ST. LOUIS — A Missouri appellate court reversed and remanded a petition by Engineered Sales Acquisition (ESI) involving Missouri American Water and Travelers Casualty Insurance Company of America.
In its appeal, ESI argued that the trial court wrongly dismissed its lawsuit based on the statute of limitations for three reasons: ESI claimed the parties had agreed to waive or toll the statute of limitations while waiting for ESI’s expert to assess any underground flood damage; ESI didn’t know the full extent of its damages until the expert completed the report, so the statute of limitations had not expired; and ESI alleged a valid claim against Travelers, the insurer, asserting that Travelers misled them into believing the statute of limitations would be waived, the judges wrote in the Sept. 24 opinion filed in the Missouri Court of Appeals, Eastern District-Division Four.
The appeal was before Judges John P. Torbitzky, James M. Dowd and Michael S. Wright.
"We reverse and remand in part upon our finding that ESI's petition sufficiently pleaded, bun the thinnest of margins, the ultimate fact that the parties had agreed to waive or toll the statute of limitations and such allegation was not a legal conclusion," the judges wrote in the opinion. "We affirm, however, the trial court's dismissal of ESI's claim against Travelers since ESI's pleading has failed to state a direct claim against Travelers in its status as MAWC's insurer on this claim."
On June 12, 2017, flooding damaged a building and parking lot that ESI was leasing in Missouri that caused more than $100,000 in damage. MAWC had recently been working on the water mains and pipes near the property and ESI submitted a claim for the damage to MAWC's insurer, Travelers, who accepted and agreed to pay $33,406 for the loss.
However, Travelers wanted ESI to complete a release of all claims for $33,406, and ESI refused, and in 2023, ESI provided Travelers with an expert report that showed the total damages to exceed $100,000.
Travelers then denied the claims and ESI initiated litigation.
"...we reject the notion that ESI's claim that the parties agreed to waive or toll the statute of limitations was a mere legal conclusion," the judges wrote in the opinion. "ESI's petition certainly alleged the agreement. But, significantly, it did much more than that. It presented the agreement in the factual context of the parties' communications and negotiations."
The judges wrote that upon remand, ESI may need to substantiate that an agreement existed inasmuch as under Rule 55.03(c), counsel must have a good faith basis for making this allegation in the petition, but this substantiation is not required at this stage of litigation.
The court reversed in part and affirmed in part, the judges wrote.
Division Four held that the case should be sent back to the trial court because ESI’s claim about the waiver of the statute of limitations was adequately pleaded, however, the dismissal of ESI’s claim against Travelers was upheld.
The appellant was represented by Edward J. Sluys, Kenneth J. Heinz and Keith K. Cheung.
The respondents were represented by Blake D. Hill, Jason S. Retter and Robert W. Cockerham.
Attorneys declined to comment on the case.
Missouri Court of Appeals, Eastern District-Division Four case number: ED112315