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A. Ferlito Farms, Inc v. Empire Fresh Cuts

September 14, 2011

A. FERLITO FARMS, INC., PLAINTIFF,
v.
EMPIRE FRESH CUTS, LLC; JAMES R. ZAPPALA; AND SAMUEL A. ZAPPALA, DEFENDANTS,



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

Currently before the Court, in this action filed by A. Ferlito Farms, Inc. ("Plaintiff") against Empire Fresh Cuts, LLC, James R. Zappala, and Samuel A. Zappala ("Defendants") pursuant to the Perishable Agricultural Commodities Act of 1930 ("PACA"), is Plaintiff's motion for default judgment against Defendants Empire Fresh Cuts, LLC, and James R. Zappala, pursuant to Fed. R. Civ. P. 55(b). (Dkt. Nos. 24, 27.) For the reasons set forth below, Plaintiff's motion is granted.

I. RELEVANT BACKGROUND

A. Plaintiff's Complaint

Generally, liberally construed, Plaintiff's Complaint alleges as follows. Between about December 9, 2009, and April 20, 2010, Plaintiff sold and shipped perishable agricultural commodities (onions) to Defendants, who were engaged in the handling of produce in interstate commerce as commission merchants, dealers and/or retailers subject to the provisions of the PACA and the regulations promulgated by the Secretary of Agriculture of the United States of America pursuant to the PACA. (Dkt. No. 1.) Defendants in turn agreed to pay Plaintiff principal amounts at least as great as the sum of $429,590.00 for these perishable agricultural commodities. (Id.) After shipping these perishable agricultural commodities through interstate commerce, Plaintiff sent Defendants invoices for the shipments, setting forth in detail the amounts owed by Defendants and written provisions for providing recovery pursuant to PACA. (Id.) Although Plaintiff has repeatedly demanded that Defendants pay the principle amount of at least $429,590.00, Defendants have failed and refused and continue to fail and refuse to pay Plaintiff for the perishable agricultural commodities purchased. (Id.)

Based on these (and other) factual allegations, Plaintiff's Complaint asserts the following six claims against Defendants: (1) breach of contract; (2) violation of Statutory Trust Provisions of PACA [7 U.S.C. §499a(4)]; (3) violation of the PACA for failure to account and pay promptly; (4) breach of fiduciary duty to PACA trust beneficiaries; (5) conversion and unlawful retention of PACA trust assets; and (6) fraudulent transfer under New York's Debtor and Creditor Law §§ 1, et seq. (See generally Dkt. No. 1.)

As relief, Plaintiff seeks (1) a declaratory judgment directing Defendants to pay the sum of $429,590.00, together with interest at the statutory interest rate of 9% per annum, and establishing that the PACA trust funds never became property of Defendants, and (2) injunctive relief and/or a temporary restraining order requiring Defendants to "turnover all amounts subject to the PACA trust or to enter a temporary restraining [order]." (Dkt. No. 1.)

B. Plaintiff's Service of Complaint and Defendants' Failure to Answer

Between September 3, 2010, and September 7, 2010, Plaintiff properly served its Complaint on each Defendant. (Dkt. No. 12, 13, 14.) As of the date of this Decision and Order, Defendants have filed no Answer to that Complaint. (See generally Docket Sheet.)

C. Clerk's Office's Entry of Default and Defendants' Non-Appearance

On October 29, 2010, Plaintiff filed a request for entry of default against each Defendant. (Dkt. No. 19, 20, 21.) On November 1, 2010, the Clerk of the Court entered default against Defendants (including Samuel A. Zappala) pursuant to Fed. R. Civ. P. 55(a). (Dkt. No. 23.) As of the date of this Decision and Order, Defendants have not appeared and attempted to cure that entry of default. (See generally Docket Sheet.)

D. Plaintiff's Motion for Default Judgment and Defendants' Non-Response

On February 1, 2011, Plaintiff filed a motion for default judgment pursuant to Fed. R. Civ. P. 55(b). (Dkt. No. 24.) Generally, in its motion, Plaintiff requests that the Court issue default judgment against Defendants, pursuant to Fed. R. Civ. P. 55(b), based on Defendants' failure to appear, answer, or otherwise move with respect to the pleadings. (See generally id.)

Defendants' response to the motion was due on February 28, 2011. (Docket Entry dated 02/01/2011.) As of the date of this Decision and Order, Defendants have filed no response ...


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