By Robin Fornoff
CMI PROJECTS EDITOR
A California chocolate maker suing Sunland Inc. for $1 million has also set its sights on the defunct Portales peanut processor’s CEO Jimmie Shearer.
Albuquerque attorney Nathan Mann said in addition to suing Sunland, Swain Creations Inc. is asking for a judgment individually against Shearer. Swain is accusing Sunland and Shearer of fraud, concealment and intentional misrepresentation.
Mann and Swain’s California attorneys say Shearer failed to disclose repeated health and safety violations found at Sunland years before the FDA finally shut down operations in response to a national salmonella outbreak linked to the plant in 2012.
Shearer referred any comment to Sunland’s attorney William Arland of Santa Fe. Arland didn’t return telephone calls.
The disclosures are among the latest filings in the Chapter 7 bankruptcy protection sought by Sunland, once the nation’s largest producer of organic Valencia peanuts.
In a lawsuit filed in a California federal court, Swain says the FDA shutdown forced it to recall more than $1 million worth of chocolate confections made with Sunland peanut butter and distributed worldwide. The suit claims Shearer and other Sunland officers repeatedly assured Swain it would be reimbursed for the loss.
The complaint Swain filed notes, “even though Plaintiff (Swain) advised Defendants (Sunland and Shearer) that as a small company it could not survive without immediate reimbursement, Defendants not only failed to provide any restitution, but intentionally mislead Plaintiff into believing Sunland would begin reimbursing Plaintiff … in early November, 2012, and later again on March 1, 2013.”
When Sunland didn’t pay, Swain filed the lawsuit May 22 in California. Five months later, Sunland filed for bankruptcy protection and liquidation at bankruptcy court in Albuquerque in the midst of settlement negotiations between its insurance carrier and Swain’s attorneys, according to court documents.
In the California lawsuit, Swain’s attorneys alleged the company was deceived into buying peanut butter from Sunland. While being encouraged to purchase Sunland’s products, Swain was never informed by any Sunland official of the repeated health and safety violations, according to the complaint.