Facts

In August 2007, plaintiff Primex Farms, LLC brought suit against defendant Chaparral Farms Inc. (a farming corporation with 910 acres of pistachio trees located in Lost Hills) when Chaparral failed to deliver its pistachios under its three-year agreement with pistachio processor Primex. Chaparral's authorized California agent and farm manager, Bill Klepper, signed the three-year Primex agreement in November 2006 in Fresno.

In 2007, the drought impacted the availability of water for farmers throughout the State. In addition to the drought, legal issues impacting the pumping of water from the Delta caused the state water project allocation of irrigation water to diminish considerably.

Paramount Farms Inc., a competing pistachio processing plant with large water storage in Kern County, sent a representative to Graz, Austria to negotiate with Chaparral Farms Inc., unbeknownst to Klepper.

In July 2007, before the 2007 pistachio harvest began, a three-year contract with Paramount was signed by Chaparral despite the fact that two years still remained under the Primex contract. Instead of delivering the pistachios to Primex, as required by the Primex contract, in both 2007 and 2008, Chaparral delivered its 5.5 million pounds of pistachios to Paramount Farms.

During the drought, and after Chaparral signed the contract with Paramount, Paramount sold 1400 acre feet of water (approximately 456,192,000 gallons of water) to Chaparral for use on its pistachio trees in Lost Hills. Chaparral denied the reason it switched processors was because of water and insists it was because of the prices offered by Paramount. In fact, had Chaparral sent its pistachios to Primex for 2007 and 2008, it would have realized approximately $480,000 more than what Paramount paid for the crops in those two years.

Chaparral filed lawsuits against Klepper Ag Services in July 2009 and against Primex in March 2010.

DEFENDANT'S CONTENTIONS:
Chaparral claimed that Klepper (now deceased), did not have authority to enter into the three-year contract with Primex and that water had nothing to do with the decision to switch pistachio processors.

Result

The jury returned a unanimous verdict in the amount of $3,460,043 against Chaparral Farms Inc. and its principal, M.T. Aleghbandian, and for Primex Farms LLC. The jury found unanimously (12-0) that Bill Klepper was the authorized agent of Chapparal and was authorized to sign the three-year contract. The jury found unanimously (12-0) against Chaparral on its cross-complaints and in favor of Klepper Ag Services and Primex Farms, LLC.

Deliberation

three hours

Poll

12-0