Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 1 of 68
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
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`Plaintiff,
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`ASCOT VALLEY FOODS, LTD.,
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`v.
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`ADF FOODS (USA), LTD.,
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`Defendant.
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`Civil Case No. ___
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`COMPLAINT AND JURY DEMAND
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`Plaintiff ASCOT VALLEY FOODS, LTD. (“Ascot” or the “Plaintiff”), by and through its
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`attorneys Brach Eichler LLC, brings the following Complaint against Defendant, ADF FOODS
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`(USA), LTD. (“ADF” or “Defendant”), and alleges as follows:
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`NATURE OF THE ACTION
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`1.
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`This is an action seeking: (a) money damages for breach of a July 29, 2015
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`minimum quantity demand contract for the sale of goods between two merchants; (b) common law
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`and UCC remedies related to the sale of goods; (c) equitable relief related to the purchase of
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`materials unique to the Defendant and not sellable to other customers; and (d) a declaratory
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`judgment determining with finality that the Co-Pack Agreement was terminated by the Plaintiff.
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`PARTIES
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`2.
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`Plaintiff, ASCOT VALLEY FOODS, LTD. is a limited liability company formed
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`and organized under the laws of the State of Ohio.
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`3.
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`Defendant, ADF FOODS (USA), LTD., is a corporation incorporated under the
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`laws of the State of Delaware.
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`SUBJECT MATTER JURISDICTION
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`4.
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`The Court has jurisdiction over the subject matter of this civil action pursuant to 28
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`U.S.C. § 1332(a)(2), because the amount in controversy exceeds $75,000.00, exclusive of interest
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`and costs, and is between citizens of different states. 28 U.S.C. § 1332(c)(1).
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`5.
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`Ascot’s principal place of business is located in 205 Ascot Pkwy, Cuyahoga Falls,
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`State of Ohio.
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`6.
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`ADF’s principal place of business is located in 800 South Claremont Street, San
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`Mateo, State of California.
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`7.
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`Based upon the foregoing, complete diversity of jurisdiction exists between all
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`parties to this action.
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`8.
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`This Court has supplemental subject matter jurisdiction over Plaintiff’s state law
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`claims, pursuant to 28 U.S. Code § 1367, for the Plaintiff’s account stated (Count I), breach of
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`contract (Count II), goods sold and delivered (Count III), promissory estoppel (Count IV), sale of
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`goods by seller (Count V), and declaratory judgment (Count VI) causes of action.
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`VENUE
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`9.
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`Venue is proper in the Southern District of New York pursuant to 28 U.S.C. §
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`1391(b)(3) pursuant to an exclusive and mandatory forum selection clause in Paragraph (32) of
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`the July 29, 2015 Co-Pack Agreement between Ascot and ADF designating the United States
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`District Court of the Southern District of New York as the selected venue.
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`EXHIBITS TO THE COMPLAINT
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`10.
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`Annexed hereto as Exhibit “A” to the Complaint is a true and accurate copy of the
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`July 29, 2015 Co-Pack Agreement between the Plaintiff’s predecessor-in-interest, Ascot Valley
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`Foods, LLC, and Defendant, ADF, inclusive of all amendments and addendums thereto
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`(hereinafter, the “Co-Pack Agreement”).
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`11.
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`Annexed hereto as Exhibit “B” to the Complaint is a true and accurate copy of the
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`Consent to Assignment of the July 29, 2015 Co-Pack Agreement from Ascot Valley Foods, LLC
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`to the Plaintiff, Ascot Valley Foods, Ltd. (hereinafter, the “Assignment”).
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`12.
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`Annexed hereto as Exhibit “C” to the Complaint is a true and accurate copy of a
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`letter dated October 11, 2021, including a printout of a spreadsheet calculating the weighted
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`average price per case and Invoice No. 2479, sent from Ascot to ADF via email to swathi@adf-
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`foods.com and overnight mail via FedEx (hereinafter, the “October 11, 2021 Letter”).
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`13.
