author: PRITCHARD, Judge.

text:
    Deidre WARRINGTON, Appellant, v. Ross L. WARRINGTON, Respondent.
    No. WD 35208.
    Missouri Court of Appeals, Western District.
    Oct. 23, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.

      Howard E. Bodney, Overland Park, Kan., Kevin M. McCormick, Kansas City, for appellant.
    Dennis E. Dibler, Kansas City, for respondent.
    Before CLARK, P.J., and PRITCHARD and LOWENSTEIN, JJ.
   PRITCHARD, Judge.

This proceeding began upon appellant’s motion for modification of child support increasing the same for two minor children born of the dissolved marriage; for permission for appellant to remove the children to the State of California; for specifically defining and delineating visitation rights of the parties; and for attorney fees and costs incurred in the presentation of her motion. The relief requested by appellant was denied. The motion of respondent for custody of the children and abatement of child support, and to set visitation privileges, was sustained.

The parties were married on December 22, 1973. Two children were born of the marriage, a daughter on June 20,1975, and a son on November 9, 1976. The marriage was dissolved on December 1, 1981, and appellant was granted the care, custody and control of the children subject to respondent’s reasonable visitation rights. Respondent was ordered to pay $600.00 per month child support for the two children which amounts or more the trial court found that he had paid since the dissolution decree.

Appellant had done dental hygiene coun-selling for children in Sedalia, Missouri. After the dissolution she was employed as a secretary and receptionist in the office of Dr. Daniel Jolly, a dentist, at the Truman Medical Center, where she first became casually acquainted with Dr. William J. Beard (M.D.), who was then a patient of Dr. Jolly. Apparently, he and appellant met more formally in February, 1983, at which time they started dating. They decided to be married in March, 1983, at which time Dr. Beard was still married to his third wife, the dissolution of that marriage not being final until April, 1983. Appellant and Dr. Beard were married about the 9th of July, 1983, not having lived together before that time. At the time of trial, August 10, 1983, Dr. Beard was sixty years of age, and appellant was about thirty years his junior. At the time of his third marriage, the children of that wife were not involved, one being grown, one was in Guam with his father, and another was in college. Dr. Beard’s own four children were born during his first marriage of 23 years.

Dr. Beard had graduated from Cornell University in 1947, and had training in psychiatry and internal medicine. He taught general medicine and geriatrics at the University of Missouri at Kansas City College of Medicine, and he was medical director of the long-term care facility of the Truman Medical Center. On May 1, 1983, he resigned that employment to accept a position with a Health Maintenance Organization in Long Beach, California, as director training of geriatric medicine, with some patient care. Pursuant to that move he purchased a four bedroom ranch-style home in Long Beach. He testified that in the event of his death, he had made provisions that appellant would get that house and its contents, and appellant and he planned to move to it about August 20, 1983. Appellant filed her motion to modify the decree requesting permission to move the two children to California on May 24, 1983. The Long Beach home would have separate bedrooms for the children, a separate playroom building, a yard, a separate guest room, and a patio and grill in the back. Photographs show it to be a well-kept modern home.

After Dr. Beard met the children he and appellant involved them in a number of social activities two or three weekends a month. They took them to Worlds of Fun, the Nelson Art Gallery, Swope Park, to dinner, and the children were participants in their wedding. He swam and played games with them, and he would read to them. Neither he nor appellant ever told the children to call him “Dad” or “Father”, and he was not trying to take their father’s place, or take them away from him. He testified that he loved the children and planned to make them a part of his life. They had never appeared to be mistreated or neglected; they were neat, clean, well dressed, healthy, mannerly and respectful, and minded appellant when she disciplined them. He observed the son’s poison ivy, which he testified is not ordinarily treated because it is self-limiting, and it was much worse when respondent returned him several weeks later, it having been treated with zinc oxide which makes it worse — it does not help. The best thing to do is to leave it open and bathe it frequently which was done after the children returned, and the condition improved. Dr. Beard had never bathed with the children and he thought it would be inappropriate to do so. There were appointments made with a pediatrics neurologist and a speech pathologist in the Long Beach area for the children following trial. Dr. Beard’s Long Beach home is in an area where professional people, physicians, attorneys, dentists, and people of that nature reside. The school system there is one of the best.

In support of her motion, appellant produced Dr. Roberta B. Hausman, a Ph.D. licensed to practice psychology in Missouri, with impressive professional credentials. She interviewed Dr. Beard for six hours and appellant for six hours on July 1, 1983, and a further two hour conference with them and the two children on July 7th. As to appellant, Dr. Hausman’s conclusions were that she was a woman with a very strong sense of responsibility for her children; somewhat dominant and self-assured; some insecurity about the custody fight; basic good health; socially active, reaching out to people; intelligence of a borderline genius level; some problem with anger, but tends to get over it rapidly; but basically, a very solid, very reliable human being.

Dr. Hausman concluded that Dr. Beard’s intelligence level was about the same as appellant’s, his strengths being complementary to hers. Both were extroverted and matched in neuroticism factors, and both had better than average common sense. There was no evidence that they would not be compatible.

On August 8, 1983, Dr. Hausman spent most of the day with the two children. She administered a series of psychological and intelligence tests to them, and found that their I.Q.s were in the very above average range. She observed an articulating speech problem with the son, indicating to her that minimal brain damage should be investigated, and she made appellant aware of that, and she did note that he had a problem with controlling his anger. Dr. Hausman asked the son if he was going to miss his daddy if he went to California, and he said “No”, and gave as a reason that he was not as kind as Bill (Dr. Beard). The son thought that Dr. Beard would make a good daddy because “he is nice and sweet”, gentle and loving. He did not think that he was too old. The son was very consistent, very strong, and very persuasive about wanting to be with his mother and Dr. Beard. The daughter expressed that Dr. Beard was nice and her father was okay, and her mother was nice. She did not think her other mom was nice and said that she did not like her. The daughter was asked, “ ‘Do you want to go with your father?’ And she said ‘no’. And I said, ‘Why?’ She said, ‘He is not that kind; he is not that nice.’ And she said, ‘Sometimes Mother gets angry at me for no reason but she is good, she loves me and I love her.’ ” During the interviews, the children were clean and neat, healthy looking and were appropriately dressed. They were very loving toward Dr. Beard during the interview, sitting on his lap, reaching for him and asking him questions. They had good eye contact with him and with their mother. Both children were required to work with the father in his rehabilitation work on an old home in St. Louis during the visitation period, and the daughter did not seem to sound very happy about that experience, and said she was not really wanting to go back there. The children seemed more stressed by their visits with their father than anything else. Dr. Hausman gave her opinion as to whether it would be in the best interest of the children to remain in the custody of their mother and with their stepfather (Dr. Beard): “A. I think that they would do very well for many reasons that I have described and that their development would continue to be optimum; and I think that that’s their choice, their stated and implicit choice.” As to whether the children’s move to California would in any way be detrimental to them, Dr. Hausman gave her opinion: “A. I believe it would not be detrimental in the sense that they stated that they were eager to go to California, ⅜ * *. I think the parents intend to give the children a stable home, have discussed their plans with me and what they have already done in that direction. They have bought a home; the home is adequate in all ways; it is better than adequate, it is above average. They have good schools there. I am familiar with schools in both areas. I know the schools in California are at least as good, and in my opinion better than the schools here. I think their eagerness to be with their mother, their eagerness to move, and the medical supports that are available there, the fact that their parents have already established liaison with adequate medical supervision there, the fact that Dr. Beard will be back and forth on occasion because of his ties with this area [The University of Missouri at Kansas City Medical School], I think, will allow the children continuity here, if they need it. I just can’t see any really authentic objective reason why it wouldn’t be a good move.”

Respondent produced evidence that on the 1982 summer visitation of the daughter, she arrived with a vaginal infection caused by not properly bathing herself and which was of such severity that it caused her to cry when she urinated; that her pierced ears were infected on arrival at the Thanksgiving, 1982, visitation; that both children were dirty and in need of a bath on June 8, 1983, when they arrived for summer visitation, described by respondent’s mother as to the son, as “crud” of long lasting duration. Appellant acknowledged that the daughter did on occasion have a vaginal irritation, and had been playing outside at a day school before being picked up for the 1983 summer visitation. All the other evidence, gleaned from testimony, of a number of classroom teachers, day school instructors, overwhelmingly establishes that appellant’s children, while in her custody, were always clean, well-clothed, well-mannered, and were well-liked and getting along well with their peers. All of these witnesses testified that the children were never a discipline problem and never misbehaved. Both had high academic ability with excellent vocabularies. The son was in a speech therapy class and his problem improved during the course of the school year. There was evidence from respondent that when his wife and his mother picked up the children on June 8, 1983, at a day school, they were not then clean, but there was evidence that they had been outside playing for some time before being picked up. On going into appellant’s apartment to get the children’s luggage, respondent’s mother found it to be cluttered, unclean, with an odor. There was, however, evidence that the apartment had flooded a short time before which accounted for the odor.

