credit for income taxes on its 2004 Missouri credit institution tax return. The AHC’s decision is affirmed.

I. Jurisdiction and Standard of Review

This Court has jurisdiction to review the AHC’s decision pursuant to Mo. Const, art. V, section 3, as the case involves construction of the state revenue laws. This Court reviews the AHC’s interpretation of revenue law de novo. Six Flags Theme Parks, Inc. v. Dir. of Revenue, 102 S.W.3d 526, 527 (Mo. banc 2003). The AHC’s factual determinations are upheld if supported by law and, after reviewing the whole record, there is substantial evidence to support them. Id.

Exemptions for taxation are strictly construed against the taxpayer and, as such, it is the burden of the taxpayer claiming the exemption to show that it fits the statutory language exactly. Id. at 528.

II. Background

Midwest is a credit institution as defined by section 148.130(2). Section 148.140 imposes an annual tax on credit institutions according to their net income for the preceding calendar year. Under section 148.140.3, however, credit institutions are entitled to credits against the credit institution tax. Section 148.140.3 provides:

Each taxpayer shall be entitled to credits against the tax imposed by sections 148.120 to 148.230 for all taxes paid to the state of Missouri or any political subdivision thereof during the relevant income period, other than taxes on real estate, contributions paid pursuant to the unemployment compensation tax law of Missouri and taxes imposed by said sections.

Midwest has elected “S corporation” status. 26 U.S.C. section 1362(a) (2000). Pursuant to section 143.471, Midwest, as an S corporation, is not subject to the Missouri income tax on corporations under section 143.071. Midwest’s shareholders, however, pay Missouri income tax on their share of Midwest’s income.

On its 2004 credit institutions tax return, Midwest claimed a section 148.140.3 credit for $77,800, the amount of Missouri corporate income tax it believed it would have paid were it a C corporation rather than an S corporation. The Director of Revenue audited Midwest’s 2004 return and disallowed the credit. The Director assessed a deficiency of $54,486, plus interest.

Midwest timely protested the Director’s decision and, after the Director denied relief, Midwest sought review from the AHC.

The AHC found that Midwest was not entitled to the section 148.140.3 credit because, as an S corporation, it did not pay Missouri corporate income tax. It further found that Midwest could not utilize the credit for the personal income taxes paid by its shareholders on their Midwest income. The AHC found that Midwest owed $49,899, plus interest in credit institute tax for 2004. Midwest now seeks relief from this Court.

III. Is Midwest entitled to an income tax credit?

Midwest argues that the AHC erred in denying it a credit for either the Missouri personal income tax paid by its shareholders on their Midwest income or the Missouri corporate income tax Midwest would have paid were it a C corporation.

The plain language of section 148.140.3 gives Midwest tax credits against the credit institution tax for “taxes paid.” Midwest cannot claim such a credit for taxes it does not pay. Midwest does not pay Missouri personal income tax, its shareholders do. Midwest, as an S corporation, does not pay Missouri corporate income tax. Because Midwest does not pay Missouri income tax, it cannot claim Missouri income tax as a credit under section 148.140.3.

Midwest argues that disallowing it a credit for the Missouri income tax paid by its shareholders unfairly results in a double tax in that Midwest must pay the credit institution tax without benefit of the credit and its shareholders must pay Missouri personal income tax on their income from Midwest. Midwest also posits that it is unfair to tax credit institutions organized as S corporations differently than similarly situated banks or credit institutions that are organized as C corporations or sole proprietorships. These taxes are assessed to Midwest and its shareholders as required by statute. Midwest does not contend that the statutes themselves are unconstitutional, but alleges that they are unfair.

Midwest’s claims of unfairness should be directed to the legislature. Midwest elected to be an S corporation under the statutes because it wanted the benefits of doing so. Midwest cannot now also argue it is entitled to the benefits available to other types of entities that it did not elect to be. When previously addressing an argument by S corporation shareholders who sought tax treatment similar to C corporations, this Court stated: “[T]he corporation has voluntarily elected to assume S corporation status. It could have elected to be taxed as other corporations are, but it made use of a choice expressly authorized by statute. It cannot have the benefits of the S election without the burdens.” Wolff v. Dir. of Revenue, 791 S.W.2d 390, 392 (Mo. banc 1990). Such is the case here.

IV. Conclusion

Midwest is not entitled to a section 148.140.3 credit for the Missouri personal income tax paid by its shareholders or by the amount of Missouri corporate income tax it would pay were it a C corporation. The AHC’s decision is affirmed.

All concur.

      . Section 148.130(2) defines a "credit institution” as:
      [EJveiy person, firm, partnership, or corporation engaged principally in the consumer credit or loan business in the making of loans of money, credit, goods, or things in action, or in the buying, selling, or discounting of, or investing in negotiable or nonnegotiable instruments given as security for or in payment of the purchase price of consumer goods .... but shall not include banks, trust companies, credit unions, insurance companies, mutual savings and loan associations, savings and loan associations, or real estate mortgage loan companies.

      . All further statutory references are to RSMo 2000, unless otherwise indicated.

      . 26 U.S.C. section 1361(a)(1) (2000) defines an "S corporation” as a small business corporation that makes an election under 26 U.S.C. section 1362(a) (2000).

      . This state income tax benefit for an S corporation mirrors the federal income tax benefit such a corporation receives. An S corporation is not subject to federal income tax, but its shareholders are taxed on their pro rata share of the S corporation’s income. 26 U.S.C. sections 1363(a)-(b), 1366(a) (2000).

      . During the tax year at issue, Midwest had two shareholders, each with 50 percent interest in the corporation. Each shareholder filed a Missouri income tax return with their respective spouse, and the Director did not dispute those returns.

