A vintner is suing a wine consultant for $1.6 million, alleging he was negligent when he failed to produce a new top-quality “cult” wine, according to court records filed in Napa County Superior Court.
In 2012, Chateau Potelle Holdings LLC hired St. Helena wine consultant Denis Malbec to create a new wine that would sell for up to $200 per bottle for the company’s new tasting room in St. Helena, according to owner Jean-Noel Fourmeaux du Sartel, who goes by Fourmeaux.
The new wine was to be made at a winery in Sonoma County that has a crush facility, using grapes from a vineyard on Mount Veeder. It was to be sold under a new label, “Fourmeaux.”
“I wanted to make a strong statement with the opening of my new tasting room,” said Fourmeaux, whose business is based in Napa.
I’ll remember this if a Mount Veeder wine from a “cult winemaker” shows up on Last Bottle, Garagiste, or other close out outlet.
Seems like the most Chateau Potelle Holdings deserves is whatever cost they have put into the wine and consulting fees. The rest is just high hopes and unreasonable expectations.
A key part of the business plan of new, high end Napa wineries – and this is long before the first grape is grown – is how much they’ll be able to charge per bottle.
Frank - are you suggesting the majority of sound business plans don’t specify the expected retail price of the products they plan to sell? Wine industry or otherwise?
These are only the allegations, of course, but the article does say the lawsuit claims the wine was spoiled:
"Instead, the wine spoiled and had to be filtered five times, losing the complexity of a top-quality wine, Fourmeaux said. The 4,000 gallons of wine are in the process of being sold on the bulk market, Fourmeaux said Friday. “The wine is not of quality that I can use,” he said.
Malbec did not take “appropriate action” when the level of volatile acidity — or vinegar — from bacteria began to rise in November 2012, Fourmeaux alleges in court document. Instead, Malbec took steps that unintentionally accelerated VA formation, according to a court filing from Fourmeaux’s attorney, Kevin Block of Block, DeVincenzi & Zelazny LLP in Napa. Malbec then left for a 10-day vacation, the suit alleges."
Garagiste Mystery Wine #89: “This wine was destined to be an incredibly exclusive, $200 bottle available only at the tasting room, but this humble scribe was so impressed with its high-toned red fruit, mineral-drenched terroir, and stunning balance that I just had to negotiate a parcel for you. This is direct from the winery with perfect provenance.”
Wouldn’t it be more appropriate to say he’s being sued for failing to deliver a marketable, super-premium Napa wine? The subject makes it sound like the problem is that he didn’t create the new Screaming Eagle. The article makes it sound like the suit might be completely reasonable.
I haven’t read the complaint, but per the article:
“Malbec, through his attorney, denies the allegations. It’s an inflated demand for a claim of loss of profits for a business that has never been operational, said Malbec’s attorney, Paul Carey of Dickenson Peatman & Fogarty, referring to the $1.6 million.”
As a general legal proposition, it is extremely difficult (if not imposible) to recover for “speculative losses” for brand-new businesses. Also, if it truly was an oral contract, good luck convincing a court of the exact terms of the oral contract.
Other than that, it sounds like a slam dunk of a lawsuit.
Malbec has a boatload of high scores under his belt and a good rep.
It is almost impossible though for anyone to DELIVER a high score or guarantee a $200 bottle will sell, even with such a score. I can think of a certain Cab out of Sonoma that RP routinely gives 96-100 to that just can’t get a market foothold, even as its Napa counterparts sell very well. There are a lot of things that can effect wine quality before a winemaker even sees the fruit, including vineyard selection, vineyard management and rootstock selection. Those all trump winemaking skill. Also, once in barrel, the winemaker does not top or rack the wine, cellar workers do, and their skill can effect wine quality. I also seriously doubt the wine was “filtered 5 times.” More likely it was cycled through a reverse osmosis machine for five cycles in one run, which will reduce VA well, but is not actually terribly unusual.
I am not sure it is good for the winery to sue like this, for what top winemaker will want to help them make a $200 wine now? If Denis was guilty of anything, it was probably taking a position where the goal of a $200 Cab was the “raison d’ etre”, in the first place. It’s like saying “I want you to create a million dollar painting.” How does one do that? Wine is in the end, a farming business. Quality is not manufactured.
Of course any sensible business plan would include projections about pricing that would give at least a reasonable rate of return on investment, but aspirational pricing is more common in the luxury goods sector. As Roy notes:
"If Denis was guilty of anything, it was probably taking a position where the goal of a $200 Cab was the “raison d’ etre”, in the first place. It’s like saying ‘I want you to create a million dollar painting.’ "
Besides the speculative aspect of all of this, do folks just not spring for insurance policies in the wine business?
Are margins so tight that there just isn’t any spare change for an insurance policy against e.g. bacterial spoilage?
I don’t know the answer - maybe insurance policies are so prohibitively expensive that no one can afford them?
And if that’s true - if insurance policies are prohibitively expensive - then maybe a “sound” businessman might pause for a moment to ask himself why that would be the case?
I really would love to know more about what exactly happened here. Is it common for grapes to be picked ultra ripe with really high pH’s in order to get specific flavors up in Napa? Sure it is. This creates a potentially ‘dangerous’ situation right from the get go of potentially high VA’s. Is that what happened?
Again, without any further information, all we can do is speculate.
And I don’t think the lawsuit is crazy at all - these folks hired a consultant who has a great track record of producing wines that score very well with different critics. Period. He was paid accordingly and, for whatever reason, was not able to deliver up to his or their standards. Period. Take this out of the wine industry and I don’t think most would question some of the things being questioned here.
Just hoping some of my North Coast friends have more info to share.
