United States District Court, D. New Hampshire
B & R Produce Packing Co., Inc. et al
A & H Farms, Inc. et al. Opinion No. 2014 DNH 030
JOSEPH A. DICLERICO, Jr., District Judge.
B & R Produce Packing Company, Inc., Grant Stanton Produce Company, Inc., Gregg Dziama, Inc., J. Bonafede Company, Inc., S. Strock & Company, Inc., and State Garden, Inc., who are all sellers of produce, brought suit to recover amounts owed to them by A & H Farms, Inc. d/b/a Coll's Farm, Lori Coll, and Mark Coll. Default has been entered as to each defendant. The plaintiffs moved for default judgment on their claims, and a hearing was held on January 16, 2014. The plaintiffs have also filed a motion for attorneys' fees and accumulated interest. The defendants did not respond to either motion or attend the hearing.
Standard of Review
After default is entered and when the amount at issue is not a sum certain, "the party must apply to the court for a default judgment." Fed.R.Civ.P. 55(b)(2); see also KPS & Assocs., Inc. v. Designs by FMC, Inc. , 318 F.3d 1, 19 (1st Cir. 2003). "Although a defaulting party admits the factual basis of the claims asserted against it, the defaulting party does not admit the legal sufficiency of those claims." 10 James Wm. Moore, Moore's Federal Practice § 55.32[b] (3d ed. 2013). To recover on a motion for default judgment, "[t]he claimant must state a legally valid claim for relief." Id .; see also Ramos-Falcon v. Autoridad de Energia Electrica , 301 F.3d 1, 2 (1st Cir. 2002). Therefore, before entering default judgment, the court must determine whether the admitted facts state actionable claims. See Hop Hing Produces Inc. v. X & L Supermarket, Inc., 2013 WL 1232919, at *2 (E.D.N.Y. Mar. 4, 2013); E. Armata, Inc. v. 27 Farmers Market, Inc., 2009 WL 2386074, at *2 (D.N.J. July 31, 2009).
The plaintiffs brought claims for "Goods Sold and Delivered, " breach of contract, violation of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499a. et seq., and violation of the Massachusetts Consumer Protection Act, Massachusetts General Laws Annotated ("M.G.L.A.") ch. 93A, § 11. At the hearing, the plaintiffs provided evidence of the amounts owed by the defendants, the plaintiffs' compliance with the requirements of PACA, and evidence pertaining to the claim under chapter 93A. After the hearing, the plaintiffs filed a motion for attorneys' fees and interest.
The plaintiffs focus their arguments in support of default judgment on their PACA claim, Count XIII, and their claim for violation of M.G.L.A. ch. 93A, § 11, Count XIV. The PACA claim is addressed first.
A. PACA Claim
"PACA seeks to protect produce sellers against the vulnerabilities inherent in financing arrangements frequently used in the trade of perishable agricultural commodities, by which produce sellers become unsecured creditors to buyers whose creditworthiness cannot be verified in a timely manner." Boston Tomato & Packaging, LLC v. Bostonia Produce, Inc., 2013 WL 1793858, at *2 (D. Mass. Apr. 8, 2013); see also Hiller Cranberry Prods., Inc. v. Koplovsky , 165 F.3d 1, 6 (1st Cir. 1999). PACA requires that PACA licensed produce dealers promptly pay for produce purchased. § 499(b)(4). If a licensed PACA produce dealer violates any provision of § 499(b), "he shall be liable to the person or persons injured thereby for the full amount of damages... sustained in consequence of such violation." § 499e(a).
When a produce supplier provides notice to the buyer that the produce is being sold subject to the PACA trust, PACA imposes a floating trust for the benefit of unpaid suppliers on purchasers' receivables and proceeds from the sale of commodities. § 499e(b) & (c)(2); Boston Tomato, 2013 WL 1793858, at *2. In addition, individuals who are "responsibly connected" to the produce buyer are personally liable for using PACA trust assets for a purpose other than to pay the seller. Hiller Cranberry , 165 F.3d at 8-9; Hop Hing Produces, 2013 WL 1232919, at *3. Provisions for interest and attorneys' fees that are part of the sales invoices are enforceable under PACA as "sums owing in connection with' perishable commodities transactions under PACA." Coosemans Specialties, Inc. v. Gargiulo , 485 F.3d 701, 709 (2d Cir. 2007) (quoting § 499e(c)(2)); Northeast Treading, Inc. v. Ven-Co Produce, Inc., 2011 WL 444511, at *5-*6 (S.D.N.Y. Sept. 26, 2011).
In this case, the plaintiffs have shown that they are all licensed under PACA. With the exception of some of the sales by B & R Produce, the plaintiffs provided notice to the defendants that their sales were subject to the PACA trust requirements. They have also shown that Mark Coll and Lori Coll are responsibly connected to A & H Farms and Coll Farm and that they have dissipated PACA trust assets, making Mark and Lori Coll personally liable for the amounts due to the plaintiffs. The plaintiffs have shown the amounts due on their unpaid invoices to the defendants. Therefore, the plaintiffs have actionable claims under PACA against the defendants and are entitled to payment of the amounts owed. See Midwest Marketing Co., Inc. v. Quality Produce Suppliers, Inc., ___ F.Supp.2d ___, 2013 WL 6691213, at *4 (N.D. Ill.Dec. 19, 2013).
Many but not all of the plaintiffs' invoices provided for payment of attorneys' fees and for interest. Attorneys fees will be awarded to the extent provided in the invoices. Similarly, interest will be included to the extent provided in the invoices.
B. Contract Claims
The plaintiffs brought claims for breach of contract and for "Goods Sold and Delivered" in Counts I through XII. They represent that those claims are their contractual claims, without distinguishing among the claims as to causes of ...