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Pre-trial motions denied in Bluegrass seed suit

Motions for partial summary judgments were denied Monday morning in superior court to close three hours of hearings by the attorneys involved. The hearings again followed a flurry of court filings related to what parts of the case can be presented to the jury at a trial.

The court schedule now calls for a four-week trial on the suit to begin Oct. 15.

Growers of bluegrass in the Tekoa and Tensed area seek damages from Seeds, Inc., Tekoa, and the Scotts Company for alleged failure by Scotts to make payments after bluegrass seed was delivered after harvest from 2008 to 2010.

Results of Monday’s hearing will allow attorneys for the growers to continue to sue for damages under the Consumer Protection Act. Also, declarations made by six farmers and compilations of the alleged damage impact to Seed, Inc., can be presented at the trial.

Result of a third decision left award of damages from a prior decision, presented to the court at $1,489,545, in limbo until either the jury weighs out the evidence or the suit is settled before trial.

Tim Esser, attorney for Seeds, had filed the motion for the sum as the amount due the seed processor as the result of a previous court decision which said Scotts is responsible for payments under an 18-percent penalty clause in the seed contracts. The sum was placed in the agreement between Seeds and Scotts as a penalty clause in the event Scott failed to adhere to a payment schedule.

Esser Monday told the court he had filed the request as a means of clearing that part of the dispute off the books. The request relates to an earlier summary judgment decision which said Scotts failed to meet the contracted payment schedule when it refused to make a first of three payments for 2010 harvest deliveries.

Esser based the request on the payments which were eventually made by Scotts for the 2010 crop. Esser argued the payment total, less than the 18 percent penalty, was on the books and the seed had been processed.

Scotts attorney Matthew Turetsky contended Scotts should be allowed an offset on the sum due under the company’s contention it had been “wrongfully charged” for seed grown outside of the contract which had been “stuffed” into the billing.

Turetsky before the hearing filed a declaration from Jeff Dieleman, a partner in the Moss Adams accounting firm which was hired by Scotts to audit the accounts. Dieleman’s declaration contends Scotts was wrongfully charged $4,694,188 for bluegrass seed which was not on the contracts over the three year span.

Judge Frazier ruled the parties will have to await a determination by the jury before making an award of sum due. He pointed out Scotts and Seeds could resolve the sum due dispute before the trial and reduce the potential load which could be faced by jurors.

Esser had also filed notice of intent to seek more than $2 million said due from the court’s prior decision that Scotts was responsible for a 20-cent-per-pound bonus on contracts for 2009 and 2010. That motion included a declaration from Douglas Schroeder, Seeds general manager, that bonus sums due for 2009 crop totaled $1,015,179 and for 2010 totaled $1,077,638. Scotts paid bonus money for the 2008 crop but declined to make the payments in the subsequent two years when the markets for bluegrass seed dropped with the real estate market plunge.

Turetsky since filed notice with the court of intent to seek discretionary review of the bonus pay decision with the Division III Court of Appeals.

In another decision Monday, Judge Frazier denied a motion by Turetsky to remove declarations made by growers and a compilation made by Seeds CEO Terry Peters on losses sustained as the result of Scotts alleged failure to meet payment terms for harvested crops. The growers’ declaration said they decided to quit or cutback on contracting for bluegrass production as the result of Scotts non-payment.

Esser during the argument on that point said an agent for the Coeur d’Alene tribe told growers the tribe would not commit tribal lands for grass production as long as Seeds was dealing with Scotts.

Peters’ declaration listed company production records which he said showed a drop of more than 10,000 acres contracted by Seeds to 16,106 compared to a 10-year average. The declarations said the loss in production pounds worked out to more than $1.29 million in production losses.

Turetsky Monday argued the declaration by the growers and records submitted by Peters contained hearsay statements and lacked merit.

Judge Frazier determined the declarations could remain on the record for possible presentation to the jury. He noted citations of Peters long record in crop processing and production made him qualified to comment on what the impact carried for Seeds.

Turetsky pointed out Peters during a deposition attributed possibly 50 percent of the decline to the Scotts dispute. He also noted the crash of the real estate market was not mentioned as a possible factor.

The growers declaration and Peters’ report are part of a move by Esser and the growers to seek damages under the Consumer Protection Act. Richard Kuhling, who represents the growers, plaintiffs in the suit, contended the record in the case shows Scotts executives intended early on to not honor the production contracts if the demand for bluegrass plunged.

Turetsky Monday again asked the court to stop any damage claims brought under the Consumer Protection Act. Judge Frazier a year ago rejected Turetsky’s first motion to stop the CPA damage claims.

Turetsky’s motion this time was based on a doctrine which applies first amendment prohibitions in civil cases. Judge Frazier Monday stuck with his original decision to allow the CPA damage claims to be presented to the jury. He said he believed the doctrine cited by Turetsky, known as Noerr-Penington, applied to a narrow set of circumstances which didn’t apply in the bluegrass suit.

 

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