Rezac Livestock Commission Co. v. Pinnacle Bank

Charles Leonard was in the business of buying and reselling cattle. Leonard attended a cattle auction run by Rezac Livestock Commission Company, Inc. (Rezac) (plaintiff). Before the auction, Leonard discussed with Dinsdale Brothers, Inc. (Dinsdale) (defendant) his plan to attend the auction, about which Dinsdale did not previously know. Dinsdale told Leonard that it was interested in acquiring cattle that met certain weight specifications, but Dinsdale and Leonard did not discuss price or quantity. Leonard ultimately purchased cattle at the auction for the price of approximately $980,000. Some of the cattle that Leonard purchased did not meet Dinsdale’s weight specifications. Leonard resold the nonconforming cattle to another buyer but declined to sell the remaining cattle to a third party because Leonard felt bound by a preexisting offer. Leonard provided Rezac with a check drawn on Rezac’s account with Pinnacle Bank (Pinnacle) (defendant) and instructed Rezac to transport the cattle to a feedlot in Colorado. Dinsdale’s name was not on the check or on any Rezac-generated invoices, nor did Leonard tell Dinsdale how much Leonard paid. Instead, Leonard provided Dinsdale with his own invoice, which reflected a mark-up in an amount undeterminable by Dinsdale. Leonard did not have check-writing authority for Dinsdale, use Dinsdale vehicles, letterhead, logos, business cards, or apparel, and Dinsdale never provided Leonard with tax documents reflecting that Leonard was a Dinsdale employee or independent contractor. Pinnacle did not honor Leonard’s check to Rezac due to insufficient funds, leading Rezac to sue Pinnacle and Dinsdale, seeking payment. According to Rezac, Leonard acted as Dinsdale’s agent and thus, among other things, Dinsdale (which had no direct contact with Rezac) breached a contract with Rezac. Dinsdale moved to dismiss the complaint pursuant to failing to state a claim. The district court denied Dinsdale’s motion, ruling that Rezac adequately pleaded the elements of a principal-agent relationship, including an intended benefit to the principal and control by the principal. Dinsdale subsequently moved for summary judgment, arguing, among other things, that the summary-judgment record did not support a finding that Leonard acted as Dinsdale’s agent.