Weyand & Son, Inc. v. Guzman

Filing 8

ORDER: Plaintiff Weyand & Son, Inc.'s Motion for Default Judgment 7 is GRANTED consistent with the foregoing. Weyand & Son, Inc. may renew its request for attorneys' fees and costs within 14 days of the date of this Order. The Clerk is directed to enter judgment in favor of Weyand & Son, Inc. and against Nancy Guzman in the amount of $73,079.35. The Clerk shall thereafter close this case. Signed by Judge Virginia M. Hernandez Covington on 4/11/2014. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
WEYAND & SON, INC.,
Plaintiff,
v.

Case No. 8:14-cv-312-T-33TBM

NANCY GUZMAN,
Defendant.
________________________________/
ORDER
This cause is before the Court pursuant to Plaintiff
Weyand & Son, Inc.’s Motion for Default Judgment (Doc. # 7),
which was filed on April 8, 2014. The Court grants the Motion
as articulated below.
I.

Background
On February 6, 2014, Plaintiff Weyand & Son filed an

action under Section 5(c)(5) of the Perishable Agricultural
Commodities Act (“PACA”), 7 U.S.C. §§ 499b and 499e(c)(5).
Therein,

Weyand

&

Son

alleged

that

it

is

“a

Florida

corporation with a principal place of business in Tampa,
Florida, [] engaged in the business of buying and selling
wholesale quantities of perishable agricultural commodities
(‘produce’) in interstate commerce . . . and was . . . a
dealer subject to and licensed under the provisions of the
PACA.” (Doc. # 1 at ¶ 3).
Weyand & Son asserts that Defendant Nancy Guzman, the

owner of a bankrupt entity known as N.G. Fresh, accepted
$67,758.00 “worth of wholesale quantities of produce” between
November 11, 2013, and December 10, 2013, but failed to pay
Weyand & Son for the same. (Id. at ¶¶ 6-12).

Weyand & Son

also asserts:
At the time of receipt of the produce, Plaintiff
became a beneficiary in a statutory trust designed
to assure payment to produce suppliers. The trust
consists of all produce or produce-related assets,
including all funds commingled with funds from
other sources and all assets procured by such
funds, in the possession or control of Defendant
since the creation of the trust.
(Id. at ¶ 8).

Weyand & Son explains that it “preserved its

interest in the PACA trust in the unpaid amount of $67,758.00
by sending invoices to N.G. Fresh and Defendant containing the
language required by 7 U.S.C. § 499e(c)(4), and remains a
beneficiary until full payment is made for the produce.” (Id.
at ¶ 9).
In

Count

One

of

the

Complaint,

titled

“Unlawful

Dissipation of Trust Assets by a Corporate Official,” Weyand
& Son indicates that Guzman “was the President and 100%
shareholder of N.G. Fresh during the period of time in
question and is and was in a position of control over the PACA
trust assets belonging to Plaintiff.” (Id. at ¶ 14). Weyand &
Son also contends that Guzman “failed to direct N.G. Fresh to

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fulfill its statutory duties to preserve PACA trust assets and
pay

Plaintiff

for

the

[p]roduce

it

supplied,”

and

that

Guzman’s failure to do so “was an unlawful dissipation of
trust assets by a corporate official.” (Id. at ¶¶ 15-16). In
Count Two of the Complaint, Weyand & Son seeks prejudgment
interest at the rate of 18% per annum and attorneys’ fees.
Weyand & Son effected service of process on Guzman via
personal service on February 13, 2014. (Doc. # 4). Guzman
failed to file a responsive pleading to the Complaint.

On

April 3, 2014, Weyand & Son filed a motion for entry of
Clerk’s default. (Doc. # 5).

The Clerk entered a default

against Guzman pursuant to Rule 55(a), Fed.R.Civ.P., on April
4, 2014. (Doc. # 6).

Thereafter, Weyand & Son filed the

present Motion on April 8, 2014.
II.

Default
Federal Rule of Civil Procedure 55(a) sets forth the

following regarding an entry of default:
(a) Entering a Default. When a party against
whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend,
and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s
default.
A district court may enter a default judgment against a
properly served defendant who fails to defend or otherwise

3

appear pursuant to Federal Rule of Civil Procedure 55(b)(2);
DirecTV, Inc. v. Griffin, 290 F. Supp. 2d 1340, 1343 (M.D.
Fla. 2003).
The mere entry of a default by the Clerk does not, in
itself, warrant the Court entering a default judgment.

See

Tyco Fire & Sec. LLC v. Alcocer, 218 F. App’x 860, 863 (11th
Cir. 2007)(citing Nishimatsu Constr. Co. v. Houston Nat’l
Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)).

Rather, a court

must ensure that there is a sufficient basis in the pleadings
for the judgment to be entered.

Id.

A default judgment has

the effect of establishing as fact the plaintiff’s well-pled
allegations of fact and bars the defendant from contesting
those facts on appeal.

Id.

