Hayden Outdoors, Inc. v. Mason & Morse Ranch Company LLC et al
MEMORANDUM AND ORDER granting 12 defendant Stratman's Motion to Dismiss for Failure to State a Claim. PLEASE REFER TO THE ORDER FOR AN IMPORTANT SHOW CAUSE FILING DEADLINE. Signed by District Judge J. Thomas Marten on 1/28/2014. (mss)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
HAYDEN OUTDOORS, INC.,
Case No. 13-1288 JTM
LINDA NIEBUR and
MEMORANDUM AND ORDER
The court has before it defendant John Stratman’s Motion to Dismiss for Failure
to State a Claim (Dkt. 12). After reviewing the parties’ briefs on the motion, the court is
prepared to rule.
The complaint alleges the following facts. Plaintiff Hayden Outdoors signed a
contract, agreeing to sell 22,720 acres of Delmer Zweygardt’s farm land on June 27,
2008. The contract was an “Exclusive Right to Sell Listing Agreement,” under which
Hayden was entitled to a 7% commission of the final sales price. The agreement
included a provision compensating Hayden if the property was sold to anyone Hayden
had shown the property to or negotiated with.
In February of 2009, defendants John Stratman and Linda Niebur, agents for
Mason & Morse Ranch Company, LLC, contacted Zweygardt regarding some potential
buyers for his property. After hearing of this contact with its client, Hayden gave
Stratman and Niebur the listing information but told Mason & Morse Ranch Company
that Stratman and Niebur should contact Hayden, rather than contacting Zweygardt
directly. Zweygardt told Hayden that even if it failed to sell the land by the end of the
listing agreement on June 27, 2009, he would sign a new listing agreement because he
was satisfied with Hayden’s performance.
Despite Hayden’s warnings, Stratman and Niebur continued to contact
Zweygardt about selling his property. Hayden prepared a new listing agreement,
believing Zweygardt would extend its time to sell the land as he had promised.
However on June 27, 2009, Zweygardt told Hayden he would not be signing the
extension. On July 1, 2009, Stratman purchased Zweygardt’s property. Stratman then
sold portions of Zweygardt’s land on August 18, 2009 for a total of over $8.2 million.
The extension clause from Hayden’s listing agreement was still valid and enforceable at
the time of this sale, entitling Hayden to compensation for the sale of Zweygardt’s land.
Later in 2009, Hayden filed suit against Zweygardt in state court alleging breach
of contract. The district court awarded Hayden $437,649, based on a 7% commission of
the sale by Stratman less the commission due to Stratman, Niebur and Mason & Morse
Ranch Company. Zweygardt appealed the decision, and Hayden cross-appealed. The
Kansas Court of Appeals affirmed the district court’s ruling. On August 1, 2013,
Hayden filed this suit, asserting tortious interference of contract by Stratman, Niebur
and Mason & Morse Ranch Company.1
court dismissed defendant Mason & Morse Ranch Company on January 9, 2014. See Dkt. 22.
Defendant Niebur has apparently not yet been served, as her summons was returned unexecuted. See
II. Legal Standard: Motion to Dismiss Under Rule 12(b)(6)
A complaint must contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). The complaint must give the
defendant adequate notice of what the plaintiff’s claim is and the grounds of that claim.
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). “In reviewing a motion to dismiss,
this court must look for plausibility in the complaint . . . . Under this standard, a
complaint must include ‘enough facts to state a claim to relief that is plausible on its
face.’ “ Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219, 1223–24 (10th Cir. 2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (clarifying and affirming Twombly’s probability standard).
“The issue in resolving a motion such as this is ‘not whether [the] plaintiff will
ultimately prevail, but whether the claimant is entitled to offer evidence to support the
claims.’ “ Bean v. Norman, No. 008-2422, 2010 WL 420057, at *2, (D. Kan. Jan. 29, 2010)
(quoting Swierkiewicz, 534 U.S. at 511).
Defendant Stratman argues that the complaint should be dismissed because
Hayden filed it after the statute of limitations had run. Hayden argues the statute of
limitations does not bar its claim because it could not file this suit until its state court
claims against Zweygardt were fully resolved.