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`Annexed hereto as Exhibit “D” to the Complaint is a true and accurate copy of a
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`letter dated October 22, 2021 sent from Ascot to ADF via email to swathi@adf-foods.com and
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`overnight mail via FedEx (hereinafter, the “October 22, 2021 Letter”).
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`14.
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`Annexed hereto as Exhibit “E” to the Complaint is a true and accurate copy of a
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`letter dated January 21, 2022, including an itemization of all outstanding balances on past due
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`invoices, a copy of Invoice No. 2424, 2428, 2433, 2451, 2468, 2479, and 2831, sent from Ascot
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`to ADF via email to swathi@adf-foods.com and overnight mail via FedEx (hereinafter, the
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`“January 21, 2022 Letter”).
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`15.
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`Annexed hereto as Exhibit “F” to the Complaint is a true and accurate copy of an
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`email sent from jgorski@smdklaw.com to swathi@adf-foods.com and bimaltravel@adf-
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`foods.com on October 11, 2021, at 11:58 AM, with the document(s) annexed herein as Exhibit
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`“C” included as PDF attachment to said email.
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`16.
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`Annexed hereto as Exhibit “G” to the Complaint is a true and accurate copy of an
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`email sent from alinen@smdklaw.com to swathi@adf-foods.com and bimaltravel@adf-foods.com
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`on October 22, 2021, at 10:48 AM, with the document(s) annexed herein as Exhibit “D” included
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`as PDF attachment to said email.
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`17.
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`Annexed hereto as Exhibit “H” to the Complaint is a true and accurate copy of an
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`email sent from jgorski@smdklaw.com to swathi@adf-foods.com, bimaltravel@adf-foods.com
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`and hari@hksamaroo.com on January 21, 2022, at 4:58 PM, with the document(s) annexed herein
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`as Exhibit “E” included as PDF attachment to said email.
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`BACKGROUND AND APPLICABLE NEW YORK STATE LAW
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`Assignment of Co-Pack Agreement
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`Plaintiff Ascot’s predecessor-in-interest was Ascot Valley Foods, LLC.
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`Ascot Valley Foods, LLC and Defendant ADF entered into the Co-Pack Agreement
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`A.
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`18.
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`19.
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`on July 29, 2015.
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`20.
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`On November 11, 2016, Plaintiff Ascot purchased all or substantially all of Ascot
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`Valley Foods, LLC’s business and assets (hereinafter, the “Acquisition”).
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`21.
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`In connection with the Acquisition, Ascot Valley Foods, LLC and Plaintiff Ascot
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`executed the Assignment.
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`22.
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`Paragraph 30 of the Co-Pack Agreement permitted assignment of the Co-Pack
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`Agreement without ADF’s written consent “to the purchaser of all or substantially all of [Ascot
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`Valley Foods, LLC] business and assets, and [Ascot Valley Foods, LLC] may otherwise assign
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`this Agreement by operation of law to any successor of [Ascot Valley Foods, LLC] due to merger
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`or reorganization.”
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`23.
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`Additionally, Plaintiff Ascot obtained the written consent to assign the Co-Pack
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`Agreement from Ascot Valley Foods, LLC to Ascot Valley Foods, Ltd.
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`B.
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`24.
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`Choice of Law
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`Paragraph 31 of the Co-Pack Agreement states, “This Agreement shall be
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`interpreted and enforced in accordance with the laws of the State of New York, without regarding
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`to conflict of law principles which would otherwise require application of the law of any other
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`jurisdiction.”
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`a.
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`Statutory Interest
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`25.
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`In New York, pre-judgment interest is determined by state law, since interest is
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`considered part of the substantive claim. Erie R. Co. v. Tompkins, 304 U.S. 64 (1938); Quincy
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`Mut. Fire Ins. Co. v. New York Cent. Mut. Fire Ins. Co., 89 F. Supp. 3d 291, 313 (N.D.N.Y. 2014).
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`26.
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`Under New York law, the application of pre-judgment interest is set forth in CPLR
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`§ 5001(a), which provides that such interest "shall be recovered" by a prevailing plaintiff in a
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`breach of contract action or in an action involving "an act or omission depriving or otherwise
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`interfering with title to, or possession or enjoyment of, property."
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`27.
