Court Opinion

ID: 4668656
Source: CourtListenerOpinion
Date Created: 2021-03-17 16:00:35.059911+00
Date Added: 2024-06-11T08:03:04.322790
License: Public Domain

United States Court of Appeals
                           For the Eighth Circuit
                       ___________________________

                               No. 19-2982
                       ___________________________

                                  Tom Dunne, Jr.

                      lllllllllllllllllllllPlaintiff - Appellant

                                          v.

 Resource Converting, LLC; Tim Danley; Rick Kersey; Sebright Products, Inc.;
Gary Brinkmann; NewWay Global Energy; David Wolf; Jerry Flickinger; JWR, Inc.

                     lllllllllllllllllllllDefendants - Appellees
                                     ____________

                   Appeal from United States District Court
                 for the Eastern District of Missouri - St. Louis
                                 ____________
                        ___________________________

                               No. 19-3170
                       ___________________________

                           Resource Converting, LLC

                       lllllllllllllllllllllPlaintiff - Appellee

                                          v.

                                  Tom Dunne, Jr.

                     lllllllllllllllllllllDefendant - Appellant
                          ___________________________

                                 No. 19-3271
                         ___________________________

                              Resource Converting, LLC

                         lllllllllllllllllllllPlaintiff - Appellant

                                            v.

                                    Tom Dunne, Jr.

                        lllllllllllllllllllllDefendant - Appellee
                                       ____________

                     Appeals from United States District Court
                   for the Southern District of Iowa - Des Moines
                                   ____________

                             Submitted: January 14, 2021
                               Filed: March 17, 2021
                                   ____________

Before SMITH, Chief Judge, KELLY and ERICKSON, Circuit Judges.
                              ____________

ERICKSON, Circuit Judge.

      Tom Dunne, Jr. purchased licenses for Resource Converting, LLC’s (“RCI”)
non-thermal, pulverizing, and drying system technology (“PAD System”). Dunne
alleges the capabilities of the PAD System were misrepresented to him. Two lawsuits
ensued in federal district court, one in Iowa and one in Missouri. In this consolidated

                                            -2-
appeal, we affirm the Iowa judgment and reverse and remand the Missouri judgment
for further proceedings consistent with this opinion.

I.    BACKGROUND

      RCI; Tim Danley; Rick Kersey; Sebright Products, Inc.; Gary Brinkmann;
NewWay Global Energy; David Wolf; Jerry Flickinger; and JWR, Inc. (collectively,
“the RCI defendants”) targeted Dunne to purchase licenses granting Dunne the
exclusive right to sell the PAD System in the St. Louis, Missouri, area. The stated
purpose of the PAD System was to convert municipal waste into “biomass and
ultimately renewable fuels.” On August 21, 2015, Dunne entered into five license
agreements with RCI for the PAD System, agreeing to pay a total of $1,000,000.
Dunne made an initial payment of $400,000 but refused to make the final payment
when he was never able to see an operational PAD System.

       Approximately ten months after entering into the license agreements, Dunne
sent the RCI defendants a letter that sought a refund of the $400,000 and threatened
to sue in federal court in Missouri if the refund was not promptly issued. Ten days
later, RCI commenced an action against Dunne in the Polk County Iowa District
Court, alleging breach of the license agreements and seeking payment of the
remaining $600,000. Dunne then simultaneously removed the Iowa state action to
the United States District Court for the Southern District of Iowa (“Iowa action”) and
sued the RCI defendants in the United States District Court for the Eastern District
of Missouri (“Missouri action”). Both sides made unsuccessful motions to transfer
and consolidate the cases, so the two cases proceeded on parallel paths.

