Allen v. Agreliant Genetics, LLC.

• Decision Date: 20 March 2017
• Docket Number: No. C15-3172-LTS,C15-3172-LTS
• Parties: DAN ALLEN, Plaintiff, v. AGRELIANT GENETICS, LLC., Defendant.
• Court: U.S. District Court — Northern District of Iowa

DAN ALLEN, Plaintiff, v. AGRELIANT GENETICS, LLC., Defendant.

No. C15-3172-LTS

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA CENTRAL DIVISION

March 20, 2017

ORDER ON DEFENDANT'S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS

I. INTRODUCTION

This case is before me on motion for partial judgment on the pleadings filed by defendant AgReliant Genetics, LLC (AgReliant). Doc. No. 15. AgReliant argues that Counts I, II and III of plaintiff's state court petition fail as a matter of law.¹ Plaintiff has filed a resistance (Doc. No. 16) and AgReliant has filed a reply (Doc. No. 17) and a supplement (Doc. No. 26).

II. PROCEDURAL HISTORY AND BACKGROUND FACTS

AgReliant is an Indiana corporation in the business of selling agricultural products and seeds. In 2013, AgReliant hired plaintiff Dan Allen, an Iowa resident, to sell seeds in Iowa.² Various documents addressed the terms and conditions of Allen'semployment, including the calculation of selling bonuses. Allen received a bonus for his work during the 2013/2014 season, but not for the 2014/2015 season. AgReliant terminated Allen's employment in late 2014.

Allen filed this case in the Iowa District Court for Worth County on November 10, 2015. He alleges that: (1) AgReliant breached his contract by not providing certain sales-related bonuses; (2) he detrimentally relied on promises made by AgReliant; (3) AgReliant engaged in constructive fraud by not compensating Allen for clients he brought to the company; and (4) AgReliant defamed Allen. On December 31, 2015, AgReliant removed the case to this court. Doc. No. 2.³

III. APPLICABLE STANDARDS

Federal Rule of Civil Procedure 12(c) states:

(c) Motion for Judgment on the Pleadings. After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.

Fed. R. Civ. P. 12(c). As a general rule, motions brought under Rule 12(c) are reviewed under the same standards that apply to motions to dismiss brought pursuant to Rule 12(b)(6), which provides for dismissal on the basis of "failure to state a claim upon which relief can be granted." Clemons v. Crawford, 585 F.3d 1119, 1124 (8th Cir. 2009), cert. denied, 561 U.S. 1026 (2010). In determining whether a plaintiff has stated a claim sufficient to survive a Rule 12(b)(6) motion to dismiss, the court must accept all of the plaintiff's factual allegations as true. Ashcroft v. Iqbal, 556 U.S. 662, 696 (2009). "The court may consider the pleadings themselves, materials embraced by the pleadings,exhibits attached to the pleadings, and matters of public record.'" Illig v. Union Electric Co., 652 F.3d 971, 976 (8th Cir. 2011) (quoting Mills v. City of Grand Forks, 614 F.3d 495, 498 (8th Cir. 2010)); accord Mulvenon v. Greenwood, 643 F.3d 653, 656-57 (8th Cir. 2011); Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

"To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord B & B Hardware, Inc. v. Hargis Indus., Inc., 569 F.3d 383, 387 (8th Cir. 2009). A claim satisfies the plausibility standard "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl., 550 U.S. at 556). "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." Id. (quoting Bell Atl., 550 U.S. at 556).

Although a plaintiff need not provide "detailed" facts in support of his or her allegations, the "short and plain statement" requirement of Federal Rule of Civil Procedure 8(a)(2) "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at 677-78 (citing Bell Atl., 550 U.S. at 555); see also Erickson v. Pardus, 551 U.S. 89, 93 (2007) ("Specific facts are not necessary [under Rule 8(a)(2)]."). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl., 550 U.S. at 555). And, "[w]here the allegations show on the face of the complaint [that] there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate." Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008) (citing Parnes v. Gateway 2000, Inc., 122 F.3d 539, 546 (8th Cir. 1997)).

IV. DISCUSSION

A. Count I - Breach of Contract

1. Standard

The Iowa Supreme Court has stated, "Except when there is ambiguity, the question of whether a written instrument ... binds the parties in contract is a question of law." French v. Foods, Inc., 495 N.W.2d 768, 770 (Iowa 1993) (citing Fogel v. Trustees of Iowa College, 446 N.W.2d 451, 456 (Iowa 1989)); see Bradshaw v. Brown Group, Inc., 258 F.3d 847, 849 (8th Cir. 2001) ("Whether an employer's policy manual binds the parties in contract is a question of law, unless the document is ambiguous." (citing Thompson v. City of Des Moines, 564 N.W.2d 839, 844 (Iowa 1997))).

