Muhammad et al v. Public Storage

Filing 27

ORDER granting in part and denying in part 6 Motion to Dismiss. Signed on 7/24/14 by District Judge Ortrie D. Smith. (Matthes, Renea)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
EDNA and WALLACE MUHAMMAD,
Plaintiffs,
vs.
PUBLIC STORAGE CO.,
Defendant.

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Case No. 14-0246-CV-W-ODS

ORDER AND OPINION GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS
Pending is Defendant’s Motion to Dismiss (Doc. # 6). The Motion is granted in
part and denied in part.

I. BACKGROUND

The facts alleged in the state-court Petition (hereinafter “Complaint”) construed in
the light most favorable to the Plaintiff indicate the following. This suit arises from a
contractual relationship between Plaintiff Wallace Muhammad and Defendant Public
Storage. On October 28, 2011, Wallace Muhammad signed a Lease/Rental Agreement
(hereinafter “Agreement”) for a self-storage unit at the Public Storage location at 9527
James A. Reed Road, Kansas City, Missouri 64134. Complaint, ¶ 9. The instant
Motion seeks dismissal pursuant to Rule 12(b)(6), but the Court can consider the
Agreement because it is fairly embraced by the Complaint. See Enervations, Inc. v.
Minn. Mining & Mfg. Co., 380 F.3d 1066, 1069 (8th Cir. 2004). Although the Complaint
alleges that both Wallace and Edna Muhammad signed the Agreement, the Agreement
only provides Wallace Muhammad’s signature. Agreement, Exhibit A (Doc. # 7-1), p. 4.
The Agreement lists “Wallace Muhammad” as “Occupant” and Edna Muhammad as
“Occupant’s Authorized Access Person.” Agreement, p. 1.
Other relevant portions of the Agreement provide the following:

In the event rent shall be in default . . . and thereafter Occupant shall have failed
to give operator written notice of an intention not to abandon the Premises and
the personal property located in, on or about the Premises within fifteen (15)
consecutive days after notice of nonpayment of rent has been given by Operator
to Occupant . . . the Premises shall be deemed abandoned. Agreement § 4(b).
In the event Occupant shall change Occupant’s physical address . . . as set forth
in this Lease/Rental Agreement, Occupant shall give Owner written notice of
such change signed by Occupant and specifying Occupant’s current physical
address . . . within ten (10) days of the change; such notice to be mailed to
Owner by first class mail with proof of mailing. Agreement § 15(a).
[A]ny written notices or demands required or permitted to be given under the
terms of this Lease/Rental Agreement may be personally served or may be
served by first class mail . . . to the party at the address provided for in this
Lease/Rental Agreement. Agreement § 15(b).
The Agreement lists the “Occupant address” as 8929 Cambridge Ave., #2706,
Kansas City, Missouri 64138. Agreement, p. 1. On May 28, 2012, Edna Muhammad
informed the customer service representative at Public Storage, through written notice,
that Plaintiffs’ address had changed to 11009 E. 51st Street, Kansas City, Missouri
64133. Complaint, ¶ 14. Edna Muhammad observed the customer service
representative change her address in the computer system. Id., ¶ 15. The customer
service representative further acknowledged that the address had been changed in
Defendant’s database. Id., ¶ 16.
Plaintiffs paid Defendant a monthly fee for the rental of the Unit, in which they
stored nearly 300 personal items valued at more than $20,000. Id., ¶ 12-13. On
November 1, 2012, Plaintiffs missed the rental payment deadline. Id., ¶ 17. On
December 4, 2012, and January 2, 2013, Plaintiffs made payments of $211.00. Id., ¶
18-19. Both payments were made at the Public Storage location on 3440 Main Street,
Kansas City, Missouri 64111. Id. These payments were apparently first applied to
November’s and December’s rent because following the January 2, 2013 payment, a
balance of $161.00 remained for January 2013’s rent. Id., ¶ 20.
On January 24, 2013, Defendant sold all items within the Unit. Id., ¶ 21.
Plaintiffs contacted Defendant’s regional managers regarding reimbursement for the
items sold within the Unit, but Defendant refused. Id., ¶ 22-23. Plaintiffs allege that
Defendant, through its agents, servants, and employees, failed to provide notice of
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default of payment to Plaintiffs’ last known address pursuant to the terms of the
Agreement. Plaintiffs also allege that they were never given proper notice that
Defendant intended to sell the items within the Unit. Id., ¶ 24-26.
On January 31, 2014, Plaintiffs filed their state-court Petition in the Circuit Court
of Jackson County, Missouri. The case was removed to federal court on March 14,
2014. The Plaintiffs raise four counts in their Complaint: (1) violation of the Missouri
Merchandising Practices Act (“MMPA”); (2) breach of contract; (3) unjust enrichment;
and (4) negligent misrepresentation.