      The Iowa action went to trial in May 2018. Dunne defended against the RCI
contract claim on a theory of fraudulent misrepresentation and counterclaimed for the
return of his initial payment. After an eight-day trial, the jury returned a verdict,
finding both that Dunne breached the license agreements and that RCI fraudulently

                                         -3-
misrepresented the PAD System. The jury awarded no compensatory damages to RCI
or Dunne but awarded Dunne $200,000 in punitive damages. Post-trial motions were
brought by both parties, and the district court1 entered an order that upheld the jury’s
verdict; dismissed Dunne’s counterclaims for equitable relief; and awarded Dunne
attorney’s fees and costs. Both parties appeal the judgment in the Iowa action.

      After the Iowa trial, the Missouri district court dismissed Dunne’s claims for
fraudulent misrepresentation, fraudulent inducement, negligent misrepresentation,
unjust enrichment, and civil conspiracy under Fed. R. Civ. P. 12(b)(6) and awarded
the RCI defendants costs. Dunne appeals the judgment in the Missouri action.

II.   DISCUSSION

      A.     Iowa Action

       Dunne asserts the district court erred in three ways: (1) when it failed to
increase the compensatory damages award; (2) when it dismissed his equitable
counterclaims; and (3) when it failed to award his full claim for attorney’s fees and
costs. RCI also asserts three district court errors: (1) when it failed to strike the
punitive damages award; (2) when it failed to enter a judgment as a matter of law in
favor of RCI on the fraudulent misrepresentation counterclaim; and (3) when it
concluded Dunne was a prevailing party and awarded fees and costs. Having
carefully reviewed the record and each issue raised by the parties, we find neither
error nor an abuse of discretion.

      1
       The Honorable John A. Jarvey, Chief Judge, United States District Court for
the Southern District of Iowa.

                                          -4-
             1.     Damages

       Dunne contends the amount of compensatory damages was uncontested and,
therefore, the district court erred when it denied his motion under Fed. R. Civ. P. 59
for $400,000 in compensatory damages. We review “the denial of an additur for
abuse of discretion, bearing in mind that if the amount of damages was disputed, a
grant of additur violates the losing party’s Seventh Amendment right to a jury trial.”
Am. Bank of St. Paul v. TD Bank, N.A., 713 F.3d 455, 468 (8th Cir. 2013) (citations
omitted).

       While it is undisputed that Dunne made an initial $400,000 payment for the
licenses, the parties contested the existence of any damages. Dunne claimed he
suffered a loss of $400,000 as a result of RCI’s misrepresentation and RCI countered
that Dunne received some value from the licenses. The question of damages was
properly left to the jury, and the record makes plain that the jury carefully deliberated
on this issue.

       The jury was asked to decide what amount would reimburse Dunne and put him
in as good a position as if the misrepresentations were not made. The court instructed
the jury that it “may” consider the $400,000 payment when considering compensatory
damages. When, during deliberations, the jury sent the court a question expressly
asking whether it could award no compensatory damages, the court responded: “The
determination of damages is your decision to make. You decide how much harm was
caused by either a breach of contract or a fraudulent misrepresentation.” Dunne did
not object to the court’s response.

        It is apparent that when resolving the question of compensatory damages, the
jury arrived at the conclusion that no award was proper. Under these circumstances,
a grant of additur would violate the losing party’s Seventh Amendment right to a jury
trial. The district court did not abuse its discretion in denying Dunne’s request for

                                          -5-
additur. See Trinity Prods., Inc. v. Burgess Steel, L.L.C., 486 F.3d 325, 335 (8th Cir.
2007) (finding no abuse of discretion in denying a motion for additur when the jury
“obviously” found the actual damages were less than the market value).

