Netherlands Insurance Company et al v. Cellar Advisors, LLC et al

Filing 45

MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that each "non-governmental organizational" Defendant shall file its Certificate no later than March 5, 2018. IT IS FURTHER ORDERED that Plaintiffs' unopposed motion to co ntinue the Rule 16 Conference [ECF No. 44 ] is GRANTED so that the Rule 16 Conference is RESCHEDULED for April 4, 2018, at 1:30 p.m. before the undersigned in Courtroom 9N on the ninth floor of the Thomas F. Eagleton U.S. Courthouse. IT IS FURTHE R ORDERED that, due to the rescheduling of the Rule 16 Conference, the parties' Joint Proposed Scheduling Plan is now due no later than March 28, 2018. All other terms and provisions of the Order Setting Rule 16 Conference [ECF No. 43] remain in full force and effect. IT IS FURTHER ORDERED that Great Northern's request for oral argument on Cellar Defendants' motion to dismiss Great Northern's crossclaim is GRANTED so that the oral argument is SCHEDULED for May 2, 2018, at 10:00 a.m. before the undersigned in Courtroom 9N on the ninth floor of the Thomas F. Eagleton U.S. Courthouse. IT IS FINALLY ORDERED that, no later than April 4, 2018, Cellar Defendants and Great Northern shall file their briefs addressing: (1) t he extent to which, if any, the Court may consider the parties' exhibits in resolving the pending motion to dismiss, and (2) which state's law applies to resolve the substantive issues presented in the motion to dismiss and opposition to the motion. Signed by Magistrate Judge Patricia L. Cohen on 2/22/2018. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
NETHERLANDS INSURANCE
)
COMPANY and HAWKEYE-SECURITY )
INSURANCE COMPANY,
)
)
Plaintiffs/Counterclaim Defendants, )
)
v.
)
)
CELLAR ADVISORS, LLC, DOMAINE
)
SAINT LOUIS, LLC, DOMAINE NEW
)
YORK, LLC, and MARC LAZAR,
)
)
Defendants/Counterclaimants/
)
Crossclaim Defendants,
)
)
and
)
)
GREAT NORTHERN INSURANCE
)
COMPANY,
)
)
Defendant/Crossclaimant.
)

Case no. 4:17cv02585PLC

MEMORANDUM AND ORDER
This matter is before the Court (1) on review of the record regarding the need for each of
the four organizational Defendants to file a Disclosure of Organizational Interests Certificate
(“Certificate”); (2) on a motion for continuance of the Rule 16 Conference filed by Netherlands
Insurance Company (“Netherlands”) and Hawkeye-Security Insurance Company (“HawkeyeSecurity”) (collectively referred to as “Plaintiffs”) [ECF No. 44]; 1 and (3) on a motion to dismiss
Defendant/Crossclaimant Great Northern Insurance Company’s (“Great Northern’s”) crossclaim,
filed by Defendants/Crossclaim Defendants Cellar Advisors, LLC (“Cellar Advisors”), Domaine
Saint Louis, LLC (“Domaine StL”), Domaine New York, LLC (“Domaine NY”), and Marc
Lazar (collectively referred to as “Cellar Defendants”) [ECF No. 35].
1

Each Plaintiff filed its Certificate. See Certificates, filed Oct. 16, 2017 [ECF Nos. 5 and 6].

I.

Background

Great Northern “issued a homeowners’ insurance policy to [non-parties] Reid and Krista
Buerger . . . [who] contracted with . . . Cellar Defendants for wine consultation and storage
services.” 2 When the Buergers’ approximately nine-year relationship with Cellar Defendants
ended in 2014, the Buergers claimed that approximately 1,300 bottles of their wine, having a
value over $1.9 million, were missing. 3 Great Northern paid the Buergers for the loss and, as
subrogee of the Buergers, is now suing Cellar Defendants in a Pennsylvania state court to
recover the loss. 4
Plaintiff Netherlands issued a $1 million per occurrence primary commercial general
liability insurance policy and Plaintiff Hawkeye-Security issued a $1 million per occurrence
umbrella policy for the period July 5, 2012, to July 5, 2013. 5 Netherlands issued its policy to
Cellar Advisors, Domaine StL, and Domaine NY, and Hawkeye-Security issued its policy to
Cellar Advisors and Domaine StL. 6 Defendants Cellar Advisors, Domaine StL, and Domaine
NY “are [allegedly] owned, operated, and/or managed by [D]efendant Marc Lazar, [and] are in
the business of wine consultation and storage.” 7
Utilizing this Court’s diversity jurisdiction under 28 U.S.C. § 1332, Plaintiffs seek
declaratory judgment relief under 28 U.S.C. § 2201. 8 By their four-count complaint, Plaintiffs

2

Pls.’ compl. para. 2 [ECF No. 1].