      . This amount reflects the AHC's finding that Midwest was entitled to a section 148.140.3 credit for $4,932 St. Louis City earnings taxes it paid, but had failed to claim on its 2004 return, and reflects an adjustment to Midwest’s federal taxable income.


author: LAURA DENVTR STITH, Judge.

text:
    In re the MARRIAGE OF Lewis HENDRIX and Kimberly Ann Hendrix, Lewis Hendrix, Respondent, v. Kimberly Ann Hendrix, Appellant.
    No. SC 86938.
    Supreme Court of Missouri, En Banc.
    Feb. 14, 2006.

      Mark J. Murphy, J. Michael Murphy, Liberty, for Appellant.
    James R. Royce, Springfield, for Respondent.
   LAURA DENVTR STITH, Judge.

Kimberly Hendrix (Mother) appeals the trial court’s refusal to set aside its judgment modifying custody of her two children so as to make the home of Father, Lewis Hendrix, their residence for mailing and educational purposes. She argues that the judgment modifying custody was void under section 452.410 and Rule 74.06 because based on stipulated facts rather than on facts developed at an evidentiary hearing.

This Court affirms the judgment. The modification was not based merely on a stipulation of Mother and Father that a change of circumstances had occurred that required a modification of custody arrangements. Rather, after notice and an opportunity for hearing, the parties presented the court with sufficient, uncontested facts — set out in a parenting plan and in the proposed judgment and the stipulation signed by both the parties and the guardian ad litem (GAL) — to support the modification. This included facts showing that Mother had moved out of the marital home, leaving the children there in Father’s care, and other facts underlying the court’s determination that a change of circumstances had occurred sufficient to support modifying custody and making the children’s address for mailing and educational purposes that of Father. The parties did not dispute the facts on which the modification was based or suggest, pri- or to entry of the order, that a hearing was necessary to establish additional facts. In these circumstances, section 452.410 did not require the trial court to hold an evi-dentiary hearing sua sponte.

I. FACTUAL AND PROCEDURAL BACKGROUND

Mother and Father separated in September 1998. Their March 1999 judgment dissolving their marriage gave them joint legal custody, but gave Mother “primary” physical custody and granted Father substantial visitation. The parties returned to living together and sharing expenses almost immediately, however, and in September the court modified the judgment to eliminate provisions ordering Father to pay child support.

Mother and Father continued to live together in the family home in Marshfield, Missouri, until January 2003, when Mother moved out, leaving the children with Father. He then filed a motion to modify and proposed parenting plan in which he asked that he be given “primary” physical custody. The motion alleged Mother had left the children in Father’s care in the marital home and that she stated she would keep Father from seeing the children. Mother filed a counter-motion and parenting plan proposing that she be given physical custody and Father have only visitation rights.

A hearing on the motions to modify was set for May 27, 2003. That hearing was never held, however, because on that date, at the parties’ request, the GAL prepared and presented to the court a short stipulation, signed by both parties, agreeing to joint physical and legal custody as follows:

The parties do hereby agree and stipulate to the following conditions regarding custody and support of their minor children:
1. The parties shall share joint legal and joint physical custody;
2. There shall be no child support paid to either party, and Father shall maintain health insurance on the children;
3. Parenting time with the children shall be as follows:
Parties will prepare a parenting plan, which mil maximize the time each parent spends with the children during that parent’s non-working hours. As closely as possible the parties will alternate weekends and holidays and shall each have available to them one uninterrupted two-week period of parenting time in the summer;
4. Parties shall allow phone contact with the non-custodial parent;
5. Parties will communicate with each other regarding the health, education and schedule of the children;
6. The non-custodial parent shall be the first option for a baby-sitter should the need arise. Only if the non-custodial parent is unavailable should a baby-sitter be consulted.

(emphasis added).

The parties and their counsel at that time also agreed that the children would live with Father and that counsel for Father would prepare a parenting plan and Form 14 reflecting this agreement. Counsel would also draft a proposed judgment that would incorporate the stipulation, parenting plan and Form 14 and fill in remaining factual details about the circumstances of the parties that formed the basis for the modification. In accordance with this agreement, counsel prepared a proposed judgment stating:

4. [Tjhere has been a substantial and continuing change of circumstances which include, but are not limited to the following:
a. That the minor children have lived continuously with [Father] since the date of the dissolution of marriage;
b. [Mother] no longer resides with [Father], and the parties and children desire to change the provisions of the custody plan; and
c. The circumstances of the parties and the unemancipated minor child have changed to make the present order for custody and support unreasonable.

The proposed judgment did not itself make Father’s home the children’s residence for mailing and educational purposes, but incorporated the parenting plan and stated that the parties agreed to joint legal and physical custody, that neither was to pay child support, and that each would pay their own attorneys’ fees. That plan, as agreed, provided that the children’s address for mailing and educational purposes would be Father’s home.

Counsel for Mother and Father, and the GAL, all submitted the proposed judgment to the court, along with the stipulation, Form 14 and parenting plan. At the end of the proposed judgment all three signed their names beneath the legend, “approved as to form.” While the purpose of having counsel and the GAL “approve” a judgment is not self-evident — only a judge can enter a judgment — counsel suggest that requiring such signatures is local practice and indicates that counsel agree that the judgment accurately reflects the matters addressed therein. The court signed the judgment, without change, on July 22, 2003.

Although counsel had approved the judgment as to form and later testified that it accurately reflected the parties’ agreement, Mother later claimed that she first became aware that Father’s home would be the primary residence for educational and mailing purposes only when she was sent a copy of the signed judgment in August. She raised no objection to this provision until she found, after she moved to Kansas City in September, that visitation under the plan had become more difficult. In December, she filed a motion to set aside the modification pursuant to Rule 74.06(b), alleging that the court’s judgment was void because the court had not held an evidentiary hearing on the motion to modify and asking that primary physical custody be returned to her.