       Without an award of compensatory damages, RCI contends that the jury’s
award of punitive damages must be stricken and that if punitive damages are
available, the award is unconstitutionally excessive. Interpretations of state law and
the constitutionality of a punitive damages award are reviewed by us de novo. See
Cooper Indus., Inc. v. Leatherman Tool Gr., Inc., 532 U.S. 424, 436 (2001);
Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir. 2005). Under Iowa
law, “an award of punitive damages does not depend on an award of compensatory
damages, but rather depends on a showing of actual damages.” Podraza v. City of
Carter Lake, 524 N.W.2d 198, 203 (Iowa 1994); see also Pringle Tax Serv., Inc. v.
Knoblauch, 282 N.W.2d 151, 154 (Iowa 1979) (“[A] failure to award actual damages
will not bar [punitive] damages when actual damage has in fact been shown.”). As
noted by RCI, more recently, the Iowa Supreme Court made a statement in a footnote
indicating a punitive damages award may only be recoverable if the plaintiff proves
compensatory damages. Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 746 n.10
(Iowa 2009). Contrary to RCI’s interpretation, we do not read this statement as a
declaration of a new rule of Iowa law. The opinion, citing Pringle, instead supports
that actual damages need only be established in order for punitive damages to be
recoverable. Establishment of damages is a different concept than an award of
damages, and upholding the jury’s verdict on punitive damages in this case would not
run afoul of Iowa law.

       A close reading of the jury instructions and verdict demonstrate that the jury
found Dunne suffered actual damages, even though it did not award compensatory
damages. In particular, the jury found fraudulent misrepresentation, which required
a finding that RCI’s false representations were “a cause of [Dunne’s] damage[s].”
Further, the jury was instructed that it could only award punitive damages if it found

                                         -6-
that RCI “caused actual damage to [Dunne].” We presume the jury followed the
instructions. See Borchardt v. State Farm Fire & Cas. Co., 931 F.3d 781, 786 (8th
Cir. 2019). Because the jury necessarily found that Dunne suffered actual damages
when it found fraudulent misrepresentation, punitive damages were recoverable under
Iowa law. See Pringle, 282 N.W.2d at 154 (upholding award of punitive damages
even though compensatory damages were not computed or awarded). For the same
reasons, we also reject RCI’s argument that it is entitled to judgment as a matter of
law because the jury awarded no compensatory damages.2

       We next turn to RCI’s claim that the punitive damages award is
unconstitutionally excessive under the Due Process Clause.3 Punitive damages are
grossly excessive if they shock the conscience or demonstrate passion or prejudice
by the jury. See Trickey v. Kaman Indus. Techs. Corp., 705 F.3d 788, 802 (8th
Cir. 2013). When considering the excessiveness of the award, we consider certain
“guideposts,” including (1) the reprehensibility of the conduct; (2) the disparity
between the actual or potential harm and the punitive damages award; and (3) the
difference between the civil penalties authorized in comparable cases and the punitive
damages award. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574–75 (1996).
After careful review, we are convinced that the award of punitive damages in this
case is not unconstitutionally excessive.

     Reprehensibility, “the most important guidepost,” May v. Nationstar Mortg.,
LLC, 852 F.3d 806, 816 (8th Cir. 2017), is demonstrated in this record. RCI made

      2
       While serious questions exist as to whether or not this issue was preserved as
it was not expressly raised in RCI’s Rule 50(b) motion, we need not consider the
preservation issue as the record makes plain that the jury necessarily found that
Dunne suffered actual damages.
      3
       We apply the same analysis for federal and Iowa due process principles. See
Eden Elec., Ltd. v. Amana Co., 370 F.3d 824, 827–28 (8th Cir. 2004) (citing Wilson
v. IBP, Inc., 558 N.W.2d 132, 147 (Iowa 1996)).

                                         -7-
multiple misrepresentations and acted in a manner calculated to trick or deceive
Dunne. See Hallmark Cards, Inc. v. Monitor Clipper Partners, LLC, 758 F.3d 1051,
1061 (8th Cir. 2014) (noting two of the factors for reprehensibility include repeated
conduct and trickery). The district court described RCI’s conduct as “blatantly” lying
to Dunne about the commercial success of the PAD system and the number of units
operating commercially when, in fact, the PAD system had little to no commercial
success. It found that RCI “employed the offensive strategy of forcing Dunne to
make a quick decision with a false assertion that there was another buyer waiting in
the wings ready to purchase the licenses if Dunne did not act quickly.” RCI’s
multiple misrepresentations and trickery induced Dunne to enter into the license
agreements to his detriment and are sufficiently reprehensible to warrant punitive
damages.

