Winner Road Properties, LLC v. BMO Harris Bank, N.A.

Filing 84

MEMORANDUM AND ORDER -.....IT IS HEREBY ORDERED that defendant BMO Harris Bank, N.A.'s re-filed motion to dismiss is GRANTED in part and DENIED in part. [Doc. 49] The motion is granted as to Counts I and IV, and denied in all other re spects. IT IS FURTHER ORDERED that defendant BMO Harris Bank, N.A.'s re-filed motion to stay discovery is DENIED as moot [Doc. 52] An appropriate Order of Partial Dismissal will accompany this Memorandum and Order. Signed by District Judge Charles A. Shaw on 9/28/2017. (MRC)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
WINNER ROAD PROPERTIES, LLC,

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Plaintiff,
v.
BMO HARRIS BANK, N.A., as trustee
of Mount Washington Cemetery trusts,
and individually,
Defendant.

4:16-CV-1395 CAS

MEMORANDUM AND ORDER
This matter is before the Court on defendant BMO Harris Bank, N.A.’s motion to
dismiss. Plaintiff Winner Road Properties, LLC has responded to the motion, and it is fully
briefed. For the following reasons, the Court will grant in part and deny in part BMO Harris
Bank, N.A.’s motion. The Court finds plaintiff’s Counts I and IV are barred by the doctrine of
res judicata, and Count IV does not state a claim for relief that is plausible on its face. The Court
will grant the motion to dismiss as to Counts I and IV. The Court cannot find that Counts II and
III are barred by the statute of limitations, and the Court will deny the motion as to these Counts.
Background
On June 13, 2016, plaintiff Winner Road Properties, LLC (“Winner Road”) filed this
action in the Circuit Court of Jackson County, Missouri, against defendant BMO Harris Bank,
N.A. (“BMO”), seeking declaratory relief and restitution. BMO removed the case to federal
court, and it was transferred to this Court on a motion of change of venue under 28 U.S.C. §
1404(a), based primarily on the litigation history between the parties in this Court, specifically in

1

Jo Ann Howard & Assocs., P.C. v. Cassity, 4:09-CV-1252 ERW (E.D. Mo. filed Aug. 6, 2009)
(the “Jo Ann Howard” litigation).
Winner Road owns a cemetery in Jackson County, Missouri, the Mount Washington
Cemetery, and asserts it is the beneficiary of preneed trusts related to the Cassity-family preneed
funeral services business, National Prearranged Services (“NPS”) (Compl. Intro., ¶ 1.) NPS sold
preneed funeral contracts to consumers through funeral homes whereby the consumers would
pay a fixed price for funeral services before the need for those services arose. In Missouri, the
Cassity family placed the funds received from these sales in various trusts, which it then
manipulated into purchasing life insurance policies from a Cassity-controlled insurance company
named Lincoln Memorial Insurance Company (“Lincoln Memorial”). The Cassity family then
stole from the insurance policies held in the trusts. When NPS and the Cassity insurance
companies were ultimately declared insolvent, the policies in the preneed trusts were worthless.
(Compl. Intro., ¶¶ 7-8.)
Winner Road, through a judicial foreclosure sale, is the successor in interest to three
Mount Washington Cemetery preneed trusts: the Merchandise and Services Trust, the Endowed
Care Trust, and the Special Care Trust (collectively the “Mount Washington Cemetery trusts”).1
These trusts had a series of trustees during the Cassity fraud scheme. (Compl. at 3.) Defendant
BMO, through its predecessor Marshall & Ilsley Trust Company, first became trustee of the
trusts in 2005. By this time, the Merchandise and Services Trust had already been stripped of its
cash assets—assets that had been replaced with Lincoln Memorial insurance policies by a prior
trustee. These insurance policies, with the collapse of the Cassity fraud scheme, were worthless.