The trial court held an evidentiary hearing on the motion to set aside the modification, at which Mother testified that she had neither seen nor authorized counsel to approve the parenting plan before the court signed the judgment. Her counsel and his paralegal testified by deposition to the contrary, stating that she had approved the contents of the parenting plan and was agreeable to having Father’s residence be the children’s address for mailing and educational purposes. They stated Mother feared that if such an agreement had not been reached, the court might have given Father sole custody due to Mother’s having moved out of the home, the difficulties she gave Father in regard to seeing the children, and other matters. The court overruled the motion to set aside. Mother appeals. After opinion by the Court of Appeals, Southern District, this Court granted transfer. Mo. Const, art V, sec. 10.

II. STANDARD OF REVIEW

“The judgment denying a motion filed pursuant to Rule 74.06(b) is appeal-able.” Baxi v. United Technologies Auto. Corp., 122 S.W.3d 92, 95 (Mo.App. E.D.2003). “The trial court is vested with broad discretion in determining whether to set aside a judgment under Rule 74.06,” id., and “its decision shall not be reversed unless the record clearly and convincingly proves an abuse of that discretion.” In re Marriage of DeWitt, 946 S.W.2d 258, 261 (Mo.App. W.D.1997). “An abuse of discretion occurs when a trial court’s ruling is clearly against the logic of the circumstances then before the court and is so unreasonable and arbitrary that it shocks the sense of justice and indicates a lack of careful, deliberate consideration.” Hancock v. Shook, 100 S.W.3d 786, 795 (Mo. banc 2003); DeWitt, 946 S.W.2d at 261. “If reasonable persons can differ as to the propriety of the trial court’s action, then it cannot be said that the trial court abused its discretion.” Hancock, 100 S.W.3d at 795.

III. JURISDICTION TO MODIFY CUSTODY UPON FINDING A CHANGE IN CIRCUMSTANCES FOLLOWING NOTICE AND STIPULATIONS AS TO FACTS SUPPORTING MODIFICATION

Mother argues that section 452.410 requires a court to hold an evidentiary hearing before it may modify custody and that the absence of such a hearing left the court without jurisdiction to modify custody. Because Mother is using the word “jurisdiction” in a broader sense than is usual, it is helpful to explain the types of jurisdictional defects that may render a court without power to hear a case or render a judgment.

A Nature of Court’s Jurisdiction and Authority.

The essential bases of a court’s authority to adjudicate a controversy are its jurisdiction over the subject matter of the controversy and jurisdiction over the parties. This Court has also recognized that in certain narrow circumstances a party may question the authority, or jurisdictional competence, of a court to “render the particular judgment in the particular case.” Mo. Soybean Ass’n v. Mo. Clean Water Comm’n, 102 S.W.3d 10, 21 (Mo. banc 2003).

In State ex rel. Lambert v. Flynn, 348 Mo. 525, 154 S.W.2d 52, 57 (banc 1941), this Court noted that subject matter jurisdiction and jurisdiction over the person “are grand subdivisions of jurisdiction.” “Subject matter jurisdiction is a tribunal’s statutory authority to hear a particular kind of claim.” Sexton v. Jenkins & Assocs., 152 S.W.3d 270, 273 (Mo. banc 2004). “The court must have cognizance of the class of cases to which the one to be adjudged belongs.” Kristanik v. Chevrolet Motor Co., 335 Mo. 60, 70 S.W.2d 890, 894 (banc 1934). Subject matter jurisdiction is “derived from the law and cannot be conferred by consent,” Flynn, 154 S.W.2d at 57, while personal jurisdiction “may be waived because it is a personal privilege.” Id.

Mother does not contest that the court below had subject matter jurisdiction to decide a motion to modify and concedes that it had personal jurisdiction over the parties. But, she asserts, it did not have what she says is also a jurisdictional prerequisite, that is, jurisdiction to “render the particular judgment in the particular case.” Mo. Soybean, 102 S.W.3d at 21. Flynn states that the latter, which it sometimes called “jurisdictional competency” to enter judgment on a particular issue in a particular case, “partakes of the character of one or the other of the first two,” 154 S.W.2d at 57. By this Flynn meant that it normally becomes an issue when there is no question as to the court’s authority to decide the general issue before it, but there is a question whether the issue or parties affected by the court’s judgment are properly before it for resolution at that time.

In Flynn, for example, the issue was whether a court had authority to decide a case in which the relevant statutes required the plaintiff to first seek various administrative remedies that had not been utilized. The Court explained:

It is said ... ‘If the court cannot try the question except under particular conditions or when approached in a particular way, the law withholds jurisdiction unless such conditions exist or unless the court is approached in the manner provided, and consent will not avail to change the provisions of the law in this regard.’

154 S.W.2d at 57 (citation omitted). Flynn then concluded that in the case before it:

[RJespondent’s court had no power to try the case until statutory conditions had been complied with and administrative remedies had been exhausted, and also unless these facts were shown by the petition upon which respondent’s jurisdiction was invoked. It partook of jurisdiction of the subject matter and could not be waived by mere appearance of the relators.

Id. (emphasis in original). Accord, Bullmaster v. Krueger, 151 S.W.3d 380, 385 n. 4 (Mo.App. W.D.2004) (where statute required claimant to serve notice of intent to file mechanic’s lien prior to filing lien affidavit, issue was one of competency jurisdiction because concerning satisfaction of statutory prerequisites to suit).

Another situation in which questions about a court’s authority to issue a particular judgment in a particular case may arise is where the court has proceeded “beyond the allegations of the pleadings and the prayer for relief.” Charles v. White, 214 Mo. 187, 112 S.W. 545, 549 (1908). In such cases, Charles held, “to that extent, at least, its judgment is void and it is open to collateral attack,” id., further stating:

‘Persons by becoming suitors do not place themselves for all purposes under the control of the court, and it is only over these particular interests which they choose to draw in question that a power of judicial decision arises. If, in an ordinary foreclosure case, a man and his wife being parties, the Court of Chancery should decree a divorce between them, it would require no argument to convince every one that such decree, so far as it attempted to affect the matrimonial relation, was void.... In such a case the court would have acted within the field of its authority, and the proper parties would have been present; the single but fatal flaw having been the absence from the record of any issue on the point determined.’

