Opinion
No. WD 56802.
Opinion filed: May 30, 2000.
APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY, THE HONORABLE THOMAS JOSEPH BROWN, III, JUDGE.
W. Bevis Schock, St. Louis, Missouri, for appellant[s].
Paul Campbell Wilson, Jefferson City, Missouri, for respondent[s].
Claiming standing as taxpayers, State Senator Peter Kinder and Rickey Jamerson ("Appellants") filed a two count petition against Attorney General Jay Nixon and Thomas Strong ("Respondents") challenging the validity of a contract for legal services entered into by the Attorney General with Mr. Strong, a private attorney. The petition alleged the contract was illegal and void for a variety of reasons, and sought injunctive relief in Count I, and a declaratory judgment in Count II. By agreement, all parties filed motions for judgment on the pleadings. Thereafter, the trial court denied the plaintiffs' motion, and granted the defendants' motion. Senator Kinder and Mr. Jamerson appeal.
I. FACTUAL BACKGROUND
In 1997, Attorney General Nixon filed a multi-count petition against companies manufacturing and selling tobacco products in the State of Missouri. The case, State ex rel. Nixon v. American Tobacco Co., et al ., No. 972-1465, sought monetary, equitable and injunctive relief, including health care expenditures from "smoking-attributable" diseases. This case was ultimately one of forty-six state cases pending against the tobacco companies in early 1998. A tentative global settlement of the cases was reached, but it suffered defeat in the United States Congress in the Spring of 1998. Thereafter, on or about June 15, 1998, the Circuit Court of the City of St. Louis entered a scheduling order requiring trial of the Missouri tobacco case to commence in January, 2000.
On June 29, 1998, with less than 19 months remaining before the commencement of trial, Attorney General Nixon entered into a "Contract Agreement For Legal Services" with Attorney Strong. The contract appointed Mr. Strong as "Lead Special Assistant Attorney General" for the tobacco litigation. Under the terms of the contract, Mr. Strong was required to provide all the financial and personnel resources to bring the case to trial in accordance with the trial court's scheduling order. The contract recognized the need for, and authorized, Mr. Strong to retain additional counsel to assist him in the preparation for and conduct of the trial. However, it provided that compensation of such additional counsel, as well as reimbursement of their expenses and costs, was to be paid by Mr. Strong from any amounts due him under the contract. Nonetheless, the Attorney General retained final authority over all aspects of the litigation.
The contract contained alternative provisions for compensation of Mr. Strong. It called for fees to be paid to Mr. Strong (1) on an hourly basis in the event that settlement or judgment favorable to the state is obtained, or if the tobacco litigation is preempted by an act of Congress favorable to the state, either condition occurring on or before January 1, 1999; or (2) on a percentage basis in the event of settlement, judgment or preemption by act of Congress, favorable to the state, after January 1, 1999. If the settlement or judgment occurred after January 1, 1999 and before January 1, 2000, the fee percentage was 6.15% of the settlement or judgment; if after the latter date, the percentage was 7.15%. The agreement also provided for reimbursement of expenses. Notwithstanding the alternative bases for payment, all compensation and reimbursement of costs and expenses was contingent on a resolution of the litigation favorable to the State of Missouri and resulting in recovery and collection of money from the tobacco companies.
The contract provided for payment of hourly fees to be made within 90 days of the beginning of the state fiscal year following occurrence of the qualifying contingency. Any percentage fees were to be paid in five equal installments, beginning 90 days after the beginning of the fiscal year following the occurrence of the appropriate contingency. Finally, the Attorney General reserved on behalf of the State of Missouri the right to petition any court before payment to determine the reasonableness of fees and costs.
On July 17, 1998, the Attorney General amended the state's petition in the tobacco litigation to include Count XIII, a declaratory judgment action. Count XIII alleged the Attorney General had determined that additional resources and expertise would be necessary to maximize the State's potential for recovery in the tobacco litigation, and therefore the Attorney General had entered into a contract for legal services with Mr. Strong whereby Mr. Strong was to serve as Lead Special Assistant Attorney General in such litigation. The Count further alleged that under the contract, Mr. Strong obligated himself to provide all necessary resources and expertise, and to advance all costs, to prosecute the litigation. Count XIII also contained allegations that it was anticipated that Mr. Strong would be required to advance expenses for the litigation in excess of $10 million ($10,000,000) and that he would be required to assemble a team of 40 or more attorneys to pursue the State's claims. The Count then set forth the contingent nature and details of the contract's compensation provisions, and incorporated a copy of the contract by reference. Finally, the Attorney General alleged:
353. The defendants in this litigation are or have been defendants in similar litigation in a number of foreign jurisdictions and, as part of a coordinated effort to block, hinder and delay recovery by states, have consistently and repeatedly challenged the validity of contingent fee contracts entered into by those states with special assistant attorneys general or other counsel, claiming that such contracts violated the constitution, laws, and/or the public policy.
354. The state reasonably anticipates that the defendants will challenge the contract [with Mr. Strong] as being in violation of the constitution, laws or public policy of the State of Missouri.
