GRAND HAVEN — A West Michigan farm is suing a South Dakota-based wholesale operation for failing to pay for produce.
According to a lawsuit filed July 5 in the U.S. District Court for the Western District of Michigan, David Reenders Blueberries LLC and the related Crossroad Blueberry Farm LLC sold $67,500 worth of perishable fresh fruit on credit to the Sioux Falls, S.D.-based The Fruit Club Inc., a direct-to-consumer fruit distribution company.
The farm, which sells wholesale quantities of fresh fruits nationwide, alleges that Fruit Club received the shipment in July 2017, but “failed to pay for the produce, despite Plaintiff’s repeated demands,” according to the filings.
In an April reparation proceeding, the U.S. Department of Agriculture ordered The Fruit Club to pay the full balance plus interest and a $500 handling fee within 30 days. Reenders said in the lawsuit that The Fruit Club failed to issue the payments.
“(The) Fruit Club has failed and refused, without reasonable cause, to account and make full payment promptly of $67,500 to Plaintiff, which sum is unpaid and overdue to Plaintiff for perishable agricultural commodities ordered, received, and accepted from Plaintiff,” wrote Eric Kyser of the Cleveland, Ohio-based Martyn and Associates, the law firm representing Reenders.
Hannah Arnold, customer service manager of The Fruit Club, said the company is aware of the lawsuit and is “working to reach a fair resolution on this matter,” which it said stems from a “quality issue with this supplier’s fruit.”
The federal lawsuit follows USDA action on May 29 to sanction The Fruit Club under the Perishable Agricultural Commodities Act (PACA) after the company failed to pay an unspecified Florida seller for more than $108,000 in produce, according to a statement.
The Fruit Club’s owner Matthew Kleinsasser is named in the PACA sanctions and in the Reenders lawsuit.
PACA enforces a code of fair business practices among companies trading in certain agricultural commodities. The law allows growers and wholesalers of perishable agricultural commodities to retain a trust claim over the produce after it’s been processed or resold until they are paid in full.
If companies fail to pay PACA reparations, the USDA can impose sanctions that effectively bar them from operating in the produce industry until the bills are paid off.
Additionally, two other companies have sued The Fruit Club over nonpayment since December 2017. They include Chestnut Hill Farms of Coral Gables, Fla. — which voluntarily dismissed its case on July 17 — and Hood River, Ore.-based The Fruit Co., which came to a settlement with The Fruit Club on Feb. 8.
In the Reenders case, the court issued a summons to The Fruit Club and Kleinsasser on July 6. After it the summons is served, the defendants will have 21 days to respond.
According to its website, the Fruit Club is still in business and taking reservations for fruit deliveries.
Kyser and Reenders could not be reached for comment before this story went to press.
Editor’s note: This story has been updated to include comment from The Fruit Club.