Jury awards $1.5m in family greenhouse dispute
An ugly court dispute that played out for months in Ohio between two Kingsville greenhouse operators and family members resulted with a jury deciding late last week that Paul Mastronardi will receive US$1.5 million (C$1.98 million) from his uncle Luis Chibante. “He was grateful for the jury’s consideration of the matter and securing (the decision),” Mastronardi’s lawyer, Marion Little, said in Ohio on Wednesday.
“It has been unfortunate and trying circumstances for Paul, so he is grateful the jury saw fit to reach the conclusion they did.” Mastronardi first filed a court claim in September 2017 against his business partner Chibante following troubles regarding their Golden Fresh Farms operation, a $22-million greenhouse entity that primarily grew tomatoes covering 20 acres in Wapakoneta, Ohio.
Mastronardi has gained prominence in the business locally as a third-generation co-owner of Red Sun Farms in Kingsville. Chibante, meanwhile, long operated Golden Acres Farm in Kingsville with his wife Lynn, who is a member of the Mastronardi family.
Back in 2015, Paul Mastronardi joined with his uncle Chibante, to open a tomato greenhouse business in Ohio in proximity to I-75 freeway, a key location due to the ease of distribution to several states across the United States. The Golden Fresh Farms business was to operate under the Mas- tronardi family’s Red Sun Farms group of companies.
To launch construction of the greenhouse operation in Ohio, Mastronardi’s parents loaned $2 million through a promissory note, according to a statement of claim filed in court. The Mastronardi family also served as guarantees for loans and debts to launch the business.
Things started to go wrong when Chibante and wife Lynn began divorce proceedings in June 2017, according to the statement of claim. Chibante is alleged to have initially breached conditions of the loan, then roughly two months later attempted to move the distribution portion of the business under another entity. Chibante next informed Red Sun Farms it would not be receiving the Ohio company ’s upcoming winter crop harvest.
When Mastronardi called to discuss the problem, Chibante refused to discuss the matter and hung up, the court documents said. It was alleged Chibante was acting out against Mastronardi and Red Sun Farms “without regard to the best interest” of the Ohio company due to divorce proceedings. Financial difficulties for the company followed due to the violation of credit agreements, the court document said. Chibante was alleged in court to have blocked Mastronardi from viewing purchase agreements and other company documents.
He is also alleged to have refused to participate in company shareholder meetings.
With the company deadlocked in its operation and control, it eventually went into receivership and has since been sold. Mastronardi alleged in court his partner breached fiduciary duty, attempted to benefit at his expense, and the jury in Ohio agreed following lengthy court proceedings in Auglaize County. As plaintiff, he was awarded $727,343 by the jury last Thursday, to be paid by Chibante.
A day later, a second phase of the dispute was agreed to by lawyers from both sides awarding Mastronardi another $350,000 in damages from Chibante, plus $425,000 in legal fees, according to Little. Chibante’s lawyer in Ohio, Michael Scheier, noted on Wednesday that four other claims filed by Mastronardi seeking $6 million in damages overall, ended up being dismissed by the judge prior to the trial as having no merit. “They had five claims and only one got put in front of the jury,” Scheier said.
The jury’s decision can be appealed within 30 days to the state’s Third District Court of Appeal once the judgment is officially entered in the coming days. Chibante’s lawyer indicated his client is leaning toward filing an appeal of the decision.
“Mr. Chibante respects the jury ’s decision, but believes errors were made (in court) and will pursue an appeal,” Scheier said.
Also yet to be decided in court — but expected to be resolved shortly according to Little — is an added claim by Mastronardi for another $268,666 in court costs.