Moza LLC v. Tumi Produce International Corp. et al

Filing 130

OPINION & ORDER: For the foregoing reasons, this Court awards Moza LLC judgment in the amount of $218,921.73 against Defendants Tumi Produce International Corp., Catherine Bracho, and Michael E. Felix. The Clerk of Court is directed to mark this case closed. (Signed by Judge William H. Pauley, III on 9/16/2019) (jwh) Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
MOZA LLC,
Plaintiff,
-againstTUMI PRODUCE INTERNATIONAL
CORP., et al.,
Defendants.

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17cv1331
OPINION & ORDER

WILLIAM H. PAULEY III, Senior United States District Judge:
Plaintiff Moza LLC (“Moza”) brings this action against Defendants Tumi Produce
International Corp. (“Tumi”), Catherine Bracho, William Bracho,1 Ultra Fresh, LLC (“Ultra
Fresh”), and Michael E. Felix under the Perishable Agricultural Commodities Act (“PACA”), 7
U.S.C. § 499e(c)(5). Following a one-day bench trial, this Court makes the following findings of
fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.
BACKGROUND
This action arises out of a dispute between two now-defunct perishable goods
wholesalers—Moza and Tumi—over unpaid balances for the sale of produce.2 Between October
4, 2016 and December 22, 2016, Moza made shipments of fruits and vegetables to Tumi worth
hundreds of thousands of dollars (the “Transactions”) for which it claims to have received partial
or no payment. (See Am. Compl., ECF No. 70, at Ex. A.)

1

At times, this Court refers to Tumi, Catherine Bracho, and William Bracho collectively as the “Tumi
Defendants.”

2

Moza obtained a PACA license on April 4, 2016. (P-2 at 156.) Tumi received a PACA license on October
18, 2016. (See P-4 at 159.) Tumi concedes that, at all relevant times, it was subject to PACA as a commission
merchant, dealer, or broker of produce. (See Answer to Am. Compl., ECF No. 81, ¶ 8.)

1

The Transactions resulted from purchase orders submitted by Michael Felix at
Tumi to Moza’s owner, David Martin. (Trial Tr., ECF No. 121, at 31, 150.) Once Martin
received a purchase order from Felix, Moza secured the produce and sent Tumi either a bill of
lading or a “passing” listing the produce aboard the shipment. (Trial Tr. at 29, 31.) Martin then
created and sent an official invoice to Tumi using “FreshBooks” accounting software. (See Trial
Tr. at 74, 170.) In addition to listing the produce Tumi purchased, Moza’s invoices and passings:
(1) were dated, (2) stated the total balance owed to Moza, (3) demanded payment within 10 days,
and (4) contained the following language:
The perishable agriculture 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 USC 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.
(See generally P-1 (collection of Transaction invoices and passings); see also Trial Tr. at 28.)
Each passing also stated the day on which the produce shipped. (See, e.g., P-1 at 003 (Passing
for Transaction 4046).) During the relevant period, Martin sent these documents to a
combination of three Tumi-affiliated email addresses, usually within a day after the produce
shipped. (See Trial Tr. at 29–30.)
The Transaction invoices and passings were addressed to Tumi at 3082 Decatur
Avenue, Bronx, New York.3 (See e.g., P-1 at 001.) The invoices—but not the passings—were
also specifically addressed to “Mike Felix.” Felix did not live at the Bronx address; rather,
Felix’s mother, Catherine Bracho, and his half-brother, William Bracho, lived there. (Trial Tr. at

3

All but one of the Transaction invoices and passings introduced at trial were addressed to “Tumi Produce
Inc.”—that is, Tumi’s predecessor. (See generally P-1.) Defendants, however, have not claimed that this error
impacted Tumi’s receipt of the invoices and passings. Indeed, both entities operated at the Bronx address.
(Compare P-4 at 159 (Tumi PACA license), with P-5 at 160 (N.Y.S. Dep’t of Corps., Listing for Tumi Produce
Inc.).)

