Tractor and Equipment Co. v. Dual Trucking and Transport, LLC et al, No. 2:2015cv05413 - Document 14 (E.D. La. 2016)
Court Description: ORDER AND REASONS denying 4 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Sarah S. Vance on 6/7/16. (jjs)
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Tractor and Equipment Co. v. Dual Trucking and Transport, LLC et al Doc. 14 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA TRACTOR AND EQUIPMENT CO. CIVIL ACTION VERSUS NO. 15-5413 DUAL TRUCKING AND TRANSPORT, LLC, AND ANTHONY ALFORD SECTION: R ORD ER AN D REASON S Defendants Dual Trucking and Transport, LLC and Anthony Alford m ove to dism iss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants urge the Court to dism iss Tractor and Equipm ent Co.’s claim against Anthony Alford for failure to state a claim , and to abstain from deciding a purported claim against DTT in deference to a related Montana state-court proceeding. The Court denies defendants’ request for abstention as m oot and finds that plaintiff states a plausible claim against Alford as Dual Trucking and Transport, LLC’s surety. I. BACKGROU N D This action arises out of the alleged default of Dual Trucking and Transport, LLC (DTT) under an open account agreement with Tractor and Dockets.Justia.com Equipm ent Co. 1 Tractor and Equipm ent originally sued DTT and Anthony Alford in Montana state court, alleging that DTT had an unpaid account balance of $ 292,646.30 . 2 Tractor and Equipm ent also alleged that Alford had personally guaranteed DTT’s open account and was therefore jointly liable for the am ounts due under its open account agreem ent. 3 The Montana court dism issed the claim s against Alford for lack of personal jurisdiction, and later entered sum m ary judgment in favor of Tractor and Equipm ent and against DTT on the open account. 4 After the Montana court dism issed Alford from that litigation, Tractor and Equipm ent filed this suit seeking a declaratory judgment that Alford’s surety contract is valid and enforceable. The com plaint alleges that a DTT em ployee sent Tractor and Equipm ent a form application for credit on or about March 19, 20 12. 5 The application consisted of two parts, first a section requesting inform ation on the entity seeking credit and a signature of the applicant, and second, a 1 R. Doc. 1 at 1 ¶ 1. 2 Id. at 3 ¶ 7. 3 Id. at 4 ¶ 11. 4 R. Doc. 5-4 at 10 ; R. Doc. 6-3 at 7. 5 R. Doc. 1 at 3 ¶ 8. personal guarantee. 6 The next day, a Tractor and Equipm ent em ployee inform ed DTT in writing that the “Personal Guarantee” section was not signed, and requested that an owner or officer of DTT sign an attached copy of the form application for credit. 7 Alford signed the credit application form supplied by Tractor and Equipm ent and returned it the following day. 8 The application for credit form Alford signed was identical to the copy DTT subm itted on March 19, except that the March 19 copy was, with the exception of the “Personal Guarantee” section, m ostly filled-out. 9 It was signed on the line requesting the signature of an owner, principal, or authorized officer or partner of the applicant. 10 By contrast, the form Alford allegedly signed was nearly blank. 11 It identified only the applicant’s corporate nam e and address, and it was not signed by a corporate representative. 12 6 R. Doc. 1-3. 7 Id. at 3 ¶ 9; R. Doc. 1-4. 8 R. Doc. 1 at 4 ¶ 10 ; R. Doc. 1-5. 9 See R. Doc. 1-3. 10 Id. 11 See R. Doc. 1-5. 12 Id. Tractor and Equipm ent asserts that the version of the application that Alford signed is a valid surety agreement and that Alford is therefore jointly liable for DTT’s full $ 292,646.30 debt. 13 Defendants allege that the agreement is invalid, and m ove to dismiss Tractor and Equipm ent’s claim for a declaratory judgm ent regarding the validity of the surety agreement under Rule 12(b)(6). 14 Defendants also m ove this Court to dism iss, in deference to the Montana proceedings, a purported claim for a declaratory judgment on the validity of DTT’s underlying debt. 15 II. LEGAL STAN D ARD To survive a Rule 12(b)(6) m otion to dism iss, the plaintiff m ust plead “enough facts to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 697 (20 0 9) (quoting Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7)). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Id. at 678. A court m ust accept all well-pleaded facts as true and m ust draw all reasonable inferences 13 R. Doc. 1 at 1 ¶ 1. 14 R. Doc. 4. 15 Id. in favor of the plaintiff. See Lorm and v. US Unw ired, Inc., 565 F.3d 228, 239 (5th Cir. 20 0 9); Baker v. Putnal, 75 F.3d 190 , 196 (5th Cir. 1996). A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elem ents of a cause of action. Id. In other words, the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff’s claim. Lorm and, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculative level, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, the claim m ust be dism issed. Tw om bly , 550 U.S. at 555. III. D ISCU SSION A. D TT – Abs te n tio n As an initial m atter, the Court considers defendants’ abstention argument. Defendants ask this Court to abstain from deciding the validity of DTT’s underlying obligation to Tractor and Equipm ent in deference to the Montana proceedings. Tractor and Equipm ent insists that