PRIMO NUMBER ONE IN PRODUCE, INC. v. VG SALES LLC et al

Filing 12

OPINION FILED. Signed by Judge Noel L. Hillman on 1/18/17. (js)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

PRIMO NUMBER ONE IN PRODUCE,
INC.,

HONORABLE NOEL L. HILLMAN

Plaintiff,

CIVIL ACTION NO. 16-1395
OPINION

v.
VG SALES LLC t/a PAPA G PRODUCE,
and VINCENT A. GUARINO,
Defendants.

APPEARANCES:
ARCHER & GREINER PC
By: Douglas G. Leney, Esq.
One Centennial Square
Haddonfield, New Jersey 08033
Counsel for Plaintiff

HILLMAN, United States District Judge:
Plaintiff Primo Number One in Produce, Inc. brings this
suit pursuant to the Perishable Agricultural Commodities Act
(“PACA”), 7 U.S.C. § 499a, et seq. 1, alleging that Defendant VG
Sales LLC, trading as Papa G Produce, and Papa G’s President and
principal, Defendant Vincent A. Guarino, failed to pay Primo for
produce Primo sold to Papa G’s between April 2015 and May 2015.

The Court has federal question subject matter jurisdiction
pursuant to 28 U.S.C. § 1331.
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Defendant Papa G was properly served with the summons and
complaint in this action on March 26, 2016 (see Docket Entry No.
7), but has failed to appear.

The Clerk of Court properly

entered default pursuant to Fed. R. Civ. P. 55(a) against Papa G
on May 2, 2016.
As to Defendant Guarino, Primo filed on the docket a
Suggestion of Bankruptcy, and Guarino was administratively
terminated without prejudice as a Defendant to this suit on May
3, 2016.
Presently before the Court is Primo’s Motion for Default
Judgment against Defendant Papa G only.

For the reasons stated

herein, the motion will be granted.
I.
Primo and Papa G had a contract pursuant to which Primo
sold various items of produce (including bananas, broccoli,
mushrooms and potatoes) to Papa G during April and May 2015.
(Kroschwitz Aff. ¶¶ 2-3, 6 and Exs. A-B)
numerous invoices.

Papa G failed to pay

The sum of the outstanding balances is

$51,155.10. (Id. ¶ 7)

Each invoice contains the following

language at the top:
The perishable agricultural commodities listed on
this invoice are sold subject to the statutory
trust authorized by section 5(c) of the Perishable
Agricultural Commodities Act, 1930 (7 U.S.C.
499e(c)). The seller of these commodities retains
a trust
claim
over
these
commodities,
all
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inventories of food or other products derived from
these commodities until full payment is received.
Interest and attorney’s fees necessary to collect
any balance due hereunder shall be considered sums
owing in connection with the transaction under the
PACA trust.
Interest shall be added to unpaid
balances as provided herein.
(Kroschwitz Ex. A)
Further, Primo and Papa G entered into an agreement
entitled “Terms of Credit and Establishment of Account” which
provides that if Papa G fails to pay on its account, Papa G
agrees “to appear for and to confess or enter judgment . . . on
the purchase invoice for such unpaid balance plus costs, accrued
interest and with (10%) percent [sic] added as a reasonable
attorney’s fee, which purchase invoice shall constitute the
instrument on which judgment shall be confessed.” (Kroschwitz
Ex. B)
II.
“Federal Rule of Civil Procedure 55(b)(2) authorizes courts
to enter a default judgment against a properly served defendant
who fails to a file a timely responsive pleading.”

Chanel v.

Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (citing
Anchorage Assoc. v. Virgin Is. Bd. of Tax Rev., 922 F.2d 168,
177 n.9 (3d Cir. 1990)).

However, a party seeking default

judgment “is not entitled to a default judgment as of a right.”
Franklin v. Nat’l Maritime Union of America, No. 91-480, 1991 WL
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131182, at *1 (D.N.J. 1991) (quoting 10 Wright, Miller & Kane,
Federal Practice and Procedure § 2685 (1983)), aff’d, 972 F.2d
1331 (3d Cir. 1992).

