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

United States District Court, D. Maryland

November 21, 2019



          A. David Copperthite United States Magistrate Judge.

         Defendant, Access World (USA) LLC ("Defendant"), moves this Court to dismiss Counts IV, V, and VI of the Amended Complaint of Plaintiff, Agropex International, Inc. ("Plaintiff'), for fraudulent misrepresentation, fraudulent concealment, and negligent misrepresentation, respectively (the "Motion to Dismiss") (ECF No. 33). After considering the Motion to Dismiss and the responses thereto (ECF Nos. 37, 41), the Court finds that no hearing is necessary. See Loc.R. 105.6 (D.Md. 2018). For the reasons stated herein, the Court DENIES Defendant's Motion to Dismiss.

         Factual Background

         When reviewing a motion to dismiss, this Court accepts as true the facts alleged in the challenged complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). As part of its business operations, Plaintiff arranges for the import and export of bulk agricultural products, such as corn and soya. ECF No. 31 at 2, ¶ 4. In early 2017, Plaintiff entered a contract with Global Natural, LLC ("Global Natural") to sell corn and soya to downstream buyers after Plaintiff delivered the products to the United States. Id. at 3, ¶ 8. The contract between Plaintiff and Global Natural was for 21, 000 metric tons of corn and 17, 500 metric tons of soya (collectively the "Cargo"). Id. at 2, ¶ 7. Global Natural entered a contract with Defendant to store the Cargo in Defendant's storage facility until Global Natural arranged the transport of the Cargo to buyers. Id. at 3, ¶ 9. In April 2017, when Plaintiff delivered the Cargo to Defendant's facility an independent entity, SGS, inspected the Cargo to ensure its quantity and quality; SGS confirmed that the entirety of the Cargo was in good condition upon delivery to Defendant's facility. Id. at 3, ¶¶ 10-11.

         Disputes quickly arose regarding the storage fees and whether the Cargo was properly certified "organic," which led to the Cargo remaining in Defendant's storage facility. Id. at 3, ¶¶ 12-13. In a discussion about the storage fees, Global Natural's employee Michael Spangler informed Defendant employees Richard Jamison and Spencer Jamison that Plaintiff was the owner of the Cargo as early as April 7, 2017. Id. at 3, ¶ 12. Per industry standards, the Cargo needed to be stored so it would be free from moisture and identifiable for Plaintiffs future sales. Id. at 4, ¶¶ 14-15.

         On July 11, 2017, Plaintiffs officer Darla Turner emailed Defendant's employee Jennifer Lewis to ask specifically about Defendant's storage methods for the Cargo. Id. at 4, ¶ 16. The same day, Ms. Turner also informed Defendant that Plaintiff had a buyer for the Cargo, and she requested the Cargo be available for Plaintiff to transport to the buyer. Id. at 4, ¶ 19. In a separate exchange on July 12, 2017, Defendant's counsel informed Plaintiff that Defendant would be responsible for any damage to the Cargo under Defendant's "care, custody, and control." Id. at 4, ¶ 18. After Plaintiffs request that Defendant make the product available for transport, Defendant refused to release the product because its storage agreement was with Global Natural, not with Plaintiff, and Global Natural would need to consent to the release. Id. at 5, ¶ 20. Although Defendant refused to release the Cargo to Plaintiff, Defendant still simultaneously demanded Plaintiff pay Global Natural's outstanding storage fees for the Cargo. Id. at 5, ¶ 21. On July 14, 2017, Defendant's counsel admitted to Plaintiff that Plaintiff had title to the Cargo, and still demanded Plaintiff pay all storage and handling costs. Id. at 5, -¶ 22.

