ST. LOUIS – A case concerning an alleged loss of $2 million worth of wine was only partially dismissed in the U.S. District Court for the Eastern District of Missouri in the Eastern Division on Jan. 23.
U.S. Magistrate Judge Patricia L. Cohen denied the cellar defendants' motion to dismiss seven counts in a crossclaim filed by Great Northern Insurance Co. with prejudice, granted the defendants' motion to dismiss with prejudice a gross negligence claim, and granted in part and denied in part a motion to dismiss Great Northern Insurance's crossclaim.
Reid and Krista Buerger owned the 1,300 bottles of wine, which were worth roughly $2 million. The order states in 2005, cellar defendant Marc Lazar started to select, buy and transport or store wine for the Buergers for a fee. The following year, the Buergers and cellar defendant Domaine StL partnered via a wine storage agreement with the Buergers to store wine in St. Louis, and another with cellar Domaine New York for the couple to store wine bottles in New Jersey. Each agreement had a subrogation waiver and indemnity clauses.
The Buergers ultimately ended their partnership with the cellar defendants in 2014.
Shortly after, the order states the couple noticed discrepancies between the wine the cellar defendants said they purchased and the wine in the actual facilities. They allege 1,300 bottles were missing from their collection and presented a claim to their insurer, Great Northern, which paid them $1.9 million for the wine.
Great Northern filed an eight-count crossclaim against the cellar defendants over allegations of conversion, breach of contract and other counts. Plaintiffs/counterclaim defendants Netherlands Insurance Co. and Hawkeye-Security Insurance Co. are the cellar defendants' insurers, and filed a complaint for declaratory judgment against the cellar defendants and Great Northern stating that their polices did not cover the loss of the wine.
When it comes to the cellar defendants' motion to dismiss Great Northern's subrogation claim, the court pointed out that no party has determined when or where the alleged loss actually happened. Plus, the Buergers did waive Great Northern’s right to subrogation claims for its lawsuit against the cellar defendants.
“Discovery might reveal that the cellar defendants invoiced the Buergers for wine that was never purchased and/or never placed in storage,” according to the order.
If this is the case, the Buergers’ loss isn’t protected by subrogation waivers, Cohen said. Since it’s difficult to tell in this phase of the case, the court denied the motion to dismiss Great Northern’s crossclaim on the basis of the subrogation waivers.
The cellar defendants also wanted the court to dismiss Great Northern’s unjust enrichment crossclaim, arguing that Missouri law doesn’t allow quasi-contractual claims for situations related to express contracts.
"Although Great Northern did not explicitly plead its unjust enrichment claim in the alternative, it clearly intended this claim to operate as an alternative cause of action to its breach of contract claim," Cohen write, and denied the defendants' motion to dismiss this claim.