112 S.W. at 549, quoting, Munday v. Vail, 34 N.J.L. 418, 422-23 (N.J.1871).

In the context of custody actions, courts similarly have found a court lacks authority to modify a decree without first providing notice and an opportunity for hearing. For instance, this Court has held void a decision transferring custody from mother where she had not first received notice and an opportunity to be heard, stating:

The mother was not notified that such motion was filed or would be heard. Her rights were fixed by the previous decree, and such decree could not be modified or changed without notice to her.... Without the presence of the mother, and without notice to her, the court entered a new decree. Such action violated due process of law, as guaranteed by the fundamental law. Citation of authority upon a question so plain will add nothing. The rights of a party cannot be disturbed without notice and a legal hearing. The judgment under which the father claims these children is void.

Jack v. Jack, 295 Mo. 128, 243 S.W. 314, 315 (Mo. banc 1922).

B. Authority to Modify Custody Based on Stipulations of Fact.

Mother argues that the principles just discussed apply here and deprive the trial court of jurisdiction to modify custody. She argues section 452.410 required the court to hold a hearing before it modified custody and it erred in failing to do so, instead relying on the stipulation signed by the parties. Section 452.410 states in relevant part:

1. Except as provided in subsection 2 of this section, the court shall not modify a prior custody decree unless it has jurisdiction under the provisions of section 452.450 and it finds, upon the basis of facts that have arisen since the prior decree or that were unknown to the court at the time of the prior decree, that a change has occurred in the circumstances of the child or his custodian and that the modification is necessary to serve the best interests of the child....

Sec. 452.410.1. Mother acknowledges that section 452.410 does not expressly require an evidentiary hearing in order to modify custody. But, Mother argues, various cases nonetheless have relied on it or its predecessors to hold that child custody modification proceedings require a hearing because the guiding principle in such proceedings is the best interest of the children and that cannot be determined by stipulation.

Cases such as those cited by Mother are correct to the extent they state that, absent notice and an opportunity for hearing, a court has no authority under the statute to modify custody. Whether or not such a defect is labeled as “jurisdictional,” it is clear that in such a case the court does not have authority “to render the particular judgment in the particular case.” But that is not dispositive here, for, as discussed below, the evidence presented permitted the court to find that both parents had notice of the modification hearing, that they conferred with counsel and agreed to the change of custody, that they filed both a document labeled “stipulation” and additional stipulated facts in a proposed judgment that they prepared and in a parenting plan, and Mother neither sought nor was denied the opportunity to present additional facts. Thus, notice and an opportunity for hearing were provided and the court had authority to modify custody.

Mother suggests that a court may nonetheless retroactively be deprived of jurisdiction, and any judgment entered by it thereby rendered void, if in entering the judgment the court failed to follow all procedures set out in the relevant statutes, such as by failing to make findings of fact or to hold a hearing the statutes require. But, such errors would not deprive the court of subject matter or personal jurisdiction, nor would they affect the power of the court to render a particular judgment in the particular case.

The tendency to call matters “jurisdictional” that are really only assertions of legal error greatly confuses the notion of jurisdiction in civil cases. It can also create the potential for great mischief because calling legal errors “jurisdictional” could be used years later to void settled judgments.

The label “jurisdictional defect” is seldom appropriate outside the context of lack of jurisdiction of the subject matter or of the person. While it is not erroneous to use it in the narrow circumstances noted above in which a court by statute is without authority to hear a matter or to issue a judgment on a matter it purports to resolve, or does so without notice and an opportunity for hearing— areas that are related to, if not subsets of, lack of jurisdiction of the subject matter or the person — the label “jurisdictional defect” has no application to mere legal errors. Having obtained jurisdiction of the subject matter and the parties and having entered a judgment on the particular claims raised by the pleadings, at a time when statutory prerequisites to filing suit had been fulfilled, a court has jurisdiction to decide the case.

If a court then errs in substance or procedure in failing to make necessary findings, in making findings not supported by the evidence, in excluding necessary evidence or in mistaking hearing requirements, it has not lost jurisdiction. It simply has erred. Such errors should be raised on appeal and, if prejudicial, may lead to reversal and remand. But, they do not affect the court’s jurisdiction to render the particular judgment in the particular case, and “[a] judgment is not void simply because it is erroneous, or based, on precedent later determined to be incorrect or unconstitutional.” Baxi, 122 S.W.3d at 96. To the extent that prior cases have misinterpreted Flynn, Charles, and their progeny, to say to the contrary, they are incorrect and should no longer be followed.

Of course, as Mother notes, section 452.410 does require the trial court to base its decision on facts that have arisen or been made known to it since its last decree. But, the statute does not state how these facts are to be made known, and nothing in it supports the assertion that the requirement that facts be found means that stipulations have no place in modification proceedings or that an evidentiary-hearing invariably is required.

In non-custody cases, facts may be adduced in a variety of ways, including the use of live testimony, the presentation of documentary evidence in support of a motion or at an evidentiary hearing, or by stipulation of the parties. “A stipulation of fact dispenses with proof of the matters stipulated.” In re An Omega Brand, 676 S.W.2d 292, 294 (Mo.App. E.D.1984). Further, “parties to such stipulation, should not be heard to object to the proceedings or to the findings of facts by the trial court, if such findings are supported by substantial evidence.” General Motors Acceptance Corp. v. VanAusdall, 241 Mo.App. 499, 249 S.W.2d 1003, 1006 (1952). Nothing in section 452.410 or other statutes suggests that different evi-dentiary rules apply in modification proceedings.

