Del Smith estate files hazelnut lawsuit

SALEM — The estate of Delford E. Smith, founder of the bankrupt Evergreen International Aviation and its Evergreen Agricultural Enterprises subsidiary, has filed a lawsuit against the Hazelnut Growers of Oregon, a growers’ cooperative.

The complaint was filed in Multnomah County Circuit Court. It seeks $150,000 in additional payments for hazelnuts from the 2013 season.

According to the complaint, Smith negotiated a deal to sell the co-op 1 million pounds of hazelnuts at 35 cents above the rate established by the Hazelnut Growers Bargaining Association, which is responsible for negotiating a price with major processors.

The association established an initial field price of $1.15 per pound, so the co-op paid Smith $1.50 a pound. However, favorable market conditions led the price to later rise to $1.30 per pound, and the complaint maintains Smith should thus have received $1.65 per pound.

The co-op’s CEO, Jeff Fox, declined to discuss the matter.

He referred questions to attorney Brandy Sargent, who told Capital Press she is expecting the dispute to be resolved out of court. “This matter is pending settlement right now,” she said.

Regardless of how the controversy between the co-op and Smith is resolved, however, the lawsuit raises questions about the co-op’s pricing deal with the entrepreneur.

Processors who enter into deals with the Hazelnut Growers Bargaining Association are prohibited from paying certain farmers a premium over the established rate, said Bruce Chapin, chairman of the Oregon Hazelnut Commission. “They don’t make special deals, so everybody is paid the same,” he said.

Not every processor signs off on the agreement, but most of the major ones do, Chapin said.

If a processor contracting with the bargaining association is later found to have provided a particular grower with special terms, it would be required to compensate other growers, according to Doug Olsen, the group’s president. “If they end up paying more than what we agreed on, then they owe growers in the association the same amount,” he said.

Given the contract dispute, however, it’s unclear at this point what the co-ops actual payment to Smith’s estate will ultimately be.