Central Produce Corp. v. 34-18 M&M Corp. et al

Filing 8

MINUTE ENTRY AND ORDER: The Court held a hearing on Plaintiff's motion for a preliminary injunction 3 on July 12, 2017. Defendants failed to appear. For the reasons set forth in attached order, Plaintiff's motion is GRANTED. Ordered by Judge LaShann DeArcy Hall on 7/14/2017. (Figueroa, Tiffani)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------------------------------------X
CENTRAL PRODUCE CORP.,
Case No. 17-cv-3841 (LDH)(RLM)
Plaintiff,
- against -

PRELIMINARY
INJUNCTION ORDER

34-18 M&M CORP. t/a MET FRESH
SUPERMARKET, FRANK’S CABALLITO #2
MARKET PLACE, INC. t/a SUPER PIONEER
MARKET PLACE and FRANK RODRIGUEZ,
Defendants.
-----------------------------------------------------------------X
LASHANN DEARCY HALL, United States District Judge:
THIS MATTER is before the Court upon the Order to Show Cause brought by Plaintiff
Central Produce Corp. (“Central” or “Plaintiff”) seeking an order enjoining and restraining the
Defendants 34-18 M&M Corp. t/a Met Fresh (“Met Fresh”), Frank’s Caballito #2 Market Place,
Inc. t/a Super Pioneer Market Place (“Pioneer”) and Frank Rodriguez (“Rodriguez”) (Met Fresh,
Pioneer and Rodriguez collectively, “Defendants”) and their customers, agents, employees,
officers, directors, successors, subsidiaries, related entities, assigns, and banking institutions
from taking any action to assign, transfer, convey, spend or dissipate PACA trust funds in the
sum of $154,454.50, except for payment to Plaintiff, and directing and requiring Defendants to
account for the assets and liabilities of Met Fresh and Pioneer. Plaintiff’s motion for a
preliminary injunction is unopposed.
“The usual standard for preliminary injunctions applies to ‘applications based upon the
duties of a statutory trustee’ under PACA.” Bonell Produce Co. Inc. v. Chloe Foods, Inc., No.
08-CV-4218FBCLP, 2008 WL 4951942, at *3 (E.D.N.Y. Nov. 19, 2008) (quoting JSG Trading
Corp. v. Tray–Wrap, Inc., 917 F.2d 75, 79 (2d Cir.1990)). The applicant “must make an

-1-

appropriate showing with regard to the merits of the litigation, [and] also must show the
likelihood of irreparable injury if the requested relief is not granted.” Id. Specifically, the
movant must show “(a) irreparable harm and (b) either (1) likelihood of success on the merits or
(2) sufficiently serious questions going to the merits to make them a fair ground for litigation and
a balance of hardships tipping decidedly toward the party requesting the preliminary relief.”
Horizon Mktg. v. Kingdom Int’l Ltd., 244 F. Supp. 2d 131, 139 (E.D.N.Y. 2003) (quoting
Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979)). Plaintiff likely
meets this burden.
Plaintiff has demonstrated a likelihood of success on its claim. Plaintiff is a PACA
licensee. (See Decl. in Supp. of Appl. for Emergency Relief, ECF No. 3-1 at ¶ 3.) Defendants
have not disputed that they are subject to the PACA trust mechanism or that Plaintiff sold and
delivered wholesale quantities of produce to Defendants between February 9, 2015 and May 19,
2017. (See id. at ¶¶ 4-5, 8.) Further, Plaintiff has submitted invoices, which contain the language
necessary to perfect its trust interest by notice. (Id. at Ex. B); see also 7 C.F.R. § 46.46(f)(3)(i);
7 U.S.C. § 499(e)(3) and (4) (“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 inventories of food or other products derived from these
commodities, and any receivables or proceeds from the sale of these commodities until full
payment is received.”). Additionally, Plaintiff has submitted evidence demonstrating that
multiple checks Defendants tendered to Plaintiff as payment have been returned by Defendants’
bank for insufficient funds. (See Decl. Ex. C.)
Plaintiff has similarly shown irreparable harm. It is long settled that “[a] risk that a

-2-

PACA trustee will dissipate the trust constitutes irreparable harm.” See Bonell Produce Co. Inc.,
2008 WL 4951942, at *3 (citing Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d
132, 139 (3d Cir.2000)). Here, the evidence demonstrating that Defendants’ checks have been
returned for insufficient funds indicates that dissipation of trust assets has already occurred.
Lastly, the balance of equities tips in Plaintiff’s favor because “[g]ranting Plaintiff[’]s[] motion
would only require that Defendants satisfy their fiduciary duties under PACA. Defendants will
not be harmed by fulfilling their statutory obligations and preventing the dissipation of trust
assets.” S. Katzman Produce Inc. v. Kato Food Corp., No. 16 CIV. 8116 (CM), 2016 WL
6561414, at *5 (S.D.N.Y. Oct. 26, 2016).
It appearing that Plaintiff will be irreparably and immediately harmed if the relief
requested is not granted, and for good cause shown;
IT IS HEREBY ORDERED, that Plaintiff’s Motion for Preliminary Injunction is
granted; and it is further
ORDERED, that Defendants, their customers, agents, employees, officers, directors,
subsidiaries, related entities, successors, assigns, and banking institutions, shall not alienate,
dissipate, pay over or assign any assets of Met Fresh and Pioneer, their successors, subsidiaries
and related companies, except for payment to Plaintiff, until further order of this Court or until
Defendants pay Plaintiff the amount of $154,454.50 by bank check or wire transfer; and it is
further
ORDERED, that within five (5) business days of the date of this Order, Defendants shall
supply to Plaintiff’s counsel the following documents regarding the assets of Met Fresh and
Pioneer, their successors, subsidiaries and related companies: most recent balance sheets and
profit/loss statements, accounts receivable names and addresses for collection purposes, and all

-3-

records, such as checking account registers and cash receipt records, showing how any funds of
Met Fresh and Pioneer were spent in the last six (6) months; and it is further
ORDERED, that Defendants and/or any banking institutions used by Met Fresh and
Pioneer shall, within two (2) business days of service of this Order, pay any and all funds
realized from the sale of produce in their possession up to $154,454.50 to McCarron & Diess,
707 Walt Whitman Road, Melville, New York 11747, attorneys for Plaintiff, for payment to
Plaintiff; and it is further
ORDERED, that any and all funds belonging to Met Fresh and Pioneer, and their
successors, subsidiaries and related companies, in the possession of third parties, including all
funds belonging to Met Fresh and Pioneer, their successors, subsidiaries and related companies,
on deposit at banking institutions up to $154,454.50, shall be immediately paid to McCarron &
Diess, 707 Walt Whitman Road, Melville, New York 11747, attorneys for Plaintiff, for payment
to Plaintiff; and it is further
ORDERED, that the attorneys for Plaintiff are hereby authorized and directed to collect
all outstanding accounts receivable of Met Fresh and Pioneer, their successors, subsidiaries and
related companies, and transfer said collections to Plaintiff until Plaintiff receives full payment
of the sum of $154,454.50, and that Defendants are required to cooperate with Plaintiff’s
attorneys in providing any necessary documents to effect collection; and it is further
ORDERED, that delivery of a copy of this Order to Defendants shall be deemed to
constitute notice of this Order upon Defendants, their agents, servants and employees pursuant to
Fed. R. Civ. P. 65(d)(2).

-4-

SO ORDERED.
Date: July 14, 2017

/s/ LDH
Hon. LaShann DeArcy Hall, U.S.D.J.

-5-