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`The use of the term "shall" in the statute has been found by the courts to make pre-
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`judgment interest mandatory, not discretionary. Spodek v. Park Prop. Dev. Assoc., 96 N.Y.2d 577,
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`581, 733 N.Y.S.2d 674, 676 (2001).
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`28.
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`CPLR § 5004 sets forth (9%) as the statutory rate of pre- and post-judgment interest
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`in New York, calculated on a simple basis.
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`b.
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`New York’s Uniform Commercial Code
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`29.
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`New York’s Uniform Commercial Code (“UCC”) § 2-201(1) states, “Except as
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`otherwise provided in this section a contract for the sale of goods for the price of $500 or more is
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`not enforceable by way of action or defense unless there is some writing sufficient to indicate that
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`a contract for sale has been made between the parties … .”
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`30.
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`UCC § 2-201(2) states, “Between merchants if within a reasonable time a writing
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`in confirmation of the contract and sufficient against the sender is received and the party receiving
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`it has reason to know its contents, it satisfies the requirements of subsection (1) against such party
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`unless the written notice of objection to its contents is given within ten days after it is received.”
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`31.
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`UCC § 2-105(1) states, “‘Goods’ means all things (including specially
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`manufactured goods) which are movable at the time of identification to the contract for sale other
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`than the money in which the price is to be paid, investment securities (Article 8) and things in
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`action.”
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`32.
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`UCC § 2-104(1) states, “‘Merchant’ means a person who deals in goods of the kind
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`or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the
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`practices or goods involved in the transaction or to whom such knowledge or skill may be
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`attributed by his employment of an agent or broker or other intermediary who by his occupation
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`holds himself out as having such knowledge or skill.”
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`33.
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`UCC § 2-103(1)(b) states, “‘Good faith’ in the case of a merchant means honesty
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`in fact and the observance of reasonable commercial standards of fair dealing in the trade.”
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`34.
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`New York’s highest court, the New York State Court of Appeals, has held, “As in
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`all contracts, implicit in contracts … is a covenant of good faith and fair dealing … .” Bi-Economy
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`Mkt., Inc. v. Harleysville Ins. Co. of N.Y., 10 N.Y.3d 187, 856 N.Y.S.2d 505, 886 N.E.2d 127
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`(2008).
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`35.
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`UCC § 1-202(a) states, in part, “a person has ‘notice’ of a fact if the person: (1) has
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`actual knowledge of it; (2) has received a notice or notification of it; or (3) from all the fact and
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`circumstances known to the person at the time in question, has reason to know that it exists.”
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`36.
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`UCC § 1-202(d) states, “A person ‘notifies’ or ‘gives’ a notice or notification to
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`another person by taking such steps as may be reasonably required to inform the other person in
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`the ordinary course, whether or not the other person actually comes to know of it.”
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`C.
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`37.
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`Status of Transactions and Parties Pursuant to the UCC
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`Paragraph 1 of the Co-Pack Agreement states, in part, “Co-Packer agrees to
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`manufacture, produce, package, store, pick for shipment and stage for shipment for, and sell to,
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`Company, and Company agrees to purchase from Co-Packer, the products listed in Exhibit A
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`attached hereto (the “Products”) on a product-by-product basis as Company shall reasonably
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`request. Co-Packer shall manufacture, produce and package the Products in compliance with the
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`specifications attached hereto as Exhibit B (the “Specifications”).”
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`38.
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`Exhibit A to or of the Co-Pack Agreement states, in part, a description of the
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`Products, which include, without limitation, “Chicken Traditional Burrito,” “Steak & Cheese
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`Burrito,” “Traditional Burgers,” “Classic Meatballs,” “Kale,” and “Sweet Potato.”
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`39.
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`Exhibit B to or of the Co-Pack Agreement described the “Specifications” of the
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`Products.
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`40.
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`Exhibit C to or of the Co-Pack Agreement described “Quality Control and Testing”
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`obligations and standards applicable to the Products.
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`41.
