fundamental change from the fresh state of the vegetables. Should further proceedings be necessary with regard to the Endico claim, the parties are to inform the Court.
Plaintiff McCain seeks to enforce its rights under PACA for a single shipment of frozen potatoes on December 31, 1990. McCain filed a timely PACA notice, which Merberg admits was received, and the U.S.D.A. has qualified the claim in the full amount of $ 15,094.96. Paul Ouellette, credit manager, in an affidavit submitted with the motion, describes McCain's process of peeling, cutting, blanching, removing the surface moisture by briefly heating, and then freezing the potatoes--all processes sanctioned by the regulations and which do not change the nature of the potatoes. Significantly, McCain does not spray the potatoes with oil. We find that McCain has preserved its PACA rights, and is entitled to the full amount of its claim.
Plaintiff UFS (Sally Sherman Foods) is in much the same position as Endico. It seeks money due to it for the sale of prepared salads which contain fresh fruits and vegetables in varying percentages, ranging from potato salad with vegetables representing 86 percent, to cream cheese with scallions, where the vegetables represent only 4 percent. The U.S.D.A. did not gualify any of UFS's claim. For the same reasons stated with regard to Endico, we find that the products sold by UFS do not gualify as perishable agricultural commodities under the Act, and UFS' claim is therefore denied.
We turn now to the remaining plaintiffs. In the Complaint, plaintiffs set forth claims in excess of two million dollars; the U.S.D.A. subsequently produced its qualification list wherein certain of the claims were greatly reduced or disallowed entirely because of deficiencies in the notice filings. The total amount qualified with regard to the named plaintiffs, including the Endico and McCain claims with which we have already dealt, was approximately $ 940,000. Defendant CIT's motion sought to limit the claims to those amounts listed on the U.S.D.A. list. Counsel for the majority of the plaintiffs now presses its claims only for those amounts set forth on the U.S.D.A. list.
While there would thus appear to be consensus as to the claims of the remainder of the plaintiffs, at oral argument counsel for CIT stated that in fact he believed the correct amount of the claim was closer to $ 250,000. This assertion appears to be based in large part on defenses which we have already rejected, namely that the "course of dealing" of the parties was a waiver by certain plaintiffs of PACA rights, and that some of the plaintiffs filed against Diversified Food Services (or some variation on that name) instead of N. Merberg & Son. In light of plaintiffs' consent, we grant defendant's motion to limit the PACA claims to those amounts listed on the U.S.D.A. list.
In so doing, we eliminate the claims of those named plaintiffs whose PACA claims were entirely disallowed by the U.S.D.A. or not on the U.S.D.A. list at all, on the ground that counsel for those plaintiffs has conceded to the amounts on the list. Those plaintiffs who therefore will not recover are the following: Algin Import & Export, Inc., Amigo Foods, Bronia Produce, Inc., Fresh Network, Hudson Valley Apple Products, Co., Hunts Point Tomato Co., Inc., Rigby Produce, Inc., and A.J. Trucco Co, Inc.
As to those plaintiffs whose claims are challenged only on the two insufficient grounds stated above, namely that they filed against the wrong entity or had terms outside the PACA protection, we find that there is no genuine issue of material fact requiring trial. The defendants do not seriously dispute that these plaintiffs filed timely PACA notices, and defendant Merberg had admitted that he received the notices. We therefore grant the plaintiffs' motion for summary judgment in the amount indicated on the U.S.D.A. list. Those plaintiffs are: Amalgamated Produce, Inc., Coosemans Specialties, Inc., D'Arrigo Bros. Co. of New York, Inc., Fierman Produce Exchange, Inc., H & M Fleisher, Inc., Fresh Western Marketing, Inc., Fruit Salad, Inc., Inn Foods, Inc., J & S Produce, T.M. Kovacevich, Inc., Maine Farmers Exchange, Mouyios Co., Inc., Sansu Produce Co., Inc., H. Schnell & Company, Inc., Sciandra International Ltd., Shapiro & Cohen, Inc., Square Produce Co., Inc., Martin Striks & Son, Inc., Vita-Wellbrock-Kearney, Inc., Wishnatzki & Nathel, Inc., and Harry Zimmerman, Inc.
CIT however also argues that the Merberg records indicate that certain of the claims have been inflated, amounting to an overcharge of almost $ 50,000. The claims which are allegedly inflated are those of the following plaintiffs: A & J Produce Corp., B.T. Produce, Inc., E. Armata, Inc., Goodie Brand Packing Corp., M & M Produce Farms and Sales (as noted in n.3, not a named plaintiff herein), Morris Okun, Inc., M & R Tomato Distributors, N. Pugach, Inc., Prevor Marketing International, Inc., Post & Taback, Inc., and Rubin Bros. Produce Corp. As to these plaintiffs, we grant the motion for summary judgment as to liability only, and we will conduct further proceedings to determine the exact amount of damages owed to these plaintiffs.
Finally, although we also grant the motion for summary judgment as to liability of Finest Fruits, Inc. and M. Trombetta & Sons, Inc., there is a disputed issue of fact regarding the credit due CIT for produce which was reclaimed by those plaintiffs from the Merberg companies after the bankruptcy and resold. Both plaintiffs have filed affidavits admitting that the claims qualified by the U.S.D.A. should be reduced; Finest Fruits by $ 18,155.97, and Trombetta by $ 4,151. CIT contends that the amounts of the credit should be higher, but does not submit any accountings.
Further proceedings are therefore necessary with regard to these two plaintiffs.
For the reasons stated above, plaintiffs' motions to strike the sixth affirmative defense are granted; defendant's motion for summary judgment based on the "course of dealing" defense is denied; defendant's motion to limit the claims to the amounts qualified by the U.S.D.A. is granted, with the exception of the Endico claim as discussed above; and plaintiffs' motions for summary judgment are granted as to some plaintiffs and granted on liability only as to other plaintiffs, against both defendants jointly and severally. The parties are to inform the Court as of September 15, 1993 of the nature of the further proceedings necessary to resolve those matters which remain outstanding.
Dated: New York, New York
August 19, 1993
Leonard B. Sand