III. The Perishable Agricultural Commodities Act
As explained in Red’s Market v. Cape Canaveral Cruise
Line, Inc., 181 F. Supp. 2d 1339, 1341-42 (M.D. Fla. 2002), a
case finding the individual principals of a cruise ship liable
for non-payment with respect to produce under PACA, the court
explained:
Congress enacted PACA in 1930 to regulate trading
in perishable agricultural products with the intent
of preventing unfair business practices and
promoting financial responsibility in the fresh
fruit and produce industry.
To this end, PACA
requires that dealers make prompt and full payment
for their produce purchases. In 1984, troubled by
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the practices of some dealers, Congress amended the
Act, adding section 499e(c)(2), which provides
additional protection for the sellers of fruits and
vegetables. Under this provision, the agricultural
commodities, products derived from the produce, and
proceeds from the sale of such items are subject to
a statutory trust for the benefit of the seller
until full payment is made to the seller by the
dealer.
Id. (internal citations omitted). The court also emphasized
that “by enacting section 499e(c)(2), Congress intended that
PACA trusts remain in effect until full payment is made by the
purchaser of agricultural commodities.” Id. at 1342.
As to the issue of individual liability for corporate
officers, such as Guzman, the Red’s Market court noted that
“those who are in a position to control PACA trust assets, and
who breach their duty to preserve those assets, may be held
personally liable under the act.” Id. at 1344 (citing Sunkist
Growers, Inc. v. Fisher, 104 F.3d 280, 283 (9th Cir. 1997)).
The Red’s Market court also explained that “it is appropriate
to impose personal liability on shareholders, officers, and
directors of corporate buyers who are in a position to control
PACA trust assets and fail to maintain the assets.” Id.
(citing Golman-Hayden Co. v. Fresh Source Produce, Inc., 217
F.3d 348, 350 (5th Cir. 2000)).

Additionally, “a shareholder

who was in a position to protect trust assets but failed to do
so would be personally liable for the unpaid debt for produce”
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regardless of whether the failure was intentional or whether
the individual was an otherwise responsible corporate officer.
Id. (citing Morris Okun, Inc. v. Harry Zimmerman, Inc., 814 F.
Supp. 346 (S.D.N.Y. 1993)).
In Country Best v. Christopher Ranch, LLC, 361 F.3d 629,
632

(11th

Cir.

“unambiguously

2004),

the

encompasses

court
not

also

only

noted

the

that

price

of

PACA
the

commodities but also additional related expenses, [which]
include attorneys fees and interest that buyers and sellers
have bargained for in their contracts.”

In addition, “[i]f

the invoices for the products contain language providing for
attorney fees, reasonable attorney fees may be recovered.”
Covenant Tomato Sales, Inc. v. Suttles, No. 2:10-cv-337-FtM29DNF, 2011 U.S. Dist. LEXIS 97812, at *6 (M.D. Fla. Aug. 31,
2011).
IV.

Default Judgment Analysis
Weyand & Son moves for the entry of default judgment and

indicates that Guzman is not an infant, an incompetent person,
or in the military service of the United States. (Doc. # 7 at
¶ 6).
Judgment

Weyand & Son has supported the Motion for Default
with

the

declaration

of

Richard

Weyand

(Chief

Financial Officer of Weyand & Son), a copy of Weyand & Son’s
PACA dealer license, numerous invoices supporting its claim,
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as well as other relevant documents.
The invoices supporting the amount claimed are before the
Court and Mr. Weyand explains that such invoices were “made in
the ordinary course of business . . . at or near the time of
the occurrence of the event of which they are a record. These
business records are made by me or under my direction and
supervision.” (Weyand Decl. Doc. # 7 at ¶ 5).
contains

a

provision

for

the

payment

of

Each invoice
18%

interest,

attorneys’ fees, and costs. (See, e.g., Doc. # 1-1 at 7).
Mr. Weyand further states that “Nancy Guzman and N.G.
Produce have failed to make any payment under the trust
provisions of the PACA, and the balance of $67,758.00, plus
interest of $5,321.35 and attorneys’ fees of $5,011.25 are due
and owing.” (Id. at ¶ 12).
Based upon the Clerk’s entry of default, the well-pleaded
factual

allegations

contained

in

the

Complaint,

and

Mr.

Weyand’s declaration and supporting documentation, the Court
determines that a default judgment is warranted as to the
unpaid invoices and interest.

Guzman is liable for the

balance of the invoices, which is $67,758.00, plus interest of
$5,321.35 (which is 7.853 of the invoiced amount).1

1

The Court

While Weyand & Son has repeatedly claimed that it is
entitled to interest at the rate of 18%, the amount of
7

further determines that a hearing as to these sums is not
needed because the damages are capable of accurate and ready
mathematical computation or ascertainment.
has

supplied

a

chart

for

the

Court’s

Indeed, counsel

convenience

which

catalogues the amount of each invoice and the interest claimed
for such amount. (Doc. # 7 at 41).
However, Weyand & Son has not provided any support for
the claimed attorneys’ fees and costs of $5,011.25.

Weyand &

Son may renew its request for attorneys’ fees and costs via
separate motion to be filed within 14 days of the date of this
Order.

Any motion requesting fees and costs should describe

the resources allocated to this case including the number of
hours expended on the prosecution of this case and the hourly
rate of the billing attorney.

In addition, any motion

requesting fees and costs should include a detailed fee and
cost ledger.
Accordingly, the Court directs the Clerk to enter a final
default judgment against Guzman in the amount of $73,079.35
($67,758.00 + $5,321.35 = $73,079.35).

After entry of the

interest Weyand & Son has requested in the Motion for Default
Judgment, $5,321.35, represents 7.853% of the unpaid balance
of $67,758.00.
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