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`Paragraph 20 of the Co-Pack Agreement, titled, “Recipes; Formulas,” states, in
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`part, “the specific recipes and/or formulas provided by Company and used by Co-Packer in
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`accordance with the Specifications for the Products (the “Formulas”) will remain exclusive to
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`Company … .”
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`42.
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`All references to the term “Company” in the Co-Pack Agreement refer to Defendant
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`ADF.
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`43.
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`All references to the term “Co-Packer” in the Co-Pack Agreement refer to the
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`Plaintiff, Ascot.
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`44.
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`Defendant ADF made orders pursuant to the Co-Pack Agreement from July 29,
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`2015 through January 19, 2022.
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`45.
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`The Products described in the Co-Pack Agreement are things, or specially
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`manufactured goods, which are movable at the time of identification to the contract for sale.
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`46.
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`47.
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`ADF deals in goods of the kind described in the Co-Pack Agreement.
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`ADF, by its occupation, holds itself out as having knowledge or skill peculiar to the
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`practices or goods involved in the Co-Pack Agreement.
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`48.
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`Knowledge or skill may be attributed by ADF’s employment of an agent or broker
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`or other intermediary who by its occupation holds itself out as having such knowledge or skill to
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`the practices or goods involved in the Co-Pack Agreement.
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`49.
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`50.
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`51.
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`ADF is a “merchant” within the meaning of UCC § 2-104(1).
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`Ascot is a “merchant” within the meaning of UCC § 2-104(1).
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`The Co-Pack Agreement concerned or involved the sale of “goods” within the
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`meaning of UCC § 2-105(1).
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`D.
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`52.
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`Specific Terms of the Co-Pack Agreement
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`Paragraph (2) of the Co-Pack Agreement states, in part:
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`The annual minimum order volume for Product to be ordered by
`Company from Co-Packer is 200,000 total cases in each year (12
`month period from inception) of the Term of this Agreement
`(“Minimum Commitment”). For any Renewal Term, agreed upon
`minimum volume requirements will be mutually negotiated by
`Parties, provided, however, that if the Parties fail to agree upon new
`minimums, the current Minimum Commitment requirements shall
`remain in place … Notwithstanding the foregoing, if Company’s
`purchase orders, in the aggregate as of the end of any year during
`the Term or Renewal Term, as applicable, fail to specify quantities
`of Product at least equal to the Minimum Commitment for such year
`as provided in this Section 2, Co-Packer, in its sole discretion, may
`send Company a written notice (including an invoice) of its purchase
`shortfall, which notice will create a binding obligation on Company
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 9 of 68
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`to purchase or pay for the balance of Company’s Minimum
`Commitment.”
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`53.
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`Paragraph 3 of the Co-Pack Agreement states, in part:
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`54.
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`Co-Packer shall be precluded from selling identical products,
`derived from Company Intellectual Property,
`including
`the
`Specifications and Formulas, as well as other Proprietary
`Information provided in writing by Company to Co-Packer (the
`“Company Intellectual Property”), to others which are specifically
`made for the Company, irrespective of the brand.
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`Paragraph 6 of the Co-Pack Agreement states, in part:
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`Co-Packer shall be responsible for timely procurement of and
`payment for all raw materials and ingredients used in the
`manufacture and production of the Products (“Raw Materials” and
`“Ingredients,” respectively) and all packaging materials used for the
`Products (the “Packaging Materials” and collectively with Raw
`Materials and Ingredients, the “Materials”). All Materials shall
`comply with the Specifications.
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`55.
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`Paragraph 16(a) of the Co-Pack Agreement states, in part:
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`Co-Packer may terminate this Agreement upon ninety (90) days’
`written notice if Company (i) fails to make any payment due under
`this Agreement and such nonpayment continues ten (10) days after
`written notice from Co-Packer … .
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`STATEMENT OF FACTS
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`56.
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`From July 29, 2020 through July 28, 2021, ADF failed to place orders for the
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`minimum quantity of 200,000 cases with Ascot.
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`A.
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`57.