355. A genuine controversy therefore exists between the State of Missouri and the defendants with respect to whether certain elements of the contract between Strong and the State is [sic] fair, reasonable, constitutional, lawful and consistent with the public policy of the State of Missouri. . . .
The pleading went on to pray for a judgment declaring that the contract was fair and reasonable and consistent with the constitution, laws and public policy of the State of Missouri and Missouri Supreme Court Rule 4.
On August 5, 1998, Senator Kinder and Mr. Jamerson filed the instant action in the Circuit Court of Cole County. They brought the suit in their individual capacities, asserting standing as taxpayers. In their first amended petition, they generally alleged (a) that the compensation provisions of the contract, to the extent they call for the State of Missouri to pay out funds which have not been appropriated by the General Assembly, are unlawful and unconstitutional; (b) that "[t]he hourly fee portion of the contract lacks mutuality and is therefore void and unenforceable"; (c) that "[t]he portions of the contract calling for Defendant Strong to be paid contingent fees are . . . in violation of [§ 105.452], and are unlawful"; and (d) that payment of legal fees pursuant to the contract would constitute payment of fees from funds at stake and "would therefore be an illegal act, an improper payment of public funds, and unlawful." In Count I, the petition prayed for injunctive relief, enjoining enforcement of the contract, and in Count II for a declaratory judgment that the contract was void.
The Respondents filed an Answer to the petition (and later to the First Amended Petition). The parties filed their respective motions for judgment on the pleadings and the trial court ultimately entered judgment denying Senator Kinder and Mr. Jamerson's motion, and granting Attorney General Nixon and Mr. Strong's motion. Senator Kinder and Mr. Jamerson bring this appeal.
II. PRELIMINARY ISSUES
Before we can reach the points presented on appeal, there are two preliminary matters that must be addressed and resolved. First, Respondents challenge the standing of Appellants to bring the action. Second, Respondents assert the appeal should be dismissed for mootness.
A. TAXPAYER STANDING
After this suit was filed, the Respondents moved to dismiss the original petition on the grounds that Appellants lacked standing to bring the action. The trial court denied the motions. In their answer to the First Amended Petition, the Respondents denied the allegations that the actions complained of relate to "(a) [c]ircumvention of the constitutionally required legislative appropriations process, and (b) [i]llegal acts and potentially improper payments of public funds." In addition, they included as an affirmative defense that the court lacked subject matter jurisdiction because "plaintiffs have not alleged facts sufficient to demonstrate standing." The trial court did not mention the issue of standing in its judgment, perhaps because it believed the issue had been resolved when the motions to dismiss were denied. On appeal, the Respondents renew their challenge to Appellants' standing.
Standing means that a party seeking relief must have a legally cognizable interest in the subject matter and that he has a threatened or actual injury. Eastern Missouri Laborers Dist. Council v. St. Louis County , 781 S.W.2d 43, 46 (Mo.banc 1989). Regardless of the merits of a case, a court may not entertain the action unless the parties have proper standing. Id . at 45-46.
Missouri courts have historically recognized the right of taxpayers to bring an action to enjoin the illegal expenditure of public funds. Id . at 46. "The primary basis for taxpayer suits arises from the need to ensure that government officials conform to the law." Id . In Eastern Missouri Laborers Dist. Council , our Supreme Court expressly addressed the proper test for conferring taxpayer standing when an unlawful expenditure of public funds is alleged. The Court held:
Absent fraud or other compelling circumstances, to have standing a taxpayer must be able to demonstrate a direct expenditure of funds generated through taxation, or an increased levy in taxes, or a pecuniary loss attributable to the challenged transaction of a municipality. This holding is consistent with the Court's prior decisions and the public policy implicit in taxpayer suits.
Id . at 47.
In their First Amended Petition, Senator Kinder and Mr. Jamerson include a section designated "Standing of Plaintiffs" in which they allege in relevant part: "The actions complained of in this Petition relate to: a) Circumvention of the constitutionally required legislative appropriations process, and b) Illegal acts and potentially improper payments of public funds." In their brief to this court, they note that if the percentage provisions of the contract come to fruition, the payments are to be made over five years, starting after the settlement or judgment is obtained. They contend the aforementioned allegations in the petition, among others, "suggest that as taxpayers, they will suffer a 'pecuniary loss attributable to the challenged transaction' if these payments are made," and that "[t]heir loss consists of their representative portions, as citizens, of the amounts paid.
The Respondents counter that the allegations of the petition do not bring the plaintiffs within the test for taxpayer standing set forth in Eastern Missouri Laborers Dist. Council . They argue that (a) the contract only authorizes a direct expenditure of funds generated through taxation if those funds are appropriated by the General Assembly, which, of necessity, would negate any contention the payment was unlawful; (b) an increased levy in taxes is neither contemplated by the contract, nor alleged in the petition; and (c) there is no showing the plaintiffs or the State will suffer a pecuniary loss by virtue of the contract.
