Missouri Court of Appeals for the Western District in Kansas City
KANSAS CITY — The Missouri Court of Appeals Western District has upheld a Jackson Circuit Court decision granting summary judgment in favor of multiple defendants in a dispute over proceeds from the settlement of claims related to the design and installation of a heating, ventilation and air conditioning system.
The appellate panel, which included Presiding Judge Edward R. Ardini Jr., Judge Alok Ahuja, and Judge Cynthia L. Martin, affirmed the lower court’s ruling and remanded the case for a determination of the defendants’ reasonable attorney’s fees incurred on appeal.
The case began when Acoma Development, and its sole member, Michael Knight, filed suit seeking 20% of the net proceeds from settlements reached in a lawsuit concerning the HVAC system at the Commerce Tower Property in Kansas City.
Acoma and Knight argued that, under a 2021 settlement agreement, they were entitled to a portion of the recovery. The trial court disagreed, granting summary judgment for the defendants, and the appellate court has now affirmed that decision.
The controversy arose out of a broader settlement agreement entered on May 4, 2021, which resolved numerous business disputes involving four property-owning entities: Commerce Tower Place; Commerce Tower Garage; Monogram Building; and 1600 Washington.
The agreement required Acoma to redeem its membership interests in the companies as of Jan. 1, 2021.
Among the various issues settled was an understanding that legal claims would be pursued regarding the HVAC system installed in the Commerce Tower building.
Acoma and Knight contended that they were owed a share of the proceeds after learning that settlements totaling $415,000 had been reached with some of the defendants in the HVAC lawsuit.
They demanded an accounting and disbursement of 20% of the net proceeds, which they claimed were due under the 2021 Settlement Agreement.
When no payment was made, Acoma and Knight filed a new suit in September 2024 alleging breach of contract and seeking both damages and attorney’s fees.
The defendants moved to dismiss the case. Because the motion relied on evidence outside the pleadings, the trial court treated it as a motion for summary judgment. After reviewing the record, the court found no genuine issue of material fact and entered judgment for the defendants.
According to the defendants’ uncontroverted facts, the HVAC settlements generated $415,000 in gross proceeds, but the litigation costs exceeded $1.17 million, including more than $800,000 in attorney’s fees.
Under the Settlement Agreement, “net proceeds” were defined as gross proceeds minus all litigation costs, including attorney’s fees and expert expenses.
The defendants produced billing records, ledgers, and affidavits showing that total litigation costs far surpassed the settlement amounts — meaning there were no net proceeds to distribute.
Acoma and Knight did not dispute most of the defendants’ factual statements but argued that some of the attorney’s fees were incurred before the HVAC lawsuit was filed and should not count as litigation costs.
They also questioned whether the fees were reasonable and whether the amounts billed had actually been paid. Acoma requested a continuance under Rule 74.04(f) to obtain additional discovery, including copies of cancelled checks, to verify payment of attorney’s fees.
The trial court denied the continuance and granted summary judgment, ruling that Acoma had failed to demonstrate any genuine issue of material fact.
On appeal, Acoma and Knight raised a single issue, arguing that the court erred in refusing to allow more time for discovery. The appellate court rejected that argument.
The appellate court affirmed the judgment as to Knight individually, finding that he had no ownership interest in Commerce Tower Place, and thus no right under the Settlement Agreement to a share of the HVAC settlement proceeds.
The court cited prior precedent allowing summary judgment to be affirmed on any appropriate legal theory.
Finally, the court granted the defendants’ request for attorney’s fees related to the appeal, as the Settlement Agreement provided for such an award to the prevailing party. The matter was remanded to the trial court to determine and award a reasonable amount.
The judgment of Jackson Circuit Court was affirmed in full. All judges concurred.
Missouri Court of Appeals, Western District case number: WD87977