This does not mean that the parties can simply submit a document that states that the parties stipulate that there has been a change of circumstances and that a modification of custody is in the best interests of the children. As numerous cases note, the parties cannot stipulate to the ultimate issues, for Missouri law requires that the court, not the parties, determine what custody arrangement is in the best interests of the children. If the court merely accepted the parents’ stipulation as to best interests or a change of custody, its order would not be supported by substantial evidence and would be subject to reversal. And, a party has a right not to submit its case based on a stipulation but instead to request a hearing. But, nothing in the statute precludes a stipulation as to facts, and numerous local court rules permit modification pursuant to such stipulations.

Applying these principles here, if the stipulated facts were insufficient or raised issues of credibility or best interests, then further evidence should have been taken before entering judgment. Normally, such a hearing would be the preferred course so that the stipulated facts could be explored and supplemented; such a hearing would, moreover, have avoided the kind of later questions that have arisen here as to whether the modification was based on sufficient notice and evidence. But, to the extent that some of the cases cited by Mother suggest that a hearing is required by section 452.410 even where the court finds that the stipulated facts are sufficient to allow it to determine that a change of circumstances has occurred and that a modification of custody is in the best interests of the children, they are incorrect and should no longer be followed.

C. The Court Did Not Abuse Its Discretion in Denying the Motion to Set Aside the Modification Judgment Here.

The trial court did not abuse its discretion here, for sufficient facts were established, despite the lack of a hearing, to support its determination that a change in circumstances had occurred sufficient to justify a modification of custody, and the court clearly believed these facts sufficient to support the change in custody it ordered.

The only aspect of the parenting plan or judgment Mother claims was unsupported was the statement that the parties agreed that the children’s residence for mailing and educational purposes would be that of Father. But, it was only after the judgment was final and signed and Mother moved from Marshfield to Kansas City, and so had less contact with her children under the modified custody arrangement, that she first raised an objection to it. She claimed that her attorney had not told her that the proposed parenting plan made Father’s address the one used for mailing and school purposes until after the court entered judgment. Only then did she argue that the parenting plan should not be considered and that the stipulation alone was insufficient to support the judgment. While the court could have accepted Mother’s version of the facts, it was not required to do so.

Mother’s trial counsel testified to the contrary in his deposition. He said that Mother agreed to the residency arrangement after he and Mother extensively discussed her chances if the case went to trial. Their discussions included his concern that Father might be given physical custody of the children in place of Mother, as the GAL apparently was going to recommend, due in large part to Mother’s work schedule and certain negative personal facts. According to counsel, Mother understood and agreed to the changes in the parenting plan and did not want an evidentiary hearing. He testified that his paralegal attempted to contact Mother to go over the final version of the parenting plan, but she did not respond.

Counsel’s paralegal confirmed that she tried to contact Mother by telephone and by sending a copy to her address, but the mailed copy was neither signed nor -returned, nor did she or counsel hear from Mother at all. Counsel testified that, at the time the proposed judgment was submitted, Mother had orally agreed to joint custody and making Father’s residence the one utilized for mailing and educational purposes as set out in the finalized parenting plan, stipulation and Form 14. Therefore, he went ahead and signed the proposed judgment below the space indicating “approved as to form.”

The trial court was free to accept the version of events testified to by counsel and his paralegal rather than that of Mother. Moreover, even if counsel had acted beyond the authority Mother gave him, “[generally, actions of a party’s attorney, including procedural neglect that precludes a client’s substantive rights, are imputed to the client,” Cotleur v. Danziger, 870 S.W.2d 234, 238 (Mo. banc 1994), and “[a] party who contends that an attorney lacked authority to bind him in a particular way bears a heavy burden.” Jacobs v. Georgiou, 922 S.W.2d 765, 770 (Mo.App. E.D.1996). The trial court did not abuse its discretion in not finding this burden met here. Mother was not entitled to change her mind after the conclusion of the case and retroactively request a hearing. Mother is, of course, entitled to file a new motion to modify if facts have arisen since the modification at issue that show that a change of circumstances has occurred and a modification is necessary to protect the best interests of the children.

TV. CONCLUSION

The court did not abuse its discretion in overruling Mother’s motion to set aside the modification. Its judgment is affirmed.

All concur.

      . All statutory citations are to RSMo 2000 unless otherwise indicated.

      . The reference to "primary” physical custody is inappropriate. Section 452.375 permits either sole or joint custody; a parent may no longer be granted "primary” legal or physical custody. See, e.g., Speer v. Colon, 155 S.W.3d 60, 62 n. 11 (Mo. banc 2005).

      . The original parenting plan provided that Father was to have the children every other weekend, one overnight a week, and any other night Mother attended classes. For unexplained reasons, the parties’ later motions to modify and the court’s July 22, 2003, order refer to the initial dissolution decree entered in March 1999 rather than the modification order entered in September 1999.

      . The practice of including the legend "approved as to form” at the end of a proposed judgment with a place for counsel to sign is potentially confusing and should be avoided.

      . See, e.g., Jack, 243 S.W. at 315 (no jurisdiction to modify based on motion filed by third person as amicus without notice to and service on parties); State ex rel. Perrella v. McGuire, 757 S.W.2d 223, 225 (Mo.App. S.D.1988) (proper petition for modification and notice are jurisdictional prerequisites to modification); Fernbaugh v. Clark, 236 Mo.App. 1200, 163 S.W.2d 999, 1003 (1942) (notice required before decree can be modified).

      . See, e.g., Fleming v. Fleming, 562 S.W.2d 168, 170 (Mo.App.1978) (no jurisdiction to modify custody without holding hearing); In re Lipschitz, 466 S.W.2d 183, 185 (Mo.App.1971) ("an order purporting to rule on a motion to modify without a hearing at which evidence is adduced would be in excess of the court’s jurisdiction”).

