Walt Goodman Farms, Inc. v. Hogan Farms, LLC

• Docket Number: 1:22-cv-01004-JDB-jay
• Decision Date: 28 July 2022
• Parties: WALT GOODMAN FARMS, INC., Plaintiff, v. HOGAN FARMS, LLC and CHARLES PHILIP HIGDON, Defendants.
• Court: U.S. District Court — Western District of Tennessee

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WALT GOODMAN FARMS, INC., Plaintiff, v. HOGAN FARMS, LLC and CHARLES PHILIP HIGDON, Defendants.

No. 1:22-cv-01004-JDB-jay

United States District Court, W.D. Tennessee, Eastern Division

July 28, 2022

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT HIGDON'S MOTION TO DISMISS AND DIRECTING PLAINTIFF TO AMEND COMPLAINT

J. DANIEL BREEN, UNITED STATES DISTRICT JUDGE.

INTRODUCTION

Pursuant to 28 U.S.C. § 1332, the Plaintiff, Walt Goodman Farms Inc. (“Goodman Farms”), brought this action against Defendants, Hogan Farms, LLC (“Hogan Farms”) and Charles Philip Higdon, alleging claims under state law. (Docket Entry ("D.E.”) 1.) Before the Court is Higdon's motion to dismiss all claims against him in accordance with Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure (D.E. 15), to which Plaintiff has responded (D.E. 21), and the movant has replied (D.E. 22). The issues raised in the briefs are ripe for disposition.

FACTS ALLEGED IN THE COMPLAINT

The following facts have been alleged in the complaint relative to Plaintiff's claims against the movant. In March 2001 David and Linda Hogan purchased 270 acres of land in Fulton County, Kentucky. The following month, they entered into a contract with Goodman Farms in which they agreed to lease the property to Plaintiff for a term of the life of Goodman Farms' president, Walter Goodman.^[1] Plaintiff also rented two farms in Obion County, Tennessee, from Jesse B. Murphy, Linda Hogan's father, from 1994 until Murphy's death in June 2001. The Hogans entered into an oral agreement with Goodman Farms under which Plaintiff would continue to rent the Tennessee properties and two additional farms owned by the Hogans under the same terms as the written contract covering the Kentucky farm. In late 2012, the Hogans conveyed the Kentucky and Obion County, Tennessee, farms to Defendant Hogan Farms.

An amicable relationship between the Goodman and Hogan families continued for several years. Beginning on or about June 1 2017, however, Higdon, a salesman for Nutrien Ag Solutions (“Nutrien Ag”), began advising Hogan Farms concerning farming procedures.^[2] Upon visiting the farms rented by Goodman Farms, Higdon would then provide information to David Hogan that prompted the latter to complain about farming practices at the properties. Higdon gave unnecessary recommendations regarding input and testing as well as advice relative to planting and harvesting that were unreasonable in light of weather and ground conditions. He also insisted on the use of certain seed marketed by Nutrien Ag. Higdon's interference and criticism of Goodman Farms' practices led to a deterioration of the relationship between the Goodman and Hogan families. In May 2021, the Goodman family was notified by Hogan Farms that they would no longer be permitted to farm any of the land after the end of the 2021 crop year.^[3] The instant action was filed on January 10, 2022.

JURISDICTION AND CHOICE OF LAW

According to the complaint, Plaintiff is a Kentucky corporation with its principal business office in Hickman, Kentucky. Hogan Farms is a Tennessee limited liability company with its principal business office in Lakeland, Tennessee, and Higdon resides in Obion County, Tennessee. The amount in controversy exceeds $75,000. Thus, this Court has diversity jurisdiction over the matter under § 1332. A court sitting in diversity is to apply the law of the forum state, see Croce v. New York Times Co., 930 F.3d 787, 792 (6th Cir. 2019), which is, in this case, Tennessee. The parties appear to agree that Tennessee law applies. Thus, the Court will look to the law of Tennessee in resolving the issues at bar.

ARGUMENTS OF THE PARTIES AND ANALYSIS

Interference Claims.

At the outset, Higdon points out that the nature of Plaintiff's claim, or claims, of interference is ambiguous. In the complaint, the claim appears under the heading “Intentional Interference with Business Relationship” (D.E. 1 at PageID 5) but contains allegations consistent with a claim for intentional interference with a contract. Indeed, the section cites to and specifically avers a violation of Tennessee Code Annotated § 47-50-109, which prohibits “[i]nducement of [b]reach of [c]ontract.” Neither claim, movant argues, could survive a motion to dismiss under Rule 12(b)(6).