We agree that Appellants' action does not fit neatly into any of the three categories spelled out by the Court in Eastern Missouri Laborers Dist. Council . The petition does, however, contain sufficient allegations to provide standing. Given its broadest intendment, the First Amended Petition generally alleges a potential pecuniary loss by virtue of the contract. Moreover, in Eastern Missouri Laborers Dist. Council , the Supreme Court noted:
Public policy demands a system of checks and balances whereby taxpayers can hold public officials accountable for their acts. Even though an expenditure might produce a net gain, if the expenditure is not contemplated by the enabling legislation, it is illegal and should be enjoined. Taxpayers must have some mechanism of enforcing the law.
Id . at 47 (emphasis added). The Court pointed out that it had recently held that citizens and taxpayers had standing to challenge the legality of expenditures made by the Lottery Commission, even though money would probably be added to, rather than taken away from the state treasury, and that taxpayers had been found to have standing to challenge the expenditure of public funds for parochial schools, even though no private pecuniary loss was alleged. Id . at 46 ( citing Tichenor v. Missouri State Lottery Commission , 742 S.W.2d 170, 172 (Mo.banc 1988) and Beghorn v. Reorganized School Dist. No. 8 , 260 S.W.2d 573, 581 (Mo. 1953)). Similarly, Appellants here have sufficient standing as taxpayers to challenge the legality of the contract for legal services entered into by the Respondents even though private pecuniary loss to Appellants is remote.
The Respondents also argue that the Appellants did not have standing to bring the declaratory judgment action, even if they did have standing to seek injunctive relief. They argue extensively that the declaratory judgment action was brought pursuant to § 527.020, which generally authorizes persons "interested" in a contract or "whose rights, status, or other legal relations are affected by a . . . contract" to bring an action to construe the contract or determine its validity. § 527.020. Respondents generally assert that Appellants do not fall into either category.
All statutory references are to RSMo (1994) unless otherwise noted.
These arguments disregard § 527.050 which provides that the enumeration in §§ 527.020 to 527.040 does not limit or restrict the general powers conferred in § 527.010 "in any proceeding where declaratory relief is sought, in which a judgment or decree will terminate the controversy or remove an uncertainty." § 527.050. Section 527.010 generally grants circuit courts the power "to declare rights, status, and other legal relations whether or not further relief is or could be claimed." § 527.010. As explained previously, Appellants, as taxpayers, have standing to challenge the validity of the contract, and that standing, of necessity, includes the right to pursue a declaratory judgment which "will terminate the controversy or remove an uncertainty." § 527.050. Moreover, the argument disregards the many cases where taxpayers have brought declaratory judgment actions for a variety of reasons. See O'Reilly v. City of Hazelwood , 850 S.W.2d 96 (Mo. banc 1993); Roberts v. McNary , 636 S.W.2d 332 (Mo.banc 1982) ( overruled on other grounds by City of Lexington v. Seaton , 819 S.W.2d 753 (Mo.App.W.D. 1991)); Beghorn , 260 S.W.2d 573; Duvall v. Coordinating Board for Higher Education , 873 S.W.2d 856 (Mo.App.W.D. 1994); Frene Valley Corp. v. Missouri Health Facilities Review Committee , 818 S.W.2d 665 (Mo.App.W.D. 1991). For the foregoing reasons, we find that the plaintiffs had standing to bring the action.
B. MOTION TO DISMISS APPEAL FOR MOOTNESS
The Respondents have filed a motion to dismiss the appeal alleging the issues presented in the appeal are now moot. The motion was taken with the case.
The motion asserts that the issues in this case became moot on November 23, 1998, when the Attorney General entered into a settlement agreement in the tobacco litigation (the "Master Settlement Agreement" or "MSA"). This agreement resulted in a final judgment and consent decree in the tobacco litigation pending in the Circuit Court of the City of St. Louis. Under the terms of the MSA, the tobacco defendants agreed to pay the State's costs and attorneys' fees, including those of Mr. Strong. As provided in the MSA, Mr. Strong has now executed the Model Fee Payment Agreement ("MFPA") with the settling tobacco defendants. Accordingly, Mr. Strong has executed a Release in favor of the State of Missouri, relieving it of any and all liability under the contract for legal services. Appellants do not dispute these events. Indeed, the MFPA and a copy of the signed release are attached as exhibits to their amended brief filed in this court. They nevertheless contend the case is not moot and should not be dismissed, while the Respondents argue that it is moot because the specter of unlawful performance by the State on which the attacks to the legality of the contract were based cannot occur.
Mootness is a threshold question in appellate review. Armstrong v. Elmore , 990 S.W.2d 62, 64 (Mo.App.W.D. 1999). Mootness implicates the justiciability of a case. Id . "In terms of justiciability, a case is moot if a judgment rendered has no practical effect upon an existent controversy." Id . "'The existence of an actual and vital controversy susceptible of some relief is essential to appellate jurisdiction.'" Id . ( quoting State ex rel. Wilson v. Murray , 955 S.W.2d 811, 812-13 (Mo.App.W.D. 1997). When an intervenient event occurs which makes a court's decision unnecessary or granting effectual relief impossible, the case is moot and generally should be dismissed. State ex rel. Chastain v. City of Kansas City , 968 S.W.2d 232, 237 (Mo.App.W.D. 1998). Even a case vital at the inception of the appeal may be mooted by subsequent occurrences which so alter the position of the parties that any judgment rendered would become merely a hypothetical opinion. Gilroy-Sims and Assoc. v. City of St. Louis , 697 S.W.2d 567, 569 (Mo.App.E.D. 1985).
