                       In the Missouri Court of Appeals
                               Eastern District
                                            DIVISION THREE

NATIONAL INFORMATION                               )        No. ED101636
SOLUTIONS, INC.,                                   )
                                                   )        Appeal from the Circuit Court
        Appellant,                                 )        of St. Charles County
vs.                                                )
                                                   )        Hon. Daniel G. Pelikan
CORD MOVING & STORAGE                              )
COMPANY, INC.,                                     )
                                                   )        Filed:
        Respondent.                                )        February 24, 2015

        National Information Solutions, Inc. (“NISC”1) appeals from the judgment granting Cord

Moving & Storage Company’s motion for summary judgment and denying NISC’s motion for

partial summary judgment on the same issue.2 We affirm.

        NISC entered an Office Relocation Agreement with Cord in which Cord agreed to move

the contents of NISC’s warehouse to a new location. The one-page Agreement contained the

following provision in the middle of the page in a bold typeface larger than the rest of the

contract:

        Insurance:

        Cord’s liability is $.30 cents per pound, per article. If you require additional
        insurance, you can explore options with your present insurance carrier, or
        call an independent cargo insurance provider.
1
  National Information Solutions, Inc. is referred to throughout the record on appeal as “National Information
Solutions Cooperative, Inc.” or “NISC.”
2
  Our decision affirming summary judgment in Cord’s favor disposes of the appeal of the denial of NISC’s partial
summary judgment motion. See Antrim v. Wolken, 228 S.W.3d 50, 55 (Mo. App. E.D. 2007).
After a copier was damaged during the move, NISC “short-paid” Cord $450, which represented

$.30 per pound for the damaged copier.

       Thereafter, NISC filed a one-count petition alleging that Cord was negligent in failing to

properly secure the copier during the move. Cord asserted as an affirmative defense that the

Agreement limited Cord’s liability for its own negligence to the $.30 per pound NISC had

already recovered. Cord then moved for summary judgment on that basis. In response to Cord’s

motion, NISC argued that the limitation on liability was not valid with respect to claims of

negligence because the Agreement did not explicitly refer to “negligence” or use similar

language. Cord replied that the Agreement was between “sophisticated commercial entities”

and, therefore, less precise language was acceptable to limit liability even for one’s own

negligence. NISC moved for partial summary judgment on the same issue, seeking a judgment

that as a matter of law Cord could not succeed on its affirmative defense. The trial court granted

Cord’s motion, denied NISC’s motion and entered judgment in Cord’s favor. This appeal

follows.

       Summary judgment is proper when no genuine issue of material fact exists and the

movant is entitled to judgment as a matter of law. Rule 74.04. In this case, Cord may establish a

right to summary judgment by showing that there is no genuine dispute as to the existence of the

facts required to support its affirmative defense. See ITT Commercial Finance Corporation v.

Mid-America Marine Supply Corporation, 854 S.W.2d 371, 381 (Mo. banc 1993).

       In general, for a party to effectively release itself from or limit liability for its own

negligence, the language of the contract must be clear, unequivocal, conspicuous and include the

word “negligence” or its equivalent. Alack v. Vic Tanny International of Missouri, Inc., 923

S.W.2d 330, 337 (Mo. banc 1996). But less precise language may be effective when the contract


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is negotiated at arm’s-length between equally sophisticated commercial entities. Id. at 346 n.4.

The first case to discuss this “sophisticated business” exception in depth was Purcell Tire &

Rubber Company v. Executive Beechcraft, Inc., 59 S.W.3d 505 (Mo. banc 2001).

       In that case, the Purcell tire company contracted with Beechcraft to perform a pre-

purchase survey of an airplane Purcell wanted to buy. Id. at 507. The contract contained a

provision limiting Beechcraft’s liability to the cost of the services performed thereunder. Id. at

508. Purcell sued Beechcraft for breach and negligence after discovering an oil leak that

Beechcraft had overlooked, and the trial court enforced the provision limiting Beechcraft’s

liability to the price of the contract. Id. On appeal, the Supreme Court started its analysis by

referring to both parties as “sophisticated businesses,” pointing out that Purcell was a large retail

tire chain and also noting that its president was a former pilot who had “been involved in fifteen

plane purchases and fourteen pre-purchase inspections.” Id. The Court determined that, as

sophisticated businesses, these parties could limit liability for their own negligence without

specifically mentioning “negligence” or the equivalent. Id. at 509.