      . See, e.g., secs. 452.410, .325.2, .375.6, .395.1; Williams v. Cole, 590 S.W.2d 908, 911 (Mo. banc 1979) (agreement as to "custody, support, and visitation of minor children is not binding on the trial court, nor can the parties preclude or limit the court with respect to the modification of the support, custody, or visitation provisions of the decree”); Blackburn v. Mackey, 131 S.W.3d 392, 399 (Mo.App. W.D.2004) ("court in a dissolution or modification case is not bound by the terms of an agreement between the parties with regard to custody, support, or visitation of children”); M.F.M. v. J.O.M., 889 S.W.2d 944, 956 (Mo.App. W.D.1995) (parties’ admissions of substantial and continuing change of circumstances do not bind court or require it to modify judgment).

        . See, e.g., Thirteenth Judicial Circuit, Rule 68.10; Twenty-Ninth Judicial Circuit, Rule 68.11; Thirty-Second Judicial Circuit, Rule 68.08.

      . See, e.g., Riley v. Riley, 643 S.W.2d 298, 300 (Mo.App. W.D.1982) (court "must conduct a hearing and can only act upon presentation of facts from which it may be determined that a change in custody would be in the best interests of the children”); Fleming, 562 S.W.2d at 171 (requiring hearing); Flickinger v. Flickinger, 494 S.W.2d 388 (Mo.App.1973) (properly rejecting modification decision based entirely on juvenile officer's report but erroneously also requiring a hearing before modifying child custody in order to maintain jurisdiction).


author: MICHAEL A. WOLFF, Chief Justice.

text:
    Terri Jo HEMME and Terry Hemme, Appellants, v. Sam BHARTI, Kusum Bharti, and Bharti Midway Properties, Inc., and R.J. Reynolds Tobacco Co., Respondents.
    No. SC 86937.
    Supreme Court of Missouri, En Banc.
    Feb. 14, 2006.

      Linda C. McFee, Robert L. Wehrman, Kansas City, for Appellants.
    Kathleen Kopach Woods, Richard F. Lombardo, Jennifer Joyce Price, Jean-Paul Assouad, David R. Buchanan, Kansas City, for Respondents.
   MICHAEL A. WOLFF, Chief Justice.

Introduction

This case concerns the interplay between the procedural rules governing cross-claims and compulsory counterclaims. The question is whether a personal injury claim is barred under the compulsory counterclaim rule when it is brought by a plaintiff who, as a defendant in a previous action, did not raise the claim against a co-defendant who made a cross-claim for indemnity and contribution.

This controversy arises from an automobile accident between Deborah Harrison and Terri Jo Hemme in February 1998. Hemme was exiting a parking lot owned by the Bhartis — Sam Bharti, Kusum Bhar-ti, and Bharti Midway Properties, Inc.— when her car collided with Harrison’s car. Harrison sued Hemme, alleging negligence. Harrison subsequently amended her petition to add the Bhartis and RJ Reynolds as defendants, alleging that the Bhartis were negligent in allowing RJ Reynolds to place an outdoor sign on their property that impeded Hemme’s vision.

Hemme, the Bhartis, and RJ Reynolds filed cross-claims against one another as co-defendants for contribution, indemnification, and apportionment of fault relating to Harrison’s injuries. Although Hemme was injured in the accident, she did not file any cross-claims relating to her injuries. Harrison’s lawsuit was settled, and all of Harrison’s claims were dismissed with prejudice.

Hemme then sued the Bhartis and RJ Reynolds for damages for personal injuries arising from the accident with Harrison. Her husband joined as plaintiff seeking damages for loss of consortium. The Hemmes claimed that the Bhartis and RJ Reynolds negligently placed the sign in a location where it impaired Hemme’s ability to safely exit the parking lot. The Bhartis and RJ Reynolds filed motions for summary judgment, asserting that Rule 55.32(a) and res judicata barred the Hem-mes from raising their claims in the new lawsuit. The Hemmes argued that, pursuant to Jacobs v. Corley, 732 S.W.2d 910 (Mo.App.1987), the filing of permissive cross-claims does not make co-defendants “opposing parties” and, thus, does not trigger the compulsory counterclaim rule.

The trial court granted summary judgment in favor of the Bhartis and RJ Reynolds and dismissed the Hemmes’ claims, finding that Rule 55.32(a) barred the Hem-mes’ suit because the claims were compulsory counterclaims to cross-claims in the original suit. After opinion by the court of appeals, this Court granted transfer. Mo. Const, art. V, sec. 10.

The Holding

The compulsory counterclaim rule does not require a defendant against whom a cross-claim for indemnity, contribution or apportionment of fault is asserted to set forth her claim for injuries against her cross-claiming co-defendant in a response. The trial court’s judgment is reversed, and the case is remanded.

Analysis

When analyzing problems raised under the rules of civil procedure, it is wise to start with the words of the rules. Rule 55.32(f) says that a pleader may state as a cross-claim “any claim ... against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein.... ” A cross-claim “may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.”

A cross-claim, under this rule, is 'always permissive and never compulsory.

When a claim is compulsory, you use it or lose it. Such is the case with the compulsory counterclaim rule, Rule 55.32(a), which requires a party to bring “any claim that at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.” (Emphasis added.)

The Easiest Analysis: A Correct Result Here, But Wrong Reason

The simplest answer is to hold that all claims by one party against a co-party are cross-claims and, as such, are never compulsory. Though it has the beauty of simplicity and works in this case, this analysis does not consistently yield the correct answer. The counterclaim rule is not limited to claims by a defendant against a plaintiff — Rule 55.32(a) does not use those labels. So it is possible for co-parties in some circumstances to be “opposing parties,” for example, when one co-party brings a claim for its own damages against another co-party. In that circumstance, they would be opposing parties — though both originally are co-defendants — and, thus, would be subject to the compulsory counterclaim rule.

The Prevailing Analysis: These Co-Parties Are Not “Opposing Parties”

The Bhartis and RJ Reynolds assert that the Hemmes were required to bring their claims as part of Harrison’s lawsuit because, once a cross-claim for indemnity, contribution or apportionment of fault was filed, the co-defendants became “opposing parties.”