“A federal court sitting in diversity jurisdiction must apply the substantive law
of the state in which it sits, including that state’s choice-of-law rules.” Vazirani & Assoc’s
Fin., LLC v. Heitz, No. 11-1032-MLB, 2011 WL 2295027, at *2 (D. Kan. June 8, 2011)
(internal citation omitted). In Kansas, tortious interference claims are subject to a twoyear statute of limitations. Id. (citing KAN. STAT. ANN. 60-513(4)). The statute of
limitations begins to run when the right to maintain a legal action arises. Johnston v.
Farmers Alliance Mutual Ins. Co., 218 Kan. 543, 548, 545 P.2d 312, 317 (1976). “In Kansas, a
cause of action accrues ‘at the time of the act giving rise to the cause of action, unless the
fact of injury is not reasonably ascertainable.’ ” Heitz, 2011 WL 2295027 at *3 (quoting
See v. Hartley, 257 Kan. 813, 820, 896 P.2d 1049, 1054 (Kan. 1995)). “Kansas law
recognizes that a claim for tortious interference with contract accrues when the injury is
reasonably ascertainable though the full actual loss may not happen until later.”
Rinehart v. Saint Luke’s South Hosp., Inc., No. 10-2209-SAC, 2011 WL 3348234, at *14 (D.
Kan. Aug. 3, 2011).
Hayden filed this case on August 1, 2013. Using this date as a starting point, to be
timely, the cause of action must have accrued within two years prior. But Hayden
alleges that Stratman’s tortious interference with contract took place in 2009, and
Hayden admits that its suit against Zweygardt did not toll the statute of limitations.
Therefore, Hayden’s claim is time-barred unless it can show its injury was not
reasonably ascertainable until after August 1, 2011. See Heitz, 2011 WL 2295027 at *3.
Hayden argues that it was unable to bring suit against these defendants until its
breach of contract case against Zweygardt was resolved, including the appeals process.
Hayden notes that a breach of contract action is intended to place the injured party in
the same position it would have been in but for the breach, and a double or duplicative
recovery for its injury arising from a breach of contract would be invalid. Based on this,
Hayden asserts that if it had recovered full compensation against Zweygardt, it would
have been barred from seeking what would amount to duplicative compensatory
damages against the defendants in this case. Hayden adds that since it could not have
known what its recovery against Zweygardt would be, any amount of damages claimed
against the defendants in this case before the first case concluded would have been too
speculative. According to Hayden, this would have been a fatal flaw because “damages
suffered by plaintiff as a direct or proximate cause of defendant’s misconduct” are one
element of a tortious interference claim, and damages in this case “are limited to those
damages not recovered from the party breaching the contract.” Hayden’s Memorandum
in Opposition, Dkt. 19, p. 6 (citing Maxwell v. Southwest Nat’l Bank, 593 F. Supp. 250, 253
(D. Kan. 1984); Restatement (Second) of Torts § 774A (2)(1979)). Finally, Hayden argues
that “[t]o require Plaintiff to simultaneously maintain separate suits against separate
defendants with claims arising out of one set of facts” would place an undue burden
upon it and the courts.
The court finds a useful example in Phillips USA, Inc. v. AllFlex USA, Inc., 869 F.
Supp. 842 (D. Kan. 1994). In Phillips USA, the plaintiffs alleged that the tortious
interference of Allflex caused NJ Phillips to breach its agreement with Felton & Co. Id.
at 851. NJ Phillips’s breach and the alleged interference of Allflex gave rise to the same
injuries or damages to the plaintiffs. Id. “The same acts and events giving rise to NJP’s
breach of contract substantially form the basis of plaintiffs’ tortious interference claim
against Allflex . . . .” Id. The court reasoned that once the plaintiffs ascertained or could
have reasonably ascertained injury from NJ Phillips’s breach of contract, they could also
have reasonably ascertained that Allflex was interfering with their contractual
relationship with NJ Phillips. Id. “Thus, under the circumstances of this case, plaintiffs’
cause of action for tortious interference began to accrue at the same time, or no later
than, its cause of action accrued for breach of the . . . contract.” Id.
Similar circumstances are present here. When Hayden ascertained the injury
caused by Zweygardt’s breach, it also ascertained the injury caused by the alleged
tortious interference of the defendants in this case. Hayden does not argue that it was
unaware of these defendants’ actions until later. Therefore, Hayden’s cause of action
accrued at the same time its cause of action for breach of the contract accrued. See id.