We cannot agree that the case is moot at this point. The Release signed by Mr. Strong provides that it "shall become effective immediately upon Final Approval." "Final Approval" is defined as when the "judgment, order and consent decree [approving the MSA] [is] finally sustained on appeal or the time for all appeals having run without any appeal having been filed." The Release also provides that the "release is conditioned upon the State of Missouri receiving Final Approval, and upon Thomas Strong and the Team obtaining an attorneys' fee from the Tobacco Defendants by negotiation or arbitration."
The trial court entered a Consent Decree and Final Judgment in the tobacco litigation in March, 1999, after denying motions to intervene filed by various parties. State ex rel. Nixon v. American Tobacco Co., Inc. , No. 76054, slip op. at *1 (Mo.App.E.D. Jan. 18, 2000). The court then entered an Agreed Dismissal Order and Judgment dismissing the State's claims with prejudice. Id . The proposed Intervenors, however, appealed the trial court's denial of their motions to intervene to the Eastern District of this court, which affirmed the trial court's judgment. Id . However, the case was transferred to our Supreme Court on May 3, 2000. Id ., appeal docketed, No. SC 82392 (Mo. May 3, 2000). Thus, "Final Approval" as defined in the Release has not occurred and the Release is not effective to relieve the State of potential liability under the Contract Agreement for Legal Services. Accordingly, the case is not moot.
III. STANDARD OF REVIEW
On appeal from the grant of a motion for judgment on the pleadings, we review the allegations of the non-movant's petition to determine if the facts pled therein are insufficient as a matter of law. "The party moving for judgment on the pleadings admits, for purposes of the motion, the truth of all well pleaded facts in the opposing party's pleadings." Barker v. Danner , 903 S.W.2d 950, 957 (Mo.App.W.D. 1995) ( quoting Angelo v. City of Hazelwood , 810 S.W.2d 706, 707 (Mo.App.E.D. 1991)). "The position of a party moving for judgment on the pleadings is similar to that of a movant on a motion to dismiss, i.e., assuming the facts pleaded by the opposite party to be true, these facts are nevertheless insufficient as a matter of law." Madison Block Pharmacy v. U.S. Fidelity , 620 S.W.2d 343, 345 (Mo.banc 1981) ( quoting Cantor v. Union Mutual Life Insurance Company , 547 S.W.2d 220, 224 (Mo.App.E.D. 1977)). A trial court properly grants a motion for judgment on the pleadings if, from the face of the pleadings, the moving party is entitled to a judgment as a matter of law. Madison Block , 620 S.W.2d at 345.
IV. POINTS ON APPEAL
A. Appropriation Requirement
In their first point, Appellants argue that the trial court erred when it found that the portion of the contract which provides for compensation to Strong did not violate the appropriations and separation of powers provisions of the Missouri Constitution, because the Constitution requires that the General Assembly appropriate all expenditures for compensation.
Article IV, § 28 of the Missouri Constitution of 1945 provides, in pertinent part: "No money shall be withdrawn from the state treasury except by warrant drawn in accordance with an appropriation made by law. . . ." It should be noted at the outset that all parties agree, and the proposition requires no citation, that this provision requires that all funds paid from the state treasury must be appropriated.
The crux of Appellants' argument under this point is that the Legislature has not appropriated funds to pay Mr. Strong the compensation provided for in the contract and therefore the contract is void. The Appellants' argument is somewhat convoluted but the reasoning begins with the assumption, contrary to the terms of the contract, that all compensation to be paid to Mr. Strong must come from the state treasury. It then proceeds by noting that under the doctrine of separation of powers set out in Art. II, § 1 of the Missouri Constitution (1945), only the General Assembly can spend state money, and that by appropriation. The penultimate assertion is that there has been no appropriation for the fees, and that there are insufficient discretionary funds in the Attorney General's budget to pay the fees, and therefore the reasoning yields its inescapable conclusion that the contract is void.
There are a number of flaws in the Appellants' reasoning. First, Appellants' argument is based on the assumption that the contract requires that any money paid to Mr. Strong must come from the state treasury. The assumption is erroneous. The contract expressly provides that in the event of a negotiated recovery, "the Attorney General may in his discretion negotiate to have the fees and expenses paid directly to the Lead Special Assistant Attorney General by one or more of the [tobacco] defendants." Indeed, based upon the Master Settlement Agreement and the Model Fee Pay Agreement, the tobacco defendants have agreed to pay those fees and expenses, and such amounts do not come from funds due the State of Missouri under the settlement, nor will it be paid from the state treasury. Furthermore, the contract is unlike the typical contingent fee contract utilized by lawyers. It does not give Mr. Strong an interest in any portion of the State's potential recovery. Rather, it merely utilizes the amount of any State recovery to calculate the attorney fees owed (if the percentage fees apply). This is clear from the plain language of the contract. It provides that Mr. Strong shall be entitled to "[a] fee that is equal to six and fifteen one-hundredths percent (6.15%) [or 7.15%] of the settlement or judgment. . . ." (emphasis added). Under the contract, either the tobacco defendants will pay Mr. Strong from their own resources under a "loser pays" arrangement, or, as will be discussed, infra, the state will pay, in which case it is further contingent upon the General Assembly appropriating the funds.
