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Horti Americas, LLC v. Steven Produce King, Inc.

United States District Court, E.D. New York

January 27, 2017

HORTI AMERICAS, LLC, Plaintiff,
v.
STEVEN PRODUCE KING, INC. et al., Defendants.

          MEMORANDUM AND ORDER

          I. LEO GLASSER, SENIOR UNITED STATES DISTRICT JUDGE

         Plaintiff Horti Americas, LLC (“Horti” or “Plaintiff”) alleges violations of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499a et seq., breach of contract and breach of fiduciary duty against defendants Steven Produce King, Inc. (“SPK”) and Shy Yosofov (together, the “Defendants”). This Court granted Plaintiff's unopposed motion to dismiss Defendants' second counterclaim, alleging fraud and material misrepresentation. Horti Americas, LLC v. Steven Produce King, Inc., No. 16-CV-889, 2016 WL 6872624 (E.D.N.Y. Nov. 21, 2016). SPK's counterclaim for breach of contract survives.

         Plaintiff now seeks discovery sanctions following Defendants' failure to respond to three discovery requests. For the reasons stated herein, the motion is GRANTED.

         BACKGROUND

         The facts of this case are set forth in Horti Americas, 2016 WL 6872624, familiarity with which is assumed. On August 12, 2016, Plaintiff duly served Defendants with three separate discovery requests: 1.) Plaintiff's First Requests for Admissions, pursuant to Fed.R.Civ.P. § 36, 2.) Plaintiff's First Set of Interrogatories, pursuant to Fed.R.Civ.P. § 33, and 3.) Plaintiff's First Request for the Production of Documents, pursuant to Fed.R.Civ.P. § 34. See ECF 22-2, 22-3, 22-4. The deadline to respond was extended to September 19, 2016. ECF 22-1 at ¶ 3.

         At a status conference before Magistrate Judge Reyes on September 8, 2016, the parties discussed a consent judgment and Defendants indicated they would timely answer the discovery requests. ECF 30. Defendants never answered the requests. Over the next two months, Plaintiff's counsel attempted to negotiate a consent judgment and repeatedly noted the unanswered discovery requests in emails to Defendants' counsel and in letters to the Magistrate Judge. ECF 18; ECF 20; ECF 29 at ¶¶ 5-6. On a number of occasions, counsel indicated that Defendants lacked funds to defend the action or pay a judgment. ECF 29 at ¶¶ 4, 13; ECF 30. A settlement conference was held on October 26, 2016. See ECF Entry dated Oct. 26, 2016. Defendants and their counsel failed to appear, as ordered by the Magistrate, and had to be tracked down via telephone. ECF 29 at ¶ 13. The case was not settled and Plaintiff stated an intention to move for discovery sanctions because of Defendants' failure to respond to the discovery requests. Id.

         The discovery deadline was November 21, 2016. On December 1, 2016, Plaintiff filed this motion. Plaintiff seeks sanctions in the form of an order that the following facts are conclusively established:

1. Horti's Admission requests are admitted.
2. SPK failed to maintain records required by PACA regulations to determine profits or losses on re-sale of Persian pickles supplied by Horti, which are the subject of this case.
3. SPK sustained no provable damages as a result of the quality or condition of the subject Persian pickles supplied by Horti to SPK relating to this case.
4. SPK sustained no economic losses as a result of its transactions with Horti with respect to the Persian pickle shipments at issue.
5. Defendants failed at all relevant times to maintain sufficient freely available inventories and proceeds of produce sales to pay Horti in full.
6. Yosofov transferred to himself SPK's proceeds of produce sales in an amount greater than $143, 455.00 plus interest and any attorney's fees due to Horti during the period when Horti was unpaid for the Persian pickles at issue.

See ECF 22-5, Memo of Law, pp. 5-6. Defendants opposed the motion, alleging that they do not possess any responsive documents, that they never received the request for admissions, and that the motion was untimely and ...


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