Stemilt Growers, LLC v. Reasor's, LLC et al
Filing
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OPINION AND ORDER by Judge Claire V Eagan that defendant shall file its Answer no later than 8/27/14 ; denying 9 Motion to Dismiss for Failure to State a Claim; denying 16 Motion to Stay (Re: 2 Complaint ) (RGG, Chambers)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
STEMILT GROWERS, LLC,
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Plaintiff,
v.
REASOR’S, LLC,
d/b/a Reasor’s Foods, et al.,
Defendants.
Case No. 14-CV-0230-CVE-PJC
OPINION AND ORDER
Now before the Court is Defendant Reasor’s, LLC’s, Motion to Dismiss, or in the
Alternative, to Stay These Proceedings, and Brief in Support (Dkt. ## 9, 16). Reasor’s, LLC
(Reasor)1 argues that Stemilt Growers, LLC (Stemilt) has failed to allege sufficient facts to state a
claim and that, in the alternative, this case should be stayed pending the resolution of another case.
Dkt. # 9. Stemilt responds that it has pled sufficient facts and that the other case should have no
bearing on this case. Dkt. # 18.
I.
On May 13, 2014, Stemilt filed a complaint against Reasor and ten John Doe defendants.
Dkt. # 2. Stemilt alleges that it packs, sells, and markets “wholesale quantities of perishable
agricultural commodities” (Produce). Id. at 2. Stemilt alleges that, during the times at issue, Reasor
“was a commission merchant, dealer, or broker subject to [the Perishable Agricultural Commodities
Act of 1930 (PACA), 7 U.S.C. § 499a, et seq.], and held a valid PACA license issued by the United
1
Although the corporate name is Reasor’s, LLC, for grammatical reasons, the Court will refer
to this defendant as Reasor.
States Department of Agriculture.” Id. at 3. Stemilt alleges that it also held a valid PACA license.
Id. Stemilt alleges that it and Reasor “entered into contracts in which Stemilt sold to [Reasor] in
interstate commerce, and [Reasor] purchased, Produce in the total amount of $301,081.26.” Id.
Stemilt further alleges that “[Reasor], by its designated agent(s), accepted the Produce from Stemilt
without objections” and that “[Reasor] failed to pay for the Produce sold to it by Stemilt.” Id.
Stemilt also states that it sent invoices to “Reasor’s designated agent(s).” Id. at 4.
Stemilt alleges that, by failing to pay for the Produce, Reasor breached its contracts with
Stemilt. Id. at 3. Stemilt requests that this Court enter an order “declaring that [Stemilt] holds a
valid trust claim . . . against [Reasor].” Id. at 4.2 Stemilt alleges that Reasor has failed to maintain
sufficient PACA Trust Assets and has failed to promptly pay Stemilt. Id. at 6-7. Stemilt also alleges
that the John Doe defendants (identified as “corporate officers, directors, shareholders, and/or
employees of [Reasor]”) breached their fiduciary duty to Stemilt in regard to the alleged PACA trust
and improperly received trust assets. Id. at 7-9. Stemilt alleges that both Reasor and the John Doe
defendants have been unjustly enriched by their conversion of the funds entitled to Stemilt and that
both Reasor and the John Doe defendants will be unjustly enriched if they are allowed to continue
to convert Stemilt’s Produce. Id. at 9.
Reasor has filed a motion to dismiss or, in the alternative, stay the proceedings. Dkt. ## 9,
16. Stemilt has responded (Dkt. # 18), and Reasor has replied (Dkt. # 19). Both Reasor’s motion
to dismiss and Stemilt’s response present matters outside of the pleadings. Dkt. ## 9-1, 9-2, 9-3, 94, 18-1, 18-2. “Where a party has moved to dismiss under Rule 12(b)(6) for failure to state a claim
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Stemilt further requests that Reasor be ordered to pay Stemilt “PACA Trust Assets equal to
the sum of $301,081.22, plus interest . . . , costs and attorneys’ fees.” Dkt. # 2, at 5.
2
upon which relief can be granted and matters outside of the pleadings have been presented to the
court for consideration, the court must either exclude the material or treat the motion as one for
summary judgment and dispose of it as provided by Rule 56.” Nichols v. U.S., 796 F.2d 361, 364
(10th Cir. 1986); see also Fed. R. Civ. P. 12(d) (“If, on a motion under Rule 12(b)(6) or 12(c),
matters outside the pleadings are presented to and not excluded by the court, the motion must be
treated as one for summary judgment under Rule 56.”). Rather than convert Reasor’s motion to
dismiss into a motion for summary judgment and render a ruling prior to discovery based upon an
incomplete record,3 this Court chooses to exclude all matters outside of the pleadings.
Consequently, this Court will consider only the complaint itself in ruling on Reasor’s motion to
dismiss.4
II.
In considering a motion to dismiss under Rule 12(b)(6), a court must determine whether the
claimant has stated a claim upon which relief may be granted. A motion to dismiss is properly
granted when a complaint provides no “more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A
complaint must contain enough “facts to state a claim to relief that is plausible on its face”and the
factual allegations “must be enough to raise a right to relief above the speculative level.” Id.
(citations omitted). “Once a claim has been stated adequately, it may be supported by showing any
set of facts consistent with the allegations in the complaint.” Id. at 562. Although decided within
3
Neither party has even presented the alleged contract at issue.
4
In considering Reasor’s motion to stay, the Court will, necessarily, consider matters outside
of the pleadings.
3
an antitrust context, Twombly “expounded the pleading standard for all civil actions.” Ashcroft v.