3

Pls.’ compl. para. 28 [ECF No. 1].

4

Pls.’ compl. paras. 3 and 29 [ECF No. 1].

5

Pls.’ compl. paras. 32 and 33 [ECF No. 1].

6

Pls.’ compl. paras. 32 and 33 [ECF No. 1].

7

Pls.’ compl. para. 1 [ECF No. 1].

8

Pls.’ compl. [ECF No. 1].

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seek a judgment declaring that there is no coverage under their insurance policies and Plaintiffs
have no duty to defend or indemnify Cellar Defendants because the alleged loss: (1) did not
result from an occurrence either within the policies’ period or that was unknown prior to the
policies’ effective dates; (2) did not result from an “occurrence” or “accident” as defined by the
policies due to Great Northern’s claims for conversion and breach of contract; (3) is not for
“property damage” as defined in the policies, but instead is for wine that was lost, stolen, or
never acquired; and (4) falls within one or more of the policies’ exclusions. 9
Great Northern filed a crossclaim alleging eight claims against Cellar Defendants. 10
Cellar Defendants filed a counterclaim seeking relief for Plaintiffs’ alleged breach of their
insurance policies by denying indemnification and defense of Cellar Defendants with respect to
Great Northern’s claims in the Pennsylvania lawsuit and crossclaim in this lawsuit. 11 Cellar
Defendants allege in relevant part that Great Northern’s crossclaim in this lawsuit “makes the
same general allegations that [Great Northern made] in the [Pennsylvania lawsuit] complaint.” 12
II.

Disclosure of Organizational Interests Certificate

Local Rule 3-2.09(A) requires “[e]very non-governmental organizational party” to file a
Certificate “with the party’s first pleading or entry of appearance.”

In relevant part, the

Certificate provides specified information about the ownership of a corporate entity and the
membership of a limited liability company or partnership. Local Rule 3-2.09(B). In the Court’s

9

Pls.’ compl. paras. 5, 60-61, 64-72, 74-80, and 82-95 [ECF No. 1].

10

Great Northern’s crossclaim [ECF No. 23 at 11-23].

11

Cellar Defs.’ counterclaim [ECF No. 33 at 12-19].

12

Cellar Defs.’ counterclaim para. 17 [ECF No. 33 at 15].

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Order Setting Rule 16 Conference, the Court reminded “[a]ll non-governmental corporate parties
. . . to comply with” the Local Rule requiring the filing of the Certificate. 13
An entry of appearance on behalf of each Defendant was first filed in November 2017.14
Each Defendant filed an answer in November or December 2017. 15 A review of the record
reveals that, as of this date, none of the four Defendants who are “non-governmental
organizational” litigants have filed Certificates. Therefore, the Court will set a deadline for each
of those Defendants to file the Certificate.
III.

Plaintiffs’ motion for continuance of Rule 16 conference [ECF No. 44]

The Court scheduled a Rule 16 conference for March 15, 2018. 16 Plaintiffs ask that the
Court re-set the conference “in or after the week of March 19, 2018” because “both of plaintiffs’
counsel will be out of the office and have a scheduling conflict that prevents their attendance at
the conference.” 17 Defendants have not responded to the motion or sought more time in which
to do so. See Local Rule 7-4.01(B). The Court will grant Plaintiffs’ unopposed motion to
continue the Rule 16 Conference.
IV.

Motion to dismiss Great Northern’s Crossclaim [ECF No. 35]

Great Northern’s crossclaim seeks monetary relief from Cellar Defendants for
conversion, breach of contract, unjust enrichment, negligent misrepresentation, negligence, gross

13

See Order Setting Rule 16 Conference at 4, filed Feb. 6, 2018 [ECF No. 43].

14

See Entries of appearance for Cellar Defs., filed Nov. 8, 2017 [ECF Nos. 16 and 18]; Entry of
appearance for Great Northern, filed Nov. 13, 2017 [ECF No. 20].
15

See Answers, filed Nov. 17, 2017 [ECF No. 23] and Dec. 15, 2017 [ECF No. 33].

16

See Order Setting Rule 16 Conference, filed Feb. 6, 2018 [ECF No. 43].

17

Pls.’ mot. continuance Rule 16 conference [ECF No. 44].

