AFCM, Inc et al v. Elite Global Farming and Logistics, Inc et al

Filing 61

ORDER by Judge Claudia Wilken DENYING DEFENDANTS 47 MOTION TO DISMISS. (ndr, COURT STAFF) (Filed on 4/16/2012)

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3
4
5

AFCM, INC.; and FO-FARMER’S
OUTLET, INC.,

8
9

United States District Court
For the Northern District of California

10
11

v.
ELITE GLOBAL FARMING AND
LOGISTICS, INC; RICHARD
ESCAMILLA, SR.; JOSE ESCAMILLA;
JOHN CREIGHTON; STEPHEN WYRICK;
KENT CURLEY; DAVID GATTIS; AMBER
RIGOR; and RICHARD ESCAMILLA,
JR.,
Defendants.

12
13

ORDER DENYING
DEFENDANTS’ MOTION
TO DISMISS
(Docket No. 47)

Plaintiffs,

6
7

No. C 11-4677 CW

________________________________/
Moving Defendants John Creighton, Kent Curley and David

14
Gattis (hereinafter, Defendants) move to dismiss all claims made
15
against them by Plaintiff AFCM, Inc., as well as AFCM’s claim for
16
damages and penalties under the California Food and Agriculture
17
Code (FAC) §§ 55631, et seq., and its request for attorneys’
18
fees.1

Plaintiffs oppose the motion.

Having considered the

19
arguments presented by the parties in their papers and at the
20
hearing, the Court DENIES Defendants’ motion to dismiss.
21
BACKGROUND
22
The following facts are taken from Plaintiffs’ complaint and
23
the documents attached thereto.
24
25
26
27
28

1

In this motion, Defendants do not challenge AFCM’s claims
against the non-Moving Defendants or Plaintiff FO-Farmer’s Outlet,
Inc.’s claims against any Defendants, including its claim against
Creighton for breach of contract. FO-Farmer’s Outlet does not
bring any claims against Curley or Gattis.

1

Creighton, Curley and Gattis are managers or owners of Elite

2

Global Farming and Logistics, Inc., a corporation in the business

3

of growing, harvesting, marketing and selling perishable

4

agricultural commodities.

5

corporation in the business of growing these commodities.

6

¶ 3.

Compl. ¶¶ 5, 8, 10-11.

AFCM is a
Id. at

7

In late October or early November 2010, AFCM and Elite

8

entered into an oral agreement to grow jointly certain crops for

9

the 2010-11 farming season.

Id. at ¶ 23.

In addition, Elite

United States District Court
For the Northern District of California

10

agreed to harvest, market and sell the crops and to distribute

11

proceeds from the sale of the crops to AFCM.

12

Id.

AFCM performed its duties under the oral agreement.

Id. at

13

¶ 24.

14

its customers and received payment in full from them.

15

However, Elite failed to pay AFCM its share of the profits.

16

at ¶ 25.

Elite harvested, marketed, sold and delivered the crops to
Id.
Id.

17

AFCM alleges that, under the terms of the Perishable

18

Agricultural Commodities Act (PACA), 7 U.S.C. §§ 499e, et seq.,

19

Elite is obliged to hold these proceeds in trust for AFCM until

20

full payment has been made.

21

notice of intent to preserve PACA trust benefits in accordance

22

with the provisions of 7 U.S.C. § 499e(c) and 7 C.F.R. § 46.46.

23

Compl. ¶ 26.

24

On July 26, 2011, AFCM sent a written

On September 21, 2011, Plaintiffs filed the instant action

25

against Creighton, Curley and Gattis, along with Defendants Elite,

26

Richard Escamilla, Jr., Richard Escamilla, Sr., Jose Escamilla,

27

Amber Rigor and Stephen Wyrick.

Docket No. 1.

28
2

Default has been

1

entered as to all Defendants except Creighton, Curley and Gattis.

2

See Docket Nos. 16, 21, 29, 35 and 43.

3

AFCM asserts the following causes of action against

4

Creighton, Curley and Gattis: (1) enforcement of PACA trust

5

provisions and disgorgement (seventh cause of action);

6

(2) violation of the PACA and the FAC for failure to account and

7

pay promptly (eighth cause of action); (3) conversion (ninth cause

8

of action); (4) unjust enrichment (tenth cause of action);

9

(5) constructive trust and disgorgement (eleventh cause of

United States District Court
For the Northern District of California

10

action); (6) declaratory judgment (twelfth cause of action); and

11

(7) injunctive relief (thirteenth cause of action).

