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Fresh Results, LLC v. ASF Holland, B.V.

United States District Court, S.D. Florida

January 8, 2020


          Valle, Judge



         THIS CAUSE is before the Court upon Defendant ASF Holland, B.V.'s (“ASF” or “Defendant”) Motion to Dismiss Count II of Fresh Results, LLC's Third Amended Complaint, ECF No. [94] (“Motion”). Plaintiff Fresh Results, LLC (“Fresh Results” or “Plaintiff”) filed a response, ECF No. [103] (“Response”), to which ASF filed a reply, ECF No. [108] (“Reply”). The Court has carefully considered the Motion, Response and Reply, the record in this case and the applicable law, and is otherwise fully advised. For the reasons that follow, the Motion is denied.

         I. BACKGROUND

         The facts in this case remain essentially unchanged.[1] According to the Third Amended Complaint (“TAC”), Fresh Results is engaged in the business of buying and selling wholesale quantities of produce in interstate and foreign commerce. ECF No. [92] ¶ 5. Plaintiff maintains direct business relationships with growers and producers of produce, who seek to market and sell their produce in interstate and foreign commerce. Id. ¶ 6. Plaintiff had business relationships with several growers located in South America at the time period relevant to this case. Id. ¶ 7. As part of its agreement with the growers, Plaintiff was hired to identify prospective consignees/wholesalers, negotiate and enter into consignment transactions with wholesaler/consignees, provide administrative support including arranging for overnight airfreight shipments, manage relationships with consignees, and receive and process payments from consignees. Id. ¶ 9.

         ASF is a wholesaler located in Holland to which the berries at issue in this case were consigned. Id. ¶ 12. According to the TAC, Fresh Results and ASF entered into a contractual relationship through which Fresh Results arranged for numerous bulk shipments of berries sourced from the growers in South America to ASF in Holland. Id. ¶¶ 22-23. As the shipments were sent on a consignment basis, ASF would take custody and control of the shipments upon arrival in Holland, and was obligated to undertake efforts to sell the berries to its customers in Europe. Id. ¶ 24. Out of the payments received from its customers, ASF could deduct costs for inspecting, sorting and re-packing the berries, and to take an eight percent (8%) commission. Id. ¶ 25. ASF then remitted payment of the net proceeds of sales to Fresh Results. Id.

         The relationship between Fresh Results and ASF lasted for two berry seasons in 2015 and 2016. Id. ¶ 27. The first season proceeded successfully, so Fresh Results continued its relationship with ASF for the second season. Id. ¶ 42. During the second season, Fresh Results consigned berries in twenty-two (22) bulk shipments to ASF between October 8, 2016 and November 8, 2016. Id. ¶ 29. Prior to a shipment, ASF provided Fresh Results with a reference price which represented the anticipated net returns less ASF's commission and costs for each shipment that would be paid to Fresh Results after ASF's sales to one or more of its customers. Id. ¶ 30. Based upon the reference price and ASF's ability to timely process and sell the requested volume of berries, Fresh Results would decide in consultation with the growers whether to make arrangements for the harvesting and shipment of the requested volume of berries to ASF. Id. ¶ 32. Fresh Results alleges further that ASF knew that Fresh Results relied upon the reference prices in order to decide whether to make a shipment of berries to ASF. Id. ¶ 33.

         Upon arrival of the berries in Holland, it was ASF's responsibility to break bulk, inspect the berries, and prepare quality control (“QC”) reports and send the QC reports to Fresh Results. Id. ¶ 35. ASF also was responsible for sorting and re-packing the berries to its customers' specifications, issuing pack reports, and sending the pack reports to Fresh Results. Id. ¶ 36. The QC inspections were to take place within one or two days after the arrival of shipments, and the sorting, re-packing and delivery to ASF's customers should have occurred within four days of arrival. Id. ¶ 38. In reliance on the reference prices, QC reports and pack reports, Fresh Results generated final invoices for each shipment of berries, and upon payment by ASF of the net returns, Fresh Results would pay the growers. Id. ¶¶ 39-41.

         According to the TAC, prior to the second berry season, Ron Jongbloed, a managing executive for ASF, assured Fresh Results that ASF could handle any volume of shipments and encouraged Fresh Results to consign all of its berries to ASF. Id. ¶¶ 14, 43. The first seven bulk shipments appeared to go smoothly. Id. ¶ 44. However, by the time of the seventh shipment, ASF became aware that the market had changed, and that it would not be able to market or sell berries for the prices it had been receiving. Id. ¶ 46. Fresh Results alleges that even so, ASF continued to request shipments from Fresh Results, and induced Fresh Results to continue shipments by giving reference prices that ASF knew were false and were far in excess of what ASF would be able to realize. Id. Based on ASF's misrepresentations, Fresh Results arranged for an additional fifteen (15) bulk shipments, which ASF reported eventually selling for only a fraction of the represented reference price. Id. ¶ 47. According to Fresh Results, ASF continued making misrepresentations about reference prices and inducing Fresh Results to make more shipments to increase revenues in the face of a declining market. Id. ¶ 61. As a result of ASF's actions, Fresh Results estimates that it has incurred damages of at least $798, 500.00.

         In the TAC, Fresh Results asserts claims for breach of contract (Count 1), fraudulent inducement (Count 2), and tortious interference with business relationship (Count 3) against ASF. In the Motion, ASF seeks dismissal of Fresh Results' claim for fraudulent inducement.


         Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). “Rule 9(b) is satisfied if the complaint sets forth ‘(1) precisely what statements were made in what documents or oral representations or what omissions were made, and (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of fraud.'” Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (quoting Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir. 1997)). “The particularity rule serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior.” United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1359 (11th Cir. 2006) (quoting Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988)) (internal quotations omitted).

         To state a claim for fraud in the inducement under Florida law, a party must allege a “(1) misrepresentation of a material fact, (2) by someone who knew or should have known of the statement's falsity, (3) with intent that the representation would induce another to rely and act on it, and (4) injury suffered in justifiable reliance on the representation.” Florida Evergreen Foliage v. E.I. Dupont Nemours & Co., 336 F.Supp.2d 1239, 1284 (S.D. Fla. 2004). “Fraud in the inducement presents a special situation where parties to a contract appear to negotiate freely . . . but where in fact the ability of one party to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior.” HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238, 1240 (Fla.1996) (citation omitted). Through this lens, the Court considers the Motion.

         III. ...

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