If Hemme, the Bhartis, and RJ Reynolds were merely co-defendants in Harrison’s lawsuit, and not “opposing parties,” then Rule 55.32(a) does not apply, and the Hemmes’ claims were not compulsory counterclaims, but rather permissive cross-claims.

The Hemmes argue that the controlling case is Jacobs v. Corley, 732 S.W.2d 910 (Mo.App.1987). In Jacobs, Dean Witter, a brokerage firm, filed an interpleader to determine whether Jacobs or Corley was entitled to a settlement held by Dean Witter. Jacobs and Corley filed several cross-claims against one another relating to a prior agreement. Jacobs filed a new suit against Corley alleging breach of contract and fraud. The subject matter was the same attorney contingent fee contract that led to the interpleader suit. Corley filed a motion to dismiss, arguing that the issues had already been litigated and that Rule 55.32 required the claims to be raised in response to Corley’s cross-claim in the in-terpleader action. Id. at 911-12. The court determined that Jacobs’ claim was not barred because the parties were not “opposing parties” in the interpleader action. The court adopted the simple notion that “[c]o-parties are persons on the same side (i.e. all plaintiffs or all defendants) of the principal litigation” even if their interests were adverse in the original lawsuit. Id. at 914. “[C]o-defendants’ interests may well be adverse, as in the case of joint-tortfeasors, but that does not serve to transform them from co-parties into opposing parties under Rule 55.32(a) governing counterclaims.” Id. The court continued, “[a]s a co-party, Jacobs was entitled to file any cross claims against Corley, arising out of the transaction or occurrence of the interpleader action. It is clear that such cross claims are merely permissive rather than compulsory.” Id.

The Jacobs court relied on Brown v. Harrison, 637 S.W.2d 145 (Mo.App.1982), where Brown sued Oliver and Harrison for injuries from a car accident, alleging that both shared fault. Oliver filed a cross-claim against Harrison, and Harrison included a cross-claim against Oliver in his defense. The trial court severed Oliver’s cross-claim and tried only Brown’s case against Oliver and Harrison. When Oliver tried to bring her claim after the judgment in Brown’s case, Harrison argued that res judicata barred Oliver’s claim. The court held that Oliver’s claim was not barred because it had never been tried by the trial court. Id. at 148.

Although Brown and Jacobs do not directly address the same issue, Brown contains some language that seems contrary to the holding of Jacobs. Brown states that the co-defendants “were, of course, in adversary positions insofar as both were resisting Brown’s claim against both as alleged joint tort-feasors, and before it was severed for separate trial, they were in adversary positions as to Oliver’s cross-claim.” 637 S.W.2d at 147. This language indicates that, had the cross-claim not been severed, it would have transformed the co-defendants into “opposing parties” and triggered the compulsory counterclaim rule.

In addition to the contradictory language in Brown and Jacobs, the court in Jones v. Corcoran, 625 S.W.2d 173, 175 (Mo.App.1981), reached the opposite conclusion to that in Jacobs, holding that co-defendants became “opposing parties” when they filed cross-claims against each other. The Jacobs court does not distinguish, or even mention, Jones. These cases reflect confusion and disagreement within the court of appeals as to when co-defendants become “opposing parties.”

The federal courts have also considered this issue and not come away in complete agreement. Missouri’s Rule 55.32(a) is based on Federal Rule 13(a), and, where “the Missouri and federal rules are essentially the same, federal precedents constitute persuasive, although not binding, authority.” Joel Bianco Kawasaki Plus v. Meramec Valley Bank, 81 S.W.3d 528, 532-33 (Mo. banc 2002). Although there is disagreement among the federal courts as to the interpretation of Rule 13(a), several courts have held that, where cross-claims between co-defendants are for non-substantive claims, such claims do not invoke the compulsory counterclaim rule. See, e.g., Augustin v. Mughal, 521 F.2d 1215 (8th Cir.1975) (applying both Missouri and federal law); Kirkcaldy v. Richmond Cty. Bd. of Education, 212 F.R.D. 289 (M.D.N.C.2002); Rainbow Mgmt. Growp, Ltd. v. Atlantis Submarines Hawaii, L.P., 158 F.R.D. 656 (D.Haw. 1994); Answering Serv., Inc., v. Egan, 728 F.2d 1500 (D.C.1984). These courts’ approach to the compulsory counterclaim rule is sound and helpful in this Court’s analysis of Rule 55.32(a).

The purpose of the compulsory counterclaim rule is to promote judicial economy by requiring all logically related claims to be brought in a single proceeding. Joel Bianco Kawasaki, 81 S.W.3d at 532; Cantrell v. City of Caruthersville, 359 Mo. 282, 221 S.W.2d 471, 474 (1949). “[T]he general purpose of the [compulsory counterclaim] rule ... is to avoid a multiplicity of suits and to dispose of litigation more expeditiously and properly.” State ex rel. Buchanan v. Jensen, 379 S.W.2d 529, 531 (Mo. banc 1964).

This purpose is not necessarily furthered by a rule that cross-claims for indemnity or contribution transform co-defendants into “opposing parties.” Such a rule “may actually increase the amount or complexity of litigation.” Rainbow Mgmt, 158 F.R.D. at 660. A claim for indemnity or contribution “would not introduce new issues into the case, and could, in all likelihood, be litigated without substantially increasing the cost or complexity of the litigation.” Id. In contrast, a substantive claim — which the federal cases refer to as a claim for relief other than indemnity or contribution — between co-defendants may introduce whole new parties, legal issues, witnesses, and facts into a case. The danger with a broad rule is that, if a co-defendant merely files a cross-claim for indemnification, the other defendant is forced immediately to bring each and every possible claim, even those he might otherwise decide not to raise at all, in order to avoid losing those claims forever. Id. This would substantially increase the complexity of the litigation. In contrast, if a defendant merely raises an indemnification claim, and the second defendant is not forced to raise all of his counterclaims, the litigation is not made significantly more complicated.