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`October 11, 2021 Letter
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`The October 11, 2021 Letter from Ascot to ADF stated, in part:
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`This letter shall serve as notice on behalf of Ascot to ADF that
`ADF’s purchase orders during the Term year July 29, 2020 – July
`28, 2021 failed to specify quantities of Product at least equal to the
`Minimum Commitment for such year, as required under Section 2
`of the Agreement. Specifically, ADF purchased 166,445 total cases
`during the prior Term year, less than the required Minimum
`Commitment amount of 200,000 total cases.
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 10 of 68
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`58.
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`The October 11, 2021 Letter from Ascot to ADF stated, in part:
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`Ascot is sending ADF this written notice and the enclosed invoice
`for the purchase shortfall in the amount of $821,761.95 (33,555
`cases multiplied by the weighted average case price of $24.49).
`Pursuant to Section 2, this notice creates a binding obligation on
`ADF to pay for the balance of ADF’s Minimum Commitment.
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`Please cause ADF to issue payment to Ascot on the enclosed
`Minimum Quantity invoice, immediately. In the event ADF fails to
`issue payment on these invoices within ten (10) days after the date
`of this notice, Ascot will pursue all of its rights and remedies
`available under the Agreement and at law, including terminating the
`Agreement pursuant to Section 16(a) of the Agreement.
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`October 22, 2021 Letter
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`The October 22, 2021 Letter from Ascot to ADF stated, in part:
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`As you are aware, I sent ADF notice of the Minimum Quantity
`payment obligation under Section 2 of the Agreement on October
`11, 2021. To date, Ascot has not received full payment on the
`amounts outstanding. As a result, Ascot has elected to terminate the
`Agreement pursuant to Section 16(a) of the Agreement. Please be
`advised that, unless otherwise agreed to by Ascot in writing, the
`Agreement will terminate and be of no further force or effect ninety
`(90) days from the date of this letter, January 20, 2022.
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`The October 22, 2021 Letter from Ascot to ADF referred to Invoice No. 2424 and
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`B.
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`59.
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`60.
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`stated, “with a due date of 10/07/21 and a balance due of $744.46.”
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`61.
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`The October 22, 2021 Letter from Ascot to ADF referred to Invoice No. 2428 and
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`stated, “with a due date of 10/10/21 and a balance due of $23,627.50.”
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`62.
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`The October 22, 2021 Letter from Ascot to ADF referred to Invoice No. 2433 and
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`stated, “with a balance due date of 10/14/21 and a balance due of $29,080.00.”
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`C.
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`63.
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`64.
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`65.
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`January 21, 2022 Letter
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`The January 21, 2022 Letter from Ascot to ADF stated, in part:
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`As provided in my letter to ADF dated October 22, 2021, the above-
`referenced Agreement has been terminated effective January 20,
`2022. To date, Ascot has not received payment on the outstanding
`invoices itemized on the enclosed schedule. In addition, ADF is
`obligated under the Agreement to reimburse Ascot for the cost of
`unique raw materials and packaging purchased by Ascot on behalf
`of ADF, in the amount of $365,429.08. Enclosed are copies of all
`of the outstanding invoices. The total amount now due and payable
`is $1,287,897.99.
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`Effective January 20, 2022, the July 29, 2015 Co-Pack Agreement had terminated.
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`ADF failed to make payment in full satisfaction of the total account balance stated
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`to be due and owing in an amount of $1,287,897.99.
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`66.
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`ADF continues to maintain the July 29, 2015 Co-Pack Agreement has not been
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`terminated effective January 20, 2022.
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`67.
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`As a result of the foregoing, Ascot brings this action to recover the money damages
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`it is due and owing as well as resolve with finality any disputes concerning the termination of the
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`July 29, 2015 Co-Pack Agreement.
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`COUNT I
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`ACCOUNT STATED
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`68.
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`Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
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`though fully set forth and further allege as follows.
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`69.
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`On October 11, 2021, Ascot sent the October 11, 2021 Letter to ADF by email and
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`FedEx.
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`70.
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`ADF did not dispute the fact that ADF did not place an order for 200,000 cases
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`from July 29, 2020 through July 28, 2021.
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 12 of 68
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`71.
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`ADF did not dispute that portion of the October 11, 2021 Letter stating, “ADF
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`purchased 166,445 total cases during the prior Term year, less than the required Minimum
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`Commitment amount of 200,000 total cases.”