1

In its briefing, Winner Road refers to the Mount Washington Merchandise and Services trust as
the “Mount Washington Forever Preneed Trust.”
2

Winner Road alleges BMO allowed more than $7 million of trust assets to disappear, specifically
from the Merchandise and Services Trust.
Winner Road brings its complaint in four counts:

Determination of Rights in and

Representation for the Merchandise and Services Trust: Request for Restoration of Trust Assets
and Other Relief (Count I); Determination of Rights in and Representation for the Endowed Care
Trust and Request for Trust Administration Rulings (Count II); Determination of Rights in and
Representation for the Special Care Trust and Request for Trust Administration Rulings (Count
III), and; (4) Petition for Restitutionary Award Against Trustees for Breaching Trustee Duties
Relating to Preneed Funeral and Cemetery Trusts (Count IV). With respect to the Mount
Washington Merchandise and Services trust (Count I), Winner Road alleges this trust was
depleted of $7.3 million in assets. Winner Road seeks trust administration or remedies for the
Mount Washington Cemetery trusts, such as restoration of the functionality of the Mount
Washington Cemetery trusts by an accounting, a finding of breach of trust, a report to
beneficiaries, and a return or replacement of trust assets.
The Jo Ann Howard Litigation
In its motion to dismiss, BMO contends Winner Road’s Counts I and IV are precluded by
a settlement agreement entered in the Jo Ann Howard litigation. In May 2008, a Texas Court
entered a joint liquidation plan for NPS and Lincoln Memorial. The liquidation plan established
the authority of a Special Deputy Receiver (“SDR”) to collect money to pay NPS’s creditors.
(Compl. at ¶ 37.) Under the liquidation plan, state guaranty associations, who had guaranteed
payments under Lincoln Memorial insurance policies, were assigned all claims by present or
future recipients of benefits under the insurance policies in the trust accounts. (Compl., Ex. H,
Liquidation Plan ¶ 9.1.)

3

The state guaranty associations and the SDR then brought the Jo Ann Howard litigation,
a $600 million lawsuit, in this District Court against defendant trustee banks, including BMO and
its predecessors. (Compl., Ex. J.) The SDR was the court-appointed representative to bring
claims on behalf of funeral homes and consumers for losses under the trusts arising from alleged
breaches of fiduciary duty by BMO.
The Jo Ann Howard plaintiffs’ claims for breach of fiduciary duty, negligence, and gross
negligence by trustee banks were brought by “the individual state guaranty associations from
Missouri . . . and the SDR on behalf of NPS, funeral homes, and consumers.” (Ex. J. ¶¶ 32.1932.20.) This explicitly included claims against bank trustees for losses to the Mount Washington
Merchandise and Services trust. (Id. at ¶¶ 197.8-197.9.)
In Jo Ann Howard, the Court ruled that the SDR had standing to bring such claims:
The final argument asserted by the Trustees is the Trustees cannot be liable for claims
related to the Mount Washington and CSA trusts because the SDR does not have standing
to bring claims related to those trusts. The Trustees claim NPS is not the settlor or
beneficiary of these trusts and the SDR is asserting claims only on behalf of NPS, funeral
homes, and consumers. Plaintiffs argue NPS was the pre-need seller for these trusts and
as such is a beneficiary of the trusts . . . . NPS sold the contracts in the trust and was the
actual seller. As the seller, even though not named in the trust agreement, NPS is a
beneficiary of the trusts in practice. The SDR has standing to bring claims related to
the Mount Washington and CSA pre-need trusts.
Jo Ann Howard, 79 F. Supp. 3d at 1020-21 (emphasis added). BMO states the settlement of all
claims by the plaintiff SDR and Missouri guarantee associations in the Jo Ann Howard litigation
acts to bar Winner Road’s Counts I and IV by the doctrine of res judicata.
BMO also moves to dismiss Counts I through III as time barred by Missouri’s one-year
statute of limitations. As to Count IV, BMO moves to dismiss this Count for the additional
reason that it had no duty to Winner Road that can support a breach of duty or negligence claim,
and Winner Road has not stated a claim that is plausible on its face.

4

Legal Standard
To survive a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon
which relief can be granted, “a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Braden v. Wal-Mart Stores, Inc., 588
F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A claim is
plausible on its face “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at
678. In making this determination, the Court must grant the plaintiff all reasonable inferences
that can be drawn from the complaint’s factual allegations. See Lustgraaf v. Behrens, 619 F.3d
867, 872-73 (8th Cir. 2010).
The Court can take judicial notice of public records and consider them on a motion to
dismiss. Stahl v. U.S. Dep’t of Agric., 327 F.3d 697, 700 (8th Cir. 2003). Here, the Court has
considered certain matters of public record—the Jo Ann Howard case file—as well as documents
that are necessarily embraced by the complaint—the Mount Washington Cemetery trust
agreements and the SDR liquidation plan.2 See Porous Media Corp. v. Pall Corp., 186 F.3d
1077, 1079 (8th Cir. 1999) (holding that, when considering a motion to dismiss, the court “may
consider some materials that are part of the public record or do not contradict the complaint, as
well as materials that are necessarily embraced by the pleadings”) (citations and internal
quotation marks omitted); see also Knutson v. City of Fargo, 600 F.3d 992, 1000 (8th Cir. 2010)
(“[W]e see no reason why the District Court, like this Court, could not take judicial notice of the
publicly available state-court argument, particularly where the issue at hand is possible