The Bhartis and RJ Reynolds rely on Safeway Stores, Inc. v. City of Raytown, 633 S.W.2d 727 (Mo. banc 1982). Safeway Stores holds that a store that was sued in a wrongful death action could later maintain a separate suit for contribution and indemnity against a defendant who was not brought into the original suit. Id. at 731. Safeway Stores does not help the Bhartis and RJ Reynolds. It merely recognizes the right of an original defendant to bring indemnity or contribution claims in a separate action and the right of the defendant in that action to challenge both liability and the amount of damages.

A claim for indemnity or contribution is really an anticipatory claim; that is, the claim by a defendant who is held liable to a plaintiff really is not ripe until the defendant has suffered a judgment. At that point, the defendant would be permitted to bring an independent action against a co-defendant for indemnity or contribution. What the cross-claim rule allows by recognizing claims for indemnity and contribution is for the follow-up claim to be brought in the same lawsuit as the plaintiffs claim against the original defendants. This promotes a form of judicial economy and allows the finder of fact to assess the relative percentages of comparative fault. Missouri Pac. R. Co. v. Whitehead & Kales Co., 566 S.W.2d 466 (Mo. banc 1978).

The rules in all instances treat indemnity and contribution claims as permissive, not compulsory. Rule 52.11(a), relating to third-party defendants, states that, “a defending party, as a third-party plaintiff, may cause a summons and petition to be served upon a person not a party to the action who is or may be liable to the defending party for all or part of the plaintiffs claim against the defending party.” (Emphasis added). This is similar to the language in Rule 55.32(f), which specifically describes indemnity and contribution claims as permissive. The rules treat indemnity and contribution claims differently because those claims are always permissive. The purpose of the rules relating to those claims is to allow, but not require, such claims to be brought by the defendant. When considered as cross-claims or third-party claims, claims for indemnity and contribution only address the issue of who is hable for the substantive claims that have been brought by the original plaintiff. An original defendant in a suit for damages retains the right, however, to bring such claims in a separate suit, if he so chooses. That is ah that Safeway Stores holds.

Although the Hemmes were free to bring their substantive claims in a separate suit, if Harrison’s original suit had gone to trial rather than settling, Hemme would be bound in her later suit by any apportionment of fault determined by the jury in the first case. See Hudson v. Carr, 668 S.W.2d 68, 70 (Mo. banc 1984).

It is easy to question Jacobs and the federal cases cited above that conclude that co-parties with cross-claims for indemnity or contribution are not “opposing parties.” At least as to their differing contentions as to who is responsible for the plaintiffs injuries, they are certainly in opposition to each other. The attraction of the prevailing analysis, however, is that it draws a bright line. If a claim by one co-party against another is only for indemnity, contribution, or allocation of fault, they are not opposing parties for purposes of the compulsory counterclaim rule.

The Bhartis and RJ Reynolds also invoke the doctrine of res judicata, known modernly as claim preclusion. See Chesterfield Village, Inc. v. City of Chesterfield, 64 S.W.3d 315, 318 (Mo. banc 2002). The compulsory counterclaim rule can simply be considered a codification of the principles of claim preclusion, i.e., res judicata, and issue preclusion, i.e., collateral estop-pel. Joel Bianco Kawasaki Plus v. Meramec Valley Bank, 81 S.W.3d 528, 532 (Mo. banc 2002). Although the compulsory counterclaim rule and the claim preclusion doctrine serve the same purpose, there is nothing in the claim preclusion doctrine that would broaden the rule beyond its terms. If the compulsory counterclaim rule does not apply, neither does claim preclusion {res judicata).

A Practical Note

Procedural rules exist in the real world of lawyers and lawsuits. Although the record does not indicate the source of Hemme’s legal representation in the original lawsuit, in many such lawsuits counsel is retained by an insurance company. An insurer would not undertake, by its contract, to provide representation for its insured’s own injuries. Thus, if the compulsory counterclaim rale were to be applied to the cross-claim in the original case, the Court would impose on counsel the obligation of representing its insured in her claim for injuries or of informing her to retain separate counsel to represent her in the counterclaim to the cross-claims. This would add a layer of complexity and dysfunction in the original lawsuit that is not appropriate.

Conclusion

Hemme was not required to make a claim for her own injuries in Harrison’s lawsuit. The Hemmes’ subsequent lawsuit is not barred. The trial court’s judgment is reversed, and the case is remanded.

PRICE, TEITELMAN, LIMBAUGH, RUSSELL and WHITE, JJ„ and BLACKMAR, Sr.J., concur. LAURA DENYIR STITH, J., not participating.

      . The Missouri cross-claim rule, Rule 55.32(f), which is the same as Federal Rule 13(g), provides in full: "Cross-Claim Against Co-Party. A pleading may state as a cross-claim any claim by one party against a co-parly arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.”

      . Missouri’s counterclaim rule, Rule 55.32(a), which is the same as Federal Rule 13(a), provides in full: "Compulsory Counterclaims. A pleading shall state as a counterclaim any claim that at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require" for. its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if: (1) at the time the action was commenced the claim was foe subject of another pending action or (2) the opposing party brought suit upon the claim by attachment or other process by which foe court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 55.32.”

      . The parties agree that foe claims arise out of the same transaction or occurrence under Rule 55.32(a).

      . See, e.g., Kane v. Magna Mixer Co., 71 F.3d 555, 562 (6th Cir.1995) (holding that the filing of any cross-claim requires co-defendants to assert all counterclaims against one another).

      . Safeway Stores refers to indemnity and contribution claims as "substantive in nature” because the claims were being brought in an entirely separate suit. 633 S.W.2d at 728, n. 1. The holding of Safeway Stores does not extend to the proposition the Bhartis and RJ Reynolds present here.

      . The same is true where contribution or indemnity is sought from a third-party defendant joined in the litigation under Missouri Rule 52.11 and Federal Rule 14.

      . Substantially the same provision is in Federal Rule 14(a).