II.STANDARD

The liberal pleading standard created by the Federal Rules of Civil Procedure
requires Aa short and plain statement of the claim showing that the pleader is entitled to
relief.@ Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Fed. R. Civ. P.
8(a)(2)). ASpecific facts are not necessary; the statement need only >give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.=@ Id. (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In ruling on a motion to dismiss,
the Court Amust accept as true all of the complaint=s factual allegations and view them in
the light most favorable to the Plaintiff[ ].@ Stodghill v. Wellston School Dist., 512 F.3d
472, 476 (8th Cir. 2008).
To survive a 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. 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. The plausibility standard is
not akin to a probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully. Where a complaint
pleads facts that are merely consistent with a defendant’s liability, it stops
short of the line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted).
In keeping with these principles a court considering a motion to dismiss
can choose to begin by identifying pleadings that, because they are no
more than conclusions, are not entitled to the assumption of truth. While
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legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations. When there are well-pleaded factual
allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.
Id. at 679.

III.DISCUSSION

A. Count I—MMPA Claim

Count I alleges that Defendant violated the MMPA. Defendant argues that Edna
Muhammad cannot assert an MMPA claim because she was neither a party to the
Agreement nor a customer of Public Storage. Second, Defendant argues that Count I
should be dismissed because both Plaintiffs failed to plead their MMPA claim with
particularity.
In relevant parts, the MMPA prohibits:
[t]he act, use or employment by any person of a deception, fraud, false pretense,
false promise, misrepresentation, unfair practice or the concealment,
suppression, or omission of any material fact in connection with the sale or
advertisement of any merchandise in trade or commerce . . . whether committed
before, during or after the sale, advertisement or solicitation.
Mo. Rev. Stat. § 407.020.1. The Complaint alleges that Defendant violated the MMPA
with regard to “the sale of Plaintiffs’ personal items contained in the Unit and
Defendant’s refusal to give Plaintiffs proper notice of default, and subsequent sale of the
personal items . . . .” Complaint, ¶ 42. To establish an MMPA claim, a plaintiff must
allege that he “(1) purchased or leased merchandise; (2) primarily for personal, family or
household purposes, and (3) thereby suffered an ascertainable loss of money or
property, real or personal; (4) as result of the defendant’s use of one of the methods or
practices declared unlawful by Section 407.020.” Wivell v. Wells Fargo Bank, N.A., No.
12-3457-CV-S-DGK, 2013 WL 2089222, at *4 (W.D. Mo. 2013) (citing Mo. Rev. Stat §
407.025.1 and Owen v. Gen. Motors Corp., 533 F.3d 913, 922 (8th Cir. 2008)).

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Edna Muhammad cannot satisfy the first element of her MMPA claim because
she did not purchase or lease anything from Public Storage. Although the Complaint
alleges that both Plaintiffs entered into the Agreement with Defendants on October 28,
2011, the Agreement only lists Wallace Muhammad and Public Storage as the parties to
the Agreement. Edna Muhammad was not a party to the Agreement, nor did she sign
the Agreement—she was only listed as an “Occupant’s Authorized Access Person.”
There is no allegation that Edna Muhammad was a client or customer of Public Storage.
Public Storage did not sell any goods or merchandise or provide any services to Edna
Muhammad. Accordingly, Edna Muhammad has failed to state cause of action under
the MMPA. The Court dismisses Edna Muhammad’s claim from Count I.
Next, Defendant argues that both Plaintiffs failed to plead their MMPA claim with
particularity. Plaintiffs contend that Rule 9(b) does not apply to their MMPA claim. Rule
9(b) provides: “In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). As Defendant points
out, this Court has previously held that the MMPA requires particularized pleading.
Khaliki v. Helzberg Diamond Shops, Inc., 2011 WL 1326660, *3 (W.D. Mo. Apr. 6,
2011); Lavender v. Wolpoff & Abramson, L.L.P., 2007 WL 2507752, *2 (W.D. Mo. Aug.
30, 2007); Courchene v. Citibank N.A., 2006 WL 2192110, *2 (W.D. Mo. Aug. 1, 2006).
However, in these cases the MMPA was utilized to assert a claim sounding in fraud.
The MMPA addresses misconduct beyond fraud and includes “unfair practices.” In
other circumstances, courts have been required to delve into the specific nature of an
MMPA claim to determine whether it sounded in fraud. For instance, in Huffman v.
Credit Union of Texas, the Court of Appeals conducted this inquiry and, after concluding
the plaintiffs’ MMPA claim did not sound in fraud, declined to apply the special accrual
rules applicable to fraud claims. No. 13-1881, 2014 WL 3377778, at *4 (8th Cir. 2014).
In this case, the Court concludes Plaintiffs are not asserting a fraud-based claim.
They contend, essentially, that Defendant committed an unfair trade practice by
breaching the contract.1 Because this is not a fraud-based claim, Rule 9’s heightened

