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Santoni’s settles lawsuit with produce vendor

Santoni’s Super Market settled one lawsuit Friday, but now must prepare for a hearing next week in another.

BSV Highlandtown LLC, Santoni’s landlord, is seeking approximately $150,000 in unpaid rent from the grocer, according to a lawsuit filed Thursday in Baltimore City District Court.

BSV’s lawyer mentioned the lawsuit during a hearing Friday in U.S. District Court in Baltimore, when the grocer agreed to pay a produce vendor $115,000 in exchange for the vendor dismissing its lawsuit.

The settlement came after an hour of negotiations between Santoni’s and Jessup-based G. Cefalu & Bro. Inc. during the time the two sides were supposed to appear before Judge Catherine C. Blake. Once court was in session, Blake agreed to lift a temporary restraining order G. Cefalu had obtained to freeze Santoni’s assets.

The produce vendor’s lawsuit was filed under the federal Perishable Agricultural Commodities Act, which was created to ensure payment to produce suppliers. The law also gives PACA trust beneficiaries, of which G. Cefalu is one, priority over all other creditors.

Under the settlement agreement, payment will be made by Tuesday afternoon; if it is not, Blake will consider putting the restraining order back in place. Lawyers for both sides said they were confident the payment would be made.

The prospect of Santoni’s assets being frozen again, however, caught BSV’s attention. Douglas J. Furlong, BSV’s lawyer, said another temporary restraining order could affect the unpaid-rent proceedings.

It could also be “catastrophic” for BSV, Furlong said, as it attempts to find another grocer to take Santoni’s location.

“I’d hate to have the temporary restraining order in place to prevent someone from taking over the space immediately,” said Furlong, a partner at Rosenberg Martin Greenberg LLP in Baltimore.

But Blake A. Surbey, G. Cefalu’s lawyer, said PACA gives his client priority over all creditors, even landlords.

“Everything under the PACA is considered a trust asset,” said Surbey, of McCarron & Diess in Washington, D.C.

Blake said she would wait and make sure Santoni’s satisfied the settlement agreement with G. Cefalu.

“If it becomes necessary to reinstate the temporary restraining order, I will consider your objection,” she told Furlong.

Santoni’s announced Sunday it would be closing by the end of the month after 83 years in Highlandtown, citing the city’s bottle tax as the primary reason.

Robert N. Santoni Jr. and his father attended Friday’s hearing and chatted amicably with Furlong afterward. The store was represented at the hearing by Michael S. Myers of Scarlett & Croll P.A. in Baltimore.

The younger Santoni, in an interview following the hearing, reiterated that his family is working with BSV to find a new tenant and that there has been “a lot of interest” from local grocers.

He also reiterated that the bottle tax is at the root of all the litigation for unpaid bills.

“All of this is a byproduct of decreasing sales,” he said.