Of course Dr. Beard is some thirty years senior in age to appellant. There is, however, no evidence that he is a person unfit to be around the children. The evidence is to the contrary that he is a kind, gentle person, with great interest in the children. They obviously are fond of him. Appellant’s marriage to him was her choice and her right. There is nothing in the fact that he had been thrice married that would impugn his character, nor is there anything about the fact that he had changed jobs, all within his medical profession, which would evidence any lack of stability. The home which will be provided in Long Beach is obviously a better living environment for the children than that of respondent, which, although in an area undergoing salutary rehabilitation of older homes, is in a high crime area. The schools in the Long Beach area are equal to, if not better than, those in the St. Louis area where respondent resides, and appellant and Dr. Beard have made arrangements for medical care of the children, especially for the son because of his speech impediment and possible minimal brain damage.

The trial court placed emphasis upon the fact that Dr. Hausman was hired by appellant and concluded that therefore she would favor appellant’s position, as contrasted with the unpaid deposition testimony of psychologist Bette Jean Weisman who interviewed the children at the request of respondent’s wife. Ms. Weisman did not do extensive mental and psychological testing of the children as did Dr. Hausman, and she did not have access to the children’s school records, which are in evidence and which reflect excellent progress and adjustment while the children have been in appellant’s custody. Ms. Weisman did conclude that the children needed a stable environment, but the whole of the evidence shows that to be what they have possessed while in appellant’s care. There is one important factor which came into evidence without objection in the testimony of Dr. Hausman. That is that both children expressed a positive preference to be with their mother and to move to California, and not be in their father’s care. This is one of the factors to be considered in adjudging custody under § 452.375(2), RSMo 1978. These children, being obviously very bright mentally, are capable of making that decision in the light of the evidence that they had been in a stable, happy and well-cared for situation with the mother. Although the children were available to the trial court for interview, the record does not show that was done. Accordingly, great weight must be given to the expressed preferences of the children, although that is not conclusive. Respondent did not show such a change in circumstances such as to give definite promise that the change will benefit the children in a substantial way. Schmidt v. Schmidt, 591 S.W.2d 260, 262[1-3] (Mo.App.1979), and cases cited. What seems to have precipitated respondent’s motion was appellant’s marriage to Dr. Beard and her requested permission to move the children to California, neither of which facts are shown to be detrimental to the children. Indeed, the move to California appears to be in the best interests of the children and should therefore be permitted. In re Marriage of Wofford, 589 S.W.2d 323, 326[5,6] (Mo.App.1979), and cases cited.

There is one other fact shown by the record and admitted by respondent and his present wife. During the summer of 1982, she took showers in the nude with both the son and the daughter, and respondent similarly bathed with the daughter. Thereafter, the son drew pictures of naked women at the day care center, which was adjudged by an expert to be inappropriate behavior for a child of his age. These bathings were purportedly done to instruct the children properly to cleanse themselves, but this court well knows that such exposures should not be made with children of these tender years. There are other ways to instruct children in cleanliness.

Upon the whole record, this court is convinced that the judgment is against the weight of the evidence and entertains the firm belief that it is wrong. Murphy v. Carron, 536 S.W.2d 30, 32[1, 3] (Mo. banc 1976).

The judgment is reversed with directions that appellant’s award of custody of the two children be reinstated; for an order that she be permitted to move them to the state of California; and for an order that the original award of $600.00 per month for child support be reinstated pending further review of that issue. Further proceedings should be had on the issue of child support considering what the support needs for the children will be in California; upon the issue of appellant’s entitlement to an award of attorney fees in this proceeding; and for fixing visitation privileges, and who shall bear the cost of transportation therefor.

All concur.


source: Caselaw Access Project

author: LOWENSTEIN, Judge.

license: Public Domain

text:
    Wilbur L. DEAN, Georgia F. Todd, and Phyllis Loan Lee, Trustees of the Wilbur L. Dean Trust, Appellants, v. CENTERRE BANK OF NORTH KANSAS CITY, Respondent.
    No. WD 35412.
    Missouri Court of Appeals, Western District.
    Oct. 23, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.
    Kenneth I. Grissinger, Kansas City, for appellants.
    Jon M. Krebbs, Krebbs & Holdsworth, Liberty, for respondent.
    Before CLARK, P.J., and NUGENT and LOWENSTEIN, JJ.
   LOWENSTEIN, Judge.

Appellants are trustees of a certain trust which had its bank account with respondent Centerre Bank of North Kansas City, Missouri (Bank). The trustees hired an accountant, Ron Jenkins, to administer the account. The only two living trustees, Logan and Lee both had authority to both write checks, Jenkins was authorized by them to receive the monthly bank statements and cancelled checks as well as all income payable to the trust for deposit. About a year after being hired, Jenkins began forging the signatures of the trustees on checks on the trust bank account. The checks were payable to Jenkins, his firm R & J, or to Jenkins’ creditors. Later, in an apparent attempt to pay back this money, Jenkins deposited some checks from his personal accounts in other banks. On fifteen occasions these checks were returned because of insufficient funds or the account having been closed. All the returned deposits and debit memos and forged checks were included in the monthly statements, but since these were mailed to Jenkins, the perpetrator, the trustees did not find out about the forgeries until informed by the prosecuting attorney.

The entire scheme of using forged checks went from June of 1978 until March of 1980. The net loss out of the trust account was $48,913.68. At no time did the trustees ever question Jenkins about the financial status of the trust account or did they ever ask to see a statement or can-celled checks.

About fourteen months after the first of Jenkins’ checks were returned, the bank notified the county prosecutor that something was wrong with the trust account. Two days later Jenkins was arrested, found guilty and subsequently sentenced to three years in prison. He also was declared a bankrupt. The trustees filed suit against the bank for wrongful invasion of the trust account. The trustees filed suit in December of 1980 alleging Jenkins’ acts were done with the actual knowledge of the bank. The petition further alleged that the bank should have monitored the account and advised the trustees of the forged checks and of the insufficient fund checks of Jenkins not being credited to the account. The trustees asked for the amount of the net loss under a conversion theory and also for punitive damages. On the day of trial they amended the petition by deleting the prayer for punitive damages and alleging the bank failed to use ordinary care and was negligent by failing to inquire of the trustees as to Jenkins authority “to dispose of trust funds;” by not inquiring of the trustees when checks were presented on unrelated trust activities,” and failure to advise the trustees when Jenkins’ checks to the trust didn’t clear; and by not training an employee as to the limitations of the trust instrument. This amendment adding lack of ordinary care was made, “because that will circumvent and get around the portions of the Uniform Commercial Stat-ute_” At the close of trustees’ evidence, the bank moved for a directed verdict which was sustained. It is from this directed verdict that the trustees appeal.

The trustees claim that the bank assumed an additional responsibility when it accepted this account because this was a trust. While this may have been true at common law, when Missouri in 1959 adopted the Uniform Fiduciaries Act at §§ 456.240-456.350 RSMo 1978, it relieved the depository bank of the duty of seeing that fiduciary funds are properly applied. Trenton Trust Co. v. Western Surety Co., 599 S.W.2d 481, 490 (Mo. banc 1980). The Missouri Supreme Court held that mere negligence on the part of the depository bank is not sufficient to hold it liable to the principal if the fiduciary in fact misappropriated the fund. Id. Since the trustees only argue that the bank was negligent, there can be no liability under the Uniform Fiduciaries Act. They produced no evidence of “actual knowledge” by the bank of a breach of a fiduciary obligation of Jenkins to the trustees. Id. at 491. The trustees failed further to show “bad faith” on the part of the bank in handling the checks or returning the debits to Jenkins’ office. Mere negligence does not amount to “bad faith,” Id. 492, and there was no evidence support was put forth that the bank profited by the acts of Jenkins. Id. at 493. Southern Agency Co. v. Hampton Bank of St. Louis, 452 S.W.2d 100, 105 (Mo.1970).