12

instant motion, Defendants seek to dismiss each of these claims,

13

and AFCM’s requests for damages, penalties and attorneys’ fees.

14

In the

On February 23, 2012, the Court held a hearing on Defendants’

15

motion to dismiss.

16

permission to submit short supplemental briefs within two days,

17

regarding certain legal authority that was newly presented during

18

the hearing.

19

page supplemental brief.

20

brief.

21
22

At the hearing, the Court gave the parties

On February 25, 2012, Plaintiffs submitted a threeDefendants have not filed a supplemental

LEGAL STANDARD
A complaint must contain a “short and plain statement of the

23

claim showing that the pleader is entitled to relief.”

24

Civ. P. 8(a).

25

state a claim, dismissal is appropriate only when the complaint

26

does not give the defendant fair notice of a legally cognizable

27

claim and the grounds on which it rests.

28

Twombly, 550 U.S. 544, 555 (2007).

Fed. R.

On a motion under Rule 12(b)(6) for failure to

3

Bell Atl. Corp. v.

In considering whether the

1

complaint is sufficient to state a claim, the court will take all

2

material allegations as true and construe them in the light most

3

favorable to the plaintiff.

4

896, 898 (9th Cir. 1986).

5

to legal conclusions; “threadbare recitals of the elements of a

6

cause of action, supported by mere conclusory statements,” are not

7

taken as true.

8

(citing Twombly, 550 U.S. at 555).

NL Indus., Inc. v. Kaplan, 792 F.2d

However, this principle is inapplicable

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009)

When granting a motion to dismiss, the court is generally

10
United States District Court
For the Northern District of California

9

required to grant the plaintiff leave to amend, even if no request

11

to amend the pleading was made, unless amendment would be futile.

12

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

13

F.2d 242, 246-47 (9th Cir. 1990).

14

amendment would be futile, the court examines whether the

15

complaint could be amended to cure the defect requiring dismissal

16

“without contradicting any of the allegations of [the] original

17

complaint.”

18

Cir. 1990).

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th

19
20

In determining whether

DISCUSSION
I.

AFCM’s claims under the PACA

21

A. PACA Statutory Trust

22

AFCM alleges a violation of section 5(c) of the PACA, 7

23

U.S.C. § 499e(c).

24

to deal with the “burden on commerce in perishable agricultural

25

commodities . . . caused by financing arrangements under which

Congress added this section to the PACA in 1984

26
27
28
4

1

commission merchants,2 dealers, or brokers, who have not made

2

payment” for the commodities “give lenders a security interest in”

3

the commodities or proceeds from their sale.

4

§ 499e(c)(1).

5

remedy “a statutory trust in which essentially all produce,

6

produce-derived revenues or products would constitute the trust

7

res until all produce suppliers are paid in full.”

8

Harvest Buffet Restaurants, Inc., 245 B.R. 650, 652 (B.A.P. 9th

9

Cir. 1999).

7 U.S.C.

To address this problem, Congress created as a

In re Country

United States District Court
For the Northern District of California

10

Specifically, the statute provides,

11

Perishable agricultural commodities received by a
commission merchant, dealer, or broker in all
transactions, and all inventories of food or other
products derived from perishable agricultural
commodities, and any receivables or proceeds from the
sale of such commodities or products, shall be held by
such commission merchant, dealer, or broker in trust for
the benefit of all unpaid suppliers or sellers of such
commodities or agents involved in the transaction, until
full payment of the sums owing in connection with such
transactions has been received by such unpaid suppliers,
sellers, or agents.

12
13
14
15
16
17

7 U.S.C. § 499e(c)(2).

18

requirements to which a beneficiary must adhere to preserve the

19

trust benefits.

20

The statute also creates certain notice

7 U.S.C. §§ 499e(c)(3)-(4).

Dissipation of trust assets, defined as “any act or failure

21

to act which could result in the diversion of trust assets or

22

which could prejudice or impair the ability of unpaid suppliers,

23

sellers, or agents to recover money owed in connection with

24

produce transactions,” is unlawful.

7 C.F.R. § 46.46(a)(2), (d).

25
26
27
28

2

“The term ‘commission merchant’ means any person engaged in
the business of receiving in interstate or foreign commerce any
perishable agricultural commodity for sale, on commission, or for
or on behalf of another.” 7 U.S.C. 499a(5).
5

1

The Ninth Circuit has held that “individual shareholders,

2

officers, or directors of a corporation who are in a position to

3

control PACA trust assets, and who breach their fiduciary duty to

4

preserve those assets, may be held personally liable.”

