Full title: Grafe Auction Company, Plaintiff, v. Quality Beef Products Cooperative and…
Court: UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA
Civil No. 12-2831(DSD/SER)
Date published: Oct 16, 2013
Fact:
- Grafe Auction Company (Grafe) contracted with MB Holding, LLC (MB Holding) to auction a kosher beef kill plant in Buffalo Lake, Minnesota.
- The Auction Contract provided that Grafe would advertise the auction, accept sealed bids, and conduct a live auction with the highest bidders.
- Defendants, including Randall Jones acting on behalf of Quality Beef Producers Coop, submitted a sealed bid of $2.8 million at the live auction.
- After the auction, Quality Beef entered into a Sale Agreement with MB Holding, agreeing to pay a 10% buyer’s premium to Grafe Auction Company.
- Defendants never paid the purchase price or the buyer’s premium to Grafe.
- The plant was later sold to another buyer for $1.7 million, and Grafe received a buyer’s premium of $85,000.
- Grafe filed a verified complaint alleging breach of contract against defendants.
Issue: Whether defendants breached the contract with Grafe by failing to pay the purchase price and the buyer’s premium.
Decision:
- The court denied defendants’ motion to dismiss for failure to state a claim.
- Grafe sufficiently pleaded a viable breach of contract claim against defendants based on the submitted bid form and the Auction Agreement terms.
- The bid form signed by Jones demonstrated defendants’ agreement to be bound by the auction terms, including the payment of the buyer’s premium.
- Although Grafe was not a party to the Sale Agreement between Quality Beef and MB Holding, the provision requiring payment of the buyer’s premium reflected the existence of an agreement between Grafe and defendants.
- Grafe also argued that it could sue as a third-party beneficiary of the Sale Agreement, but the court did not reach this argument since Grafe had already stated a plausible claim for breach of contract.
- The court also found that Grafe had pleaded a plausible claim of personal and individual liability against Jones, as it was unclear whether he was bidding in a personal or agency capacity.
- Therefore, the motion to dismiss was denied.