       The Court then went on to reject other arguments for why the provision should not be

enforced, in each instance referring back to the fact that the parties were “sophisticated

businesses.” Id. at 509-10 (provision did not lack consideration and was not unconscionable).

Id. at 510. In its discussion of whether the phrase “any claims” in the provision was ambiguous,

the Court stated that ambiguity depends on context, pointing out that language that is ambiguous

to an “unsophisticated party may not be ambiguous to a sophisticated commercial entity.” Id. at

510. It concluded that Beechcraft and Purcell were “sophisticated businesses, experienced in this

type of transaction” and in that commercial context, no ambiguity existed.           Id. at 510-11.

Although the Court did not specifically cite the facts upon which it relied to reach this conclusion



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about the parties’ experience, we can fairly assume that the other pre-purchase inspections in

which Purcell was involved were a relevant factor in deciding whether the language in this

contract was ambiguous to Purcell.

        The Supreme Court addressed this issue again just a few years later in Utility Service and

Maintenance, Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910 (Mo. banc 2005). The Court

held that the language “any and all claims” in an indemnity provision was sufficient to require

Utility, a “sophisticated commercial entity,” to indemnify Noranda for all claims including

negligence. Id. at 914, 915. The opinion describes Utility as an industrial painting company, but

does not indicate on what facts the Court based its conclusion that Utility was “sophisticated.”

Id. at 911.

        Just last year, while the instant case was pending in the trial court, the Western District

addressed the “sophisticated business” exception in detail in Village of Big Lake v. BNSF

Railway Company, Inc., 433 S.W.3d 460 (Mo. App. W.D. 2014). The court discussed Purcell

and Noranda at length and concluded that “a different standard applies to determine whether

general exculpatory clauses or indemnity clauses can cover claims of future negligence

depending on whether the parties to the contract are ‘sophisticated businesses, experienced in

this type of transaction.’” Id. at 468 (quoting Purcell, 59 S.W.3d at 510-11). The court held as

an apparent matter of first impression that this issue is a question of fact, citing to Purcell as a

having gone to “great lengths” to set forth the facts before concluding that the parties were

“sophisticated businesses in the ‘type of transaction’ involved in the case.” Id. at 470 (quoting

Purcell, emphasis added by Big Lake). In a footnote to that sentence, the court found that

Purcell’s reliance on the type of transaction in determining sophistication suggested that an entity

may be sophisticated in one negotiation but not in another:



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       Thus, it is not merely the characterization of a contracting party as a business,
       commercial entity or governmental entity that disposes of the question of
       sophistication. Rather, all relevant facts must be considered including the party’s
       relative bargaining power and experience in the subject matter of the contract.

Id. at 471 n.8. The railroad in that case sought to enforce a provision in pipeline permits it had

issued to the village, which purported to release the railroad from liability. Ultimately, the court

concluded that the record was devoid of any facts showing the permits were negotiated at arm’s

length between “businesses or commercial entities of equal power and sophistication in such

transactions.” Id. at 471.

       NISC argues that under Purcell and Big Lake, Cord must prove NISC is sophisticated in

the subject matter of this contract—namely, that it is sophisticated in moving office equipment.

We disagree. Big Lake does seem to paraphrase Purcell in a way that suggests a party must be

“sophisticated”—as opposed to merely “experienced”—in the “type of transaction” at issue,

which the Western District seems, in places, to equate with the “subject matter of a contract.”

We find some of this paraphrasing misinterprets Purcell, especially to the extent that it focuses

on one phrase in that opinion—“experienced in this type of transaction”—as the standard of

proof for this exception to apply and then restates that phrase in a way that changes its meaning.

We note that no other court—including the Supreme Court itself—has relied on that particular

language when citing to Purcell. See Noranda, supra; see also Lone Star Industries, Inc. v.

Howell Trucking, Inc., 199 S.W.3d 900, 907 n.2 (Mo. App. E.D. 2006) (noting, but not applying,

distinction in Purcell for “businesses of equal power and sophistication” and “sophisticated

businesses that negotiate at arm’s length”); Caballero v. Stafford, 202 S.W.3d 683, 696 n.2 (Mo.