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The Court harbors doubts as to whether a single instance of breach of contract can
constitute an unfair practice under the MMPA, see, e.g., Jackson v. Hazelrigg
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pleading requirements do not apply. Accordingly, the Court denies Defendant’s Motion
to dismiss Wallace Muhammad’s MMPA claim.

B. Count II—Breach of Contract

Count II asserts a breach of contract claim. Defendant first contends that Edna
Muhammad cannot assert a claim for breach of contract because she is not a party to
the Agreement with Public Storage. In response, Plaintiffs argue that Edna Muhammad
can assert a claim for breach of contract as a third-party beneficiary.
Under Missouri law, “[a] third-party beneficiary can sue to enforce the contract if
the contact terms ‘clearly express’ an intent to benefit either that party or an identifiable
class of which the party is a member.” Peters v. Employers Mut. Cas. Co., 853 S.W.2d
300, 301 (Mo. 1993) (en banc); see also McKenzie v. Columbian Nat’l Title Ins. Co., 931
S.W.2d 843, 845 (Mo. Ct. App. 1996) (“Only those third parties for whose primary
benefit the contracting parties intended to make the contract may sue on the contract.”)
(internal quotations omitted). “Furthermore, a mere incidental benefit to the third party
is insufficient to bind that party.” Netco, Inc. v. Dunn, 194 S.W.3d 353, 358 (Mo. 2006)
(en banc). “Third party beneficiary status depends not so much on a desire or purpose
to confer a benefit on the third person, but rather on an intent that the promisor assume
a direct obligation to him.” McKenzie, 931 S.W.2d at 845 (internal quotations omitted).
“In cases where the contract lacks an express declaration of that intent, there is a strong
presumption that the third party is not a beneficiary and that the parties contracted to
benefit only themselves.” Netco,194 S.W.3d at 358.
The Agreement was entered into by Wallace Muhammad and Public Storage.
Thus, Public Storage owed no contractual duties to Edna Muhammad. Although the
Agreement lists Edna Muhammad as the “Occupant’s Authorized Access Person,” this
reference does not clearly express an intent for the contract terms to benefit her. Any
benefits actually obtained from the Agreement (i.e. having access to the Unit) were
merely incidental to Public Storage’s obligations to Wallace Muhammad. Further, the
Automotive Serv. Center, Inc., 417 S.W.3d 886, 894 (Mo. Ct. App. 2014), but
Defendants have not raised this argument.
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Agreement does not express intent that Public Storage would assume a direct
obligation to Edna Muhammad. Thus, because Edna Muhammad is not a party or a
third-party beneficiary to the Agreement, she cannot assert a claim for breach of
contract and her claim in Count II is dismissed.
Next, Defendant argues Count II should be dismissed because: (1) Plaintiffs do
not plead that Public Storage failed to send notice to the original address provided by
Wallace Muhammad; (2) the Agreement cannot be construed to require Public Storage
to send notices to an address provided to Public Storage by Edna Muhammad; and (3)
Edna Muhammad’s actions did not effectuate a valid change of address under the
Agreement. The Court rejects Defendant’s arguments.
Under Missouri law, to show a breach of contract, the plaintiff must prove: (1)
“the existence and terms of a contract,” (2) that he “performed or tendered performance
pursuant to the contract,” (3) that the defendant breached the contract, and (4)
damages. Affordable Communities of Missouri v. Federal Nat. Mortg. Ass’n, 714 F.3d
1069, 1075 (8th Cir. 2013) (quoting Keveney v. Mo. Military Acad., 304 S.W.3d 98, 104
(Mo. 2010)). In this case, Wallace Muhammad has alleged that there was a contract
between him and Public Storage. Complaint, ¶¶ 8, 9. He alleged he performed on the
Agreement by paying a monthly fee for the Unit and that Defendant breached the
Agreement by not providing a notice of default or a notice that Defendant intended to
sell the items in the Unit. Id. ¶¶ 12, 24-26. Finally, Wallace Muhammad alleged he was
damaged as a result. Id., ¶¶ 13, 30, 53.
Defendant argues Wallace Muhammad did not strictly comply with the
Agreement’s provisions for changing his address, so Defendant cannot be held liable for
failing to provide notices to the new address. However, the Complaint alleges
Defendant acquiesced to the means employed to change the address: Defendant
allegedly accepted the change of address submitted by Edna Muhammad, recorded the
change in the computer system, undertook no further inquiry, and accepted payments
thereafter. “[A] party to a contract may by express agreement or by his own course of
conduct waive his legal right to insist on strict performance of the covenants of the
contract . . . .” S. S. Silberblatt, Inc. v. Seaboard Sur. Co., 417 F.2d 1043, 1055 (8th Cir.
1969); see also Spencer Reed Grp., Inc. v. Pickett, 163 S.W.3d 570, 574 (Mo. Ct. App.
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2005); Walker Transp. Co. v. Neylon, 396 F. 2d 558, 560 n.4 (8th Cir. 1968). The facts
alleged might be sufficient to persuade a jury that Defendant waived the right to insist
upon the method for changing addresses specified in the contract – particularly if
Defendant’s computerized records reflect Wallace Muhammad’s new address as
alleged in the Complaint.2 Accordingly, the Court denies Defendant’s motion to dismiss
Wallace Muhammad’s breach of contract claim.