Standard of Review

The rule permits dismissal for “failure to state a claim upon which relief can be granted[.]” Fed.R.Civ.P 12(b)(6). The question before the Court on a motion to dismiss is not whether the plaintiff will ultimately prevail, Skinner v. Switzer, 562 U.S. 521, 530-31 (2011), but whether the well-pleaded facts “permit the court to infer more than the mere possibility of misconduct,” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In resolving a Rule 12(b)(6) motion, a court is to “view the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual allegations as true, and look to see whether the complaint contains sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ammex, Inc. v. McDowell, 24 F.4th 1072, 1079 (6th Cir. 2022) (internal quotation marks omitted). “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.” Id. Factual allegations “must be enough to raise a right to relief above the speculative level[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In making its determination, the district court is to “stay within the four corners of the complaint[.]” Bell v. City of Southfield, Mich., 37 F.4th 362, 364 (6th Cir. 2022). “A complaint should only be dismissed if it is clear to the court that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Herhold v. Green Tree Servicing, LLC, 608 Fed.Appx. 328, 331 (6th Cir. 2015) (quoting Trzebuckowski v. City of Cleveland, 319 F.3d 853, 855 (6th Cir. 2003)) (internal quotation marks omitted).

Interference with Contract

Section 47-50-109 renders it “unlawful for any person, by inducement, persuasion, misrepresentation, or other means, to induce or procure the breach or violation, refusal or failure to perform any lawful contract by any party thereto[.]” Tenn. Code Ann. § 47-50-109. To succeed under the statute or on a Tennessee common law tortious interference claim with respect to the performance of a contract,^[4] a plaintiff must show

(1) that there was a legal contract; (2) that the wrongdoer had sufficient knowledge of the contract; (3) that the wrongdoer intended to induce its breach; (4) that the wrongdoer acted maliciously; (5) that the contract was breached; (6) that the act complained of was the proximate cause of the breach; and (7) that damages resulted from the breach.

Bluecross Blueshield of Tenn., Inc. v. Dunwoody Labs, Inc., Case No. 1:20-cv-167, 2021 WL 6275252, at *8 (E.D. Tenn. Mar. 8, 2021) (quoting TSC Indus., Inc. v. Tomlin, 743 S.W.2d 169, 173 (Tenn. Ct. App. 1987)). The purpose of the tort is to “deter third parties from interfering with the contractual relations of parties to a contract.” Zitzow, 2022 WL 1787110, at *5 (quoting Cambio Health Solutions, LLC v. Reardon, 213 S.W.3d 785, 789 (Tenn. 2006)) (emphasis omitted).

Higdon submits that Goodman Farms has failed to allege sufficient facts to show that he acted intentionally and maliciously to cause a breach of the contract between Hogan Farms and the Plaintiff. Rather, he insists, Goodman Farms' allegations of intent, malice, and causation are at best purely conclusory.

Conclusory allegations are not entitled to the presumption of truth generally afforded a plaintiff upon review of a Rule 12(b)(6) motion. See Iqbal, 556 U.S. at 678 (“A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'”). However, the Court finds the allegations contained in the complaint to be more than conclusory.

“A defendant acts intentionally when he desires the act to cause the breach or when he is substantially certain that his acts will result in a breach.” Landers v. LoanCare, LLC, Case No. 1:20-cv-284, 2021 WL 6340987, at *4 (E.D. Tenn. Sept. 29, 2021) (quoting JIT Concepts, Inc. v. Shelby Cty. Healthcare Corp., 358 F.Supp.2d 678, 686 (W.D. Tenn. 2005)) (brackets omitted). “The essential thing is the intent to cause the result.” Zitzow, 2022 WL 1787110, at *4 (quoting Restatement (Second) of Torts: Intentional Interference with Performance of Contract by Third Person § 766, cmt. h) (emphasis omitted). Proximate cause, a “flexible concept that must be assessed case-by-case,” requires “some direct relation between the plaintiff's injury and the defendant's conduct.” Lick Branch Unit, LLC v. Reed, No. 3:13-cv-203, 2014 WL 546696, at *9 (E.D. Tenn. Feb. 10, 2014) (internal quotation marks omitted). The complaint alleges that Higdon intended to cause a breach of the contract by providing information to David Hogan that led the latter to complain about Goodman Farms' practices; giving unnecessary recommendations and advice relative to the farming operations that were, in Plaintiff's view, unreasonable; and insisting on the use of certain seed.

In the context of the instant claim, “malice” is defined as “the willful violation of a known right.” Santoni v. Mueller, No. 3:20-cv-00975, 2022 WL 97049, at *10 (M.D. Tenn. Jan. 10, 2022). To “properly plead malice in a tortious interference claim, [a p]laintiff must allege that [the d]efendant acted intentionally and without legal justification.” Id. “Interference is without justification if it is done for the indirect purpose of injuring plaintiff or benefiting the defendant at ...