5

Growers, Inc. v. Fisher, 104 F.3d 280, 283 (9th Cir. 1997).

6
7

Under the terms of the statute, to show a perfected PACA
trust interest, AFCM must show:

8

(1)

9

(2)

10
United States District Court
For the Northern District of California

(3)
11
12
13
14
15

Sunkist

(4)
(5)

there was a transaction in interstate commerce
involving perishable agricultural commodities;
these commodities were received by a commission
merchant, dealer or broker;
AFCM was a supplier or seller of such commodities
or an agent involved in the transaction;
AFCM has not received full payment; and
AFCM preserved its trust rights by giving proper
notice to Elite.

7 U.S.C. §§ 499e(c).
Defendants argue that a PACA trust claim arises only when the

16

trust beneficiary sells perishable agricultural products to a

17

buyer, who fails to pay in full, and that a joint venture

18

arrangement, such as the one alleged between AFCM and Elite,

19

cannot give rise to a statutory trust under the PACA.

20

responds that a sales transaction is only one type of transaction

21

that is covered by the PACA and that the PACA is not as limited as

22

Defendants claim.

23

Plaintiffs are correct.

AFCM

The PACA statutory language is

24

broad, and specifically states that the trust beneficiaries are

25

“unpaid suppliers, sellers, or agents.”

26

statute describes commodities that are “received” in a

27

transaction, which the regulations define broadly as “when the

28
6

7 U.S.C. § 499e(c).

The

1

buyer, receiver or agent gains ownership, control, or possession”

2

of them.

3

See 7 U.S.C. § 499e(c); 7 C.F.R. 46.46(a)(1).

The legislative history for the addition of the statutory

4

trust remedy confirms that such a trust may arise in the type of

5

relationship alleged here.

6

Agriculture recommending approval of the amendment stated in part,

7

In the marketing of perishable agricultural commodities,
there are many varied business arrangements resulting in
the movement of these commodities from the farm to the
shipping point and to destination markets and ultimately
to the consumer. They include but are not limited to
consignments, joint ventures, and grower agency
arrangements. In a joint venture, it is common for one
of the joint ventures [sic] to gain ownership,
possession or control of the goods for the purposes of
marketing the goods. In that situation, a trust
relationship arises as between the joint venture partner
which has marketing responsibility and all other joint
venturers. Another trust relationshp [sic] is
established in the person or entity which gains
ownership, possession or control of the goods from the
joint venturers.

8
9

United States District Court
For the Northern District of California

10
11
12
13
14
15

The report of the House Committee on

H. Rep. No. 98-543, 98th Cong., 1st Sess. 5 (1983) (emphasis
16
added).

Thus, Congress specifically considered the type of

17
transaction at issue here and intended that it would be
18
encompassed within the statutory trust remedy.
19
While Defendants cite several cases in support of their
20
argument that PACA claims are limited to sales transactions, those
21
cases arose out of sales transactions and the courts did not
22
discuss whether other types of transactions are covered by the
23
PACA.

See, e.g., Family Tree Farms, LLC v. Alfa Quality Produce,

24
Inc., 2009 U.S. Dist. LEXIS 16940 (E.D. Cal.); C.H. Robinson Co.
25
v. Marina Produce Co., Inc., 2007 U.S. Dist. LEXIS 3098 (N.D.
26
Cal.).
27
28
7

1

At the hearing, Defendants argued for the first time that

2

AFCM could not be a PACA trust beneficiary as a joint venturer,

3

because AFCM was not licensed under PACA.

4

argument, Defendants relied upon Alvaro v. Rey Rey Produce SFO,

5

Inc., 2008 U.S. Dist. LEXIS 14747 (N.D. Cal.), in which the court

6

addressed whether a joint venturer asserting a PACA trust claim

7

had given notice sufficient to establish benefits under such a

8

trust.

9

beneficiary may do this.

In support of their

Under the PACA, there are two ways that a trust
First, an “unpaid supplier, seller, or

United States District Court
For the Northern District of California

10

agent” may give “written notice of intent to preserve the benefits

11

of the trust to the commission merchant, dealer, or broker.”