Iqbal, 556 U.S. 662, 684 (2009). For the purpose of making the dismissal determination, a court
must accept all the well-pleaded allegations of the complaint as true, even if doubtful in fact, and
must construe the allegations in the light most favorable to claimant. Twombly, 550 U.S. at 555;
Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007); Moffett v. Halliburton Energy
Servs., Inc., 291 F.3d 1227, 1231 (10th Cir. 2002). However, a court need not accept as true those
allegations that are conclusory in nature. Erikson v. Pawnee Cnty. Bd. of Cnty. Comm’rs, 263 F.3d
1151, 1154-55 (10th Cir. 2001). “[C]onclusory allegations without supporting factual averments
are insufficient to state a claim upon which relief can be based.” Hall v. Bellmon, 935 F.2d 1106,
1109-10 (10th Cir. 1991).
III.
A. Motion to Stay
Reasor argues that this case should be stayed because Stemilt’s claims have already been
alleged in another PACA case before this Court. Dkt. # 9, at 2, 7-8. Reasor is correct that Stemilt
is a plaintiff in another PACA case before this Court. See First Amended Complaint, Keith Connell,
Inc. v. Crossroads Fresh Connections, Inc., No. 14-CV-0166-CVE-TLW (N.D. Okla. May 30, 2014).
Reasor argues that this case is in violation of an order entered in that case. The referenced order
states that:
All other actions against the Defendants of any nature and kind in any other court or
forum by any unpaid seller of Produce to [Crossroads Fresh Connections, Inc.
(Crossroads)] are barred, pending further order of this Court. All persons or entities
having unsatisfied claims against Crossroads, its officers or employees, arising under
or relating to the PACA trust have the right to seek recovery solely in this action and
only by following the procedures stated in the Agreed Order.
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Stipulated Injunction and Agreed Order Establishing PACA Trust Claims Procedure at 10, Keith
Connell, Inc. v. Crossroads Fresh Connections, Inc., No. 14-CV-0166-CVE-TLW (N.D. Okla. April
16, 2014). However, that order in inapplicable; it applies only to actions against the defendants in
the Keith Connell case and actions against Crossroads’ officers and employees. See id. Reasor is
not a defendant in that case, nor could it be an officer or employee of Crossroads. See First
Amended Complaint, Keith Connell, Inc. v. Crossroads Fresh Connections, Inc., No. 14-CV-0166CVE-TLW (N.D. Okla. May 30, 2014). Stemilt is not in violation of that order, and that order does
not mandate a stay of this case. Relatedly, Reasor argues that this case violates the rule that “[a]
single PACA trust exists for the benefit of all of the sellers to a Produce debtor.” Dkt. # 9, at 7
(quoting Tom Lange Co. v. Kornblum & Co. (In re Kornblum & Co.), 81 F.3d 280, 286 (2d Cir.
1996)) (internal quotation marks omitted). As Reasor and Crossroads are not the same produce
debtors, this rule is also inapplicable. Reasor’s motion to stay should be denied.
B. Motion to Dismiss
Reasor argues that Stemilt’s complaint should be dismissed because Reasor is not party to
any contract with Stemilt and because Reasor has not purchased any produce from Stemilt. Dkt. #
9, at 2, 4-7. These arguments challenge the factual accuracy of Stemilt’s claims. However, in ruling
on a motion to dismiss, a court must accept non-conclusory allegations as true. See Twombly, 550
U.S. at 555; Erikson v. Pawnee Cnty. Bd. of Cnty. Comm’rs, 263 F.3d 1151, 1154-55 (10th Cir.
2001).
Stemilt alleges that it has multiple contracts with Reasor under which it sold Produce (i.e.,
“wholesale quantities of perishable agricultural commodities”) to Reasor in exchange for
$301,081.26. Dkt. # 2, at 2-3. Stemilt further alleges that Reasor has failed to pay Stemilt for the
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Produce. Id. at 3. Reasor argues that Stemilt “has not set forth any facts as to the date or subject
matter of any contract; the type or quantity of any alleged produce that was the subject of any
contract; the identity of the parties to the contract; or who Plaintiff claims entered any contracts on
behalf of [Reasor].” Dkt. # 19, at 2. Stemilt has clearly alleged the subject matter of the contract
(i.e., the sale of Produce) and the identity of the parties to the contract (i.e., Reasor and Stemilt).
Dkt. # 2, at 3. And while Stemilt may not have specifically alleged the quantity of the Produce,
Stemilt has identified its worth, a reasonable substitute. Id. While facts relating to the date of the
alleged contract, the exact type of Produce being sold, and the identity of the party entering into the
contract on behalf of Reasor may have been helpful, they are by no means mandatory to render a
claim plausible. Stemilt’s complaint raises a plausible claim for breach of contract that is
sufficiently supported by alleged facts and provides adequate notice to Reasor. Cf. Fed. R. Civ. Pro.
Form 10(c).5 Reasor’s motion to dismiss should be denied.
IT IS THEREFORE ORDERED that defendant Reasor’s, LLC’s motion to dismiss (Dkt.
# 9) is denied. Defendant shall file its answer to the complaint no later than August 27, 2014.
IT IS FURTHER ORDERED that defendant Reasor’s, LLC’s motion to stay (Dkt. # 16)
is denied.
DATED this 13th day of August, 2014.
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Reasor also argues that Stemilt’s other claims fail because there was no contract between
Reasor and Stemilt. Dkt. # 9, at 6. This argument fails for the same reasons that Reasor’s
argument regarding the breach of contract claim fails.
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