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`72.
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`ADF did not dispute that portion of the October 11, 2021 Letter stating, “weighted
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`average case price of $24.49.”
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`73.
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`ADF did not dispute that portion of the October 11, 2021 Letter stating, “purchase
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`shortfall in the amount of $821,761.95 (33,555 cases multiplied by the weighted average case price
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`of $24.49). Pursuant to Section 2, this notice creates a binding obligation on ADF to pay for the
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`balance of ADF’s Minimum Commitment” within ten (10) days from when Ascot gave notice to
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`ADF of the October 11, 2021 Letter.
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`74.
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` On October 22, 2021, Ascot sent the October 22, 2021 Letter to ADF by email and
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`FedEx.
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`75.
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`ADF did not dispute the $744.46 amount stated for Invoice No. 2424 within ten
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`(10) days from when Ascot gave notice to ADF of the October 22, 2021 Letter.
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`76.
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`ADF did not dispute the $23,627.50 amount stated for Invoice No. 2428 within ten
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`(10) days from when Ascot gave notice to ADF of the October 22, 2021 Letter.
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`77.
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`ADF did not dispute the $29,080.00 amount stated for Invoice No. 2424 within ten
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`(10) days from when Ascot gave notice to ADF of the October 22, 2021 Letter.
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`78.
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`On January 21, 2022, Ascot sent the January 21, 2022 Letter to ADF by email and
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`FedEx.
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`79.
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`ADF did not dispute the $1,287,897.99 amount stated within ten (10) days from
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`when Ascot gave notice to ADF of the January 21, 2022 Letter.
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 13 of 68
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`80.
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`An implied agreement to pay the account stated can be inferred by ADF’s silence,
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`delay in providing any kind of response as between merchants in a transaction involving the sale
`
`of goods, and the absence of any good faith dispute as to the amount or fact of liability.
`
`81.
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`As a result, the Plaintiff is owed $1,287,897.99 along with pre-judgment interest
`
`and post-judgment interest on its claim for an account stated in an amount to be determined at trial.
`
`COUNT II
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`BREACH OF CONTRACT
`
`82.
`
`Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
`
`though fully set forth and further allege as follows.
`
`83.
`
`A valid contract existed between Ascot and ADF, specifically, the Co-Pack
`
`Agreement.
`
`84.
`
`Ascot had performed its obligations pursuant to the terms of the Co-Pack
`
`Agreement.
`
`85.
`
`ADF failed to perform its obligations pursuant to the terms of the Co-Pack
`
`Agreement.
`
`86.
`
`87.
`
`88.
`
`Specifically, ADF failed to place an order for a minimum quantity of 200,000 cases.
`
`Additionally, ADF failed to pay for goods sold, delivered, and invoiced to ADF.
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`As a result, the Plaintiff has been damaged in an amount of $821,761.95 (for failure
`
`to order a minimum quantity of 200,000 cases), $100,706.96 (for ADF’s failure to pay for goods
`
`sold, delivered, and invoiced to ADF), plus pre-judgment and post-judgment interest on its breach
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`of contract claim in an amount to be determined at trial.
`
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`BE:12484612.1/ASC016-281773
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`13
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 14 of 68
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`
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`COUNT III
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`GOODS SOLD AND DELIVERED
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`89.
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`Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
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`though fully set forth and further allege as follows.
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`90.
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`Ascot sold to ADF certain goods described in Invoice No. 2424, 2428, 2433, 2451,
`
`and 2468.
`
`91.
`
`Ascot delivered to ADF certain goods described in Invoice No. 2424, 2428, 2433,
`
`2451, and 2468.
`
`92.
`
`The goods described in Invoice No. 2424, 2428, 2433, 2451, and 2468 were sold
`
`pursuant to an order placed by ADF to Ascot.
`
`93.
`
`As a result, the Plaintiff has been damaged in the amount of $100,706.96 plus pre-
`
`judgment and post-judgment interest in an amount to be determined at trial.
`
`COUNT IV
`
`PROMISSORY ESTOPPEL (CUSTOM GOODS UNIQUE TO BUYER)
`
`94.