2

20.) Felix lived in Orangeburg, New York. (Trial Tr. at 20.) Tumi’s PACA license listed the
Bronx address as the company’s mailing address and identified Catherine and William as the
company’s principals. (P-4 at 159.)
Tumi received an invoice or a passing—and usually both—for each Transaction.
(See generally P-1; D-A–ZZ (billing documents for each Transaction).) As such, the parties
focused on three disputed issues at trial: (1) whether Moza received full payment for the
Transactions, (2) whether Moza properly preserved its PACA trust rights for any outstanding
Transaction balances, and (3) which—if any—of Catherine Bracho, William Bracho, Felix, and
Ultra Fresh is liable for Tumi’s purported debt to Moza. Moza contends that each Defendant is
jointly and severally liable for an outstanding balance of $222,709.93 plus interest for the 27
Transactions at issue.4 (See Am. Compl., ECF No. 70, at Ex. A.) Moza also avers that it
perfected its PACA trust rights for that balance by regularly sending Tumi invoices and passings
that comport with the statute’s notice requirements. (Am. Compl. ¶ 30.) Defendants dispute the
balance due and maintain that Moza did not preserve its PACA trust rights because its billing
practices were irregular.
DISCUSSION
“Congress enacted PACA in 1930 to regulate the interstate sale and marketing of
perishable agricultural commodities.” Coosemans Specialties Inc. v. Gargiulo, 485 F.3d 701,
705 (2d Cir. 2007). Under PACA, “perishable commodities or proceeds from the sale of those
commodities are held in trust by the buyer for the benefit of the unpaid seller until full payment
is made.” Coosemans Specialties Inc., 485 F.3d at 705; see also 7 U.S.C. § 499e(c)(2). This

4

While the Amended Complaint alleges that there is a total outstanding balance of $236,912.73 plus interest,
Moza has clarified that the correct balance is $222,709.93 based on: (1) an $800 credit applied to Transaction 4046
and (2) its receipt of $13,402.80 in full satisfaction of Transaction 4072. (See Trial Tr. at 26, 33.)

3

trust “is formed at the moment the produce is shipped to the buyer and remains in effect until the
seller is paid in full.” Ger-Nis Int’l, LLC v. FJB, Inc., 2007 WL 656851, at *1 (S.D.N.Y. Mar. 1,
2007). “To enforce payment from the trust, PACA beneficiaries may sue in an appropriate U.S.
district court.” Am. Banana Co. v. Republic Nat’l Bank of N.Y., N.A., 362 F.3d 33, 38 (2d Cir.
2004). To recover the proceeds from the trust, a beneficiary must establish that: “(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 the law.” A & J Produce Corp. v. Chang, 385 F. Supp. 2d 354, 358
(S.D.N.Y. 2005); see also Double Green Produce, Inc. v. Forum Supermarket Inc., 387 F. Supp.
3d 260, 267 (E.D.N.Y. 2019); DiMare Homestead, Inc. v. Alphas Co. of N.Y., 2012 WL
1155133, at *9 (S.D.N.Y. Apr. 5, 2012).
The Transactions undeniably concerned perishable agricultural commodities sold
in interstate commerce. And Tumi concedes that it was a commission merchant, dealer, or
broker under PACA during the relevant period. (See Answer to Am. Compl. ¶ 8.) The parties,
however, squabble over the final two elements: payment and preservation of trust rights.
I.

Whether Moza Received Full Payment
Neither Moza nor Tumi was adept at recordkeeping, and the evidence at trial was

disorganized. Tasked with parsing the parties’ jumbled submissions, this Court places the
Transactions in several different buckets: (1) Transactions subject to inspection by the United
States Department of Agriculture (“USDA”); (2) Transactions paid with cash; (3) Transactions
with revised invoices for additional produce or freight charges; and (4) Transactions for which

4

Tumi offered no evidence of payment or did not otherwise dispute the amount charged. Two of
the 27 Transactions at issue (4057 and 4076) fall into two of these categories.
A. Produce Subject to Inspection
For eleven Transactions,5 the produce that Tumi received was inspected by the
USDA for defects. And at trial, Defendants introduced: (1) USDA inspection certificates,6 and
(2) “accounts of sale” illustrating the amounts for which Tumi resold the allegedly defective
produce to third parties. (See, e.g., D-Q at 063–64 (USDA inspection certificate and
accompanying account of sale for Transaction 4097).) In their post-trial submission, the Tumi
Defendants claim that it is “customary” in the produce industry for a buyer to resell defective
produce on the original seller’s account. (Defs.’ Tumi Produce Int’l Corp., Catherine and
William Bracho, Proposed Findings of Fact and Conclusions of Law, ECF No. 123 (“Tumi
Defs.’ PFF&CL”), ¶ 14.) Stated differently, if Moza sent Tumi defective produce—so long as
Tumi gave Moza the USDA inspection certificate and its account of sale—Moza would need to
accept the diminished returns Tumi received upon resale of that produce as full payment.
Perhaps such agreements are commonplace in the produce industry—but this Court has no way
of knowing, as Defendants have not offered evidence discussing the prevalence of this purported
“custom.”
The only evidence Defendants offered suggesting that Moza agreed to accept
diminished payments for the USDA-inspected produce is testimony from Felix specifically
regarding Transaction 4056. Felix claimed that Martin gave Tumi the “OK to sell the product,

