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Haberer Foods International, Inc. v. Goya De Puerto Rico, Inc.

United States District Court, D. Minnesota

September 13, 2017


          Samuel S. Rufer, PEMBERTON, SORLIE, RUFER & KERSHNER, PLLP, for petitioner.

          Paul R. Smith, LARKIN HOFFMAN DALY & LINDGREN, LTD., for respondent.



         Petitioner Haberer Foods International, Inc. (“Haberer”) filed this petition seeking to confirm an arbitration award in the amount of $506, 606.94 and requesting that the Court enter judgment for that amount plus pre- and post-judgment interest against Respondent Goya de Puerto Rico, Inc. (“Goya”). The underlying dispute centered on two agreements under which Goya was to purchase light red kidney beans from Haberer. Goya refused to accept Haberer's beans, and Haberer filed an arbitration demand. Goya declined to participate in the arbitration, but Haberer proceeded and received an arbitration award. Goya now opposes Haberer's motion to confirm the arbitration award, arguing that the parties never entered into an agreement to arbitrate. Because factual questions remain over whether the parties entered into an arbitration agreement, the Court will deny Haberer's motion to confirm the arbitration award.


         Goya uses brokers to enter into agreements with various bean growers and suppliers. (Decl. of Luis Sellés (“Sellés Decl.”) ¶ 6, Mar. 17, 2017, Docket No. 18.) In February 2014, Goya communicated the first relevant offer to Haberer, through a broker, Michael Slauson. (Id. ¶ 10.) Slauson communicated a second offer to Haberer in June 2014. (Id. ¶ 12.) The parties disagree over whether the agreements they entered into through Slauson included an agreement to arbitrate.

         Haberer contends that the National Pulse Trade Rules (“NPTR”), including its arbitration provision, governed the parties' agreements. (See Aff. of Samuel S. Rufer (“Rufer Aff.”), Ex. C, Feb. 22, 2017, Docket No. 12.) The confirmation emails Haberer received from Slauson reflect this understanding, stating “Rules to Govern: NPTR.” (Second Aff. of Samuel S. Rufer (“Second Rufer Aff.”), Ex. A, Mar. 31, 2017, Docket No. 20.) But Goya contends that it only agreed to the terms presented in the confirmation emails it received from Slauson, none of which mentioned the NPTR or arbitration. (See Sellés Decl. ¶¶ 10-12; id., Exs. B-C.) Thus, at least on the current record, it appears the parties received confirmation emails with different terms.

         Haberer challenges Goya's contention that the confirmation emails Goya provides were the only description of the agreement in Goya's possession and that Goya was not aware that the NPTR governed the parties' agreements. Haberer notes that the confirmation emails Goya provides did not include key details that Goya later referenced including order numbers, shipment dates, and references to terms present in the NPTR.[1](Second Rufer Aff., Ex. B at 4-7.) Additionally, following the parties' dispute, Haberer's correspondence referenced the NPTR and Goya never raised any concern over whether the NPTR applied; but Goya also never confirmed or indicated that it agreed the NPTR applied. (See Second Rufer Aff., Exs. C, D (Haberer's correspondence); id., Ex. B at 4-7 (response from Goya).)

         Haberer eventually viewed Goya's rejection of Haberer's beans as a breach of contract and filed an arbitration demand in the summer of 2015. Record evidence shows that Goya was aware of the arbitration, but refused to participate. (See Second Rufer Aff., Ex. B at 2.) On August 21, 2015, Goya filed a letter with the arbitrators stating that it “ha[d] chosen not to participate of the Arbitration Demand filed by Haberer, ” adding that the demand was “totally frivolous and empty of any kind of merit.”[2] (Id. at 4.) Goya also stated in a February 8, 2016, email regarding the arbitration that Goya had “made clear that [it] would not actively participate, nor voluntarily submit [itself], to th[e] arbitration process frivolously filed by Haberer foods.” (Id. at 2.)

         On August 11, 2016, the arbitrators issued an award in Haberer's favor. (Rufer Aff., Ex. A at 7-8.) The arbitrators found that the parties “intended that their relationship with respect to th[ese] transaction[s], like their prior transactions, be subject to the NPTR Rules, ” and therefore, they were “contractually obligated to participate in arbitration to resolve any disputes under their contracts.” (Id. at 3.) The arbitrators noted that “Goya's refusal to participate in arbitration based on [its] one-sided determination that [it] had not breached the contract [was] not justified under [its] contract with Haberer nor under the NPTR Rules.” (Id.) After reviewing the record, the arbitrators found Goya breached the agreements by rejecting beans of the requisite quality. (Id. at 5.) The arbitrators found Haberer was entitled to a total of $506, 606.94, based on the difference in market value of the beans; the cost of storage, insurance, and related expenses; attorney fees and costs; expert witness fees; and fees related to the arbitration. (Id. at 7.)

         Haberer filed its petition for confirmation of the arbitration award on January 9, 2017, and Haberer filed the present motion to confirm the arbitration award on February 22, 2017. Haberer asks this Court to enter judgment against Goya for the $506, 606.94 provided for in arbitration, as well as pre- and post-judgment interest. Goya responded, arguing that the Court should reject Haberer's motion because it did not provide evidence that Goya entered into a written arbitration agreement.



         Haberer moves to confirm its arbitration award under the Federal Arbitration Act (“FAA”). Specifically, under 9 U.S.C. § 9, a party may seek confirmation of an arbitration award within one year of the award and within the court identified in the arbitration agreement or, if no court is specified, within “the United States court in and for the district within which such award was made.” The statute specifies that “the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.” Id. Section 10, in turn, provides that federal courts may vacate an arbitration award “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C. § 10(a)(4). However, “motion[s] to vacate, modify, or correct an [arbitration] award must be served . . . within three months after the award is filed or delivered.” 9 U.S.C. § 12. This three-month period ended on November 19, 2016, and Goya has not attempted to ...

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