Stadelman Fruit, LLC v. Jim D. Voorhies

CourtCourt of Appeals of Washington
DecidedJuly 10, 2018
Docket35165-3
StatusUnpublished

This text of Stadelman Fruit, LLC v. Jim D. Voorhies (Stadelman Fruit, LLC v. Jim D. Voorhies) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stadelman Fruit, LLC v. Jim D. Voorhies, (Wash. Ct. App. 2018).

Opinion

FILED JULY 10, 2018 In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

STADELMAN FRUIT, LLC, a ) Washington limited liability company, ) No. 35165-3-III ) Respondent, ) ) v. ) ) UNPUBLISHED OPINION JIM D. VOORHIES, a single person, ) ) Appellant, ) ) JOHN E. HOWARD, as Personal ) Representative for the ESTATE OF ) FLORENCE E. HOWARD, ) ) Defendant. )

FEARING, J. — Plaintiff Stadelman Fruit, LLC filed suit to collect on a debt owed

by defendant Jim Voorhies and to foreclose on a mortgage securing the debt. The trial

court granted Stadelman Fruit summary judgment and dismissed counterclaims asserted

by Jim Voorhies. We affirm.

FACTS

Plaintiff Stadelman Fruit, LLC operates as a fruit packing facility that handles,

packs, markets, and sells fruit grown by Yakima Valley orchardists. As with other fruit No. 35165-3-III Stadelman Fruit, LLC v. Voorhies

packing facilities, Stadelman Fruit enters agreements with orchardists, under which

agreements an orchardist agrees to deliver the orchardist’s entire crop for a year and the

facility agrees to store, process, pack, market, and sell the fruit on behalf of the

orchardist. Often the fruit packing facility advances growing and harvesting costs to the

orchardist so that the orchardist need not procure a bank loan. Defendant Jim Voorhies

has operated apple orchards in Yakima Valley since at least 1996.

Jim Voorhies first contracted with Stadelman Fruit to pack, store, and market

Voorhies’ apple crop in 1996. Stadelman Fruit then advanced money to Voorhies for

operating expenses. After the sale of the 1996 crop, Voorhies owed a deficit of $100,000

to Stadelman Fruit. Stadelman Fruit did not then demand payment of $100,000, but

instead insisted that Voorhies deliver three loads of apples to Stadelman Fruit in 1997.

Voorhies did so.

Jim Voorhies next entered a fruit handling agreement with Stadelman Fruit in

1998. Stadelman Fruit loaned money to Voorhies that year. As in 1996, the proceeds

from the 1998 crop did not offset the debt owed to Stadelman Fruit and the charges

assessed by Stadelman Fruit for handling the crop. In a declaration, Jim Voorhies

testified that Pete Stadelman, an owner of Stadelman Fruit, told him that he need not pay

the debt. Pete Stadelman is deceased.

From 1999 to 2007, Jim Voorhies delivered his apple crops to other fruit handling

facilities. Hopefully, he enjoyed a financial return in one or more of those

2 No. 35165-3-III Stadelman Fruit, LLC v. Voorhies

years. An agent of Stadelman Fruit approached Jim Voorhies in early 2008 and Voorhies

agreed to market his 2008 crop through Stadelman Fruit in exchange for advances for

growing and harvest expenses from Stadelman Fruit.

On March 5, 2008, Jim Voorhies and Stadelman Fruit entered a fruit handling

agreement. The agreement required Voorhies to deliver to Stadelman Fruit all

marketable apples grown in his orchards during the crop year. In exchange, Stadelman

Fruit, in its sole discretion, handled all necessary processes for postharvest handling,

packing, market and sale. Paragraph 1.2 of the agreement declared:

Basis of Handling and Marketing: During the term of this Agreement, Grower [Jim Voorhies] hereby authorizes Handler [Stadelman Fruit] to handle and market Grower’s fruit described in paragraph 2.1 below in Handler’s regular pool(s) as Handler, in its sole discretion, determines to be in Grower’s best interest.

Clerk’s Papers (CP) at 72. The agreement imposed onerous terms on Jim Voorhies

regarding the wide discretion Stadelman Fruit reserved in handling and marketing

Voorhies’ crop. In addition to the language of paragraph 1.2, paragraph 1.4 of the fruit

handling agreement prescribed:

Handling and Marketing: Handler shall handle and market Grower’s fruit in accordance with the customs and standards of the industry and in accordance with Handler’s standard practices, which Handler may, in its sole discretion, change from time to time, provided such changes shall apply to and treat all growers similarly situated with respect to quality, quantity and varieties of fruit alike. Unless otherwise agreed in writing between Handler and Grower, Handler shall have the following rights, obligations and authority with respect to the handling and marketing of Grower’s fruit:

3 No. 35165-3-III Stadelman Fruit, LLC v. Voorhies

1.4.1 Packing - Grade Standards: Handler shall have the right and is authorized to determine the type of pack and packaging of Grower’s fruit to establish standards for packs and types of packs, which standards may be greater than those established by state, federal or industry grades. In addition, Handler reserves the right to establish quality and other reasonable standards for the purpose of determining which fruit, if any, may be placed in Handler’s controlled-atmosphere storage facilities. 1.4.2 Marketing Decisions: Handler is authorized to market all fruit subject to this Agreement at such times and prices, and in such quantities as the market will accept and as Handler, in its sole discretion, deems to be in the best interest of Grower. All sales and marketing decisions, including extensions of credit, price adjustments, the use of handlers, dealers, brokers, dealers, or traders and the geographic location of purchasers, shall be made in the sole discretion of Handler.

CP at 72-73.

The fruit handling agreement signed in March 2008 applied to the 2008 crop year.

Nevertheless, paragraph 3 of the agreement declared that it automatically renewed in

subsequent crop years unless either party chose to terminate the agreement in writing.

The agreement further extended its terms to include all crop years until Jim Voorhies paid

all debt owed Stadelman Fruit:

3. TERM: The term of this Agreement is for the 2008 crop year; provided, however, that this Agreement shall be considered as automatically renewed from year to year thereafter, unless either party terminates this Agreement by giving the other party written notice not later than March 1 of the crop year in which termination is desired. In addition, the term of this Agreement shall automatically be extended and shall include all subsequent crop years and crops grown during such crop years until all obligations, including advances, owed by Grower to Handler under the terms of this Agreement have been paid in full unless otherwise determined by Handler. In other words, it is contemplated that so long as Grower is indebted to Handler, Grower will continue to bring Grower’s fruit to Handler for the purpose of handling and marketing in order to

4 No. 35165-3-III Stadelman Fruit, LLC v. Voorhies

accommodate Handler’s economic interest as a handler and packer of Grower’s fruit and for the purpose of protecting Handler’s rights as a creditor of Grower. Termination shall be prospective only and shall not, unless otherwise agreed in writing, affect the rights, liabilities and obligations of the parties with respect to fruit which previously has been delivered by Grower to Handler for purpose of handling and marketing.

CP at 75.

The 2008 fruit handling agreement allowed Stadelman Fruit to provide advances

or operating loans to Jim Voorhies, which loans Voorhies would secure with a mortgage.

The parties anticipated use of the advances for growing expenses. Voorhies would not

have marketed his apples through Stadelman Fruit without Stadelman Fruit’s willingness

to provide operating loans. The advances clause in the agreement read:

7.

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