A fight between a US importer of Chilean seabass and its Panama-based supplier has taken yet another legal twist.

Kendell Seafood Imports, a seafood importer based in Newport, Rhode Island, filed a short, five-page complaint last week in the US District Court for the District of Rhode Island, charging that New York City-based importer, processor and wholesaler Mark Foods "intentionally interfered" in Kendell's ongoing contractual relationship with Patagonian toothfish supplier Chilean Sea Bass Inc. (CSB). 

Though the complaint reports only that the damages suffered by Kendell Seafood exceed $75,000, the case is linked to another much more costly court decision for the Rhode Island company.

US district chief judge John McConnell, Jr., in the same Rhode Island federal court, ruled in May 2024 that Kendell Seafood breached its contract for buying toothfish from CSB in 2020 and ordered the company to pay CSB $575,496.50 "plus costs and interest."

In its more recent complaint against Mark Foods, Kendell Seafood's attorneys explain how the company had a longstanding relationship with CSB exclusively through Pedro Grimaldi, an individual who "acted as an authorized agent and owner on behalf of CSB," dating back roughly a decade.

"The nature of the ongoing contractual relations between Kendell and Grimaldi was that Kendell would purchase CSB's entire catch annually through Grimaldi, who was acting as an authorized agent on CSB's behalf," the complaint recounted. 

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Kendell "purchased large volumes of fish" from CSB, which has its primary place of business in Punta Arenas, Chile, between 2012 and 2020 and was working with Grimaldi and CSB to purchase the supplier's entire catch for 2021. That's when Kendell alleges Mark Foods "intentionally interfered" with an agreement to "ameliorate the 2020 losses."

"Mark Foods' intentional interference with the agreement was done with the intent to interfere with the ongoing contractual relationship between Kendell and CSB," the court filing reads. "As a result of Mark Foods' intentional interference with the agreement, Kendell has been damaged."

Kendell Seafoods is taking on no small player in Mark Foods. 

The company absorbed the seafood division of Arista Industries in 2023, creating a US frozen-focused importer with an annual revenue of $800 million, as previously reported by Undercurrent News.

Mark Foods said in a statement at the time that the combined company would sell around 100m pounds of seafood annually with a focus on Chilean seabass/ Patagonian toothfish, farmed and wild shrimp, New Zeland mussels, lobster, pasteurized crab, Spanish octopus and other seafood products.

A tale of two lawsuits

To fully understand Kendell's complaint against Mark Foods, however, it's important to revisit the earlier 2021 lawsuit that CSB filed against Kendell in the same federal court, seeking $2.5 million.

McConnell's 16-page decision opens like a short novel.

"This is [a] cautionary tale about the price of fish," the judge wrote. "In January 2020, at the beginning of the COVID-19 pandemic, CSB contracted to sell over 350 [metric] tons of Antarctic toothfish to Kendell. Soon after, COVID-19 upended the domestic and international fishing markets, resulting in significant losses to both parties."

As noted above, Kendell had a longstanding relationship with CSB exclusively through Grimaldi. In late 2019 and early 2020, before the COVID-19 pandemic, Kendell owner Michael DellaGrotta negotiated with Grimaldi and agreed to purchase "all the cargo" from all three of CSB's vessels at $21 per kilogram. 

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DellaGrotta initialed invoices in February 2020 totaling more than $6m for just over 329,042 kg of fish, according to the complaint. Less than a month later, he sent letters to Kendell's suppliers, including CSB, "advising them that the company was "temporarily stopping payments because restaurants in the US had been closed."

Per the complaint, DellaGrotta told Grimaldi that he could no longer accept the fish and that he had no duty to accept it. That led Grimaldi and DellaGrotta to renegotiate the deal, and Grimaldi agreed to reduce Kendell's price by $6/kg, "offering his personal guarantee" so that the company would accept the fish. 

Kendell paid a total of $3.5m for the March 2020 catch and, in negotiations for the 2021 catch, had developed a new payment plan to "settle the outstanding balance." However, CSB argued in the filings that Grimaldi lacked the authority to act on behalf of CSB as he had sold his stake in the company years prior.

McConnell sided with CSB, however, finding in his May decision that "Kendell entered a valid oral contract, supported by a writing to buy the bulk of CSB's March 2020 catch for $21 per kilo." 

Payback's a fish

The 2021 effort by Mark Foods wasn't its first attempt at taking over the toothfish supply relationship with CSB, according to Kendell Seafood's complaint. Kendell alleges that Mark Foods made multiple stabs at usurping the business between 2012 and 2020.  

Kendell is seeking a jury trial on all issues. It's requesting that the court declare that Mark Foods intentionally interfered with Kendell's contractual relations and award actual and consequential damages in Kendell's favor, including Kendell's attorneys' fees and costs, as well as any other "further relief as the court deems necessary."

Undercurrent reached out to DellaGrotta who said that he cannot formally comment on the details of the ongoing case as there is "too much being investigated at this time."

"However, I can confidently tell you that more information will surface as time goes on," DellaGrotta told Undercurrent. 

Mark Foods issued the following statement: "Mark Foods never interfered with any contract of Kendell Seafood. While Mark Foods has not been served with Kendell Seafood's lawsuit and lacks a clear picture of what is being alleged, we intend to vigorously fight this meritless suit."