Second, there is nothing in the contract that purports to bind the State of Missouri to pay Mr. Strong from the state treasury without such funds being appropriated. While it is true that the contract does not expressly declare that any money being paid from the state treasury must be appropriated by the General Assembly, it is just as true that the contract does not suggest that the funds need not be appropriated. The Appellants' argument is based on their speculation that the contract might someday be performed in an illegal manner and might someday result in potentially improper payments. However, there are no such allegations in the First Amended Petition and there is nothing to support that argument other than sheer speculation.
Moreover, and more importantly, the contract does provide that its terms are governed by the laws of the State of Missouri. It is well settled in Missouri that public officials must comply with mandatory constitutional and statutory provisions. County of St. Francois v. Brookshire , 302 S.W.2d 1, 4 (Mo. 1957); Fulton v. City of Lockwood , 269 S.W.2d 1, 8 (Mo. 1954); Elkins-Swyers Office Equipment Co. v. Moniteau County , 209 S.W.2d 127, 131 (Mo. 1948); McDonald Special Road Dist. v. Pickett , 694 S.W.2d 273, 277 (Mo.App.S.D. 1985). It is just as well settled that public officials are presumed to rightfully, lawfully and properly perform their duties. Dittmeier v. Missouri Real Estate Commission , 316 S.W.2d 1, 5 (Mo.banc 1958); Waterman v. Chicago Bridge Iron Works , 41 S.W.2d 575, 578 (Mo. 1931); City of Higginsville ex rel. and to Use of Kasco, Inc. v. Alton R. Co. , 171 S.W.2d 795, 802-03 (Mo.App.W.D. 1943); City of Maplewood v. Meryl Realty Investment Co. , 27 S.W.2d 433, 434 (Mo.App.E.D. 1930). Thus, because (1) the contract is governed by the laws of Missouri, (2) public officials must comply with the constitutional mandate that all funds expended from the state treasury must be appropriated, and (3) public officials are presumed to act lawfully, it can only be concluded that the contract contemplates that any funds to be paid from the state treasury would be appropriated. In other words, its terms will be performed in accordance with the constitution and laws of Missouri.
The situation here is not unlike that in Fust v. Attorney General for the State of Mo. , 947 S.W.2d 424 (Mo.banc 1997). In that case, Carl and Rita Fust were judgment creditors, having been awarded $330,000 in punitive damages in a malicious prosecution action in 1994. Id. at 427. They brought a declaratory judgment action seeking a declaration that § 537.675, which provides that 50% of any punitive damage judgment is deemed rendered in favor of the State of Missouri, was unconstitutional. Id. The statute also creates the "Tort Victims' Compensation Fund" and directs the Attorney General to collect the state's share of punitive damage awards and deposit them into the fund. Id. The trial court found the statute constitutional. Id. On appeal to the Supreme Court, the Fusts argued, inter alia, that the statute authorizes distribution of money from the fund without appropriation. Fust , 947 S.W.2d at 430. While conceding that expenditure of money from the fund requires appropriation, the Court went on to state:
However, the legislature has yet to appropriate such funds, and the attorney general is making no threat to expend such funds without an appropriation. Until that occurs, a claim regarding expenditures of state funds for which there has been no appropriation is premature.
Id . Thus, the Supreme Court was presuming the correctness and propriety of the Attorney General's conduct and declaring that any claim based on expenditure of funds without appropriation is premature until the expenditure is threatened or made.
In Fust , the statute did not expressly declare that expenditures from the fund could only be made after they had been appropriated, just as the contract at issue here did not expressly state that any compensation payable under the contract from the state treasury could only be made after funds were appropriated. Id. For the same reasons that this deficiency was not fatal to the statute in Fust , it is not fatal to the contract between the Attorney General and Mr. Strong. Therefore, Appellants' fundamental contention is erroneous and the contract is not void.
Appellants' argument that § 27.020 somehow "prevents contracts which call for money to be paid in excess of appropriations" is of no avail. While articulated in terms of payment in excess of appropriations, the contention is in actuality that the Attorney General lacks authority to hire special assistant attorneys general. Section 27.020, quoted infra, authorizes the Attorney General to appoint assistant attorneys general to his staff and their salaries are to be paid from appropriations. Resolution of the issue requires a review of the powers of the Attorney General.
The Attorney General is the only constitutional officer in Missouri whose power and duties are not set forth in and limited by the constitution. Article IV, § 12 of the Missouri Constitution of 1945 merely states: "In addition to the governor and lieutenant governor there shall be . . . [an] attorney general. . . ." Mo. Const. art. IV, § 12 (1945). Article IV, § 17 only declares that the attorney general "shall be elected at the presidential elections for terms of four years. . . ." Mo. Const. art. IV, § 17 (1945). This is a change from the Constitution of 1875 which provided that "the Executive Department shall consist of a Governor . . . [and an] Attorney General . . . all of whom . . . shall perform such duties as may be prescribed by law. . . ." Mo. Const., art. V, § 1 (1875) (emphasis added). This change and lack of specificity in the 1945 Constitution is consistent with prior court rulings holding that the Attorney General is vested with the full powers of that office at common law.
