Farmers sue Encinitas Union School District over contract

Eat Well Group believes that the Encinitas Union School District wrongly terminated its contract to oversee this 10-acre plot
Eat Well Group believes that the Encinitas Union School District wrongly terminated its contract to oversee this 10-acre plot
/ Jared Whitlock

Lawsuit seeking $5.28 million in damages from district

Two farmers previously in charge of transforming 10 acres of land into a farm education center have filed a breach-of-contract lawsuit against the Encinitas Union School District.

In turn, the district slapped the farmers and their company, Eat Well Group, with a counter lawsuit on Dec. 2. It states the company failed to put in irrigation, fencing and access roads at the district satellite campus, located at 441 Quail Gardens Drive in Encinitas.

Eat Well Group’s Oct. 20 complaint alleges that the district prevented Eat Well Group from fulfilling contract duties at the property, stating in one instance the Encinitas district changed the fence locks and refused to hand over the key.

Originally, the district envisioned a long-term agreement in which Eat Well Group would develop and manage the farm education site, as well as lease space to subtenants. But last year, the district decided to retain control of the property and carry out its own vision.

Students last spring for the first time visited the farm, in the making for more than five years. The property is still a work in progress, but has rows of crops for school lunches and four portable buildings, dedicated to nutrition and science lessons.

Eat Well Group in 2013 entered into a one-year license to get the ball rolling on the farm education center, and the lawsuit alleges that the district prematurely canceled the deal for no reason.

“This blindsided them,” said attorney Greg Woodard, representing farmers Scott Murray and Jerry Miller of Eat Well Group. “Suddenly the license was terminated and they had no idea why.”

Woodard said Eat Well Group agreed to the deal based on the understanding it would lead to a long-term extension. The one-year contract “specifically contemplates” Eat Well Group overseeing the property by way of a 30-year, joint-occupancy agreement, but that never materialized, according to the lawsuit.

The two farmers sunk a lot of time into planning the farm, and Miller even relocated his family from Colorado to the area to push it forward, Woodard said. He added their dedication was the result of repeated district support for the farm vision, which abruptly ended in March 2014 when the district cut off all communications.

They’re seeking $5.28 million in damages from the Encinitas Union School District, the lion’s share of which represents lost lease revenue from the proposed 30-year agreement. The figure also includes Eat Well Group’s out-of-pocket expenses and fees the company would have received for converting the then-vacant site into an agriculture education center.

Murray’s company, Murray Farms, is also named as a plaintiff in their lawsuit.

The lawsuit alleges that in addition to the district locking Eat Well Group off the property for a period, the district wouldn’t agree to a location for fencing and access roads. It goes on to say the district’s contractor denied the company’s proposed site improvements for eight months. And it states that the district changed the configuration of the Encinitas Community Garden on the land, requiring an overhaul of plans.

District Superintendent Tim Baird said that the district didn’t get in Eat Well Group’s way, adding the group had access to the site but didn’t make improvements as required under the one-year license.

“Eat Well was not locked out of the site…I don’t think they had the capacity to do what we expected them to do,” Baird said.

Baird said the district ended the license with Eat Well Group and declined a long-term extension because it realized that maintaining district control over the site would mean more flexibility. The nonprofit Healthy Day Partners briefly oversaw the property earlier this year, but the district now manages it.

“At the end of the day, it makes more sense that we’re in charge both of the production farm and the instructional programming,” Baird said.

Baird said it’s “crazy” that Eat Well Group is looking for $5.28 million.

“That’s an awful lot of tomatoes you have to grow to make $5 million,” Baird said. He noted that the district’s counter lawsuit is seeking compensatory damages and attorneys’ fees.

Proposition P, a $44 million bond passed in 2010 for facility and technology upgrades, has paid for development of the 10-acre property.

The site was gifted to the district after a large development deal about a dozen years ago. Enrollment projections showed there wouldn’t be enough students in the district to justify another school, so the district board approved a farm concept in 2010 with the aim of offering hands-on education.

Baird said he’s confident the district will prevail in Eat Well Group’s lawsuit.

“I don’t believe there’s a lot of substance to it,” he said.