      While RCI focuses on the second guidepost and asserts the award must be
vacated because no ratio can be calculated between $0 and $200,000, RCI misreads
our precedent. We are to consider both actual harm and potential harm. See Asa-
Brandt, Inc. v. ADM Investor Servs., Inc., 344 F.3d 738, 747 (8th Cir. 2003). The
potential harm that Dunne faced as a result of RCI’s misrepresentations was the entire
$1,000,000 licence fee. A $200,000 award of punitive damages in a case with
potential harm of $1,000,000 is not disproportionate. Our precedent shows that we
have upheld similar punitive damages awards when only nominal damages were
awarded. See, e.g., Bryant v. Jeffrey Sand Co., 919 F.3d 520, 527–29 (8th Cir. 2019)
(upholding $250,000 in punitive damages when only nominal damages were
awarded). The award of punitive damages here is not unconstitutionally excessive.

        RCI’s reliance on a $10,000 criminal penalty under Iowa law for fraud is
misplaced. The Supreme Court has recognized that criminal penalties are more
closely tied to “the seriousness with which a state views the wrongful action” and are
less helpful “[w]hen used to determine the dollar amount of the award.” State Farm
Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 428 (2003). The failure of either

                                         -8-
party to identify comparable civil penalties does not render the award
unconstitutionally excessive, especially when the criminal penalty is for general fraud
and unrelated to the amount of loss arising from that fraud. For all of these reasons,
we affirm the district court’s decision on damages.

             2.     Equitable Relief

       Dunne alternatively argues that if his additur request is denied, he is entitled
to an award of $400,000 under his equitable counterclaims. The district court
concluded that because Dunne had an adequate remedy at law, it would not exercise
its equitable jurisdiction. We review the district court’s application of law de novo
and its denial of equitable relief for abuse of discretion. See Smith Commc’ns, LLC
v. Wash. Cnty., 785 F.3d 1253, 1257 (8th Cir. 2015). “A district court abuses its
discretion if it bases its judgment on clearly erroneous factual findings or erroneous
legal conclusions.” Lonesome Dove Petroleum, Inc. v. Holt, 889 F.3d 510, 516 (8th
Cir. 2018) (citations omitted). Applying these standards, we conclude Dunne is not
entitled to equitable relief.

       Under Iowa law, the presence of an adequate remedy at law generally limits the
exercise of equity jurisdiction. Palmer v. Unisys Corp., 637 N.W.2d 142, 154 n.2
(Iowa 2001). In other words, “[e]quity generally will not provide relief where an
adequate remedy at law existed and defendant was denied that relief for appropriate
legal reasons.” CMI Roadbuilding, Inc. v. Iowa Parts, Inc., 920 F.3d 560, 566 (8th
Cir. 2019) (quoting Mosebach v. Blythe, 282 N.W.2d 755, 761 (Iowa Ct.
App. 1979)). Dunne prevailed on his fraudulent misrepresentation claim at law.
While he is unhappy with the decision the jury made on the issue of compensatory
damages, the jury’s disagreement with his view of damages does not render the
remedy at law inadequate. The remedy Dunne sought was at all times available for
the jury to award, the jury simply rejected his proof of damages. Finding neither an

                                         -9-
error of law nor an abuse of discretion, we affirm the district court’s disposition on
Dunne’s equitable counterclaims.

             3.     Attorney’s Fees and Costs

       Finally, we turn to attorney’s fees and costs. Dunne requested $922,816.50 in
fees for the Iowa action; $672,467.00 in fees for the Missouri action; and $160,912.30
in costs. Dunne’s request was made pursuant to statutory and contractual
authorizations, or, alternatively, in equity and as a matter of Iowa common law. The
district court declined to award any fees incurred in the Missouri action because
Dunne failed to establish his attorneys’ work in Missouri was actually used in Iowa.
It reduced the award of Iowa fees by half, reasoning (1) the case did not present
difficult or important issues; (2) the amount involved and recovered did not warrant
the request; and (3) the case was over-litigated. The court also reduced the requested
amount of costs by half.

