Columbia AG Group, LLC v. International Farming Corporation, LLC

District Court, E.D. Washington·Decided June 4, 2020·No. 1:18-cv-03235·Unknown

Opinion

FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON Jun 04, 2020 SEAN F. MCAVOY, CLERK

EASTERN DISTRICT OF WASHINGTON

COLUMBIA AG GROUP, LLC, a Delaware limited liability company; NO: 1:18-CV-3235-RMP and JAY GRAHAM, an individual, ORDER DENYING PLAINTIFFS’ Plaintiffs, MOTION FOR SUMMARY JUDGMENT v.

CORPORATION, LLC, a Delaware limited liability company,

Defendant.

BEFORE THE COURT is a Motion for Summary Judgment brought by Plaintiffs Columbia Ag Group, LLC (“CAG”) and Jay Graham’s (collectively, “Plaintiffs”). ECF No. 24. Defendant International Farming Corporation, LLC (“IFC”) opposes the motion. ECF No. 31. Having reviewed the parties’ filings related to the Motion for Summary Judgment, the remaining record, and the relevant law, the Court is fully informed. Factual Context The following facts are undisputed unless otherwise noted. Graham is a Real Estate Managing Broker for CAG, a real estate firm based in

Port Ludlow, Washington. ECF No. 25 at 2−3. IFC is a private investment manager based in Kinston, North Carolina, focusing on agribusiness assets. ECF Nos. 25-8 at 4; 26 at 2; and 36 at 2. In approximately May 2017, Graham called

IFC’s Pacific Northwest Sourcing Manager Toby McKay and, as recalled by McKay, told McKay that Graham “knew about two possible purchase and sale opportunities that he thought IFC would be interested in pursuing.” ECF No. 32 at 2−3. At the time, Graham referred to the opportunities using the code names

“Project Victory” and “Project Fuji” to maintain their confidentiality. Id. at 3. That summer, IFC and CAG executed nondisclosure agreements to discuss in limited detail and without identification of the businesses offered for sale in either project,

the purchase opportunities. Id. Also throughout summer 2017, McKay, on behalf of IFC, negotiated with Graham the terms of a brokerage contract. McKay recalls:

Graham led me to believe that he and his firm would be working directly with the sellers and providing to IFC exclusive information that would not be available to anyone else to facilitate a purchase that would not be made available to other prospective buyers, meaning that the purchase would be “off market.” Because of these assurances, IFC agreed to include a commission provision in the contract between the parties. ECF No. 32 at 4. On approximately September 9, 2017, IFC, CAG, and Graham partially executed a “Buyer Agency Agreement” (the “Agreement”). ECF No. 25-1. Pursuant to the Agreement, IFC engaged CAG and Graham to act as its broker to

purchase “property or business” of the following general nature: “[a]ny Washington State apple packing facility” priced between $20,000,000 and $150,000,000. ECF No. 25-1 at 4. The Agreement was finalized when CAG signed “Exhibit A” of the

Agreement, which identified specific assets subject to the Agreement on September 11, 2017, and IFC added its signature on September 22, 2017. ECF Nos. 32 at 6−7; 33 at 2; and 36 at 2. In the Agreement, IFC agrees to pay “a commission equal to three quarters of

one percent (0.75%) of the purchase price of applicable business or property up to $75 Million and one-half of one percent (0.5%) of the purchase price of such applicable business or property if the applicable purchase price is greater than $75

million.” ECF No. 25-1 at 2−3. The Agreement further provides that the “businesses and properties covered by this Agreement shall be the applicable properties or businesses purchased by [IFC] through the exclusive information

provided by and efforts of [Graham] for a business or property is [sic] listed in Exhibit A attached hereto and incorporated herein by reference.” Id. at 3. The Agreement does not define “exclusive information.” ECF No. 25-1. Furthermore, although the information provided by Graham is to be “exclusive,” the Agreement provides: [IFC] and all other applicable parties hereto agree and confirm that the relationship established by this Agreement is non-exclusive: [IFC] may use other brokers or third parties to locate property and to act as a broker or representative of [IFC]; and [Graham] and other brokers referenced hereunder may represent other buyers and/or sellers.