5

The Transactions are: 4056, 4057, LP28USDA, LM2060USDA, LP-29, 4076, 4097, 4098, 4100, 4107, and

4119.
6

Defendants, however, failed to introduce evidence to assist this Court in interpreting these inspection
certificates, all of which contain unfamiliar terminology, such as “SER. DAM” and “CHECKSUM.”

5

do an account of sale . . . and get it to him.” (Trial Tr. at 180.) But this Court doubts the veracity
of that testimony. Indeed, Felix also testified that Tumi wrote a check for $5,225 to cover
Transaction 4056’s total balance. (Trial Tr. at 180.) That check, according to Felix, was
ultimately an overpayment because Tumi only generated $4,491.22 from its sale of the defective
produce. (Trial Tr. at 180.) Yet Tumi’s check to Moza is dated October 28, 2016—10 days after
the last transaction listed on Tumi’s account of sale. (See D-C at 009–010.) In other words, if
Felix’s testimony were true, it would mean Tumi willingly overpaid Moza after it had already
sold the defective produce.
Accordingly—to the extent it has not paid the full amounts due—Tumi owes
Moza the remaining balances for these eleven Transactions. Cf. Belleza Fruit, Inc. v. Suffolk
Banana Co., Inc., 2012 WL 2675066, at *8 n.6 (E.D.N.Y. July 5, 2012) (“[W]hether the parties
agreed to a discounted price based upon the quality of the produce delivered, or whether
defendants unilaterally decided to pay a discounted price based upon the quality of the produce
. . . [is an] issue . . . appropriately left to the finder of fact after a trial on the merits.”). This
Court reaches the same conclusion for Transaction 4046, for which Felix testified that Moza
agreed to accept a diminished sum following an “in-house” inspection. (Trial Tr. at 178–79.) To
be sure, Martin did not accept the results of that inspection. (See Trial Tr. at 72.)
B. Transactions Paid with Cash
For Transactions 4076 and 4088, Defendants contend that Moza agreed to accept
cash payments in full satisfaction of the amounts to which Moza claims it is entitled. The
invoices introduced at trial for these Transactions (1) state the amount that Moza allegedly
agreed to accept in cash, and (2) are dated and hand-signed by Felix, Martin, and a Tumi
employee named “Frankie.” (See D-L at 046; D-P at 056.) Martin testified that his signature on

6

these documents was forged, Trial Tr. at 131, 134, while Felix claimed to have seen Martin sign
them, Trial Tr. at 187. This Court observes that while Martin’s purported signature on these
invoices resembles his undisputed signature on certain endorsed checks, compare D-L at 046,
with D-F at 025; see also Trial Tr. at 141, his signature—a circle next to a horizontal line—is not
difficult to duplicate. This Court credits Martin’s testimony on this point. Accordingly, to the
extent that Tumi has not paid for Transactions 4076 and 4088 in full, the outstanding balances
are due.
C. Revised Invoices with Added Produce or Freight Charges
For Transactions LM2058 and LM2059, Moza sent Tumi “revised” invoices that
increased the amount of produce listed thereon and, in turn, increased the total balance. (See P-1
at 061, 063, 067.) Martin testified that Moza was initially misinformed about what produce was
shipped to Tumi. (See Trial Tr. at 103–05 (“The bill of lading was not received, and we were
incorrectly invoiced. And I had the e-mail thread that went from the person who sold it to me
showing that they wrongly invoiced me.”).) After realizing that Tumi had only been billed for a
portion of what it received, Martin claimed he sent out revised invoices. (See Trial Tr. at
103–05.) This Court credits Martin’s testimony on Transaction LM2058, which is corroborated
by a bill of lading confirming that Tumi received more produce than initially invoiced. (P-1 at
064.) This Court also credits Martin’s testimony on Transaction LM2059 because Defendants do
not argue that Tumi did not receive the additional produce.7 Accordingly, to the extent that Tumi
has not paid the full amounts due for these Transactions a balance remains.
For Transactions 4057 and 4067, Moza issued revised invoices that contained
freight charges. (See P-1 at 012 (4057), 016 (4067).) Similarly, for Transaction 4069, Moza

7

At trial, counsel for the Tumi Defendants merely noted that the invoice is absent from Tumi’s records and
that Moza did not offer affirmative proof showing that it sent the invoice to Tumi. (Trial Tr. at 105.)