`
`Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
`
`though fully set forth and further allege as follows.
`
`95.
`
`Pursuant to the Co-Pack Agreement, Ascot was contractually obligated to be ready
`
`to fulfill orders unique to ADF’s specifications.
`
`96.
`
`Pursuant to the Co-Pack Agreement, Ascot was contractually prohibited from re-
`
`selling products that were “identical” to ADF’s products to other customers.
`
`97.
`
`In order to service the Co-Pack Agreement, and its contractual obligations to ADF,
`
`Ascot had ordered and paid for custom materials and packaging unique to ADF.
`
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`BE:12484612.1/ASC016-281773
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`14
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 15 of 68
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`
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`98.
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`Ascot had ordered and paid for custom materials and packaging unique to ADF in
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`the amount of $365,429.08.
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`99.
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`Pursuant to the Co-Pack Agreement, the promise to pay for 200,000 cases of goods
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`unique and exclusive to ADF is clear and unambiguous.
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`100. Ascot’s reliance upon the Co-Pack Agreement was reasonable.
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`101. Ascot’s reliance upon Co-Pack Agreement was foreseeable.
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`102. As a result, the Plaintiff has been damaged in the amount of $365,429.08 plus pre-
`
`judgment and post-judgment interest in an amount to be determined at trial.
`
`COUNT V
`
`SALE OF GOODS BY SELLER (UCC 2-703, 2-708, 2-709 REMEDIES)
`
`103. Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
`
`though fully set forth and further allege as follows.
`
`104. The goods described in Invoice No. 2424, 2428, 2433, 2451, and 2468 were sold
`
`and delivered pursuant to an order placed by ADF to Ascot.
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`105. ADF did not reject the goods described in Invoice No. 2424, 2428, 2433, 2451, and
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`2468 upon delivery.
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`106. ADF accepted the goods described in Invoice No. 2424, 2428, 2433, 2451, and
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`2468.
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`107. As a result, this Count being pleaded in the alternative, in the event that the Plaintiff
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`does not prevail on its other available remedies, the Plaintiff may elect to proceed pursuant to UCC
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`2-703, 2-708 and 2-709 to calculate its damages in an amount to be determined at trial.
`
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`
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`BE:12484612.1/ASC016-281773
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`15
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 16 of 68
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`
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`COUNT VI
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`DECLARATORY JUDGMENT
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`108. Plaintiff repeats and restates each of the allegations in the preceding paragraphs as
`
`though fully set forth and further allege as follows.
`
`109. ADF materially breached Section 16(a) of the Co-Pack Agreement.
`
`110. Ascot effectively terminated the Co-Pack Agreement pursuant the October 22,
`
`2021 Letter when a ninety (90) day period had elapsed since Ascot gave notice to ADF of the
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`October 22, 2021 Letter.
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`111. As a result, the Plaintiff seeks a declaratory judgment declaring with finality that
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`the Co-Pack Agreement has been terminated effective January 20, 2022.
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`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff respectfully requests that this Court enter the following relief
`
`against all Defendants:
`
`A.
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`Compensatory damages, direct damages, consequential damages, indirect damages,
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`punitive damages and both pre-judgment and post-judgment interest;
`
`B.
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`Requiring Defendants to pay or reimburse the Plaintiff its reasonable attorneys’
`
`fees and costs of suit incurred by the Plaintiff as foreseeable consequential damages arising from
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`the breach of the implied covenant of good faith and fair dealing, especially between merchants,
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`for the unjustified refusal to pay for past due accounts due and owing and requiring the Plaintiff to
`
`commence this instant action. Bi-Economy Mkt., Inc. v. Harleysville Ins. Co. of N.Y., 10 N.Y.3d
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`187, 856 N.Y.S.2d 505, 886 N.E.2d 127 (2008);
`
`C.
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`Such other and further relief that the Court deems equitable, just and proper.
