American Distribution & Manufacturing Co., LLC v. NP Acquisition, LLC

U.S. District Court, District of Minnesota May 29, 2024

Trial Court Opinion

                UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


American Distribution & Manufacturing  Case No. 23-cv-3250 (SRN/DTS)     
Co., LLC,                                                                

          Plaintiff,

ORDER

NP Acquisition, LLC d/b/a Natural Pawz

Defendant.

Patrick C. Summers, Dewitt LLP, 901 Marquette Avenue, Suite 2100, Minneapolis, MN
55402, for the Plaintiff.

Amanda M. Williams and Shashi K. Gowda, Gustafson Gluek PLLC, 120 South Sixth
Street, Suite 2600, Minneapolis, MN 55402, for the Defendant.

SUSAN RICHARD NELSON, United States District Judge
This matter is before the Court on Plaintiff American Distribution & Manufacturing
Co. (“ADMC”)’s Motion to Dismiss Counterclaim [Doc. No. 26]. Based on a review of
the files, submissions, and proceedings herein, and for the reasons below, the Court grants
the motion.
I. BACKGROUND
This matter arises out of a collection dispute between ADMC and NP Acquisition,
LLC, d/b/a Natural Pawz, in which ADMC claims Natural Pawz owes it over one million
dollars. (Compl. [Doc. No. 1] at 7, ¶ 13.) ADMC initially filed suit in Washington County
District Court on September 22, 2023, alleging breach of contract, unjust
enrichment/quantum meruit, and account stated. (Id. at 1.) Natural Pawz removed the
lawsuit to this Court on October 23, 2023.1 (Id.)

On January 19, 2024, Natural Pawz filed an answer to the complaint, and asserted a
counterclaim against ADMC. (Answer to Complaint and Counterclaim [Doc. No. 22].) The
counterclaim alleges a number of facts related to the actions of two former officers of
Natural Pawz, Carmine Piccone and Nadine Joli-Couer. (Id. at 7–8.) Natural Pawz seeks,
through its counterclaim, a declaratory judgment establishing the rights and legal relations
between the parties and non-parties pursuant to

28 U.S.C. § 2201

(a). (Id. at 9.) Specifically, 

Natural Pawz asks the Court to declare that:                              
    A. No written contract exists between the parties;                   
    B. No agreement, written or otherwise, exists between the parties;   
    C. Defendant did not approve or ratify any orders placed with Plaintiff; 
    D. To the extent any orders were placed with Plaintiff, those orders were placed by 

      Picone and Joli-Couer while acting outside the scope of their employment, and 
      accordingly Defendant is not responsible for sums owed on those orders; 
    E.  To the extent that any orders were placed with Plaintiff, under the terms of the 
      Credit Agreement, Picone and Joli-Couer are personally liable for sums owed 
      on those orders.                                                   

(Id. at 9–10.)                                                            
                   –––––––––––––––––––––––––––––––––––––––––––––––––     
1    ADMC is a citizen of the state of Minnesota, whereas Natural Pawz is a citizen of 
the state of Texas. (Id. at 2.) This Court has jurisdiction, because the matter in controversy 
exceeds the sum or value of $75,000 and is between citizens of different states.

28 U.S.C. § 1332

(a).                                                                
    ADMC  filed  its  motion  to  dismiss  on  February  9,  2024,  arguing  that  the 
counterclaim fails to state a claim upon which relief can be granted. The Court held a 

hearing on the Motion on May 15, 2024, and took the matter under advisement. (See Minute 
Entry [Doc. No. 46].)                                                     
II.  DISCUSSION                                                           
    A Rule 12(b)(6) motion to dismiss a counterclaim is subject to the same standard as 
a motion to dismiss a complaint. See Reis v. Walker,

491 F.3d 868, 870

 (8th Cir. 2007). To 
survive a motion to dismiss, a counterclaim must allege sufficient facts to state a facially 

plausible claim for relief. Ashcroft v. Iqbal,

556 U.S. 662, 678

 (2009). When determining 
whether a counterclaim is sufficient, the Court accepts as true all of the factual allegations 
in the claim and draws all reasonable inferences in favor of the nonmoving party. Cook v. 
George’s, Inc.,

