C.H. Robinson Worldwide, Inc. v. Auster Acquisitions, LLC et al

Filing 387

MEMORANDUM OPINION signed by the Honorable Charles P. Kocoras on 10/11/2011.Mailed notice(sct, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
C.H. ROBINSON WORLDWIDE, INC.,
a corporation, et al.,
Plaintiffs,
vs.
AUSTER ACQUISITIONS, LLC, d/b/a
THE AUSTER COMPANY, INC., a
corporation, et al.,
Defendants.

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MEMORANDUM OPINION
CHARLES P. KOCORAS, District Judge:
This case comes before the Court on several petitions for the approval of
attorneys’ fees and costs. For the reasons stated below, the petitions are granted in part
and denied in part.
BACKGROUND
On January 7, 2011, Plaintiff C.H. Robinson Worldwide, Inc. (“C.H. Robinson”)
filed a complaint against Defendants Auster Acquisitions, LLC d/b/a The Auster
Company, Inc. (“Auster”), Tom Bastounes, Paul Duggan (“Duggan”), and The Estate
of Dennis F. Nardoni, individually and in their corporate capacities, and Standard Bank
and Trust Co., seeking enforcement of a trust pursuant to the Perishable Agricultural
Commodities Act (“PACA”), 7 U.S.C. § 499(c)(4). Since a similar complaint was later

filed by Jack Tuchten Wholesale Produce, Inc. (“Jack Tuchten”), this Court
consolidated the two cases. Thereafter, numerous creditors filed intervening complaints
claiming trust rights under PACA and against Auster. Several claimants included
requests for attorneys’ fees and costs as part of their claims. In accordance with the
Court’s deadline for the parties to file objections to the claims, Duggan expressly
reserved the right to challenge the reasonableness of attorneys’ fees, but did not object
to the claimants’ right to recover attorneys’ fees.
The following claimants now move for an order awarding attorneys’ fees and
costs in the amounts specified below:
CLAIMANTS

ATTORNEYS’ FEES

Jack Tuchten

$15,010.16

Ruby Robinson Company, Inc. (“Ruby

$2,916.34

Robinson”)
Strube Celery & Vegetable Company (“Strube

$4,293.72

Celery”)
Durango’s Products, Inc. d/b/a Junior Produce

$5,720.04

(“Junior Produce”)
Everyday Fresh Produce, Inc. (“Everyday

$2,221.25

Fresh Produce”)
Produce Plus, Inc. (“Produce Plus”)

$14,318.09

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Keith Connell, Inc. (“Keith Connell”)

$7,411.76

Evergreen International, Inc. (“Evergreen”)

$2,063.01

RPE, Inc. d/b/a Russett Potato Exchange

$5,144.91

(“Russet Potato Exchange”)
J.L Gonzalez Produce, Inc. (“J.L. Gonzalez

$3,000.74

Produce”)
Emerald Packing Company, LLC (“Emerald

$12,632.50

Packing”)
AMC Direct, Inc. (“AMC Direct”)

$8,496.70

C.H. Robinson

$63,199.37

Dietz & Kolodenko Co. (“Dietz &

$341.53

Kolodenko”)
Veg-Pro, Inc. (“Veg-Pro”)

$4,734.20

Mandolini Company, Inc. (“Mandolini”)

$1,584.99

Nico Mexi Foods, Inc. (“Nico Mexi”)

$3,651.07

Quality Foods Products, Inc. (“Quality Foods”)

$11,436.00

Domex Superfresh Growers, LLC (“Domex”)

$12,342.20

Hughes Produce Sales, Inc. (“Hughes

$595.01

Produce”)
Scattaglia Growers & Shippers, LLC

$9,936.66

(“Scattaglia”)
Tom Lange Co., Inc. (“Tom Lange”)

