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Basciani Foods, Inc. and andrew & Williamson Sales Co., Inc v. Mid Island Wholesale Fruit and Produce

January 3, 2011


The opinion of the court was delivered by: Seybert, District Judge:


Pending before the Court is a motion by Daniel Kane, Jr., Oscar Gonzalez, Charles Machadio, Richard Bylott, Myra Gordon and Vincent Pacifico, as Trustees of the United Teamster Fund and as Trustees of the United Teamster Pension Fund "A," (collectively, the "Trustees") to intervene in this case pursuant to Federal Rule of Civil Procedure 24(a)(2). Also pending is the Trustees' motion to amend their proposed intervenor complaint. For the reasons that follow, both motions are GRANTED.


Plaintiffs Basciani Foods, Inc. and Andrew & Williamson Sales, Inc. ("Plaintiffs") are unpaid sellers of produce within the meaning of the Perishable Agricultural Commodities Act, 7 U.S.C. § 499e, et seq. ("PACA" or "Section 499e"). On October 26, 2009, Plaintiffs filed a civil action alleging PACA violations and other causes of action against Defendants Mid-Island Wholesale Fruit and Produce, Inc. ("Mid-Island"), Howard Greissman, and David M. Fleschner (collectively, "Defendants"). Plaintiffs sought an order enforcing payment from the PACA produce trust.

I. Procedural History

On November 3, 2009, the Court issued a preliminary injunction enjoining Defendants from, among other things, transferring or removing the "proceeds from sales of any or all existing or future inventories of food procured from Plaintiffs, including, but not limited to inventory on hand, perishable agricultural commodities, or other products derived from perishable agricultural commodities, or receipts of payments for such commodities sold prior to the date" of the injunction." (Prelim. Inj. at 3.) The parties thereafter entered into a Settlement Agreement, and this Court administratively closed the case on November 4, 2009 but retained jurisdiction to enforce the agreement.

Defendants Mid-Island and Howard Greissman eventually stopped making payments required by the Settlement Agreement, and the Court re-opened the case on June 14, 2010. (June 14, 2010 Stipulation.) On the same day, the Court so-ordered a Consent Injunction that, among other things, granted Plaintiffs permission to file an Amended Complaint and established the claims procedures for additional PACA Trust-qualified unpaid sellers to intervene in this action. Since then, a number of PACA Trust beneficiaries have intervened (the "PACA Claimants"). The Consent Injunction also bars and/or stays any other actions by, or on behalf of, Defendants' creditors. (Consent Injunction at 2.)

II. The Union Trustees

The Trustees are trustees of two labor union funds that provide pension, health and welfare benefits to eligible union members and their beneficiaries (the "Union Funds"). The funds pay for these benefits by collecting monthly contributions from employers who are party to various collective bargaining agreements.

The Trustees' funds obtained a $33,329.26 judgment against Mid-Island in a separate federal action, captioned Daniel Kane, Jr. v. Mid-Island Wholesale Fruit & Produce, Inc., No. 10-CV-0207 (E.D.N.Y.), arising out of Mid-Island's failure to remit the required monthly contributions (the "Kane Judgment"). In their reply in further support of their motion to intervene, the Trustees represented that they have taken the steps required to obtain a judgment lien on Mid-Island's assets. (Trustees' Reply at 2.)

The Trustees moved to intervene in this action to protect their ability to enforce the Kane Judgment. They claim that certain assets now held in the PACA Trust for the PACA Claimants' benefit are not trust assets within the meaning of Section 499e. Specifically, the Trustees claim that some of Mid-Island's assets were purchased before a PACA Trust existed, and that these assets therefore should not be held in trust for the exclusive benefit of unpaid produce sellers. (Proposed Intervenor Compl. ¶¶ 30-31.) The Trustees' Proposed Intervenor Complaint seeks: (1) a declaratory judgment that certain assets now held in the PACA Trust are not covered assets and thus should not be used to satisfy PACA claims (id. at ¶¶ 29-32); and

(2) an order that Mid-Island permit and cooperate in an accounting to determine the full amount of Mid-Island's assets (id. at ¶¶ 33-36). Additionally, by letter motion dated October 29, 2010, the Trustees seek leave to amend their Proposed Intervenor Complaint to add a cause of action for withdrawal liability under the Multiemployer Pension Plan Amendments Act ("MPPAA"). (Trustees' Mot. to Amend Compl. at

1.) Plaintiffs, and PACA Claimants Taylor Farms California, Inc., Potandon Produce, LLC, and Steinbeck Country Produce, Inc. (the "Objecting Claimants"), ...

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