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Jackson & Perkins wins payment dispute

A U.S. District Court jury has sided with rose grower Jackson & Perkins and says a Florida nursery must pay the majority of the $191,000 it has owed since 2002.

Jackson & Perkins, a Harry & David Holdings unit, sued Smith Rose Nursery of Palmetto, Fla., and its owners Calvin Smith and Melvin Smith, in order to recoup the remaining portion of an order that totaled more than $500,000. The Smiths argued a substantial portion of their order wasn't viable and withheld payment. The jury decided that the nursery was liable for 88 percent of the order, but didn't set a dollar figure.

The trial was held last week in Medford before U.S. District Judge Owen Panner, who will determine the actual amount of money the Smiths must pay.

"We're very pleased with the outcome," said Bob Bluth, senior vice president, general counsel and secretary of Harry & David Holdings. "We tried to have discussions since the matter began and they owed a lot of money before we cancelled the contract."

He said the company anticipated the judge would award between $120,000 and $125,000 to the rose grower.

Smith Rose Nursery ordered approximately 153,000 plants in the summer of 2002 with payment due in late December. When some of the roses died, the Smiths withheld payment. The two parties negotiated for some time before Jackson & Perkins filed a $550,000 suit in September 2003. After the suit was filed, the Smiths paid $330,000 and Jackson & Perkins charged off another $65,000.

Bill Deatherage, attorney for the Smiths, argued some of the roses were immature and shipped too early because Jackson & Perkins desired to strengthen its third-quarter earnings. Joe Kellerman told the jury that the Smiths left plants exposed to the sun with inadequate drainage, leading to greater loss.

The jury also determined that the Smiths didn't violate their contract when they sold some of the plants to another nursery.

"We got part of the load," Detherage said. "But my people are not satisfied with the end result. I think their roses are still very first class. Unfortunately too many arrived dead. They were too young when they were shipped and that was a major issue for us."

Jackson & Perkins produces between 6 million and 7 million roses annually in Wasco, Calif., north of Bakersfield. The particular Floriana stock was developed in 1990 for the Florida climate.

"It's a very small part of what we do, but you can't be in business when a customer withholds hundreds of thousands of dollars," Bluth said. "It was a simple issue of our customer not paying and us taking such legal steps necessary for them to pay. Assuming they pay the judgment, we'll put the issue behind us."

Reach reporter Greg Stiles at 776-4463 or at business@mailtribune.com