The bank argues, and this court agrees, that the controlling statute is § 400.4-406 RSMo 1978 under the Uniform Commercial Code. The underlying premise is laid down in § 400.3-404(1) that any unauthorized signature is wholly inoperative to that person unless he is precluded from denying it. As pertains to this cause § 400.4-406 reads:

(1) When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request or instructions of its customer or otherwise in a reasonable manner makes the statement and items available to the customer, the customer must exercise reasonable care and promptness to examine the statement and items to discover his unauthorized signature or any alteration on an item and must notify the bank promptly after discovery thereof.
(2) If the bank establishes that the customer failed with respect to an item to comply with the duties imposed on the customer by subsection (1) the customer is precluded from asserting against the bank
(a) his unauthorized signature or any alteration on the item if the bank also establishes that it suffered a loss by reason of such failure; and
(b) an unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank after the first item and statement was available to the customer for a reasonable period not exceeding fourteen calendar days and before the bank receives notification from the customer of any such unauthorized signature or alteration.
(3) The preclusion under subsection (2) does not apply if the customer establishes lack of ordinary care on the part of the bank in paying the items.
(4) Without regard to care or lack of care of either the customer or the bank a customer who does not within one year from the time the statement and items are made available to the customer (subsection (1)) discover and report his unauthorized signature or any alteration on the face or back of the item or does not within three years from that time discover and report any unauthorized in-dorsement is precluded from asserting against the bank such unauthorized signature or indorsement or such alteration.

The Missouri Code Comment following the section in V.A.M.S. says it specifically applies to forged signatures. The UCC Comment, also set out in 20B V.A.M.S., 413, explains that the duty of the customer to examine his monthly statement and promptly report any forgeries to the bank is triggered when the bank mails out the statement and cancelled checks. The effect of the failure of a customer to notify the bank is the preclusion of an action against the bank by the customer. The only way to avoid the preclusion is for the customer to establish lack of ordinary care on the part of the bank.

At trial the trustees only presented four witnesses. The prosecuting attorney of Clay County testified the bank notified him that there was “something wrong” with the trust account because Jenkins was putting his own checks in the trust account and they were bouncing. This witness further testified that Jenkins was convicted on the forgery charge.

The second witness had conducted an audit at the bank of the trust account. He went into great detail about the dates and amounts of the 15 personal checks of Jenkins that were returned for insufficient funds, and the 53 forged checks that were cashed. Nothing was said about the bank’s lack of ordinary care.

The other two witnesses were the trustees whose signatures had been forged. They testified how they had hired Jenkins and that the signatures on the checks were in fact forged. They also testified that all the cancelled checks had been mailed to Jenkins and that they were totally unaware of Jenkins’ illegal activities.

In essence the Code as adopted in Missouri, as applicable here, is as follows:

(1) The bank sent the statements to the agent of the trustees. This was the equivalent of sending them to the trustees.

(2) The trustees had the duty and obligation to exercise reasonable care and promptness to notify the bank of checks with forged signatures. The burden of proof on this point was on the bank. Here the evidence showed the trustees’ failed to perform the duties which could preclude them from collecting against the bank on the first forged cheek (if the bank could carry the burden and show a loss), and on all subsequent forgeries honored by the bank 14 days after the first forged item was made available to the customer. The comment at 20B V.A.M.S. 414 reads as follows:

One of the most serious consequences of failure of the customer to comply with the requirements of subsection (1) is the opportunity presented to the wrongdoer to repeat his misdeeds. Conversely, one of the best ways to keep down losses in this type of situation is for the customer to promptly examine his statement and notify the bank of an unauthorized signature or alteration so that the bank will be alerted to stop paying further items. Hence, the rule of subparagraph (b) is prescribed and to avoid dispute a specific time limit for action by the customer is designated, namely fourteen calendar days.

(3) The preclusion to the trustees could have been avoided by the customer carrying the burden of establishing lack of ordinary care by the bank in paying these items.

The trustees in turning over the checking account to their agent, who, without supervision or audit received the statements resulted in their failure to use the standard of care of review and' failure to supply timely notice to the bank. George Whalley Co. v. National City Bank of Cleveland, 55 Ohio App.2d 205, 380 N.E.2d 742, 747 (1977). The trustees are precluded from recovery against the bank, despite their lack of care, unless they can establish lack of ordinary care on the part of the bank.

Although belatedly amending their petition to allege lack of ordinary care, the trustees presented no evidence of either accepted standards of ordinary care in the banking world to detect such forgeries, or that the bank’s methods did not meet this standard. As such they did not carry the burden they had and their cause must fail. Ossip-Harris Insurance Inc. v. Barnett Bank of South Florida, N.A., 428 So.2d 363, 365 (Fla.App. 3 Dist.1983). In fact, the trustees do not even show whether the forgeries were skillful or subject of detection by the bank. The facts here are similar to those in Nu-Way Services, Inc. v. Mercantile Trust Company National Association, 530 S.W.2d 743 (Mo.App.1975). Some 43 checks by an employee were forged over a period of months. The company agreed it had the burden under § 400.4-406(3) to prove the bank failed to use ordinary care, and the court found as a matter of law the company failed to do so. The court in Nu-Way at 747 noted the bank employed persons to review incoming checks against the signature cards and this was substantially the same as used by banks in the St. Louis area. It also found the forgeries sufficiently adroit as to escape detection. In contrast the bank in Hanover Insurance Companies v. Brotherhood State Bank, 482 F.Supp. 501, 505 (1979), admitted it did not have time to check signatures. They did not supply the forged checks, signature cards or any evidence with the legal file on appeal. The closest the evidence came to touching on this pivotal issue was the testimony of one of the trustees who said the bank should have caught the “big checks” that were coming through.

When reviewing a motion for directed verdict this court must consider evidence in a light most favorable to the appellant, but this court cannot supply evidence nor ignore evidence binding on the plaintiff. Adler v. Laclede Gas Co., 414 S.W.2d 304, 306 (Mo.1967); Levin v. Sears, Roebuck & Co., 535 S.W.2d 525, 527 (Mo.App.1976). The trustees had the burden of proof on the issue of whether the bank had failed to use ordinary care. Even if there was such evidence available, the trustees failed to present it in their case in chief.

The trustees’ case did not really touch on § 400.4-406. They argue in the brief the attempts to replenish the account by Jenkins starting on January 3, 1979 should have caused the bank to tell them and thus stop the forgeries. The problem is however, contrary to their petition which says the forgeries commenced in November of 1979, the actual forged checks for which they want damages started on June 25, 1978 with a check for $4,000. As can best be gleaned from the trial exhibits, which the trustees failed to supply on appeal, the first three forged checks appeared with and on a statement sent by the bank on August 8, 1978. In accordance with the trustees’ instructions this and all subsequent statements were sent to the office of R & J Accounting. As noted the first check was for $4,000 and payable to R.L. Jenkins, it was dated June 28, 1978 and deposited by Jenkins in the R & J account on July 21, 1978. The second was payable to R & J for $1,000 and was dated July 25, 1978 and was deposited the next day. The third check was dated August 4 payable to R & J for $250 and deposited in R & J’s account on August 7, 1978.

The application of subsection (2)(a) would allow an interpretation that the first item would be the bank’s responsibility, but after the first item and statement (dated August 8, 1978) were available, the customer had up to 14 days to notify the bank. Subsection (2)(b) supra. An argument could be made that the first three checks were the bank’s responsibility since they first appeared on the August statement. Industrial Systems of Huntsville, Inc. v. American National Bank of Huntsville, N.A., 376 So.2d 742, 744 (Ala.Civ.App.1979). Any potential relief for the trustees under subsection (2) runs smack against subsection (4). The Comment on (4) at 20B V.A.M.S. 414-415 says subsection (2) is based on the use of care by the customer and the bank, while (4), “places an absolute time limit on the right of a customer to make claim for payment of altered or forged paper without regard to care or lack of care of either the customer or the bank. In the case of alteration or the unauthorized signature of the customer himself the absolute time limit is one year.... This recognizes that there is little excuse for a customer not detecting an alteration of his own check or a forger of his own signature.”

Since the trustees never brought the matter to the bank’s attention (suit was filed by them in December 1980), they did not comply with the one year limitation. Without compliance with (4), which is not based upon fault of either side, the customer here failed within one year from the first forged check, make a claim for that initial check or the other two forged checks on the first statement. With regard to the checks that followed, spanning over a years time, subsection (2)(b) prevails as a preclusion for the customer’s recovery since (3) (a lack of ordinary care in paying the checks) was not proven of the bank by the trustees.

