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Filing # 28450632 E-Filed 06/12/2015 04:47:30 PM
IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT
OF THE STATE OF FLORIDA, IN AND FOR BROWARD COUNTY
CIVIL DIVISION
EVERGREEN SWEETENERS
INC., a Florida corporation,
Plaintiff,
vs. CASE NO.: 14-CA-010427
CUSTOM BEVERAGE CONCEPTS,
INC., a foreign corporation,
Defendant.
CUSTOME BEVERAGE CONCEPTS MEMORANDUM OF LAW IN SUPPORT OF
MOTION TO COMPEL PRODUCTION OF DOCUMENTS
Defendant, CUSTOM BEVERAGE CONCEPTS, by and through its undersigned
attorney, files this its Memorandum of Law In Support of the Motion to Compel Production of
Documents which is currently set for hearing on Tuesday, June 16, 2015 and states:
CASE BACKGROUND
Evergreen Sweeteners, Inc. (hereinafter, “Evergreen”) filed a lawsuit against Custom
Beverage Concepts, Inc. (hereinafter, “CBC”) for breach of contract on three separate contracts
for the purchase of white refined sugar from Evergreen. The complaint seeks damages under
Section 672.708, Florida Statutes, which provides two avenues of recovery. One avenue
provides for recovery of the difference between the contract price and the market price at time
and place of delivery, less expenses saved in consequence of the breach. The second avenue
provides for the recovery of the seller’s profit had full performance of the contract occurred,
along with incidental damages. While Evergreen would like to seek damages under the first
avenue, it is unclear to the Defendants if the first avenue is the appropriate avenue to place
Evergreen in the same position it would have been in had the contract been fully performed.
Accordingly, CBC has requested discovery that would shed light on the matter which has been
*** FILED: BROWARD COUNTY, FL HOWARD FORMAN, CLERK 6/12/2015 4:47:30 PM.****objected to by Evergreen.
THE MOTION TO COMPEL
CBC has requested information in order to ascertain whether or not EVERGREEN
purchased any sugar in furtherance of its contracts with CBC, the amount of sugar purchased (if
any) in furtherance of the contracts with CBC, what expenses were incurred or avoided as a
consequence of the breach, and if Evergreen resold any of the sugar it acquired in furtherance of
the contracts with CBC. Additionally, CBC has requested the purchase price of any sugar
acquired in order to determine what Evergreen stood to profit from its contracts with CBC.
Evergreen has objected to any discovery regarding the acquisition of sugar purchased in
furtherance of the CBC contract and with regard to any sale of sugar acquired for that purpose.
CBC has provided some invoices for sugar sold during the contract years, but there is nothing to
indicate that the sugar sold was sugar purchased in furtherance of the contracts with CBC, or was
sugar subject to a different Evergreen supply agreement.
The discovery requests are all relevant to the defenses asserted by CBC in its answer.
Specifically the 5"" (failure to mitigate), 7" (Plaintiffs have failed to incur damages...as no
products were purchased, processed or delivered by Plaintiff for the damages alleged), and 14"
(Should the Court ward the damages requested by Plaintiff, Plaintiff shall be unjustly enriched as
no products were purchased, processed, or delivered by Plaintiff for the damages alleges and any
award would be a windfall to Plaintiff) affirmative defenses directly relate to the discovery
requests. “A party may obtain discovery regarding any matter, not privileged, that is relevant to
the subject matter of the pending action, whether it relates to the claim or defense of the party
seeking discovery or the claim or defense of any other party.” Nucci v Target Corp. 2015 WL
71726 (4" DCA 2015) citing Fla. R. Civ. P. 1.280(b)(1).
