Blueline Rental, LLC. v. Rowland, Case No. 1:18-cv-00195-SNLJ
| Decision Date | 20 April 2020 |
| Docket Number | Case No. 1:18-cv-00195-SNLJ |
| Parties | BLUELINE RENTAL, LLC., and UNITED RENTALS, INC. Plaintiffs, v. DANA ROWLAND, ALESHIA MUSGRAVE, JOSEPH KELPE, and SUNBELT RENTALS, INC., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This case comes before the Court on defendant Sunbelt Rentals, Inc.'s motion to dismiss (#60) and counter-defendants BlueLine Rental, LLC. and United Rentals, Inc.'s motion to dismiss Joseph Kelpe's counterclaim (#62). For the following reasons, Sunbelt's motion is GRANTED IN PART and DENIED IN PART and BlueLine's motion is GRANTED.
BlueLine and Sunbelt were competitors in the rental business for heavy industrial and construction equipment.1 BlueLine claims Sunbelt recruited co-defendant Dana Rowland to establish a new branch location that would compete with BlueLine's Scott City, Missouri, branch. Before being hired by Sunbelt, Rowland was a branch manager for BlueLine and had access to confidential and trade secret information including"pricing policies, sales data, information regarding customers, and other market data." Rather than hire her immediately, BlueLine alleges Sunbelt "instructed Rowland to hold off giving notice [] of her resignation" so that she could take steps to sabotage BlueLine's operations. Rowland executed Sunbelt's letter offering employment on March 1, 2018, but she did not join Sunbelt until sometime after March 29, 2018—her last day of employment with BlueLine.
During that month-long span, and after, Rowland allegedly solicited customers to switch to Sunbelt and also recruited other BlueLine employees to make the switch as well. As a result, four BlueLine employees—including defendants Kelpe and Musgrave—provided notice of their resignation within days of each other, between July 6 and July 10, 2018, which BlueLine says "crippled the Scott City Branch." Rowland was also receiving confidential pricing information from Kelpe before his resignation, and Musgrave allegedly agreed with Rowland that they would "burn the BlueLine Scott City Branch the f*** down."
The claims against Sunbelt largely circle around its encouragement of Rowland to breach various terms of her employment agreement with BlueLine. For a period of six months, Rowland agreed not to solicit customers and not to recruit other employees. The relevant provisions are set forth below:
ECF #34-1, p.4, §§ 524, 525. The complaint alleges Sunbelt was made aware of Rowland's obligations under her employment agreement no later than July 9, 2018, when BlueLine sent a demand letter to Sunbelt raising concerns about Rowland's conduct. In this letter, BlueLine insisted that Sunbelt take immediate steps to ensure Rowland (and others) were not engaging in actions that violated the employment agreement. Nonetheless, Rowland continued to "solicit significant BlueLine customers long after Sunbelt had notice." But even before the July 9 date, BlueLine says Sunbelt was aware of Rowland's contractual obligations and disregarded them. BlueLine points out that Sunbelt's offer letter—dated February 23, 2018—required Rowland to either "represent that [she] was not subject to any agreement prohibiting or restricting [her] from workingin the rental equipment industry or competing with a prior employer" or else forward a copy of such to Sunbelt's human resources department. The inference, of course, is that Rowland gave Sunbelt a copy of her employment agreement well before the demand letter was sent.
Three counts are asserted against Sunbelt: (1) Count IV—tortious interference with contractual relations and business expectancies; (2) Count V—aiding and abetting; and (3) Count VI—fraudulent concealment. BlueLine concedes the fraud count should not have been made against Sunbelt at this time, therefore Count VI is dismissed without prejudice. Sunbelt says the remaining counts should be dismissed under Rule 12(b)(6) because they fail to "allege a facially plausible claim."
The purpose of a Rule 12(b)(6) motion to dismiss is to test the legal sufficiency of a complaint so as to eliminate those actions "which are fatally flawed in their legal premises and designed to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir. 2001) (quoting Neitzke v. Williams, 490 U.S. 319, 326-27 (1989)). "[T]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face." Jones v. Douglas County Sheriff's Dept., 915 F.3d 498, 499 (8th Cir. 2019) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Courts "do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550U.S. 544, 547 (2007). A complaint must set forth factual allegations which are enough to "raise a right to relief above the speculative level." Id. at 555.
In addressing a motion to dismiss, a court must view the allegations of the complaint in the light most favorable to the plaintiff. United States ex rel. Ambrosecchia v. Paddock Laboratories, LLC., 855 F.3d 949, 954 (8th Cir. 2017). While a complaint challenged by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff must still provide the grounds for relief, and neither "labels and conclusions" nor "a formulaic recitation of the elements of a cause of action" will suffice. Bell Atlantic Corp., 550 U.S. at 545 (internal citations omitted). That is to say, neither "legal conclusions" nor "conclusory statements" will "save [a] complaint" from dismissal pursuant to Rule 12(b)(6). Whitney v. City of St. Louis, Mo., 887 F.3d 857, 860 (8th Cir. 2018).
To begin, plaintiffs' tortious interference claim is inappropriately compound and complicates this Court's analysis. Tortious interference comes in "two forms ... as distinct and separate torts." See Rail Switching Servs, Inc., v. Marquis-Missouri Terminal, LLC., 433 S.W.3d 245, 258 (Mo. App. E.D. 2017). Generally, "allegations of tortious interference with a contract refers to the defendant's intrusion on an existing contract." Id. at 258-259. Whereas, "allegations of tortious interference with a business expectancygenerally pertains to the defendant's interference with a reasonable expectancy of future financial benefit." Id.
On the latter claim, no business expectancy has been detailed in the complaint beyond the conclusory allegation that Sunbelt was aware of and otherwise harmed BlueLine's "business expectancies"—apparently an indirect reference to BlueLine's customer base, or else its employees. One reason this expectancy must be properly pled with factual detail is to evaluate its objective reasonableness. Indeed, "mere hope is not enough," rather the "expectancy must be reasonable and valid under the circumstances presented." Vilcek v. Uber USA, LLC., 902 F.3d 815, 818 (8th Cir. 2018) (quoting Stehno v. Sprint Spectrum, LP., 186 S.W.3d 247, 250 (Mo. banc. 2006)). Prior dealings with customers may suggest a valid business expectancy, but even then the complaint must give some definition to the anticipated business that is likely to follow. See Western Blue Print Co., LLC. v. Roberts, 367 S.W.3d 7, 19 (Mo. banc. 2012) (plaintiff presented sufficient evidence of future business expectancy in university contract bid where record reflected success on two prior bids). Simply put, if BlueLine had an objective expectation in particular customers or particular employees, it must give factual meaning and support to those expectations. Here, it failed to do so. Accordingly, this separate claim of tortious interference will be dismissed.
On the separate claim for tortious interference with a contract, five elements must be met: "(1) a contract; (2) defendant's knowledge...
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