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S. Katzman Produce, Inc. v. Won

August 7, 2009


The opinion of the court was delivered by: Matsumoto, United States District Judge


Presently before the court is plaintiff's motion for default judgment against defendant. (Doc. No. 9.) Plaintiff, a produce wholesaler, commenced this action on June 16, 2008, against defendant Sam Won d/b/a "Sam the Korean" ("defendant" or "Won"), for alleged violations of the Perishable Agricultural Commodities Act of 1930 ("PACA"), 7 U.S.C. §§ 499 et seq. Plaintiff alleges that defendant failed to pay for produce that it sold and delivered to defendant. Plaintiff's Complaint alleges breach of a statutory trust imposed by PACA on the proceeds of perishable produce, breach of contract, and other common law causes of action. Plaintiff seeks to recover for the principal amount owed for the unpaid produce, pre-judgment interest, attorney fees and costs. (See generally, Doc. No. 1, Complaint ("Compl.").)

Plaintiff seeks an order directing defendant to pay the principal amount of $43,676 for the unpaid produce, $8,777.54 in pre-judgment interest, and $6,380.00 in attorney fees and costs, for a total award of $58,833.54. (See Doc. No. 10, Declaration of Stephen Katzman ("Katzman Decl.") ¶ 10; Declaration of Timothy J. Fierst, Esq. ("Fierst Decl.") ¶ 6 and Ex. E, Attorney Billing Summaries.) Defendant has not appeared or opposed plaintiff's default judgment motion, despite receiving notice and an opportunity to do so. (See Fierst Decl., Ex. B, Affidavit of Service of the Complaint, dated August 22, 2008; Doc. No. 8, Affidavit of Service of the Scheduling Order, dated January 29, 2009; Doc. No. 13, Affidavit of Service of the default judgment motion, dated July 17, 2009.) For the reasons set forth herein, plaintiff's motion is granted in part and denied in part.


A. Factual Background

The following facts are taken from plaintiff's Complaint and the evidence submitted in support of its motion for default judgment. Plaintiff, S. Katzman Produce, Inc. ("Katzman Produce"), is a New York corporation that sells wholesale quantities of produce in interstate commerce. (Compl. ¶¶ 5-6.) At all relevant times, defendant was a purchaser of produce in wholesale quantities and, therefore, a "dealer" in perishable agricultural commodities subject to the PACA. (Id. ¶ 7.)

From November 2007 through January 2008, at defendant's request, plaintiff sold to defendant perishable agricultural commodities worth a total of $43,676. (Id. ¶¶ 13, 17, 33 and invoices annexed to Complaint.) Each sale was memorialized by an invoice prepared by plaintiff and payable by defendant. (Id. ¶¶ 14-15, 20.) Plaintiff alleges that each invoice constituted a contract. (See id. ¶¶ 37-40.) According to plaintiff, defendant received the produce without objection and failed and refused to pay for it despite plaintiff's repeated demands. (Id. ¶¶ 15-16, 19.) Plaintiff alleges that, by failing to remit payment for the produce, defendant breached his contract with plaintiff and violated PACA.

Each of plaintiff's invoices notified defendant, in writing, that plaintiff reserved its rights as a beneficiary to a statutory trust pursuant to PACA. Specifically, each invoice provides that,

The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by Section 5(c) of the Perishable Agricultural Commodities Act 1930 (7 U.S.C. § 499(e)(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities and any receivables or proceeds from the sale of these commodities until full payment is received. In the event of the enforcement of our trust claim, we will seek to recover reasonable attorney's fees and the cost of recovery. Interest at the rate of 1.5% per month added to unpaid balance, interest and attorney's fees necessary to collect any balance owe [sic] hereunder shall be considered sums owing in connection with this transaction under the PACA trust. (See Invoices annexed to Compl.)

Plaintiff alleges that any proceeds realized by defendant from the sale of the produce constituted trust assets. (See Compl. ¶ 23.) Plaintiff further alleges that Mr. Won was in a position to prevent the dissipation and/or conversion of the trust assets, but failed to do so. (See id. at ¶¶ 9, 27-28, 33-35.)

B. Procedural History

Plaintiff served its Complaint on defendant on June 18, 2008. (See Fierst Decl., Ex. B, Affidavit of Service of the Complaint.) Defendant failed to answer or otherwise respond to the Complaint. On December 15, 2008, plaintiff moved for default judgment (see doc. nos. 4-6) and, on January 27, 2009, the Clerk of the Court entered a notation of defendant's default (doc. no. 7).

By Scheduling Order dated January 27, 2009, plaintiff was directed to serve and file documentation in support of its damages calculations on or before February 18, 2009, and defendant was directed to serve and file any response to plaintiff's submissions by March 11, 2009. The Scheduling Order also directed that any request for a hearing on damages be made by March 11, 2009. The January 27, 2009 Scheduling Order was served on defendant on January 29, 2009. (Doc. No. 8.) Having ...

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