XYZ Department Store, Inc. (hereinafter, XYZ), whose headquarters are located in the state of California, agrees to purchase coffee from El Rico Café Corp. (hereinafter, Rico Café), whose headquarters are located in Maricao, Puerto Rico. After six (6) months of supplying coffee to XYZ, Rico Café decides to terminate the contract, since the purchasing company owes it $500,000.00. Rico Café decides to start legal action to claim the money owed. However, the coffee distribution contract between the parties does not provide in court as to what status a dispute between the parties would be resolved, should one arise. Imagine that Rico Café decided to present its case before the courts of the state of California and that it does not agree with the decision of the court that received the evidence presented: 3. Discuss the different typical levels of hierarchy that state courts have. 4. To which court would Rico Café have to present its appeal to review the determination with which it disagrees?

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XYZ Department Store, Inc. (hereinafter, XYZ), whose headquarters are located in the state of California, agrees to purchase coffee from El Rico Café Corp. (hereinafter, Rico Café), whose headquarters are located in Maricao, Puerto Rico. After six (6) months of supplying coffee to XYZ, Rico Café decides to terminate the contract, since the purchasing company owes it $500,000.00. Rico Café decides to start legal action to claim the money owed. However, the coffee distribution contract between the parties does not provide in court as to what status a dispute between the parties would be resolved, should one arise.

Imagine that Rico Café decided to present its case before the courts of the state of California and that it does not agree with the decision of the court that received the evidence presented:

3. Discuss the different typical levels of hierarchy that state courts have.
4. To which court would Rico Café have to present its appeal to review the determination with which it disagrees?

Expert Solution
Step 1: Introducing the given case:
  • XYZ Department Store, Inc., based in California, entered into a coffee supply agreement with El Rico Café Corp. of Maricao, Puerto Rico.
  • However, after six months of fulfilling their coffee orders, Rico Café opted to terminate the contract due to an outstanding debt of $500,000.
  • Consequently, Rico Café initiated legal proceedings to recover the owed amount. Notably, the contract did not specify or mention the dispute resolution mechanism in the event of conflicts, leaving this matter to be determined or decided by the legal process.
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