7

contends that it is owed a freight charge of $6,100 even though it has not produced an invoice or
a passing with that charge listed. (Cf. Trial Tr. at 167.) While it appears that Moza did
occasionally bill Tumi for freight in connection with the Transactions, see, e.g., P-1 at 001
(invoice for Transaction 4046 with freight charge), Moza has not offered evidence showing that
Tumi agreed to accept freight for these specific transactions. Accordingly, these charges are
deducted from Tumi’s outstanding balances.
D. Transactions for which Tumi has Offered No Evidence of Payment
For the following transactions, Tumi introduced no evidence indicating that it
paid Moza or otherwise disputed the amounts charged: LM2063, 4066,8 4084USDA, 4101, 4102,
4105, 4108, 4110, and 4112. Any outstanding balances therefore remain due.
E. Total Outstanding Balance
This Court has crunched the numbers and—in light of the above conclusions—
finds that Moza is owed outstanding balances for the following Transactions, some of which are
necessarily grouped together because Tumi occasionally paid multiple invoices with a single
check or wire transfer:
Transaction Number
4046 and LM2058
4056
4057 and 40679
LP28USDA
LM2059, 2060USDA, and 4097
4066
4069

Amount Outstanding
$14,745.85
$4,197.00
$2,160.00
$318.00
$12,487.80
$4,988.60
$750.00

8

At trial, counsel for the Tumi Defendants observed that the amount billed on a revised invoice for
Transaction 4066—upon which Moza bases its claim—is more than the amount stated on an earlier invoice and
passing. (Trial Tr. at 109.) There is no dispute, however, that Tumi received this revised invoice from Moza. (See
D-I at 027.) And Defendants have not argued that Moza overbilled Tumi for this Transaction.
9

Although this Court concludes that Moza cannot collect on the additional freight charges imposed via its
revised invoices for Transactions 4057 and 4067, Tumi still has not paid the full amounts due for the original
outstanding balances. The same is true of Transaction 4069.

8

4076
LM2063
LP-29
4084USDA
4088
4098
4100
4101
4102
4105
4107
4108
4110
4112
4119

II.

$30,529.00
$22,285.00
$11,561.75
$14,580.00
$17,573.90
$6,837.50
$8,553.00
$8,791.90
$8,962.00
$8,815.00
$8,425.00
$8,935.43
$4,675.00
$9,925.00
$8,825.00
$218,921.73

Whether Moza Preserved Its PACA Trust Rights
Since Moza has not received full payment on the Transactions, the next step is to

determine whether Moza preserved its PACA trust rights for those balances. This Court
concludes that it has.
“Complying with the PACA notice requirements is ‘an absolute precondition to
pursuing trust assets held by a [PACA trustee].’” DiMare Homestead, Inc., 2012 WL 1155133,
at *9 (alteration in original) (quoting D.M. Rothman & Co. v. Korea Commercial Bank of N.Y.,
411 F.3d 90, 96 (2d Cir. 2005)). Under PACA, a plaintiff may provide notice in one of two
ways: (1) a written notice of its intent to preserve its trust rights within thirty calendar days after
payment was due (the “written notice method”), or (2) a printed statement on its “ordinary and
usual billing or invoice statements” (the “invoice method”). 7 U.S.C. § 499e(c)(3)–(4); see also
A & J Produce Corp., 385 F. Supp. 2d at 361. The invoice method is available only to PACA
licensees. See 7 U.S.C. § 499e(c)(4).
Moza—a PACA licensee during the relevant period—relied exclusively on the
invoice method, for which there are three requirements. First, the billing statement or invoice
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must be “ordinary and usual,” which the relevant regulations define as “communications
customarily used between parties to a transaction in perishable agricultural commodities in
whatever form, documentary or electronic, for billing or invoicing purposes.” 7 C.F.R.
§ 46.46(a)(5). Second, “[w]hen the parties expressly agree to a payment time period different
from that established by the [regulations],” that payment time period must be disclosed on the
billing statement or invoice. 7 U.S.C. § 499e(c)(3)–(4). The default payment period under the
regulations is “10 days after the day on which the produce is accepted.” 7 C.F.R. § 46.2(aa)(5).
“Parties who elect to use different times for payment must reduce their agreement to writing
before entering into the transaction.” 7 C.F.R. § 46.46(e)(1). And “[t]he maximum time period
for a shipment to which a seller . . . can agree, prior to the transaction, and still be eligible for
benefits under the trust is 30 days after receipt and acceptance of the commodities.” 7 C.F.R.
§ 46.46(e)(2). Finally, the billing statement or invoice must contain the following language:
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.
7 U.S.C. § 499e(c)(4).
Each of Moza’s invoices (and its passings) contained the requisite statutory
language and called for payment within 10 days. (See generally P-1.) Presumably in light of
these facts, Defendants spent the bulk of trial attempting to show that Martin could not prove
when Moza created and sent Tumi its invoices. (See, e.g., Trial Tr. at 74 (“Q. Nothing indicating
that that invoice was sent at the time of the sales, correct? A. On that page? No.”).) In an
attempt to capitalize on this testimony, the Tumi Defendants contend in their post-trial
submission that “[m]any of [Moza’s] invoices” are not “ordinary” or “usual” as required by the
10

