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International Environmental Management, Inc. v. United Corporate Services, Inc.

United States Court of Appeals, Eighth Circuit

May 26, 2017

International Environmental Management, Inc. Plaintiff- Appellant
United Corporate Services, Inc. Defendant-Appellee

          Submitted: January 12, 2017

         Appeal from United States District Court for the Western District of Missouri - Jefferson City

          Before LOKEN, BEAM, and BENTON, Circuit Judges.

          LOKEN, Circuit Judge.

         A foreign corporation doing business in Missouri, International Environmental Management (IEM) must designate a registered agent for service of process by filing a certificate of authority with the Missouri Secretary of State. See Mo. Rev. Stat. §§ 351.586, 351.592(1), 351.594(1). At the end of 2007, IEM changed registered agents, hiring CT Corporation Systems (CT) and terminating United Corporate Services (UCS). However, a change of registered agent form was not filed in the Secretary of State's "active" file for IEM. In 2009, a state court process server delivered a summons and petition against IEM to UCS as registered agent. IEM defaulted, and the state court entered a default judgment and awarded plaintiffs more than $9, 700, 000 in damages. The Missouri Court of Appeals affirmed the denial of IEM's motion for relief from that judgment. Sieg v. Int'l Envtl. Mgmt., Inc., 375 S.W.3d 145 (Mo. App. 2012). IEM paid the default judgment and then commenced this action against UCS and CT, asserting breach of fiduciary duty, contract, and negligence claims. Defendants removed the action to the Western District of Missouri, invoking the court's diversity jurisdiction.

         Both defendants moved to dismiss for failure to state a claim. The district court granted UCS's motion, dismissing all claims against it, but denied CT's motion. Two years later, after extensive discovery and motion practice, IEM and CT settled. The district court denied IEM's motion for reconsideration of the order dismissing claims against UCS and entered final judgment. IEM appeals the initial Rule 12(b)(6) dismissal and the denial of its motion to reconsider. Assuming the truth of fact allegations in IEM's Complaint, and reviewing the grant of a motion to dismiss de novo, we reverse dismissal of IEM's fiduciary duty claim and otherwise affirm. See OmegaGenesis Corp. v. Mayo Found. for Med. Educ. & Research, 851 F.3d 800, 802 (8th Cir. 2017) (standard of review).

         I. Background.

         IEM is a Georgia corporation providing recycling and waste-reduction services for shopping malls throughout the country, including the Columbia Mall in Boone County, Missouri. In June 2006, IEM contracted with UCS, a New York corporation, to provide registered agent services in Missouri and four other States. A certificate of authority identifying UCS as IEM's registered agent was filed with the Missouri Secretary of State. In late 2007, IEM contracted with CT, a New York and Delaware corporation, to serve as its new registered agent in Missouri and elsewhere. On November 5, 2007, CT filed a "Change of Registered Agent" form with the Missouri Secretary of State in File No. 217, an inactive IEM file, but not in File No. 488, the active IEM file. In December 2007, IEM advised UCS it was no longer IEM's registered agent in Missouri and elsewhere. UCS filed documents in other States reflecting this change but filed no notice with the Missouri Secretary of State. Consequently, the Missouri Secretary of State's website continued to list UCS as IEM's registered agent.

         Ricky Sieg was injured when he received an electric shock from a trash compactor at the Columbia Mall and commenced a negligence action against IEM in 2009. A process server delivered the summons and petition in the Siegs' lawsuit to the UCS office. UCS accepted service. IEM alleges that UCS failed to deliver the service documents to IEM.[1] Lacking notice of the lawsuit, IEM defaulted. IEM alleges that it had no notice of the lawsuit until April 2011, when the Siegs' counsel contacted IEM regarding garnishment proceedings to collect the default judgment.

         In its motion to dismiss, UCS argued that its contractual and fiduciary duties to IEM ceased when IEM terminated UCS as its agent; that IEM, the foreign corporation, had the duty to notify the Missouri Secretary of State of the change of registered agent; and UCS owed no post-termination fiduciary or contractual duty to IEM. The district court agreed and granted the motion to dismiss, explaining:

[T]here was never any agreement between the parties for UCS to provide any post-termination services. . . . [A]ny fiduciary duties ended when plaintiff terminated UCS's services. Both Missouri caselaw and Missouri statutes state that it was IEM's responsibility to notify third parties and file the change of registered agent forms. . . . UCS owed no fiduciary or contractual duties to IEM after its services were terminated in December 2007.

         On the eve of settlement with CT, IEM timely moved for reconsideration of the order dismissing its claims against UCS, arguing that deposition admissions by UCS's chief executive officer "show that after termination of its agency, UCS continued to act as IEM's agent and accepted service on IEM's behalf at its office and then failed to transmit that process." The district court denied reconsideration, concluding that "the duties and rules for changing registered agents are already established by statute and Missouri caselaw and it is clear that the duty to inform third parties of any changes rests with the principal and not with the former agent."

         In its reply brief supporting the motion to reconsider, IEM for the first time asserted claims against UCS for bailment and conversion, but it never moved to amend its Complaint to add these claims. The court concluded that IEM's pleadings fail to state a claim for bailment or conversion, denied the motion for reconsideration, and entered final judgment granting IEM's and CT's stipulation of dismissal with prejudice and dismissing the claims against UCS. This appeal followed.

         II. ...

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