Breach of Contract Case Against Winery Will Continue

A federal judge held Wednesday that a breach of contract claims in a case against Crown Valley Winery, Inc. can proceed, dismissing fraud and unjust enrichment claims. District Judge Stephen N. Limbaugh of the Eastern District of Missouri granted the defendant’s partial motion to dismiss claims asserted in the amended complaint.

Plaintiff L&F Brands, Inc. originally sued Crown Valley in August 2019 alleging breach of a manufacturing agreement between the parties. “In mid-August 2018, L&F discovered that Crown Valley had used the wrong ingredients in producing this batch [of wine] and that Crown Valley tried to add an additional ingredient after the batch was completed, causing an improper PH level which ultimately led to product failure.”  Furthermore, L&F alleged that Crown Valley concealed this information, and by the time L&F discovered the problem “it had already distributed over half of the cases to various markets throughout the United States, and L&F was notified by its clients that the product they received was defective.”  L&F is seeking $687,000 in total for damages and attorney’s fees.

Crown Valley originally moved to dismiss the complaint, but in response L&F filed an amended complaint that added on the claims contested by Crown Valley’s motion to dismiss.  In his opinion, Judge Limbaugh only outlines his reasoning for granting the defendant’s partial motion to dismiss.

In the opinion, the court agreed with Crown Valley’s argument that the plaintiff’s alleged fraud claim in the amended complaint was barred by the economic loss doctrine.  The court noted L&F’s damages from the alleged fraud were essentially the same damages as the breach of contract claim, “Plaintiff’s damages from the alleged “fraud” are exactly its damages as a result of the breach of contract.”  Crown Valley’s obligation to procure the product at issue was an incorporated part of the contract, that did not allow outside or special damages as common law requires. 

The court also agreed with Crown Valley’s arguments and dismissed for the unjust enrichment and money had and received claims.  The court held following common law precedent, “It is a well-settled principle of law that implied contract claims [such as unjust enrichment] arise only where there is no express contract.”  Furthermore, ““Accordingly, a plaintiff cannot recover under an equitable theory when she has entered into an express contract for the very subject matter for which she seeks to recover.”  Since L&F did not argue these equitable remedies in the alternative, the court dismissed these claims “because they are improperly pleaded.”

L&F Brands are being represented by Behr, McCarter & Potter, P.C., and Jones and Solomon.  Crown Valley is being represented by Greenspoon Marder Law and Capes Sokol.