Interestingly, Appellants state in their Reply Brief that they have previously conceded that the Attorney General's powers are plenary.
[W]e have long had a statute [now section 1.010, RSMo 1994] . . . adopting the common law of England and all statutes and acts of Parliament made prior to the fourth year of the reign of James the First, which are of a general nature, not local to that kingdom, and not repugnant to or inconsistent with the Constitution of the United States and the Constitution and statutes of this State in force for the time being. This section evidently has been construed as adopting not only the common-law rights and remedies of litigants, but also such common law powers of public officers as were possessed by similar officers in England. . . . For it has been held in a majority of the states, including Missouri, that the Attorney General does have common-law powers.
State ex rel. McKittrick v. Missouri Public Service Commission , 175 S.W.2d 857, 861 (Mo.banc 1943) (emphasis in original). Nonetheless, the Attorney General's authority, while plenary, is not unlimited.
It is generally held in this country that the office of Attorney General is clothed, in addition to the duties expressly defined by statute, with all the powers pertaining thereto under the common law. "A grant by statute of the same or other powers does not operate to deprive him of those belonging to the office under the common law, unless the statute, either expressly or by reasonable intendment forbids the exercise of powers not thus expressly conferred." 6 C.J. 816. This view has been tacitly accepted, and acted upon, in this state for many years. (Citations omitted).
State ex rel. Barrett v. Boeckeler Lumber Co. , 257 S.W. 453, 456 (Mo.banc 1924).
Accordingly, the Attorney General has the authority to appoint special assistants unless the Legislature has expressly forbidden the exercise of that power. Indeed, Missouri courts have recognized that "our Attorney General does have the authority to employ special assistants." Thatcher v. the City of St. Louis , 122 S.W.2d 915, 917 (Mo. 1938) (emphasis added). And, as the Court observed in Thatcher , long before any statute relating to employment of assistant attorneys general was adopted, the Attorney General had appointed special assistant attorneys general and the Legislature had appropriated funds for their compensation. Id .
We now turn to § 27.020.1, which provides:
The attorney general is hereby authorized to appoint such assistant attorneys general as may be necessary to properly perform the duties of his office and shall fix the compensation of such assistants within the limits of the amount appropriated by the general assembly. Said assistant attorneys general shall hold their office at the pleasure of the attorney general, shall possess the same qualifications as the attorney general, and before entering upon the discharge of their duties shall each take and subscribe to an oath to support the Constitution of the United States and of the state of Missouri and to faithfully demean themselves in office. It shall be their duty to assist the attorney general in his official duties with power and authority under his direction to represent him in the discharge of all the duties of his office.
This statute addresses only "assistant attorneys general" who have authority to represent the Attorney General generally, that is, "in the discharge of all duties of his office." § 27.020.1 (emphasis added). The statute does not, however, speak to "special assistant attorneys general." In this regard, Missouri cases have long recognized the distinction between "assistant attorneys general" as used in § 27.020.1, and "special assistant attorneys general" appointed pursuant to common law. The former are members of the Attorney General's staff, they generally assist the Attorney General in the discharge of all duties of his office, and they are paid an annual salary. State v. Crockett , 419 S.W.2d 22, 28 (Mo. 1967). A "special assistant attorney general," on the other hand, is retained for specific limited purposes, or for an individual or single case. Id . See also State v. Weatherby , 129 S.W.2d 887, 889 (Mo. 1939) and State v. Weatherby , 168 S.W.2d 1048, 1051 (Mo.banc 1943) (Ellison, C.J., dissenting).
From the foregoing, several things become clear. First, the Attorney General has common law authority to appoint special assistants and nothing in § 27.020 either expressly or by reasonable intendment forbids the exercise of that power. However, the power to appoint special assistants does not include the power to compel payment to special assistants from the treasury. In other words, the power to appoint is independent of the power to pay . If special assistants are to be paid from the state treasury, as with any other payment as noted at the outset, the funds must be appropriated by the General Assembly. Thus, Appellants' argument that § 27.020 somehow voids the contract between the Attorney General and Mr. Strong is of no avail. Point denied.
Appellants concede in their Reply Brief that the Attorney General has the power to appoint Assistant Attorneys General and state: "Appellants do not believe they have never [sic] taken the position that the Attorney General may not appoint assistant attorneys general." However, as discussed in the main text, they fail to distinguish between "special assistant attorneys general" and the Attorney General's staff members.
B. § 105.452
In Point II, Appellants argue that the trial court erred in ruling that the contract did not violate § 105.452, in particular § 105.452(4) which prohibits state officials from receiving a personal pecuniary benefit from actions on which they act favorably. In addition, in their briefing of Point I, Appellants aver generally and with little discussion that the contract violates § 105.452(1), which prohibits state officials from acting or refraining from acting in return for payments, gifts etc.