       The Supreme Court has noted that “[a] request for attorney’s fees should not
result in a second major litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
Contrary to RCI’s assertion, Dunne is a prevailing party. See, e.g., Matter of Herrera,
912 N.W.2d 454, 472 (Iowa 2018) (a defendant is a prevailing party if he fulfills his
“primary objective” of rebuffing the plaintiff’s claim). Iowa law governs Dunne’s fee
request, see Ferrell v. W. Bend Mut. Ins. Co., 393 F.3d 786, 796 (8th Cir. 2005), and
permits the recovery of fees in this case under the terms of the license agreements,
see NevadaCare, Inc. v. Dep’t of Human Servs., 783 N.W.2d 459, 469–70 (Iowa
2010). We review an award of attorney’s fees for abuse of discretion. Weitz Co. v.
MH Wash., 631 F.3d 510, 528 (8th Cir. 2011).

      We find the method used and reasons given by the district court for the
reductions were well within its discretion. See Lee v. State, 906 N.W.2d 186, 199
(Iowa 2018) (finding the percentage method was not an abuse of discretion under

                                         -10-
Iowa law); cf. Banks v. Slay, 875 F.3d 876, 882 (8th Cir. 2017) (approving district
court’s use of a percentage reduction to a fee request under 42 U.S.C. § 1988 after
considering the complexity of the case). Here, the district court thoroughly analyzed
the request and found the hourly rate was reasonable but Dunne’s attorneys expended
an unreasonable number of hours. It then applied a percentage reduction rather than
a line-by-line reduction. The method applied was consistent with Iowa law and the
finding that the number of hours were excessive is amply supported in the record.

      In addition, Dunne failed to present evidence that any of his attorneys’ work
done in preparation for the Missouri action was actually used in the Iowa litigation.
The district court’s refusal to assume the work was used in the Iowa litigation was
appropriate, particularly when the Missouri action involved several additional
defendants and additional claims. The district court did not abuse its discretion by
reducing the attorney’s fees request. We affirm the award of $461,408.25 for
attorney’s fees.

        On the other hand, federal law governs an award of costs. See Stender v.
Archstone-Smith Operating Tr., 958 F.3d 938, 947 (10th Cir. 2020) (explaining in
detail why Fed. R. Civ. P. 54(d) governs in diversity cases); see also 10 Charles Alan
Wright et al., Federal Practice & Procedure § 2669 (3d ed. 1998). Dunne sought
costs taxable under 28 U.S.C. § 1920 and Rule 54(d). He also sought other non-
taxable costs and costs incurred in the Missouri action under the terms of the license
agreements and Iowa law. See Weitz Co. v. MH Wash., 631 F.3d 510, 536 (8th Cir.
2011) (noting a contractual provision requiring the losing party to pay costs
“overrid[es] the strictures of § 1920”).

       A district court has “substantial discretion” when determining an award of
costs to a prevailing party under § 1920 and Rule 54(d). See Richmond v. Southwire
Co., 980 F.2d 518, 520 (8th Cir. 1992) (per curiam); see also Little Rock Cardiology
Clinic PA v. Baptist Health, 591 F.3d 591, 601 (8th Cir. 2009) (noting the district

