Opinion ID: 215200
Heading Depth: 3
Heading Rank: 2

Heading: Grounds for Insecurity

Text: According to Validsa, in March 2008, Validsa’s principals Tomas Gonzalez (“Gonzalez”) and Pablo Cardenas (“Cardenas”) were approached by a Venezuelan businessman, Juan Carlos Chourio (“Chourio”), who demanded a $2 million kickback that he claimed was requested by Georges Kabboul (“Kabboul”), president of Bariven and PSI, to keep the contracts in place. Validsa asserts that Chourio has a family connection with Bariven’s third-highest-ranking officer, who Validsa claims is a close confidant of Kabboul’s. Bariven and PSI dispute some of these facts, as well as the import of the purported kickback demand. Kabboul, for instance, stated that he had never met Chourio and became aware of him only during this litigation. Additionally, PSI and Bariven point out what they say are inconsistencies in Validsa’s principals’ deposition testimonies about the kickback demand. Finally, PSI and Bariven dispute that there is any significance to the familial relationship between Chourio and the Bariven employee, stating that it is an attenuated relationship to an employee who has not been demonstrated to be involved in food procurement. 6
On April 15, 2008, Validsa received an e-mail string from Paolo Rivas (“Rivas e-mail”), a PSI employee. This string included an April 8, 2008 e-mail from Rafael Rosales (“Rosales”), an in-house attorney for Bariven. The e-mail was intended as an internal communication to employees of PSI and Bariven, and was sent inadvertently to Validsa. The e-mail was entitled “Dexton[2]-Suspension of PSO Meat-Demand for Delivery of Chicken” and read in part as: On the instructions of Mr. Georges Kabboul–effective immediately–you are instructed to cancel [Purchase Order] 757. Likewise, we request the current situation of the delay of chickens also purchased from this company, in any case you are instructed to suspend any payment if there is any. On the part of our Law Office, we request the documentation that shows the problems about the failure to deliver chickens.[3] The string also included a second message that read: Per Mr. Georges Kabboul’s instructions, please proceed to cancel Purchase Order No. 5100061757 [Contract 757] for 2400 [sic] MT of beef placed with Empresa [Company] Dexton . . . Likewise, it is instructed that any pending payment to said company be suspended. As of April 15, 2008, the date Validsa received the e-mail containing these messages, Validsa had not delivered any beef under contract 757 or any sugar 2 Dexton is a name that Validsa used in some of its business dealings. 3 The original e-mail was in Spanish, and the parties use slightly different versions. The defendants-appellants’ version is reproduced here; the differences in the translations are immaterial. 7 under contract 632. According to Bariven and PSI, Rosales sent the e-mails following meetings in Brazil with a supplier that raised concerns about Validsa’s performance under some of the November 2007 contracts for chicken. Between April 8, when Rosales sent the e-mails, and April 15, when the e-mails were sent to Validsa, no one from Bariven or PSI informed Validsa that Bariven or PSI intended to cancel contract No. 757, and the companies did not seek the return of the $44.580 million in advance payments from Validsa.
On April 17, 2008, Validsa principal Gonzalez sent a letter to PSI requesting “immediately a written explanation of the situation that is set forth in this [Rosales] e-mail” and “demand[ing] an immediate response to this situation.” Kabboul agreed to meet with Gonzalez. Kabboul and Gonzalez met on April 29, 2008. They discussed the status of over 1,275 metric tons of chicken still undelivered under the November 2007 contracts and how to proceed under the March 2008 contracts. Kabboul proposed using the advance money as payment for the first $44 million in deliveries under the March 2008 contracts, then using letters of credit for the remaining deliveries. The parties could not agree on how to proceed, and Kabboul asked for a follow-up 8 meeting on May 2. Validsa agreed to this follow-up meeting, but for reasons not clear from the record, the meeting did not occur.
On May 9, counsel for Validsa sent Kabboul a letter requesting adequate assurances of performance within five days. PSI responded with a letter dated May 16, 2008, which stated in relevant part: [We] have [informed] your company several times that [] Validsa was not intended to be the recipient of [] [the internal communications contained in Ms. Rivas’s e-mail of April 15], so they should not have [been] taken into consideration. For that reason, we find it very hard to understand how your company even takes the issue to a legal pre-claim communication. On May 22, Validsa sent another letter to PSI regretting PSI’s lack of a concrete response to Validsa’s complaint and asking that PSI “normalize the late payments” on the contracts. PSI did not directly respond to this letter, but instead sent a new draft agreement to Validsa on June 3.
The June 3 draft agreement4 was attached to an e-mail to Validsa from Alfonzo Gravina, Purchasing Manager for PSI, and contained a header stating “DRAFT WITH NO LEGAL OR COMMERCIAL VALUE [sic].” The draft 4 Again, the original version of this e-mail was written in Spanish; we use the translation provided to the district court. 9 agreement stated that “[t]he Parties bind themselves to comply with each and every one of the reciprocal obligations deriving from the Purchase Orders with respect to the amounts to be delivered subsequent to” agreement on these new terms. This draft also contained, inter alia, a new delivery schedule, a forum selection clause, and, most importantly, language now naming PSI as the party responsible for paying the debts owed Validsa. The cover e-mail invited Validsa to “send to me . . . any comments you may have . . . .” Validsa did not respond to this communication, or contact PSI or Bariven at all. Instead of contacting them, Validsa filed suit on June 12, 2008. At the time this lawsuit was filed, Validsa alleged the status of the contracts was: 10 March 2008 Contracts November 2007 Contracts Contract 632 757 326 368 405 Subject Sugar Beef Beef Chicken Beef Value $44.7 $103.9 $24.6 $21.4 $1.5 million million million million million Delivery No Delivery 1 installment Complete Complete Complete Status delivered Unpaid 0 0 $1,599,923 $4,157,021 $62,487 Balance Advance $13,407,600 $31,172,976 n/a n/a n/a Paid on April 2 Scheduled 9-Apr-08 30-Mar-08 n/a n/a n/a Delivery Date The one installment delivered under March 2008 contract 757 constituted 427.3 metric tons of beef. Given the contract price of $4,329.58 per ton, this installment was arguably worth about $1,850,000.5 At the time suit was filed, PSI and Bariven owed a total of $5,819,431 on the three November 2007 contracts and for the one delivery on contract 757, but, notably, Validsa still had Bariven’s $44.580 million in advances.