$22,856.89

Duggan now objects to the award of attorneys’ fees.
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LEGAL STANDARD
PACA mandates that perishable agricultural commodities received by a
merchant, dealer, or broker, as well as the sales proceeds from such commodities, are
held in trust for the benefit of unpaid suppliers “until full payment of the sums owing
in connection with such transactions has been received.” 7 U.S.C. § 499e(c)(2). The
three appellate courts resolving the issue of attorneys’ fees under PACA have held that
“where the parties’ contracts include a right to attorneys’ fees, they can be awarded as
‘sums owing in connection with’ perishable commodities transactions under PACA.”
Coosemans Specialities, Inc. v. Gargiulo, 485 F.3d 701, 709 (3d Cir. 2007) (finding that
attorneys’ fees were recoverable under PACA because plaintiffs’ invoices created an
enforceable contract providing for such fees); see also Country Best v. Christopher
Ranch, LLC, 361 F.3d 629, 632 (11th Cir. 2004) (finding that the PACA language
“unambiguously encompasses not only the price of commodities but also additional
related expenses . . . includ[ing] attorney fees and interest that buyers and sellers have
bargained for in their contracts”); Middle Mountain Land & Produce Inc. v. Sound
Commodities Inc., 307 F.3d 1220, 1222-23 (9th Cir. 2002).
DISCUSSION
Duggan previously reserved his right to challenge the reasonableness of the fees.
Now, for the first time and after the deadline for objecting to the claims has expired,
Duggan argues that the claimants are not entitled to attorneys’ fees under PACA. Even
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though Duggan failed to timely object on this basis, and thus has waived his right to do
so, the Court nevertheless follows the appellate courts’ approach and finds that the
claimants are entitled to attorneys’ fees if the claimants had an enforceable contract
providing for such fees.
Everyday Fresh Produce and Keith Connell base their claims for attorneys’ fees
and costs on an express contract term. Duggan does not argue that the provisions or
contracts are unenforceable. Accordingly, the attorneys’ fee provisions are part of the
enforceable contracts between the claimants, Everyday Fresh Produce and Keith
Connell, and Auster. Therefore, the Court grants their petitions for attorneys’ fees.
All claimants, except for Everyday Fresh Produce, Keith Connell, Emerald
Packing, and AMC Direct, assert a contractual right to attorneys’ fees and costs based
on fee language included in their invoices. Section 2-207 of the Illinois Compiled
Statutes provides that, between merchants, additional terms in an acceptance or
confirmation becomes part of the contract unless the offer expressly limits acceptance
to the terms of the offer, the terms materially alter the contract, or the other party
previously objected to the terms or objects within a reasonable time. 810 Ill. Comp.
Stat. 5/2-207.

Here, the parties are merchants, so the attorneys’ fee provisions

contained in the invoices are part of the contracts unless one of the exceptions applies.
The party objecting to the inclusion of the attorneys’ fee provision bears the burden of

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proving the exception. Comark Merch., Inc. v. Highland Grp., Inc., 932 F.2d 1196,
1201 (7th Cir. 1991). Because Duggan does not even argue that one of the exceptions
applies, the attorneys’ fee provisions are part of the enforceable contracts between the
claimants and Auster. See, e.g., Sato & Co. v. S&M Produce, Inc., 2010 WL 431601,
at *5 (N.D. Ill. Feb. 2, 2010) (holding, pursuant to Section 2-207, that the attorneys’ fee
provisions are part of the enforceable contracts between the parties). The Court
therefore grants the attorneys’ fee petitions of Jack Tuchten, Ruby Robinson, Strube
Celery, Junior Produce, Produce Plus, Evergreen, Russett Potato Exchange, J.L.
Gonzalez Produce, C.H. Robinson, Dietz & Kolodenko, Veg-Pro, Mandolini, Nico
Mexi, Quality Foods, Domex, Hughes Produce, Scattaglia, and Tom Lange.
Unlike the other claimants, Emerald Packing and AMC Direct do not point to any
contractual right to attorneys’ fees and costs. Accordingly, the Court denies their claims
for attorneys’ fees.
As a final matter, Duggan does not challenge the reasonableness of the rates
charged by various counsel, but argues that the Court should significantly reduce the
amount of recoverable fees because the fees represent a significant duplication of effort.
Duggan provides no support for his proposition that the Court has authority to reduce
the fees where the claimants are contractually entitled to such fees. Thus, the Court will
not reduce the fees based on Duggan’s unsubstantiated claim.

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CONCLUSION
For the foregoing reasons, the Court grants in part and denies in part the petitions
for attorneys’ fees.

Charles P. Kocoras
United States District Judge
Dated: October 11, 2011

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