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Fimco, Inc v. Wootton New Holland, LLC

United States District Court, W.D. Oklahoma

March 21, 2017

FIMCO, INC. d/b/a Ag Spray Equipment, Plaintiff,



         Before the Court is Defendants' Motion to Dismiss claims against Capital Machinery I Corp. and Sean Raimbeault. (Doc. 17). For the reasons that follow, that Motion is DENIED.

         I. Background

         This case concerns farming and agricultural equipment that Defendants bought from Plaintiff but allegedly never paid for. Plaintiff FIMCO, Inc. consists of two divisions. One of those divisions is Ag Spray, which offers a variety of lawn, garden, and agricultural products for wholesale to agricultural equipment dealers. One of those dealers, Defendant Wootton New Holland, LLC, (Wootton), purchased farm sprayers and other miscellaneous items from July 2015 to May 2016 for use at its various Oklahoma locations. These purchases were made on credit from Ag Spray and subject to the agreement that Wootton would pay Ag Spray for the equipment and parts within a certain amount of time.[1]Wootton's alleged outstanding balance with Ag Spray stands at $237, 773.63 today.

         With Wootton refusing to pay any portion of the balance, even as the invoices piled up, its owners decided to yield control of the company's business operations. To that end, on December 26, 2015, it executed a Management Services Agreement with Defendant Capital Machinery, which bestowed on Capital the right to manage Wootton-everything from dictating operations and accounting to satisfying Wootton's outstanding obligations.[2]The Agreement also appointed Capital and its CEO, Sean Raimbeault, to be Wootton's “attorney-in-fact, ” thereby giving them the power to manage and sell Wootton's property. After the execution of the Management Agreement, Wootton continued to purchase equipment and parts on credit from Ag Spray, including almost $3, 000 in equipment and $2, 300 in parts.

         So by January 2016, Capital was running Wootton per the Management Agreement. Yet Capital-at some unknown time in the summer of 2016-also made an ownership play, acquiring all issued and outstanding membership interest in Wootton. As of October 7, 2016, Capital, through its CEO Raimbeault, was portraying itself as the owner of Wootton. This seems to have begun as early as June 8, 2016, when Capital applied for a line of credit with Ag Spray. (Doc. 1, Ex. 2). Capital listed its address on the Business Credit Application as 402 N. 16th St. in Chickasha, Oklahoma-which just happens to be the address of one of Wootton's dealership locations. Further, Capital's listed store locations, bank reference, and trade reference also match those of Wootton's. Capital also represented it had been in business for nine years, despite having not been incorporated until December 28, 2015, and not registered to conduct business in Oklahoma until May 9, 2016. Also of note: the Application included Raimbeault's signature personally guaranteeing “the full and prompt payment of all liabilities, obligations, charges and dues of [Capital] to FIMCO.” (Doc. 1, Ex. 2, at 3).

         Ag Spray now demands that Wootton settle its nearly $238, 000 account balance, or in the alternative, return the purchased equipment and parts, including the ten farm sprayers. Capital and Wootton, though, claim six of the sprayers are missing, possibly having been sold. In any event, Capital refuses to turn over any of the alleged sales proceeds or the remaining four sprayers in its possession. Ag Spray thus raises nine claims for relief against various Defendants. Capital and Raimbeault have moved to dismiss the causes of action against them.

         II. Standard of Review

          “Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.'” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). “The pleading standard Rule 8 announces does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the- defendant-unlawfully-harmed-me accusation.” Id. at 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To survive a motion to dismiss, a pleading must offer more than “labels and conclusions” and “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. There must be “sufficient factual matter, [which if] accepted as true . . . state[s] a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A plausible claim is one that “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A plaintiff must “nudge[] his claims across the line from conceivable to plausible . . . .” Twombly, 550 U.S. at 570. Further, the Court “must accept all the well-pleaded allegations of the complaint . . . and must construe them in the light most favorable to the [non-moving party].” Thomas v. Kaven, 765 F.3d 1183, 1190 (10th Cir. 2014).

         III. Analysis

         A. The Claims for Unjust Enrichment and Conversion against Capital

         Ag Spray's first cause of action against Capital is for unjust enrichment on the basis that Capital has yet to pay any portion of Wootton's $237, 773.63 balance on the Ag Spray account, continues to retain possession of four of the farm sprayers sold to Wootton, and has failed to account for the other six. These allegations are enough to state a claim for unjust enrichment, a claim for relief that arises where a “party has money in its hands that, in equity and good conscience, it should not be allowed to retain.” Harvell v. Goodyear Tire and Rubber Co., 167 P.3d 1028, 1035 (Okla. 2006). Why Ag Spray has stated a plausible claim against Capital is straightforward: Capital, as the sole owner and operator of Wootton, will not turn over equipment and proceeds allegedly owed to Ag Spray.

         Capital counters that because corporations are distinct legal entities, they are generally not responsible for the acts of another. Yet if Capital truly owns and manages Wootton-as Ag Spray alleges-then Wootton's obligations may be Capital's, thus giving rise to a plausible claim for unjust enrichment. And as for Capital's argument that it has not been unjustly enriched because it is not in control of any profits from the possible sale of the farm sprayers or other parts, that misstates the law: if the equipment purchased by Wootton is still in its possession without having been paid for, that alone bestows a benefit on Capital that is sufficient to state a plausible claim for unjust enrichment. See, e.g., Branch v. Mobil Oil Corp., 778 F.Supp. 35, 36 (W.D. Okla. 1991) (denying motion to dismiss unjust enrichment claim because it could be inferred that defendants' use of plaintiffs' property to dispose of pollutants [thus] saved the expenses” that Defendant otherwise would have incurred).

         Further, these same facts and allegations serve as the basis-and state a plausible claim-against Capital for Ag Spray's third cause of action: conversion, simply the interference of another person's right to possess the property in question. White v. Webber-Workman Co., 591 P.2d 348, 350 (Okla.Civ.App. 1979). If Capital is currently ...

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