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Fuel-From-Waste, LLC v. Gold Coast Commodities, Inc.

United States District Court, N.D. Alabama, Southern Division

January 9, 2017

FUEL-FROM-WASTE, LLC, Plaintiff/Counterclaim Defendant,


          John E. Ott Chief United States Magistrate Judge

         This action is before the court on two related motions. Defendant Tyson Farms, Inc. (“Tyson”), the sole remaining defendant, has filed a motion to dismiss plaintiff Fuel-From-Waste, LLC's (“FFW”) First Amended Complaint. (Doc. 49). FFW, in turn, has filed a motion to file a Second Amended Complaint. (Doc. 52). For the reasons that follow, Tyson's motion to dismiss will be granted and FFW's motion to file its Second Amended Complaint will be denied.


         In June 2014, Tyson entered into a contract with Gold Coast Commodities, Inc. (“Gold Coast”) for the removal and disposal of lagoon cap sludge materials from Tyson's processing plant in Blountsville, Alabama (the “Service Agreement”).[2] Under the Service Agreement, Gold Coast agreed to remove and dispose of the sludge materials at no cost to Tyson in exchange for the right to sell oil extracted from the sludge. The Service Agreement was to “continue in effect for two (2) years … unless terminated as provided in [the Service] Agreement.” (Service Agreement at ¶ 1).

         After entering into the Service Agreement with Tyson, Gold Coast entered into a Subcontract Agreement with FFW (the “Subcontract”).[3] Pursuant to the Subcontract, FFW agreed to perform the services Gold Coast had agreed to perform for Tyson under the Service Agreement. The Subcontract provided that FFW would pay Gold Coast “2% of the amount received from Magnus International from sales of oil from the [Tyson] Lagoon.” (Subcontract at ¶ 3). In the event Magnus International did not buy the oil, Gold Coast agreed “to buy the oil with no sales commissions.” (Id.) The term of the Subcontract was the same as the term of the Service Agreement between Tyson and Gold Coast. (Id. at ¶ 2).

         According to FFW, it was “ready, willing and able” to perform its duties under the Subcontract and, in fact, extracted approximately ten truck-loads of oil from the Tyson lagoon. (Doc. 37 at ¶ 17). However, in February 2015 Gold Coast refused to purchase the oil from FFW despite prior assurances from Gold Coast and its principals (Tom and Robert Douglas) that Gold Coast would honor its obligations under the Subcontract and purchase the oil.[4] Six months later, in August 2015, Tyson terminated its Service Agreement with Gold Coast.

         On August 20, 2015, FFW filed this action against Gold Coast and Tom Douglas. (Doc. 1). FFW did not name Tyson as a defendant. FFW's Complaint asserted a claim against Gold Coast for breach of the Subcontract, a claim against both defendants for fraud, and a claim against Gold Coast for negligence.

         After the action had been pending nearly eleven months, FFW filed a motion to file a First Amended Complaint, which motion was granted. (Docs. 36, 37 & 39). Among other additions, the First Amended Complaint adds Tyson as a defendant and asserts two claims against Tyson. In Count Three of the First Amended Complaint, FFW alleges that Tyson tortiously interfered with the “contractual agreement and/or business relationships between [FFW] and Defendant Gold Coast …, as well as other potential purchasers of the oil to be extracted from the [Tyson] lagoon by unilaterally and untimely terminating the [Service] [A]greement prior to the expiration of the two year term without proper justification.” (Doc. 37 at ¶ 45). In Count Four, which is labeled as a negligence claim, FFW alleges that Tyson “owed a duty to [FFW] to provide … access to the lagoon for a period of two years” but that Tyson “unilaterally and untimely terminated its agreement with Gold Coast … and further restricted [FFW's] access to the lagoon ….” (Id. at ¶¶ 53-54).

         After being served, Tyson filed the pending motion to dismiss the First Amended Complaint, asserting that FFW has failed to state a claim against Tyson for either tortious interference or negligence. (Doc. 49). In response, FFW has agreed to the voluntarily dismissal of its negligence claim against Tyson (doc. 58 at 6), but has also filed a motion to file a Second Amended Complaint that retains a tortious interference claim against Tyson and adds a claim against Tyson for breach of contract.[5] The breach-of-contract claim is based on Tyson's alleged breach of duties it owed to FFW as an alleged third-party beneficiary of the Service Agreement and as an alleged assignee of Gold Coast's scope of work under the Service Agreement. (Doc. 53 at ¶¶ 57-62).

         Tyson has submitted both a reply in support of its motion to dismiss FFW's First Amended Complaint (doc. 66) and an opposition to FFW's motion to file its Second Amended Complaint (doc. 59). Tyson argues that FFW has still failed to state a tortious interference claim against Tyson and that the factual allegations in the Second Amended Complaint do not support a breach-of-contract claim against Tyson. Tyson thus argues that FFW's motion to file the Second Amended Complaint should be denied and that Tyson should be dismissed from this case.[6]


         A. Motion to Dismiss

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a motion to dismiss an action on the ground that the allegations in the complaint fail to state a claim upon which relief can be granted. On such a motion, the “‘issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.'” Little v. City of North Miami, 805 F.2d 962, 965 (11th Cir. 1986) (quoting Scheur v. Rhodes, 416 U.S. 232, 236 (1974)). In considering a motion to dismiss, the court assumes the factual allegations in the complaint are true and gives the plaintiff the benefit of all reasonable factual inferences. Hazewood v. Foundation Financial Group, LLC, 551 F.3d 1223, 1224 (11th Cir. 2008) (per curiam).

         Rule 12(b)(6) is read in light of Rule 8(a)(2), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” in order to “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citations, brackets, and internal quotation marks omitted). “Factual allegations must be enough to raise a right to relief above the speculative level . . . .” Id. Thus, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face, '” i.e., its “factual content . . . allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 557).

         B. Motion to Amend

         “Ordinarily, ‘[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, ' Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962), leave to amend ‘should be freely given, ' Fed.R.Civ.P. 15(a). Under Foman, however, a district court may properly deny leave to amend the complaint under Rule 15(a) when such amendment would be futile. Foman, 371 U.S. at 182, 83 S.Ct. at 230.” Hall v. United Ins. Co. of America, 367 F.3d 1255, 1262-63 (11th Cir. 2004). Denial of leave to amend is justified by futility “‘when the complaint as amended is still subject to dismissal.'” Id. at 1263 (quoting Burger King Corp. v. Weaver,169 F.3d 1310, 1320 (11th Cir. 1999)). See also Sirote v. BBVA Compass Bank, 857 F.Supp.2d 1213, 1216 (N.D. Ala. 2010) (“the court may refuse ...

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