KOR Services, LLC, which does business as KOR Produce, filed a complaint in the Central District of California on Friday alleging that Thomson International Incorporated owes it over $1.7 million after a salmonella outbreak required it to dispose of onions it had purchased from the defendant and sold to other companies, including Sysco a food distributor.
Reportedly, on February 29, 2020 the parties entered a marketing agreement where it would supply onions to KOR Produce and Onions 52 Inc. According to the agreement, Thompson International would supply onions it grew, which matched U.S. Department of Agriculture guidelines and Food Safety Modernization Act standards, to the plaintiff. The onions would be marketed and sold by KOR Produce and Onions 52. The plaintiff would pay back sales proceeds to Thomson International after deducting a sales commission.
Between May 1, 2020 and July 31, 2020, however, the defendant sold onions that could be contaminated with salmonella, and were recalled. According to the complaint, a traceback of a multistate salmonella outbreak by the Food and Drug Administration and Centers for Disease Control and Prevention identified Thompson International as the source. The defendant reportedly alerted the plaintiff on Aug. 1, 2020 about the recall and told the plaintiff to quarantine or destroy products sent in the applicable time period.
Businesses which KOR Produce and Onions 52 sent the recalled onions to asked for a reimbursement for damages. Sysco, which had the largest request, asked for over $1.5 million in damages. KOR Produce alleged that it fulfilled all of the terms under the contract that it was responsible for, it resold onions to Onions 52, which then sold them to Sysco and Hartley Produce both before learning that they were contaminated.
The plaintiff purported that since Thomson International breached the parties’ contract by selling contaminated onions and then recalling them, it should be liable to cover the claims for reimbursement.
The complaint included counts of breach of contract, breach of warranty, and violations of the Perishable Agricultural Commodities Act (PACA). KOR Services is represented by Meuers Law Firm P.L.
