Midbrook Flowerbulbs Holland B v. v. Holland America Bulb Farms, Inc.

874 F.3d 604, 2017 WL 4799263, 2017 U.S. App. LEXIS 21172
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 25, 2017
Docket14-36085
StatusPublished
Cited by42 cases

This text of 874 F.3d 604 (Midbrook Flowerbulbs Holland B v. v. Holland America Bulb Farms, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Midbrook Flowerbulbs Holland B v. v. Holland America Bulb Farms, Inc., 874 F.3d 604, 2017 WL 4799263, 2017 U.S. App. LEXIS 21172 (9th Cir. 2017).

Opinion

OPINION

BEA, Circuit Judge:

After the collapse of the Dutch Tulip Bubble of 1637, we’ve heard little about that flower’s market. But it hasn’t gone away.

This action grows out of a family business dispute: The Dutch shipper of tulip bulbs to his brother in America claims his brother shorted him. The dispute was litigated at three court levels in Holland. The shipper won. Now he comes to Seattle to enforce his judgment. Enforce it the district court did. The American importer-buyer appeals that judgment. He will lose.

I. Background

A. Factual Background

' Holland America Bulb Farms, Inc. (“Holland America”) is a Washington eor-poration that grows and sells tulips and other varieties of cut flowers. Its sole owners, Benno and Klazina Dobbe, founded Holland America together after immigrating to the United States from the Netherlands in 1980.

In 1994, Holland America began purchasing flower bulbs from Midbrook Flow-erbulbs Holland, B.Y. (“Midbrook”), ' a Dutch corporation in which Arie Dobbe, Benno’s brother, was a manager and part owner. Midbrook purchased flower bulbs from farms in the Netherlands and elsewhere, packaged them for shipment, and exported them to Holland America’s farm in Washington. Though Holland America and Midbrook never entered into a written agreement regarding payment, Benno and Arie orally agreed that Holland America would pay Midbrook its “actual costs on a one to one basis plus, a commission.”

For each shipment, Midbrook sent Holland America an invoice in Dutch guilders. 1 Instead of paying these invoices directly to Midbrook in guilders, Holland America deposited a lump sum of dollars into a Dutch bank account in Midbrook’s name (the “dollar account”). At “fixed intervals,” Midbrook withdrew dollars from the dollar account, exchanged them into guilders, and then deposited them into a second Dutch bank account (the “guilder account”), which was also in its name. Then, when the invoices became, due, Midbrook paid itself the invoiced amount of guilders from the guilder account. Midbrook regularly sent Holland America statements for the two accounts, and Holland America was responsible for ensuring that there were enough dollars in-the dollar account to cover the periodic transfers to the guilder account.

Sometime in 1997, Benno Dobbe noticed that Midbrook’s costs “appeared to be higher than the bulb import costs that [his] competitors were obtaining from, other Dutch suppliers.” Benno became suspicious that Midbrook was overcharging Holland America, and he asked Arie to provide documentation substantiating Mid-brook’s costs. Arie assured. Benno that Midbrook’s invoices were correct, but he refused to provide the requested documentation, In June 1999, the parties agreed that they would “terminate their relationship” the following year, but that Midbrook would “still handle the export of the flower bulb harvest [in the fall] of 1999.” Between January 11 and May 22, 2000, Midbrook sent Holland America invoices for the 1999 harvest which totaled 3,211,568 guilders. Holland America never deposited dollars into the dollar account sufficient to cover these invoices, and Mid-brook overdrew the dollar account to pay itself for them.

B. Procedural Background

1. Proceedings in the Alkmaar District Court .

In 2002, Midbrook filed a lawsuit against Holland America in the Alkmaar District Court in the Netherlands, seeking payment for the 1999 harvest shipments. Holland America did not deny that it had not paid Midbrook for the 1999 harvest; rather, it'argued that Midbrook had “invoiced [Holland America] for too high an amount for years,” and that Holland America had “[overpaid more in total during the period from 1994 to August 2000 ... than Mid-brook had-invoiced [for the 1999 harvest],” Though Holland America “provisionally estimated” the' amount of the overcharge to be $4,434,387 (roughly 9 million guilders), it asked the court to “order Midbrook to provide its bookkeeping records for the years 1984 up to and including December 2000” so that Holland America could “more particularly specif[y]” its damages.

In a series of “judgments,” 2 four of which were “interlocutory” and one of which was final, the Alkmaar District Court rejected Holland America’s counterclaim and entered judgment in Midbrook’s favor. In its first interlocutory judgment, entered after the court had reviewed the parties’ pleadings and briefs, the court made several rulings. First, it noted that Midbrook claimed in its briefing “that it [had] agreed with [Holland America] on October 22, 1999 that [Holland America], after receiving a credit note in the amount of ... 100,000 [guilders], would havé no more right to compensation for damages from improper invoicing in the past.” The court ruled that Midbrook would be given “the opportunity [ ] to provide evidence for [this] agreement.”

Second, although the court agreed with Holland America that “in principle, [it is] Midbrook’s responsibility to specify and justify its invoice[s]” with documentation, it noted that “the period for which Mid-brook must specify and substantiate its invoice[s]” would depend on whether Holland America had settled its claims for the harvests of 1994-1998; if it had, then it would not be entitled to any discovery with respect to the invoices for that period. Thus, the court deferred ruling on the parties’ remaining claims until after it had heard evidence on the alleged settlement agreement.

The district court entered its second interlocutory judgment after hearing from witnesses from both parties regarding the settlement agreement, which allegedly took place at a meeting between Benno and Arie Dobbe in October 1999 at Mid-brook’s offices in the-Netherlands.-Mid-brook’s witnesses were Johannes Elling, Midbrook’s tax advisor; and Elisabeth Dobbe-Ruygrok, Arie Dobbe’s wife and a secretary at Midbrook. Elling and Dobbe-Ruygrok both. testified that they were present at the meeting when Benno and Arie agreed to settle Holland America’s claims for 100,000 guilders. Holland America’s two witnesses, Benno Dobbe and Hugo Dobbe (another of Benno’s brothers), testified that no such agreement was reached at the meeting, and that they had come to the Netherlands only because Arie had promised them that they could examine Midbrook’s records, which Arie ultimately did not allow them to do. The district court found that Midbrook’s witnesses were not credible 3 and therefore determined that no settlement agreement had been reached.

Having disposed of the settlement issue, the court proceeded to address the parties’ claims regarding the invoices for the harvests of 1994-99. It directed Holland America to “specify the [] invoices [to which it objected] concretely, submitting them ... and indicating] which amounts Midbrook invoiced unjustifiably to [Holland America] and why.” Then, the court explained, Midbrook would “be given the opportunity to respond” by “provid[ing] insight into the structure of the invoices” identified by Holland America with “documented evidence.”

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Bluebook (online)
874 F.3d 604, 2017 WL 4799263, 2017 U.S. App. LEXIS 21172, Counsel Stack Legal Research, https://law.counselstack.com/opinion/midbrook-flowerbulbs-holland-b-v-v-holland-america-bulb-farms-inc-ca9-2017.