United States District Court, E.D. Missouri, Eastern Division
JACOBSON WAREHOUSE COMPANY, INC., d/b/a XPO LOGISTICS SUPPLY CHAIN, Plaintiff/Counterclaim Defendant,
SCHNUCK MARKETS, INC., Defendant/Counterclaim Plaintiff.
MEMORANDUM AND ORDER
A. ROSS UNITED STATES DISTRICT JUDGE
matter is before the Court on the following motions:
Defendant Schnuck Markets, Inc. (“Schnuck”)'s
Motion to Dismiss Counts IV and V of Plaintiff's
Complaint (Doc. No. 24); Plaintiff/Counterclaim Defendant
Jacobson Warehouse Co., Inc., d/b/a/ XPO Logistics Supply
Chain (“XPO”)'s Motion to Dismiss Counts III,
IV, and V of Defendant/Counterclaim Plaintiff's
Counterclaim (Doc. No. 37); and Plaintiff's Motion for
Judgment on the Pleadings - Counts I and II of Counterclaim
(Doc. No. 39). The motions are fully briefed and ready for
XPO is a global logistics company providing warehousing and
related logistical services to clients. (Complaint
(“Compl.”), Doc. No. 1 at ¶¶ 1, 7.)
Defendant Schnuck is a supermarket retailer that owns and
operates “Schnucks” branded grocery stores.
(Compl. at ¶¶ 1, 8.) In May 2015, XPO and Schnuck
entered into an Amended and Restated Operating Agreement (the
“Agreement, ” Doc. No. 8-1) setting forth the
terms and conditions under which XPO would provide certain
warehouse management services for a new distribution facility
Schnuck was designing (Compl. at ¶¶ 1, 9, 10.) In
the Agreement, Schnuck agreed to pay XPO a weekly Warehousing
Fee in exchange for its warehouse management services, and to
provide information and other assistance required by XPO to
perform those services. (Compl. at ¶¶ 10, 11, 19,
alleges that Schnuck subsequently breached its contractual
and other obligations in at least three ways: (1) by failing
to properly equip and furnish the new warehouse facility; (2)
by failing to provide necessary information or otherwise
cooperate with XPO, thereby materially impeding XPO's
ability to manage the warehouse facility; and (3) by
withholding, without cause or justification, fees owed to XPO
for its services. On February 8, 2017, XPO notified Schnuck
that it was in material default of its obligations and that
XPO was terminating the Agreement. (Compl. at ¶ 28.) On
February 14, 2017, Schnuck responded by purporting to
terminate the Agreement due to XPO's alleged breaches of
the Agreement. (Compl. at ¶ 29.)
February 17, 2017, XPO filed its Complaint against Schnuck
seeking damages and a declaratory judgment stating that
Schnuck is in breach of its obligations, owes XPO for
services rendered, and that XPO validly terminated the
contract. The complaint asserts causes of action for breach
of contract (Count I); declaratory judgment (Count II);
action on account (Count III); quantum meruit (Count IV); and
unjust enrichment (Count V). Schnuck counterclaims for breach
of contract (Count I); breach of the covenant of good faith
and fair dealing (Count II); negligence (Count III); fraud
(Count IV); conversion (Count V); and breach of contract -
transition services agreement (Count VI). (First Amended
Counterclaim (“FAC”), Doc. No. 59.)
Motions to dismiss
ruling on a motion to dismiss, the Court assumes all facts
alleged in the complaint are true, and liberally construes
the complaint in the light most favorable to the plaintiff.
Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th
Cir. 2008). To survive a motion to dismiss, a complaint must
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). “Further,
documents attached to or incorporated within a complaint are
considered part of the pleadings, and courts may look at such
documents for all purposes.” Brown v. Medtronic,
Inc., 628 F.3d 451, 459-60 (8th Cir. 2010).
Schnuck's motion to dismiss Counts IV and V of
quantum meruit claim (Count IV), XPO alleges that: Schnuck
requested XPO manage and operate the facility; XPO conferred
a benefit upon Schnuck by managing and operating the
facility; Schnuck appreciated that a benefit was conferred,
including but not limited to executing the Agreement and, for
a time, by fully paying the weekly Warehousing Fees;
Schnuck's acceptance and retention of the benefit of
XPO's management and operation of the Facility is
inequitable and unjust under the circumstances as Schnuck has
not paid for the services XPO provided; and XPO has been
unjustly enriched by its acceptance and retention of the
services rendered by XPO to manage and operate the Facility
without rendering full payment for the same. (Compl. at
¶¶ 49-53.) XPO further alleges that the services it
provided had a fair and reasonable value of “not less
than the amount of all unpaid Warehousing Fees.”
