Bailey v. Hawthorn Bank
382 S.W.3d 84
| Mo. Ct. App. | 2012Background
- Bailey’s Wine Bistro loaned funds by Hawthorn Bank over years; Bailey sought $510,000 to buy and renovate the building and add a kitchen; Cross prepared a detailed business plan; Lutz approved the loan based on a Loan Summary and a Loan Commitment Letter; Bailey’s sister Briggs provided $120,000 for down payment; the Bank never funded the $510,000 loan and Bailey closed his business; plaintiffs sued for contract, fraud, negligent misrepresentation, promissory estoppel; jury awarded damages including punitive damages to Bailey; the court later entered JNOV striking only the punitive award; cross-appeal challenged punitive damages and prejudgment interest; on appeal, court affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of alleged credit agreement under the Credit Agreement Statute | Bailey argues the written Loan Summary/Commitment satisfied §432.047. | Bank contends no enforceable credit agreement existed. | Credit agreement satisfied written, interest, and terms requirements; JNOV on contract denied. |
| Damages for lost future profits were recoverable | Bailey presented expert projections and a plan showing profitability. | Damages based on speculative future profits should be denied. | Damages for lost profits sustained; sufficient basis to support jury award. |
| Statute of Frauds defense applicable to contract claim | Bailey contends agreement could be performed within one year; statute not applicable. | Bank argues §432.010 bars enforcement; not applicable if performance possible within one year. | Statute of frauds not a bar; contract could be performed within one year. |
| Negligent misrepresentation submission and punitive damages | Bailey/ Briggs presented evidence of misrepresentation and bank’s reckless conduct. | Bank argues no misrepresentation and that evidence shows no evil motive. | Punitive damages reinstated for Bailey; cross-appeal granted on punitive damages. |
| Prejudgment interest and attorney’s fees on cross-appeal | Seek prejudgment interest and fees under §408.020 and §408.092. | No preservation of error; damages not liquidated; no fee entitlement. | Prejudgment interest denied for unliquidated damages; attorney’s fees denied; cross-appeal denied on those points. |
Key Cases Cited
- Smith Moore & Co. v. J.L. Mason Realty & Inv., Inc., 817 S.W.2d 530 (Mo. App. E.D. 1991) (terms to finance may be identified even if some terms are to be determined later)
- Ameristar Jet Charter, Inc. v. Dodson Intern. Parts, Inc., 155 S.W.3d 50 (Mo. banc 2005) (lost profits damages require reasonable certainty but not perfect precision)
- Meridian Enters. Corp. v. KCBS, Inc., 910 S.W.2d 329 (Mo. App. 1995) (lost profits proof must be more than mere speculation)
- Rissler v. Heinzler, 316 S.W.3d 533 (Mo. App. W.D. 2010) (general rule: anticipated profits are too uncertain; recover only with reasonable certainty)
- Koppe v. Campbell, 318 S.W.3d 233 (Mo. App. W.D. 2010) (standard for reviewing punitive-damages submissions on appeal)
- Horizon Memorial Grp., L.L.C. v. Bailey, 280 S.W.3d 657 (Mo. App. W.D. 2009) (standard for proving punitive damages; clear and convincing evidence of culpable mental state)