Boswell v. Panera Bread Co.

Citations: 91 F. Supp. 3d 1141; 2015 U.S. Dist. LEXIS 17277; 2015 WL 631259Docket: Case No. 4:14-CV-01833-AGF

Court: District Court, E.D. Missouri; February 11, 2015; Federal District Court

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Defendant Panera, LLC and its parent company, Panera Bread Company, filed motions seeking a more definite statement regarding a fraud claim and to dismiss a conversion claim in a lawsuit by Plaintiffs Mark Boswell and David Lutton, former Joint Venture General Managers (JVGMs) for Panera. The Plaintiffs allege that Defendants misrepresented and inadequately paid them one-time "JVGM Buyout" payments as outlined in their employment contracts. The second count, alleging fraud in the inducement, was claimed by Defendants to lack the specificity required by Federal Rule of Civil Procedure 9(b), prompting their request for a clearer statement. The third count, alleging conversion, was challenged by Defendants on the grounds that Missouri law does not support such a claim for recovering money, as conversion pertains to tangible property. The Court ultimately denied the motion for a more definite statement but granted the motion to dismiss the conversion claim. The background indicates that the Plaintiffs entered a five-year compensation agreement with Defendants, which was modified without consent to cap the buyout payments, leading to allegations of breach of contract, fraud, and conversion. The complaint seeks damages and injunctive relief, with Defendants contending that the fraud claim lacks sufficient detail and arguing against the legal basis for the conversion claim.

Plaintiffs assert that the funds in question are identifiable amounts wrongfully appropriated by Defendants, qualifying as "specific chattel," which allows for a claim of wrongful conversion under Missouri law. Defendants counter that the "specific chattel" exception applies only to funds entrusted to another for a defined purpose, which they argue is not applicable here. The court discusses the procedural aspects of Defendants' motions under Federal Rules of Civil Procedure, specifically Rule 12(e) for a more definite statement and Rule 12(b)(6) for dismissal. It clarifies that a Rule 12(e) motion must be filed before any responsive pleading; since Defendants filed an answer before their motion, the court denies their request for a more definite statement. Similarly, the court notes that a Rule 12(b)(6) motion cannot be filed after an answer, though it can be raised in a motion for judgment on the pleadings under Rule 12(c). The court emphasizes a preference for resolving legal issues on their merits and indicates that it will consider Defendants’ motion despite its improper styling. For a claim to survive a motion to dismiss, it must present sufficient factual allegations that, if taken as true, establish a plausible claim for relief.

Threadbare recitals of a cause of action with mere conclusory statements are insufficient to withstand dismissal; a complaint must present enough facts to create a reasonable expectation of evidence supporting the claim. In evaluating motions to dismiss under Rules 12(b)(6) or 12(c), the court assumes the facts in the complaint as true and interprets them in favor of the plaintiff, but does not accept the plaintiff's legal conclusions. Under Missouri law, conversion can be established in three ways: by showing a tortious taking, a use or appropriation by the defendant that asserts a claim against the owner, or a refusal to return possession on demand. Conversion is not applicable solely for recovering money. Specific checks or notes can support a conversion claim if they are identifiable as specific chattels. An exception exists for funds placed in custody for a specific purpose that are misappropriated by the defendant. In this case, the funds owed to the plaintiffs under the plan cannot be identified as a specific chattel and were never under the plaintiffs' control or entrusted for a specific purpose. Therefore, the plaintiffs cannot convert a claim for damages into a conversion action. The court concludes that the plaintiffs have failed to state a viable conversion claim under Missouri law, resulting in the dismissal of Count III of the complaint.

Defendants' motion for a more definite statement regarding Count II of the complaint is denied, while their motion to dismiss Count III for failure to state a claim is granted, resulting in the dismissal of Count III. The complaint consists of five counts: 1) breach of contract (class claim), 2) fraud (class claim), 3) conversion (class claim), 4) fraud (individual claim by named Plaintiffs), and 5) unjust enrichment (individual claim by named Plaintiffs). The motion for a more definite statement pertains only to Count II, and the dismissal motion exclusively concerns Count III. Both parties agree that Missouri law applies to the claims. The named Plaintiffs assert jurisdiction under 28 U.S.C. 1332(a) due to diversity of citizenship and an amount in controversy exceeding $75,000 per named Plaintiff. Additionally, they claim jurisdiction over the putative class' state law claims under 28 U.S.C. 1332(d) based on minimum diversity and an aggregate amount in controversy exceeding $5 million, which Defendants do not specifically contest.