This cause of action accrued more than two years before Hayden filed this suit.
Therefore, the statutory two-year limitations period bars Hayden’s claims.
Hayden misinterprets the Restatement (Second) of Torts in claiming that it could
not properly file suit against the defendants in this case prior to the resolution of its case
against Zweygardt. The Restatement (Second) states:
In an action for interference with a contract by inducing or causing a third
person to break the contract with the other, the fact that the third person is
liable for the breach does not affect the amount of damages awardable
against the actor; but any damages in fact paid by the third person will
reduce the damages actually recoverable on the judgment.
Restatement (Second) of Torts § 774A(2)(1979). Additionally, comment e to the
Restatement (Second) of Torts § 774A(2) states:
The fact that the plaintiff may have a cause of action against the person
who has broken his contract does not prevent recovery against the
defendant who has induced or otherwise caused the breach, or reduce the
damages recoverable from him. The defendant and the contract breaker
are both wrongdoers (compare § 875), and each is liable for the entire loss
that he has caused. Even a judgment obtained for breach of the contract if
it is not satisfied does not bar or reduce recovery from the one who has
caused the breach. But since the damages recoverable for breach of the
contract are common to the actions against both, any payments made by
the one who breaks the contract or partial satisfaction of the judgment
against him must be credited in favor of the defendant who has caused the
Conversely, an action or judgment against the one who causes the breach
without satisfaction will not bar or reduce recovery from the one who
breaks the contract; but to the extent that there is duplication of the
damages any payments made by the tortfeasor must be credited in favor
of one who has broken the contract.
According to the Restatement (Second), Hayden was not prohibited from filing
the instant suit before its action against Zweygardt was complete. Hayden could
have sued Stratman and the other defendants in this case for the full amount of
the damages it suffered from Zweygardt’s breach, even though the recoverable
damages assessed against parties would be limited to the total amount of
damages caused by the breach.
The court is not persuaded by Hayden’s argument that any damages claimed
against these defendants would have been too speculative before the completion of its
case against Zweygardt. Hayden’s damages as a result of the defendants’ alleged
tortious interference are essentially the same as Hayden’s damages from Zweygardt’s
breach of contract. The fact that Hayden could not know the precise amount that would
be awarded in one case does not make the amount of damages awardable in the other
case “too speculative.” Only the recoverable damages would be speculative, but
knowing the amount of damages that are recoverable from the defendant is not a
required element in a tortious interference case.
Finally, the court must address Hayden’s argument that its interpretation would
have required it, unjustly, to file multiple simultaneous lawsuits against Zweygardt and
the defendants in this case, forcing it to “[withdraw] from one if it is successful in the
other.” Hayden had other options available to comply with the statute of limitations.
Rather than filing multiple simultaneous lawsuits, Hayden could have brought one suit
against all the parties, ensuring it had the opportunity to hold all appropriate parties
responsible for its damages and determining what amount of damages each party
would be held liable for. Alternatively, Hayden could have sued Zweygardt first, as it
did, and then filed this suit on the final day of the period of limitations. Although some
overlap between the two cases would exist, its burden on Hayden would have been
The ultimate question the court faces in ruling on Stratman’s motion is whether
Hayden could have filed this suit without knowing the amount of damages it would be
awarded in its lawsuit against Zweygardt. The court finds no legal barriers to Hayden’s
filing this lawsuit before the period of limitations ran. When a complaint shows on its
face that the applicable statute of limitations has run, an action is subject to dismissal for
failure to state a claim upon which relief can be granted. Turner and Boisseau, Inc. v.
Nationwide Mut. Ins. Co., 944 F.Supp. 842, 844 (D. Kan. 1996). Accordingly, the court
grants Stratman’s motion to dismiss.
IT IS THEREFORE ORDERED this 28th day of January, 2014, that defendant
Stratman’s Motion to Dismiss (Dkt. 12) is granted.
IT IS ALSO ORDERED that Hayden Outdoors must show good cause within
fourteen days of the filing of this order why its claims against defendant Linda Niebur
should not be dismissed for failing to comply with the statute of limitations.
s/ J. Thomas Marten
J. THOMAS MARTEN, JUDGE
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