ANCHORAGE, Alaska. (CN) - A federal judge refused to dismiss claims that a company hired to fill ATM machines is liable for more than $138,000 that "disappeared."
In June 2014, Cash Depot hired Alaska ATM Service to fill its ATM machine at the Wal-Mart store in Kodiak, Alaska.
Under an agreement, Alaska ATM would send a courier to pick up money from a Wells Fargo bank in Anchorage. The courier was supposed to load the cash into a "cassette," travel to Kodiak, remove the old cassette - which normally contained "residual" cash - and install the new cassette into plaintiff's ATM. The courier would then return the old cassette with the residual cash to the bank in Anchorage.
Cash Depot alleges in an April 27, 2015 lawsuit, however, that a total of $138,940 of residual cash "disappeared" over time.
"The disappearance occurred because one or more of Alaska ATM's couriers failed to return residual vault cash to the bank," according to the complaint.
Cash Depot sued Commercial ATM Services, Societe Financial, Societe Financial Group, all doing business as Alaska ATM Service, and individual defendants James Dainis, Dominic Krueger and Reynold Krueger.
The company alleges breach of contract, conversion, fraudulent misrepresentation, conspiracy to commit fraud and conversion, unjust enrichment, unfair trade practices and punitive damages.
Alaska ATM and the other defendants moved to dismiss all but the breach of contract claim against Commercial ATM in August.
The three individual defendants argue that seven of Cash Depot's eight claims against them must be dismissed because "plaintiff has not stated any facts to support a legal theory of liability an owner or employees of a company that has a contracting relationship with plaintiff" and contend that "this is nothing more than a contract dispute and thus plaintiff's claims are limited to the entity with which it contracted," in this case Commercial ATM.
They added the claims against them must be dismissed because Cash Depot "has alleged no facts to support its contention that they would be liable for any of these claims since they were not parties to the contract."
U.S. District Judge Russel Holland rejected the argument.
"This argument fails," he wrote in a 19-page order. "It is possible that if any of the individual defendants took the residual vault cash, that they did so while acting outside the scope of their employments, which would make them personally liable. And it is plausible that the Societe defendants are contracting parties."
Holland noted that Cash Depot alleges that the three individual defendants were the couriers, and that they had access to the cash.
He granted the defendants' fraudulent misrepresentation claim, stating that "plaintiff failed to plead this claim with particularity."
"With one exception, plaintiff has not alleged who made any of the alleged misrepresentations. It is not sufficient to allege that statements were made by Alaska ATM. Plaintiff must allege what individual made the alleged misrepresentations. Plaintiff's fraudulent misrepresentation claim is dismissed as is plaintiff's conspiracy to commit fraud claim," Holland wrote.
Holland preserved the Alaska Unfair Trade Practices Act claims against all defendants except Alaska ATM and Dainis, who Cash Depot says could be liable even if it were proven that the Kruegers were the ones who took the money.
Under the act, liability can be extended to officers, directors and owners "with authority to control the unfair act or practice if they had knowledge, were recklessly indifferent, or knew that it was highly probably that an employee or agent of the corporation would commit an unfair act or practice."
Holland dismissed the claim, however, because "joint and several liability is a request for relief or a rule of contribution: it is not a cause of action," he said. "If plaintiff wants to allege that Dainis and the corporate defendants could be liable under the UTPA even if the Kruegers stole the residual cash, it should do so as part of its UTPA cause of action."
Finally, Holland dismissed the plaintiff's eighth cause of action because "punitive damages do not constitute a cause of action," he said. "If plaintiff want to put defendants on notice that it is seeking punitive damages, the place to do so in plaintiffs' prayer for relief."
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.