(Compl. at ¶ 54.) XPO's unjust enrichment claim
(Count V) is similarly pled. (Compl. at ¶¶ 56-61.)
support of its motion to dismiss, Schnuck argues that
quasi-contractual claims like quantum meruit and unjust
enrichment cannot be based - even at the pleadings stage - on
the terms and benefits conferred by an express contract.
(Doc. No. 25 at 3-5.) XPO responds that while a plaintiff
cannot recover on both an express contract and
quasi-contractual claim, under the Federal Rules of Civil
Procedure, quasi-contractual claims may be pled as
alternative relief to breach of an express contract. (Doc.
No. 33 at 4-5.) XPO further responds that neither of its
quasi-contractual claims rely upon or presuppose the
existence of the Agreement; the only references to the
Agreement or Warehousing Fees were to show that Schnuck
appreciated the benefit XPO conferred and to state that the
value of the benefit was worth “no less than” the
Warehouse Fees. (Id. at 6-10.) In reply, Schnuck
argues that since neither party disputes the existence and
validity of the Agreement, XPO's quasi-contractual claims
cannot lie. (Doc. No. 41 at 3-4.)
rule, a plaintiff cannot pursue quasi-contractual claims
where there is an express contract between the parties.
Prime Aid Pharmacy Corp. v. Express Scripts, No.
4:16-CV-1237-CEJ, 2017 WL 2021082, at *6 (E.D. Mo. May 12,
2017) (citing Affordable Communities of Missouri v. Fed.
Nat. Mortg. Assn, 714 F.3d 1069, 1077 (8th Cir. 2013)).
Here, there is no dispute that a contract exists; XPO is
asserting claims based on an alleged breach of the Agreement.
Under the federal notice pleading standards, however, a party
may plead claims in the alternative, even if the claims are
inconsistent. See Fed.R.Civ.P. 8(d)(2); Volz v.
Provider Plus, Inc., No. 4:15-CV-0256-TCM, 2015 WL
3621113, at *2 (E.D. Mo. June 9, 2015). A review of the
complaint indicates that this is not what XPO is actually
doing. In Counts IV and V, XPO pleads the elements of a
contract (perhaps implied-in-fact) to manage and operate the
Facility, and the damages it seeks to recover, i.e.,
“the balance of all unpaid Warehousing Fees, plus
pre-and post-judgment interests, costs of suit and
attorneys' fees, ” are the same damages sought in
its contract claims. Further, XPO has incorporated its breach
of contract allegations into its quasi- contract claims
(“XPO repeats and incorporates herein by reference the
allegations set forth [above]”). (See Compl.
at ¶¶ 48, 55.) XPO has not provided a basis for
distinguishing its claims for unjust enrichment and quantum
meruit from its contract claims, or explained how these
claims are truly “alternative, ” given that there
is no contention that the Agreement is somehow unenforceable.
As pled, Counts IV and V must be dismissed. Accordingly,
Schnuck's motion to dismiss Counts IV and V of the
Complaint will be granted and XPO's claims for quantum
meruit and unjust enrichment will be dismissed without
XPO's motion to dismiss Counts III, IV and V of
Negligence (Count III)
alleges that XPO was negligent in operating the Facility.
Specifically, Schnuck claims that XPO breached its duty of
care by “failing to conduct its operations pursuant to
prevailing warehouse industry practices and inadequately
planning, hiring, training, staffing, and supervising at the
Facility.” (FAC at ¶¶ 81-82.) XPO argues that
Schnuck's negligence claim should be dismissed under the
economic loss doctrine because it is not independent of its
breach of contract claim; both claims reference the same
subject matter of the Agreement - management of the Facility,
and the same standard of care - “prevailing warehouse
industry standards.” (Doc. No. 38 at 8.) Schnuck
responds that the doctrine does not apply because the parties
contractually created a relationship and status under which
XPO is liable in negligence for its acts and omissions. (Doc.
No. 45 at 2-7.) Schnuck further responds that even if the
economic doctrine applied, Missouri recognizes an exception
in cases involving the negligent rendition of services by a
professional like XPO. (Id. at 7.)
economic loss doctrine prohibits a plaintiff from seeking to
recover in tort for economic losses that are contractual in
nature. Trademark Med., LLC v. Birchwood Labs.,
Inc., 22 F.Supp.3d 998, 1002 (E.D. Mo. 2014); Self
v. Equilon Enterprises, LLC, No. 4:00-CV-1903-TIA, 2005
WL 3763533, at *8 (E.D. Mo. Mar. 30, 2005). The doctrine
exists to protect the integrity of the bargaining process,
through which the parties have allocated the costs and risks.
Marvin Lumber & Cedar Co. v. PPG Indus., Inc.,
223 F.3d 873, 882 (8th Cir. 2000).
true that XPO agreed to adhere to performance requirements
and key performance indicators as set forth in the Agreement.