A cursory examination of Appellants' assertions strongly suggest that they are without merit. The purpose of §§ 105.450 to 105.498 is the regulation of conflicts of interest. These sections generally prohibit public officials and employees from engaging in activities that may create or appear to create a conflict of interest. The contract between the Attorney General and Mr. Strong expressly provides that the Attorney General "shall have final authority over all aspects of the tobacco litigation." Mr. Strong, as a lawyer representing a client in litigation where the client retains absolute control of that litigation, is not acting or refraining from acting as contemplated by § 105.452(1). He is providing legal services to his client subject to the approval of that client. Similarly, § 105.452(4) is directed to "decision makers" acting "favorably" on matters so as to provide a special monetary benefit. The "decision maker" in the tobacco litigation was the Attorney General, who retained absolute control of the litigation, not Mr. Strong, so it is hard to see how this provision would have any application here.
In any event, we need not finally decide these issues. Appellants' first amended petition was in two counts, one seeking a declaratory judgment, the other seeking injunctive relief. In Cottleville Community Fire Protection Dist. v. Morak , 897 S.W.2d 647 (Mo.App.E.D. 1995), the District filed a declaratory judgment action asking the court to interpret § 105.452 and enter judgment as to whether Ms. Morak, an elected District Board member, could participate in various activities and decisions of the District Board since her husband was employed as a firefighter by the District. On appeal of the trial court's decision, the Eastern District of this court noted that the conflict of interest statutes are criminal in nature, not civil. Id . at 648. It pointed out that § 105.478 specifies the penalties for violation of §§ 105.450 to 105.498 as either a felony or misdemeanor, depending upon the number of violations. Id . The court then stated:
A criminal statute must be sufficiently clear on its face to inform the public what is defined as criminal conduct. There is no need for [a court] to utilize the declaratory judgment statute to interpret the meaning of a criminal statute. Moreover, a civil judgment would not be binding upon the state. It would therefore be legally meaningless.
Id . at 649. We concur in the court's assessment and, for the same reasons, hold that Appellants are not entitled to a declaratory judgment construing § 105.452 and its application, if any, to the contract here in issue.
Similarly, a court of equity will generally not permit itself to be used as a medium for the enforcement of criminal laws or quasi-criminal ordinances. City of Kansas City v. Mary Don Co. , 606 S.W.2d 411, 415 (Mo.App.W.D. 1980). The only commonly recognized exception to this rule is that "courts of equity do have jurisdiction to enjoin public nuisances even though the parties maintaining them may also be liable to prosecution under criminal or quasi-criminal statutes or ordinances. . . ." Id . There are sound policy reasons why courts sitting in equity should avoid being used to civilly enforce criminal laws, the most obvious being the difference in the burden of proof between a criminal prosecution and an injunctive action. In addition, the rule prevents duplication and waste of scarce judicial resources. Finally, courts should avoid encroaching on the constitutional and statutory duties of prosecutors to enforce the criminal laws by permitting private litigants to seek enforcement through a civil action for injunctive relief.
Accordingly, since Appellants are not entitled to a declaratory judgment construing § 105.452, or an injunction based on the provisions of that statute, the trial court did not err in rejecting those claims.
C. Funds at Stake
In their third point on appeal, Appellants contend that there is a rule in Missouri which prohibits special assistant attorneys general from being paid from funds at stake in litigation, that the contract calls for Mr. Strong to be paid from any recovery in the tobacco litigation, and therefore, the contract is void.
In support of this assertion, Appellants rely primarily on Thatcher v. City of St. Louis , 122 S.W.2d 915 (Mo. 1938). In that case, a decedent had created a charitable trust under the terms of his will. Id. Some of his descendants brought an action to terminate the trust, alleging that its purpose had long since failed. Id. The Attorney General hired a special assistant attorney general to represent the state. Id. The special assistant successfully defended the state's position, which did not result in a money judgment but rather sustained the continued viability of the charitable trust. Id. Nevertheless, as part of its judgment, the trial court directed payment of the special assistant's fees from the corpus of the trust. Thatcher , 122 S.W.2d at 915.
On appeal, the Supreme Court reviewed the history of charitable trust litigation and the interest of the state therein. The Court noted that it could find only one case addressing whether special assistant attorneys general can receive compensation for their services from a charitable trust, that being Wemme v. First Church of Christ, Scientist , 219 P. 618 (Ore. 1923) and Wemme , 223 P. 250 (Ore. 1924), which held that such fees could not be paid out of the trust fund. Thatcher , 122 S.W.2d at 918. The Court agreed with the reasoning in Wemme and held: "[N]either the Attorney General nor special attorneys employed to represent him are entitled to have fees allowed and paid out of the funds of a charitable trust." Id. at 918.