12

U.S.C. § 499e(c)(3). Second, “a licensee” may use “ordinary and

13

usual billing or invoice statements to provide notice of the

14

licensee’s intent to preserve the trust,” so long as the billing

15

and invoice statements contain certain statutorily-mandated

16

language.

17

alleged that he used the second of these two methods, and thus the

18

court found that, because he was not a licensee, he had failed to

19

state a PACA trust claim.

20

In contrast, Plaintiffs allege here that AFCM gave notice of its

21

PACA trust claim in accordance with the first provision, see

22

Compl. ¶ 26, which may be used by any “unpaid supplier, seller, or

23

agent,” not just PACA licensees.

24

7 U.S.C. § 499e(c)(4).

7

In Alvaro, the plaintiff

2008 U.S. Dist. LEXIS 14747, at *6-8.

Accordingly, the Court DENIES Defendants’ motion to dismiss

25

AFCM’s seventh, twelfth and thirteenth causes of actions to

26

enforce the PACA trust and for declaratory and injunctive relief

27

based on the establishment of a PACA trust.

28
8

1

B. Failure to Account and Pay Promptly under the PACA

2

In its eighth cause of action, AFCM alleges that Defendants

3

failed to account and make full payment properly for the

4

perishable goods under the PACA and the California FAC.

5

Defendants again argue that the PACA is not applicable, because

6

the agreement between AFCM and Elite was not for the sale and

7

purchase of produce.

8

FAC claim in their motion to dismiss.

9

United States District Court
For the Northern District of California

10
11
12
13
14
15

Defendants do not address or challenge the

Section 499b(4) of the PACA prohibits “unfair conduct”
including
For any commission merchant, dealer, or broker . . . to
fail or refuse truly and correctly to account and make
full payment promptly in respect of any transaction in
any such commodity to the person with whom such
transaction is had; or to fail, without reasonable
cause, to perform any specification or duty, express or
implied, arising out of any undertaking in connection
with any such transaction; or to fail to maintain the
trust as required under section 5(c).

16

7 U.S.C. § 499b(4).

While the implementing regulations do not

17

define the phrase “any transaction,” they do refer to and define

18

certain kinds of transactions, including a “joint account

19

transaction,” which means “a produce transaction in commerce in

20

which two or more persons participate under a limited joint

21

venture arrangement whereby they agree to share in a prescribed

22

manner the costs, profits, or losses resulting from such

23

transaction.”

24

explain the meaning of the statutory phrases “truly and correctly

25

to account,” “account promptly” and “full payment promptly” in

26

relation to such a joint account transaction.

27

§§ 46.2(y)(2), (z)(2), (aa)(1)-(2).

7 C.F.R. § 46.2(s).

28
9

Further, the regulations

See 7 C.F.R.

These regulations would be

1

rendered meaningless if joint venture arrangements were read to be

2

categorically excluded from the statute.

3

Administrative decisions from the United States Department of
Agriculture support this conclusion.

5

Associates, the judicial officer described an early decision

6

considering a “situation [that] involved no purchase and sale

7

transaction as between complainant and respondent but rather

8

concerned produce which was jointly owned by the parties,” where

9

the Secretary of Agriculture had held that this “joint venture

10
United States District Court
For the Northern District of California

4

which was directly concerned with participation in the proceeds

11

from the sale of perishable agricultural goods” was a transaction

12

under the meaning of the PACA, given the broad “any transaction”

13

language of the statute.

14

(summarizing O.S. Lloyd v. E.F. Dellartim, PACA Docket No. 366

15

(U.S.D.A. 1933)).

16

which was directly concerned with participation in the proceeds

17

from the sale of perishable agriculture commodities,” the judicial

18

officer found that the “undertaking to remit a percentage of the

19

net proceeds from the sale of the perishable agricultural

20

commodities involved in this proceeding is an undertaking” within

21

the meaning of this section as well.

22

In Joanne M. Eady v. Eady &

37 Agric. Dec. 1589 (U.S.D.A. 1978)

In Eady itself, also involving “a joint venture

Id. at 1593.

Accordingly, the Court DENIES Defendants’ motion to dismiss

23

AFCM’s eighth cause of action.

24

II.

AFCM’s conversion claim

25

Defendants argue that AFCM’s ninth cause of action for

26

conversion should be dismissed, because the conversion claim is

27

predicated on a breach of contract, which, under California law,

28

cannot be brought as a tort unless there is also a breach of a
10

1

legal duty.

