City of Harrisonville, Appellant-Respondent v. McCall Service Stations d/b/a Big Tank Oil, the Missouri Petroleum Storage Tank Insurance Fund
2016 Mo. LEXIS 279
| Mo. | 2016Background
- McCall owned a service station with a leaking underground petroleum tank; the Missouri Petroleum Storage Tank Insurance Fund (Fund) investigated and monitored contamination; McCall later sold to Fleming.
- During a City sewer upgrade, contaminated soil from the station’s tank area was discovered, requiring specialized remediation and increased construction costs.
- Fund representatives (through its third-party administrator) recommended Midwest Remediation and represented that the Fund would reimburse the City; the City hired Midwest and paid but was not reimbursed.
- The City sued McCall and Fleming for nuisance and trespass (directed verdict entered on liability) and sued the Fund for negligent and fraudulent misrepresentation; trial limited to damages against McCall/Fleming and liability/damages against the Fund.
- Jury awarded $172,100.98 compensatory damages against McCall, Fleming, and the Fund; $100 punitive damages against McCall and Fleming; $8 million punitive damages against the Fund (remitted by trial court to $2.5 million on due-process grounds).
- Supreme Court affirmed compensatory awards and nuisance/trespass instructions, reversed punitive damages against the Fund (holding claims against the Fund not cognizable under its enabling statutes and that the Fund is an account — the Board of Trustees administers it), and remanded for fairness to allow possible substitution/claims against the Board.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were nuisance and trespass instructions (including “consequential damages”) erroneous? | City: instructions properly allowed recovery of costs proximately caused by contamination. | McCall/Fleming: wording permitted consequential/economic damages and gave jury a roving commission. | Affirmed — instructions appropriate; testimony defined consequential damages; no prejudice shown. |
| Was compensatory damages supported / should they be remitted? | City: testimony and estimates supported $172,100.98 damages incurred to complete sewer project. | McCall/Fleming: only $72,009.98 of remediation bid was contamination-related; verdict excessive. | Affirmed — substantial competent evidence supported award; remittitur not required. |
| Did City prove detrimental reliance for fraud/negligent misrepresentation against Fund? | City: relied on Fund rep’s promise to reimburse and would have acted differently (costlier complete excavation vs. subcontracting). | Fund: City actually saved money by hiring Midwest; no detrimental reliance. | Affirmed — sufficient evidence of detrimental reliance to submit fraud/negligent misrepresentation to jury. |
| Could punitive damages be awarded against the Fund and is the Fund a proper defendant? | City: punitive damages recoverable based on Fund representatives’ conduct. | Fund: Fund is a statutory account with no authority to pay punitive damages; Board (not Fund) is the operative entity and should be the defendant; punitive damages beyond statutory coverage. | Reversed as to punitive damages vs. Fund — claims against the Fund not cognizable for punitive damages under enabling statutes; remanded to allow potential action against Board; compensatory award left intact because Fund counsel did not challenge it on appeal. |
Key Cases Cited
- Hervey v. Missouri Dep’t of Corrections, 379 S.W.3d 156 (Mo. banc 2012) (standard for reviewing jury instructions)
- Fleshner v. Pepose Vision Inst., P.C., 304 S.W.3d 81 (Mo. banc 2010) (no prejudice where damages allowed under one theory makes overlapping instruction harmless)
- Kenney v. Wal-Mart Stores, Inc., 100 S.W.3d 809 (Mo. banc 2003) (deviation from MAI presumed prejudicial)
- Smith v. Brown & Williamson Tobacco Corp., 410 S.W.3d 623 (Mo. banc 2013) (standard for JNOV/submissibility review)
- MoGas Pipeline, LLC v. Missouri Pub. Serv. Comm’n, 366 S.W.3d 493 (Mo. banc 2012) (statutory entities act only within their enabling statutes)
- Ellison v. Fry, 437 S.W.3d 762 (Mo. banc 2014) (punitive damages depend on existence of compensatory damages)