it never asked the Court to rule on DTT’s obligation, and that the “only relief” it seeks is “declaratory relief that the surety executed by Alford is valid and enforceable.”16 The com plaint itself is am biguous. It nam es DTT as a defendant, and once, in the m iddle of a long sentence, asks the Court to “[d]eclar[e] valid and enforceable obligation [sic.] against Dual Trucking and Transport.”17 By contrast, the complaint states several tim es that Tractor and Equipm ent seeks declaratory relief as to the validity of Alford’s surety agreement, and the single reference to DTT’s obligation is found in a section titled “DELCARATORY [sic.] RELIEF-SURETY IS VALID AND ENFORCEABLE.”18 Faced with this am biguity, the Court accepts Tractor and Equipm ent’s interpretation of its own com plaint as seeking only a declaratory judgment that Alford’s surety agreem ent is valid. See Gen. Chem icals, Inc. v. Exxon Chem ical Co., USA, 625 F.2d 1231, 1234 (5th Cir. 1980 ) (considering plaintiff’s briefing in interpreting com plaint that was “not a m odel of clarity”); see also Lippitt v. Ray m ond Jam es Fin. Servs., Inc., 340 F.3d 10 33, 16 R. Doc. 5 at 9. 17 R. Doc. 1 at 5 ¶ 18. 18 Id. at 1, 4, 5. 10 40 (9th Cir. 20 0 3) (deferring to plaintiff’s m ore lim ited interpretation of the claim s brought in its am biguous com plaint). Because Tractor and Equipm ent does not ask this Court to decide the validity of DTT’s underlying obligation, the portion of defendants’ m otion that asks the Court to abstain from answering this question is denied as m oot. B. Alfo rd – Failu re to State a Claim Defendants also argue that Tractor and Equipm ent has failed to state a claim against Alford because Alford’s alleged guaranty is invalid as a m atter of law. The parties agree that Louisiana law governs the validity of the alleged surety contract. “In Louisiana, a contract of guaranty is equivalent to a contract of suretyship.” LBUBS 20 0 4-C8 Derek Drive, L.L.C. v. Gerbino, No. 13-2264, 20 14 WL 2446362, at *5 (W.D. La. May 30 , 20 14) (quoting Finova Capital Corp. v. Short’s Pharm ., Inc., 90 4 So. 2d 57, 59 (La. App. 2 Cir. 20 0 5)). In a contract of suretyship “a person binds him self to a creditor to fulfill the obligation of another upon the failure of the latter to do so.” La. Civ. Code art. 30 35. To bind a surety, a contract m ust be “express and in writing.” La. Civ. Code art. 30 38. “The surety’s contract need not observe technical form alities, but m ust contain an absolute expression of intent to be bound.” Pelican State W holesale, Inc. v. May s, 15 So. 3d 341, 343 (La. App. 2 Cir. 20 0 9). Here, Tractor and Equipm ent alleges that Alford signed a form contract entitled “Application for Com m ercial Credit.”19 Although m uch of the docum ent consists of unfilled blank spaces, it identifies “Dual Trucking and Transport LLC” as the applicant for credit. 20 Further, Alford’s alleged signature appears under the heading “PERSONAL GUARANTEE.”21 Directly above the signature, the docum ent reads, in part: The undersigned, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , in consideration of your giving credit to the aforesaid applicant, jointly and severally guarantee(s) and agree(s) to pay to TRACTOR & EQUIPMENT CO., N C MACHINERY CO., MACHINERY POWER & EQUIPMENT CO., N C POWER SYSTEMS CO. OR ANY OF THEIR RELATED OR AFFILIATED COMPANIES all m onies which shall become due you from Dual Trucking and Transport LLC by reason of any credit you extended as credit you extend as [sic.] herein requested, including late paym ent charges and all costs of collection and reasonable attorney’s fee for recovery of the debt if it is due whether it is incurred by the debtor or guarantor or both. 22 19 R. Doc. 1-5. 20 Id. 21 Id. 22 Id. Drawing all reasonable inferences in favor of the plaintiff, the Court cannot conclude as a m atter of law that the alleged contract does not “contain an absolute expression” of Alford’s “intent to be bound.” Pelican State, 15 So. 3d at 343. The agreem ent clearly identifies the applicant or principal obligor (DTT), the creditor (Tractor and Equipm ent), and states Alford’s agreement to guarantee and pay the creditor “all m onies” due from the principal obligor by reason of “any credit extended” at request of the principal obligor. 23 As a result, defendants’ m otion to dism iss Tractor and Equipm ent’s claims against Alford m ust be denied. Defendants’ citation to Chretien v. Bienvenir, 6 So. 553 (1889), does not disturb this conclusion. In that case, the Louisiana Supreme Court declared unenforceable a form contract so incom plete that the docum ent contained “nothing defining or expressing any obligation whatsoever.” Id. at 554. Chretien does not, however, stand for the blanket proposition that all alleged surety contracts with unfilled blanks are invalid. The contract at issue in this case is distinguishable, am ong other reasons, because the Chretien contract “m ention[ed] no principal obligor.” Id. 23 R. Doc. 1-5. IV. CON CLU SION For the foregoing reasons, the Court DENIES defendants’ m otion to dism iss Tractor and Equipm ent’s complaint. 7th New Orleans, Louisiana, this _ _ _ day of J une, 20 16. ____________________________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE
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