                                        -11-
court’s “broad discretion” over an award of costs). “[N]ot all expenses of litigation
are costs taxable against the losing party, and within the statutory framework of costs
eligible to be taxed, the district court has discretion in determining and awarding
costs in a given case.” Pershern v. Fiatallis N. Am., Inc., 834 F.2d 136, 140 (8th Cir.
1987). Within that discretionary authority, the district court may, for example, reduce
or deny a request for costs “because the prevailing party obtained only a nominal
victory, or because the taxable costs of the litigation were disproportionate to the
result achieved.” Richmond, 980 F.2d at 520. Arguably, Dunne’s request for costs
suffered from both defects. But, more importantly, a district court abuses its
discretion when determining an award of costs only if its conclusion is based on
“clearly erroneous factual findings or erroneous legal conclusions.” Little Rock
Cardiology Clinic PA, 591 F.3d at 601 (quoting Lankford v. Sherman, 451 F.3d 496,
503–04 (8th Cir. 2006)). Neither are present in this case.

       Dunne obtained a $200,000 punitive damages award and then sought to recover
$160,912.30 in costs. When considering the disproportionality between the fees/costs
sought and the amount at issue, the court observed the “overkill” involved in
defending against RCI’s breach of contract claim, which was in “stark contrast” to
“Dunne’s disturbing lack of due diligence in investigating whether or not to purchase
the licenses in the first place.” The district court had also noted in an earlier order the
difficulty in “generat[ing] sympathy for Dunne as his lack of due diligence clearly
showed that he is not the sophisticated business person that he claims to be.” These
findings are supported by evidence in the record and are not clearly erroneous.

       The district court, in its discretion, reduced Dunne’s request for costs by one-
half because the case was over-litigated and the request for costs was simply not
reasonable when compared to the amount at issue. The district court’s finding that
the case was over-litigated is supported by the evidence in the record and is not
clearly erroneous. Likewise, the district court’s finding that the request for costs was
disproportionate to the amount in controversy is not clearly erroneous. Based on

                                           -12-
these findings and our review of the record, we conclude the district court did not
abuse its broad discretion by reducing Dunne’s request for costs by one-half. The
district court’s award of costs in the amount of $80,456.15 is affirmed.

      B.     Missouri Action

       Dunne sued the RCI defendants in Missouri for the same controversy over the
PAD System. After the Iowa jury verdict, Dunne filed a Second Amended Complaint
in the Missouri action, asserting claims for (1) fraudulent misrepresentation,
(2) fraudulent inducement, (3) negligent misrepresentation, (4) unjust enrichment, and
(5) civil conspiracy. The district court dismissed the complaint pursuant to Fed. R.
Civ. P. 12(b)(6), concluding Dunne’s claims were barred by both claim preclusion
and the economic loss doctrine. The district court also awarded the RCI defendants
their costs. Dunne appeals, arguing the district court erred when it (1) applied federal
law instead of state law in its claim preclusion analysis; (2) applied the economic loss
doctrine to his misrepresentation claims; and (3) awarded costs without an
opportunity to respond.

             1.     Claim Preclusion

       Dunne asserts the district court mistakenly applied federal law rather than Iowa
law when it concluded that claim preclusion barred some of Dunne’s claims against
certain defendants. We review the district court’s choice-of-law determination and
application of claim preclusion de novo. See St. Paul Fire & Marine Ins. Co. v.
Compaq Comput. Corp., 457 F.3d 766, 770 (8th Cir. 2006); Stricker v. Union
Planters Bank, N.A., 436 F.3d 875, 877–78 (8th Cir. 2006).

      It is well established that “[t]he law of the forum that rendered the first
judgment controls the” claim preclusion analysis. C.H. Robinson Worldwide, Inc.
v. Lobrano, 695 F.3d 758, 764 (8th Cir. 2012) (quoting Laase v. Cnty. of Isanti, 638

                                         -13-
F.3d 853, 856 (8th Cir. 2011)). When a federal court sitting in diversity renders the
first judgment, we apply the law of the forum state of that court. See id. Thus,
Iowa’s claim preclusion rules govern here, and the district court erred when it applied
federal law rather than Iowa law. The parties dispute the effect that Iowa’s claim
preclusion rules will have on Dunne’s claims. We do not resolve these disputes that
involve legal and factual questions but rather leave them to the district court in the
first instance. See United Fire & Cas. Co. v. Titan Contractors Serv., Inc., 751 F.3d
880, 887 (8th Cir. 2014) (remanding for the district court to consider in the first
instance an issue not decided by the district court that raised complex factual and
legal issues).

