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California North Coast vintner claims smoky grapes ruined its tanks; grower alleges winery is holding up sales

A Lake County winery is suing a grape growing company run by a former top executive with Jackson Family Wines and then finance mogul Bill Foley’s wine portfolio, claiming that grapes harvested during the wildfires last fall ruined nearly two dozen oak tanks and barrels.

Langtry Farms LLC sued Hugh Reimers and one of Reimers’ companies, Torick Farms LLC, in Lake County Superior Court on May 3. The vintner alleges that Torick delivered grapes that were supposed to be free of “smoke taint” and those grapes supposedly damaged a number of tanks.

At a court hearing on the suit on May 20, the judge noted he has seen evidence provided by Reimers’ side that a manager at Langtry Farms accepted the deliveries and did not raise any question about the quality of grapes. The winery filed receipts from grape deliveries and third-party laboratory test results showing high levels of taint-associated compounds in samples supposedly from tanks associated with those grapes. Both sides will get a chance to submit more evidence and argue their cases at a forthcoming court hearing, tentatively set for mid-June.

Langtry Farms now wants to exercise a warehouse lien to sell the wine to cover the supposed damage, according to the complaint drafted by Joshua Devore of Dickenson Peatman & Fogarty.

Meanwhile, Reimers and Torick countersued on Wednesday, claiming that oral custom-crush agreements with Langtry Farms were made last fall and that the winery is interfering with sales in progress by holding onto the wine in its tanks. Reimers’ attorney, Kevin Block of Napa’s Block and Block LLP, asked for a temporary restraining order to allow those deals to proceed.

Langtry Farms on April 14 sent Torick Farms a bill for $330,266 for oak tanks and barrels where the allegedly tainted wine was stored, plus installation and replacement with nearly 42,000 gallons of stainless-steel tanks, according to court filings. That includes five 3,200-gallon tanks, eight 6,700-gallon vessels and nine barrels.

Torick says the vintner is holding onto about 45,000 gallons of Torick’s wine, valued at roughly $900,000 at $20 a gallon, according to court testimony Thursday.

“Obviously, ultimately the case will turn on the condition of the grapes delivered by Torick to Langtry and the respective parties’ knowledge — actual or constructive — of the condition of the grapes,” said Judge Michael Lunas at the virtual hearing from the Lakeport courthouse.

While Lunas noted that Langtry Farms will have more time to prove its case about the condition of the grapes, he was skeptical about the outcome of the warehouse lien. So on Thursday he orally granted the temporary restraining order, which both attorneys said they would comply with, and called for a preliminary injunction hearing for both sides to present more evidence.

Another court hearing is set for Tuesday at 9 a.m. to formalize the order and set the timeline for the future hearing in the next couple of months.

Torick Farms submitted to the court two memorandums of sale through Turrentine Brokerage for $460,200 for 21,900 gallons of wine in Langtry Farms storage. One was for 11,100 gallons to Bogle Vineyards, and the other was for 10,800 gallons to Novato-based WX Brands.

The judge’s oral order called for the proceeds from those sales to be deposited in an interest-bearing escrow account held by Langtry Farms and Torick Farms until the litigation is resolved. He also offered the parties the option that all the stored wine be sold and the proceeds be deposited into that account or held in bond.

“That's very creative,” Block told the judge. “And I appreciate your honor’s selection, because that addresses the concern I raised that the wine will become almost worthless as we move through August, because people stop buying it.”

The attorney noted that bulk-wine sales tend to trail off as the wine grape harvest begins.

Langtry Farms LLC is part of the portfolio of Hawaii-based Malulani Investments, majority owned by Easton Manson since 2003. In 2012, Sonoma County-based Foley Family Wines purchased the Middletown winery, 500 acres of land and the wine brands Langtry and Guenoc, but Langtry Farms kept about 23,000 acres of land in southern Lake and northern Napa counties.

Last year, Foley transferred the winery back to Langtry Farms, according to county and state records.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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