United States District Court, E.D. Missouri, Eastern Division
RONNOCO COFFEE, LLC, and MID-AMERICA ROASTERIE, LLC, Plaintiffs,
WESTFELDT BROTHERS, INC., Defendant.
MEMORANDUM AND ORDER
C. HAMILTON UNITED STATES DISTRICT JUDGE
matter is before the Court on the Motion to Dismiss of
Plaintiffs/Counterclaim Defendants Ronnoco Coffee, LLC and
Mid-America Roasterie, LLC, and Third-Party Defendants Scott
Meader and Eric Bomball. (ECF No. 18). The motion is fully
briefed and ready for disposition.
Brothers, Inc. ("Westfeldt") is a corporation
organized and existing under the laws of the State of
Louisiana, with its principal place of business in New
Orleans, Louisiana. (Counterclaims and Third Party Complaint
("Counterclaim"), ¶ 1). Westfeldt is in the
business of importing green coffee to supply to coffee
roasters. (Id., ¶ 9).
in 2010, U.S. Roasterie, Inc. ("U.S. Roasterie")
became a customer of Westfeldt. (Counterclaim, ¶ 10).
Throughout their course of dealing, Westfeldt and U.S.
Roasterie entered into futures contracts for the purchase of
green coffee. (Id., ¶ 11). Over time, U.S.
Roasterie became delinquent in its payments due under the
terms of the futures contracts. (Id., ¶ 12).
late summer or fall of 2014, U.S. Roasterie and Counterclaim
Defendant Ronnoco Coffee, LLC (“Ronnoco Coffee”)
entered into negotiations for the sale of U.S.
Roasterie's assets to Ronnoco Coffee. (Counterclaim,
¶¶ 2, 13). In conducting due diligence during the
negotiations, Ronnoco Coffee became aware of the substantial
debt that Westfeldt had allowed U.S. Roasterie to incur.
(Id., ¶ 14). Ronnoco Coffee ultimately did not
complete the purchase of U.S. Roasterie's
subsequent point U.S. Roasterie's lender, Great Western
Bank, took control of the assets of U.S. Roasterie.
(Counterclaim, ¶ 17). All of U.S. Roasterie's assets
then were formally acquired by Counterclaim Defendants
Ronnoco Coffee and Mid-America Roasterie, LLC
(“Mid-America”), pursuant to a Sale Agreement
dated February 9, 2015. (Id., ¶¶ 3, 26).
That same day Westfeldt received two nearly identical
letters, one from Ronnoco Coffee and one from Dixon Avenue
Holdings, LLC, notifying it that the assets of U.S.
Roasterie had been taken over by Great Western Bank and then
sold to Mid-America, a subsidiary of Ronnoco Coffee, and that
no invoices prior to the asset sale would be paid because
Ronnoco Coffee did not assume any of U.S. Roasterie's
liabilities. (Id., ¶ 28).
around the day after the asset sale closing, a telephone
conference took place between Ronnoco Coffee, U.S.
Roasterie's former CEO and CFO, and Westfeldt.
(Counterclaim, ¶ 30). According to Westfeldt, Ronnoco
Coffee expressly agreed during the conference to assume
certain futures contracts that were previously in place
between Westfeldt and U.S. Roasterie. (Id.).
Westfeldt maintains that although Ronnoco Coffee/Mid-America
(collectively “Ronnoco”) initially took delivery
of the coffee subject to the futures contracts, it later
informed Westfeldt that it would not continue taking delivery
in fulfillment of the remaining assumed futures contracts.
(Id., ¶ 33). Westfeldt further alleges that as
of September, 2016, the value of the outstanding futures
contracts assumed by Ronnoco was $145, 776.88. (Id.,
filed its Counterclaim against Ronnoco on September 22, 2016.
