Judge denies motion to vacate $7.4 million ruling against Scotts

After an hour-long hearing, Superior Court Judge David Frazier Tuesday denied a motion to vacate January a ruling which granted Seeds, Inc., of Tekoa $7,448,103 on a motion for a partial summary judgment.

Scotts, Inc. has been ordered to pay the sum under terms of standard contracts for 2010 delivery of harvested grass seed by growers.

Seattle attorney Colin Folawn Feb. 11 filed the motion to vacate the ruling. Folawn contended the court erred when it failed to allow Scotts more time to document its argument that crop estimates, which provided the basis for the amounts ruled due, were invalid.

Scotts has contended the prices on their 2010 contracts for grass seed delivery, which were substantially higher than the spot market for seed, provided an incentive for growers to deliver crops from fields not included in the contracts, a practice identified as “stuffing” in court papers filed in the case.

Folawn contended in the weeks since the judge’s Jan. 21 ruling, the company has collected information which can document that estimates used to determine payment amounts were invalid.

Judge Frazier Tuesday ruled the focus at the time the Seeds, Inc., motion was presented to the court was whether or not Scotts could withhold payments because of a contract clause which allowed them to audit Seeds, Inc., books.

The judge ruled that Scotts could not withhold payments for the crops because they had an audit provision in the contracts. The $7,448,103 ruling amounts to the sum due Seeds for the estimated overall harvest due on payment dates in October and December.

Pullman Attorney Tim Esser, who made the motion on behalf of Seeds, represented the Tekoa firm Tuesday.

The judge Tuesday noted undisputed evidence that the contracts included a duty for growers to deliver seed and a duty for Scotts to pay.

He pointed out the figures were based on crop estimates which were provided in writing and acknowledged by Scotts representatives who at the time indicated payment would be forthcoming.

The judge Tuesday again noted Scotts still has the option of taking action if it feels it overpaid. He pointed out the contracts include a provision for a third “true up” payment where the dispute could be resolved, if needed, at that time.

The ruling on the motion for a partial summary judgment still leaves the overall suit before the court, although the judge suggested attorneys and their clients also had the option of working out a settlement.

The judge has awarded Seeds 18 percent interest from the date the amount due was determined, Jan. 31. The argument on whether or not the interest charge could date back to the September payment deadline has also yet to be determined by the court.