Dr. Sanford Siegal
Dr. Sanford Siegal ()

The case of the doctor who wants to avoid paying a $2.9 million judgment in a dispute over stale diet cookies came before the Third District Court of Appeal on Tuesday.

Dr. Siegal’s Direct Nutritionals LLC, better known to consumers as “The Cookie Diet,” argued it shouldn’t have to reimburse Walgreen Co. for the cookies the drugstore chain was unable to sell.

Walgreen asserts the parties entered an agreement in 2009 in which Siegal’s Miami-based company guaranteed sales on all orders. Walgreen bought more than $5.4 million worth of cookies but sold only half that amount by the time the shelf life expired.

When Walgreen sought reimbursement, Siegal’s refused and Walgreen sued.

Last May, Miami-Dade Circuit Judge Jose M. Rodriguez entered final judgment for Walgreen of $2.6 million in principal and $173,418 in prejudgment interest. Rodriguez later added $100,943 in legal fees and costs for Walgreen.

The diet cookie company asked the appellate court to reverse Rodriguez’s judgment.

Siegal attorney Gregory N. Anderson of Stack Fernandez Anderson & Harris in Miami told the Third District panel this is a dispute over how to interpret two contracts—the purchase agreement and the purchase order.

Anderson said the agreement “did not obligate Walgreen to purchase any goods at all. It was not a binding agreement on Walgreen. It was an agreement to agree to possibly purchase in the future.”

He said the initial agreement at Siegal’s insistence stipulated Walgreen should not stock more than 12 boxes per store. Walgreen, on its own, far exceeded the quantity provision. Moreover, the purchase order did not contain a buyback clause, he added.

Judge Edwin Scales questioned Siegal’s handling of the purchase order. Once the cookie maker was aware the order exceeded what it felt was reasonable, Walgreen’s attorney said it should have notified Walgreen the order would be filled only on the condition the guaranteed sales provision was no longer valid.

Anderson argued the transaction proceeded with an implied retraction and maintained full payment was needed in advance. Walgreen could have refused, “but they didn’t. They paid for everything.”

Walgreen attorney Loren Cohen of Mitrani, Rynor, Adamsky & Toland in Miami Beach was asked why the chain paid for the cookies.

Cohen said the email record between Siegal’s and Walgreen’s agent makes clear they bargained the transaction subject to a guaranteed sale. Siegal’s insisted on a minimum shelf time, and that was agreed to.

Cohen also noted 20 days passed between the master agreement and the purchase order. If Siegal’s thought the quantity warranted retracting the guaranteed sales provision, “he should have objectively expressed it to Walgreen. It’s been our position that once the order was made, it’s binding.”

On rebuttal, Anderson emphasized the difference between the two documents.

“It was their documents. It was their failure to incorporate the two. That burden should not pass to my client. It would not be a just result,” he said.

The other members of the panel were Chief Judge Frank Shepherd and Judge Linda Ann Wells.