2

These documents were attached as Exhibits A, C, and H to Winner Road’s complaint. The Jo
Ann Howard complaint was attached as Exhibit J to Winner Road’s complaint.
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preclusion of a federal claim as a result of those same state-court proceedings.”); see also
Germain Real Estate Co., LLC v. HCH Toyota, LLC, 778 F.3d 692, 695 (8th Cir. 2015).
Discussion
A.

Res Judicata

BMO argues Counts I and IV should be dismissed under the doctrine of res judicata. To
establish that a claim is barred by res judicata, BMO must show “(1) the first suit resulted in a
final judgment on the merits; (2) the first suit was based on proper jurisdiction; (3) both suits
involve the same parties (or those in privity with them); and (4) both suits are based upon the
same claims or causes of action.” Yankton Sioux Tribe v. United States Dep’t of Health &
Human Servs., 533 F.3d 634, 639 (8th Cir. 2008) (internal quotations omitted). “Dismissal on
the basis of res judicata at the pleading stage is appropriate if the defense is apparent on the face
of the complaint.” Magee v. Hamline Univ., 775 F.3d 1057, 1058-59 (8th Cir. 2015) (per
curiam).
(1)

Final Judgment on the Merits

On December 16, 2014, in the Jo Ann Howard litigation, the plaintiffs and BMO
defendants filed a stipulation of dismissal with prejudice. See Jo Ann Howard, 4:09-CV-1252
ERW (Doc. 2033). In their stipulation, plaintiffs and the BMO defendants “[p]ursuant to Fed. R.
Civ. P. 41(a)” . . . “stipulate to the dismissal with prejudice of the BMO Defendants, and of all of
Plaintiffs’ claims against the BMO Defendants, in the above-entitled action, all matters in
controversy between the Plaintiffs and the BMO Defendants having been settled, compromised,
and adjourned.” Id. at 1-2. That same day, the Court entered an Order dismissing with prejudice
all the claims against the BMO defendants. See Jo Ann Howard, 4:09-CV-1252 ERW (Doc.
2034).

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Stipulations pursuant to Rule 41(a) to a dismissal with prejudice “are considered to be on
the merits for purposes for claim preclusion, and are an exercise of judicial power having a
presumption of validity.”

18 JAMES WM. MOORE

ET AL.,

MOORE’S FEDERAL PRACTICE §

131.30[3][c][ii] (3d ed. 2016) (“MOORE’S FEDERAL PRACTICE”). If, however, a judgment based
on the stipulation of the parties in settlement “is ambiguous as to whether it is intended to
preclude future claims, courts employ basic contract interpretation principles to determine the
intent of the parties,” such as examining the circumstances surrounding the formation of the
consent judgment, the technical meanings of words, and other documents expressly incorporated
into the judgment. Id.
Winner Road argues that the Court cannot determine whether the Jo Ann Howard
dismissal with prejudice is a final judgment on the merits for purposes of res judicata in this case
without first reviewing the settlement agreement in the Jo Ann Howard litigation. For support,
Winner Road cites the Eighth Circuit’s decision in Larken, Inc. v. Wray, 189 F.3d 729, 732 (8th
Cir. 1999). In Larken, however, the settlement was ambiguous. Id. at 731-32. The parties had
reached an oral settlement just as a jury was about to hear additional evidence. The settlement
dismissed the breach of fiduciary claims at issue, but the court directed the parties to explicitly
reserve those items that were not to be included in the settlement.

