Coast-To-Coast Produce Company, LLC v. Mountain Fresh Farms, LLC et al
DECISION AND ORDERED, that CCPCs Motion (Dkt. No. 12) is GRANTED in part as to the $72,830.00 in unpaid invoices against defendant Mountain Fresh Farms, LLC, and DENIED in part as to the requested prejudgment interest. Signed by Senior Judge Lawrence E. Kahn on March 13, 2017. (sas)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
MOUNTAIN FRESH FARMS, LLC, et al.,
DECISION AND ORDER
Plaintiff Coast-To-Coast Produce Company, LLC (“CCPC”) brought this action against
Defendants Mountain Fresh Farms, LLC (“MFF”) and Carole Crimivaroli to recover payment for
produce sold to MFF over the course of several months. Dkt. No. 1 (“Complaint”). CCPC
subsequently filed a motion for default judgment pursuant to Federal Rule of Civil Procedure
55(b). Dkt. Nos. 12 (“Motion”), 12-3 (“Memorandum”). For the following reasons, the Motion is
granted in part and denied in part.
CCPC, a Connecticut LLC and wholesale produce distributor, is a licensed dealer as
defined in the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499a, et seq.
Compl. ¶ 3. MFF, a New York LLC, is also a wholesale produce distributor, and Crimivaroli is
an officer, manager, and member of MFF with control over its operations. Id. ¶¶ 4–5. CCPC
provides invoices showing that between December 21, 2015, and June 7, 2016, CCPC sold and
delivered $72,820.00 in produce to MFF. Id. ¶ 7; Dkt. No. 12-2 (“Exhibits”) at 18–39.1 Despite
repeated requests, MFF has failed to pay the $72,820.00 that it owes to CCPC for produce
delivered during that time period. Id. ¶ 8.
On July 7, 2016, CCPC filed the Complaint in this action asserting a variety of statutory
and common law causes of action and seeking damages and interest. Id. ¶ 41. Defendants did not
file a responsive pleading, and on August 5, 2016, the Clerk of the Court filed an entry of default
against Defendants at CCPC’s request. Dkt. No. 9. On August 8, 2016, CCPC filed the Motion
for Default Judgment seeking monetary relief on its PACA claims in the amount of $72,820.00
in unpaid invoices and $3,145.02 in prejudgment interest. Mot. at 1. Defendants have not
responded or otherwise appeared in this case. On September 20, 2016, CCPC filed a suggestion
of bankruptcy as to Crimivaroli, requesting that all actions against Crimivaroli be stayed pursuant
to 11 U.S.C. § 362, Dkt. No. 13 (“Suggestion of Bankruptcy”), and the Court granted that
request, Dkt. No. 15.
“Federal Rule of Civil Procedure 55 provides a two-step process that the Court must
follow before it may enter a default judgment against a defendant.” Elec. Creations Corp. v.
Gigahertz, Inc., No. 12-CV-1423, 2013 WL 3229125, at *3 (N.D.N.Y. June 25, 2013) (quoting
Robertson v. Doe, No. 05-CV-7046, 2008 WL 2519894, at *3 (S.D.N.Y. June 19, 2008)). “First,
under Rule 55(a), when a party fails to plead or otherwise defend . . . the clerk must enter the
The page numbers of the Exhibits correspond to those assigned by the Court’s
electronic filing system (“ECF”).
party’s default.” Id. Second, under Federal Rule of Civil Procedure 55(b)(2), “the party seeking
default judgment is required to present its application for entry of judgment to the court.” Id.
“When a default is entered, the defendant is deemed to have admitted all of the wellpleaded factual allegations in the complaint pertaining to liability.” Bravado Int’l Grp. Merch.
Servs., Inc. v. Ninna, Inc., 655 F. Supp. 2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound
Exhibitgroup, Inc. v. E.L. U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). “While a default
judgment constitutes an admission of liability, the quantum of damages remains to be established
by proof unless the amount is liquidated or susceptible of mathematical computation.” Flaks v.
Koegel, 504 F.2d 702, 707 (2d Cir. 1974); accord Bravado Int’l, 655 F. Supp. 2d at 189. “[E]ven
upon default, a court may not rubber-stamp the non-defaulting party’s damages calculation, but
rather must ensure that there is a basis for the damages that are sought.” Robertson, 2008 WL
2519894, at *3. “The burden is on the plaintiff to establish its entitlement to recovery.” Bravado
Int’l, 655 F. Supp. 2d at 189. “While ‘the court must ensure that there is a basis for the damages
specified in a default judgment, it may, but need not, make the determination through a
hearing.’” Id. at 190.
Under Local Rule 55.2(b), the moving party must submit with its motion for default
judgment: (1) a clerk’s certificate of entry of default, (2) a proposed form of default judgment,
(3) a copy of the pleading to which no response has been made, and (4) an affidavit. L.R. 55.2(b).