             2.     Economic Loss Doctrine

      Dunne also contends the district court erred in applying the economic loss
doctrine under Missouri law to his claims for fraudulent and negligent
misrepresentation. Our role “is to interpret [Missouri] law, not to fashion it.” Dannix
Painting, LLC v. Sherwin-Williams Co., 732 F.3d 902, 905 (8th Cir. 2013) (citations
omitted). The parties agree that the Missouri Supreme Court has yet to decide
whether the doctrine would apply to Dunne’s misrepresentation claims, so “we must
predict how the court would rule.” Id. (citations omitted).

       Dunne argues Missouri law would not apply the doctrine to his claims, in part,
because the license agreements are not governed by the Uniform Commercial Code
(“UCC”). Under Missouri law, “[t]he economic loss doctrine prohibits a commercial
buyer of goods ‘from seeking to recover in tort for economic losses that are
contractual in nature.’” Id. at 905–06 (quoting Autry Morlan Chevrolet Cadillac, Inc.
v. RJF Agencies, Inc., 332 S.W.3d 184, 192 (Mo. Ct. App. 2010)). As we explained
in Dannix Painting, the economic loss doctrine “was judicially created to protect the
integrity of the [UCC] bargaining process” by “prevent[ing] tort law from altering the
allocation of costs and risks negotiated by the parties.” 732 F.3d at 906 (citations

                                         -14-
omitted). Recently, in Vogt v. State Farm Life Insurance Co., this Court declined to
apply the doctrine under Missouri law to a conversion claim, noting that Missouri law
has limited “this doctrine to warranty and negligence or strict liability claims.” 963
F.3d 753, 774 (8th Cir. 2020) (collecting Missouri cases applying the doctrine to
UCC claims). In Vogt, we found it proper to limit the doctrine to its “traditional
moorings.” Id. That rationale applies with equal force here, and, while there may be
some circumstance where the Missouri Supreme Court would apply the doctrine
outside the UCC, this is not the case. We find the courts which have found the
doctrine does not apply in circumstances like these persuasive. See, e.g., Steadfast
Ins. Co. v. ARC Steel, LLC, Case No. 16-3214-CV-S-SRB, 2019 WL 2090696, at *3
(W.D. Mo. May 13, 2019) (collecting cases declining to apply the doctrine to cases
outside the UCC). We will not expand the economic loss doctrine beyond the
contexts in which it has been applied by Missouri courts. We reverse the district
court’s application of the doctrine to bar Dunne’s misrepresentation claims.4

             3.    Remaining Claims and Costs

       After the district court’s rulings on claim preclusion and the economic loss
doctrine, only the conspiracy claims remained. The district court dismissed these
claims because conspiracy is not an independent cause of action but rather requires
an underlying claim. See, e.g., Envirotech, Inc. v. Thomas, 259 S.W.3d 577, 586
(Mo. Ct. App. 2008). As we have revived the underlying claims, the reasoning for
dismissing the conspiracy claims no longer applies. We offer no opinion on
resolution of the conspiracy claims except to note they too are revived by our
decision. With Dunne’s claims being subject to further proceedings in the district
court, the RCI defendants are no longer a prevailing party. We vacate the district
court’s award of costs in favor of the RCI defendants.

      4
      Likewise, we predict that the Missouri Supreme Court would not apply the
economic loss doctrine to bar Dunne’s other tort claims.

                                        -15-
III.   CONCLUSION

      For the foregoing reasons, we affirm the Iowa judgment in its entirety. We
reverse the Missouri judgment, vacate the costs award, and remand for further
proceedings consistent with this opinion.
                      ______________________________

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