After the parties oral

settlement, on the record, the judge declared the case settled. Thereafter, the parties were unable
to reduce the settlement agreement to writing because they disagreed about the scope of the
settlement. Id. at 731. That disagreement gave rise to another lawsuit, in which one side argued
that res judicata barred the claim of the other side. Id. at 732.
The Eighth Circuit stated that “[w]hen the parties to a previous lawsuit agree to dismiss a
claim with prejudice, such a dismissal constitutes a final judgment on the merits for purposes of

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res judicata.” Id. at 732. In Larken, because the movant sought to bar by res judicata a claim
that was not pleaded in the first action’s complaint, the Court stated “[n]evertheless, the question
of whether the parties actually agreed to dismiss a particular claim depends upon the proper
interpretation of their settlement agreement—a legal inquiry governed by the parties’ intent at
the time of settlement.” Id. Because of the confusion in the court record, the Eighth Circuit
considered extrinsic evidence about the scope of the settlement agreement.3
Unlike Larken, here BMO states res judicata should bar claims that were pleaded against
BMO in the Jo Ann Howard litigation and claims that were permanently resolved pursuant to a
Rule 41(a) dismissal with prejudice. In their stipulation of dismissal with prejudice, plaintiffs
and the BMO defendants “stipulate to the dismissal with prejudice of the BMO Defendants, and
of all of Plaintiffs’ claims against the BMO Defendants . . . .” Jo Ann Howard, 4:09-CV-1252
ERW (Doc. 2033). Winner Road does not dispute that all claims pleaded against BMO in Jo
Ann Howard were dismissed with prejudice after settlement. The stipulation as to “all of
Plaintiffs’ claims against the BMO Defendants,” unambiguously includes the Jo Ann Howard
plaintiffs’ claims of breach of fiduciary duty by trustee banks. See Murphy v. Jones, 877 F.2d
682 (8th Cir. 1989) (finding earlier action settled with prejudice was entitled to preclusive effect
for purposes of res judicata).
The Court finds that plaintiffs and BMO defendants intended their resolution of the Jo
Ann Howard litigation to permanently resolve their claims; they stipulated pursuant to Federal
Rule 41(a) to a dismissal with prejudice of all “claims against the BMO defendants”; and the

3

In footnotes, the Eighth Circuit states “there [was] no indication that the parties intended to
settle any claims other than those that were brought to the court,” and there was a question “of
precisely what was before the district court to begin with.” Larken, 189 F.3d 733 n.8-9.
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Court finds such dismissal with prejudice to be a judgment on the merits for purposes of claim
preclusion.
(2)

First Suit Based on Proper Jurisdiction

The parties do not dispute that the Jo Ann Howard litigation was based on proper
jurisdiction.
(3)

Winner Road Was in Privity With the Jo Ann Howard Plaintiffs

In its motion to dismiss, BMO contends the complaint is barred because BMO has
already litigated and settled the same claims in litigation brought by the court-appointed SDR
and Missouri guaranty associations who acted as the representatives of funeral homes, including
Mount Washington Forever.
To find Winner Road’s claims barred, the Court must find Winner Road in privity with
the SDR and the guarantee associations in the Jo Ann Howard litigation. A non-party to a prior
suit can be barred by res judicata, so long as the non-party was adequately represented by
someone with the same interests who was a party to the prior suit. Richards v. Jefferson County,
Ala., 517 U.S. 793, 798-99 (1996) (“We have recognized an exception to the general rule [that a
judgment does not conclude the rights of strangers to the proceedings] when, in certain limited
circumstances, a person, although not a party, has his interests adequately represented by
someone with the same interests who is a party.”); see generally MOORE’S FEDERAL PRACTICE, §
131.40[3][e][i][A] (“A nonparty who is properly represented by a party to an action is bound by
and entitled to the preclusive effects of the resulting judgment. . . The party representing the
absent person or persons must have been properly authorized to act as such, either by private
agreement (such as a trustee of a private trust) or by operation of law (such as an administrator of
a decedent’s estate or certain public officials).”)

