Gallo Vineyards has sued Long Meadow Ranch Wine Estates over the St. Helena-based producer’s alleged inability to fulfill its end of a two-year grape contract, according to a complaint filed at the end of January in Napa County Superior Court.
This lawsuit marks the second time Gallo Vineyards, a subsidiary of the world’s largest winery E & J Gallo Winery, has taken legal action against Long Meadow Ranch Wine Estates. It previously sued the winery in September, Wine Business reported, over non-payment for grapes harvested and delivered in 2019. That lawsuit was “dismissed over a technicality,” according to Wine Business.
Long Meadow Ranch Wine Estates initially entered into the contract with Gallo in January of 2019, according to the complaint. That contract, which was to span harvest years 2019 and 2020, dictated the quantity of grapes Long Meadow Ranch Wine Estates would purchase from Gallo and the price to be paid per ton of grapes. For harvest year 2020, Long Meadow Ranch Wine Estates agreed to purchase 120 tons of Cabernet Sauvignon from a Gallo-owned vineyard in Pope Valley for $5,500 per ton — a total value of $660,000, according to the suit.
In a letter sent to Long Meadow Ranch Wine Estates in September 2020, a lawyer for Gallo Vineyards said the winery owed Gallo more than $771,000 for wine grapes harvested and delivered in 2019 — a sum that included the wine grapes, interest on that payment and attorney’s fees. The letter requested “adequate assurance” that Long Meadow Ranch Wine Estates would be able to pay Gallo for the contracted grapes from the 2020 harvest in lieu of its nonpayment in 2019, according to the suit.
“Gallo has reason to believe that LMR is unable to pay for any grapes Gallo would deliver to LMR under the agreement for the 2020 harvest,” the letter continued.
After receiving no response from Long Meadow Ranch Wine Estates, Gallo Vineyards sought an alternative buyer for the 120 tons of Pope Valley Cabernet Sauvignon, according to the complaint; it ultimately sold the grapes to Carneros Vintners in Sonoma for $2,000 per ton. The grapes in question were vetted for smoke taint and ultimately found to have markers below the threshold specified in the contract between Long Meadow Ranch Wine Estates and Gallo Vineyards, the lawsuit says.
Long Meadow Ranch Wine Estates — owned by the Hall family, which also owns Farmstead at Long Meadow Ranch — did not respond to request for comment.
In a second letter sent in September of 2020, Gallo notified Long Meadow Ranch Wine Estates that it would seek an alternative buyer but would continue to “seek payment from LMR for the delta between what the 2020 crop is sold for” and what Long Meadow Ranch Wine Estates agreed to pay.
The sale to Carneros Vintners — at a total value of $240,000 — resulted in a $420,000 loss for Gallo Vineyards, the lawsuit says. Gallo Vineyards is now suing Long Meadow Ranch Wine Estates for that amount plus interests, costs and attorney’s fees, according to the lawsuit.
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