Martini E Ricci Iamino S.P.A. v. Trinity Fruit Sales Co.

• Citation: 30 F.Supp.3d 954
• Decision Date: 02 July 2014
• Docket Number: Case No. 1:13–CV–276 AWI SAB.
• Court: U.S. District Court — Eastern District of California
• Parties: MARTINI E RICCI IAMINO S.P.A. —CONSORTILE SOCIETA AGRICOLA, an Italian Company, Plaintiff v. TRINITY FRUIT SALES COMPANY, INC., A California Corporation, and Does 1–20, Defendant.

30 F.Supp.3d 954

MARTINI E RICCI IAMINO S.P.A. —CONSORTILE SOCIETA AGRICOLA, an Italian Company, Plaintiff

v.TRINITY FRUIT SALES COMPANY, INC., A California Corporation, and Does 1–20, Defendant.

Case No. 1:13–CV–276 AWI SAB.

United States District Court, E.D. California.

Signed July 2, 2014.

A. Geoffrey Hutchinson, David L. Strong, John R. Campo, Branson Brinkop Griffith and Strong, Redwood City, CA, for Plaintiff.

Lawrence H. Meuers, Steven E. Nurenberg, PHV, Meuers Law Firm, P.L., Naples, FL, for Defendant.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

ANTHONY W. ISHII, Senior District Judge.

This case stems from the provision of kiwi fruit from Plaintiff Martini E Ricci Iamno S.P.A. (“M & R”) to Trinity Fruit Sales Company, Inc. (“Trinity”). The active complaint is the First Amended Complaint (“FAC”). M & R alleges five causes of action against Trinity in the FAC: (1) breach of contract under the United Nations Convention for the International Sale of Goods (“CISG”);¹ (2) breach of written contract; (3) price of goods; (4) account stated; and (5) open book account. M & R now moves for summary judgment, and Trinity through its opposition counter moves for summary judgment. For the reasons that follow, M & R's motion will be denied and Trinity's counter motion will be granted in part and denied in part. Additionally, the Court will give the parties the opportunity to file a request for a second summary judgment motion.

FACTUAL BACKGROUND

M & R is an Italian company that grows kiwi fruit on its property in Italy. See PUMF 1² Andrea Martini (“Martini”) is the Vice President of M & R. PUMF 2. Gary Raden (“Raden”) and Stefano De Nadai (“De Nadai”) worked together and were something between an agent and broker for M & R. See Raden Depo. 8:15–10:10, 66:11–66:18. Raden explained that they solicit the product from producers/suppliers and negotiate the sales with the receivers. See id. at 8:15–20, 9:21–10:10. Raden is located in the United States, and De Nadai is located in Italy. See id. at 7:8–8:2, 9:21–10:4. Raden and De Nadai were involved in the solicitation of fruit from M & R for the transaction with Trinity. See id. at 10:2–10:19. Martini worked with De Nadai on a regular basis, and De Nadai was aware of the general terms under which M & R sold kiwis, including the prices M & R expected for various sizes and quantities. PUMF 4. Martini has characterized Raden and De Nadai as independent sales people who are not employees of M & R. See Martini Dec. ¶ 3. M & R paid Raden and De Nadai fees of 3% for their services, but Trinity paid Raden and De Nadai nothing. See Raden Depo. 66:20–67:1. Raden would typically negotiate with Trinity, pass the order information on to De Nadai, and De Nadai would transmit the order to M & R by e-mail. PUMF 7. De Nadai's e-mail orders were copied to Raden, who would confirm that the e-mail reflect the agreement struck with Trinity. See PUMF 8.

In 2007, De Nadai contacted Trinity about marketing and selling M & R's kiwis to the open market on an open consignment basis. See White Dec. ¶ 4. Trinity and M & R reached an oral agreement for the marketing and sale of M & R's 2007 kiwi crop on an open consignment basis. See id. at ¶ 5. In two e-mails dated November 15, 2007 and November 16, 2007, De Nadai confirmed that M & R would supply kiwis on an open consignment basis for the open market. See id.; Trinity Ex. B at Bates Nos. 000086, 000088. Trinity marketed and sold M & R's 2007 kiwis on an open consignment basis, transmitted accountings and the net proceeds of the sales to M & R, and M & R accepted the accountings and net proceeds without objection. See White Dec. ¶ 6.

In late 2008, De Nadai and Raden contacted Trinity regarding the option to market and sell M & R's 2008–2009 kiwi crop.See id. at ¶ 7. Trinity agreed to conduct business with M & R regarding the 2008–2009 crop. See Martini Dec. ¶ 4; White Dec. ¶ 8. Martini characterizes the relationship as M & R selling kiwis to Trinity, while Trinity's President, David White, declares that Trinity agreed to market and sell Martini's kiwis on an open consignment basis, just as in 2007. See id. Generally, there were two types of kiwi shipments involved between M & R and Trinity regarding M & R's 2008–2009 kiwi crop. See Martini Dec. ¶ 4; White Dec. ¶ 9. The first type involved 14 kg. boxes that were to be sold to Trinity's customers Costco and Sam's Club at fixed prices. See id.; PUMF 11. Raden confirmed that the 14 kg. boxes were fixed price loads for sale to Costco or Sam's Club, with the price per box indicated on the confirming order e-mail. PUMF 11. M & R provided 4 loads of the 14 kg. boxes. See White Dec. ¶ 4. The second type involved consignments of 9 kg. boxes of kiwis to be sold on the general market. See Martini Dec. ¶ 4; White Dec. ¶ 9. Raden also testified that all of the 9 kg. boxes were consignment deliveries for sale on the open market, as indicated on the e-mail orders sent from De Nadai to Martini. PUMF 2. M & R provided 5 containers of 9 kg. boxes. See id. At no time did M & R sell kiwis directly to Trinity, nor did Trinity ever agree to purchase kiwis from M & R. See White Dec. ¶ 13. Trinity did not purchase the 14 kg. boxes from M & R and resell them to Costco, rather Trinity handled the 14 kg. boxes on consignment and took a commission for the sale of the 14 kg. boxes to Costco. See id. at ¶ 12.