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The Court finds that Winner Road’s interests were adequately represented by the SDR,
the properly authorized, court-appointed representative to bring claims on behalf of funeral
homes and consumers for losses under the preneed trusts arising from alleged breaches of
fiduciary duty by BMO. The Jo Ann Howard complaint expressly alleged that the claims against
BMO were brought:
on behalf of NPS, funeral homes, and consumers, [for] breach of fiduciary duty,
negligence and gross negligence . . . against the Trustee Defendants who were
trustees, or whose predecessors were trustees, of one or more of the following
trusts: . . . the Mt. Washington Forever Pre-Need Trust . . . .
Compl., Ex. J. ¶ 197.9 (emphasis added).
Secondly, in Jo Ann Howard, the Court explicitly ruled that the SDR had standing to
bring such claims:
The final argument asserted by the Trustees is the Trustees cannot be liable for claims
related to the Mount Washington and CSA trusts because the SDR does not have standing
to bring claims related to those trusts. The Trustees claim NPS is not the settlor or
beneficiary of these trusts and the SDR is asserting claims only on behalf of NPS, funeral
homes, and consumers. Plaintiffs argue NPS was the pre-need seller for these trusts and
as such is a beneficiary of the trusts . . . . NPS sold the contracts in the trust and was the
actual seller. As the seller, even though not named in the trust agreement, NPS is a
beneficiary of the trusts in practice. The SDR has standing to bring claims related to
the Mount Washington and CSA pre-need trusts.
Jo Ann Howard, 79 F. Supp. 3d at 1020 (emphasis added).
The Jo Ann Howard court has already decided that the SDR was pursuing the bank
trustees, including BMO, for the shortage in the Mount Washington Merchandise and Services
trust. This is the same shortage Winner Road pleads it is entitled to sue BMO for in Counts I and
IV. The Court finds Winner Road’s interests were properly represented by the SDR in the Jo
Ann Howard litigation, and Winner Road is bound by the preclusive effects of the resulting
judgment.

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(4)

Both Suits Are Based Upon Same Claims or Causes of Action

“To determine whether two causes of action are the same, the court examines whether the
second lawsuit is ‘part of the transaction, or series of connected transactions, out of which the
[first] action arose . . . , giving weight to such considerations as whether the facts are related in
time, space, origin, or motivation, [and] whether they form a convenient trial unit.’” First Nat’l
Bank in Sioux Falls v. First Nat’l Bank South Dakota, 679 F.3d 763, 767 (8th Cir. 2012)
(quoting Lane v. Peterson, 899 F.2d 737, 742 (8th Cir. 1990)). “Whether two claims are the
same for res judicata purposes depends on whether the claims arise out of the same nucleus of
operative fact or are based on the same factual predicate.” Murphy v. Jones, 877 F.2d 682, 684
(8th Cir. 1989).
“As stated in Lane, ‘reliance . . . on different substantive law and new legal theories does
not preclude the operation of res judicata. . . . [W]here a plaintiff fashions a new theory of
recovery or cites a new body of law that was arguably violated by a defendant's conduct, res
judicata will still bar the second claim if it is based on the same nucleus of operative facts as the
prior claim.’ Lane, 899 F.2d at 744. In effect, ‘res judicata bars relitigation not only of those
matters that were actually litigated, but also those which could have been litigated in the earlier
proceeding.’ King v. Hoover Group, Inc., 958 F.2d 219, 223 (8th Cir. 1992).” Banks v. Int’l
Union Electronic, Elec., Tech., Salaried & Machine Workers, 390 F.3d 1049, 1052-53 (8th Cir.
2004); see also Ashanti v. City of Golden Valley, 666 F.3d 1148, 1153-54 (8th Cir. 2012) (res
judicata bars claims “‘arising from the original circumstances’ but ‘under new legal theories’”
(quoted case omitted)).
The 228-page complaint in the Jo Ann Howard litigation lists in great detail the alleged
breaches of fiduciary duty by the trustee defendants, including trustee defendant Marshall &

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Ilsley, the predecessor trustee of BMO. (Compl., Ex. J, 68-102, 111-23.) The complaint alleged
a cause of action by the SDR on behalf of funeral homes and consumers and against the trustee
defendants for breach of fiduciary duty by trustee banks (19th Claim); negligence and gross
negligence by trustee banks (20th Claim); unjust enrichment (28th Claim); money had and
received (29th Claim); and constructive trust (30th Claim). As for the relief the SDR sought
against the trustee defendants, the Jo Ann Howard complaint asks for damages, restitution,
imposition of a constructive trust, equitable accounting, injunctive relief, punitive damages,
attorneys’ fees and costs, and pre- and post-judgment interest as provided by statute.
The allegations in Counts I and IV of the instant action are part of the same series of
transactions out of which the Jo Ann Howard litigation arose. Both actions allege malfeasance
by BMO as trustee that allowed the preneed trust’s assets to be dissipated by the Cassity fraud
scheme. Both claims look to BMO to recoup for shortages in the assets in the NPS preneed
trusts, including the Mount Washington Merchandise and Services trust. Res judicata bars these
counts as based on the same nucleus of operative fact.
Because the Court finds Counts I and IV (to the extent it is based on the Mount
Washington Merchandise and Services trust) of Winner Road’s complaint barred by the doctrine
of res judicata, the Court will grant BMO’s motion to dismiss these counts.
B.

