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KNG, Inc. v. First Bank & Trust

United States District Court, D. Oregon, Eugene Division

July 27, 2018

KNG, INC., d/b/a KLUPENGER NURSERIES INC. Plaintiff,
v.
FIRST BANK & TRUST, d/b/a FIRSTLINE FUNDING GROUP Defendant.

          OPINION AND ORDER

          Ann Aiken United States District Judge.

         In this action, plaintiff KNG, Inc. ("KNG") asserts a number of claims related to the alleged breach of a series of shipping contracts. Plaintiff claims relief for unjust enrichment, money had and received, and common law indemnification. Defendant First Bank & Trust ("First Bank") moves to dismiss all of plaintiffs claims pursuant to Fed.R.Civ.P. 12(b)(6) under the doctrines of claim and issue preclusion, (doc. 3). For the reasons set forth below, defendant's motion is granted, and this action is dismissed.

         BACKGROUND

         For the purposes of considering the motion to dismiss, plaintiffs allegations in its complaint are accepted as true.[1] Plaintiff is a nursery and ornamental plant distributor incorporated in the State of Oregon. Prior to 2012, Plaintiff entered into a series of shipping contracts with United Distribution Services, Inc. ("UDS") who arranged for transportation of plaintiff's goods throughout the United States. Plaintiff contracted for compensation to UDS through defendant First Bank.[2] Under the terms of the contract, either UDS or First Bank was to pay shipping agents on behalf of plaintiff. When plaintiff discovered that neither UDS nor First Bank had made certain payments to plaintiffs shipping vendors as proscribed, plaintiff made repeated demands that the funds be remitted or paid to the shipping vendors. Plaintiff alleges that those defendants did not remit the funds or tender payments to the shipping vendors. Further, neither UDS nor First Bank provided plaintiff with requested documentation regarding the disputed transactions and disposition of the funds tendered to defendants by plaintiff.

         In November 2012, plaintiff instituted an action (the "2012 suit") against UDS and First Bank in Multnomah County Circuit Court. Plaintiff included in the action Bardue Transportation Services, Inc. ("BTS"), an alleged continuation business of UDS, Baxter Baily & Associates, Inc. ("BBA"), an assignee of two debts relevant to the disputed contracts, and Lukas Bardue ("Bardue"), the alleged owner of UDS and BBA. Plaintiff raised claims for breach of contract against UDS, BTS, and Bardue, breach of fiduciary duty and indemnification against UDS, BTS, Bardue, and First Bank, sought declaratory judgment against all defendants, and declaratory judgment for veil piercing against UDS, BTS, and Bardue. Plaintiff claimed economic damages in the sum of $95, 000 plus prejudgment interest of 9% per annum from July 1, 2012 until paid in full. Id. at ¶ 35.

         On February 27, 2015, the Multnomah County Circuit Court issued a default judgment in favor of plaintiff on plaintiffs claims for breach of contract, breach of fiduciary duty, indemnification/contribution, and veil piercing as against defendants Bardue, UDS, and BTS. Monetary damages were awarded to plaintiff against Bardue, UDS, and BTS in the amount of $95, 000 with costs pursuant to Oregon Rules of Civil Procedure ("ORCP") 68. Stein Decl. Ex. 3, 3:5, 3:9-10. The judgment also entitled plaintiff to pre-judgment interest in the amount of $20, 918.21 and post-judgment interest of 9% per annum from entry of judgment until paid in full. Id. at 3:6-8. On June 21, 2016, more than one year after the default judgment was entered, plaintiff filed a motion to correct the judgment pursuant to ORCP 71A. Plaintiff averred that, although First Bank was subject to the judgment previously submitted to the court for signature, that judgment was never signed and First Bank was omitted from the final judgment. Court records reveal that the motion was neither granted nor denied by the circuit court. No. additional actions have been taken by the parties with respect to the judgment against Bardue, UDS, and BTS.

         In September 2017, plaintiff initiated another action (the "2017 suit") against defendant asserting claims for unjust enrichment and money had and received. Plaintiff again claimed economic damages in the sum of $95, 000 plus prejudgment interest of 9% per annum from My 1, 2012 until paid in full, attorney fees and associated costs, and any equitable relief granted at the court's discretion. Stein Decl., Ex. 6, ¶ 12.

         The Circuit Court dismissed the action for failure to prosecute on December 28, 2017. Plaintiff filed a motion to vacate the judgment of dismissal on January 26, 2018. Following briefing by both parties and a hearing, plaintiffs motion was denied.

         Plaintiff filed the present Complaint before this Court on January 30, 2018. The facts alleged arise from the same transactions underlying plaintiffs claims in both the 2012 and 2017 suits, namely, that plaintiff entered into a series of contracts with UDS and that defendant, acting as the factoring agent, failed to pay the shipping agents on behalf of plaintiff. Plaintiff claims that defendant's nonpayment of the shipping fees entitle it to relief for unjust enrichment, money had and received, and indemnification in money damages amounting to $95, 000 plus prejudgment interest from July 1, 2012 until paid in full. Id. at ¶ 8, 11, 12, 19. Defendant now moves this Court to dismiss the action under the doctrines of claim and issue preclusion.

         STANDARDS

         Courts must dismiss an action when the plaintiff "fail[s] to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A court considering a motion to dismiss for failure to state a claim construes the complaint in favor of the plaintiff and takes the complaint's factual allegations as true. Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). "[F]or a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged," Iqbal, 556 U.S. at 678. "Dismissal under Rule(12)(b)(6) is proper only when the complaint either (1) lacks a cognizable theory or (2) fails to allege sufficient facts to support a cognizable legal theory." Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013).

         DISCUSSION

         Defendant asserts that claim preclusion requires dismissal of the present action because the claims asserted here are based on the same factual transactions underlying both the 2012 and the 2017 suits. Defendant further contends that the 2015 general default judgment in plaintiffs favor constitutes a final judgment precluding ...


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