Baily International, Inc. v. Harcros Chemicals, Inc.

Filing 13

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant's Motion to Dismiss Plaintiff's Complaint 7 is DENIED. IT IS FURTHER ORDERED that a Rule 16 conference will be set by separate order. Signed by District Judge John A. Ross on 4/15/15. (ARL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

BAILY INTERNATIONAL, INC.,
Plaintiff,
v.
HARCROS CHEMICALS, INC.,
Defendant.

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No. 4:14-CV-1708 JAR

MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion to Dismiss Plaintiff’s Complaint.
(Doc. No. 7) The motion is fully briefed and ready for disposition. For the following reasons, the
motion will be denied.
Background
Plaintiff Baily International Inc. (“Baily”) brings this action for negligence (Count I) and
breach of express and implied warranties (Counts II-IV) against Defendant Harcros Chemicals,
Inc. (“Harcros”), a Kansas corporation in the business of manufacturing, selling and delivering
food grade and industrial grade chemicals. (Complaint (“Compl.”), Doc. No. 1 at ¶ 3) Baily is in
the business of manufacturing and selling food sauces in single serve plastic packets. (Id. at ¶ 2)
The parties’ relationship dates back to 2001, when Harcros began supplying “food grade”
chemicals to Baily. (Id. at ¶¶ 7-8) From 2007 to 2010, Baily entered into agreements with
Harcros to purchase “food grade” Glacial Acetic Acid for use in its Spice King food sauce
products. (Id. at ¶¶ 9, 14) Baily alleges that “[a]t an unknown time, without notifying Baily and
without seeking or receiving Baily’s permission, Harcros delivered an unknown quantity of
Glacial Acetic Acid that was not “food grade” quality” to Bailey’s St. Louis, Missouri facility.

(Id. at ¶ 13) On April 26, 2011, the Food and Drug Administration (“FDA”) inspected Baily’s
plant and identified a Harcros barrel of Glacial Acetic Acid that was not “food grade.” (Id. at ¶
17) Baily was subsequently required by the FDA to recall all of its products using the non-food
grade Glacial Acetic Acid. (Id. at ¶¶ 17-18, 21) Bailey alleges that as a result of the recall, it has
incurred substantial damages to its business and its Spice King brand. (Id. at ¶¶ 22-23)
Legal standard
In considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court must assume
all the facts alleged in the complaint are true, and liberally construe the complaint in the light
most favorable to the plaintiff. Foster v. Deutsche Bank Nat. Trust Co., 2012 WL 5285887, at *2
(E.D.Mo. Oct. 25, 2012) (citing Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir.2008)).
The 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). Thus, a dismissal under Rule 12(b)(6) should be granted “only in the
unusual case in which a plaintiff includes allegations that show, on the face of the complaint, that
there is some insuperable bar to relief.” Strand v. Diversified Collection Serv., Inc., 380 F.3d
316, 317 (8th Cir.2004).
Discussion
Negligence (Count I)
Under Missouri law, in any negligence action, the plaintiff must first establish that a duty
of care is owed to the plaintiff by the defendant to protect the plaintiff from the alleged injury
suffered. City of Kennett v. Wartsila North America, Inc., 2005 WL 3274334, at *2 (E.D.Mo.
Dec. 2, 2005) (citing Rockport Pharmacy, Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 197 (8th