Martini declares that there was a minimum price expectation for the 9 kg. boxes. See Martini Dec. ¶ 4. Martini declares that the minimum agreed price was memorialized in e-mails between De Nadai and M & R. See id. White declares, however, that there were no fixed or minimum prices for the 9 kg. boxes. See White Dec. ¶ 9. Raden testified that he did not recall whether any minimum price was established for the 9 kg. consignment loads, but that a seller in Trinity's position has an obligation to achieve the best possible market price. PUMF 14. However, Raden also testified that the price per box which appears on the 9 kg. box consignment orders was a “theoretical price.” PUMF 13. Similarly, after acknowledging that the 9 kg. boxes were on consignment, Raden testified that the term “consignment” meant to him that the receiver sells the product at the best price it can get, deducts its costs, and returns the net amount that is left after deductions to the shipper. See Raden Depo. 76:7–25. Raden testified that M & R's invoice amounts (found in the third column of the invoices) were of “no moment” because Trinity did not agree to buy the fruit at an agreed price. See id. at 77:7–78:11.

On December 30, 2008, Trinity (through Maria Alaniz (“Alaniz”)) sent an e-mail to Raden objecting to the prices listed on the pro forma invoices and stating that the pricing was in excess of the real market in the United States. See White Dec. ¶ 14; Trinity Ex. B at Bates No. 000065. On the same day, and in apparent response to Trinity's e-mail, De Nadai stated in part that as to 42' and 45' kiwis, “as I told you by phone, not any price is low enough, cause there is a stock of these sizes, so we can discuss an espected [sic] return wk by wk.” Trinity Ex. B at Bates No. 000064. De Nadai also stated in part, “I do not see major problems for landed and traveling centers for General Market, as returns will be on line with all other receivers, regardless of how low they will be.... All the deal you can find on the market by now will significantly decrease or disappear in 2–3 wks ... so I can try to get maximum support to you on current January shipments, but no guarantee and no fixed prices from now up to the end of the season, it is not reasonable and then I will not push for it, it wouldn't succeed.” Id. Also, on January 2, 2009, Raden sent an e-mail to Trinity that purports to confirm a conversation with Trinity. See Trinity Ex. B at Bates No. 0098. Under a heading called “East and West Coast General Market Loads,” Raden wrote, “These loads will be on open consignment to Trinity. It is agreed that the Trinity margin will be 8%.” Id.

On January 5, 9, 14, 20, and 28, eight containers of kiwi were received by Trinity in either California or New Jersey.³ See White Dec. ¶ 10. The 9 kg. containers each had corresponding pro forma invoices. See Martini Dec. ¶ ¶ 10, 11, 14, 15, 18, 19, 22, 23, 26, 27. Martini declares that each of the pro forma invoices include a price per box, which is the alleged minimum price agreed per box. See id. at ¶ 11, 15, 19, 23, 27. Of the shipments of M & R kiwis that were inspected by the USDA, all but one received a grade of Number 1. See PUF 32.⁴ Only one container (Order No. 12) failed USDA inspection, which had average defects of 9%. See PUF 34. However, each of the USDA reports did indicate some degree of decay. See Trinity Ex. B at Bates Nos. 000073–000080. Additionally, on February 16, 2009, and February 20, 2009, Trinity sent e-mails to Raden and De Nadai regarding severe damage to Order No. 30. See Trinity Ex. B at Bates Nos. 000106–000114. On February 20, 2009, Trinity sent another e-mail to Raden and De Nadai that M & R's kiwis were not holding up well in storage, and that Trinity had been telling De Nadai and Raden this “from the beginning.” See id. at Bates No. 000116.

Trinity marketed and sold the kiwis, accounted to M & R for its handling of all loads, and submitted the net returns to M & R, which were accepted by M & R. See White Dec. ¶ 19. However, Martini was concerned over the returns that Trinity was paying M & R for the kiwis because Martini believed that the returns were far below what they should have been, given the price of kiwis at the time. See Martini Dec. ¶ 41. The market prices for kiwis at Los Angeles for January 2009 appear to be higher than M & R's alleged minimum prices for the 9 kg. containers.⁵ See PUF 16. Martini reviewed liquidation reports, but did not believe that the liquidation reports explained what he believed to be the low returns. See Martini Dec. ¶ 41. In some instances, there were up to 3 liquidation...