MARY JOHNSON LOWE, D.J.
Before the Court is a motion for summary judgment filed by defendant, Business Funding Group, Inc. ("BFG"), a Massachusetts corporation engaged in the business of purchasing commercial accounts receivables at discounted rates.
BFG's summary judgement motion seeks a dismissal of the plaintiffs' Complaint against BFG. For the reasons stated below, BFG's summary judgement motion is denied.
Plaintiffs are dealers of agricultural commodities who sold commodities (fruits and vegetables to Western Growers, Inc. ("Western") during 1989 and 1990. In connection with those sales, the plaintiffs filed, with the Secretary of Agriculture, notices of intention to preserve trust benefits pursuant to the Perishable Agricultural Commodities Act ("PACA").
Plaintiffs filed the above action on June 11, 1991, claiming that they are trust beneficiaries under PACA. Plaintiffs contend that defendants received PACA assets and that defendants are constructive trustees for the amounts claimed. Plaintiffs claimed that they are entitled to recover those amounts.
Thereafter, defendants, Merrill Lynch and BFG, filed motions for summary judgment against the plaintiffs on the complaint. Merrill Lynch argued that because it acquired the trust property for value and without notice of the breach of trust, it was a bona fide purchaser and thus took the property free of the trust.
By Order dated September 23, 1993 (the "Order"), this Court dismissed the plaintiffs' claims against Merrill Lynch. The Court, citing to C.H. Robinson Co. v. Trust Co. Bank, N.A., 952 F.2d 1311 (11th Cir. 1992), stated that PACA trusts operate in accordance with traditional trust principles. The Order stated that under those traditional principles, a purchaser of trust property can take that property free of the trust if the property is transferred for value and without notice of the breach of trust. (See Order at 6). The Court dismissed the plaintiffs' complaint against Merrill Lynch, finding that Merrill Lynch, did in fact, receive the trust property for value and without notice of the breach of trust. (See Order at 7-8).
BFG argued that the plaintiffs' complaint against BFG should also be dismissed because it too was a bona fide purchaser. This Court, however, found that BFG was situated differently from Merrill Lynch. The Court found that, since BFG conceded that it had constructive knowledge of the PACA trust and purchased Western's accounts receivables for a discount, BFG was on constructive notice of the breach of trust. The Court stated in the Order:
"A breach occurred in the present case not simply because a sale was made, but because the sale was made at a discount to raise funds for the trustee, Western, rather than to maintain assets that could satisfy Western's obligations to unpaid sellers and suppliers. BFG should have known that Western was breaching its obligations as trustee when it offered to sell trust property at a discount."