United States District Court, E.D. Missouri, Northern Division
OPINION, MEMORANDUM AND ORDER
EDWARD AUTREY UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff and Third Party
Defendant's Motion to Dismiss Count Two of
Defendant's First Amended Counterclaim and Third Party
Complaint pursuant to Fed.R.Civ.P. 12(b)(6), [Doc. No. 25].
Defendant has filed a response in opposition and the issues
are fully briefed.
filed this action against Defendant alleging breach of
contract, conversion, and unjust enrichment. Defendant filed
a counterclaim and third party complaint against Plaintiff
and Plaintiff's President claiming breach of contract,
fraudulent misrepresentation, negligence, and defamation.
purpose of a motion to dismiss under Rule 12(b)(6) is to test
the legal sufficiency of the complaint. Fed.R.Civ.P.
12(b)(6). The factual allegations of a complaint are assumed
true and construed in favor of the plaintiff, “even if
it strikes a savvy judge that actual proof of those facts is
improbable.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 508 n. 1 (2002)); Neitzke v.
Williams, 490 U.S. 319, 327 (1989) (“Rule 12(b)(6)
does not countenance ... dismissals based on a judge's
disbelief of a complaint's factual allegations.”);
Scheuer v. Rhodes, 416 U.S. 232, (1974) (stating
that a well-pleaded complaint may proceed even if it appears
“that a recovery is very remote and unlikely”).
The issue is not whether the plaintiff will ultimately
prevail, but whether the plaintiff is entitled to present
evidence in support of his claim. Scheuer, 416 U.S.
at 236, 94 S.Ct. 1683. A viable complaint must include
“enough facts to state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at
570; see Id. at 563, 127 S.Ct. 1955 (stating that
the “no set of facts” language in Conley v.
Gibson, 355 U.S. 41, 45-46 (1957), “has earned its
retirement”); see also Ashcroft v. Iqbal, 556
U.S. 662, 678-84 (2009) (holding that the pleading standard
set forth in Twombly applies to all civil actions).
“Factual allegations must be enough to raise a right to
relief above the speculative level.” Twombly,
550 U.S. at 555.
Defendant's fraudulent misrepresentation claim is subject
to Rule 9(b), which provides that, “[i]n alleging fraud
or mistake, a party must state with particularity the
circumstances constituting the fraud or mistake.” Rule
9(b)'s particularity requirement demands a higher degree
of notice than that required for other claims, and is
intended to enable the opponent to respond specifically and
quickly to the potentially damaging allegations. To satisfy
the particularity requirement of Rule 9(b), the complaint
must plead such facts as the time, place, and content of the
alleged false representations, as well as the details of the
fraudulent acts, including when the acts occurred, who
engaged in them, and what was obtained as a result. Put
another way, the complaint must identify the “who,
what, where, when and how” of the alleged fraud.
United States ex rel. Joshi v. St. Luke's Hosp.,
Inc., 441 F.3d 552, 556 (8th Cir.2006). A party must
state an underlying basis for its assertions sufficient to
provide an indicia of reliability. Id. at 557. While
not every specific details of every alleged fraud need be
stated, the party must provide some representative examples
of the alleged misconduct. Id.
order to state a claim for fraudulent misrepresentation under
Missouri law, the party must plead: (1) a representation; (2)
its falsity; (3) its materiality; (4) the speaker's
knowledge of its falsity or ignorance of its truth; (5) the
speaker's intent that it should be acted on by the person
in the manner reasonably contemplated; (6) the hearer's
ignorance of the falsity of the representation; (7) the
hearer's reliance on the representation being true; (8)
the hearer's right to rely thereon; and (9) the
hearer's consequent and proximately caused injury.
Failure to establish any one of the essential elements of
fraud is fatal to recovery. Renaissance Leasing, LLC v.
Vermeer Mfg. Co., 322 S.W.3d 112, 131-32 (Mo.2010).
alleges two statements as giving rise to the fraudulent
misrepresentation claim: That Bowling Auctioneers and Bowling
represented and warranted that:
(1) “they possessed the skill, knowledge, expertise and
reputation and an extensive network of customers and
industry-wide contacts sufficient to guaranty the attendance
of a large number of bidders and buyers at the live auction
in Moberly, Missouri on July 15, 2015”; and
(2) because of “their skill, knowledge, expertise and
reputation and an extensive network of customers and
industry-wide contacts, their services were superior to and
would generate more live bidders and buyers and generate
greater sale revenue than IronPlanet [the other auctioneer
Worldwide was considering.]”
alleged misrepresentations regarding future attendance of
prospective buyers cannot support a fraud claim. To establish
fraud under Missouri law, the party alleging fraudulent
misrepresentations must show that the opponent made a
misrepresentation concerning a past or existing fact.
Sindecuse v. Katsaros, 541 F.3d 801, 803 (8th
Cir.2008) (citing Trotter's Corp. v. Ringleader
Rests., 929 S.W.2d 935, 940 (Mo.Ct.App.1996)). A
plaintiff cannot predicate a fraud action on a statement
regarding what independent third parties will do in the
future. Id. (citing Eureka Pipe. Inc. v.
Cretcher-Lynch & Co., 754 S.W.2d 897, 899
(Mo.Ct.App.1988)). “Because a statement about the
future actions of third parties is really a prediction rather
than a promise, this rule is just a corollary of another
Missouri rule that predictions for the future are not
actionable as fraudulent misrepresentations.”
the alleged statement that Plaintiff and Bowling's skill,
knowledge and expertise were superior to and would generate
more live bidders and generate greater sale revenue fails to
specifically detail a past or existing fact; this statement
is clearly a sales pitch and a prediction of future facts.
Such statements amount to no more than expressions of
opinion. See Reis v. Peabody Coal Co., 997 S.W.2d
49, 65 (Mo.Ct.App.1999) (“The generally recognized
distinction between statements of fact and opinion is that
whatever is susceptible of exact knowledge is a matter of
fact, while that not susceptible is generally regarded as an
expression of opinion.”). “[M]ere statements of
opinion, expectations and predictions for the future”
cannot support a fraud claim. Stevens v. Markirk Constr.,
Inc., 454 S.W.3d 875, 881 (Mo.2015) (quoting Lowther
v. Hays, 225 S.W.2d 708, 714 (Mo.1950)).
addition to failing to state a claim under Missouri law,
these allegations do not satisfy Rule 9(b)'s requirement
that the circumstances constituting fraud be pled with
particularity. The particularity requirement serves important
purposes: it deters the use of complaints as a pretext for
fishing expeditions of unknown wrongs designed to compel
in terrorem settlements; it protects against damage
to professional reputations resulting from allegations of
moral turpitude; it ensures that a party is given sufficient
notice of the allegations against him to permit the
preparation of an effective defense. Streambend
Properties II, LLC v. Ivy Tower Minneapolis, LLC, 781
F.3d 1003, 1010 (8th Cir.2015). To meet the particularity
requirement, a complaint subject to Rule 9(b) “must
identify who, what, where, when, and how.” Id.
at 1013 (citation omitted). It must “specify [ ] the
time, place, and content of the defendant's false
representations, as well as the details of ...