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Step-by-step: The alleged Reimers/Torick/Langtry conspiracy as described in amended court papers


Previous court filings reported by Wine Industry Insight (links below) contained relatively non-specific and often incomplete details about the case.

This follow-up is based on the far more specific details contained in the amended complaint filed Sept. 22 by Langtry/Guenoc Wine Inc.


Langtry Farms LLC has filed a First Amended Complaint (premium link) in Lake County Superior Court against Torick Farms LLC, its managing partner Hugh Reimers and his alleged conspirator Eric Stine. The amended complaint asks for Declaratory Judgment on wine storage charges, and also alleges:

  • Fraud,
  • Negligence,
  • Intentional Interference with Economic Advantage,
  • Negligent Interference with Economic Advantage,
  • Breach of Contract,
  • Unfair Competition,
  • Breach of Fiduciary Duty,
  • Breach of Duty of Loyalty,
  • Conversion.

$3.5 million in unlicensed wine sales; Langrty asks 3X that in damages

The Langtry complaint also charges Reimers and Stine with “unlicensed sales of wine, reaping more than $3,500,000 in illegal proceeds,” and asks for three times that amount in punitive damages.

A substantial part of the filing describes a purported scheme between Reimers and Stine (who had been a Langtry executive during the time of the alleged scheme.)

Readers should keep in mind that the issues described in the complaint are charges that remain to be litigated and have not yet been decided by the court.

Editorial Note:

  • Indented text presented in dark red type, represent direct quotes from the Amended Complaint.
  • Any black text interspersed in the red quotes has been added to avoid confusion.
  • Paragraph spacing has been added to improve readability.
  • The order of some paragraphs from the complaint has been edited in an attempt to present the text in chronological order for better comprehension.

The Parties

Plaintiff Langtry Farms (GWI) — the successor to Guenoc Winery Inc. (GWI) — is a bonded winery and grape grower in Lake County. It also serves as a custom crush facility. GWI was dissolved Dec. 28, 2020 and its operations absorbed by Langtry.

Defendant Torick Farms is a California LLC managed by

Defendant Hugh Reimers, is a Sonoma County resident who has served as a c-suite level executive with Foley Family Wines and Jackson Family wines.

Defendant Eric Stine, is a Lake County resident who was hired by GWI in July 2020 at a salary of $6,250 per month and served as its Vice President of Winemaking and Operations.

“Defendants Stine and Reimers worked together for several years at Foley Family Wines, where Stine reported to Reimers who served as the President of Foley Family Wines. Subject to the instructions of his supervisors, Defendant Stine had control over and responsibility
for all winemaking operations at the GWI winery.”



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Alleged plot began two months after GWI hired Stine

Plaintiff alleges on information and belief that Defendants Reimers and Stine formed a partnership in September 2020 to carry out the conduct described herein.

Selling wine from smoke tainted grapes

Defendants Reimers and Stine, while Defendant Stine was an employee of GWI, secretly partnered to profit from the sale of bulk wine made from smoke impacted grapes, using Plaintiff’s facility to carry out their scheme all without the knowledge or consent of Plaintiff.

Reimers & Stine form “joint venture”

The Reimers-Stine collaboration (which constituted a partnership or joint venture) had neither a winery nor alcohol beverage licensing to allow for the legal production or sale of wine.

In order to effect their plan, the partners secretly utilized Plaintiff’s winery and resources .

Plaintiff had expressly prohibited the processing of smoke-impacted grapes at its facility. Defendants did so anyway, at great cost and damage to Plaintiff.

Stine was “inside man: who made the events possible

Defendants would not have been able to effect their plan if Defendant Stine had not been the winemaker at the LF winery. Defendant Stine managed all deliveries of wine and grapes into and out of the facility and, with respect to the wine and grapes controlled by the Defendants,
Defendant Stine facilitated the processing and shipments of wine through deliberate and coordinated concealment.

Stine’s role in the smoke taint fraud scheme as the “Inside Man” was the only way that the scheme could be executed without the knowledge of his employer.

Millions of dollars projected from Reimers/Stine “joint venture”

Defendants Reimers and Stine, who have extensive histories in the wine industry, devised a scheme to profit from the widespread smoke-damage which began in August, 2020.

By September 23, 2020 Reimers and Stine had put their scheme in writing. At the most basic level the scheme was projected to generate $2,925,000 in revenue in six months – a 294% profit.

Reimers was to receive $1,957,523 in proceeds, and Stine $967,478. However, the scheme required that Reimers fund $495,248 and Stine fund $247,253.

Stine thus needed to amass significant funds to contribute to the partnership without disclosing that to his new employer.

Stine struggled to pay his share of agreement

Stine’s salary as Winemaker of GWI was modest and had started only 60 days prior to Reimers and Stine determining Stine would need to contribute nearly a quarter of a million dollars …Stine thus needed to amass significant funds to contribute to the partnership
without disclosing that to his new employer.

Alleged Insurance Fraud  #1: Langtry smoke-tainted grapes

In September 2020, Defendant Reimers presented to Langtry’s management – without noting Stine’s participation – a scheme whereby Defendants Reimers and Torick would purchase smoke tainted Napa Valley AVA grapes from Plaintiff’s (GWI’s) vineyards at “salvage” values.