Evergreen has argued in its Response to Motion to Compel and in conversation withcounsel that the requests regarding Evergreen’s acquisition of sugar, purchase price for sugar and
subsequent sale of sugar acquired in furtherance of the CBC contracts is inconsequential and
irrelevant to this dispute as a result of Evergreen’s selection of the most favorable remedy under
Section 672.708, Florida Statutes. Even the damages sought by Evergreen state that the award of
the difference between contract price and market price would be less expenses saved in
consequence of the buyer’s breach. All of the discovery requests made may uncover
admissible evidence with regard to these expenses which could significantly reduce the damages
in this matter. Additionally, CBC does not believe that Evergreen’s reliance on subsection (1) of
Section 672.708 is the proper method of damages and that Evergreen should be required to seek
damages under subsection (2), as subsection (1) damages would create a windfall for the
Plaintiffs. Evergreen is seeking damages under subsection (1), which calculates damages by
using the difference in contract price and the market price at time of delivery because the bottom
fell out of the sugar market during the time of the contracts at issue. In Nobs Chemical, USA,
Inc. v. Koppers Co., Inc., the court examined a similar claim involving the same language from
the UCC utilized in Section 672.708 with regard to the application of damages under subsection
(1) or (2). 616 F.2d 212 (5" Cir. 1980). In Koppers, the plaintiff sought the measure of damages
in subsection (1), because the price of the commodity (cumene) had dropped significantly at the
time of the breach and Defendants believed the proper measure of damages was subsection (2)
because subsection (1) would greatly overcompensate the seller. The Court states:
“Because there does not appear to be any law directly on point, we take the liberty
of looking to those more learned on the subject of the Uniform Commercial Code.
Professors White and Summers, recognizing that § 2.708(b) is not the most lucid
or best-drafted of the sales article section, decided that the drafters of the Uniform
Commercial Code intended subsection (b) to apply to certain sellers whose losses
would rarely be compensated by the subsection (a) market price-contract price
measure of damages, and for these sellers the lost profit formula was added in
subsection (b). One such type of seller is a “jobber,” who, according to the
treatise writers, must satisfy two conditions: “first, he is a seller who never
acquires the contract goods. Second, his decision not to acquire those goods after
learning of the breach was not commercially unreasonable...”(Internal citations omitted).
The Fifth Circuit upheld the district court’s application of subsection (b) (subsection (2) under
Florida law) damages over the objection of the Plaintiff The court states, “Had the transaction
been completed, their ‘*benefit of the bargain’” would not have been affected by the fall in
market price, and they would not have experienced the windfall they would otherwise receive if
the market price-contract price rule contained in § 2.708(a) is followed.” /d. at 215. Just as in the
current dispute, Evergreen is a “jobber” who does not refine the sugar it sells, but purchases the
sugar from another supplier or refinery. Whether or not Evergreen acquired the sugar to fulfill
its contracts with CBC and the price it paid for the sugar is directly at issue in this dispute, and is
clearly subject to discovery.
CONCLUSION
CBC’s discovery requests are directly related to the damages claimed by Evergreen in
this case and the determination of the proper application of the damages statute. Further the
discovery requests are related to the expenses saved by Evergreen in consequence of the alleged
breach under the subsection (1) damages claimed by Evergreen. Finally, the discovery requests
are directly related to the affirmative defenses plead by CBC. Evergreen has failed to provide
any reasons other than a failed relevancy argument for not producing the requested documents
and should be compelled to do so, based on the broad scope of discovery under Florida’s Rules
of Civil Procedure, along with an award of attorney’s fees and costs for the time incurred by
counsel in the preparing and arguing the motion and this memorandum in accordance with Fl. R.
Civ. P. 1.380.
HOLCOMB & LEUNG, P.A.
3203 W. Cypress St.
Tampa, Florida 33607
(813) 258-5835
(813) 258-5124 - FacsimileBy: /s/ Brian A. Leung
BRIAN A. LEUNG
Florida Bar #14510
BrianLeung@holcomblaw.com
Secondary email:
michelle@holcomblaw.com
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by
electronic mail to Kenneth J. Joyce at Ken.Joyce@lewisbrisbois.com,
Michael. Platner@lewisbrisbois.com, Stacy.Schwartz@lewisbrisbois.com,
ftlemaildesig@I!bslaw.com, whose address is 200 SW 1‘ Avenue, Suite 910, Fort Lauderdale,
FL 33301 and Christos Lagos, Esq., at info@attainjustice.com and file@attainjustice.com whose
address is Lagos & Priovolos PLLC, 66 W. Flagler St., Suite 1000, Miami, FL 33130 this
_12 day of June, 2015.
/s/ Brian A. Leung
Brian A. Leung