Partners sue each other over failed food contract
Gregorio Palomino praised Iverson Brownell in May 2020 for convincing him to pursue a lucrative federal contract to supply food to needy families during the pandemic.
“He reached out to me and said, ‘We should really go after this to help families out. There is such a need here in San Antonio,’ ” Palomino recalled in an interview.
The warm feelings didn’t last. The former partners are currently embroiled in a legal battle, accusing each other of fraud.
In December, Brownell’s Fork and Gardens catering and events firm alleged in a lawsuit that Palomino and his company, CRE8AD8, broke an agreement to split the profits from the $39 million federal contract. Brownell also accused Palomino of making “excessive” payments to himself and his family members.
Palomino is the San Antonio event planner who came under intense scrutiny for poor performance under the contract, which was part of the U.S. Department of Agriculture’s $4 billion Farmers to Families Food Box Program.
And he’s struck back at his onetime partner.
In a counterclaim filed March 7 in state district court in San Antonio, Palomino said Fork and Garden’s suit has no basis because he’d already paid Brownell $40,000 to drop any and all claims against him.
Palomino is suing Fork and Garden LLC for damages of more than $200,000 and up to $1 million for “flagrant violations” of a settlement agreement Palomino claims they reached Dec. 31, 2020, after partnering on the food-box project.
Palomino’s attorney, Brian A. Marks, provided the court with what appears to be a copy of the signed settlement agreement with Brownell. Marks also provided the Express-news with what appears to
be a copy of the check for $40,000 made out to Brownell on Dec. 31, 2020.
According to the lawsuit, the check cleared Fork and Garden’s bank Jan. 20.
Palomino alleged Fork and Garden committed fraud by filing its lawsuit after agreeing to accept the $40,000 payment.
Palomino and CRE8AD8 have suffered financial damage because of Fork and Garden’s lawsuit, Palomino’s counterclaim contends.
In addition to seeking punitive damages, Palomino is asking the court to award him attorney’s fees.
In an interview, Marks accused Brownell of “buyer’s remorse.”
“He is not satisfied with the $40,000, so he sues,” Marks said. “The court should rule in our favor to discourage other actors from doing the same.”
Brownell and his attorney, Eric De Leon, did not respond to requests for comment.
The dispute stems from Palomino’s and Brownell’s involvement in a program launched by the Trump administration to help farmers and ranchers redirect unsold meat, dairy and produce to hungry Americans after the pandemic severely damaged the economy.
The contract awarded to CRE8AD8 was one of the largest in the program’s first phase. Critics blasted USDA for selecting the firm and other companies with little experience in largescale food distribution.
The pact called on CRE8AD8 (pronounced “Create A Date”) to buy 18 million pounds of food, pack it into 750,000 boxes and transport them to food banks and other nonprofits in seven states by the end of June 2020.
Records provided by USDA revealed CRE8AD8 fell short by nearly 250,000 boxes and was paid $31.5 million, about $7.6 million less than the contract allowed.
In an email dated May 29, 2020, Palomino provided USDA with a spreadsheet detailing the 28 nonprofits he planned to supply. Topping the list was the San Antonio Food Bank, which was set to receive 108,000 boxes. The Houston Food Bank was second, with 72,000.
The San Antonio Food Bank said CRE8AD8 supplied it with only 26,617 boxes. Houston reported receiving just 23,832.
The USDA did not renew CRE8AD8’S contract for the program’s second phase. A 2021 report by a U.S. House subcommittee that investigated the federal government’s pandemic response sharply criticized CRE8AD8, saying the San Antonio Food Bank complained of receiving rotten food, wet and collapsing boxes, and food delivered at unsafe temperatures.
Investigations by the Expressnews after CRE8AD8 received the contract in May 2020 revealed Palomino made inaccurate claims about his professional credentials and his clients, which he said included USAA, Valero Energy Corp. and Fiesta San Antonio. All three said they never worked with him.
The Express-news also found court records showing Brownell filed for personal bankruptcy in 2011 in South Carolina after defaulting on more than $360,000 in debt.
“I bring about 25 years of culinary, team building, logistics, development and execution to the table for this project,” Brownell told the Express-news in a May 2020 interview. “It’s a huge possibility to help the city and state. To the skeptics out there, I’d say, ‘Be happy.’ ”