GREENFIELD — Tea Guys had two bank accounts frozen last week when a Franklin County Superior Court judge granted a pair of motions filed on behalf of a Baltimore tea company that is suing the Whately business.

Judge David Hodge put a freeze on accounts at Greenfield Savings Bank and Evolve Bank & Trust up to $5.67 million, the amount Zest Tea LLC seeks in damages in a lawsuit while alleging breach of contract and unjust enrichment. This amount represents the $1.87 million that Zest Tea alleges it has lost, a figure that could be tripled in accordance with state law if Tea Guys is found guilty of unfair business practices, as well as other costs, including attorney fees.

Attorney Robert Dambrov, of Halloran Sage in Springfield, argued for his motions in front of Hodge during a Zoom session Wednesday. Zest Tea founder and CEO James Fayal was also present. Oliver Rich, founder and CEO of Tea Guys at 110 Christian Lane in Whately, was not present and does not have a lawyer to represent him or his company, according to court documents.

Dambrov alleges Tea Guys breached the memorandum of understanding shortly after Fayal signed it on Jan. 19 by failing to comply with its obligations to make vendor payments and make shipments. Zest Tea manufactures and sells functional beverages, including a line of tea bags and loose-leaf teas, ready-to-drink canned beverages and hydration powders.

According to the civil complaint Dambrov filed on July 13, his client entered into an agreement to license to Tea Guys the portion of its business that sells tea bags into the retail channel. He reports Zest Tea did this at least in part because at the time there had been supply chain issues across the industry “and Tea Guys represented, and appeared, to have ample capacity and know-how to operate the retail channel.”

“While verbally agreeing upon a basic licensing structure and discussing the terms for a written agreement,” Dambrov wrote, “Zest shipped its existing component inventory to Tea Guys and provided them with pick lists as well as the total cost of that inventory.”

The agreement generally covered licensing revenue, existing inventory purchases and expectations for both parties’ intellectual property.

Dambrov argued in court this week that Tea Guys “can’t be trusted” and deliberately lied to retail customers, distributors and vendors.

“The damage, as you can see, is very significant,” Dambrov told Hodge during the Zoom session. “[Zest Tea] has lost three of its largest customers and it only has a handful of entities that it deals with directly. And he’s lost three of those.”

Dambrov said Zest Tea has lost 36% of its value as a result of Tea Guys violating the terms of the agreement.

“[Fayal] just can’t go out and get those customers back. It takes years and lots of money to get those customers back, if he’s ever going to get them back,” Dambrov added. “It was a willful violation.”

Attempts by the Greenfield Recorder to contact Rich this week were unsuccessful.

Reach Domenic Poli at: dpoli@recorder.com or 413-930-4120.]]>