This translates into a finding of lack of reasonable care on the part of the trustees under § 400.4-406 (1) in that they never examined the statements and never notified the bank. The forgeries following at least the first three were subject to the bank’s defense under (2)(b) since the trustees didn’t carry their burden of under (3) of showing lack of ordinary care. As to the initial checks it is unnecessary to find a “loss” under (2)(a) as (4) would clearly cover those forgeries. The trial court’s granting of a directed verdict as to all checks was correct and its judgment is affirmed.

All concur.


author: PER CURIAM.

text:
    WEST COUNTY INTERNAL MEDICINE, INC., Plaintiff-Appellant, v. Norman FISHMAN, M.D., Defendant-Respondent.
    Nos. 47001, 47942.
    Missouri Court of Appeals, Eastern District, Division Two.
    Oct. 23, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Denied Jan. 7, 1985.
    Application to Transfer Denied Feb. 26, 1985.

      Edward C. Cody, St. Louis, for plaintiff-appellant.
    Charles Marshall Friedman, St. Louis, for defendant-respondent.
   PER CURIAM.

Plaintiff appeals from a judgment entered by the Circuit Court of the County of St. Louis for defendant in an action seeking injunctive relief, an accounting, damages for the alleged conversion of plaintiff’s medical records and patient lists, and alleged fraud and breach of employment contract. Although injunctive relief was denied, the court ordered an accounting by the defendant. This accounting was to reflect payments defendant received for services rendered by him while in plaintiff’s employ. Also, plaintiff appeals from an order: (1) overruling plaintiff’s objections to defendant’s accounting; (2) denying plaintiff’s request for the production of documents; (3) denying plaintiff’s request for interrogatories; (4) denying plaintiff’s request for a jury trial on the fact issues in the accounting.

Defendant, Dr. Norman Fishman, was employed by plaintiff, West County Internal Medicine, Inc., from March 1978 to November 1980. In 1979, plaintiff and defendant entered into a one year contract effective July 1, 1979, providing, in pertinent part: “Upon termination of Employee’s [Fishman] employment, he shall be entitled to take with him such case records, case histories, x-ray films, etc. of patients brought in or acquired by him during the term of his employment.” In the spring and summer of 1980, defendant and plaintiff’s president attempted to negotiate a new contract, but failed to reach an agreement. In the summer of 1980, defendant began making preparations to leave plaintiff’s employ. He marked the files of patients he saw regularly, and went into the office at night to make copies of other records including patient lists. After defendant terminated his employment, he mailed announcement cards and telephoned various patients with whom he had scheduled appointments prior to his leaving. Defendant also received certain payments for work done while he was employed by plaintiff.

Plaintiff instituted action to temporarily and permanently restrain defendant from using the records obtained from plaintiff and soliciting patients listed in the records. Plaintiff also sought actual and punitive damages, as well as an accounting for the payments made to defendant for work done while he was in plaintiff’s employ.

Plaintiff contends that the trial court erred in: (1) failing to allow plaintiff to introduce relevant evidence at the show cause hearing; (2) failing to temporarily and permanently restrain defendant from using the copies of plaintiff’s records; (3) finding that the record did not establish that defendant engaged in solicitation of patients; (4) refusing to permit discovery or a hearing on plaintiff’s objections to defendant’s accounting. We affirm.

Having carefully reviewed the record and considered each of the points raised by plaintiff, we find that the trial court’s judgment is supported by substantial evidence and the trial judge did not erroneously declare or apply the law. Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). An extended discussion of these points would be of no precedential value. Rule 84.16(b).

Judgment affirmed.


author: CLARK, Presiding Judge.

text:
    R. Brian HALL and Thomas H. Stahl, Respondents, v. W.L. BRADY INVESTMENTS, INC., Appellant.
    No. WD# 35127.
    Missouri Court of Appeals, Western District.
    Oct. 30, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.

      William C. Partin, Matthew Partin, Par-tin, Partin & Barry, Kansas City, for appellant.
    John C. Dods, Joanne T. Wagner, Shook, Hardy & Bacon, Kansas City, for respondents.
    Before CLARK, P.J., and DIXON and LOWENSTEIN, JJ.
   CLARK, Presiding Judge.

This is a suit by respondents for breach of a contract to provide real estate construction loan financing. A jury awarded respondents verdicts against appellant, W.L. Brady Investments, Inc., and co-defendant Capitol Life Insurance Company in amounts totaling $166,600.00. After judgment, respondents settled with Capitol and Brady appeals. The issues Brady presents charge trial error in the exclusion of certain evidence tendered by Brady, the content of jury instructions, the submissibility of the claim for punitive damages, and the amount of the verdicts. The judgment is affirmed in part and reversed in part.

The transaction between respondents and Brady originated when respondents contacted Brady as a possible source of financing for an office building respondents planned to construct. The need was for a permanent, long term loan to replace a temporary construction loan with which the project was to be initially funded. Brady is in the business of a loan broker, that is, it acts as an intermediary between borrowers and lenders. Capitol Life Insurance Company was one of Brady’s contacts and a source of funds for mortgage loans.

In furtherance of the project, Brady prepared a “loan package” on behalf of respondents and sought to interest lenders in committing funds. The practice in such transactions is for the lender to make an advance commitment for a specified period to issue the loan on completion of construction, thereby assuring the borrower that the funds will be available when needed. Brady solicited such a commitment from Capitol as to respondents’ project and received a favorable response. At this stage of negotiations, respondents were not aware of the identity of Capitol as the ultimate lender, but dealt entirely with Brady.

A commitment to issue a loan is the document on which the loan is ultimately concluded in such cases and sets the terms to be met by the borrower. The commitment here was issued to respondents by Brady and constitutes the contract which respondents’ suit claims was breached. The obligation assumed by Brady, however, was in fact underwritten to Brady by Capitol because Brady does not have the resources nor does it act in practical terms except as a conduit for placing investors’ funds. Because of this relationship, the actual terms of the commitment were set by Capitol and were merely repeated by Brady in its commitment letter to respondents.

The commitment by Capitol to Brady was by letter dated August 9, 1979 in which Capitol agreed to purchase respondents’ loan, negotiated by Brady as intermediary. The various conditions specified by Capitol included two requirements which are the focus of this suit. The language in Capitol’s letter to Brady and in Brady’s letter to respondents is identical and is extracted from the documents as follows:

“11. The borrower is to deliver to this Company the sum of $14,600 as part of the consideration for the issuance of this commitment and for this Company’s obligation to lend the money, but this sum shall be returned to the borrower if the loan is consummated according to the terms of this commitment letter during the commitment period or any extension thereof.
12. Upon satisfactory completion of the improvements, we will fund $292,000. We will withhold the balance of the loan proceeds until such time as gross annual rents, under leases acceptable to Capitol Life, are equal to or in excess of $52,500. Upon disbursement of the initial loan proceeds, the borrower will have ninety days in which to meet the leasing requirement to provide for the funding of the remaining loan proceeds. If the leasing requirement is not met during the ninety day period, the loan shall remain in the amount of the initial disbursement with appropriate adjustment in the monthly installments.”

The date of the Brady commitment letter to respondents was August 14, 1979 and the terms were accepted by them on August 24, 1979. At that time, respondents paid Brady the commitment fee of $14,600 described in paragraph 11 above. The commitment fee was, in turn, remitted by Brady to Capitol in performance of the comparable obligation of Brady under the commitment extended to it by Capitol.

With permanent financing assured, respondents proceeded with construction of the office building. It was respondents’ plan to occupy a portion of the building for their own offices and to rent the remainder to tenants. By March of 1980, construction had progressed to the point that respondents moved their office and relocated in the new structure. Anticipated rental of the other space did not immediately materialize and the leases contemplated by paragraph 12 of the commitment agreement had not been obtained. The loan funds were therefore limited to $292,000, as the agreement provided. The completion of construction of the space in the building proposed for tenant occupancy was a source of dispute at the loan closing, thereafter aborted as described below.

The evidence in the case suggests that respondents decided to defer some interior finishing of the rental space areas until leases were procured. Brady earlier objected to this state of incompletion, but the parties nevertheless met to close the loan on April 30, 1980, the last available day before the Brady commitment expired on May 1. Some discussion ensued as to the incompleted items and agreement was reached to escrow $5000 of the loan proceeds for carpet and ceiling tile not yet installed. Brady also appears to have retained reservations concerning the extent of other finishing work more recently done since the last prior inspection. The closing statement bore the notation, “This Closing Is Subject To Final Inspection Of Stage Of Completion Of Property By Mortgagee.” In all other respects, the loan closing on April 30, 1980 was routine and the documents necessary to conclude the loan were executed by all required parties.

