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Dannix Painting, LLC v. Sherwin-Williams Co.

United States Court of Appeals, Eighth Circuit

October 21, 2013

DANNIX PAINTING, LLC, Plaintiff-Appellant
v.
SHERWIN-WILLIAMS COMPANY, Defendant-Appellee.

Submitted: Sept. 25, 2013.

Page 903

[Copyrighted Material Omitted]

Page 904

Jill R. Rembusch, argued and on the brief, Saint Louis, MO, for Plaintiff-Appellant.

Robert H. Eddy, argued, Cleveland, OH (Michael Joseph Pike, on the brief, Cleveland, OH), for Defendant-Appellee.

Before RILEY, Chief Judge, BRIGHT and BYE, Circuit Judges.

RILEY, Chief Judge.

In this diversity case, see 28 U.S.C. § 1332(a), Dannix Painting, LLC (Dannix), a Mississippi limited liability company whose sole member is a Missouri resident, appeals the dismissal of its Missouri tort action against the Sherwin-Williams Company (SWC), an Ohio corporation. Dannix alleged SWC negligently misrepresented a certain paint product SWC sold was appropriate for a particular painting project. Dannix argues the district court [1] erroneously concluded Dannix failed to state a claim because Missouri's [2] economic loss doctrine barred Dannix's only cause of action. We affirm.

I. BACKGROUND

Dannix, a commercial painting contractor, used a product manufactured by SWC to paint some buildings at Eglin Air Force Base in Florida, but the finish was defective. When Dannix sought assistance from SWC, SWC recommended an alternative product. When that product proved unacceptable due to noxious odors, an SWC employee suggested a third product. On the SWC employee's recommendation, Dannix used the third product on both interior and exterior surfaces, complying with all the manufacturer's recommendations. This product also failed. The paint " delaminated" [3] on both interior and exterior surfaces, causing Dannix to suffer financial loss when Dannix had to remove the defective paint and redo the work.

On August 13, 2012, Dannix sued SWC in Missouri state court for negligent misrepresentation in recommending the third

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product. Dannix asserted SWC " failed to exercise reasonable care or competence in investigating the accuracy of its recommendation and in specifying the [r]ecommended [p]roduct." On September 12, 2012, SWC removed the case to the Eastern District of Missouri based on diversity jurisdiction. SWC then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, arguing the economic loss doctrine barred Dannix's complaint under Missouri law.

On December 3, 2012, the district court concluded Dannix's claim for " negligent misrepresentation [was] barred by Missouri's economic loss doctrine." Noting " Missouri courts have recognized rare exceptions to the economic loss doctrine" for " cases involving a fiduciary relationship," see, e.g., Autry Morlan Chevrolet Cadillac, Inc. v. RJF Agencies, Inc., 332 S.W.3d 184, 193 (Mo.Ct.App.2010), " negligence in providing professional services," see, e.g., Business Men's Assur. Co. of Am. v. Graham, 891 S.W.2d 438, 454 (Mo.Ct.App.1994), and breach of a public duty, see, e.g., B.L. Jet Sales, Inc. v. Alton Packaging Corp., 724 S.W.2d 669, 672-73 (Mo.Ct.App.1987), the district court determined Dannix's claim did " not fall within any of those recognized exceptions." Refusing to " expand Missouri law to create a new one," the district court dismissed Dannix's complaint. Dannix timely appealed.

II. DISCUSSION

A. Standard of Review

" We review de novo the district court's grant of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), accepting [Dannix's] factual allegations as true and construing all reasonable inferences in favor of [Dannix]." Alexander v. Hedback, 718 F.3d 762, 765 (8th Cir.2013). " ‘ As a federal court, our role in diversity cases is to interpret state law, not to fashion it.’ " Kingman v. Dillard's, Inc., 643 F.3d 607, 615 (8th Cir.2011) (quoting Orion Fin. Corp. v. Am. Foods Grp., Inc., 281 F.3d 733, 738 (8th Cir.2002)). " ‘ When determining the scope of Missouri law, we are bound by the decisions of the Supreme Court of Missouri. If the Supreme Court of Missouri has not addressed an issue, we must predict how the court would rule, and we ...


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