Appellants also rely on Aetna Ins. Co. v. O'Malley , 124 S.W.2d 1164 (Mo.banc 1938). In O'Malley , the Superintendent of Insurance ordered a ten percent rate reduction in fire insurance. Id. at 1165. Numerous insurance companies challenged the order and those companies were allowed to continue charging the higher rate on the condition that they refund the excess premiums to their policyholders if their challenges were unsuccessful. Id. The trial court found in favor of the insurance companies but the Supreme Court of Missouri subsequently reversed the judgment, holding that the rate reduction was proper. Aetna Ins. Co. v. Hyde , 285 S.W. 65 (Mo.banc 1926). Thereafter, insurance companies began refunding a portion of the excess premiums already paid, but it soon became apparent to the Superintendent of Insurance that they were not refunding the entire amount. O'Malley , 124 S.W.2d at 1165. The Superintendent, with the acquiescence of the Governor as required by statute, hired three lawyers to bring suit against the insurance companies for the excess refunds due. Id. The contract with these attorneys provided they would be paid for their services from the refunds recovered and if they were unsuccessful, they would receive no pay. Id. at 1165-66. The lawyers were successful in securing a judgment in excess of $2,750,000 against the insurance companies, and the companies thereafter paid the full amount of the judgment into court. Id. at 1166. The attorneys petitioned the court for payment of their fees from the funds recovered and the trial court made an allowance of 15% as attorneys' fees, dividing that amount among the three lawyers, and declared a lien on the fund for the amounts owed. Id.
On appeal, the Supreme Court reversed the award of attorneys' fees. The Court found that the Superintendent was authorized by statute to hire the attorneys, but under the statutory scheme of the insurance code, was not permitted to set their compensation. O'Malley , 124 S.W.2d at 1167. It ruled that the insurance code superceded the equitable power of the court to award attorneys' fees. Id. Accordingly, the Court held that the trial court was "without authority to interfere with the insurance code . . . [and] erred in allowing the respondents fees from the impounded fund." Id . at 1168.
We do not read Thatcher or O'Malley as creating a general rule prohibiting attorneys hired by the state from being awarded fees from funds recovered in the litigation for which they were hired. We note that in Thatcher , there were no funds recovered; rather, the fees were awarded from the corpus of a charitable trust. We perceive this to be a very narrow holding that would not even preclude the award of fees from a recovery made on behalf of a charitable trust. By the same token, the O'Malley Court expressly recognized "that where an attorney is lawfully employed and through his efforts a fund is created for the benefit of various claimants, the court has inherent power to allow reasonable attorneys' fees out of the fund thus created, and he will be entitled to a lien on such fund to secure the payment of the fee." Id . at 1167. It held only that these "equitable principles have been superceded by the insurance code of this state." Id . Moreover, the Superintendent of Insurance was a statutory officer whose powers were limited to those expressly granted by statute, unlike the Attorney General who is a constitutional officer and possessed, as set out supra, with the common law powers of that office.
Finally, even if we assume, arguendo, that these cases do somehow create a rule precluding an award of fees from funds recovered, it does not benefit the Appellants. As we have previously found, the contract between the Attorney General and Mr. Strong does not provide for the payment of Mr. Strong's compensation from any funds recovered in the tobacco litigation. Under the terms of the contract, Mr. Strong's fees will either be paid from the state treasury after an appropriation or by the tobacco defendants from their own resources under a "loser pays" arrangement. In their argument in this court, Appellants speculate the latter scenario means that the state's settlement amount is reduced by the amount of the fees. However, their First Amended Petition contains no such allegations. Moreover, and more importantly, the contract does not provide for that; indeed, the Master Settlement Agreement, the Model Fee Pay Agreement, and the Release signed by Mr. Strong refute it. Accordingly, Appellants' contention is without merit and is denied.
D. Wording of Trial Court Judgment
In their fourth point, Appellants argue the trial court erred by ruling on the merits and then dismissing their petition with prejudice. Appellants' argument consists of three sentences with no citation to authority. Their complaint regards the wording of the trial court's judgment which stated, inter alia, that "defendants' motion for judgment on the pleadings is granted, and plaintiffs' petition is dismissed in its entirety and with prejudice."
The point is devoid of merit. Appellants and Respondents each filed motions for judgment on the pleadings. The trial court's judgment denied Appellants' motion and granted Respondents' "motion for judgment on the pleadings. . . ." The trial court clearly granted Respondents' motion for judgment on the pleadings, and denied that of Appellants. The additional language dismissing the petition with prejudice is mere surplusage and is properly disregarded. Kennedy v. Boden , 231 S.W.2d 862, 866 (Mo.App.W.D. 1950); Continent Foods Corp. v. National-Northwood, Inc. , 470 S.W.2d 315, 318 (Mo.App.S.D. 1971). Point denied.
E. Appellants' Claim for Attorney's Fees
In their final point, Appellants claim the trial court erred in not awarding them attorney's fees. In their brief, Appellants state:
The trial court's failure to award attorney's fees to Appellants is, of course, consistent with the trial court's judgment. Nevertheless, if Appellants are correct and the contract is illegal, Appellants should have prevailed and the trial court should have considered Appellants prayers for attorney's fees. Hereafter in this section of the argument, Appellants will presume those suppositions to be true. (Citations to Legal File omitted).
Based on our disposition of the other points, we need not address this point further.
The judgment of the trial court is affirmed.
All concur.