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Agropex International, Inc. v. Access World (Usa) LLC

United States District Court, D. Maryland

July 23, 2019



          J. Mark Coulson United States Magistrate Judge.

         Plaintiff, Agropex International Inc. (“Agropex”), advances several claims against Defendant, Access World (USA) LLC (“Access World”), arising out of the allegedly wrongful storage and handling of 38, 500 metric tons of agricultural products. Pursuant to Standing Order 2018-4 and 28 U.S.C. § 636(c), the case was assigned directly to a magistrate judge and the parties consented to proceed before that magistrate judge. (ECF Nos. 14, 17). Now pending before the Court is Defendant's Motion to Dismiss, (ECF No. 19), and Plaintiff's Motion for Leave to File Sur-reply. (ECF No. 22). The Court has reviewed all the filings and finds that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2018). For the reasons that follow, Defendant's Motion is GRANTED in part and DENIED in part, and Plaintiff's Motion is DENIED.

         I. BACKGROUND

         All facts below are either undisputed or in a light most favorable to Agropex. In 2017, Agropex contracted with non-party, Global Natural, LLC, to sell 21, 000 metric tons of corn and 17, 500 metric tons soya (the “Cargo”). (ECF No. 1 at ¶¶ 7-9). Global Natural then contracted with Defendant Access World to take delivery and store the Cargo until sold. (Id. at ¶ 9). After delivery another third party performed an inspection and reported that all of the Cargo was in good condition as of April 2017. (Id. at ¶¶ 10-11).

         Issues began almost immediately after delivery. First, questions arose as to who would be paying storage fees to Access World. (Id. at ¶ 12). After being informed that Agropex owned the Cargo, Access World turned to it for payment. (Id.). Next, an issue arose as to whether the Cargo was “properly certified as ‘organic'”, causing delay in shipment. (Id. at ¶ 13). Last, on June 9, 2017, Agropex learned from “a third-party” that the Cargo needed drying, indicating that it had been exposed to moisture, counter industry protocol, while in Access World's storage facility. (Id. at ¶¶ 14-16).

         On July 11, 2017, Agropex requested that the Cargo be made available for a buyer. (Id. at ¶ 17). Access World, however, refused to release the product without Global Natural's consent. (Id. at ¶ 19). Agropex alleges that Access World refused to release the Cargo despite full payment of all storage fees and knowledge that Global Natural had ceased operations or was in the process of ceasing operations. (Id. at ¶ 22). On July 21, 2017, Access World informed Agropex that it would need to pay additional “loading fees” before the Cargo could be release. (Id. at ¶ 24). On November 2, 2017, Access World told Agropex that some of the Cargo had been damaged. (Id. at ¶ 25). Although the date of release is unclear, Agropex ultimately paid $2, 109, 219.64 for the handling, storage, transportation, and disposal of the Cargo. (Id. at ¶ 35). The Cargo was only released after full payment. (Id. at ¶ 35). Agropex maintains that none of the fees were proper, and that it only paid the amount believing that the Cargo was undamaged, or alternatively, that Access World would assume the cost of any damage to the Cargo. (Id. at 37). In total, Agropex alleges more than $3.5 million in damages from a combination of wrongfully charged fees related to the storage of the Cargo, and lost revenue from the damaged, destroyed, and unaccounted for Cargo. (Id. at ¶¶ 45-52).

         Notably, this is not the first suit to arise from this Cargo. On June 29, 2017, while the Cargo was still within an Access World facility, Global Natural filed suit against Agropex in this Court. See Global Natural, LLC v. Agropex Int'l, Inc. et al, No. 1:17-cv-01799-GLR (D. Md. 2017). The prior suit concerned, among other things, the proper certification of organics and alleged that the same Cargo was fraudulently classified. After filing the Complaint, it appears that Global Natural ceased operations, causing their counsel to file a motion for leave to withdraw. After the motion was granted, Global Natural was given thirty (30) days to obtain new counsel. They did not. Agropex moved to dismiss the complaint and for default judgment on its counterclaims, including claims arising from the storage and damage of the Cargo in question. On August 23, 2018, the Court ultimately granted the motion and entered judgment in Agropex's favor against Global Natural for $9, 624, 454.14 in damages plus post-judgment interest.

         On April 24, 2019, Agropex filed suit against Access World alleging seven counts: (I) breach of contract; (II) negligence; (III) conversion; (IV) trespass to chattels; (V) fraudulent misrepresentation; (VI) fraudulent concealment; and (VII) negligent misrepresentation. (ECF No. 1 at ¶¶ 53-92). Access World now moves to dismiss many of these counts. (ECF No. 19).


         To survive the challenge of a motion to dismiss filed pursuant to Fed.R.Civ.P. 12(b)(6), a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). A complaint is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. The complaint, however, must not rely on bald allegations, as its “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S at 555. Stated another way, Plaintiffs may not “rely on naked assertions, speculation, or legal conclusions.” Trotter v. Kennedy Krieger Inst., Inc., No. CIV. 11-3422-JKB, 2012 WL 3638778, at *2 (D. Md. Aug. 22, 2012) (internal citations omitted). “If after viewing the complaint in this light the court cannot infer more than the mere possibility of misconduct, then the motion should be granted and the complaint dismissed. Id. (internal citations omitted).


         Access World argues that Agropex's Complaint is critically deficient in a few respects. First, it is asserts that Plaintiff's fraud-based counts do not meet the pleading requirements of Federal Rule 9 nor articulate an actual misrepresentation. Second, Access World argues that some tort-based counts fail as a matter of law because a necessary duty in tort does not exist. Third, Access World argues that the claim of conversion must fail as a matter of law because of the underlying contract. Finally, Access World argues that Agropex, by incorporating all prior allegations into each of its claims, violates the requirement to set forth each claim for relief separately.

         For the reasons discussed below, the Court agrees with Access World in part and will dismiss counts II, V, VI, and VII for failure to state a claim. This dismissal will be without prejudice so that Plaintiff may file an amended complaint.

         A. Count V - Fraudulent Misrepresentation and Count VI - Fraudulent Concealment

         Plaintiff advances two counts colored in fraud that require particularity: fraudulent misrepresentation and fraudulent concealment. To state a claim for fraudulent misrepresentation, a plaintiff must allege “(1) that the defendant made a false representation to the plaintiff (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plaintiff, (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) ...

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