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negligence, bailment, and breach of fiduciary duty pertaining to the Buergers’ missing wine,18
claims which Great Northern allegedly also pursues in the Pennsylvania lawsuit. 19

Cellar

Defendants move to dismiss Great Northern’s crossclaim with prejudice under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. 20 More
specifically, Cellar Defendants argue (1) all of the claims in Great Northern’s crossclaim are
barred by waivers of subrogation which are valid and enforceable under Missouri law; (2) Great
Northern’s unjust enrichment claim fails to state a claim because Missouri law does not permit a
litigant to pursue a quasi-contractual claim in a matter involving an express contract; and (3)
Great Northern’s “gross negligence” claim is not recognized in Missouri and is merely
duplicative of Great Northern’s negligence claim. 21 Great Northern opposes the motion on the
grounds: (1) the Pennsylvania court dismissed similar arguments; (2) the written agreements
between Cellar Defendants and the Buergers address only the storage of the wine and not the rest
of those parties’ relationship, which also encompassed Cellar Defendants advising the Buergers
about wine, and selecting, purchasing, and transporting wine for the Buergers; (3) the written
agreements were only between the Buergers and Domaine StL (the 2006 agreement) or the
Buergers and Domaine NY (the 2012 agreement); and (4) the exculpatory provisions in the
written agreements (like the subrogation waiver provisions) are not enforceable when, as here,
(a) a defendant engages in intentional conduct or gross negligence, or (b) the provisions are
ambiguous as written or as applied. 22

18

Great Northern’s crossclaim [ECF No. 23 at 11-23].

19

Cellar Defs.’ counterclaim para. 17 [ECF No. 33 at 15].

20

Cellar Defs.’ mot. dismiss [ECF No. 35].

21

Cellar Defs.’ mot. dismiss [ECF No. 35].

22

Great Northern’s mem. opp’n Cellar Defs.’ mot. dismiss [ECF No. 42].
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The parties attached to their motion to dismiss materials a copy of the 2006 Wine Storage
Agreement and the 2012 Wine Storage Locker Agreement executed by the Buergers and one of
the Cellar Defendants. 23 Additionally, the parties provided as exhibits to their motion to dismiss
materials a copy of Great Northern’s complaint, as well as copies of various court rulings and the
docket sheet, in the Pennsylvania lawsuit. 24 In its opposition to the motion to dismiss, Great
Northern requests oral argument. 25 The Court will grant Great Northern’s request and schedule
oral argument on the motion to dismiss. Additionally, the Court will require Great Northern and
Cellar Defendants to file briefs prior to the argument addressing: (1) the extent to which, if any,
the Court may consider the parties’ exhibits in resolving the pending motion to dismiss, see Fed.
R. Civ. P. 12(d); and (2) which state’s law applies to resolve the substantive issues presented in
the motion and opposition to the motion.
Accordingly, after careful consideration,
IT IS HEREBY ORDERED that each “non-governmental organizational” Defendant
shall file its Certificate no later than March 5, 2018.
IT IS FURTHER ORDERED that Plaintiffs’ unopposed motion to continue the Rule 16
Conference [ECF No. 44] is GRANTED so that the Rule 16 Conference is RESCHEDULED
for April 4, 2018, at 1:30 p.m. before the undersigned in Courtroom 9N on the ninth floor of
the Thomas F. Eagleton U.S. Courthouse.
IT IS FURTHER ORDERED that, due to the rescheduling of the Rule 16 Conference,
the parties’ Joint Proposed Scheduling Plan is now due no later than March 28, 2018. All
23

See Ex. 1 attached to Cellar Defs.’ mot. dismiss [ECF No. 35-1 at 16-31] and Exs. F and G attached to
Great Northern’s opp’n Cellar Defs.’ mot. dismiss [ECF Nos. 42-6 and 42-7].
24

See Ex. 1 attached to Cellar Defs.’ mot. dismiss [ECF No. 35-1]; Exs. A through E attached to Great
Northern’s mem. opp’n Cellar Defs.’ mot. dismiss [ECF No. 42-1 through 42-5].
25

Great Northern’s mem. opp’n Cellar Defs.’ mot. dismiss [ECF No. 42 at 15].
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other terms and provisions of the Order Setting Rule 16 Conference [ECF No. 43] remain in full
force and effect.
IT IS FURTHER ORDERED that Great Northern’s request for oral argument on Cellar
Defendants’ motion to dismiss Great Northern’s crossclaim is GRANTED so that the oral
argument is SCHEDULED for May 2, 2018, at 10:00 a.m. before the undersigned in
Courtroom 9N on the ninth floor of the Thomas F. Eagleton U.S. Courthouse.
IT IS FINALLY ORDERED that, no later than April 4, 2018, Cellar Defendants and
Great Northern shall file their briefs addressing: (1) the extent to which, if any, the Court may
consider the parties’ exhibits in resolving the pending motion to dismiss, and (2) which state’s
law applies to resolve the substantive issues presented in the motion to dismiss and opposition to
the motion.

PATRICIA L. COHEN
UNITED STATES MAGISTRATE JUDGE
Dated this 22nd day of February, 2018.

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