On May 1, 1980, a representative of Brady made a personal inspection of the office building and formed a judgment that the escrowed funds were insufficient to complete work on the building and that the condition of the commitment, that the improvements be satisfactorily completed, had not been met. Respondents were notified by Brady on May 5, 1980 that the loan would not be funded. The loan papers were not recorded and the commitment fee of $14,600 was declared forfeited.

The refusal by Brady to close the loan and the concurrent expiration of the commitment agreement obligated respondents to seek other financing under the circumstances of an obligation to satisfy the maturing construction loan. Upon inquiry, respondents learned that the loan market had changed since August, 1979 and interest rates had escalated. When finally obtained, the replacement loan bore an interest rate 3% higher than the Brady committed rate and the callable term was five years shorter.

For damages resulting from Brady’s alleged breach of the loan commitment agreement, respondents initially pursued a seven count petition which was distilled as trial progressed. The ultimate submission to the jury was in two branches. In the first, the cause of action was breach of contract upon the claim that Brady violated its letter commitment to fund the mortgage loan. Damages sought were those attributable to the subsequent rate differential and the expenses associated with the replacement loan. The lost commitment fee paid Brady was expressly excluded from the jury’s consideration in calculating breach of contract damages. In the second branch, the cause of action was in tort against Brady and Capitol for conversion of the $14,600 commitment fee. The jury was instructed that a verdict for plaintiffs on the tort count would require an award of actual damages of $14,600. The second branch of the submission also included a claim for punitive damages to be awarded if the jury found the conversion of the fee to have been willful, wanton or malicious. The jury did so find returning verdicts for both actual and punitive damages.

I.

More than a single point of Brady’s appeal turns on its contention that the trial court erred in submitting to the jury as a separate claim that count of respondents’ petition asking recovery of the commitment fee paid Brady and punitive damages. This point will be considered first.

Brady contends respondents impermissi-bly split their cause of action for breach of contract by the artificial creation of a tort claim to be used as a vehicle for submission of punitive damages. They argue that respondents had only one cause of action and that the unrefunded commitment fee was at most an item of damages recoverable for breach of contract. Respondents argue, to the contrary, that they were entitled to submit different theories of recovery for different elements of their damage so long as there was no dual recovery.

In considering this aspect of the case, it is first appropriate to observe that respondents were not necessarily precluded from asserting a cause of action in tort merely because the gravamen of their complaint was breach of contract. While the general rule is that punitive damages are not recoverable for breach of contract, an exception to the rule allows punitive damages when plaintiff alleges and proves an independent and willful tort founded on breach of contract. Stamps v. Southwestern Bell Telephone, 667 S.W.2d 12 (Mo.App.1984). Respondents here sued both in contract and in tort for separate damages, obviously for the purpose of seeking punitive damages. That choice is not necessarily flawed merely because all damages originated in breach of the commitment agreement.

Brady gathers its various contentions regarding submissibility of the tort count under the single umbrella assertion that separate counts could not be pursued in this case because to do so constituted a prohibited “splitting a cause of action.” The point, however, actually involves distinct and different concepts each of which is exemplified by a case Brady cites. Separate discussion will clarify the difference and explain the basis upon which the point is sustained. The case of Eugene Alper Construction Company, Inc. v. Joe Garavelli’s, 655 S.W.2d 132 (Mo.App.1983) is an example of the usual fact situation of splitting a cause of action. The rule against splitting prohibits bringing separate suits for different elements of damage arising out of the same cause of action between the same parties. Lee v. Guettler, 391 S.W.2d 311 (Mo.1965). The purpose of the rule is that all claims arising out of the same subject matter should be determined in one action. Cantrell v. City of Caruthersville, 267 S.W.2d 646 (Mo.1954).

In Alper, supra, plaintiff first sued Ga-ravelli’s, a corporation, for an account balance due on a construction contract. A judgment was entered for Alper and that judgment matured to finality. Subsequently, the judgment creditor, Alper, learned that Garavelli’s assets had been sold at a purported auction to the directors and officers of the corporation leaving the latter execution proof. Alper then commenced a second suit against Garavelli’s and the individual directors and officers to collect the account debt. The gist of the disputed count in the suit was that Alper had been induced by fraudulent misrepresentations as to the corporation’s solvency to provide goods and services and, on that ground, a recovery was sought against the individuals for the balance due on the contract. The opinion held the second suit to have been barred by the previous judgment because the contract claim was a single cause determinable as to all elements in one suit. Alper was not entitled to split out its claim against the officers and directors but was required to have asserted that claim, if at all, in the original action.

This aspect of the splitting rule plainly has no application to the subject case in which respondents asserted all claims against all parties arising out of the loan commitment agreement in the single action. To this extent, respondents’ suit complied with rather than violated the rule.

A different concept, however, is illustrated by the second case cited by Brady, Chuning v. Calvert, 452 S.W.2d 580 (Mo.App.1970). There Chuning, a fireman, was injured in an automobile accident while responding to a fire call. He sued Calvert, the driver of the other vehicle. Damages were claimed for personal injuries, medical expenses and lost wages. On motion by the city, Chuning’s employer, it was permitted to intervene in the suit and assert on its own account a claim against Calvert for wages and medical expenses the city had incurred on Chuning’s behalf. The opinion held the intervention of the city to have been improperly permitted because that constituted an impermissible splitting of Chuning’s personal injury claim. The reason the claim could not be divided and advanced separately, even in the same suit, was because public policy prohibits the assignment of any part of a personal injury claim. The city therefore had no cause of action to assert.

On similar ground, respondents were not entitled here to pursue a tort claim against Brady and Capitol for conversion of the commitment fee because, when split off and asserted under a different theory of liability, the damages respondents sustained in the loss of the fee were not recoverable under the theory adopted. In short, and despite the entitlement of respondents to recover the fee as an element of damages sustained in a cause of action for breach of contract, no case was made in tort for conversion.

Conversion is a cause of action generated where funds given into the custody of another for a specific purpose are diverted by the holder for other than such specified purpose. Dillard v. Payne, 615 S.W.2d 53 (Mo.1981). A general debt does not give rise to a cause of action in conversion. To fall within the exception which distinguishes conversion from an action on a debt, the plaintiff must have delivered funds to the defendant for a specific purpose and the defendant must have diverted them to another and different purpose. Knight v. M.H. Siegfried Real Estate Inc., 647 S.W.2d 811, 817 (Mo.App.1982). The exception requires that there be misappropriation of funds placed in the custody of another for a definite application. Boyd v. Wimes, 664 S.W.2d 596, 599 (Mo.App.1984).

Although respondents here asserted in the applicable count of their petition an entitlement to a return of the commitment fee paid Brady, there was no allegation that the fee was paid over to Brady as a special deposit or for a specific purpose, except in satisfaction of the borrowers’ obligation under the commitment agreement, and there was neither allegation nor proof that Brady diverted the funds to another or different purpose. The agreement entitled Brady to retain the fee if the loan were not closed and obligated it to return the fee if the loan was consummated. By all accounts, the loan was never closed and thus, even under the agreement itself, there was no duty on Brady to refund the particular money received when the commitment agreement was negotiated. Instead, respondents’ claim was in damages for loss of the amount of the fee, not because Brady converted money entrusted to it for a particular purpose, but because Brady breached the commitment agreement by refusing to close the loan after respondents had performed, as they contended, all applicable loan conditions.

Under the facts of this case, respondents had no cause of action in tort and their attempt to split-the claim into one for breach of contract and one for tort fails as to the latter because they failed to establish a cause upon which relief could be granted. Of necessity, the exclusion of the commitment fee as an element of damage to be considered for allowance by the jury under the breach of contract count prevents any recovery by respondents as to this item. The trial court erred in submitting the tort count to the jury and the award of $14,600 actual damages and $50,-000 punitive damages returned against Brady must be reversed.

Additional subsidiary points raised by Brady are rendered moot by the foregoing disposition of the conversion claim. The first of these is Brady’s contention that the trial court denied it an opportunity to disprove respondents’ assertion that Brady did not close respondents’ loan because of a plan between Brady and Capitol to get out of the loan business in a market of rising interest rates. Respondents’ case in support of punitive damages, allowable only under the tort count, turned in part on the insinuation that Brady and Capitol were seeking to void the loan commitment to respondents, not on the merits of respondents’ performance, but to avoid making a loan at rates substantially lower than could be obtained in the market at the scheduled closing date. Brady countered with proffered evidence that other loans, similar in terms to the commitment to respondents, had been closed by Brady and Capitol during the same time period.

