Compass Bank v. Eager Rd. Assocs., LLC, Case No. 4:12CV1059 JCH

• Court: United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
• Writing for the Court: Jean C. Hamilton
• Parties: COMPASS BANK, et al., Plaintiff(s), v. EAGER ROAD ASSOCIATES, LLC, et al., Defendant(s).
• Decision Date: 24 June 2013
• Docket Number: Case No. 4:12CV1059 JCH

COMPASS BANK, et al., Plaintiff(s),
v.
EAGER ROAD ASSOCIATES, LLC, et al., Defendant(s).

Case No. 4:12CV1059 JCH

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

Dated: June 24, 2013

MEMORANDUM AND ORDER

This matter is before the Court on Plaintiffs' Motion to Dismiss Counterclaims for Failure to State a Claim Upon Which Relief Can Be Granted, or in the Alternative, to Strike Allegations in the Counterclaims, filed on March 15, 2013. ("Motion to Dismiss," ECF No. 168). This motion is fully briefed and ready for disposition.

BACKGROUND

This action arises out of a financial transaction involving the development of commercial and retail property located at 8300 Eager Road in Brentwood, Missouri. (Plaintiffs' Memorandum in Support of Motion to Dismiss Counterclaims for Failure to State a Claim Upon Which Relief Can Be Granted, or in the Alternative, to Strike Allegations in the Counterclaims ("Memo in Support"), ECF No. 169, p. 4). The development of this property, which was known as The Meridian at Brentwood ("the Meridian"), led to two previous lawsuits: a state court action in St. Louis County, Missouri, and a federal court action in this Court. (Id.). Both previous lawsuits were dismissed after the parties entered into a settlement agreement titled "Revised Outline of Settlement Terms and Conditions" ("Settlement Agreement") during mediation on September 9, 2011. (Id., p. 5). The

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parties also executed an Acknowledgment and Acceptance of Settlement Agreement and Mutual Release of Claims ("Mutual Release") on or about September 15, 2011. (Id.).

Plaintiffs Compass Bank and Vectra Bank Colorado, N.A., filed their Complaint in this Court on June 13, 2012, on the basis of diversity jurisdiction. (ECF No. 1). In their Complaint, Plaintiffs seek damages for breach of the Settlement Agreement and specific performance of the Settlement Agreement. (Id., pp. 7-10). Defendants Eager Road Associates, LLC, Alan R. Skop, Don C. Musick III, and Adolphus A. Busch IV (collectively "the ERA Defendants") filed their "Answer, Affirmative Defenses and Counterclaims" on February 22, 2013. ("Answer," ECF No. 160). The ERA Defendants' Answer contains three counterclaims: Count I alleges breach of contract for failure to provide a letter of credit as required under the Settlement Agreement, Count II alleges breach of contract for continuing to apply the default rate of interest and fees in violation of the Settlement Agreement, and Count III alleges breach of the covenant of good faith and fair dealing for withholding material information concerning the creditworthiness and credit rating of Plaintiff Compass Bank and refusing to cooperate after the downgrade in Plaintiff Compass Bank's credit rating and outlook.

As noted above, Plaintiffs filed their Motion to Dismiss on March 15, 2013. Plaintiffs argue the ERA Defendants' counterclaims are based on "conclusory allegations of fact and law" that are contrary to the language of the Settlement Agreement and Mutual Release. The ERA Defendants counter that Plaintiffs' arguments are more appropriate for a motion for summary judgment and that the ERA Defendants have properly pled their counterclaims.

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STANDARD

I. Motion to Dismiss

In ruling on a motion dismiss, the Court must view the allegations in the complaint in the light most...