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Sale of Fire-Damaged Wines Sparks Lawsuit From Angry Vintners

Daniel Sogg
Posted: January 24, 2001

Napa Valley producers are still putting out flames from last June's inferno at Frank-Rombauer Cellars, which was believed to have torched 90,000 cases of wine worth an estimated $40 million. The fire at the Calistoga, Calif., warehouse, where more than 20 wineries had stored bulk wines and cases, has so far spawned two civil lawsuits -- filled with accusations of broken promises and backroom deals -- plus the potential threat of punitive action by federal and state alcohol control agencies.

"That fire was the beginning of a nightmare I can't wake up from," said Bob Foley, winemaker for Pride Mountain Vineyards as well as owner and winemaker of Robert Foley Vineyards. He lost 358 cases of Robert Foley wines -- nearly everything he produced in 1998, his first vintage -- in the June 15 disaster. But as distressing as that loss was, he and other winemakers were even more disturbed when they found out that some of the fire-damaged wines had been resold with their original labels to San Francisco Bay area retailers and restaurateurs.

The current mess started to unfold before the embers were even cold. Frank-Rombauer's insurer, Chubb & Sons, based in Warren, N.J., decided to salvage what it could -- even though exposure to high heat strips wines of complexity and richness, and can produce "cooked" flavors. "We told [Chubb] that it should all go in the dump," said Koerner Rombauer, owner of Rombauer Vineyards in St. Helena and a partner in Frank-Rombauer Cellars. "But they said they had to salvage something."

Salvaging wine from a fire is legal in California, but the producers whose wines had been in the fire didn't want their standing with consumers jeopardized by damaged goods. Those estates approved the salvage venture, but only if the wines were decanted into new bottles with no indication of the original producer.

Chubb hired Greer & Kirby Co., of La Mirada, Calif., to sift through the refuse. The company managed to retrieve more than 9,700 cases of wine, representing 23 different brands. The wineries involved thought that would be the end of the matter, believing that the soon-to-be-anonymous bottles would be destined for sangria, reduction sauces and the like.

But at the end of the summer, Rombauer Vineyards and Napa Cellars received a report that some of the bottles that had been in the fire -- and that were still bearing the original labels -- had been seen at San Francisco's Michelangelo Caffe, where the wines were being served. (Most of the other wineries didn't learn that the initial agreement had been violated until January, when the story broke in the San Francisco media.)

Greer & Kirby had enlisted the help of Greg Buonocore, a San Francisco middleman and salesman, who put the company in contact with Vico Piccinini, owner of Vico's Imports, in San Francisco's North Beach.

Records submitted by Piccinini to the San Francisco Superior Court show that he paid Greer & Kirby $27,292.50 for 9,097.5 cases -- the ultimate fire sale at $3 per case. While it's not clear exactly which wines Piccinini purchased, the salvage haul included 21 cases of Pride Mountain Vineyards 1997 Claret (released in March 2000 and retailing for $98 a bottle) and 149 cases of Brown Family Estate 1998 Zinfandel (never released, priced to retail for $28 a bottle).

According to court documents, Vico's Imports eventually sold at least 2,500 cases, mostly to restaurants and small stores in the San Francisco Bay area. The wines went for an average of $56 per case, with many of the bottles, if not all, bearing the original labels. Some wines were sold to a distributor in Oregon and made their way to an online auction.

Carlo Nuovo, owner of Michelangelo Caffe, bought about 200 cases, which he said he was pouring as house wine at $14 per carafe, without indicating the producers' names. He would not say if Vico's Imports revealed that the wines were salvaged. "The guy [from Vico's] said he had a good deal going on," said Nuovo. "He let me taste it, and it was a good wine for a good deal."

Following their discovery, Rombauer Vineyards, Frank-Rombauer Cellars, and Napa Cellars initiated a lawsuit, citing Vico's Imports, Piccinini, Buonocore and Greer & Kirby for unfair business practices, dilution of trademarks, unfair competition and negligence. (Chubb has not been named in any suits.) "Anyone selling [these wines] with knowledge of where it came from is potentially liable for all sorts of things," said Carl Ciochon, an attorney representing the wineries.

Among the evidence filed in court is a July 27 letter written to Buonocore by Greer & Kirby employee Troy Culiver, identifying four brands -- Rombauer Vineyards, Napa Cellars, Larkmead Cellars and Mandeville Island -- that were available for purchase. Culiver then added: "Please keep this information strictly confidential. We are in a very sensitive political situation with this claim. If any rumors or conversations get back to the insured, the insurance company, or the media, this operation will be shut down immediately. Please call me if you would like to sample any wine."

Greer & Kirby has filed its own lawsuit against Buonocore and Piccinini, claiming that all parties had orally agreed to decant and relabel the bottles before distribution. Buonocore and Piccinini deny having had any such agreement or discussion.

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