(ECF No. 9). In its Counterclaim, Westfeldt asserts the
following claims against Ronnoco: Breach of
Contract/Successor Liability (Count I); Open
Account/Successor Liability (Count II); Breach of
Contract/Single Business Entity/Alter Ego (Count III); Open
Account/Single Business Entity (Count IV); Unfair Trade
Practices (Count V); Conversion/Civil Conspiracy to Commit
Conversion (Count VI); Unjust Enrichment (Count VII); and
Breach of Futures Contracts (Count VIII). Westfeldt also
asserts a claim for Tortious Interference with Contractual
Relations/Conspiracy to Tortiously Interfere with Contractual
Relations against Third-Party Defendants Scott Meader and
Eric Bomball. (Count IX).
noted above, Ronnoco, Meader and Bomball (collectively
“Movants”) filed the instant Motion to Dismiss on
October 20, 2016, asserting all Westfeldt's counterclaims
and third-party claims must be dismissed for failure to state
a claim upon which relief can be granted. (ECF No. 18).
FOR MOTION TO DISMISS
ruling on a motion to dismiss, the Court must view the
allegations in the complaint in the light most favorable to
plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801,
806 (8th Cir. 2008). The Court, “must accept
the allegations contained in the complaint as true and draw
all reasonable inferences in favor of the nonmoving
party.” Coons v. Mineta, 410 F.3d 1036, 1039
(8th Cir. 2005) (citation omitted). The
complaint's factual allegations must be sufficient
“to raise a right to relief above the speculative
level, ” however, and the motion to dismiss must be
granted if the complaint does not contain “enough facts
to state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555, 570 (2007) (abrogating the “no set of
facts” standard for Fed.R.Civ.P. 12(b)(6) found in
Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
Furthermore, “the tenet that a court must accept as
true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing
Twombly, 550 U.S. at 555 (pleading offering only
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action” will
Successor Liability (Counts I-II)
Choice Of Law
their Motion to Dismiss, Movants first ask that the Court
apply Iowa law to Counts I and II of Westfeldt's
Counterclaim. (Memorandum in Support of Motion to Dismiss of
Movants (“Movants' Memo in Support”), PP.
10-11). “A district court sitting in diversity must
apply the conflict of law rules for the state in which it
sits.” Inacom Corp. v. Sears, Roebuck and Co.,
254 F.3d 683, 687 (8th Cir. 2001) (citing
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,
496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). “Missouri
has adopted the Restatement (Second) of Conflict of Laws
which uses the ‘most significant relationship' test
to determine which state's laws govern.” Taylor
v. Cottrell, Inc., 2015 WL 8021729, at *1 (E.D. Mo. Dec.
7, 2015) (citations omitted). See also Dorman v. Emerson
Elec. Co., 23 F.3d 1354, 1358 (8th Cir.)
(citation omitted) (“Missouri courts apply the
most-significant-relationship test as defined in the
Restatement. Under this test, the identity of the state
having the most significant relationship will depend upon the
nature of the cause of action and upon the particular legal
issue in dispute.”), cert. denied, 513 U.S.
order to determine which state has the most significant
relationship with a particular issue, the Court must consider
Restatement (Second) of Conflict of Laws § 6, which
provides in relevant part as follows:
(2) [T]he factors relevant to the choice of the applicable
rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the
relative interests of those states in the determination of
the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to
contract claims, the Court further considers § 188,
which provides in relevant part as follows:
(2) In the absence of an effective choice of law by the
parties….the contacts to be taken into account in
applying the principles of § 6 to determine the law
applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicil, residence, nationality, place of
incorporation and place of business of the parties.
contacts are to be evaluated according to their relative
importance with respect to the particular issue.
noted above, Counts I and II of Westfeldt's Counterclaim
attempt to hold Ronnoco liable on a theory of successor
liability. (Counterclaim, ¶¶ 35-54). Specifically,
the issue raised is whether Ronnoco can be held liable as a
successor to U.S. Roasterie by virtue of its purchase of U.S.
Roasterie's assets from Great Western Bank. By the terms
of Westfeldt's Counterclaim, this issue requires the
Court to consider whether Ronnoco assumed the liabilities by
virtue of the Sale Agreement (Counterclaim, ¶¶ 39,
49), whether Ronnoco is a “mere continuation” of