The evidence both from respondents and from Brady as to motivation was irrelevant to any issue in the breach of contract aspect of the case where the decision turned on whether or not respondents had satisfactorily completed the improvements as the commitment agreement required. That same evidence was, conversely, of considerable significance in determining an award of punitive damages under the tort count which involved proof of willful, wanton or malicious acts. Because the tort count and any punitive damage award are no longer in the case by reason of the disposition discussed in the first portion of this opinion, it necessarily follows that receipt or exclusion of the motivation evidence is now a moot point. We do not perceive Brady to argue otherwise and we therefore express no opinion as to the ruling by the trial court on this evidence.

In two additional points, Brady contends the award of $50,000 punitive damages was excessive and that the court’s instruction to the jury submitting punitive damages was in error. Both points are obviously mooted by the prior disposition of the first claim of error.

II.

The next point on appeal relates to the provision of the loan commitment agreement which conditioned closing of the loan on satisfactory completion of the improvements. Brady judged the improvements to have been unfinished in part and, on this account, construed itself and Capitol to be released from the agreement. Thus, it was critical to the case for the jury to decide whether construction had or had not been completed within the framework of the contract.

The evidence was undisputed that some work on the building remained unfinished. The physical details of the remaining construction were not in serious question but the effect upon fulfillment of the “satisfaction” clause was. The problem was how the language of the contract was to be construed, a matter of law, and how the jury was to be instructed on the subject of what stage of completion was or was not to be held satisfactory under the commitment agreement.

The instruction settled upon by the trial court, for which there is no applicable MAI, informed the jury that satisfactory completion meant, “completed in a manner and to an extent which a reasonable lender would regard as satisfactory under the same or similar circumstances.” Brady contends the instruction was in error and that the contract language gives to it the right of determination, in good faith, whether respondents’ performance was satisfactory. The respective contentions of the parties focus on two alternate approaches to a test for reasonableness of dissatisfaction with performance under a contract which conditions obligation of the promisor on satisfaction. The first is that advocated by Brady and leaves the decision to the personal judgment of the promisor qualified by a requirement of good faith and substantive basis. The second is that advocated by respondents and adopted by the trial court and usually denominated the reasonable man test.

In support of its contention that the instruction given was in error because Brady was denied the opportunity to prevail if its dissatisfaction was based on its own business judgment, Brady cites and relies primarily on three Missouri cases. The most recent of these was decided in 1917 and all are of dubious application to the situation in this case. Factors which distinguish appellant’s cited cases are the contract language in each and the subject matter for satisfaction. As to the former, if the contract specifies satisfaction to be a matter within the judgment exercise of the promis- or, a circumstance not present in this case, it may well be that the parties have contracted to exclude the reasonable man test. As to the latter, at least one of the cited cases involves a question of taste or aesthetics to which the reasonable man test is inapplicable.

Respondents have cited no authority to counter Brady’s argument or to support the theory of the challenged instruction. As a consequence, resolution of the point has necessitated recourse to independent research. No Missouri case has been found which rules the question of what test is applied to determine satisfaction where the contract includes no definition of a standard and where fraudulent conduct is not an element. We therefore address the issue as one of first impression.

Before discussing the rationale and authority supporting the decision that the reasonable man test is applicable in this case, it is appropriate to note that the agreement here, unlike most similar agreements in the reported cases, does not provide that the improvements are to be completed to Brady’s satisfaction. The parties have assumed that to be the construction of the document language but nothing in the agreement requires or points to that interpretation. Indeed, it is at least arguable that the provision was intended to require substantial completion, that is, a stage of construction where the building can be put to its intended use even though comparatively minor items remained to be finished. Southwest Engineering Company v. Reorganized School District R-9, 434 S.W.2d 743, 751 (Mo.App.1968).

If substantial completion be the object, a purpose compatible with the economic interests of Brady and Capitol, then no argument can be successfully advanced that a reasonable man test is not appropriate. Brady and Capitol were collectively the authors of the agreement which could readily have been drawn to require that construction be completed to Brady’s satisfaction. The failure to include this provision necessarily militates against Brady’s argument that satisfactory completion was to be evaluated solely on Brady’s good faith business judgment.

Apart from the foregoing, however, and assuming that completion of construction to Brady’s satisfaction was the condition of the agreement, the weight of authority on the subject applies an objective standard in such cases to determine whether the contract condition has been met. The Restatement (Second) of Contracts § 228 (1979) provides:

“When it is a condition of an obligor’s duty that he be satisfied with respect to the obligee’s performance or with respect to something else, and it is practicable to determine whether a reasonable person in the position of the obligor would be satisfied, an interpretation is preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied.”

The comment to the restatement points out that the objective test is appropriate where, from the agreement, it is apparent the obli-gee has not assumed the risk of the obli-gor’s unreasonable, although honest, dissatisfaction.

In Kadner v. Shields, 20 Cal.App.3d 251, 97 Cal.Rptr. 742 (1971), a sale of real estate included the condition that a first encumbrance to be assumed be satisfactory to the buyers. The Kadners as buyers expressed dissatisfaction and when the sellers insisted on performance, the Kadners filed suit for refund of the contract deposit. The question, which the court concluded was one of first impression in California, was whether Kadners were entitled to a good faith exercise of their personal judgment in evaluating the terms of the encumbrances to be assumed or whether their rejection of the conditions was to be measured by the objective considerations of a reasonable man. The court concluded the objective test should be applied. The opinion pointed out that the personal judgment test is applied most often in cases of aesthetic taste and sometimes of feasibility of operation or management irrespective of financial impact. The objective test is used where factors of commercial value or of financial concern are involved.

Kennedy Associates, Inc. v. Fischer, 667 P.2d 174 (Alaska 1983) is a case virtually identical to the subject suit. Kennedy was a participant in a loan commitment agreement issued to Fischer for the permanent financing of a building addition Fischer was to construct. A condition set out in the commitment precedent to disbursement of loan proceeds included an inspection of the completed property by the lender. The commitment was made subject to the inspection and approval of the completed property by the lender. A Kennedy representative did inspect the structure and gave an unfavorable report on the construction. Kennedy refused to close the loan and Fischer filed suit for breach of the loan commitment. One of the issues on the appeal was whether the trial court had correctly applied the subjective standard of good faith in evaluating Kennedy’s reliance on the satisfaction clause. The opinion concluded it had not stating at p. 181:

“It is well-established that where the condition requires satisfaction as to commercial value or quality, operative fitness, or mechanical utility, an objective standard is to be used in determining whether the clause has been satisfied.”

The opinion cited the Restatement, Section 228 above and Meredith Corp. v. Design & Lithography Center, Inc., 101 Idaho 391, 614 P.2d 414, 416 (1980). Also mentioned was the choice of the objective standard as a predicate for avoidance, where possible, of the forfeiture of contractual rights.

The present case involved the same considerations existing in the Kennedy suit, the economic value of a structure as security for a loan. Brady had no concern with aesthetics of design or any matters of personal taste or judgment. The satisfaction clause involved only a commercial judgment as to whether the stage of construction was to that point of completion as justified the closing of the loan. The objective test to determine whether Brady was entitled to rely on the satisfaction clause as a ground to avoid the commitment agreement was correctly posited in the jury instruction.

III.

In the final point requiring disposition, Brady contends the award of actual damages to respondents was excessive first, because the element of interest differential was not discounted to present value, and second, because the award included recovery of a portion of the principal sum loaned which could not be a component of damage.

The claim by respondents that damages were sustained when Brady refused to close the loan was supported in part by uncontested proof that interest rates had increased sharply between the date of Brady’s commitment letter and the proposed closing date for the loan. As a consequence, when respondents were forced to turn to the open market to replace the loan, the rate they were obligated to pay was 3% higher than the rate quoted in the Brady commitment letter. Respondents produced an expert witness who calculated the amount of respondents’ damage attributable to the added 3% interest charge. That computation involved a calculation of interest payable over the term of the loan at the higher rate and a similar calculation of interest at the lower committed rate. According to the witness’s testimony, respondents’ damage on this item was the difference between the two figures. Brady offered no contrary evidence.