Statute of Limitations

BMO states that Winner Road’s Counts I through III are subject to dismissal for the
additional reason that they are untimely. In Missouri, a one-year statute of limitations applies to
claims brought by beneficiaries against a trustee, and the period runs once the trustee sends a
report that adequately discloses the existence of a potential claim for breach of trust and informs
the beneficiary of the time allowed to commence a proceeding.

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[A] beneficiary may not commence a proceeding against a trustee for breach of
trust more than one year after the last to occur of: (1) the date the beneficiary or a
representative of the beneficiary was sent a report that adequately disclosed the
existence of a potential claim for breach of trust and (2) the date the trustee
informed the beneficiary of the time allowed for commencing a proceeding with
respect to any potential claim adequately disclosed on the report.
Mo. Rev. Stat. § 456.10-1005(1). Regarding whether a report adequately discloses the existence
of a claim, the statute provides that a “report adequately discloses the existence of a potential
claim for breach of trust if it provides sufficient information so that the beneficiary or
representative knows of the potential claim or should have inquired into its existence.” Mo. Rev.
Stat. § 456.10-1005(2).
Winner Road’s complaint refers specifically to the $7.3 million in withdrawals from the
trust during BMO’s tenure for purchase of insurance policies “that were ‘deleted’ in 2012.”
(Compl. at ¶ 59.) Winner Road attached to its complaint a BMO trust account statement from
September 1, 2012 through December 31, 2012.

The trust statement is for the “Mount

Washington Forever Pre-Need Trust” and showed a change in the portfolio value of negative
$7.3 million. The beginning market value of the trust for the time period was $8,344,415.92, and
the ending market value was $981,706.27. (Compl., Ex. D at 3.) In the trust account statement
detail, the asset described as “EVIDENCE OF LINC MEM LIFE INC AT FACE VALUE MT
WASHINGTON” showed a loss of -$7,366,964.07.
The “Customer Notes” of the trust account statement state as follows:
….
8.
For trust accounts governed by . . . Missouri . . . law, a beneficiary may
not commence a proceeding against a trustee for breach of trust more than one
year after the date the beneficiary or a representative of the beneficiary was sent a
report that adequately disclosed the existence of a potential claim for breach of
trust.
....

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Compl., Ex. D at 9 (emphasis in original). BMO’s September through December 2012 statement
shows the “Mount Washington Forever Pre-Need Trust” assets lost nearly 90 percent of their
value in a three-month time span. It was mailed to Forever Enterprises at an address in Creve
Coeur, Missouri. (Compl, Ex. D at 1.)
Winner Road argues that trust account statement was not a “report” within the meaning
of § 456.10-1005(1) because it was not sent to the trust beneficiary. The trust account statement
for the Mount Washington Forever Pre-Need Trust was sent to Forever Enterprises. (Compl.,
Ex. D at 1.) “BMO therefore cannot demonstrate Winner Road as a beneficiary of the trust was
sent a report adequately disclosing a potential claim.” (Def. Opp’n at 17.)
As an initial matter, Winner Road did not acquire Mount Washington Forever, LLC’s
property and rights until February 2014. See Compl. at ¶ 5(c). The trust account statement
would have not been mailed to Winner Road in 2012, because Winner Road did not institute its
judicial foreclosure case in Jackson County Circuit Court until February 2014. It was this action
that declared Winner Road as the successor to the rights and obligations of Mount Washington
Forever, LLC. (Compl. ¶ 5(c)).
In 2012, at the time the $7.3 million loss was disclosed, the Mount Washington Cemetery
was owned by Mount Washington Forever, LLC (Compl. ¶ 5(b)), which itself was half owned by
Forever Enterprises, Inc. BMO contends that Forever Enterprises, Inc.’s subsidiary, Forever
Network, Inc. was the managing member of Mount Washington Forever, LLC. BMO cites to the
Mount Washington Preneed Trust Agreement’s notary block, which states, “On this 13th day of
April, 2000, before me, the undersigned, a Notary Public, personally appeared Brent D. Cassity
and Nekol Province to me personally known to be the President and the Secretary, respectively,

