The recent filing of a lawsuit by Chateau Potelle Holdings, LLC against Denis Malbec, Medlock Ames Vintners and others shows us that, often, a court will have to determine if a wine is acceptable and what parties actually agreed on in its production. Several months ago, Chateau Potelle filed a Complaint alleging that it hired Denis Malbec to make a high quality new wine, named after the owner, Jean-Noel Fourmeaux. Chateau Potelle stated that, in 2008, it wanted a high level cult wine to sell in the $150 to $200 range, and that Mr. Malbec promised to hit that mark.
Instead, according to papers filed by Chateau Potelle, Mr. Malbec allegedly took a sabbatical to Burma and left the wine developing on its own, leading to high levels of volatile acidity – levels that Chateau Potelle states were unacceptable. For his part, Mr. Malbec claims he was not paid the agreed price.
What was missing in this breach of contract and negligence case? A contract. There was no written contract setting out what the parties expected in the wine making and what Mr. Malbec was expecting for terms of payment. Under the law, you can make a contract without putting it in writing, except for a few very, highly limited, areas – primarily the sale of real estate. Contracts happen all the time without papers being signed. For example, when you go into a coffee shop and order a coffee, you have made a contract that you will get an acceptable cup of coffee and you will pay for it. You did not need to write it down and seldom does the purchase of coffee ever lead to a claim of contract breach.
Still, certain situations call out for a written contract. Here, for example, the Napa Superior Court will hear testimony on what each of the parties expected in the transaction. Then, the Court, not the parties, will finally determine exactly what those parties expected, and whether one or both parties fell short of those expectations.
The Court may even have to determine more. The Court may also need to decide whether or not Chateau Potelle is correct in its contention that Mr. Malbec “fail(ed) to produce an elite wine” and that this wine could have made Chateau Potelle profits of over $1.6 million.
Courts are set up to do lots of fact finding. In this lawsuit, the Court may even listen to experts opine on whether or not the wine produced is elite status. Still, much controversy could have been saved if there was a written agreement setting out what each of the parties expected would happen. A contract setting out a payment schedule and details of production would have solved many of these issues for the Court – without the time consuming and potentially incorrect testimony of witnesses to the Court. Without the Court having to put together testimony that may be contradictory, to decide what the parties actually contracted to provide.
To Chateau Potelle, it could be that $1.6 million hangs on what the Court decides the parties had committed to do.