The contention now advanced by Brady is that the jury award of damages based on the interest differential as computed by respondents’ expert witness is excessive because the amount was not discounted to present value. Under Brady’s theory, respondents incur the extra interest expense only incrementally over the ten year life of the loan and if the full amount is awarded as damages at the outset, respondents are overcompensated by the value which use of the fund represents.

A calculation which reduces to present value the cost of future expenses is not one readily made by simple mathematics. It entails the assumption of a current rate of return and, in the case of recurrent installments as in the subject mortgage loan, a different amount of the future expense accrues each month. Brady contends in its brief that respondents’ damage award was excessive “by nearly $56,000” but the computation of that figure or other amounts mentioned in appellant’s brief as the appropriate reduction in the damage award are not ascertainable from the record because Brady presented no evidence on the subject.

The point set out in appellant’s brief appears to rest upon excessiveness of the verdict, but as developed in argument, the contention is that the trial court erred in failing to strike the entire testimony of respondents’ expert witness who calculated damages. The issue developed at trial in the following manner. Respondents’ witness Noble Johnson, a mortgage banker with 33 years of experience, testified as to the computation of respondents’ monetary loss attributable to the higher rate of interest and shorter term of the loan respondents obtained to replace the loan committed by Brady. On cross-examination of the witness, counsel for Brady inquired if the computation had taken into consideration any discount to present value. The witness replied that it had not. No further questions were asked. Brady adduced no evidence that such a discount was required or, if so, what the amount would be.

Brady’s motion to strike all of witness Johnson’s testimony was based on the contention that, as a matter of law, absent a discount to present value, the testimony lacked foundation and was inadmissible. No authority was cited to the trial court to support the contention and none is cited here. Such authorities as are relied on by Brady, principally Bridgkort Racquet Club Inc. v. University Bank, 85 Wis.2d 706, 271 N.W.2d 165 (1978), merely hold it to be error for the court to deny defendant the opportunity to present evidence of what the discount factor would accomplish in mitigating the damage. Here, there was no such offer of proof nor was the witness even questioned as to whether a discount to present value would result in a proper computation of plaintiffs’ loss or, if so, what the amount would be.

It is to be assumed that witness Johnson was presented as an expert qualified to make interest loan computations and projections and that his testimony was necessary to aid the jury in arriving at certain elements of the damages claimed. Appellant makes no claim to the contrary nor is any challenge leveled at the witness’s qualifications. The issue is whether objection to the foundation of the testimony should have been sustained.

Where an expert witness is called, the facts in evidence coupled with those available to the witness from investigation of his own must be sufficient to take the expert testimony out of the realm of guesswork. Any weakness otherwise present in the underpinnings of the opinion given by the witness goes not to the admissibility of the testimony but to its weight and value. Polk v. Ford Motor Co., 529 F.2d 259, 271 (8th Cir.), cert. denied 426 U.S. 907, 96 S.Ct. 2229, 48 L.Ed.2d 832 (1976).

The matter of Johnson’s failure to discount his interest computation was a circumstance the jury could have considered in weighing the testimony, but it was not an omission of any fact necessary to permit an expression by the witness as to the results of his calculation of damages and did not reduce his opinion to inadmissible guesswork or speculation. The jury was made aware by Brady’s limited cross-examination that no discount was taken and, had Brady chosen to do so, the effect of a reduction to present value could have been demonstrated by additional cross-examination or by defense evidence or both. Brady is not entitled to complain now that the damage evidence on the subject was only that favorable to plaintiffs. The trial court correctly overruled the motion to strike the testimony.

In a second branch of the point appellant argues that witness Johnson’s testimony was also faulty in that he computed as a part of plaintiffs’ loss a “principal balance differential” represented by the amount of the loan owed at the end of a ten year term of the replacement loan as compared to a similar figure which would have been due if the Brady committed loan had been funded. Apparently, the differences in remaining principal balances after ten years of payments are attributable to the fact that the higher rate of interest on the replacement loan reduced the aggregate amount of the installment payments credited to principal. Brady contends inclusion of this figure allowed respondents to recover a portion of the principal amount of the loan which could not by any theory be construed as damages.

We conclude that respondents’ judgment for actual damages is excessive by the amount of the principal balance differential because no theory entitles respondents to recoup from Brady a portion of the principal balance of the replacement loan. There is no difficulty in determining the amount of excess, $12,439.00 because the jury verdict corresponded in exact figures to the testimony of witness Johnson. Moreover, respondents present no plausible argument in their brief for entitlement to this element of damages. There is doubt as to whether Brady has preserved the point of excessive verdict by presenting only a motion for new trial and seeking here only the relief of a new trial. Respondents, however, make no claim that the point is not cognizable as presented and suggest themselves that the error, if such it be, may be cured by “remittitur.”

The jury verdict for actual damages in the amount of $102,870.00 is in part unsupported by the evidence because testimony improperly calculated part of the principal of respondents’ loan as an item of damage. The verdict was otherwise correct and is entitled to affirmance upon deduction of the improper damage allowance.

For the reasons stated, the judgment in favor of plaintiffs and against defendant W.L. Brady Investments, Inc. on Count III of plaintiffs’ petition in the amount of $14,-600.00 actual damages and $50,000.00 punitive damages is reversed. The cause as to Count I of plaintiffs’ petition is remanded with direction to enter judgment in favor of plaintiffs and against defendant W.L. Brady Investments, Inc. in the amount of $90,-431.00. The costs are ordered divided equally between appellant and respondents.

All concur.

      . Mullally v. Greenwood, 127 Mo. 138, 29 S.W. 1001 (1895); Burns v. Reis, 196 Mo.App. 694, 191 S.W. 1096 (1917); Cann v. Rector, 111 Mo.App. 164, 85 S.W. 994 (1905).

      . The case of Long v. Huffman, 557 S.W.2d 911 (Mo.App.1977) touches on the problem of satisfaction, but it announces no standard. Paradoxically, the opinion, p. 916, suggests a necessity to comply with both tests.


author: PER CURIAM:

text:
    STATE of Missouri, Respondent, v. Royal J. JOHNSON, Appellant.
    No. WD 35407.
    Missouri Court of Appeals, Western District.
    Oct. 30, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.
    James W. Fletcher, Public Defender, Kansas City, Lee M. Nation, Sp. Asst. Public Defender, for appellant.
    John Ashcroft, Atty. Gen., Jefferson City, Philip M. Koppe, Asst. Atty. Gen., Kansas City, for respondent.
    Before DIXON, J., Presiding, and SHAN-GLER and CLARK, JJ.
   ORDER

PER CURIAM:

The defendant appeals his convictions for armed robbery, Section 569.020 RSMo 1978, and armed criminal action, Section 571.015 RSMo 1978, and his court-imposed sentences as a persistent offender of twenty years for armed robbery and five years for armed criminal action. The judgments of conviction and the sentences are affirmed. Rule 30.25(b).


text:
    STATE of Missouri, Respondent, v. Arrendondo VANN, Appellant.
    No. WD 35460.
    Missouri Court of Appeals, Western District.
    Oct. 30, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.
    James W. Fletcher, Public Defender, Lee M. Nation, Sp. Asst. Public Defender, Kansas City, for appellant.
    John Ashcroft, Atty. Gen., Philip M. Koppe, Asst. Atty. Gen., Kansas City, for respondent.
    Before PRITCHARD, P.J., and SHAN-GLER and BERREY, JJ.
   ORDER

PER CURIAM:

Defendant appeals from judgment of conviction of second degree robbery, Section 569.030, RSMo 1978, and sentence to five years’ imprisonment, alleging the erroneous admission of a pretrial statement by the defendant.

Judgment affirmed. Rule 30.25(b).


text:
    Dana A. ROGERS, Appellant, v. Richard KING, Director, Department of Revenue, State of Missouri, and the State of Missouri, Respondent.
    No. WD 35261.
    Missouri Court of Appeals, Western District.
    Nov. 6, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied Feb. 26, 1985.

      Andrew J. Gelbach, Warrensburg, for appellant.
    John Ashcroft, Atty. Gen., Richard L. Wieler, Asst. Atty. Gen., Jefferson City, for respondent.
    Before CLARK, P.J., and PRITCHARD and LOWENSTEIN, JJ.
   PRITCHARD, Judge.

