533 S.W.3d 720
Mo.2017Background
- L-3 manufactured aircraft gyros and instrument-panel power supplies and appointed Sun Aviation as a distributor.
- L-3’s parent consolidated operations and directed L-3 to terminate Sun’s distributorship; Sun sued alleging multiple statutory and common-law claims.
- Counts: I (Franchise Act §407.405 — failure to give 90 days’ written notice), II (IMCPE Act §407.753 — wrongful termination of dealer of “industrial, maintenance and construction power equipment”), III (Inventory Repurchase Act §407.860 — refusal to repurchase inventory on termination), IV (fraudulent concealment of parent’s consolidation plans).
- Circuit court granted Sun partial summary judgment on Counts I–III (liability only), tried damages and Count IV, and awarded Sun damages on all counts.
- Supreme Court of Missouri: affirmed liability in part, reversed on Counts II–III and Count IV, and remanded Count I damages for a new trial on damages limited by the statutory remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether gyros and power supplies are "industrial, maintenance and construction power equipment" under the IMCPE Act and Inventory Repurchase Act | Sun: products supply or use power and so fall within "power equipment" and thus the statutory category | L-3: products are component parts/auxiliary devices for aircraft, not end-use power equipment | Court: reversed — products are component parts (not end-use power equipment); Counts II & III not covered by statutes |
| Whether L-3 had a duty to disclose its parent’s consolidation plans (fraudulent concealment) | Sun: L-3 had superior knowledge / trust and confidence with Sun, so duty to disclose | L-3: no superior knowledge or fiduciary/confidential relationship; L-3 did not know of parent’s decision before termination | Court: reversed — no duty to disclose; factual record shows L-3 lacked superior knowledge and no fiduciary duty existed |
| Scope of damages under Franchise Act §407.410.2 for failure to give 90 days’ notice | Sun: awarded 18 years of lost profits for wrongful termination and for lack of notice | L-3: damages for failure to give notice are limited to losses caused by absence of the 90‑day notice period | Court: vacated damages award and remanded for new trial; damages under §407.410.2 are limited to losses caused by the failure to give the 90‑day notice (reliance/expectation during that period) |
Key Cases Cited
- Swadley v. Shelter Mut. Ins. Co., 513 S.W.3d 355 (Mo. banc 2017) (standard of review for summary judgment)
- Parktown Imps. v. Audi of Am., 278 S.W.3d 670 (Mo. banc 2009) (statutory interpretation: give effect to legislative intent and plain language)
- McBud of Missouri, Inc. v. Siemens Energy & Automation, Inc., 68 F. Supp. 2d 1076 (E.D. Mo. 1999) (interpreting "industrial, maintenance and construction power equipment" to require end‑use machines, not auxiliary parts)
- Ridings v. Thoele, Inc., 739 S.W.2d 547 (Mo. banc 1987) (Remedy under §407.410.2 is compensatory; limitations on punitive or overly broad relief)
- Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758 (Mo. banc 2007) (duty to disclose arises where one party has superior knowledge not reasonably accessible to the other)
- Andes v. Albano, 853 S.W.2d 936 (Mo. banc 1993) (silence can be fraud only when a duty to speak exists, e.g., fiduciary or superior knowledge)