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TOP BANANA v. DOM'S WHOLESALE & RETAIL CENTER

May 16, 2005.

TOP BANANA, L.L.C., et al., Plaintiffs,
v.
DOM'S WHOLESALE & RETAIL CENTER, INC., et al., Defendants.



The opinion of the court was delivered by: ANDREW PECK, Magistrate Judge

REPORT AND RECOMMENDATION

To the Honorable George B. Daniels, United States District Judge:

Two issues are before the Court on plaintiffs' summary judgment motion in this case pursuant to the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499a et seq.: (1) can plaintiff PACA Claimants get a judgment against the individual owner of the fruit and vegetable wholesaler before exhausting all of the company's assets, which are tied up in litigation, and (2) does the PACA trust cover attorneys' fees and interest, as provided for in the PACA Claimants' invoices? For the reasons set forth below, the Court answers both questions in the affirmative. Accordingly, the Court should grant the plaintiff PACA Claimants' summary judgment motion (Dkt. Nos. 155-56) against both defendant Dom's Wholesale & Retail Center, Inc. ("Dom's") and its president Alan J. Gargiulo Sr. ("Gargiulo"), in the amount of $1,299,018.71 plus interest and attorneys' fees in amounts to be determined.

  FACTS

  The issues before the Court on plaintiffs' summary judgment motion are ones of law, and the facts are not in dispute.

  The Parties and Dom's Debt to Plainiffs

  The plaintiff "PACA Claimants are entities engaged in the business of buying and selling wholesale quantities of perishable agricultural commodities in interstate commerce, . . . and were licensed as dealers under PACA." (Dkt. No. 155-56: Plfs. Rule 56.1 Stmt. ¶ 1; Dkt. No. 179: Defs. Rule 56.1 Stmt. ¶ 1; see also Dkt. No. 167: Defs. Br. at 1.)

  Dom's was a wholesaler of fruits and vegetables that purchased produce from the plaintiff PACA Claimants. (Plfs. & Defs. Rule 56.1 Stmts. ¶¶ 3-4; Defs. Br. at 2.) Dom's ceased operations in March 2004. (Defs. Br. at 2; Dkt. No. 169: Gargiulo Aff. ¶ 7.)

  Defendant Gargiulo is the President and C.E.O., sole shareholder and sole director of Dom's, a signatory on Dom's bank accounts, and "was in a position to control the PACA trust assets belonging to PACA Claimants." (Plfs. & Defs. Rule 56.1 Stmts. ¶ 5; Gargiulo Aff. ¶ 1; Defs. Br. at 2; see also Plfs. Rule 56.1 Stmt. Ex. 1: Dom's PACA license; id. Ex. 2: Dom's check signed by Gargiulo.)

  It is stipulated that Dom's owes the plaintiff PACA Claimants $1,299,018.71. (Plfs. & Defs. 56.1 Stmts. ¶ 2; Dkt. Nos. 151-52: Stip. re PACA Claims Amounts; Gargiulo Aff. ¶ 7 ("After a claims procedure, it was determined that Dom's owed the Plaintiffs the sum of $1,299,018.71. I do not dispute this amount.").) Indeed, defendants do not oppose entry of summary judgment for the principal amount claimed as against Dom's — only against Gargiulo. (See Gargiulo Aff. ¶¶ 2, 7, 17(a) ("I respectfully request that this Court issue an order: (a) Granting judgment to Plaintiffs against Dom's in the amount of $1,299,018.71.").)

  The Dom's-Platinum Dispute

  In October 2002, Dom's entered into a factoring agreement with intervenor Platinum Funding Corp. ("Platinum"). (See Gargiulo Aff. ¶¶ 2, 6.)

  As an intervenor in this case, Platinum claims that Dom's owes Platinum over $1 million, which Dom's disputes; Dom's claims that Platinum owes Dom's $1,773,031 — if true, more than enough to pay the PACA Claimants' claims. (Gargiulo Aff. ¶ 5 ("Dom's has sufficient assets, in the form of amounts due to Dom's from Platinum . . . to pay Plaintiffs' in ...


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