Between May 10 and June 22, 1983, appellant’s driver’s license was revoked by respondent Director pursuant to § 577.041.-1, RSMo 1978, because of his refusal to take a breathalizer test. Appellant filed a petition for review of the Director’s action in the Johnson County Associate Circuit Court on June 22, 1983. On July 13, 1983, the Honorable George Mitchell, judge of that Associate Circuit Court, on his own motion, directed the clerk to transfer the case to the presiding judge of the circuit court “for the purpose of assignment of the case to be heard on the record as provided by law.” On July 18, 1983, the presiding judge assigned the case to Judge Mitchell “to be heard on the record under procedures applicable before circuit judges.” On August 12,1983, after a hearing, Judge Mitchell denied appellant’s petition for review.

In Point I, appellant contends that the certification to the presiding judge and the reassignment back to Judge Mitchell was without authority, notice or agreement of the parties, and denied him his right to a trial de novo before the circuit court.

Although the associate circuit court is empowered to hear and determine initially and without assignment petitions for review of driver’s license revocations under § 478.225.2(8), RSMo 1978, and appellant did not request a hearing before a court of record in the county in which the arrest occurred under § 577.041.2, there is nothing in the statutes which prevents the procedure of certification and reassignment such as here was done. Regardless of how the case comes to the presiding judge’s attention (here on Judge Mitchell’s certification on his own motion), § 517.010.2., without qualification, gives this power: “The presiding judge of the circuit may nevertheless in an order of special assignment specifically direct that the practice and procedure applicable before circuit judges shall apply. Such a special assignment order shall only be made if the facilities are available to the associate circuit judge to hear a case on a record so that there would be no right of trial de novo and any appeal could be taken on the record.” These statutes are obviously intended to provide for efficient judicial administration of the circuits, and to ensure judicial economy of time in any case. Appellant therefore, under these facts, has no vested right in any available procedure. His appeal is provided to be direct to this court, after the assignment, by § 512.180, and he has not demonstrated any prejudice occasioned by the statutory procedures here employed. He has his statutory appeal, herein considered. Point I is overruled.

In Point II, appellant claims error in Judge Mitchell’s denial of his requests for discovery. What happened is this: Appellant filed his petition for review on June 22, 1983. On July 13, 1983, the court overruled the request for discovery, apparently, as may be gleaned from colloquies between the court and counsel, upon the ground that the requests were based upon the criminal rules in this civil matter. Nevertheless, the court on its own motion continued the case to August 12, 1983, to afford appellant “the opportunity to complete discovery as provided by law.” The court thereafter transferred the case for assignment by the presiding circuit judge, and the parties were notified, on July 26, 1983, that the case was set for hearing on the record as a circuit court case on August 12, 1983, at 2:00 p.m.

On August 5, 1983, at 4:25 p.m., and at 4:26 p.m., appellant filed interrogatories and a motion to produce documents and items. It seems from colloquy that the secretary of appellant’s counsel slipped them under the door of the office of state’s counsel, who did not discover them until August 8, 1983. He objected to that attempt at discovery just prior to trial on the ground that the requests were not timely filed, and the court sustained the objection. No error appears. Appellant had from July 13, 1983, to file his requests for discovery. Under both Rules 57.01 and 58.01, the party upon whom requests are served shall have 20 days to respond. Obviously, there would not be available that time for the state to respond. The motion to produce requested that documents and items be produced at least 5 days prior to trial. Considering that state’s counsel did not receive it until August 8, 1983, the trial court was entitled to find that discovery could not have been reasonably made by the trial date, August 12, 1983. The trial court did not abuse its discretion in sustaining the objections to discovery in these circumstances. Point II is overruled.

In his third point, appellant contends that the trial court erred in admitting a copy of a videotape into evidence which showed him in the booking room at the time the officer attempted to administer the breathalizer test. He says that no proper foundation was laid for the admission of the copy. Officer Shultz testified that the videotape (copy) was an accurate and complete depiction of the events occurring in the booking room of the Warrens-burg Police Department. The trial court could reasonably have concluded that the videotape reliably reproduced the events so depicted, that the proper foundation for its admission was laid, and therefore it was within its discretion to admit it. See State v. Molasky, 655 S.W.2d 663, 668[7] (Mo.App.1983), and cases cited. Point III is overruled.

By Point IY, appellant contends that there was not sufficient competent and substantial evidence to support the trial court’s finding that he unequivocally refused to take the breathalizer test. The evidence shows that appellant was stopped by Officer Shultz in Warrensburg, Missouri, for operating his vehicle with expired license plates. While at the vehicle Shultz observed that appellant was slow and clumsy in his movements, his speech was slow, and there was some odor of alcohol present. Shultz thought appellant was under the influence of alcohol, and placed him under arrest for driving while intoxicated, and he was taken to the police station. The time was shortly after 5:20 p.m., on April 10,1983. The transcript of the videotape is contained in about 38 pages of the transcript on appeal. It shows that the officers were patient with appellant in allowing him time to make his decision, advising him that a refusal to take the test might result in his license revocation for not less than a year. Appellant was allowed to telephone his attorney twice. That record shows that appellant was argumentative, belligerent and abusive, and tried to delay the administering of the test, requesting that he be permitted to go to the bathroom and have a drink of water. Shultz explained to him that the test would take but five minutes, and he could go to the bathroom and have a drink of water thereafter, and that the procedures did not allow going to the bathroom and drinking water before the test. Shultz testified that he did finally allow appellant to go to the bathroom, going with him, and appellant urinated for about IV2 minutes. Thereafter, Shultz again offered to administer the test but appellant insisted on having a drink of water; Shortly thereafter, the machine was turned off. At one point, appellant received a phone call and told the caller, “I’m not taking that damn test for about an hour. I’m going to tie you up ... I’m not playing their game ...” Shultz asked appellant questions from standard DWI booking procedures, but he did not answer them, but he did do nose touches and straight line walking and recited the alphabet. Shultz requested that appellant take the test at 5:52 p.m., and then permitted him to call his attorney. Shultz told him that at 6:04 p.m., the machine was going to be turned off which was going to be a refusal. At 6:08 p.m., Shultz told appellant to mark a form as to whether he was going to consent to or refuse the test, and appellant said he was consenting to the test, but he wanted a drink — his false teeth were sticking. Shultz thereupon turned off the machine and told appellant that he had refused the test.

Appellant cites Askins v. James, 642 S.W.2d 383 (Mo.App.1983), but that case ruled merely that the evidence, if believed, that appellant there blew around the mouthpiece of the machine rather than into it must be determined in accordance with the correct rule of law as to burden of proof which the trial court improperly placed on appellant, hence the remand. In Arnold v. Director of Department of Revenue, 593 S.W.2d 624 (Mo.App.1980), the petitioner was not told that smoking, while the machine was warming up, would affect the result of the test, hence smoking was held not to be a refusal. In Hester v. Spradling, 508 S.W.2d 194 (Mo.App.1974), a judgment for petitioner that he did not refuse to take the test was affirmed upon facts showing that the officer stated to petitioner’s attorney, who arrived at the station 20 to 25 minutes after a telephone call to him and asked if petitioner could take the test, “He’s already refused by smoking.” The officer did not offer to administer the test and made no further request of respondent to take the test. The facts in these cited cases are inapposite to those here where Shultz continually asked appellant to take the test, but he refrained from doing so by delaying tactics, stating at one time he would not take the test for about an hour, and at another time that he would take it at his convenience. Appellant was advised that procedures would not permit taking water before the test, yet he continued to make that request. Spradling v. Deimeke, 528 S.W.2d 759, 766[13] (Mo.1975), states: “There is no mysterious meaning to the word ‘refusal’. In the context of the implied consent law, it simply means that an arrestee, after having been requested to take the breathalizer test, declines to do so of his own volition. Whether the declination is accomplished by verbally saying, ‘I refuse’, or by remaining silent and just not breathing or blowing into the machine, or by vocalizing some sort of qualified or conditional consent or refusal, does not make any difference. The volitional failure to do what is necessary in order that the test can be performed is a refusal.” [Emphasis added.] Compare also the delaying tactics of the arrestee in Walker v. Goldberg, 588 S.W.2d 83, 85 (Mo.App.1979), with those in this case. In the Walker case, the judgment of revocation of license was affirmed on conflicting evidence of appellant’s willingness to take the test as contrasted with his inaction and delaying tactics and equivocation. The same measure of the evidence applies here, and the trial court did not err in affirming the revocation of appellant’s license. There is no firm belief that the judgment is wrong. Murphy v. Carron, 536 S.W.2d 30, 32[1-3] (Mo. banc 1976).

The judgment is affirmed.

All concur.