United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
STEPHEN R. CLARK UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendant Pepperidge Farm,
Inc.'s Motion to Dismiss . The Court grants, in part,
and denies, in part, the motion.
S R Distributing LLC filed a petition against Pepperidge
Farm, Inc. in the Circuit Court of St. Louis County.
Pepperidge Farm removed the matter to this Court. In its
petition, SR Distributing alleges Pepperidge Farm violated
its distributorship agreement (the “Agreement”)
with SR Distributing when Pepperidge Farm purchased the
rights to distribute to “Club Stores” such as
Costco or Sam's Club. SR Distributing asserts seven
counts against Pepperidge Farm: (1) Breach of Contract, (2)
Violation of the Missouri Franchise Act, § 407.400(1)
RSMo. (3) Fraud in the Inducement; (4) Promissory Estoppel,
(5) Violation of Missouri's Sales Commissions statute,
§ 407.913 RSMo, (6) Tortious Interference with Business
Expectancy, and (7) an alternative claim seeking Arbitration
to Calculate Fair Market Value of the repurchased
distributorship rights. In its memorandum in opposition, ECF
No. 12, to the motion to dismiss, SR Distributing dismissed
the Missouri Franchise Act claim, and the Court does not
address it here.
Federal Rule of Civil Procedure (“FRCP”)
12(b)(6), a party may move to dismiss a claim for
“failure to state a claim upon which relief can be
granted.” The notice pleading standard of FRCP 8(a)(2)
requires a plaintiff to give “a short and plain
statement showing that the pleader is entitled to
relief.” To meet this standard and to survive a FRCP
12(b)(6) motion to dismiss, “a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations
and citation omitted). This requirement of facial
plausibility means the factual content of the plaintiff's
allegations must “allow the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Park Irmat Drug Corp. v.
Express Scripts Holding Co., 911 F.3d 505, 512 (8th Cir.
2018) (quoting Iqbal, 556 U.S. at 678). The Court
must grant all reasonable inferences in favor of the
nonmoving party. Lustgraaf v. Behrens, 619 F.3d 867,
872-73 (8th Cir. 2010). Ordinarily, only the facts alleged in
the complaint are considered for purposes of a motion to
dismiss; however, materials attached to the complaint may
also be considered in construing its sufficiency.
Reynolds v. Dormire, 636 F.3d 976, 979 (8th Cir.
ruling on a motion to dismiss, a court “must liberally
construe a complaint in favor of the plaintiff[.]”
Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d
853, 862 (8th Cir. 2010). However, if a claim fails to allege
one of the elements necessary to recover on a legal theory,
the Court must dismiss that claim for failure to state a
claim upon which relief can be granted. Crest Constr. II,
Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011).
Threadbare recitals of a cause of action, supported by mere
conclusory statements, do not suffice. Iqbal, 556
U.S. at 678; Bell Atlantic v. Twombly, 550 U.S. 544,
555 (2007). Although courts must accept all factual
allegations as true, they are not bound to take as true a
legal conclusion couched as a factual allegation.
Twombly, 550 U.S. at 555 (internal quotations and
citation omitted); Iqbal, 556 U.S. at 677-78.
motion to dismiss, Pepperidge Farm asserts SR
Distributing's first six claims must be dismissed for
failure to plead sufficient facts. First, Pepperidge Farm
states the breach of contract claim must be dismissed because
the unambiguous language of the Agreement gives Pepperidge
Farm the right to repurchase Club Store rights. Second,
Pepperidge Farm contends the claims for fraud in the
inducement and promissory estoppel must be dismissed because
the claims are improperly premised on an alleged promised
made during negotiations. Third, Pepperidge Farm states the
claim pursuant to the Missouri Merchandising Practices Act
(“MMPA”) must be dismissed because SR
Distributing has not earned any commissions for the time
period in question. Fourth, Pepperidge Farm argues the claim
for tortious interference with business expectancy must be
dismissed because it does not identify an actionable business
expectancy independent of the contract. Finally, Pepperidge
Farm contends SR Distributing's claim for arbitration to
calculate the fair market value is unnecessary because SR
Distributing has the right to initiate arbitration without
judicial involvement and has not yet done so.
Breach of Contract Claim - Count I
Farm asserts the breach of contract claim must be dismissed
because Section 20 of the agreement unambiguously permits
Pepperidge Farm to repurchase the Club Store rights. In
response, SR Distributing argues Section 20 gives Pepperidge
Farm the option to repurchase territory only, not any rights
of the Agreement.
Missouri,  to state a claim for breach of contract, a
plaintiff must establish the existence of a valid contract,
the rights of the plaintiff and obligations of the defendant
under the contract, a breach by the defendant, and damages
resulting from the breach. Spectrum Brands, Inc. v.
Compton's LLC, No. 2:16CV30 HEA, 2018 WL 3995687 at
*4 (E.D. Mo. Aug. 21, 2018) (citing Gillis v. Principia
Corp., 832 F.3d 865, 871 (8th Cir. 2016)). If the
contract is unambiguous, the Court must not consider any
extrinsic or parol evidence as to the intent and meaning of
the contract. Id. “Courts may not unreasonably
distort the language of a [contract] or exercise inventive
powers for the purpose of creating an ambiguity where none
exists.” Todd v. Mo. United Sch. Ins. Council,
223 S.W.3d 156, 163 (Mo. 2007). An ambiguity does not exist
just because the parties dispute the meaning of the contract.
Iappini v. Silverleaf Resorts, Inc., 116 F.Supp.3d
932, 938 (E.D. Mo. 2015). “Rather, a contract is
ambiguous when the terms are susceptible to more than one
meaning so that reasonable persons may fairly and honestly
differ in their construction of the terms.”
Id. The Court must read the terms of the contract as
a whole, given their plain, ordinary, and usual meaning.
Heisel v. John Deere Constr. & Forestry Co., No.
4:07CV1712 DDN, 2008 WL 53232 at *7 (E.D. Mo. Jan. 2, 2008)
(citing Pepsi MidAmerica v. Harris, 232 S.W.3d 648,
654-55 (Mo.Ct.App. 2007)).
20 of the Agreement states as follows:
BAKERY'S OPTION TO BUY DISTRIBUTORSHIP. Bakery
[Pepperidge Farm] shall have the right in its discretion to
purchase all or any portion of the Distributorship at any
time upon written notice to Consignee [SR Distributing].
Bakery shall become the owner of the Distributorship, or the
portion being purchased, on the date specified in the notice,
whether or not a final purchase price has been agreed upon or
determined, as provided below. Bakery may begin operating the
Distributorship, or the portion being purchased, for its own
account on such date. If Bakery elects to purchase all or any
portion of the Distributorship pursuant to this Paragraph, it
will pay to Consignee a sum equal to (a) the fair market
value of the Distributorship, or the portion thereof being
purchased, as the case may be, on the date set forth in the
written notice plus (b) 25% of such fair market value, to be
determined either by agreement between Bakery and Consignee
or, if they shall be unable to agree, by three arbitrators. .
5-1. The Agreement contains various definitions, including:
(c) TERRITORY - refers to the territory described in Schedule