Hayden Outdoors, Inc. v. Niebur

• Decision Date: 28 January 2014
• Docket Number: Case No. 13–1288 JTM.
• Parties: HAYDEN OUTDOORS, INC., Plaintiff, v. Linda NIEBUR and John Stratman, Defendants.
• Court: U.S. District Court — District of Kansas

994 F.Supp.2d 1206

HAYDEN OUTDOORS, INC., Plaintiff,

v.Linda NIEBUR and John Stratman, Defendants.

Case No. 13–1288 JTM.

United States District Court,

D. Kansas.

Jan. 28, 2014.

Jerry D. Fairbanks, Fairbanks Law PA, Goodland, KS, for Plaintiff.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, District Judge.

The court has before it defendant John Stratman's Motion to Dismiss for Failure to State a Claim (Dkt. 12). After reviewing the parties' briefs on the motion, the court is prepared to rule.

I. Background

The complaint alleges the following facts. Plaintiff Hayden Outdoors signed a contract, agreeing to sell 22,720 acres of Delmer Zweygardt's farm land on June 27, 2008. The contract was an “Exclusive Right to Sell Listing Agreement,” under which Hayden was entitled to a 7% commission of the final sales price. The agreement included a provision compensating Hayden if the property was sold to anyone Hayden had shown the property to or negotiated with.

In February of 2009, defendants John Stratman and Linda Niebur, agents for Mason & Morse Ranch Company, LLC, contacted Zweygardt regarding some potential buyers for his property. After hearing of this contact with its client, Hayden gave Stratman and Niebur the listing information but told Mason & Morse Ranch Company that Stratman and Niebur should contact Hayden, rather than contacting Zweygardt directly. Zweygardt told Hayden that even if it failed to sell the land by the end of the listing agreement on June 27, 2009, he would sign a new listing agreement because he was satisfied with Hayden's performance.

Despite Hayden's warnings, Stratman and Niebur continued to contact Zweygardt about selling his property. Hayden prepared a new listing agreement, believing Zweygardt would extend its time to sell the land as he had promised. However on June 27, 2009, Zweygardt told Hayden he would not be signing the extension. On July 1, 2009, Stratman purchased Zweygardt's property. Stratman then sold portions of Zweygardt's land on August 18, 2009 for a total of over $8.2 million. The extension clause from Hayden's listing agreement was still valid and enforceable at the time of this sale, entitling Hayden to compensation for the sale of Zweygardt's land.

Later in 2009, Hayden filed suit against Zweygardt in state court alleging breach of contract. The district court awarded Hayden $437,649, based on a 7% commission of the sale by Stratman less the commission due to Stratman, Niebur and Mason & Morse Ranch Company. Zweygardt appealed the decision, and Hayden cross-appealed. The Kansas Court of Appeals affirmed the district court's ruling. On August 1, 2013, Hayden filed this suit, asserting tortious interference of contract by Stratman, Niebur and Mason & Morse Ranch Company. ¹

II. Legal Standard: Motion to Dismiss Under Rule 12(b)(6)

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The complaint must give the defendant adequate notice of what the plaintiff's claim is and the grounds of that claim. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). “In reviewing a motion to dismiss, this court must look for plausibility in the complaint.... Under this standard, a complaint must include ‘enough facts to state a claim to relief that is plausible on its face.’ ” Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219, 1223–24 (10th Cir.2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (clarifying and affirming Twombly's probability standard). “The issue in resolving a motion such as this is ‘not whether [the] plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims.’ ” Bean v. Norman, No. 008–2422, 2010 WL 420057, at *2 (D.Kan. Jan. 29, 2010) (quoting Swierkiewicz, 534 U.S. at 511, 122 S.Ct. 992).

III. Analysis

Defendant Stratman argues that the complaint should be dismissed because Hayden filed it after the statute of limitations had run. Hayden argues the statute of limitations does not bar its claim because it could not file this suit until its state court claims against Zweygardt were fully resolved.

