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Glenwood Capital, LLC v. West Plains Co.

United States District Court, D. Kansas

July 9, 2014

GLENWOOD CAPITAL, LLC, Plaintiff,
v.
WEST PLAINS COMPANY, WEST PLAINS LLC. Defendants.

MEMORANDUM AND ORDER

RICHARD D. ROGERS, District Judge.

Glenwood Capital, LLC (Glenwood) brings this action against West Plains Company (WP Company) and West Plains, LLC (WP LLC). The claims arise out of a purported agreement between Glenwood and WP Company. Glenwood asserts three causes of action against WP Company: breach of an oral contract, quantum meruit and fraudulent inducement. Glenwood asserts two causes of action against WP LLC: breach of an oral contract and quantum meruit. This matter is presently before the court upon the following motions: (1) WP Company's motion for summary judgment; (2) WP LLC's motion for summary judgment; and (3) Glenwood's motion for sanctions against WP LLC. Having carefully reviewed the arguments of the parties, the court is now prepared to rule.

I.

The court shall first consider the motions for summary judgment. This is a case based upon diversity of citizenship jurisdiction. The claims in this case arise in Missouri and, thus, Missouri law controls.

The defendants seek summary judgment on all of the claims asserted by Glenwood against each of them. WP Company contends in its motion that Glenwood's claims must fail because it has produced insufficient evidence to support its claims for damages. WP LLC argues that it is entitled to summary judgment on the claims brought by Glenwood against it because WP Company was not authorized to entered into the oral contract with Glenwood and WP LLC was not a part of any agreement or request for services with Glenwood.

II.

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The requirement of a genuine issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). Essentially, the inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Id. at 251-52.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. See Celotex Corp. v. Catrett , 477 U.S. 317, 325 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. See Anderson , 477 U.S. at 256. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of [its] pleading, but must set forth specific facts showing that there is a genuine issue for trial. Id . Therefore, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. See id.

When reviewing a motion for summary judgment, the court should keep in mind three principles. First, the court's role is not to weigh the evidence, but to assess the threshold issue whether a genuine issue exists as to material facts requiring a trial. See Anderson , 477 U.S. at 249. Second, the court must resolve all reasonable inferences and doubts in favor of the non-moving party and construe all evidence in the light most favorable to the non-moving party. See Hunt v. Cromartie , 526 U.S. 541, 550-55 (1999). Third, the court cannot decide any issues of credibility. See Anderson , 477 U.S. at 255.

The court notes that summary judgment is not a "disfavored procedural shortcut;" rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex , 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).

III.

The uncontroverted facts are as follows: WP Company operated as a grain warehouse and merchant company. WP LLC is an agricultural commodity trading business specializing in warehouse operation.

Wells Fargo Bank, N.A., provided $34 million to WP Company for operating capital. Wells Fargo had a first priority security interest in the assets of WP Company. As part of the continuing financing, Wells Fargo required WP Company to engage a "crisis manager" from a list of firms provided by Wells Fargo. Glenwood and Wells Fargo had prior business relationships in which Glenwood had been inserted as a "crisis manager" for Wells Fargo customers. Glenwood entered into a written agreement in August 2011 to be a "crisis manager" for WP Company. The agreement provided the terms under which Glenwood would provide services for WP Company, which was in substantial financial distress. In late September 2011, the agreement was amended to increase the amount to be paid to Glenwood to $100, 000 per month and to establish a retainer of $300, 000.

Glenwood claims that in late September or early October 2011 it made an oral agreement with Bryce Wells, the former chief executive officer of WP Company, for payment of a success fee in exchange for successful completion of additional work beyond that provided for in the written agreement between Glenwood and WP Company. The additional services Glenwood says it was to provide to WP Company were "regarding the potential ...


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