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A.J. Rinella & Co v. Wohrle's Foods

February 28, 2012

A.J. RINELLA & CO., INC., PLAINTIFF,
v.
WOHRLE'S FOODS, INC.; AND WOHRLE'S INC., 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.J. Rinella & Co., Inc. ("Plaintiff") against Wohrle's Foods, Inc., and Wohrle's Inc. ("Defendants") asserting various claims including a claim arising under the Perishable Agricultural Commodities Act ("PACA"), are Defendants' two motions to dismiss Plaintiff's Complaint. (Dkt. Nos. 11, 17.) For the reasons set forth below, both motions to dismiss are denied. However, counsel are directed to participate in a teleconference with the undersigned, during which they shall be heard as to whether they would prefer a stay of this action or joinder of the bankruptcy Trustee in this action, and after which the Court will issue a Decision and Order supplementing this Decision and Order.

I. RELEVANT BACKGROUND

Because the parties have, in their motion papers, demonstrated an adequate understanding of the procedural history of this action, the claims and factual allegations asserted in Plaintiff's Complaint, the arguments asserted by the parties in their motion papers, and the legal standards governing Defendants' motions and Plaintiff's claims, the Court will not recite that information in this Decision and Order, which is intended primarily for the review of the parties.

II. ANALYSIS

A. Defendants' First Motion to Dismiss

Defendants' first motion to dismiss is denied for each of the following two alternative reasons. First, under the circumstances, the Court finds that it cannot consider any of the extrinsic documents that are offered by Defendants without converting their motion to dismiss for failure to state a claim to a motion for summary judgment. Gasaway v. Williams, 11-CV-0549, 2012 WL 264611, at *4 & n.9 (N.D.N.Y. Jan. 30, 2012) (Suddaby, J.) (describing the circumstances under which a court can consider documents outside the four corners of a complaint, on a motion to dismiss for failure to state a claim). The Court further finds that, without the benefit of such extrinsic documents, Defendants' failure-to-state-a-claim argument (which is based on those documents) fails.

The Court acknowledges that Plaintiff's Complaint references, and Defendants' motion papers attach, three of the extrinsic documents in question: (1) Plaintiff's Complaint in Intervention in the Massachusetts Case, (2) the 2009 Order in the Massachusetts Case, and (3) the 2010 Order in the Massachusetts Case. (Dkt. No. 1, at ¶¶ 23-24 [referencing those documents]; Dkt. No. 1, Attach. 4-6 [attaching documents].) The Court also acknowledges that, in certain circumstances, it could take judicial notice of the other documents, because they are accessible through the Federal Judiciary's Public Access to Court Electronic Records, or "PACER," Service.

However, none of the extrinsic documents can be relied on if there exists material disputed issues of fact as to the relevance of the documents.*fn1 Here, Plaintiff reasonably argues that none of those documents can be relied on to apply the doctrines of res judicata, collateral estoppel, or judicial estoppel, because they are undermined by a Tolling Agreement (not on the docket) entered into between Defendant Wohrles Foods, Inc. and Plaintiff on January 29, 2010. (Dkt. No. 13, Attach. 2, at 7-10; Dkt. No. 12, at ¶¶ 3-7; Dkt. No. 13, Attach. 1.)

Moreover, generally, a court may take such judicial notice only "for the factual background of the case." L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011); accord, Roberts v. Babkiewicz, 582 F.3d 418, 419 (2d Cir. 2009). Here, such notice would be taken for more than the factual background of the case--it would be taken for purpose of dismissing the case based on the very documents.

Second, even if the Court could consider the extrinsic documents in question without converting Defendants' motion into one for motion for summary judgment, the Court would be unable to find, as a matter of law, that, based on Plaintiff's Complaint and those documents, Plaintiffs are precluded from asserting any of the claims in this action by the doctrines of res judicata, collateral estoppel, and/or judicial estoppel.

Generally, the Court reaches this conclusion for the six reasons stated by Plaintiffs in their opposition memorandum of law: (1) it appears that the relevant decision in the 2010 Order in the Massachusetts Case was not "on the merits" for purposes of the doctrine of res judicata; (2) it appears that the relevant claim decided in the 2010 Order in the Massachusetts Case (regarding PACA) is not the same as the Second through Eleventh Causes of Action asserted in the current case; (3) it appears that there was no privity between any of the defendants in the Massachusetts Case and Defendant Wohrle, for purposes of the doctrine of res judicata; (4) it appears that there was no privity between any of the plaintiffs in the Massachusetts Case and Plaintiff, for purposes of the doctrine of res judicata; (5) it appears that Plaintiff did not have a "full and fair opportunity" to litigate the relevant issues, for purposes of the doctrine of collateral estoppel; and (6) it appears that the relevant issue involved in the Massachusetts Case (regarding a PACA claim) is not the same as the vast majority of issues involved in the current case. (Dkt. No. 13, Attach. 2, at 1-10.)

The Court would add only three points. With regard to the second and sixth arguments (which both stem from the fact that the claims and issues in the Massachusetts Case were largely, if not entirely, different from those in the current case), the Court notes that case law from district courts in the Second Circuit suggests that non-PACA claims are not barred following the resolution of a PACA case.*fn2 The Court notes also that, while it does not question the authority of district courts to "so order" consent injunctions under PACA (e.g., requiring non-parties, upon receiving due notice, to file timely complaints in intervention before the PACA trust assets are fully distributed, or be thereafter barred from pursuing their PACA claims), the Court perceives at least an issue to exist regarding whether such injunctions could, under Fed. R. Civ. P. 65, bar non-PACA claims.*fn3

With regard to the fourth and fifth of the above-described grounds (which both stem from the fact that Plaintiff was never actually permitted to intervene under Fed. R. Civ. P. 24), the Court notes that (1) at the time, Plaintiff was appearing in the action pro se (having submitted its complaint in intervention pro se, and having had its lawyer's subsequent motion to appear on behalf of it pro hac vice denied), and (2) because pro se corporations ...


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