Federal Fruit & Produce Company v. Liborio Markets #9, Inc. et al

Filing 94

ORDER granting 75 Plaintiff Federal Fruit and Produce Companys Motion for Attorneys Fees and Costs, and Plaintiff is DIRECTED to file documentation supporting the amounts sought on or before December 17, 2013. Defendant Banco may file a response on or before December 24, 2013. No reply shall be permitted, by Judge William J. Martinez on 12/3/2013.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 12-cv-1145-WJM-BNB
FEDERAL FRUIT & PRODUCE COMPANY, a Colorado corporation,
Plaintiff,
v.
LIBORIO MARKETS #9, INC., d/b/a RANCHO LIBORIO, a California corporation,
LIBORIO MARKETS #11, INC., d/b/a RANCHO LIBORIO, a California corporation,
LIBORIO COLORADO HOLDING COMPANY, d/b/a RANCHO LIBORIO, a California
corporation,
LIBORIO HOLDING COMPANY, a California corporation,
TRIPLE A GROCERS, INC., d/b/a RANCHO LIBORIO, d/b/a LIBORIO MARKETS, a
Nevada corporation,
JOHN ALEJO, in his corporate and individual capacity,
RANDY ALEJO, in her corporate and individual capacity,
ENRIQUE M. ALEJO, in his corporate and individual capacity,
ENRIQUE J. ALEJO, in his corporate and individual capacity, and
BANCO POPULAR NORTH AMERICA, a New York corporation,
Defendants.

ORDER GRANTING PLAINTIFF’S MOTION
FOR ATTORNEYS’ FEES AND COSTS

This Perishable Agricultural Commodities Act (“PACA”) case has been brought
by Plaintiff Federal Fruit and Produce Company (“Plaintiff”) asserting a claim for the
value of perishable produce for which it has not been paid. Before the Court is Plaintiff
Federal Fruit and Produce Company’s Motion for Attorneys’ Fees and Costs (“Motion”).
(ECF No. 75.) For the reasons set forth below, the Motion is granted.
I. BACKGROUND
Plaintiff is a Colorado corporation that sells wholesale quantities of perishable

agricultural commodities. (Am. Compl. (ECF No. 57) ¶ 23.) Plaintiff filed a Complaint
on May 2, 2012, asserting that various corporate and individual defendants related to or
doing business as Rancho Liborio (collectively the “Liborio Defendants”) were liable
under PACA for failure to preserve and pay the proceeds of a PACA trust created when
Plaintiff sold them produce. (ECF No. 1.) On October 5, 2012, Plaintiff filed an
Amended Complaint, adding a claim against Defendant Banco Popular North America
(“Banco”) alleging that Banco had received assets belonging to the PACA trust, and
had thereby breached the trust. (Am. Compl. p. 12.)
Banco was served with the Summons and Amended Complaint on November
21, 2012. (ECF No. 59.) On January 3, 2013, because Banco had filed neither an
answer nor a responsive pleading, Plaintiff filed a Motion for Entry of Default. (ECF No.
63.) A Clerk’s Entry of Default was entered against Banco on January 4, 2013. (ECF
No. 64.) On March 29, 2013, Banco filed a Motion to Set Aside the Clerk’s Entry of
Default. (ECF No. 72.) On April 4, 2013, Plaintiff filed a Response to the Motion to Set
Aside, within which Plaintiff requested an award of attorneys’ fees and costs in the
event that the Court granted Banco’s motion and set aside the entry of default. (ECF
No. 73.) The Court denied Plaintiff’s request for fees without prejudice because it was
contained within a response rather than in a separate motion. (ECF No. 74.) Plaintiff
then filed the instant Motion requesting the attorneys’ fees and costs expended as a
result of Banco’s default. (ECF No. 75.) Banco filed a Response opposing the Motion
(ECF No. 77), and Plaintiff filed a Reply (ECF No. 78).
On September 11, 2013, the Court granted Banco’s Motion to Set Aside the
Entry of Default, finding that Banco’s failure to timely respond to the Amended
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Complaint was neither willful nor unduly prejudicial to Plaintiff. (ECF No. 80.)
Accordingly, Plaintiff’s Motion is now ripe for disposition.
II. DISCUSSION
Plaintiff contends that it was prejudiced by Banco’s failure to respond to its
Complaint in that it had to expend resources in moving for the clerk’s entry of default
and for default judgment, and was also forced to file a response to Banco’s motion to
set aside the entry of default. (ECF No. 75 at 2.) In response, Banco argues that
Plaintiff is partially at fault for its default because Plaintiff was in communication with
Banco’s bankruptcy counsel and should have informed Banco through counsel of its
intent to seek Banco’s default. (ECF No. 77 at 3-4.)
“[I]n determining whether a defendant has met the good cause standard” to set
aside a clerk’s entry of default, courts consider multiple factors, including “whether the
plaintiff would be prejudiced if the default should be set aside.” Hunt v. Ford Motor Co.,
65 F.3d 178 (10th Cir. 1995) (unpublished) (citing In re Dierschke, 975 F.2d 181, 183
(5th Cir. 1992)). In the Court’s Order setting aside the Clerk’s entry of default, the Court
found that because the other Defendants had failed to participate actively in the case,
the case had never progressed beyond its initial stages, and thus Banco’s delay in
responding did not prejudice Plaintiff in its ability to prepare its case against Banco.
(ECF No. 80 at 6-7.) However, the Court did not discuss Plaintiff’s expenditure of time
and resources in seeking Banco’s default, reserving such discussion for the instant
Order. (Id. at 6 n.1.)

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The Court finds that Banco’s failure to timely respond was the cause of Plaintiff’s
expenditure of resources in seeking Banco’s default, and Plaintiff is therefore entitled to
be compensated for such expenses in order to mitigate any prejudice to Plaintiff. With
respect to Banco’s contention that Plaintiff is partially at fault for the default, in the
Court’s order setting aside the entry of default the Court rejected this argument, holding
that Plaintiff had no duty to confer prior to moving for an entry of default against a party
that had been properly served. (ECF No. 80 at 5; see also ECF No. 72 at 4.) Banco’s
Response to the instant Motion provides no reason for the Court to reconsider this
ruling. Banco admitted in its Motion to Set Aside that its default resulted from its own
error in misplacing Plaintiff’s Amended Complaint. (ECF No. 72 at 4.) Although
Banco’s delay in responding was not intentional or willful (see ECF No. 80 at 5), Plaintiff
must not be required to bear the expense of Banco’s error.
Accordingly, the Court finds that Plaintiff is entitled to its reasonable attorneys’
fees and costs in filing its Motion for Entry of Default, its Motion for Default Judgment,
its Response to Banco’s Motion to Set Aside Clerk’s Entry of Default, and the instant
Motion for Attorneys’ Fees and Costs, as well as in preparing documentation supporting
the amounts requested.
III. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Plaintiff’s Motion for Attorneys’ Fees and Costs (ECF No. 75) is GRANTED; and

2.

Plaintiff is DIRECTED to file documentation supporting the amounts sought on or
before December 17, 2013. Defendant Banco may file a response on or before
December 24, 2013. No reply shall be permitted.
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Dated this 3rd day of December, 2013.
BY THE COURT:

William J. Martínez
United States District Judge

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