Id. at 3. The Agreement defines the “Assistance” that Graham and CAG were to provide: “Graham and [CAG] shall advise [IFC] from time to time of properties and businesses that [Graham and CAG] can legally provide to [IFC] (respecting any confidentiality agreements executed by [CAG] or Graham), and counsel [IFC] on potential properties or businesses that might become available for purchase.” ECF No. 25-1 at 3. The Agreement provides that it began on September 1, 2017, and that it

expired “at 11:59 p.m. on August 31, 2018.” ECF No. 25-1 at 2. Any commission becomes due and payable “at the time of the applicable closing and only if the applicable property or business is purchased by [IFC].” ECF No. 25-1 at 3. The

commission is the only compensation from IFC to CAG and Graham provided for by the Agreement. Id. at 2 (“In consideration of the services to be rendered by [CAG], [IFC] agrees to pay [CAG] the Commission amount, as applicable, as checked below.”). A previous draft of the agreement from approximately July 2017 provided a different definition of when the commission becomes payable: This commission shall be payable if [IFC] shall, during the term of this Agreement or within eighteen months after the Expiration Date or earlier termination, enter into a written purchase, option to purchase, or lease agreement for a property that [IFC] learned about during the term of this Agreement, regardless of whether [IFC] learned of the same through the efforts of [Graham], a third party, or through [IFC’s] own efforts.

ECF No. 32-1 at 6. In that unexecuted version of buyer agency agreement, the parties’ agreement began on July 24, 2017, and expired on December 31, 2017. ECF No. 32-1 at 5. On September 11, 2017, when CAG transmitted Exhibit A to IFC, CAG granted IFC “initial access to a relatively small set of data files for Project Victory.” ECF No. 32 at 6. McKay recalled: Based on Mr. Graham’s statements, I understood that CAG had received these data files from the Verbrugge and Larson families, two of the sellers, and that CAG had not compiled this information. The information provided in these data files was general in nature and included descriptions of the properties, spreadsheets showing how many acres of which fruit each orchard had, and other general business information. The information in these initial data files generally described the businesses, but it was insufficient for IFC to evaluate and analyze the suitability of [sic] feasibility of purchasing the assets, and IFC did not form a position based on these files. IFC did not rely on the information contained in these initial data files provided for Project Victory page [sic] in making the ultimate decision regarding purchase of the assets.

ECF No. 32 at 6. Once IFC executed Exhibit A on September 22, 2017, CAG transmitted a “Confidential Information Memorandum” (“CIM”) to McKay later that day. ECF No. 32 at 7; see also ECF Nos. 33 at 4; 36 at 3. The CIM was prepared by Moss Adams Capital (“Moss Adams”) and analyzed the assets comprising Project Victory,

but which the CIM renamed “Project Crisp.” ECF Nos. 32 at 7; 36 at 3. The CIM identified the three assets for sale, the same assets that had been identified as Project Victory. ECF Nos. 25-4 at 9; 32 at 7. The CIM provided that the sellers had

approved the CIM and that the memorandum was “intended to assist investors in determining their interest in pursuing a potential [t]ransaction” with the sellers. Id. McKay recounts that he immediately called Graham after reading the CIM and conveyed that he was “surprised and disappointed” to learn that Moss Adams

Free access — add to your briefcase to read the full text and ask questions with AI

Columbia AG Group, LLC v. International Farming Corporation, LLC, (E.D. Wash. 2020).

Columbia AG Group, LLC v. International Farming Corporation, LLC (Columbia AG Group, LLC v. International Farming Corporation, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Stender v. Twin City Foods, Inc.
510 P.2d 221 (Washington Supreme Court, 1973)
Thayer v. Damiano
511 P.2d 84 (Court of Appeals of Washington, 1973)
Federal Trade Commission v. Stefanchik
559 F.3d 924 (Ninth Circuit, 2009)
Berg v. Hudesman
801 P.2d 222 (Washington Supreme Court, 1990)
Willis v. Champlain Cable Corp.
748 P.2d 621 (Washington Supreme Court, 1988)
PROFESSIONALS 100 v. Prestige Realty, Inc.
911 P.2d 1358 (Court of Appeals of Washington, 1996)
Tanner Electric Cooperative v. Puget Sound Power & Light
911 P.2d 1301 (Washington Supreme Court, 1996)
Washington Professional Real Estate, LLC v. Young
260 P.3d 991 (Court of Appeals of Washington, 2011)
Cedar v. W. E. Roche Fruit Co.
134 P.2d 437 (Washington Supreme Court, 1943)
F. E. Ollinger Co. v. Benton
286 P. 849 (Washington Supreme Court, 1930)
State v. Pirtle
127 Wash. 2d 628 (Washington Supreme Court, 1995)
Hearst Communications, Inc. v. Seattle Times Co.
154 Wash. 2d 493 (Washington Supreme Court, 2005)
Kofmehl v. Baseline Lake, LLC
305 P.3d 230 (Washington Supreme Court, 2013)
Forsberg v. Pacific Northwest Bell Telephone Co.
840 F.2d 1409 (Ninth Circuit, 1988)