St. Louis Record

Friday, October 18, 2019

Judge issues ruling in coffee bean supplier's dispute with Ronnoco

By Sam Knef | Jun 6, 2017

ST. LOUIS — A federal judge has issued a mixed ruling in a debt and contractual dispute between a St. Louis coffee company and a green coffee bean supplier. 

In an order published on May 22, U.S. District Judge Jean Hamilton of the Eastern District of Missouri denied Ronnoco Coffee LLC's motion to dismiss successor liability claims of New Orleans-based supplier Westfeldt Brothers Inc.

According to the ruling, the controversy arose after Ronnoco negotiated with U.S. Roasterie Inc., which had incurred substantial debt to Westfeldt in futures contracts, for the purchase of its assets.

Ronnoco ultimately did not purchase U.S. Roasterie's assets in the first round of negotiations, but Great Western Bank did. Afterward, the company's assets were acquired by Ronnoco and a subsidiary of Ronnoco, Mid-America Roasterie, Inc.

Westfeldt argued that Ronnoco agreed to assume futures contracts worth $145,776.88 during a conference call with Ronnoco, U.S. Roasterie and Westfeldt, the ruling states. But later Ronnoco informed Westfeldt that it would no longer take delivery of the futures.

Westfeldt's suit followed.

In denying Ronnoco's motion to dismiss successor liability claims, Hamilton wrote that while Westfeldt's allegations and evidence "potentially render its successor liability claims even less plausible, they do not 'contradict the core of its fraud theory,' such that dismissal is appropriate at this stage."

"Rather, the Court remains unwilling to jettison the claims at the heart of Westfeldt’s Amended Counterclaim without allowing for full discovery," she wrote.

Hamilton dismissed with prejudice Westfeldt's contention that Ronnoco was the alter ego of U.S. Roasterie, finding that its arguments "are contradicted by its own allegations."

"In other words, in its background section Westfeldt pleads that its relationship with U.S. Roasterie began in 2010, and that over time U.S. Roasterie became delinquent in its payments," she wrote.

Regarding Westfeldt's unfair trade practices claim, Hamilton chose to apply Louisiana law and allowed the claim to proceed to permit discovery. She also allowed an unjust enrichment claim to go forward under the application of Iowa law.

Ronnoco's motion to dismiss a conversion claim was denied.

And in a final count of conspiracy to tortiously interfere with contractual relations against Ronnoco's CEO Scott Meader and its chief operating officer Eric Bomball, Hamilton granted Ronnoco’s motion to dismiss. 

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U.S. District Court for the Eastern District of Missouri