         On July 17, 2017, Ms. Turner notified Defendant's employee Simon Pollet that Plaintiff was in the process of securing a vessel to transport the Cargo to buyers. Id. at 6, ¶ 26. The same day, Mr. Pollet asked Ms. Turner to send him the specifications of the vessel Plaintiff was considering, and Ms. Turner immediately provided the information. Id. On July 18, 2017, Ms. Turner provided even more vessel specifications to Mr. Pollet, including its estimated arrival in Baltimore on July 21, 2017. Id. at 6, ¶ 27. Ms. Turner also informed Mr. Pollet that Plaintiff needed to confirm with the vessel that day. Id. The same day, Mr. Pollet replied to Ms. Turner's emails about the vessel requesting she sign a business confirmation document, indicating the vessel's specifications were acceptable, and informing Ms. Turner he would send her the outstanding storage invoices. Id. at 6, ¶ 28. At no point did Mr. Pollet inform Ms. Turner, or any other employee of Plaintiff s, the Cargo had been damaged while in storage. Id. Also on July 18, 2017, Mr. Pollet verbally informed Ms. Turner that Defendant would load the Cargo on the vessel at a rate of twenty dollars per metric ton at a pace of 3, 000 metric tons per day. Id. at 6-7, ¶ 29. Mr. Pollet confirmed these were the stated amounts in an email on July 21, 2017, during which he informed Ms. Turner Defendant was increasing its rates. Id.

         On July 20, 2017, Ms. Turner followed up via email with Mr. Pollet and Ms. Lewis regarding her July 11th questions concerning the Cargo's storage, to which no one had yet replied. Id. at 7, ¶ 34. On July 21, 2017, aware that Plaintiffs vessel was supposed to begin loading the Cargo that day, Mr. Pollet informed Ms. Turner that Defendant still had to weigh the Cargo, so the rates and pace he had quoted to her for loading the Cargo needed to be modified. Id. at 8, ¶ 36. Ms. Turner immediately responded questioning the additional fees. Id. Also on July 21, 2017, Defendant's counsel told Global Natural's counsel that the Cargo belonged to Plaintiff, which had paid all outstanding and applicable fees, but Defendant still required that Plaintiff pay additional "loading fees." Id. at 7, ¶ 35. On July 24, 2017, Mr. Pollet informed Ms. Turner that Defendant was increasing its loading rate to thirty-six dollars per metric ton and decreasing its loading pace to 1, 900 metric tons per day. Id. at 8, ¶ 37. Because Plaintiff had already secured a buyer and a vessel for the Cargo, it was forced to pay Defendant's new rates; Plaintiff was also subject to a $345, 951.04 fee from the vessel for the delay. Id. at 8, ¶¶ 38-39. Also on July 24, 2017, Ms. Lewis partially responded to Ms. Turner's July 11th and 20th emails by stating only the Cargo was stored outside. Id. at 8, ¶ 40.

         On July 25, 2017, Ms. Turner informed Mr. Pollet and Defendant's employee Len Crescenzo via email that the United States Department of Agriculture ("USDA") found that one pile of corn that was part of the Cargo was damaged, and the USDA would be performing inspections the next day. Id. at 8, ¶ 41. Ms. Turner also informed Mr. Pollet and Mr. Crescenzo that the vessel would not dock to be loaded until the USDA reported on the quality of the Cargo. Id. After this discovery, on July 27, 2017, Mr. Pollet responded to Ms. Turner's July 11th email by providing more information on Defendant's storage system. Id. at 8-9, ¶ 42. Mr. Pollet stated that Defendant had an aeration system, but Defendant "d[id] not check quality, quantity, temperature, humidity, or for infestation." Id. In the same email, Mr. Pollet also sought to disclaim Defendant's previous assurances that it was responsible for any damage to the Cargo while it was stored in Defendant's facility. Id. at 9, ¶ 43.

         On August 4, 2017, Plaintiff sent Defendant a formal protest letter signed by Ms. Turner asking Defendant to accept liability for the damage to the Cargo. Id. at 9, ¶ 45. Plaintiffs letter detailed the substandard conditions to which Defendant subjected the Cargo as well as Defendant's deficiencies compared to the expected loading pace. Id. On August 17, 2017, Defendant sent Plaintiff a letter signed by Mr. Pollet refusing to accept responsibility, and alleging Global Natural was an agent for Plaintiff as opposed to an intermediary. Id. at 9, ¶ 46. Defendant's letter also admitted for the first time that the Cargo had been stored for five months in a system only intended to be used for thirty days. Id.