952 F.3d 935, 938

 (8th Cir. 2020).                        
    Declaratory  relief  is  discretionary,  and  “an  important  factor  in  exercising  that 

discretion is whether the declaratory judgment plaintiff has another, more appropriate 
remedy.” Gulf Underwriters Ins. Co. v. Burris,

674 F.3d 999, 1004

 (8th Cir. 2012). Thus, 
“a redundant declaratory judgment claim should be dismissed.” American Achievement 
Corp. v. Jostens, Inc.,

622 F. Supp. 3d 749

, 766 (D. Minn. 2022) (quoting Mille Lacs Band 
of Chippewa Indians v. Minnesota,

152 F.R.D. 580, 582

 (D. Minn. 1993)) (cleaned up). A 

declaratory judgment claim is not redundant merely because it is closely related to another 
claim. Id.; Fed. R. Civ. P. 57 (“The existence of another adequate remedy does not preclude 
a declaratory judgment that is otherwise appropriate.”). Rather, the appropriate inquiry is 
“whether resolving one claim ‘would  resolve all questions  raised’ by the  other.”

Id.

 
(quoting Great Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn., LLC,

871 F. Supp. 2d 843, 862

 (D. Minn. 2012)).                                       

    In Mille Lacs, a group of landowners disputed the plaintiff tribe’s alleged treaty 
rights to hunt, fish, and gather on certain tracts of land, and sought court permission to 
assert a counterclaim seeking declaratory judgment on the status of the treaty.

152 F.R.D. at 582

. The defendant landowners’ proposed counterclaim sought a judgment declaring 
that the plaintiffs’ alleged treaty rights were no longer in force and effect. The district court 
(Murphy, J.) observed that the proposed counterclaim and the plaintiffs’ original claim to 

the  territory  raised  “identical  factual  and  legal  issues.”

Id.

  Because  the  proposed 
counterclaim was redundant and would be moot upon disposition of the plaintiffs’ claims, 
the court  found  that it was not a proper declaratory judgment claim and  denied the 
defendants’ motion.

Id.

                                                   
    Other courts in this district, citing the Mille Lacs opinion, have similarly dismissed 

counterclaims seeking declaratory judgment where the counterclaim would be rendered 
moot by full resolution of the other claims pled in the case. E.g., American Achievement 
Corp., 622 F. Supp. 3d at 767 (dismissing a counterclaim for declaratory judgment that 
“requires the same analysis” as a tortious interference with a contract claim already pled in 
the  case);  Great  Lakes  Gas  Transmission,

871 F. Supp. 2d at 862

  (dismissing  a 

counterclaim for declaratory judgment where resolution of the plaintiff’s claim, including 
the  defendant’s  affirmative  defenses,  would  resolve  all  questions  presented  by  the 
counterclaim).                                                            
    In this case, ADMC has alleged a breach of contract claim, and the formation of a 
valid contract is a required element of that claim under Minnesota law. See Lyon Financial 

Servs., Inc. v. Ill. Paper and Copier Co.,

848 N.W.2d 539, 543

 (Minn. 2014). Thus, the 
question of whether any agreement, either written or otherwise, exists between the parties 
will necessarily be resolved through litigation of the complaint. Further, Natural Pawz 
asserts five affirmative defenses, including “lack of privity”, that ADMC’s damages “were 
caused by factors or persons outside of the control of” Natural Pawz, and that those persons 
owe “contribution and indemnity.” (Answer at 5.) The Court finds that resolution of 

ADMC’s claim, along with the affirmative defenses raised by Natural Paws, would resolve 
all questions raised by the counterclaim. Accordingly, the counterclaim is redundant, and 
should be dismissed.                                                      
III.  ORDER                                                               
    Based  on  the  submissions  and  the  entire  file  and  proceedings  herein,  IT  IS 

HEREBY  ORDERED   that  Plaintiff  American  Distribution  &  Manufacturing  Co.’s 
Motion to Dismiss Counterclaim [Doc. No. 26] is GRANTED.                  

IT IS SO ORDERED.                                                         


Dated: May 29, 2024                  /s/ Susan Richard Nelson             
                                    SUSAN RICHARD NELSON                 
                                    United States District Judge