statute because they were “created more than 40 days after delivery and contained back-dated
and conflicting information.”10 (Tumi Defs.’ PFF&CL ¶ 44.) This argument lacks merit. Moza
was “not required to show delivery of the invoices beyond a metaphysical doubt,” In re
Alvarado, 2018 WL 1354512, at *7 (Bankr. C.D. Cal. Mar. 14, 2018), and Martin testified that
Moza typically delivered its passings and invoices to Tumi within a day after the produce
shipped. (Trial Tr. at 29.)
Moreover, while Martin created and sent the passings to Tumi, he created the
invoices using FreshBooks. (Trial Tr. at 170–71.) Once created, Martin sent the invoices to
Tumi through FreshBooks. (See Trial Tr. at 74, 105.) And since FreshBooks sent the invoices
to Tumi from its servers, Martin clarified that he was often left without confirmatory proof of
their ultimate delivery to Tumi. (See Trial Tr. at 105 (“Q. All right. Show me where it says you
sent the invoice. A. Those are automatically sent out by Fresh Books. I can’t account for Fresh
Books’ server. I’m not an employee of Fresh Books, so I wouldn’t have access to Fresh Book’s
server information.”).) For this reason, Martin usually sent the invoices and passings separately
and included the PACA trust language on both documents. (Trial Tr. at 74.)
Despite Defendants’ efforts to undermine Martin’s testimony, this Court
concludes that it is generally credible for several reasons. First—as Defendants’ exhibits
demonstrate—Tumi viewed and printed at least some of the Transaction invoices directly from

10

As best as this Court can tell, the Tumi Defendants’ suggestion that “40 days after delivery” is the relevant
cutoff for when Moza needed to send its invoices to Tumi is rooted in PACA’s requirement that an unpaid seller
“give[] written notice of intent to preserve the benefits of the trust . . . within thirty calendar days . . . after expiration
of the time prescribed by which payment must be made.” 7 U.S.C. § 499e(c)(3). While this requirement is listed
within the PACA provision concerning the written notice method, it is absent from the provision concerning the
invoice method. See 7 U.S.C. § 499e(c)(4). The parties have not directed this Court to any authority—and this
Court is unaware of any within this circuit—discussing whether the 30-day post-expiration cutoff is properly read
into the requirements for the invoice method. Although this argument was raised in DiMare Homestead, 2012 WL
1155133, at *11—a case cited heavily by the Tumi Defendants—the court did not discuss the validity of that
argument in reaching its decision. In any event, and as noted above, this Court credits Martin’s testimony
concerning the delivery of Moza’s invoices to Tumi.