Plaintiff would then file a claim against its crop insurance policy for losses relating to the damaged quality of the grapes.

Later, Defendants would then, with Plaintiff’s (GWI’s) proposed assistance, use those “salvage” grapes to make wine at Plaintiff’s (GWI’s) winery facility and share the proceeds from the sale of that wine.

The proposed sale would result in Plaintiff profiting from the sale of wine made from its grapes above and beyond the recovery of its crop insurance claim.

Defendant Stine strongly supported this scheme and attempted to help facilitate it without disclosing to Plaintiff’s management that he was the Inside Man in the Reimers partnership and that Stine was entitled to 33% of the profits from the scheme.

Plaintiff (GWI) declined the efforts by Reimers and Stine to participate in this scheme, which Plaintiff believed constituted attempted insurance fraud and refused to be involved.

Alleged Insurance Fraud #2: Krasilsa smoke-tainted grapes

According to the Amended Complaint Reimers reportedly mislead his business partners by telling them he was selling Krasila’s smoke-tainted Pinot Noir grapes at a salvage price and filing an insurance claim for the lost income. The Amended Complaint alleges:

Smoke-exposed winegrapes delivered to Plaintiff’s winery included grapes grown by Krasilsa Pacific Farms, LLC, a California limited liability company (“Krasilsa”), an entity for whom Reimers also served as Manager.

Reimers represented to his partners in Krasilsa on
September 9, 2020 that he was pursuing $634,000 in crop insurance for their partnership losses due
to smoke tainted Pinot Noir grapes from their partnership vineyards.

He represented that he could not find any buyers for the smoke tainted grapes other than “Langtry winery” which was only willing to pay $350 per ton for their partnership fruit.

Reimers asked his partners for approval to pursue the
$634,000 in crop insurance and to sell the smoke tainted fruit to “Langtry winery”.

However, Hugh had no intentions of selling any Pinot Noir grapes to “Langtry winery” (Langtry has never purchased
any smoke tainted fruit in the past and had no intention of purchasing any smoke tainted fruit in 2020) and Reimers was going to secretly purchase the fruit for himself.

 The “Sham” transaction

Plaintiff discovered after September 2020 that Defendants Reimers and Stine collaborated to complete a sham transaction where Langtry “purchased” grapes from Krasilsa at a purported price of $350 per ton, process that fruit into wine at the Langtry facility, and then resell
that wine to Torick for $350 per ton. Reimers repaid Langtry for the wine from that fruit with a personal check for $150,000, yet he planned to sell the resulting wine for more than $1 million.

Discovery revealed that Defendant Reimers knew that the grapes were smoke impacted and had been rejected by other purchasers. Defendant Reimers misrepresented to his
business partners that Langtry was interested in purchasing that smoke-impacted fruit.

At no time did Langtry have any interest in purchasing smoke-impacted fruit or wine from anyone prior to 2020
or during 2020. Rather, Reimers was the real purchaser – and Defendant Stine assisted Reimers in concealing the true purchaser from Reimers’ partners.

Defendant Stine conspired with Defendant Reimers to conceal from Plaintiff, and Plaintiff was thus not aware, of  the smoke impact to the delivered grapes and wine prior to
Defendants’ wine being placed in Plaintiff’s oak tanks and barrels, permanently rendering them impacted as having held smoke tainted wine.

Hide & Seek With Langtry/GWI: The Yokayo Gambit, Part 1

Rebuffed on the initial Langtry/GWI insurance ploy, Reimers went ahead and bought smoke-tainted grapes from Langtry/WGI which reiterated that the smoke-tainted grapes could not be processed at GWI/Langtry because the smoke compounds would ruin its redwood tanks.

Reimers agreed to that, then had the tainted Langtry/GWI grapes crushed at Yokayo Winery in Mendocino.

Screen Shot 2021-10-01 at 7.45.00 AM

“Me” in this screen shot refers to Stine.

According to the complaint, Stine –who was in charge of all operations at GWI, had that wine secretly delivered for aging at the Langtry/GWI winery in contradiction to GWI’s previous adamant objections.

As a result, the Langtry complaint contends that its oak aging barrels and tanks were irreparably damaged.

Laundering smoke Tainted wine, Lokayo Gambit, Part 2

To avoid having to pay another facility for storage and other charges, Defendants conspired to transfer the smoke-tainted wine back to Plaintiff’s winery facility for storage while concealing that transfer from Langtry’s management.

On October 23, 2020, Defendants Reimers and Stine reviewed a financial model for their partnership comparing the costs of Yokayo storage versus storing the wine at Plaintiff’s facility.  

On Sunday, October 25, 2020, Reimers and Stine discussed secretly shipping the smoke-tainted wine processed from the Langtry Farms’ smoke-impacted grapes at the Yokayo facility to Plaintiff’s winery.

That discussion included concealing the shipment from Plaintiff’s manager and GWI’s President, Easton Manson:

Screen Shot 2021-10-01 at 10.47.17 AM

“Me” is Stine.

Defendants succeeded in secretly transferring to and storing this smoke-tainted wine at Plaintiff’s facility for several months – without paying any storage charges – until Defendant Stine was terminated and the wine and its source was later discovered by a new winemaker.


 

Langtry Torick – First Amended Complaint Filed Sept. 22, 2021