App. S.D. 2006) (noting absence of facts in record indicating individual truck driver was

“sophisticated commercial entity”); Milligan v. Chesterfield Village GP, LLC, 239 S.W.3d 613,




                                                 5
629 n. 3 (Mo. App. S.D. 2007) (referencing “sophisticated businesses that negotiate at arm’s

length”).

          Regardless, the Western District’s statements were not essential to the court’s conclusion

in Big Lake, which relied on the total absence of any facts in the record—beyond the assertion

that the village was a municipality—showing that the village was sophisticated or experienced in

any way. Because the court had no facts before it—and thus no opportunity to analyze those

facts under any of its iterations of the law in Purcell—those statements are likely dicta and not

binding precedent on us. Statements are obiter dicta if they are not essential to the court’s

decision of the issue before it. Brooks v. State, 128 S.W.3d 844, 855 (Mo. banc 2004) (“A

judicial opinion should be read in light of the facts pertinent to that case, it being improper to

give permanent and controlling effect to statements outside the scope of the real inquiry of the

case.”)

          We find that the precise language of Purcell requires us, at most, to consider whether the

party resisting enforcement of an exculpatory provision is “experienced in the type of

transaction” at issue such that the party cannot fairly claim to have found the provision

ambiguous. 59 S.W.3d at 510-11. Beyond that, we find nothing in Purcell that would require

proof that NISC was sophisticated in the subject of moving office equipment. We believe the

following undisputed facts in this case demonstrate that NISC was a sophisticated business under

Purcell and that it cannot now escape enforcement of the limitation on liability provision—

contained in an agreement that it negotiated at arm’s length with Cord—on the ground that it was

unfamiliar with moving contracts.

          NISC is a sophisticated commercial entity in the business of offering information

technology solutions.      NISC employs over 740 people, serves more than 510 energy and



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telecommunications members in its cooperative across 47 states and American Samoa, bills more

than 7.2 million end users, processes more than $12 billion in annual billings and calculates and

tracks nearly $1 billion of payroll for its members.

       Jackie Rocha was the NISC representative primarily responsible for negotiating the

Agreement with Cord.       NISC selected Cord through a bidding process; Cord’s rates were

determined by competition through the bid process.        Rocha understood the importance of

reviewing and understanding a contract, and she read the Agreement with Cord before signing it.

“To the best of her knowledge,” Rocha thought she understood the Agreement and would not

have signed it if she thought it was ambiguous or did not understand it. Had she been confused,

Rocha could have consulted in-house counsel at NISC about the Agreement, but she did not

recall doing that. Cord’s representative advised Rocha that Cord’s liability was limited to $.30

per pound per article and that additional coverage was available from Cord or outsiders, but

Rocha declined. After the copier was damaged in the move, Rocha discussed and agreed with

Cord that NISC was entitled to a $450 credit ($.30 times the 1500 pounds the copier weighed)

and that this “was the deal” they had made under the Agreement.

       Rocha was familiar with the process of retaining outside vendors for NISC. One of the

other outside vendors with whom NISC contracted was Xerox, which had sold NISC the copier

that was damaged in the move. The sales-maintenance agreements between NISC and Xerox

contained limitations on liability provisions, which provided that Xerox’s damages to NISC were

limited to $10,000 or the amounts paid under the agreement.          The Xerox representative’s

testimony about this provision indicates that it was boilerplate language used in “all” of Xerox’s

agreements with NISC. Rocha declined to have Xerox move the copier itself, choosing Cord

because it was less expensive.



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       These undisputed facts establish that NISC is a sophisticated business entity experienced

in this type of transaction with outside vendors. In this commercial context, the limitation on

liability was not ambiguous.    NISC concedes that if it is found to be a sophisticated business

entity, the limitation on liability is enforceable. Summary judgment in Cord’s favor was proper.

       All points are denied, and the judgment is affirmed.




                                                    ROBERT G. DOWD, JR., Judge

Kurt S. Odenwald, P. J. and
Gary M. Gaertner, Jr., J., concur.




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