Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Missouri Crop, LLC v. CGB Diversified Services, Inc.

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

January 6, 2017

MISSOURI CROP, LLC, and MATTHEW BURGHER, Plaintiffs,
v.
CGB DIVERSIFIED SERVICES, INC., d/b/a DIVERSIFIED CROP INSURANCE SERVICES, and CROP USA INSURANCE AGENCY, INC., d/b/a, CROPUSA, Defendants. CGB DIVERSIFIED SERVICES, INC., d/b/a DIVERSIFIED CROP INSURANCE SERVICES, Counterplaintiff/ Crossclaim Plaintiff,
v.
MISSOURI CROP, LLC and GEMCAP LENDING I, LLC, Counterdefendants, and CROP USA INSURANCE AGENCY, INC., d/b/a, CROPUSA Crossclaim Defendants.

          MEMORANDUM AND ORDER

          E. RICHARD WEBBER SENIOR UNITED STATES DISTRICT JUDGE

         This 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].

         I. BACKGROUND

         In 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.

         In 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 the sales.

         This 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.

         Defendant 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.

         On 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.

         On 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 Plaintiffs.

         On 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.

         For the following reasons, the Court will grant Plaintiffs' Motion to Amend, and, accordingly, deny GemCap's Motion for Summary Judgment as moot.

         II. DISCUSSION

          A. MOTION TO AMEND

         Plaintiffs 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.