One of the inherent equitable powers of a court is to order that a party provide an accounting. There are four elements required to establish equitable jurisdiction for an accounting: (1) the need for discovery, (2) the complicated nature of the accounts, (3) the existence of a fiduciary relationship, and (4) the inadequacy of legal remedies (i.e., the insufficiency of money damages). Bossaler v. Red Arrow Corp., 897 S.W.2d 629, 630 (Mo. Ct. App. 1995).
Procedurally, an action for accounting proceeds in two stages in Missouri. First, the court determines whether the party seeking an accounting is entitled to an equitable accounting. Buffington v. Green,285 S.W. 531, 535 ((Mo. Ct. App. 1926). If so, the court will enter an interlocutory order establishing that party’s right to an accounting. Fleahman v. Fleahman, 25 S.W.3d 162, 164 (Mo. Ct. App. 1999). More than anything, the existence of a fiduciary relationship (e.g., trustee-beneficiary, co-partners, director-shareholder, etc.) between the parties is what a court will typically focus on in this first stage.
Only if the court determines that such right exists will it proceed to the second stage of the actual accounting, in which the nature and extent of the accounting is ordered. Id. The scope of the accounting will largely depend on the circumstances and types of assets involved. Is real estate involved? Are stocks, bonds and securities present? Are there precious items of personal property? Are appraisals feasible or costly? Practically, equitable accounting claims rarely appear alone in lawsuits. It is quite common for requests for an accounting to accompany claims for breach of fiduciary duty.
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