Bronco Wine Co. v. Frank A. Logoluso Farms

Facts and Proceedings Below

Bronco Wine Company (hereafter Bronco) operates wineries in Fresno and Ceres and processes grapes into wine for sale in bulk to other vintners. The operations of Frank A. Logoluso Farms (hereafter Logoluso) include farming Thompson seedless and French Colombard wine grapes.

In June of 1982, Bronco and Logoluso entered into two ten-year contracts for Bronco’s purchase of Logoluso’s Thompson seedless and French Colombard grapes. The contracts expressly provide that the grapes’ sugar content or “balling” would be calculated separately for each variety by averaging all loads delivered by Logoluso during the season. Sugar content bears on contract provisions dealing with (1) minimum maturity level for acceptance and (2) price. The price provision of the contracts obligates Bronco to pay Logoluso the “highest cash price generally paid by Bronco for such crop year in the area where grown for the same variety of the same balling.”

During the spring and early summer of 1982, Bronco contracted to buy Thompson seedless grapes from other growers to meet its 1982 crushing requirements at a guaranteed minimum price of $150 per ton at 20 percent sugar.…