11

FreshBooks’ website. (See, e.g., D-I at 027 (FreshBooks printout for Transaction 4066).)
Second, nearly all of the Transaction invoices introduced at trial include a footer stating: “This
invoice was sent using FreshBooks.” (See, e.g., D-E at 022 (invoice for Transaction 4066).)
Finally, while Moza did not introduce passings for every Transaction, the passings that it did
introduce include a produce shipping date that either matches or is only a few days apart from
the date of the corresponding FreshBooks invoice. (Compare P-1 at 135 (passing for Transaction
4105 dated December 10, 2016), with D-V at 088 (invoice for Transaction 4105 dated December
10, 2016).)
With that said, Martin’s testimony concerning Moza’s revised invoices for
Transactions 2058 and 2059 warrants separate analysis. These two transactions originated from
a single purchase order but were then split at Felix’s request. (P-1, at 059.) As previously noted,
Martin testified that for both Transactions, Moza was misinformed about the amount of produce
shipped to Tumi, thereby resulting in Tumi receiving more produce than for which it was
originally invoiced. Moza’s corrected invoices for these Transactions therefore call for increased
payment to correspond with the produce that Tumi received. During Martin’s crossexamination, counsel for the Tumi Defendants indicated that Moza had not preserved its PACA
trust rights to the increased amounts because: (1) Moza failed to proffer evidence showing that
Moza sent the revisions to Tumi, and (2) both the original and revised invoices for Transaction
2058 are dated October 21, 2016. (See Trial Tr. at 96–107.)
Moza introduced the bill of lading for Transaction 2058, which shows the correct
amount of produce aboard the shipment and is dated October 21, 2016. (P-1 at 064.) On
December 8, 2016, Tumi wired $22,317.05 to Moza—$9,256.05 of which was intended to pay
for Transaction 2058. (D-G at 033; Trial Tr. at 98.) Martin testified that on December 9, 2016,

12

he emailed an invoice to Tumi: (1) showing an overall charge of $17,945.90, (2) reflecting the
$9,256.05 payment, and (3) showing a remaining balance of $8,690.85. (Trial Tr. at 98.) In
their post-trial submission, the Tumi Defendants suggest that Martin’s December 9, 2016 email
was the first time Tumi received an invoice showing the $17,945.90 charge. (Tumi Defs.’
PFF&CL, at 5.) This position, however, misinterprets Martin’s testimony. Indeed, Martin
explained that he first sent Tumi the revised invoice for Transaction 2058 immediately after
receiving the bill of lading. (Trial Tr. at 103.) Again, this Court finds no reason to discredit
Martin’s testimony, and, as such, it concludes that Moza preserved its PACA trust rights to the
full $17,945.90. The same is true for Transaction 2059, for which Martin testified that Moza
used “the same shipper . . . with the same . . . problem as” Transaction 2058. (Trial Tr. at 105.)11
Accordingly, Moza preserved its PACA trust rights for the full outstanding
balance of $218,921.73.
III.

Defendants’ Liability
“An individual who is in a position to control the assets of the PACA trust and

fails to preserve them, may be held personally liable to the trust beneficiaries for breach of
fiduciary duty.” Coosemans, 485 F.3d at 705. “A court considering the liability of the
individual may look at the closely-held nature of the corporation, the individual’s active
management role and any evidence of the individual’s acting for the corporation.” Top Banana,
L.L.C. v. Dom’s Wholesale & Retail Ctr., Inc., 2007 WL 2746810, at *3 (S.D.N.Y. Sept. 19,
2007) (internal quotations marks and citations omitted).

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This Court notes that, for Transaction 4056, Moza sent a revised invoice to Tumi that decreased the amount
owed. Indeed, Moza’s initial invoice states a total charge of $10,442, but its revised invoice states a total charge of
$9,422. (P-1 at 007–009.) To the extent that Defendants contend Moza somehow forfeited its PACA trust rights by
issuing the revised invoice, this Court disagrees. Martin testified that the invoice “could have been amended . . .
[within] a couple days” or that “[i]t could have been [within] one day.” (Trial Tr. at 75.)