2

Defendants breached their legal duty to pay the sales proceeds to

3

AFCM under the PACA and not to dissipate the PACA trust assets.

4

Courts have found that conduct alleged to violate the PACA statute

5

may also constitute conversion under California law.

6

Onions Etc., Inc. v. Z & S Fresh, Inc., 2011 U.S. Dist. LEXIS

7

89184, at *13 (E.D. Cal.); Kingsburg Apple Packers Inc. v.

8

Ballantine Produce Co., 2011 U.S. Dist. LEXIS 32111, at *18-21

9

(E.D. Cal.).

United States District Court
For the Northern District of California

10

However, as Plaintiffs point out, AFCM alleges that

See, e.g.,

Accordingly, the Court DENIES Defendants’ motion to dismiss

11

AFCM’s conversion claim.

12

III. AFCM’s unjust enrichment claim

13

Defendants argue that AFCM’s tenth cause of action for unjust

14

enrichment should be dismissed, because unjust enrichment is not a

15

cause of action but rather a general principle underlying various

16

doctrines and remedies.

17

“California courts are split as to whether there is an

18

independent cause of action for unjust enrichment.”

19

Century Mortg. Corp., 2012 U.S. Dist. LEXIS 13469, at *25 (N.D.

20

Cal.) (citing Baggett v. Hewlett-Packard Co., 582 F. Supp. 2d

21

1261, 1270-71 (C.D. Cal. 2007) (applying California law)).

22

view is that it is a general principle underlying various legal

23

doctrines and remedies.”

24

Cal. App. 4th 379, 387 (2004)).

25

“purported cause of action for unjust enrichment as an attempt to

26

plead a cause of action giving rise to a right to restitution.”

27

123 Cal. App. 4th at 388.

28

bases for a cause of action seeking restitution, including as an

Cortez v. New

“One

Id. (citing McBride v. Boughton, 123
In McBride, the court construed a

The court recognized various potential

11

1

alternative to breach of contract damages when the parties had an

2

express contract which was procured by fraud or is otherwise

3

unenforceable for some reason.

4

Id.

“Another view is that it is a cause of action and its

5

elements are receipt of a benefit and unjust retention of the

6

benefit at the expense of another.”

7

Lectrodryer v. SeoulBank, 77 Cal. App. 4th 723, 726 (2000)).

8

“Determining whether it is unjust for a person to retain a benefit

9

may involve policy considerations.”

United States District Court
For the Northern District of California

10

Id. at *25-26 (citing

Id. at *26 (citing First

Nationwide Sav. v. Perry, 11 Cal. App. 4th 1657, 1663 (1992)).

11

Here, AFCM has alleged that it entered into an oral contract

12

with Elite, in which Elite agreed to market and sell crops that

13

AFCM and Elite grew together and of which they shared ownership.

14

AFCM alleges that Elite received payment from merchants for the

15

sale of those crops but has failed to share the proceeds with

16

AFCM, as promised.

17

stated an unjust enrichment claim under either view and DENIES

18

Defendants’ motion to dismiss the tenth cause of action.

19

IV.

20

Accordingly, the Court finds that AFCM has

AFCM’s constructive trust claim
Defendants move to dismiss AFCM’s eleventh cause of action

21

for a constructive trust, claiming that AFCM has not alleged facts

22

to satisfy a required element, its right to the property in which

23

it seeks to establish a constructive trust.

24

AFCM’s constructive trust claim is based on two theories, fraud

25

and violation of the PACA statutory trust provisions, and that

26

AFCM has not adequately plead either.

27

substantive arguments related to the PACA trust claim and instead

28

incorporate their previous arguments by reference.
12

Defendants argue that

Defendants make no new

1

In response, Plaintiffs argue that AFCM has adequately plead

2

an entitlement to property under the PACA statutory trust

3

provisions and that Defendants have violated its rights thereto.

4

At the hearing, Plaintiffs clarified that AFCM’s constructive

5

trust claim is predicated only on this theory and not upon fraud.

6

For the reasons previously discussed, the Court finds that

7

AFCM has adequately alleged a constructive trust claim predicated

8

on violation of the PACA statutory trust provisions and DENIES

9

Defendants’ motion to dismiss AFCM’s eleventh cause of action to

United States District Court
For the Northern District of California

10

the extent that it is based on this theory.

11

dismiss this claim, to the extent that it is predicated on fraud,

12

is DENIED as moot in that AFCM is not making such a claim.

