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FSS, Inc. v. Casablanca Foods, Inc LLC

United States District Court, D. Minnesota

March 28, 2019

FSS, Inc. a Minnesota Corporation doing business as Food Service Specialties, Plaintiff,
v.
Casablanca Foods, Inc. LLC a New York limited liability company also known as Mina Foods, Defendant.

          Joshua D. Christensen, Esq. and Anastasi Jellum, PA, 14985 60th Street North, Stillwater, MN 55082, counsel for plaintiff.

          Alexander Farrell, Esq. and Hellmuth & Johnson, PLLC, 8050 West 78th Street, Edina, MN 55439, counsel for defendant.

          ORDER

          DAVID S. DOTY, JUDGE UNITED STATES DISTRICT COURT.

         This matter is before the court upon the motion to dismiss by defendant Casablanca Foods. Based on a review of the file, record, and proceedings herein, and for the following reasons, the court grants the motion in part.

         BACKGROUND

         This contract dispute arises out of three unpaid invoices issued pursuant to the parties' Formula Production Agreement (Agreement). Plaintiff Food Specialty Services (FSS) is a Minnesota corporation specializing in food condiment and ingredient manufacture and supply. Compl. ¶ 1. Casablanca Foods is a New York company specializing in the creation and distribution of specialty sauces. Id. ¶¶ 2, 6. Casablanca sells its sauces to third-party wholesalers, who in turn, sell the sauces to restaurants and grocers. Id. ¶ 6.

         On February 12, 2016, FSS and Casablanca entered into the Agreement, whereby FSS agreed to manufacture and package Casablanca's sauces. Id. ¶¶ 6, 7. Section one of the Agreement provides that FSS would “formulate a Production Process for [Casablanca's] product based upon ingredients and criteria supplied to it by [Casablanca].”[1] Kallamni Decl. Ex. A ¶ 1. Section two, in relevant part, provides that Casablanca “shall pay FSS the costs of all ingredients, packaging and shipping costs related to the Production Process, including but not limited to: ... any changes, cancellations, and/or excess inventory of unique ingredients, expired ingredients, unique package components [i.e. labels] ... within 30 days from the date FSS invoices [Casablanca].” Id. ¶ 2. Section five provides that “the Production Process or any development thereof shall at all times remain the exclusive property of FSS; and [Casablanca] shall have no rights to any aspect thereof. [Casablanca] acknowledges it is not compensating FSS to formulate a Production Process for its product.” Id. ¶ 5.

         In mid-2016, FSS developed the Production Process and started manufacturing and distributing Casablanca's sauces. Compl. ¶ 9. FSS alleges that it acquired unique ingredients, glass containers, and labels in a manner specific to Casablanca's sauces and the Production Process. Id. ¶ 10.

         In mid-April 2018, FSS issued three invoices, totaling $320, 139.71, “for the raw ingredients, packaging, and storage necessary” to create a sauce.[2] Id. ¶ 14. Casablanca did not timely pay the invoices. Id. On July 16, 2018, Casablanca again refused to pay the invoices. Id. ¶ 16. On July 20, 2018, FSS commenced this diversity suit, raising breach of contract, promissory estoppel, and unjust enrichment claims. Casablanca now moves to dismiss.

         DISCUSSION

         I. Standard of Review

         To survive a motion to dismiss for failure to state a claim, “‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009)). “A claim has facial plausibility when the plaintiff [has pleaded] 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 677 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Furthermore, while a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. See Twombly, 550 U.S. at 555. “[L]abels and conclusions or a formulaic recitation of the elements of a cause of action” are not sufficient to state a claim. Iqbal, 556 U.S. at 677 (quotations and citation omitted). In a motion to dismiss, the court must assume all factual allegations in the complaint are true and draw all reasonable inferences in favor of the complainant. Olin v. Dakota Access, LLC, 910 F.3d 1072, 1075 (8th Cir. 2018).

         The court does not consider matters outside the pleadings under Rule 12(b)(6). Fed.R.Civ.P. 12(d). The court may, however, consider matters of public record and materials that are “necessarily embraced by the pleadings.” Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation and internal quotation marks omitted). “In a case involving a contract, the court may examine the contract documents in deciding a motion to dismiss.” Stahl v. U.S. Dep't of Agric., 327 F.3d 697, 700 (8th Cir. 2003). Here, the court properly considers the Agreement.

         II. Sufficiency of Allegations ...


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