14

of Forever Network, Inc., Managing Member of Mount Washington Forever LLC . . . .”
(Compl., Ex. C at 17) (emphasis added).
What BMO does not explain, and what the Court cannot resolve from the complaint and
supporting documents, is that this trust account statement is for the “Mount Washington Forever
Pre-Need Trust,” which is, presumably, the Merchandise and Services Trust (Counts I and IV).
It is not a trust statement that would disclose any breach of fiduciary duty with respect to the
Endowed Care trust (Count II) or the Special Care trust (Count III). Moreover, the trust account
statement was mailed to Forever Enterprises. (Compl., Ex. D at 1.) It was not mailed to Forever
Network, Inc., which BMO claims was the managing member of Mount Washington Forever,
LLC.
The Court finds factual issues exist concerning whether the Mount Washington Forever
Pre-Need Trust account statement was sent to the beneficiary or a representative of the
beneficiary pursuant to § 456.10-1005. Additionally, this account statement would not trigger
the running of the statute of limitations on Counts II and III, which are claims arising out of
different trusts. On a motion to dismiss, the Court must view all issues in the light most
favorable to plaintiff. Because the Court cannot determine whether the Mount Washington
Preneed trust account statement was sent to the “beneficiary or a representative of the
beneficiary,” it cannot find that the statement began the running of the one-year statute of
limitations of Missouri Statute § 456.10-1005(1). The Court will deny BMO’s motion to dismiss
Counts I through IV as barred by the statute of limitations.
C.

Count IV Does Not Allege a Claim that Is Plausible on Its Face

In Count IV, Winner Road seeks restitution for BMO’s alleged breach of trustee duties.
Winner Road brings Count IV as a non-beneficiary of the Mount Washington preneed trusts. It

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states that “[b]ut for the dissipation of approximately $7.3 million of trust assets and the failure
to administer the M[ount] W[ashington] Cemetery Trusts . . . Winner Road would not have been
required to make the $2.7 million of payments to keep the Cemetery open.” (Compl. at ¶ 81.)
BMO moves to dismiss this count, and argues that Winner Road has no standing as a
creditor of Mount Washington Forever, LLC to assert a breach of trust claim. BMO states that
under Missouri law, no duty is owed by a trustee to a non-beneficiary of a trust, and thus BMO
owed no duty to plaintiff. “BMO has never willingly entered into any agreement or relationship
whatsoever with the plaintiff with regard to the Mount Washington Cemetery or its trusts . . . .
During the period between 2005 and 2014, there was no legal relationship at all between BMO
and plaintiff with regard to Mount Washington.” (Reply at 14.)
The Court agrees with BMO, and finds that Count IV does not state a claim to relief that
is plausible on its face. BMO had no duty as a trustee of the Mount Washington Cemetery trusts
to reimburse Winner Road for voluntarily paying the debts of the Mount Washington Cemetery.
As BMO succinctly puts it, “Plaintiff’s investment losses are the consequences of plaintiff’s
decisions, which decisions BMO had no legal duty to make profitable, or to prevent.” (Reply at
15.) Because the Court finds Winner Road has not stated a plausible claim in Count IV, it will
dismiss this Count for this additional reason.
Conclusion
For the above-stated reasons, the Court grants BMO’s motion to dismiss Counts I and IV
(to the extent it is based on the Mount Washington Merchandise and Services trust) as barred by
res judicata because the claims have been litigated, settled, and dismissed with prejudice in the
Jo Ann Howard litigation. Because factual issues exist, the Court denies defendant’s motion to
dismiss Counts I through III as time barred under the statute of limitations. Finally, the Court

16

finds plaintiff has not stated a plausible claim for relief in Count IV, and will dismiss this Count
for this additional reason.
Accordingly,
IT IS HEREBY ORDERED that defendant BMO Harris Bank, N.A.’s re-filed motion
to dismiss is GRANTED in part and DENIED in part. [Doc. 49] The motion is granted as to
Counts I and IV, and denied in all other respects.
IT IS FURTHER ORDERED that defendant BMO Harris Bank, N.A.’s re-filed motion
to stay discovery is DENIED as moot [Doc. 52]
An appropriate Order of Partial Dismissal will accompany this Memorandum and Order.

_______________________________
CHARLES A. SHAW
UNITED STATES DISTRICT JUDGE

Dated this 28th day of September, 2017.

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