Lindsayca Inc v. Custom Process Equipment L L C
6:20-cv-01122
W.D. La.Feb 18, 2021Background
- Lindsayca contracted CPE to fabricate two electrostatic treaters; factory acceptance testing was completed in Feb. 2015.
- Project paused; parties executed a Change Order for CPE to store and preserve the treaters for a monthly fee; CPE recommended and Lindsayca paid for a separate Shrink Wrap Agreement.
- In 2020 CPE threatened to invoke a warehouseman’s lien over unpaid storage fees; the parties executed a fee settlement under which payments were to be wired to LMC.
- On inspection in June 2020 Lindsayca found the treaters unwrapped, water-damaged, and missing instruments (later found stored separately and unprotected); Lindsayca sued CPE and LMC for breach of the Louisiana Warehouse Receipts Act, breach of contract, and sought to pierce corporate separateness under the single business enterprise doctrine.
- Defendants moved to dismiss under Rule 12(b)(6) (and alternatively for a more definite statement). The magistrate recommended: dismiss Warehouse Act claims and the breach-of-contract claims as pleaded; deny dismissal of remaining claims against LMC; deny the Rule 12(e) motion; grant leave to amend limited claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CPE is a "warehouse" under the Louisiana Uniform Warehouse Receipts Act | CPE held Lindsayca's treaters in storage and invoked lien rights, so the Act applies | CPE is a fabricator/vendor storing its own goods—not a licensed public warehouse—so the Act does not apply | Court: Act does not apply; Warehouse Act claims dismissed |
| Breach of contract (Change Order / Shrink Wrap Agreement) | CPE breached duties to preserve, protect, and clean the treaters as agreed | Plaintiff failed to plead specific contractual provisions breached; allegations track warehouseman duties tied to the Act | Court: Complaint fails to plead cognizable breach claims as presented; those claims dismissed as pleaded but leave to amend granted |
| Single business enterprise (piercing to hold LMC liable) | CPE and LMC operate as a single business (shared manager/address, financing, payments directed to LMC, undercapitalization) | Plaintiff’s allegations are conclusory and insufficient to show factors supporting single business enterprise | Court: Allegations support only limited Green factors (shared manager/address); insufficient to state claim against LMC now — dismissal as pleaded, but denial of dismissal as to remaining claims and leave to amend granted |
| Motion for more definite statement (Rule 12(e)) and leave to amend | N/A (Plaintiff sought leave to amend if complaint inadequate) | Defendants asked for a more definite statement because complaint is vague | Court: 12(e) denied (no prejudice shown); leave to amend granted under Rule 15(a) to allow plaintiff to attempt to cure pleading defects |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (establishes the plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (applies plausibility and rejects legal conclusions as facts)
- Lormand v. US Unwired, Inc., 565 F.3d 228 (5th Cir. 2009) (pleading must raise reasonable expectation that discovery will reveal evidence for each claim)
- Green v. Champion Ins. Co., 577 So.2d 249 (La. App. 1 Cir. 1991) (lists factors for single business enterprise analysis)
- Energy Coal v. CITGO Petroleum Corp., 836 F.3d 457 (5th Cir. 2016) (discusses Louisiana single business enterprise doctrine)
- Louque v. Allstate, 314 F.3d 776 (5th Cir. 2002) (requires pleading of specific contractual provisions in Louisiana breach claims)
- Collins v. Morgan Stanley Dean Witter, 224 F.3d 496 (5th Cir. 2000) (limits court review to pleadings and attachments on Rule 12(b)(6))