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Web Innovations and Technology Services, Inc. v. Bridges To Digital Excellence, Inc.

United States District Court, E.D. Missouri, Eastern Division

November 19, 2014

WEB INNOVATIONS & TECHNOLOGY SERVICES, INC., Plaintiff,
v.
BRIDGES TO DIGITAL EXCELLENCE, INC. & DOUGLAS CHAPMAN, Defendants

For Web Innovations and Technology Services, Inc., Plaintiff: Matthew S. Chase, LEAD ATTORNEY, CHASE LAW FIRM, P.C., Clayton, MO; Sydney J. Chase, LEAD ATTORNEY, CHASE LAW FIRM, Clayton, MO.

For Bridges to Digital Excellence, Defendants: Steven H. Schwartz, LEAD ATTORNEY, Mark A. Koupal, Jr., BROWN AND JAMES, P.C., St. Louis, MO.

Page 929

MEMORANDUM AND ORDER

CATHERINE D. PERRY, UNITED STATES DISTRICT JUDGE.

This matter is before the court on the joint motion by defendants Bridges to Digital Excellence, Inc., and Douglas Chapman to dismiss the third count of the amended complaint of plaintiff Web Innovations and Technology Services, Inc. WITS brought claims against the defendants for breach of contract, conversion, and negligent misrepresentation. Defendants contend that Missouri's economic loss doctrine requires dismissal of the negligent misrepresentation claim. The economic loss doctrine bars purely monetary recovery in tort where that tort also constitutes breach of the contract. Because WITS alleges at least one misrepresentation that was not incorporated within the contract, dismissal is inappropriate. I will deny the defendants' motion to dismiss plaintiff's count for negligent misrepresentation.

Background[1]

Web Innovations and Technology Services, Inc., is a non-profit organization dedicated to the goal of keeping electronic devices out of landfills. WITS collects electronics from various sources and then either sells them whole or " de-manufactures" them to sell the parts. Bridges to Digital Excellence is a non-profit organization that processes electronic materials for sale and recycling. BDE also operates an online thrift store to resell electronics. Douglas Chapman is a co-founder of BDE and served as its executive director in charge of day-to-day operations.

In April 2012, WITS and BDE entered into a Memorandum of Understanding, the ultimate goal of which was for WITS to acquire BDE. The MOU established " conditions for a final sale by sharing costs and revenue that are sufficient for BDE to fund operations and reduce debt."

The MOU set forth certain obligations for BDE[2]:

1. Collect and process a minimum of four trailers per month;
2. Process an additional four trailers of electronics for WITS (trailers sent from WITS at its expense and presorted to provide 100% high value materials).
3. Triage all BDE materials into three categories: (a) reusable by BDE, (b) low value materials (to go to WITS) and (c) high value materials to be processed for sale.
4. BDE will hire and recruit staff as requested and paid for by WITS.
5. Use WITS's processes for sorting and de-manufacturing.
6. Continue, at its expense, the South Bend and Benton Harbor leases during the term of this agreement. . . .
7. Pay for shipping of BDE materials between Benton Harbor and South Bend.
8. Recover and sell all steel, aluminum, etc. recovered from all materials. BDE receives 100% of the revenue of these sales.
9. Maintain salaries at the current levels unless agreed upon by both parties.
a. Upon date of signature, Trina Bailey's salary will increase to $32,000.
10. Maintain Doug Chapman's and Trina Bailey's employment.

Page 930

11. Not contract for any capital equipment or any long term agreements unless agreed by both parties.
12. Provide regular reports of BDE ...

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