The decision to enter a default judgment

is “left primarily to the discretion of the district court.”
Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984).
Although every “well-pled allegation” of the complaint,
except those relating to damages, are deemed admitted, Comdyne
I. Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990), before
entering a default judgment the Court must decide whether “the
unchallenged facts constitute a legitimate cause of action,
since a party in default does not admit mere conclusions of
law,” Chanel, 558 F. Supp. 2d at 535 (citing Directv, Inc. v.
Asher, No. 03-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14,
2006)).

“Three factors control whether a default judgment should

be granted: (1) prejudice to the plaintiff if default is denied,
(2) whether the defendant appears to have a litigable defense,
and (3) whether defendant’s delay is due to culpable conduct.”
Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000);
United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195
(3d Cir. 1984).

If a review of the complaint demonstrates a

valid cause of action, the Court must then determine whether
Plaintiff is entitled to default judgment.
III.
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A.

Plaintiff has stated a cause of action
The PACA provides, “[i]f any commission merchant, dealer,

or broker violates any provision of section 499b of this title
he shall be liable to the person or persons injured thereby for
the full amount of damages sustained in consequence of such
violation.

Such liability may be enforced . . . by suit in any

court of competent jurisdiction.” 7 U.S.C. § 499e(a)-(b).
Section 499b provides, in relevant part, “[i]t shall be
unlawful in, or in connection with, any transaction in
interstate or foreign commerce: . . . [f]or 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.” 7 U.S.C. § 499b(4).
Primo has established that Papa G failed to “make full
payment” to Primo for transactions in agricultural commodities
subject to the PACA.

Accordingly, Primo has stated a cause of

action against Papa G.
B.

Plaintiff is entitled to default judgment

Prejudice to Plaintiff
Primo has adequately demonstrated that it will be
prejudiced absent entry of default judgment.

Its records

indicate that it has suffered an actual loss of revenue totaling
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$51,155.10. (Kroschwitz Aff. ¶7 and Ex. A)

Absent entry of

default judgment, there is a substantial danger that Primo will
never recover this loss because Papa G has, at all times,
refused to participate in this suit, which was filed over nine
months ago.
No meritorious defense
“A claim, or defense, will be deemed meritorious when the
allegations of the pleadings, if established at trial, would
support recovery by plaintiff or would constitute a complete
defense.” Poulis v. State Farm Fire and Cas. Co., 747 F.2d 863,
869-70 (3d Cir. 1984); accord $55,518.05 in U.S. Currency, 728
F.2d at 195; Feliciano v. Reliant Tooling Co., 691 F.2d 653,
657; Farnese v. Bagnasco, 687 F.2d 761, 764 (3d Cir. 1982).
Nothing in the papers before the Court, nor the Court’s
independent research concerning the relevant law, suggest that
Papa G has a meritorious defense to this suit.
Defendant’s delay is the result of culpable conduct
“Culpable conduct is dilatory behavior that is willful or
in bad faith.” Gross v. Stereo Component Sys., Inc., 700 F.2d
120, 123 (3d Cir. 1983).
The length of Primo’s delay after having been properly
served with the complaint, along with the nature of the claim
asserted by Primo, supports an inference of culpable conduct.
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C.

Damages
The invoices, along with the “Terms of Credit and Establishment

of Account,” and the Kroschwitz Affidavit demonstrate that Primo is
entitled to $51,155.10 in principal amount due, plus $9,207.91
interest on the principal, for a total amount of damages equal to
$60,363.01.
D.

Attorneys fees
Pursuant to the parties’ agreement, Primo is entitled to recover

10% of the principal amount as a reasonable attorney’s fee, which
amounts to $5,115.51.
IV.
For the above-stated reasons, Primo’s Motion for Default
Judgment will be granted.

An appropriate order accompanies this

opinion.

Dated: January 18, 2017

__s/ Noel L. Hillman_____

At Camden, New Jersey

Noel L. Hillman, U.S.D.J.

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