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Bright Harvest Sweet Potato Co., Inc. v. H.J. Heinz Co., L.P.

United States District Court, D. Idaho

March 17, 2017

BRIGHT HARVEST SWEET POTATO COMPANY, INC., Plaintiff,
v.
H.J. HEINZ COMPANY, L.P., Defendant.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill United States District Court

         INTRODUCTION

         The Court has before it Plaintiff's Motion for Award of Attorney Fees (Dkt. 332). The motion is fully briefed, and the Court now issues the following decision.

         BACKGROUND

         This matter was tried to a jury twice. Although somewhat complicated by the type of contract, at its core the case involved a single breach of contract claim. Bright Harvest alleged that Heinz breached the Co-Pack Agreement between the parties when Heinz stopped purchasing sweet potato fries prior to expiration of the agreement.

         Bright Harvest and Heinz signed the Co-Pack Agreement on December 7, 2009. The Co-Pack Agreement set terms, conditions, and prices for Bright Harvest to produce sweet potato fries under Heinz's Ore-Ida label. (Dkt. 45-2, p. 1).

         The Agreement set forth that Heinz “shall place purchase orders with Co-Packer [Bright Harvest], and Co-Packer shall sell and deliver to Heinz, quantities of the products [sweet potato fries] under the terms of this Agreement.” (Dkt. 10-1, p. 4). The term of the Agreement was from December 1, 2009 until November 30, 2015. (Dkt. 10-1, p. 4). The Agreement established a “non-binding planning target of 10 million pounds of sweet potato fries per year, ” and indicated that it was “the intent of the Parties that Heinz will deliver to Co-Packer purchase orders for such Products as hereinafter provided, subject to the current capacity of Co-Packer to produce such Products.” (Dkt. 10-1, p. 5). In addition, Heinz was to provide rolling weekly demand files with 5 weeks of firm production orders and 8 weeks of forecast. (Dkt. 10-1, p. 5). No purchase order could exceed 50% of Bright Harvest's current forecasted volume without mutual consent. (Dkt. 10-1, p. 5). Further, Heinz was to provide Bright Harvest 12 to 18 month rolling forecasts quarterly for operational management and capacity planning. (Dkt. 10-1, p. 6).

         Bright Harvest began supplying Heinz with sweet potato fries in 2009. In the first year of the contract, Bright Harvest produced approximately half of the requested 400, 000 pounds of sweet potato fries, and in 2010, they produced 6 million pounds for Heinz. (Dkt. 45-1, p. 5). While the Agreement was still in effect, Heinz began producing sweet potato fries in its Ontario, Oregon facility. (Dkt. 45-1, p. 5). And, in March 2011, it submitted a 13-month rolling forecast to Bright Harvest requesting only 4.1 million pounds of sweet potato fries between April 2011 and 2012. (Dkt. 45-1, p. 6). Sweet Harvest claimed that this drop in requested production constituted a breach of the Co- Pack Agreement. To settle this dispute, Heinz drafted a letter revising its forecast from 4.1 million pounds to over 7 million pounds, which Bright Harvest signed. (Dkt. 45-1, p. 6). However, beginning in July of 2011, Heinz provided Bright Harvest with 12-18 month forecasts showing zero volume for all products after September 2012. (Dkt. 45-1, p. 8). Regarding this as a breach of the Co-Pack Agreement, Bright Harvest filed a breach of contract claim against Heinz in July 2011.

         A jury trial was held in March 2015. At the conclusion of the evidence, the Court instructed the jury and gave the jury a special verdict form containing three questions. (Dkt. 153-1). The first question required the jury to determine whether the Co-Pack Agreement was an enforceable contract. The jury answered that it was. The second question asked the jury to decide whether Heinz had breached the Co-Pack Agreement. The jury answered that it had not. As a result, the third question regarding the amount of damages was not answered by the jury. Bright Harvest then filed a motion to amend the judgment, or, in the alternative, for a new trial. The Court granted a new trial after concluding that the jury's verdict was inconsistent.

         A second trial was conducted in February/March 2016. The jury in the second trial determined that the Co-Pack Agreement between the parties was an enforceable requirements contract, and that Heinz breached the contract. The jury then awarded damages of $976, 370.52 for lost fixed overhead, and $238, 518.56 for lost profits. Both parties filed post-trial motions, asking the Court for judgment as a matter of law, to alter or amend the judgment, or for a new trial. The Court denied all those requests. Bright Harvest's motion for attorney's fees in now ripe for disposition.

         LEGAL STANDARD

         Idaho law governs the award of attorney's fees in this matter. Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1024 (9th Cir.2003). Pursuant to Idaho Code § 12-120(3), the prevailing party in a contract dispute is entitled to a reasonable attorney fee to be set by the Court. Determination of whether a party is the prevailing party is committed to the discretion of the trial court. Sanders v. Lankford, 1 P.3d 823, 826 (Idaho 2000); see also I.R.C.P. 54(d)(1)(B).

         In Idaho, governing legal standards on the prevailing party issue are provided by I.R.C.P. 54(d)(1)(B). “[T]here are three principal factors the trial court must consider when determining which party, if any, prevailed: (1) the final judgment or result obtained in relation to the relief sought; (2) whether there were multiple claims or issues between the parties; and (3) the extent to which each of the parties prevailed on each of the claims or issues.” Id. The Court in its discretion may determine that a party prevailed in part and did not prevail in part, and may apportion the costs between and among the parties in a fair and equitable manner after considering all the issues and claims involved in the action and the ...


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