United States District Court, E.D. Missouri, Northern Division
MEMORANDUM AND ORDER
RICHARD WEBBER SENIOR UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiffs Missouri Crop,
LLC, and Matthew Burgher's Motion for Leave to File First
Amended Complaint [ECF No. 57], Cross-Claimant GemCap's
Motion for Summary Judgment [ECF No. 53], and GemCap's
Motion to Enter a New Case Management Order [ECF No. 63].
March 2015, Plaintiffs Missouri Crop, LLC ("Missouri
Crop"), and Matthew Burgher ("Burgher") filed
a civil action in the circuit court of Audrain County against
CGB Diversified Services, Inc. (“Diversified”),
and CropUSA. Diversified removed the action to the United
States District Court-Eastern District of Missouri.
their complaint, Plaintiffs alleged the following regarding
the parties: Plaintiff Burgher, the sole member of Missouri
Crop, LLC, sold multi-peril crop insurance
(“MPCI”) policies to farmers, earning commissions
for these sales. Defendant Diversified is a managing general
agent in the crop insurance industry and underwrites MPCI
policies sold to farmers by Diversified's general agents.
One of Diversified's general agents is Defendant CropUSA.
CropUSA sold Diversified's MPCI Policies in exchange for
commissions and utilized “subproducers”
(i.e., subagents, such as Plaintiffs) to assist in
case concerns commissions earned by Plaintiffs in connection
with the sale of Diversified's MPCI policies during the
2013 crop year (the “2013 commissions”).
Plaintiffs have submitted claims against Diversified and
CropUSA seeking to recover these commissions. Specifically,
in their complaint, Plaintiffs asserted that: Burgher sold
Diversified's MPCI policies pertaining to the 2013 crop
year. Burgher executed an “Assignment of
Commissions” to Missouri Crop, LLC, entitling Missouri
Crop to receive commissions owed to Burgher. Plaintiffs
earned $434, 466 in commissions related to crop insurance
policies for the 2013 growing season. GemCap, a commercial
lender, provided a line of credit to CropUSA, which
subsequently defaulted on the loan. As a result, CropUSA and
Diversified became involved in a lawsuit with GemCap in July
2013. During the pendency of this lawsuit, Diversified was
enjoined from distributing the $434, 466 in commissions
earned by Plaintiffs. In the instant suit, Plaintiffs have
alleged breach of contract, quantum meruit, unjust enrichment
and conversion claims against Defendants. Plaintiffs also
have asked the Court to enter judgment declaring the rights,
status, and legal relationships of the parties with respect
to the 2013 commissions.
Diversified's answer to Plaintiffs' complaint
included a counterclaim and interpleader against GemCap and
CropUSA. Diversified sought a determination by the Court as
to the rightful recipient of the 2013 commissions. GemCap
then filed a counterclaim/crossclaim, similarly asking the
Court to enter an order declaring the rights and obligations
of the parties with respect to the commissions held by
Diversified. GemCap asserted it was the lawful owner and
rightful recipient of the 2013 commissions. GemCap explained
that, in conjunction with the line of credit provided to
CropUSA, it filed a UCC Financing Statement against all
assets owned by CropUSA, including CropUSA's commission
streams. GemCap stated that when CropUSA defaulted on its
loan, it lawfully foreclosed on its security interest in
CropUSA's commission streams. GemCap argues these
commission streams included the disputed 2013 commissions
because Diversified was required to pay them directly to
CropUSA as its general agent.
April 1, 2016, Diversified filed an Unopposed Motion for
Entry of Stipulation and Dismissal of CGB Diversified
Services, Inc., with Prejudice. Diversified sought to deposit
the disputed commissions into the Court's registry, and
the parties stipulated to dismiss Diversified from the
action. This Court has ordered Diversified to pay $434, 466
into the Court's registry and has dismissed Diversified
with prejudice from this action. In addition, the Court
entered default judgment against CropUSA as it failed to
plead or otherwise defend against claims filed against it.
April 26, 2016, GemCap filed its Motion for Summary Judgment
[ECF No. 53], claiming it was entitled to the interpled
funds. On May 13, 2016, Plaintiffs sought leave from the
Court to file their First Amended Complaint. The proposed
First Amended Complaint sets forth several new factual
allegations. The following additional facts were averred by
Plaintiffs: Plaintiffs entered into a Sub-Agency contract
with CropUSA to sell MPCI policies. This contract was
terminated in 2012. Plaintiffs then sold their “book of
crop insurance business” to Diversified. The purchase
contract required Missouri Crop to operate under a Standard
Agency Agreement with Diversified for the 2013 crop year.
Plaintiffs had no contractual relationship or independent
contract with CropUSA for 2013. As Plaintiffs were not
contractually bound to CropUSA during the disputed time
period, Diversified must pay the 2013 commissions directly to
August 16, 2016, the Court received notice that Plaintiff
Burgher had filed for Chapter 13 Bankruptcy. The Court
delayed ruling on the pending motions as it was of the belief
that a bankruptcy stay might be entered, and awaited the
Bankruptcy Court's approval of employment of counsel for
Plaintiff. On November 22, 2016, Plaintiff Burgher informed
the Court that an agreement was reached with the Bankruptcy
trustee to file a stipulation and proposed order for the
employment of law firm--Leonatti and Baker PC--to represent
Plaintiff Matthew Burgher in the case presently pending
before this Court.
following reasons, the Court will grant Plaintiffs'
Motion to Amend, and, accordingly, deny GemCap's Motion
for Summary Judgment as moot.
A. MOTION TO AMEND
request leave of the Court to file their First Amended
Complaint. In the First Amended Complaint, Plaintiffs ask the
Court to declare the rights, status and legal relationships
of the parties with respect to the 2013 commissions.
Plaintiffs argue amendment is necessary to “realign
their theories of liability and ...