Marsh v. Commercial Relationship, Recovery, Inc.

• Decision Date: 09 December 2021
• Docket Number: 4:21-cv-912-MTS
• Parties: KENNETH MARSH, et al., Plaintiffs, v. COMMERCIAL RELATIONSHIP, RECOVERY INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

KENNETH MARSH, et al., Plaintiffs,
v.
COMMERCIAL RELATIONSHIP, RECOVERY INC., et al., Defendants.

No. 4:21-cv-912-MTS

United States District Court, E.D. Missouri, Eastern Division

December 9, 2021

MEMORANDUM AND ORDER

MATTHEW T. SCHELP, UNITED STATES DISTRICT JUDGE.

Before the Court is Defendant Ascentium Capital, LLC's Motion to Dismiss, Doc. [15], Plaintiffs' Amended Complaint, Doc. [9], pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the Court grants Defendant's Motion.

I. Background^[1]

This case concerns events surrounding the repossession of Plaintiffs Kenneth Marsh (“Marsh”), ^[2] Nitro Transport, LLC, and Nitro Auto Sales, LLC (collectively “Plaintiffs”) collateral. Plaintiffs and Ascentium Capital, LLC (“Defendant”) entered into a finance agreement for a loan to purchase a 2020 Dodge Ram 4500 (the “collateral”). After a dispute, Plaintiffs admittedly defaulted on the loan. Defendant hired Commercial Relationship Recovery, Inc. (“Commercial”) to repossess the collateral. Commercial subsequently hired Talladega Towing & Transporting, LLC and Michael D. Thompson (“Thompson”) to repossess the collateral.^[3] Plaintiffs' “biggest

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client” is Gateway Classic Cars (“Gateway”). Thompson allegedly called Gateway and told employees that the collateral was under “repo status.” Doc. [9] ¶ 29. Plaintiffs allege that “[a]s a result of this incident, Gateway terminated Plaintiff from all further business dealings.” Id. ¶ 36. Plaintiff Marsh called Thompson “to confront him.” Id. ¶ 32. Thompson allegedly told Plaintiff Marsh that if he did not “surrender the collateral immediately, ” then Thompson would go to visit “the pharmacy.” Id. ¶ 33. Plaintiff Marsh's wife worked at a pharmacy and he believed Thompson conveyed a “thinly veiled threat” that Thompson was going to harass or harm his wife. Id. ¶ 34. During the same call, Thompson allegedly also said “that's only the f***ing beginning. . . .I am going to involve your whole f***ing family and everyone you know, and everyone is going to hate you. You have two hours to turnover this f***ing car or else.” Id. ¶ 35. Thompson and no other party repossessed the collateral or made any attempt to repossess.

Based on those events, Plaintiffs seek damages against Defendant for (1) common law tortious interference with a contract or business expectancy (“Count I”) and (2) a breach of peace under Mo. Rev. Stat § 400.9-609 (“Count II”), stemming from Thompson's alleged conduct. In the instant Motion, Defendant seeks to dismiss the entire action for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Doc. [15].

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” The purpose of such a motion is to test the legal sufficiency of a complaint. When considering a Rule 12(b)(6) motion, the Court assumes all of a complaint's factual allegations to be true and makes all reasonable inferences in favor of the nonmoving party. See Neitzke v. Williams, 490 U.S. 319, 326-27 (1989); Martin v. Iowa, 752 F.3d 725, 727 (8th Cir. 2014). A complaint must contain “a short and plain statement of the claim

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showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). To survive a motion to dismiss, the complaint must allege facts supporting each element of the plaintiff's claims, and the claims cannot rest on mere speculation. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Specifically, the complaint “must allege more than ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements'” and instead must “allege sufficient facts that, taken as true, ‘state a claim to relief that is plausible on its face.'” K.T. v. Culver-Stockton Coll., 865 F.3d 1054, 1057 (8th Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The Court “need not accept as true plaintiff's conclusory allegations or legal conclusions drawn from the facts.” Glick v. W. Power Sports, Inc., 944 F.3d 714, 717 (8th Cir. 2019). The Court does not decide whether the plaintiff will ultimately prevail, but rather whether the plaintiff is entitled to present evidence in support of the claim. See Twombly, 550 U.S. at 556.

III. Discussion

1. Count I: Tortious Interreference

The question here is whether a creditor can be liable for the alleged tortious interference of a twice-removed repossessor under the legal theory of agency. Under Missouri law, a plaintiff claiming tortious interference with a contract or business expectancy must demonstrate: (1) a contract or valid business expectancy; (2) defendant's knowledge of the contract or relationship; (3) intentional interference by the defendant inducing or causing a breach of the contract or relationship; (4) absence of justification; and (5) damages resulting from defendant's conduct. W. Blue Print Co. v. Roberts, 367 S.W.3d 7, 19 (Mo. banc 2012). Here, Plaintiffs pleaded that only Thompson engaged in the alleged tortious conduct. Plaintiffs, however, argue that Defendant is liable for Thompson's conduct based on a theory of implied agency. Doc. [19] at 2.

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Despite the absence of an express agreement, ^[4] a principal-agent relationship may be created, which is known as implied agency. Stram v. Miller, 663 S.W.2d 269, 274 (Mo.Ct.App. 1983) (“An implied agency occurs when agent and principal have no express understanding as to the agent's appointment, but the conduct of the parties suggests the fact of an agency arrangement.”); Centennial State Bank v. S.E.K. Construction Co., Inc., 518 S.W.2d 143, 148 (Mo.Ct.App. 1974).^[5] In order to establish a principal-agent relationship, the principal must have a “right to control” the agent, and the agent must consent to act on behalf of the principal subject to the principal's control. Blunkall v. Heavy & Specialized Haulers, Inc., 398 S.W.3d 534, 541 (Mo.Ct.App. 2013); see also State ex rel. Ford Motor Co. v. Bacon, 63 S.W.3d 641, 642 (Mo. banc 2002) (“Agency is the fiduciary relationship resulting from the manifestation of consent by an agent to a principal that the agent will act on the principal's behalf and subject to his control.”). An implied agency must be based on facts that imply an intention to create the agency and the implication must arise from “a natural and reasonable, and not from a forced, strained, or distorted, construction of them.” Centennial, 518 S.W.2d at 148.

Here, the Court does not find a principal-agent relationship existed between Defendant and Thompson.^[6] Plaintiffs do not allege Thompson-the supposed agent-ever manifested consent to Defendant-the supposed principal-that Thompson would act on Defendant's behalf and subject

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to Defendant's control.^[7] Notably, Commercial-not Defendant-hired Thompson. Thus, Defendant lacked even “the right to control the ends of [Thompson's] activities.” Bach v. Winfield-Foley Fire Prot. Dist., 257 S.W.3d 605, 608 (Mo. banc 2008) (“It is a relationship where the principal only has the right to control the ends of the agent's activities; the principal does not have the right to control or...