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Coast-To-Coast Produce Company, LLC v. Mountain Fresh Farms, LLC

United States District Court, N.D. New York

March 13, 2017

COAST-TO-COAST PRODUCE COMPANY, LLC, Plaintiff,
v.
MOUNTAIN FRESH FARMS, LLC, et al, Defendants.

          DECISION AND ORDER

          Lawrence E. Kahn U.S. District Judge

         I. INTRODUCTION

         Plaintiff Coast-To-Coast Produce Company, LLC ("CCPC") brought this action against Defendants Mountain Fresh Farms, LLC ("MFF") and Carole Crimivaroli to recover payment for produce sold to MFF over the course of several months. Dkt. No. 1 ("Complaint"). CCPC subsequently filed a motion for default judgment pursuant to Federal Rule of Civil Procedure 55(b). Dkt. Nos. 12 ("Motion"), 12-3 ("Memorandum"). For the following reasons, the Motion is granted in part and denied in part.

         II. BACKGROUND

         CCPC, a Connecticut LLC and wholesale produce distributor, is a licensed dealer as defined in the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499a, et seq. Compl. ¶ 3. MFF, a New York LLC, is also a wholesale produce distributor, and Crimivaroli is an officer, manager, and member of MFF with control over its operations. Id. ¶¶ 4-5. CCPC provides invoices showing that between December 21, 2015, and June 7, 2016, CCPC sold and delivered $72,820.00 in produce to MFF. Id. ¶ 7; Dkt. No. 12-2 ("Exhibits") at 18-39.[1] Despite repeated requests, MFF has failed to pay the $72,820.00 that it owes to CCPC for produce delivered during that time period. Id. ¶ 8.

         On July 7, 2016, CCPC filed the Complaint in this action asserting a variety of statutory and common law causes of action and seeking damages and interest. Id. ¶ 41. Defendants did not file a responsive pleading, and on August 5, 2016, the Clerk of the Court filed an entry of default against Defendants at CCPC's request. Dkt. No. 9. On August 8, 2016, CCPC filed the Motion for Default Judgment seeking monetary relief on its PACA claims in the amount of $72,820.00 in unpaid invoices and $3,145.02 in prejudgment interest. Mot. at 1. Defendants have not responded or otherwise appeared in this case. On September 20, 2016, CCPC filed a suggestion of bankruptcy as to Crimivaroli, requesting that all actions against Crimivaroli be stayed pursuant to 11 U.S.C. § 362, Dkt. No. 13 ("Suggestion of Bankruptcy"), and the Court granted that request, Dkt. No. 15.

         III. LEGAL STANDARD

         "Federal Rule of Civil Procedure 55 provides a two-step process that the Court must follow before it may enter a default judgment against a defendant." Elec. Creations Corp. v. Gigahertz, Inc., No. 12-CV-1423, 2013 WL 3229125, at *3 (N.D.N.Y. June 25, 2013) (quoting Robertson v. Doe, No. 05-CV-7046, 2008 WL 2519894, at *3 (S.D.N.Y. June 19, 2008)). "First, under Rule 55(a), when a party fails to plead or otherwise defend . . . the clerk must enter the party's default." Id. Second, under Federal Rule of Civil Procedure 55(b)(2), "the party seeking default judgment is required to present its application for entry of judgment to the court." Id.

         "When a default is entered, the defendant is deemed to have admitted all of the well-pleaded factual allegations in the complaint pertaining to liability." Bravado Int'l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655 F.Supp.2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound Exhibitgroup, Inc. v. EX. U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). "While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974); accord Bravado Int'l, 655 F.Supp.2d at 189. "[E]ven upon default, a court may not rubber-stamp the non-defaulting party's damages calculation, but rather must ensure that there is a basis for the damages that are sought." Robertson, 2008 WL 2519894, at *3. "The burden is on the plaintiff to establish its entitlement to recovery." Bravado Int'l, 655 F.Supp.2d at 189. "While 'the court must ensure that there is a basis for the damages specified in a default judgment, it may, but need not, make the determination through a hearing.'" Id. at 190.

         Under Local Rule 55.2(b), the moving party must submit with its motion for default judgment: (1) a clerk's certificate of entry of default, (2) a proposed form of default judgment, (3) a copy of the pleading to which no response has been made, and (4) an affidavit. L.R. 55.2(b). The affidavit must set forth that: (1) the party against whom judgment is sought is not an infant, incompetent, or in military service; (2) the party against whom judgment is sought has defaulted in appearance in the action; (3) service was properly effected under Federal Rule of Civil Procedure 4; (4) the amount sought is justly due and owing, and no part has been paid; and (5) the disbursements sought to be taxed have been made in the action or will necessarily be made or incurred. L.R. 55.2(a).

         IV. DISCUSSION

         CCPC's Motion was filed along with all of the information required by Local Rule 55.2(b). Exs. at 1-7, 15, 46-47; Dkt. No. 12-1 ("Brown Declaration"). Additionally, CCPC submitted an attorney declaration containing all of the information required by Local Rule 55.2(a). Brown Decl. ¶¶ 3-4, 6, 8-9. Accordingly, the Court now considers the substance of Plaintiffs Motion.

         A. Liability

         In order to promote fairness in the interstate market for produce, "PACA provides that a dealer who receives goods or derives proceeds from a wholesaler's produce ... is to hold those goods in trust for the benefit of the unpaid seller." Maspeth Trading, Inc. v. Ou Jiang Supermarket, Inc., No. 12-CV-1997, 2014 WL 3548507, at *4 (E.D.N.Y. July 17, 2014) (quoting S. Katzman Produce, Inc. v. Won, No. 08-CV-2403, 2009 WL ...


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