         Separately on August 17, 2017, Mr. Crescenzo emailed Ms. Turner inquiring as to Plaintiff's plans for the damaged Cargo: Id. at 10, ¶ 50. Ms. Turner responded on August 18, 2017, that Plaintiff would keep Defendant updated on its plans for the Cargo, and Ms. Turner requested that Mr. Crescenzo confirm that the Cargo was being protected from further harm. Id. at 10, ¶ 51. On August 21, 2017, after receiving no response, Ms. Turner again emailed Mr. Crescenzo to inquire as to how the damaged Cargo was being protected and to request that Defendant advise her of the extent of the damage to the corn. Id. at 10, ¶ 52. Mr. Crescenzo responded that the damaged Cargo would be stored in bins covered by a tarp, but there would be no aeration system. Id. On August 22, 2017, Ms. Turner informed Mr. Crescenzo that her calculation indicated Defendant was still storing 4, 000 metric tons of damaged corn. Id. at 11, ¶ 53. On August 23, 2017, Ms. Turner responded to Mr. Crescenzo's email that the damaged Cargo was not being aerated by stating the Cargo must be stored in a way to prevent future damage and by stating the newly discovered damaged Cargo must also be protected. Id. at 11, ¶ 54. On August 28, 2017, Mr. Crescenzo told Plaintiff the damaged Cargo "was separated and protected." Id. at' 11, ¶ 55. Based on Mr. Crescenzo's statement, Plaintiff arranged to sell the damaged Cargo to a buyer. Id. at 11, ¶ 56.

         On November 2, 2017, Ms, Turner emailed Mr. Crescenzo and Defendant's employee Adam Malinski requesting they confirm the amount of Cargo was correct on a spreadsheet she obtained from Defendant's employee Katlyn Ruble. Id. at 11, ¶ 57. The spreadsheet stated Defendant was storing 4, 390 metric tons of soya and 1, 891 metric tons of corn for Plaintiff, which Mr. Malinski confirmed. Id. at 11, ¶¶ 58-59. On November 2, 2017, Plaintiff arranged for the sale of 3, 900 metric tons of the damaged soya significantly less than the standard market price for good soya. Id. at 11, ¶¶ 60-61. On November 6, 2017, Ms. Turner emailed Mr. Crescenzo and Mr. Malinski requesting that Defendant screen 3, 300 metric tons of soya being loaded from a specific bin, which Mr. Malinski replied was unnecessary. Id. at 12, ¶¶ 63-64. Because Defendant had said screening was unnecessary, Plaintiff sold the soya to a buyer without screening; the buyer refused delivery, and it was only then that Plaintiff learned the Cargo was "substantially more damaged" than Defendant had represented and contained debris. Id. at 12, ¶ 65. Plaintiff had to refund a portion of the purchase price to the buyer, and its reputation with the buyer was damaged. Id. at 12, ¶ 66. Plaintiff was unaware of the full extent of the damage to the Cargo before the buyer refused delivery, and Defendant did not inform Plaintiff of the damage. Id. at 13-14, ¶¶ 75-76.

         Plaintiff lost revenue as a result of the damage to the Cargo, and over 1, 800 metric tons of Plaintiffs corn was never recovered from Defendant's facility. Id. at 12, ¶ 67. Furthermore, almost 375 metric tons of Plaintiff s corn was so damaged it needed to be destroyed. Id. at 12, ¶ 68. From June 2017 through February 2018, Defendant charged Plaintiff approximately $1, 987, 163.48 for storage, handling, loading/unloading, and overtime without considering the damage to the Cargo. Id. at 13, ¶ 74. On August 24, 2018, Defendant charged Plaintiff for storage and disposal fees for the remaining damaged Cargo that Plaintiff was unaware Defendant still retained. Id. at 14-15, ¶¶ 78, 80, 85. Plaintiffs financial losses are attributable to lost revenue, storage and related fees, vessel demurrage fees, and refunds to buyers; by Plaintiffs calculations, these losses total $4, 152, 654.20. Id. at 17, ¶ 96.

         Procedural Background

         On April 26, 2019, Plaintiff filed this lawsuit against Defendant, seeking compensatory and punitive damages exceeding $3, 500, 000 (ECF No. I).[1] On June 7, 2019, Defendants filed a motion to dismiss for failure to state a claim as to all but Count I of the Complaint (ECF No. 19). On June 21, 2019, Plaintiff filed a response in opposition (ECF No. 20), to which Defendant replied on July 5, 2019 (ECF No. 21). On July 23, 2019, this Court entered a Memorandum Opinion and ...

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