C. Count III—Unjust Enrichment

Count III’s unjust enrichment claim asserts that it was wrongful to “sell[] Plaintiffs’
contents without providing proper notice of default or sale” and to retain “the money [it]
received from Plaintiffs[.]” Public Storage moves to dismiss Count III on the grounds
that Missouri law does not permit recovery on a quasi-contract theory when a valid,
express contract governs the subject matter of the parties’ dispute. See Affordable
Communities of Missouri, 714 F.3d at 1077 (“Unjust enrichment is an equitable remedy
based on the concept of a quasi-contract and a plaintiff may not recover under both an
express contract and unjust enrichment.”). However, although Plaintiffs cannot recover
damages under both theories, they may still plead both theories in their Complaint as
the Federal Rules permit pleading in the alternative. See Fed. R. Civ. P. 8(e)(2).
Accordingly, the Court denies Defendant’s motion to dismiss Count III.

D. Count IV—Negligent Misrepresentation

Count IV asserts a claim for negligent misrepresentation. Defendant contends
Plaintiffs have not satisfied Rule 9(b) with respect to Count IV, and the Court agrees.
As stated earlier, Rule 9(b) requires that “the circumstances constituting fraud . . . shall
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Additionally, the Court notes that if it is Defendant’s position that Edna Muhammad’s
actions were ineffective to change the address, there would have to be some evidence
that Defendant sent notice to Wallace Muhammad at the original address. Defendant
cannot contend that change was invalid and thereby deprived it of the obligation to send
notices to any address – and if it sent no notices whatsoever, it seriously undermines
Defendant’s position. Of course, this is not an issue the Court can delve into under
Rule 12(b)(6).
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be stated with particularity.” Further, when pleading fraud, a plaintiff is precluded from
simply making conclusory allegations. Commercial Prop. Invs., Inc. v. Quality Inns Int’l,
61 F.3d 639, 644 (8th Cir. 1995).
Plaintiffs’ vague reference to “Defendant’s representations in the Agreement”
does not identify a specific false representation allegedly made by Public Storage.
Absent any allegations about any specific statements made by Defendant or any
statements that Plaintiffs heard and relied upon, Count IV does not comport with Rule
9(b). However, the Court does not find it appropriate to dismiss Count IV at this time
and therefore grants Plaintiffs leave to amend the Complaint with respect to Count IV.

IV. CONCLUSION

The Court grants in part and denies in part Defendant’s Motion to Dismiss. Edna
Muhammad’s claims from Count I and Count II are dismissed. Plaintiffs are granted
leave to amend Count IV. Plaintiffs’ Amended Complaint shall be filed on or before
August 14, 2014. Failure to file an Amended Complaint before the deadline will result in
dismissal of Count IV. Defendant’s Motion is denied in all other respects.

IT IS SO ORDERED.

/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT

DATE: July 24, 2014

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