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Friedman v. Farmer

United States Court of Appeals, Eighth Circuit

June 11, 2015

Jerry Friedman; FM Service Equipment Group, Inc., Plaintiffs - Appellants
v.
Kelly Farmer, individually and in his capacity as an officer of Arkat Nutrition, Inc.; John Farmer, individually and in his capacity as an officer of Arkat Nutrition, Inc., Defendants - Appellees, Arkat Nutrition, Inc., Defendant, Ainsworth Pet Nutrition, Inc.; John Doe, Defendants - Appellees

Submitted: April 14, 2015.

Page 863

Appeal from United States District Court for the Eastern District of Arkansas - Pine Bluff.

For Jerry Friedman, Plaintiff - Appellant: Stephen Toof Brown III, Memphis, TN; Jerry Friedman, Fm Service Equipment, Huntington Beach, CA.

For FM Service Equipment Group, Inc., Plaintiff - Appellant: Stephen Toof Brown III, Memphis, TN.

For Kelly Farmer, individually and in his capacity as an officer of Arkat Nutrition, Inc., John Farmer, individually and in his capacity as an officer of Arkat Nutrition, Inc., Defendant - Appellees: Brooks A. Gill, Brooks Page Gill, Gill Law Firm, Plc, Dumas, AR.

For Ainsworth Pet Nutrition, Inc., Defendant - Appellee: H. William Allen, Allen Law Firm, Little Rock, AR; Neal Robert Devlin, Michael J. Musone, Knox & Mclaughlin, P.C., Erie, PA.

Before MURPHY, COLLOTON, and KELLY, Circuit Judges.

OPINION

Page 864

KELLY, Circuit Judge.

Jerry Friedman, a California resident, and FM Service Equipment Group, Inc., a California corporation,[1] sued two Arkansas corporations and two employees of one of those corporations for breach of contract, promissory estoppel, unjust enrichment, conversion, and other tort claims. See 28 U.S.C. § 1332. The district court[2] granted summary judgment in favor of the defendants, and Friedman appeals. We affirm the judgment.[3]

I. Background

The following facts are recounted in the light most favorable to Friedman, the non-moving party. See Jackson v. Allstate Ins. Co., 785 F.3d 1193, 2015 WL 2115528, at *5 (8th Cir. May 7, 2015). Kelly Farmer is the founder of Arkat Nutrition, Inc. (Arkat Nutrition), an Arkansas Corporation formed in 1989. Arkat Nutrition owned a feed mill in Arkansas known as Plant One. Kelly's son, John Farmer, worked at Arkat Nutrition and was in charge of overseeing production of milling operations at Plant One. Arkat Land Company (Arkat Land) is a limited liability company also located in Arkansas. Arkat Land owned a separate feed mill known as Plant Two, though it leased Plant Two to Arkat Nutrition, which used both plants to produce animal feed.

In February 2007, a tornado damaged Plant One. Arkat Nutrition decided not to repair the plant because the equipment inside had little useful life left. A third-party company cleaned up the debris from the tornado but left some scrap with potential value. Later in 2007, Friedman made an oral deal with the Farmers: He would act as a broker for Arkat Nutrition to solicit offers for the remaining equipment from Plant One. According to Friedman, any sale amount he brokered above $1.9 million would go to him as a broker's

Page 865

fee. Friedman says he " had the exclusive right to contact all potential buyers" ; Arkat Nutrition says Friedman was a " non-exclusive broker" and that " it was understood that Arkat Nutrition could also continue to attempt to find a buyer on its own." Friedman successfully sold some of the equipment to Mid America Pet Food, LLC, and received a commission of $25,000. Friedman also alleged that he purchased a palletizer[4] from Arkat Nutrition for $1000. He dismantled the palletizer and left it at Plant One, where it remained for at least two years.

In 2010, Arkat Nutrition and Arkat Land transferred most of their assets to a newly formed company, Arkat Animal Nutrition, LLC (Arkat Animal Nutrition), the equity interests of which would then be sold to Dad's Products Company, Inc. (Dad's Products). Dad's Products, however, was not to be responsible for any investor claims or third-party claims for which Arkat Animal Nutrition was liable. According to the Farmers, that sale had been contemplated since 2002, long before Friedman's oral deal. The sale was completed in February 2010, and shortly after Dad's Products changed its name to Ainsworth Pet Nutrition, Inc. (Ainsworth). After the sale, Ainsworth hired a third-party company to remove any remaining scrap from Plant One; that company paid Ainsworth less than $10,000 to keep the scrap. Arkat Nutrition continued ...


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