Kansas City Courthouse Roundup: October 13, 2008

Daily Record and the Kansas City Daily News-Press, Oct 13, 2008 by Charles Emerick

A metro-area car dealer wants a possible class action lawsuit against it arbitrated.

Attorneys for Lee's Summit Honda filed a notice with the Missouri Court of Appeals Western District last week. The dealership seeks to reverse a ruling by Jackson County Circuit Judge Jack Grate, who late last month rejected the dealership's motion to compel arbitration

In his judgment, Grate called the agreement "unduly harsh" because it strikes down the buyer's right to a jury trial.

"The Court finds that Plaintiff was in a significantly inferior bargaining position, and was presented with a take-it-or-leave-it, preprinted 'Agreement to Arbitrate,'" Grate wrote. "Thus, the Court finds that this agreement was procedurally unconscionable."

Lead plaintiff Ashlee Ruhl and her attorneys are seeking class action status in the lawsuit against Lee's Summit Honda for allegedly violating the Missouri Merchandising Practices Act. They claimed the dealership charged several unlawful fees during her purchase of a vehicle, constituting the unauthorized practice of law.

Mitch Burgess and Keith Lamb, of Burgess & Lamb, and Ralph Phalen represent Ruhl.

Lee's Summit Honda had asked Grate to compel arbitration and the dismissal of the putative class claims.

The defense questioned in its notice of appeal whether the court erred by "holding that claims for damages or statutory penalties for the unauthorized practice of law can never be submitted to an arbitral forum."

Lee's Summit Honda also took issue with Grate's judgment for holding that Ruhl's claims for damages fell outside the scope of the arbitration agreement.

Kevin Case, of Case & Roberts, represents the defendant. He was out of town and unavailable for comment last Thursday.

Appeals court denies Smithfield's writ request

Privileged attorney-client information can be used in litigation by several families suing Smithfield Foods for nuisance.

The Missouri Court of Appeals Western District last week denied the company's petition for writ of prohibition against Jackson County Circuit Judge Jay Daugherty. The writ was rejected without comment.

Smithfield Foods sought to keep Daugherty from allowing the use of the "protected document," which became public when a company employee inadvertently sent it via e-mail to a Kansas City Star reporter. Daugherty previously denied the company's motion to strike the document and references to it.

The memo detailed settlement demands and offers exchanged between Smithfield and attorneys for the rural northwest Missouri families suing the company for the alleged nuisance caused by its hog farms.

According to the appellate court filing, an administrative assistant to Smithfield executive vice president Richard Poulson inadvertently included a Star business reporter in an e-mail on March 31. The e-mail was intended for only Smithfield's board members, who were preparing for an upcoming meeting.

After realizing the mistake, Poulson asked the reporter to delete the e-mail and also called the Star's president and published, requesting that it not be published.

A week later, an attorney for Smithfield learned the Star was planning to publish information from the document. He allegedly called the plaintiffs' attorneys, who agreed not to use the memo in litigation, Smithfield argued.

The Star published its article on April 24.

Since then, Smithfield claimed, the plaintiffs have used the information in various cases pending in nine different counties. Another judge in Chariton County rejected Smithfield's motion to strike, said plaintiffs' attorney Charlie Speer, of the Speer Law Firm.

Smithfield argued a prohibition is appropriate when a trial court abuses its discretion concerning the discoverability of attorney- client protected materials.

Defense attorney Jean Paul Bradshaw, of Lathrop & Gage, could not be reached for comment on Thursday.