13

Here, Moza avers that Catherine Bracho, William Bracho, and Felix were able to
control PACA trust assets. Similarly, Moza claims that Ultra Fresh is liable for Tumi’s debt
because it “assumed and continued [Tumi’s] business” after its dissolution. (Am. Compl. ¶ 57.)
A. Catherine Bracho
In a March 11, 2019 letter to this Court, Catherine Bracho conceded that she
controlled Tumi’s finances. (ECF No. 108 (Mar. 11, 2019 Ltr.)) But even ignoring this
concession, the record is replete with evidence demonstrating that Catherine controlled Tumi’s
purse strings. Indeed, during the relevant period, only Catherine signed Tumi’s checks to Moza.
(Trial Tr. at 52–53.) Moreover, Catherine is the lone “sender” on each of Tumi’s wire transfers
to Moza. (See generally D-A, D-B, D-K.) Tumi’s PACA license states that Catherine is a
principal of the company, and it also lists her home address as the company’s mailing address.
(P-4 at 159.) Accordingly, Catherine is personally liable for Tumi’s debt to Moza. See A & J
Produce Corp. v. Borough Park Food Mart LLC, 2018 WL 566458, at *3 (S.D.N.Y. Jan. 25,
2018) (holding that individual defendants “were indisputably in positions of control of [the
company]” because they “were officers or directors of [the company], had check-signing
authority, exercised management duties over employees, and made business decisions on the
company’s behalf” (quotation marks omitted)); DiMare Homestead, Inc., 2012 WL 1155133, at
*14 (holding individual defendants liable where they were “officers and shareholders of [the
company], signatories on its corporate bank accounts, and listed as ‘Principals’ on its PACA
license”).
B. Michael E. Felix
This Court also concludes that Felix is personally liable for Tumi’s dissipation of
PACA trust assets. Felix engaged in considerable business with Moza. He submitted every

14

purchase order for the Transactions and was in near-constant contact with Martin. (Trial Tr. at
40–41, 43.) In fact, Martin believed Felix owned Tumi and was involved in “everything from A
to Z,” including paying invoices. (Trial Tr. at 41, 46.) The only responsibility that Martin
believed Felix did not have was “writing the checks physically.” (Trial Tr. at 46.) Conversely,
Felix maintains that he was merely a salesman and produce buyer at Tumi. (Trial Tr. at 185.)
He testified that he was never a Tumi officer, director, or shareholder, and he did not have the
authority to make withdrawals from Tumi’s bank account, write checks, or wire money. (Trial
Tr. at 185–86.) Felix was not a principal on Tumi’s PACA license, and he did not live at the
address listed as Tumi’s mailing address. And Tumi introduced exhibits arguably hinting that
Felix’s official title at Tumi was “salesman.” (See D-BB, at 099 (Invoice from Tumi to Moza).)
Nonetheless, this Court finds that there is ample evidence demonstrating Felix’s
control over Tumi’s business. In reaching this conclusion, this Court again observes a gap in
Felix’s testimony. At trial, Felix described himself as little more than a cog in the wheel in
assessing Tumi’s outstanding debts. (Trial Tr. at 196 (“All the files would go into the office
manager, which was Dorothy. Once the folder came in . . . I would look at it and I’d say, OK, it’s
good. Dorothy would take it, go over it, make sure, examine it, and then give it to Mrs. Bracho
for payment.”).) He also claimed to have “never told Mr. Martin” when to pick up checks from
Catherine. (Trial Tr. at 197.) Instead, “once she okayed the check, she would call [Felix]” who
would then “tell Moza to come pick it up.” (Trial Tr. at 198.)
The documentary evidence and Martin’s testimony paint a different picture.
Martin explained that whenever Catherine wrote Moza a shorted check, she would instruct him
“to talk to Mike; that’s between you and Mike; I just write the check.” (Trial Tr. at 24–25.) A
string of text messages from January 2017 corroborates that testimony. Indeed, on January 11,

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2017, Martin texted Felix requesting that he pay Tumi’s outstanding invoices. Felix replied that
Moza would “not be getting all [the requested balances],” and that “if [Martin] want[ed] [a]
check” he could “pick one up in two hours” from Catherine. (P-11.) Felix even listed for Martin
the precise Transaction numbers that Tumi intended to pay at that time. (P-11.) Accordingly,
this Court concludes that Felix possessed sufficient authority to direct the flow of Tumi’s funds.
See “R” Best Produce, Inc. v. Eastside Food Plaza, Inc., 2003 WL 22231577, at *7 (S.D.N.Y.
Sept. 30, 2003) (concluding that defendant was individually liable because—among other
reasons—defendant was “the person who create[d] orders for produce and the person who
review[ed] all invoices for purchases and decide[d] which invoices to pay,” and “was [also] the
person who ordered the produce at issue in th[e] case, acknowledged receipt of such produce,
and accepted it”); Loi Banana Corp. of Brooklyn v. Cent. Brooklyn Produce Wholesalers &
Comm’n Merchs., Inc., 1996 WL 391574, at *2 (E.D.N.Y. July 10, 1996) (rejecting argument
that defendant was merely a “‘silent partner’ and did not run the ‘day-to-day’ operations”
because it was “wholly unsupported by [the] available evidence”).
C. William Bracho
William, however, is not personally liable to Moza. To begin, this Court observes
that Moza omitted all substantive references to William in its post-trial submission, and he is not
included among the Defendants against whom Moza seeks judgment. (Pl.’s Proposed Findings
of Fact and Conclusions of Law, ECF No. 129, at 24.) And, in any event, the only evidence
Moza has offered to demonstrate William’s ability to control Tumi’s finances is: (1) his name on
Tumi’s PACA license, (2) the fact that he owned 90% of Tumi’s voting shares in 2016 and 2017,
and (3) his connection to a generic email address where Martin sometimes sent invoices and
passings—“[e-mail].” Moza, however, has offered no evidence demonstrating

