Jerry Friedman v. Kelly Farmer

788 F.3d 862, 91 Fed. R. Serv. 3d 1764, 2015 U.S. App. LEXIS 9731, 2015 WL 3622247
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 11, 2015
Docket14-2575
StatusPublished
Cited by8 cases

This text of 788 F.3d 862 (Jerry Friedman v. Kelly Farmer) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jerry Friedman v. Kelly Farmer, 788 F.3d 862, 91 Fed. R. Serv. 3d 1764, 2015 U.S. App. LEXIS 9731, 2015 WL 3622247 (8th Cir. 2015).

Opinion

KELLY, Circuit Judge.

Jerry Friedman, a California resident, and FM Service Equipment Group, Inc., a California corporation, 1 sued two Arkansas corporations and two employees of one of those corporations for breach of contract, promissory estoppel, unjust enrichment, conversion, and other tort claims. See 28 U.S.C. § 1332. The district court 2 granted summary judgment in favor of the defendants, and Friedman appeals. We affirm the judgment. 3

I. Background

The following facts are recounted in the light most favorable to Friedman, the non-moving party. See Jackson v. Allstate Ins. Co., 785 F.3d 1193, 1200-02 (8th Cir.2015). Kelly Farmer is the founder of Arkat Nutrition, Inc. (Arkat Nutrition), an Arkansas Corporation formed in 1989. Arkat Nutrition owned a feed mill in Arkansas known as Plant One. Kelly’s son, John Farmer, worked at Arkat Nutrition and was in charge of overseeing production • of milling operations at Plant One. Arkat Land Company (Arkat Land) is a limited liability company also located in Arkansas. Arkat Land owned a separate feed mill known as Plant Two, though it leased Plant Two to Arkat Nutrition, which used both plants to produce animal feed.

In February 2007, a tornado damaged Plant One. Arkat Nutrition decided not to repair the plant because the equipment inside had little useful life left. A third-party company cleaned up the debris from the tornado but left some scrap with potential value. Later in 2007, Friedman made an oral deal with the Farmers: He would act as a broker for Arkat Nutrition to solicit offers for the remaining equipment from Plant One. According to Friedman, any sale amount he brokered above $1.9 million would go to him as a broker’s *865 fee. Friedman says he “had the exclusive right to contact all potential buyers”; Ar-kat Nutrition says Friedman was a “nonexclusive broker” and that “it was understood that Arkat Nutrition could also continue to attempt to find a buyer on its own.” Friedman successfully sold some of the equipment to Mid America Pet Food, LLC, and received a commission of $25,000. Friedman also alleged that he purchased a palletizer 4 from Arkat Nutrition for $1000. He dismantled the palletizer and left it at Plant One, where it remained for at least two years.

In 2010, Arkat Nutrition and Arkat Land transferred most of their assets to a newly formed company, Arkat Animal Nutrition, LLC (Arkat Animal Nutrition), the equity interests of which would then be sold to Dad’s Products Company, Inc. (Dad’s Products). Dad’s Products, however, was not to be responsible for any investor claims or third-party claims for which Arkat Animal Nutrition was liable. According to the Farmers, that sale had been contemplated since 2002, long before Friedman’s oral deal. The sale was completed in February 2010, and shortly after Dad’s Products changed its name to Ains-worth Pet Nutrition, Inc. (Ainsworth). After the sale, Ainsworth hired a third-party company to remove any remaining scrap from Plant One; that company paid Ains-worth less than $10,000 to keep the scrap. Arkat Nutrition continued to exist only to collect proceeds from an earlier sale of some Plant One equipment not sold by Friedman. Arkat Animal Nutrition also briefly continued to exist as a subsidiary of Ainsworth before merging into it.

After the sale to Ainsworth, Friedman brought this lawsuit. He alleged that he had “expended considerable resources” to find potential buyers for the Plant One equipment and had offered “all of the equipment” to one potential buyer for $2.9 million. Friedman said he did not learn until December 2010 that Arkat Nutrition had been sold. He also asserted, however, that the deal was modified so that he would receive any amount paid above $1.5 million, though he did not say when that modification occurred. He alleged claims for breach of contract, tortious interference with a contract, unjust enrichment, promissory estoppel, and conversion (for the palletizer, which he alleges wrongly was sold to Ainsworth). He sought declaratory judgment and $1 million in owed commission.

Friedman later moved to amend the complaint to add claims against Arkat Land. Ainsworth cross-claimed for indemnity and contribution against the Farmers and Arkat Nutrition, who together filed their own cross-claim for the same against ■ Ainsworth. Each defendant also moved for summary judgment on all of Friedman’s claims.

The district court denied Friedman’s motion to amend because the proposed amended complaint did not add Arkat Land as a plaintiff but added only allegations regarding that company. Those added allegations, the court ruled, “fall far short of alleging facts” showing that Arkat Land is the “alter ego” of Arkat Nutrition. The court noted that, if properly alleged, the alter-ego theory could have justified holding Arkat Land liable for the wrongdoing of Arkat Nutrition; but the amended complaint failed to assert this theory in even a conclusory form. And even if Friedman had properly alleged claims against Arkat Land as a separate entity, the court explained, those claims would be *866 untimely, and the amendment would be futile.

The district court later ruled on the defendants’ motions for summary judgment. The court granted summary judgment in part and denied it in part for Arkat Nutrition on the claims for breach of contract and promissory estoppel; but the court granted judgment in full for the Farmers on these claims and on Friedman’s claim for tortious interference with contract. The court ruled in favor of all defendants on the claims of unjust enrichment and conversion. 5

The district court then set a trial date for Friedman’s breach of contract and promissory estoppel claims against Arkat Nutrition. Instead of pursuing those claims, however, Friedman jointly moved with Arkat Nutrition to dismiss with prejudice the claims against Arkat Nutrition, rendering the court’s summary judgment order final and appealable. Ainsworth also moved to dismiss its cross claims against Arkat Nutrition for indemnity. The district court granted both motions and, pursuant to that order and its earlier order granting summary judgment in part, dismissed all claims by all parties.

II. Discussion

Friedman appeals the grant of summary judgment for the defendants. In October 2014, Arkat Nutrition moved to dismiss itself and any adverse claims from this appeal because Friedman had dismissed his claims against that corporation in the district court. We granted that motion. This appeal, thus, concerns Friedman’s claims against only the Farmers and Ains-worth, and he also has abandoned some of those claims.

a. Summary Judgment Claims

This court reviews the grant of summary judgment de novo. Swift & Co. v. Elias Farms, Inc., 539 F.3d 849

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Bluebook (online)
788 F.3d 862, 91 Fed. R. Serv. 3d 1764, 2015 U.S. App. LEXIS 9731, 2015 WL 3622247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jerry-friedman-v-kelly-farmer-ca8-2015.