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Golden West Nuts, Inc v. R. C. Meline Orchards et al

April 15, 2011

GOLDEN WEST NUTS, INC., PLAINTIFF AND APPELLANT,
v.
R. C. MELINE ORCHARDS ET AL., DEFENDANTS AND RESPONDENTS.



(Super. Ct. No. 39200900211652CUBCSTK)

The opinion of the court was delivered by: Hoch , J.

Golden West Nuts v. R.C. Meline Orchards

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Plaintiff Golden West Nuts, Inc. (Golden West), appeals from the judgment dismissing its amended complaint. Golden West had sought a declaratory judgment regarding its agricultural contracts with seven defendants. The trial court sustained the demurrers of the four remaining defendants*fn1 without leave to amend because it found the amended pleading alleged only past performance between parties with no ongoing relationship. (Code Civ. Proc., § 1060 [undesignated section references are to the Code of Civil Procedure]).

On appeal, Golden West contends its pleading has adequately established the elements of entitlement to declaratory relief. We affirm as to three defendants, but reverse as to Meline.

FACTUAL AND PROCEDURAL SUMMARY

We assume the truth of well-pled factual allegations of the pleading. (Fogarty v. City of Chico (2007) 148 Cal.App.4th 537, 540 (Fogarty).)

Golden West operates in San Joaquin County. It entered into written contracts to buy almonds from the defendants, who were Butte County growers. Three of the contracts (with Decker, Chico, and Dress) were executed in 2007 for that crop year only. The contract with Meline was an "evergreen" three-year agreement first executed in 1997, which automatically renewed in three-year increments at the end of each period unless either party terminated it. This contract was in effect for the 2007 crop year.

As the almonds ripened in the late summer or early fall of 2007, the defendant growers shipped batches to Golden West. In accordance with industry custom, Golden West paid for the almonds in installments as it sold them, a process that could last through the start of the following crop year.

The three single-year contracts provided that the payments for the almonds were to be "'established by [Golden West] after consideration of prevailing market conditions.'" Golden West made its payments to these three defendants in accordance with its interpretation of this provision, under which it took into account its processing costs and the market price it obtained for the almonds. The growers believed Golden West was obligated to match prices that "certain other processors" paid growers for their almonds. Golden West did not allege that it had any remaining payments due on these contracts. However, it contended it was in a continuing contractual relationship with the three defendants until there was a final determination of its financial obligation to them.

In the Meline contract, an addendum provided a guarantee that Golden West would pay "a final price equal to or better than the average base varietal price" that three specified processors paid "prior to November 30th of the year following delivery. Guarantee will be over the term of the contract and paid at the completion of each year." Golden West interpreted this obligation as determining its "final" price in light of the lodestar base varietal price, and it acted accordingly. Meline believed Golden West was required to determine its "base" price in light of the lodestar base varietal price. Golden West requested a declaration to resolve this actual controversy in order to determine "the full and proper price of the almonds" in its ongoing contractual relationship with Meline that "cannot end until this issue is finally resolved."

Golden West filed its initial complaint for declaratory relief in May 2009. In its original complaint, Golden West requested a declaration that it had paid the three single-year contracts in full. In ruling on the demurrers of three of the defendants with single-year contracts (Decker, Chico, and Dress)*fn2 , the trial court ruled that the allegations involved only past wrongs because the contracts were fully performed and Golden West claimed that it had paid the defendants in full. Therefore, ...


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