Chelsea Wine Storage sued again for disposing of customer wine

WINE TALK
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You would have to look to (i) the terms of the contract between the storage business and the owner of the wine, as well as (ii) the law of the state, including the Uniform Commercial Code. Neither of these were favorable to Chelsea and neither allowed Chelsea to “dispose of” the wine. Part of the problem is that Chelsea wouldn’t state how the wine had been “disposed”, whether by selling it privately, selling it publicly at retail, selling it via auction, destroying it, drinking it, or otherwise. To your example, in general, a storage business is not allowed under the law to “dispose” of a wine collection worth $40,000 to settle a $5,000 debt, without undertaking various procedures (including, for instance, proper notice to the owner of the wine).

22

This is a tough reminder to insure your wine with a strong, reputable, third-party insurer.

23

The short version - a lien holder must dispose of the underlying property in a “commercially reasonable manner.” Example of what is not reasonable? The lien holder owns an affiliated retail store and sells $50,000 of wine held as collateral to the retail store for $5,000 and then the retail store puts it on the shelf for $50,000 and pockets the $45,000.

24

Sounds like a familiar story.

25

Is that why the storage locker type places don’t look at what’s in the locker when the renter doesn’t pay?

26

Yup. With the number of these cases starting to appear, I am wondering if maybe the wine storage business could use its own version of the Glass-Steagall Act.

When I started collecting wine here in Texas almost 25 years ago, offsite storage options were rare. Typically they were in the basements of office buildings or moving company warehouses where an owner or key client had paved the way for an option to allow those who were in the know to have offsite storage. And always- at least around here- you had sole access to your lockers and your wine.

Then in the late 90s many of the national storage companies got into that business with special wine rooms kept at 55 within facilities that were climate controlled to a lesser degree. And again- superb security, only you can get to your wine etc.

Now that has all changed and wine storage has become a profitable business unto itself. It is still possible to get your own lockers to which only you have access, but increasingly I am seeing collectors go for a less expensive route where their inventory is co-mingled in large open storage facilities. I know that has been common in NYC for some time, but even here in Texas that is now common where it was once unheard of.

Making matters more complicated, many wine storage facilities are also retail venues of some sort. Add in the fact many clients rarely- if ever- set eyes on their wines, PLUS the fact there are many instances where clients are always willing to sell something for a certain price via the wine storage facility’s retail outlet or just via word of mouth- and all kinds of terrible possibilities emerge.

Even leaving aside the obvious acts of dishonesty, all it takes is one person not paying attention or in a hurry to run into a warehouse with comingled inventory, pull a case to be sold with the right branding but not the right customer tag, and suddenly someone loses a case of wine in a mistake that could go undetected for years, if at all.

27

That is a reason to have the operator perform its own inventory count, which a customer can then reconcile versus his or her own records.

28

Under these circumstances do UCC/statutory causes of action and remedies preempt common law or are common law (non-equitable) causes of action like conversion on the table? (I didn’t look at the counterclaims and defenses.)

Also is the IRS or NYS tax authority taking a closer look st Chelsea?

29

Heck, if the State Liquor Authority examines, its business licenses are at risk.

30

here’s the lawsuit
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=XqFz8eV7wfsr2LK4spQAoQ==&system=prod

I know this is one side, but still looks pretty damning.

and it turns out the plaintiff is Pablo Alvarez’s (Vega Sicilia) wife.

31

I hope that the plaintiff has notified the Noo Yawk state liquor authority.

32

I used to store my wine at an off site storage. It was treated like a storage unit business. There is one time that I know of when they couldn’t find a client. I am not sure how long they waited, but it could have been a year. It was auctioned like in the storage wars tv show, before the show was around. This was 15 or so years ago. But the unit was sold to a high bidder, you could not sort through the wine or see what was in boxes. Is this a legal way of doing it? Oregon has unique laws around selling alcohol, so maybe that is why it happened this way.

33

Elisa was a New Yorker and a wine lover before becoming part of the Ribeiro Royalty

34

I am glad to have a self service locker. No funny business.

35

These guys sound like thieves frankly

36

Do wineries have Brail on their labels? [scratch.gif]

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One of the owners of Chapoutier told me years ago that one of the members of the family was blind so they started putting Braille on the labels so he could go down to the cellar and select a wine without assistance. Nice touch.

39

Jay et al:
Attached is a Link to a brief summary of Michel’s reason for including Braille on his labels. It was en homage to Maurice de la Sizeranne. Hope this helps clarify things.

40

Worst pun of 2019?