Mission Produce, Inc. v. AP Royal Produce, Inc. et al

Filing 19

MEMORANDUM DECISION AND ORDER dated 5/23/17 granting 17 Motion for Default Judgment; Plaintiff shall have judgment in its favor against defendants, jointly and severally, in the amount of $199,140.45 plus post-judgment interest. Judgment will be separately entered pursuant to Federal Rule of Civil Procedure 58. ( Ordered by Judge Brian M. Cogan on 5/23/2017 )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------------------------------MISSION PRODUCE, INC.
Plaintiff,
-againstAP ROYAL PRODUCT, INC. and ALEKSANDR
YAKUBOV,
Defendants.
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16 Civ. 7015 (BMC)
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COGAN, District Judge.
This is an action for goods sold and delivered pursuant to the Perishable Agricultural
Commodities Act, 7 U.S.C. § 499a et seq. (“PACA”). Before me is plaintiff’s motion for default
judgment under Rule 55(b)(2) of the Federal Rules of Civil Procedure. For the reasons set forth
below, the motion is granted.
BACKGROUND
According to the allegations in the complaint, plaintiff is a perishable produce dealer,
organized and operating under the laws of California, and is licensed by the U.S. Department of
Agriculture. The corporate defendant, AP Royal Produce, Inc. (“AP Royal”), is a New York
corporation that held itself out as being a wholesaler buyer, broker, or distributor of produce, and
the individual defendant, Aleksandr Yakubov, is either the primary shareholder, officer, or
director of AP Royal. Yakubov is responsible for the daily management and control of AP
Royal, including its finances, accounts receivable, and accounts payable.

Plaintiff alleges that it sold AP Royal wholesale quantities of fresh avocados on
September 16, 2016, and September 18, 2016, and invoiced AP Royal for the agreed purchase
price of $170,250. The invoices were payable by their terms within 10 days from the receipt of
the avocados. The invoices also advised AP Royal of the statutory PACA trust; that interest on
past due amounts would be charged at 1.5% per month of the balance; and that the failure to pay
would subject AP Royal to reasonable attorneys’ fees and costs of collection.
AP Royal has failed to pay the invoices, despite plaintiff’s demands. Plaintiff therefore
brought this action. Defendants have failed to timely appear and the Clerk of Court has entered
their default on the docket pursuant to Federal Rule of Civil Procedure 55(a). Defendants have
also failed to respond to plaintiff’s motion for a default judgment.
DISCUSSION
In light of defendants’ default in this case, all of the well-pleaded allegations in plaintiff’s
complaint pertaining to liability are deemed true. However, “[e]ven when a default judgment is
warranted based on a party’s failure to defend, the allegations in the complaint with respect to
the amount of the damages are not deemed true.” Credit Lyonnais Sec. (USA), Inc. v. Alcantara,
183 F.3d 151, 155 (2d Cir. 1999). Rule 55(b)(2) provides that when granting default judgment, a
court may conduct a hearing if it is necessary to “determine the amount of damages” or to
“establish the truth of any allegation by evidence.” The Second Circuit has held that it is not
necessary to conduct a hearing if a district court has “ensured that there was a basis for the
damages specified in the default judgment,” such as by relying on detailed affidavits and
documentary evidence. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109
F.3d 105, 111 (2d Cir. 1997) (internal quotation marks omitted).

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In support of its motion for default judgment, plaintiff has submitted the declaration of
Jeremy B. Warren, plaintiff’s Corporate Counsel. The Warren affidavit describes the sales
between plaintiff and AP Royal and has annexed and authenticated the invoices totaling
$170,250. Each invoice bears the notation that the sale is subject to PACA’s statutory trust. The
Warren affidavit also contains a table listing each sale and computing interest, which when
added to the principal totals $194,240.95.
The principal amount claimed is sufficiently proven by the invoices; it is essentially an
account stated, see generally In re Rockefeller Ctr. Props., 266 B.R. 52, 57 (S.D.N.Y. 2001),
with additional protection provided by federal law as a PACA trust. Similarly, the allegations in
the complaint as to the individual defendant Yakubov’s control of the business are sufficient to
impose liability. See e.g., Felix Produce Corp. v. New Lots Food Corp., 2009 WL 2985444, *2
(E.D.N.Y. Sept.14, 2009); John Georgallas Banana Distribs. of N.Y., Inc. v. N & S Tropical
Produce, Inc., 2008 WL 2788410, *4 (E.D.N.Y. July 15, 2008); Brigiotta’s Farmland Produce &
Garden Ctr., Inc. v. Przykuta, 2006 WL 3240729, *3-4 (W.D.N.Y. July 13, 2006); see also “R”
Best Produce, Inc. v. DiSapio, 540 F.3d 115, 125 n. 8 (2d Cir. 2008).
As to interest, the invoices contain a contractual term fixing the interest rate, and courts
will generally enforce such a rate. See Taylor & Fulton Packing, LLC v. Maro Int’l Foods, LLC,
2011 WL 6329194 (E.D.N.Y. Dec. 16, 2011).
Finally, as provided by the invoices, plaintiff is entitled to recover attorneys’ fees and
costs pursuant to the invoices. PACA explicitly provides for an award of attorneys’ fees when
“the parties’ contract so provides,” as the fees “become subject to the PACA trust together with
the principal debt.” Dayoub Mktg., Inc. v. S.K. Produce Corp., 2005 WL 3006032, *4 (S.D.N.Y.
Nov. 9, 2005) (citing, inter alia, Country Best v. Christopher Ranch, LLC, 361 F. 3d 629, 632-33

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(11th Cir. 2004)). Plaintiff requests $4000 in attorneys’ fees computed at the rate of $250 per
hour over 16 hours. Both the rate and the hours expended are eminently reasonable and will be
awarded. 1 In addition, plaintiff is entitled to recover costs of $899.50, consisting of $400 for the
filing fee and $499.50 for process server fees. 2
CONCLUSION
The motion for a default judgment is granted. Plaintiff shall have judgment in its favor
against defendants, jointly and severally, in the amount of $199,140.45 plus post-judgment
interest. Judgment will be separately entered pursuant to Federal Rule of Civil Procedure 58.
SO ORDERED.

Digitally signed by Brian
M. Cogan
U.S.D.J.

Dated: Brooklyn, New York
May 23, 2017

1

The Court commends plaintiff’s counsel on the quality and thoroughness of the motion for default judgment.

2

The individual defendant proved difficult to serve, and indeed, the allegations in the complaint suggest that
defendants’ entire business may have been a sham.

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