Rezac Livestock Commission Co. v. Pinnacle Bank

Charles Leonard purchased almost 700 head of cattle from Rezac Livestock Commission Company, Inc. (Rezac) (plaintiff) at auction for approximately $980,000. Leonard provided Rezac with a check drawn on Rezac’s account with Pinnacle Bank (Pinnacle) (defendant) and instructed Rezac to transport the cattle to Colorado. However, Pinnacle refused to honor Leonard’s check due to insufficient funds. Rezac sued Pinnacle and Dinsdale Brothers, Inc. (Dinsdale) (defendant), seeking payment for the cattle. According to Rezac, Leonard purchased the cattle as Dinsdale’s agent, and thus, among other things, Dinsdale (which had no direct contact with Rezac) breached a contract with Rezac. In support of its claim that Leonard acted as Dinsdale’s agent at the auction, Rezac alleged that Leonard told Rezac that (1) Leonard was attending the auction at Dinsdale’s direction, something that Leonard had done in the past; (2) Dinsdale provided Leonard with specific instructions regarding the maximum acceptable weight of each steer and heifer; and (3) Dinsdale wanted the cattle shipped to Colorado. Rezac further alleged that although Dinsdale wired enough money to Leonard’s account with Pinnacle to cover the cost of the cattle, Dinsdale had actual knowledge (due to overlapping family ownership of Dinsdale and Pinnacle) that Leonard owed money to Pinnacle and that cattle payments thus should be made directly to suppliers. Dinsdale moved to dismiss Rezac’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, arguing that, as a matter of law, Leonard did not buy the cattle as Dinsdale’s agent.