The affidavit must set forth that: (1) the party against whom judgment is sought is not an infant,
incompetent, or in military service; (2) the party against whom judgment is sought has defaulted
in appearance in the action; (3) service was properly effected under Federal Rule of Civil
Procedure 4; (4) the amount sought is justly due and owing, and no part has been paid; and (5)
the disbursements sought to be taxed have been made in the action or will necessarily be made or
incurred. L.R. 55.2(a).
CCPC’s Motion was filed along with all of the information required by Local Rule
55.2(b). Exs. at 1–7, 15, 46–47; Dkt. No. 12-1 (“Brown Declaration”). Additionally, CCPC
submitted an attorney declaration containing all of the information required by Local Rule
55.2(a). Brown Decl. ¶¶ 3–4, 6, 8–9. Accordingly, the Court now considers the substance of
In order to promote fairness in the interstate market for produce, “PACA provides that a
dealer who receives goods or derives proceeds from a wholesaler’s produce . . . is to hold those
goods in trust for the benefit of the unpaid seller.” Maspeth Trading, Inc. v. Ou Jiang
Supermarket, Inc., No. 12-CV-1997, 2014 WL 3548507, at *4 (E.D.N.Y. July 17, 2014) (quoting
S. Katzman Produce, Inc. v. Won, No. 08-CV-2403, 2009 WL 2448408, at *3 (E.D.N.Y. Aug. 7,
2009)). To recover the proceeds from a PACA-created trust, a plaintiff must show:
(1) The commodities sold were perishable agricultural commodities;
(2) the purchaser of the perishable agricultural commodities was a
commission merchant, dealer or broker; (3) the transaction occurred
in interstate or foreign commerce; (4) the seller has not received full
payment on the transaction; and (5) the seller preserved its trust rights
by giving written notice to the purchaser within the time provided by
A&J Produce Corp. v. Chang, 385 F. Supp. 2d 354, 358 (S.D.N.Y. 2005) (citing 7 U.S.C.
§ 499e). Here, CCPC has alleged all of the necessary elements to recover from a trust, Compl.
¶¶ 4, 7, 8, 10, and those allegations are presumed to be true for the purposes of the Motion, Fed.
R. Civ. P. 8(b)(6).
CCPC seeks damages in the amount of $72,830.00. Mot. at 1. In support of that
calculation, CCPC provides a series of twenty-two invoices covering shipments of cucumbers
and tomatoes from December 21, 2015, through June 7, 2016. Exs. at 18–39. MFF paid a portion
of the invoice dated December 21, 2015, but the remaining twenty-one invoices were entirely
unpaid. Id. at 17. After reviewing CCPC’s calculations, the Court awards a judgment of
$72,830.00 against MFF.
PACA does not explicitly provide for prejudgment interest, but the Second Circuit has
held that “[t]he decision whether to grant prejudgment interest and the rate used if such interest is
granted ‘are matters confided to the district court’s broad discretion.’” Endico Potatoes, Inc. v.
CIT Group/Factoring, Inc., 67 F.3d 1063, 1071 (2d Cir. 1995) (quoting Commercial Union
Assurance Co. v. Milken, 17 F.3d 608, 613–14 (2d Cir. 1994)). Courts in this circuit typically
grant prejudgment interest when it is provided for in the invoices or in a contract between the
parties. E.g., S. Katzman Produce, Inc., 2009 WL 2448408, at *5–6.
Here, CCPC seeks prejudgment interest at the New York statutory rate of nine percent,
but it provides no contractual basis for charging MFF interest. The invoices themselves do not
mention interest, and CCPC does not identify any other contract providing for interest on unpaid
invoices. Therefore, the Court declines to award prejudgment interest. See Hop Hing Produces
Inc. v. Lin Zhang Trading Co., Inc., No. 11-CV-3259, 2013 WL 3990761, at *6–7 (E.D.N.Y.
Aug. 5, 2013) (declining to award prejudgment interest “[b]ecause plaintiff has not established a
contractual basis for charging defendant prejudgment interest”); Poppy’s Wholesale Produce,
Inc. v. S&S Grocery of N.Y. Corp., No. 11-CV-4337, 2012 WL 2373629, at *1 (E.D.N.Y. June
22, 2012) (adopting a report-recommendation that denied prejudgment interest because the
plaintiff provided no evidence that it was entitled to prejudgment interest); Watermelon Exp.,
Inc. v. Marine Park Farmer’s Market, Inc., No. 05-CV-4649, 2007 WL 4125105, at *1 (E.D.N.Y.
Nov. 16, 2007) (same).
Accordingly, it is hereby:
ORDERED, that CCPC’s Motion (Dkt. No. 12) is GRANTED in part as to the
$72,830.00 in unpaid invoices against defendant Mountain Fresh Farms, LLC, and DENIED in
part as to the requested prejudgment interest; and it is further
ORDERED, that the Clerk of the Court serve a copy of this Decision and Order on all
parties in accordance with the Local Rules.
IT IS SO ORDERED.
March 13, 2017
Albany, New York
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