`
`
`BE:12484612.1/ASC016-281773
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`16
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 17 of 68
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`
`
`BRACH EICHLER LLC
`101 Eisenhower Parkway, Suite 201
`Roseland, NJ 07068
`(973) 364-8372
`bkasolas@bracheichler.com
`Attorneys for Plaintiff
`
`
`Dated: March 31, 2022
`
`
`
` By:
`Angelo Langadakis III, Esq.
`
`
`
`
`BE:12484612.1/ASC016-281773
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`Case 1:22-cv-02655-RA Document 1 Filed 03/31/22 Page 18 of 68
`Case 1:22-cv-02655-RA Document1 Filed 03/31/22 Page 18 of 68
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`EXHIBIT A
`EXHIBIT A
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`BE:975039.1/1-107008
`BE:975039.1/1-107008
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`

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`Case 1:22-cv-02655-RA Document1 Filed 03/31/22 Page 19 of 68
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`CO-PACK AGREEMENT
`
`THIS CO-PACK AGREEMENT(the “Agreement”) is made and entered into to be
`effective as of July 29, 2015, between ADF Foods (USA) Ltd. (“Company”), and Ascot Valley
`Foods, LLC (“Co-Packer” and, collectively with Company,the “Parties”).
`
`RECITALS
`
`Company and Co-Packerdesire to enter into a business relationship pursuant to
`A.
`which Company will outsource to Co-Packer the production of, and Co-Packerwill produce, certain
`products for the customers of Company.
`
`Company is willing to allow Co-Packer to review certain confidential information
`B.
`on the condition that Co-Packer agrees to keep such information confidential and not disclose
`such information to any other party or otherwise use the confidential information other than in
`accordance with the terms and conditions set forth in this Agreement.
`
`NOW, THEREFORE,forand in consideration of these recitals, the mutual covenants
`herein contained, and other good and valuable consideration, the receipt and sufficiency of which
`are hereby acknowledged,the parties hereby agree as follows:
`
`AGREEMENT
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`Manufacture and Purchase of the Products. Subject to the terms and conditions
`1.
`hereof, during the term of this Agreement, Co-Packer agrees to manufacture, produce, package,
`store, pick for shipment and stage for shipment for, and sell to, Company, and Company agrees
`to purchase from Co-Packer, the products listed in Exhibit A attached hereto (the “Products”) on
`a product-by-product basis as Companyshall reasonably request. Co-Packer shall manufacture,
`produce and package the Products in compliance with the specifications attached hereto as
`Exhibit B (the “Specifications”), Company may, at its own discretion make changes to the
`Specifications at any time during the term of this Agreement and Co-Packershall implement
`such changes within thirty (30) days following written notice or within such other period of time
`as the parties may agree.
`
`
`Minimum Commitment; Volume Forecasts. The annual minimum order volume
`2.
`for Product to be ordered by Company from Co-Packer is 200,000 total cases in each year (12
`month period from inception) of the Term of this Agreement (“Minimum Commitment”). For
`any Renewal Term, agreed upon minimum volume requirements will be mutually negotiated by
`
`Parties, provided, however, that if the Parties fail to agree upon new minimums, the current
`Minimum Commitment requirements shall remain in place. If Company elects to utilize a
`secondary co-packer to produce any of the Products, and the actual cases of Products ordered
`from Co-Packer falls below the Minimum Commitment amount in any year of the Term ofthis
`Agreement, Company will use its best efforts to move production from the secondary co-packer
`to Co-Packer to increase Co-Packer’s production back to the Minimum Commitment level.
`Notwithstanding the foregoing, if Company’s purchase orders, in the aggregate as of the end of
`any year during the Term or Renewal Term,as applicable,fail to specify quantities of Product at
`least equal to the Minimum Commitmentfor such year as provided in this Section 2, Co-Packer,
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`7524713.1
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`

`

`Case 1:22-cv-02655-RA Document1 Filed 03/31/22 Page 20 of 68
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`in its sole discretion, may send Company written notice (including an invoice) of its purchase
`shortfall, which notice will create a binding obligation on Company to purchase or pay for the
`balance of Company’s Minimum Commitment. By the 20" of each month, Company will
`provide Co-Packer with monthly rolling forecasts of estimated purchases of the Products for the
`foll