Hinshaw v. Ligon Indus., L.L.C., 551 F. Supp. 2d 798, 808 (N.D. Iowa 2008). However, "the question of whether the plaintiff has proved a breach of contract is for the judicial fact-finder. See Davenport Bank & Trust Co. v. State Cent. Bank, 485 N.W.2d 476, 480 (Iowa 1992) ('The existence and terms of a contract and whether the contract was breached are ordinarily questions for the jury.')." Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 658 (Iowa 2008). To prevail on a breach of contract claim, the plaintiff must prove:

(1) the existence of a contract, (2) the terms and conditions of the contract, (3) that [plaintiff] has performed all the terms and conditions required under the contract, (4) the defendant's breach of the contract in some particular way, and (5) that plaintiff has suffered damages as a result of defendant's breach. Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998).

Royal Indem. Co. v. Factory Mut. Ins. Co., 786 N.W.2d 839, 846 (Iowa 2010).

2. Arguments

The parties' arguments read as two ships passing in the night. In its brief, AgReliant argues:

Mr. Allen's breach of contract claim is improperly premised on his misrepresentation that AgReliant and Mr. Allen had an "oral contract"related to payment of any bonus. These "compensation agreements," as Mr. Allen characterizes them, were not oral contracts. They were written contracts, the terms of which were acknowledged and accepted by Mr. Allen.

It is notable that Mr. Allen did not attach a copy of the SY2015 Bonus Plan to his Complaint because the express language of the Plan precludes his breach of contact claim. The SY2015 Bonus Plan requires that the "DSM [such as Mr. Allen] must be employed by the company at the time bonus is to be paid in order to be eligible for any bonus payment on this 2014-2015 DSM bonus program." (Ex. B at 8) . . . The Bonus Payout Schedule provides that the first bonus to be paid under the SY2015 Bonus Plan was not payable until the 2nd payroll in September 2015. (Id.). That was nine months after Mr. Allen's employment relationship with AgReliant had terminated. Under Iowa law, it is a fundamental and well-settled rule that when a contract is not ambiguous, courts must simply enforce it as written. . .

To have been eligible for any bonus under the SY2015 Bonus Plan, Mr. Allen must have been employed by AgReliant at least through the second payroll in September 2015 (the first day bonuses were paid under the SY2015 DSM Bonus Plan). This was a condition precedent to earning any bonus under the SY2015 Bonus Plan. Mr. Allen's employment relationship was terminated on December 17, 2014 and, therefore, he failed to meet this condition precedent. Accordingly, at the time Mr. Allen's employment was terminated, he had earned no bonus under the SY2015 Bonus Plan.

Doc. No. 15-1 at 5-7. In its reply, AgReliant clarifies that it does not contest the existence of the contract, nor that Allen plead a breach of contract, simply that '[t]he material facts of Mr. Allen's breach of contract claim are not in dispute." Doc. No. 17 at 2.

In his response, Allen undertakes an extended discussion of the pleading standards that apply in Iowa's state courts. Doc. No. 16-1 at 4-6. However, federal law controls the standard for considering a motion to dismiss. See, e.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 417 (2010) ("[i]t is a long-recognizedprinciple that federal courts sitting in diversity 'apply state substantive law and federal procedural law.' Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965).") (Stevens, J. concurring). The Eighth Circuit has stated:

We apply federal pleading standards—Rules 8 and 12(b)(6)—to the state substantive law to determine if a complaint makes out a claim under state law. See Council Tower Ass'n v. Axis Specialty Ins. Co., 630 F.3d 725, 730 (8th Cir. 2011); see also Shady Grove Orthopedic Assoc., v. Allstate Ins. Co., 559 U.S. 393, 130 S.Ct. 1431, 1442, 176 L.Ed.2d 311 (2010).

Karnatcheva v. JPMorgan Chase Bank, N.A., 704 F.3d 545, 548 (8th Cir. 2013). Accordingly, much of Allen's resistance is irrelevant.

Allen also devotes several pages of his brief to the alleged facts giving rise to his discharge from AgReliant. In short, he contends he was discharged because his sales and customer base far outpaced what AgReliant expected, meaning that under the terms of his bonus plan he was entitled to more money than AgReliant was willing to pay. However, as AgReliant points out in reply, "[t]he reasons for AgReliant's decision to terminate Mr. Allen's employment relationship are immaterial to Mr. Allen's breach of contract claim" because Allen does not allege that his discharge was the breach of contract. Doc. No. 17 at 3.

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