(Doc. No. 8-1 at Section 2(a)(iii); Sections 6(d), 6(g),
6(i)). However, “[w]hile a mere breach of contract does
not provide a basis for tort liability, the negligent act or
omission which breaches the contract may serve as a basis for
an action in tort.” Baily Int'l, Inc. v.
Harcros Chemicals, Inc., No. 4:14-CV-1708-JAR, 2015 WL
1781672, at *2 (E.D. Mo. Apr. 15, 2015) (quoting Union
Elec. Co. v. Chicago Bridge & Iron Co., No.
4:14-CV-31-RWS, 2015 WL 1262941, at *6 (E.D. Mo. Mar. 19,
2015)). “If the duty arises solely from the contract,
the action is contractual. The action may be in tort,
however, if the party sues for breach of a duty recognized by
the law as arising from the relationship or status the
parties have created by their agreement.” Id.
Schnuck alleges that XPO was obligated to “perform the
services necessary for the proper, accurate and efficient
operation of the Facility” and to perform those
services “in a good, professional, workmanlike,
expeditious, and economical manner, consistent with the most
efficient operation of the warehouse in accordance with the
standards and prevailing practices in the warehouse
industry.” (FAC at ¶¶ 24, 26.) Thus,
Schnuck's negligence claim does not arise solely in
contract and will not be dismissed on this basis. See
Union Elec., 2015 WL 1262941, at *6.
where, as here, contracting parties “require the
exercise of reasonable skill, diligence, and care in the
handling of business given over or entrusted to” a
defendant, a special relationship or status is created by
their contract. Owen Cont'l Dev., LLC v. Vill. Green
Mgmt. Co., No. 4:11-CV-1195-FRB, 2011 WL 5330412, at *3
(E.D. Mo. Nov. 4, 2011) (quoting Autry Morlan Chevrolet,
Cadillac, Inc. v. RJF Agencies, Inc., 332 S.W.3d 184,
193 (Mo.Ct.App. 2010)). A tort action may be pursued
“if the party sues for breach of a duty recognized by
the law as arising from the relationship or status the
parties have created by their agreement.” Id.
(quoting Business Men's Assurance Co. of Am. v.
Graham, 891 S.W.2d 438, 453 (Mo.Ct.App. 1994)). In an
action by a bailor against the bailee, the bailor may proceed
on alternate theories of general negligence of the bailee,
specific negligence of the bailee, or breach of the bailment
contract. Inst. of London Underwriters v. Eagle Boats,
Ltd., 918 F.Supp. 297, 299-300 (E.D. Mo. 1996) (internal
citations omitted). The duty of the bailee is to exercise
ordinary care in the handling and safekeeping of the bailed
property. Id. (internal citations omitted).
further asserts that because XPO provided professional
services to Schnuck and held itself out as a professional by
representing it was skilled in the warehousing business and
capable of operating the Facility consistently with
prevailing practices in the warehousing industry, the
professional services exception to the economic loss doctrine
applies. (Doc. No. 45 at 7.) This exception is applied to
negligence claims involving defendants who have been held to
a professional, rather than an ordinary, standard of care and
who have provided professional services to the plaintiff.
JR14, LLC v. Jetcorp Tech. Servs., Inc., No.
4:17-CV-1469-RWS, 2017 WL 3720075, at *1 (E.D. Mo. Aug. 29,
these allegations, it would be premature at this stage of the
proceedings to conclude that Schnuck's negligence claim
arises solely in contract and dismiss it as barred by the
economic loss doctrine. Accordingly, XPO's motion to
dismiss Schnuck's negligence as barred by the economic
loss doctrine will be denied. Id. at *2.
XPO argues that Schnuck's negligence claim should be
dismissed to the extent it seeks damages barred by a
Limitation of Liability provision in the Agreement. (Doc. No.
38 at 5-7.) Section 5(b) provides:
[U]nless otherwise prohibited by law, neither
party shall be liable for incidental or consequential damages
or indirect, special or punitive damages.
Notwithstanding the foregoing limitations on types of
damages, in the event that XPO would otherwise be liable to
Schnucks for consequential, indirect, special or punitive
damages, XPO shall be liable to Schnucks for such damages up
to Schnucks' self-insured retention under any applicable
insurance policy maintained by Schnucks, not to exceed Five
Hundred Thousand Dollars ($500, 000)[.]
(Agreement, Doc. No. 8-1 at § 5(b)) (Emphasis added).
XPO contends this provision is an unambiguous and broad
waiver that bars either party from seeking the enumerated
categories of damages. Schnuck contends that Section 5(b)
only applies to contractual claims under the Agreement, and
does not waive ...