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Cir. 1995)). The plaintiff must then establish that the defendant failed to perform the duty and
that failure was the proximate cause of plaintiff's injury. Burns v. Black & Veatch Architects,
Inc., 854 S.W.2d 450, 452-53 (Mo.Ct.App.1994) (citing Krause v. U.S. Truck Co., 787 S.W.2d
708, 710 (Mo. banc.1990)).
Harcros argues that Baily’s claim for negligence is not a viable claim under Missouri law
because it is merely a restatement of its breach of contract claims and not based on a breach of
any duties independent of the duties provided for under the applicable sales agreements. (Doc.
No. 8 at 3-6) Baily responds that it did not allege the existence of any sales agreement or contract
and that in any event, the existence of a contract does not negate a negligence claim when the
duty alleged arises from the relationship the parties have created through their agreement or
when the damaging party possesses knowledge or skill superior to that of an ordinary person.
(Doc. No. 11 at 5-7) Baily maintains that Harcros’ knowledge and the past course of conduct
between them define Harcros’ duty to provide food grade product. (Id. at 7)
While 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. Union
Elec. Co. v. Chicago Bridge & Iron Co., 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. (quoting Liberty Mut. Fire
Ins. Co. v. Centimark Corp., 2008 WL 5423440, at *2 (E.D.Mo. Dec. 29, 2008)).
Here, Baily alleges that Harcros had a duty to provide it with product that was “food
grade” quality and “otherwise complied with all requirements of the FDA and any similar
regulatory agency for the use of Glacial Acetic Acid in food products.” (Compl. at ¶ 25) Baily

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further alleges that Harcros breached this and other “common law and statutory duties” by
providing it with product that was not “food grade” quality. (Id. at ¶ 26) Thus, it would be
premature for this Court to find that Baily’s allegations arise solely in contract. Accordingly, for
purposes of the instant motion, the Court finds Bailey’s complaint is sufficient for it to maintain
its negligence action. Harcros’ motion to dismiss Count I of Baily’s complaint will be denied.
Breach of warranties (Counts II, III, IV)
Harcros argues that any claim asserted by Baily for breach of warranty arising out of the
sale of Glacial Acetic Acid prior to October 7, 2010 is time barred under Mo. Rev. Stat. § 400.2725. (Doc. No. 8 at 6-9) Pursuant to § 400.2-725(1), an action for breach of contract for sale
must be commenced within four years after the cause of action has accrued, that is, when the
breach occurs. “A breach of warranty occurs when tender of delivery is made,” unless there is an
explicit warranty extending to future performance, in which case the cause of action accrues
when the breach is or should have been discovered. § 400.2-725 (2). Harcros argues that Baily
has failed to plead the existence of any such warranty.
Baily responds that it filed its claims within four years of the last known date Harcros
shipped Glacial Acetic Acid to Baily, October 8, 2010, and thus within the required limitations
period. (Doc. No. 11 at 2-3) Further, Baily argues it did not limit its claims to deliveries up to
and including October 8, 2010; rather, it alleged that deliveries occurred from 2007 through at
least October 8, 2010, leaving room for claims based on other deliveries to be identified during
discovery. (Id. at 10) (Emphasis added.)
In considering a Rule 12(b)(6) motion based on the running of a statute of limitations, the
Court may only grant the motion if it is clear from the face of the complaint that the cause of
action is time-barred. Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 367 (8th Cir. 2011);

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Jessie v. Potter, 516 F.3d 709, 713 n.2 (8th Cir. 2008). Baily filed its complaint on October 7,
2014. Thus, in order to prevail on its statute of limitations defense, Harcros has the burden of
establishing that Baily’s cause of action accrued more than four years prior to that date. The
complaint itself does not establish such a fact.
As discussed above, a breach of warranty occurs when tender of delivery is made. See,
Mo. Rev. Stat. § 400.2-725 (2). Bailey alleges that in 2007, it began purchasing product from
Harcros for its Spice King food sauce product, including Glacial Acetic Acid. (Compl. at ¶ 9)
Baily further alleges that Harcros continued to deliver Glacial Acetic Acid to Baily “through at
least October 8, 2010.” (Id. at ¶ 14) Because the complaint does not explicitly allege the last date
of delivery, it is not clear at this time that these counts are time-barred. Harcros’ motion must,
therefore be denied.
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss Plaintiff’s Complaint
[7] is DENIED.
IT IS FURTHER ORDERED that a Rule 16 conference will be set by separate order.

Dated this 15th day of April, 2015.

_________________________________
JOHN A. ROSS
UNITED STATES DISTRICT JUDGE

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