13

V.

14

Defendants’ motion to

AFCM’s request for damages and penalties under the FAC
Defendants move to dismiss AFCM’s request for damages and

15

penalties under the FAC.

16

explicitly allege a violation of the FAC in the complaint.

17

Defendants argue that AFCM cannot allege a claim for a producer’s

18

lien under the FAC, because Elite is not a “processor” within the

19

FAC, because sections 55407 and 55631 of the FAC apply to sales

20

transactions covering produce, and because there is no allegation

21

that Elite took farm products from AFCM for processing or

22

manufacturing as required by these statutes.

23

Defendants state that AFCM did not

However, Defendants are mistaken about the allegations made

24

by AFCM in the complaint.

25

opposition, Plaintiffs allege in the complaint that “Elite is a

26

California dealer of farm products, and is subject to licensure by

27

the California Department of Food & Agriculture Market Enforcement

28

Branch, and to the provisions of the California Food and

As Plaintiffs point out in their

13

1

Agricultural Code (FAC).”

2

in its eighth cause of action, AFCM alleges that “Elite’s failure

3

to pay for the Crops (which constitute farm products under the

4

FAC) in the time and manner specified in the Agreement, is a

5

violation of FAC §§ 56302 and 56603.”

Compl. ¶ 5 (emphasis added).

Further,

Id. at ¶ 70.

6

Because Defendants have made no argument that AFCM has failed

7

adequately to plead that it is a dealer of farm products under the

8

FAC or that AFCM has failed to state a claim under FAC §§ 56302

9

and 56603, the Court DENIES Defendants’ motion to dismiss AFCM’s

United States District Court
For the Northern District of California

10

request for damages and penalties under the FAC.

11

VI.

12
13
14

AFCM’s request for attorneys’ fees
Defendants also move to dismiss AFCM’s request for attorneys’

fees.
“Unlike the British legal system rule, in which the winner

15

automatically gets attorneys’ fees, the rule in American courts,

16

commonly known as the American Rule, looks with disdain upon

17

awarding attorneys’ fees unless an independent basis exists for

18

the award.”

19

Inc., 307 F.3d 1220, 1222-1225 (9th Cir. 2002) (citing Alyeska

20

Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 257-59

21

(1975)).

22

such fees when they have a contractual right to them.

23

Mt. Land, 307 F.3d at 1222-1225 (contractual rights to attorneys’

24

fees may be included in a PACA trust claim); Country Best v.

25

Christopher Ranch, LLC, 361 F.3d 629, 631-633 (11th Cir. 2004)

26

(same); JC Produce, Inc. v. Paragon Steakhouse Restaurants, Inc.,

27

70 F. Supp. 2d 1119, 1123 (E.D. Cal. 1999) (same).

28

Circuit has also “held that a court should award attorneys’ fees

Middle Mt. Land & Produce, Inc. v. Sound Commodities,

Courts repeatedly state that a PACA litigant may recover

14

See Middle

The Ninth

1

to a PACA claimant whose litigation efforts ‘are directly

2

responsible for the availability of the funds from the statutorily

3

created trust,’” under the common fund exception to the American

4

Rule.

5

Poulos, 947 F.2d 1351, 1353 (9th Cir. 1991) (awarding attorneys’

6

fees where the litigation efforts resulted in the trust being

7

declared “valid and enforceable, thereby permitting the funds to

8

be dispersed among the trust claimants”)).

9

claimant did not create a common trust,” an award of attorneys’

Middle Mt. Land, 307 F.3d at 1225 (quoting In re Milton

However, “where a PACA

United States District Court
For the Northern District of California

10

fees is “inappropriate.”

11

Source Produce Inc., 217 F.3d 348, 352-353 (5th Cir. 2000)).

12

Id. (citing Golman-Hayden Co. v. Fresh

Here, it is not clear whether Plaintiffs will ultimately be

13

able to prove an entitlement to attorneys’ fees.

14

Plaintiffs may be able to establish facts sufficient to support

15

such an award, the Court DENIES Defendants’ motion to dismiss the

16

attorneys’ fees request.

17
18
19
20

However, because

CONCLUSION
For the reasons set forth above, the Court DENIES Defendants’
motion to dismiss (Docket No. 47).
IT IS SO ORDERED.

21
22
23

Dated:

4/16/2012

CLAUDIA WILKEN
United States District Judge

24
25
26
27
28
15