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his involvement in Tumi’s business. And without more, this Court declines to find that William
is personally liable for Tumi’s debt. Indeed, while “courts have found individuals personally
liable under PACA based solely on that individual’s status as a sole shareholder, owner, officer
or director of a PACA debtor corporation, in cases involving multiple officers or shareholders,
conclusory and undetailed allegations of control by individuals over PACA trust assets are
insufficient to plausibly suggest personal liability.” Hop Hing Produces Inc. v. X & L
Supermarket, Inc., 2013 WL 1232948, at *10 (E.D.N.Y. Mar. 26, 2013); see also In re Maxsun
Produce Corp. PACA Litig., 2013 WL 795973, at *5 (S.D.N.Y. Mar. 4, 2013) (“[T]he question
turns not on whether the individual nominally held an officer position nor even the size of his or
her shareholding, and each case depends on facts found by the trier.” (quotation marks omitted)).
D. Ultra Fresh
Moza also seeks to hold Ultra Fresh liable for Tumi’s debt on the theory that Ultra
Fresh “assumed and continued [Tumi’s] business” following its dissolution. (Am. Compl. ¶ 57.)
In determining whether continuation of a predecessor’s business has occurred, courts consider
“(1) continuity of ownership; (2) cessation of ordinary business by the predecessor; (3)
assumption by the successor of liabilities ordinarily necessary for continuation of the
predecessor’s business; and (4) continuity of management personnel, physical location, assets,
and general business operation.” Nettis v. Levitt, 241 F.3d 186, 193–94 (2d Cir. 2001) (per
curiam), overruled on other grounds by Slayton v. Am. Express Co., 460 F.3d 215 (2d Cir.
2006). “Aside from continuity of ownership—the sine qua non of a merger—not all hallmarks
. . . need be shown.” Moza LLC v. Tumi Produce Int’l, 2018 WL 2192188, at *4 (S.D.N.Y. May
14, 2018). Here, Moza has not shown any of the hallmarks of continuation. Moza did not
discuss Ultra Fresh in its case in chief, and its sole piece of evidence concerning Ultra Fresh’s

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ownership is the company’s PACA license, which states that Felix’s ex-brother-in-law, William
Hidalgo, is the company’s principal. (P-7 at 164.) Accordingly, Moza’s claim against Ultra
Fresh is dismissed.
IV.

Interest
Finally, this Court briefly addresses Moza’s claim that it is entitled to

prejudgment interest for Tumi’s outstanding balances. “PACA does not provide for the award of
prejudgment interest, and under federal law such an award rests on the [c]ourt’s discretion.” E.
Armata, Inc. v. Platinum Funding Corp., 887 F. Supp. 590, 595 (S.D.N.Y.1995). “However, the
purchaser is required to pay such items when the parties’ contract so provides; in such a case, the
interest and collection costs become subject to the PACA trust together with the principal debt.”
Dayoub Mktg., Inc. v. S.K. Produce Corp., 2005 WL 3006032, at *4 (S.D.N.Y. Nov. 9, 2005).
“Thus, the pivotal question is whether the parties’ contract provides for an award of interest and
collection costs in favor of” Moza. Dayoub Mktg., Inc., 2005 WL 3006032, at *4. Moza’s
passings and invoices do not provide for interest on outstanding balances. Accordingly, this
Court declines to grant Moza prejudgment interest.
CONCLUSION
For the foregoing reasons, this Court awards Moza LLC judgment in the amount
of $218,921.73 against Defendants Tumi Produce International Corp., Catherine Bracho, and
Michael E. Felix. The Clerk of Court is directed to mark this case closed.
Dated: September 16, 2019
New York, New York
SO ORDERED:
_____________________________
WILLIAM H. PAULEY III
U.S.D.J.
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