“A federal court sitting in diversity jurisdiction must apply the substantive law of the state in which it sits, including that state's choice-of-law rules.” Vazirani & Assoc's Fin., LLC v. Heitz, No. 11–1032–MLB, 2011 WL 2295027, at *2 (D.Kan. June 8, 2011) (internal citation omitted). In Kansas, tortious interference claims are subject to a two-year statute of limitations. Id. (citing Kan. Stat. Ann.. 60–513(a)(4)). The statute of limitations begins to run when the right to maintain a legal action arises. Johnston v. Farmers Alliance Mutual Ins. Co., 218 Kan. 543, 548, 545 P.2d 312, 317 (1976). “In Kansas, a cause of action accrues ‘at the time of the act giving rise to the cause of action, unless the fact of injury is not reasonably ascertainable.’ ” Heitz, 2011 WL 2295027 at *3 (quoting See Clayton v. Hartley, 257 Kan. 813, 820, 896 P.2d 1049, 1054 (Kan.1995)). “Kansas law recognizes that a claim for tortious interference with contract accrues when the injury is reasonably ascertainable though the full actual loss may not happen until later.” Rinehart v. Saint Luke's South Hosp., Inc., No. 10–2209–SAC, 2011 WL 3348234, at *14 (D.Kan. Aug. 3, 2011).

Hayden filed this case on August 1, 2013. Using this date as a starting point, to be timely, the cause of action must have accrued within two years prior. But Hayden alleges that Stratman's tortious interference with contract took place in 2009, and Hayden admits that its suit against Zweygardt did not toll the statute of limitations. Therefore, Hayden's claim is time-barred unless it can show its injury was not reasonably ascertainable until after August 1, 2011. See Heitz, 2011 WL 2295027 at *3.

Hayden argues that it was unable to bring suit against these defendants until its breach of contract case against Zweygardt was resolved, including the appeals process. Hayden notes that a breach of contract action is intended to place the injured party in the same position it would have been in but for the breach, and a double or duplicative recovery for its injury arising from a breach of contract would be invalid. Based on this, Hayden asserts that if it had recovered full compensation against Zweygardt, it would have been barred from seeking what would amount to duplicative compensatory damages against the defendants in this case. Hayden adds that since it could not have known what its recovery against Zweygardt would be, any amount of damages claimed against the defendants in this case before the first case concluded would have been too speculative. According to Hayden, this would have been a fatal flaw because “damages suffered by plaintiff as a direct or proximate cause of defendant's misconduct” are one element of a tortious interference claim, and damages in this case “are limited to those damages not recovered from the party breaching the contract.” Hayden's Memorandum in Opposition, Dkt. 19, p. 6 (citing Maxwell v. Southwest Nat'l Bank, 593 F.Supp. 250, 253 (D.Kan.1984); Restatement (Second) of Torts § 774A(2) (1979)). Finally, Hayden argues that “[t]o require Plaintiff to simultaneously maintain separate suits against separate defendants with claims arising out of one set of facts” would place an undue burden upon it and the courts.

The court finds a useful example in Phillips USA, Inc. v. Allflex USA, Inc., 869 F.Supp. 842 (D.Kan.1994). In Phillips USA, the plaintiffs alleged that the tortious interference of Allflex caused NJ Phillips to breach its agreement with Felton & Co. Id. at 851. NJ Phillips's breach and the alleged interference of Allflex gave rise to the same injuries or damages to the plaintiffs. Id. “The same acts and events giving rise to NJP's breach of contract substantially form the basis of plaintiffs' tortious interference claim against Allflex....” Id. The court reasoned that once the plaintiffs ascertained or could have reasonably ascertained injury from NJ Phillips's breach of contract, they could also have reasonably ascertained that Allflex was interfering with their contractual relationship with NJ Phillips. Id. “Thus, under the circumstances of this case, plaintiffs' cause of action for tortious interference began to accrue at the same time, or no later than, its cause of action accrued for breach of the ... contract.” Id.

Similar circumstances are present here. When Hayden ascertained the injury caused by Zweygardt's breach, it also ascertained the injury caused by the alleged tortious interference of the defendants in this case. Hayden does not argue that it was unaware of these defendants' actions until later. Therefore, Hayden's cause of action accrued at the same time its cause of action for breach of the...