FOOD TEAM INTERNATIONAL, LTD. v. UNILINK, LLC et al

Filing 87

ADJUDICATION. SIGNED BY HONORABLE JAMES KNOLL GARDNER ON 9/30/13. 10/1/13 ENTERED AND COPIES E-MAILED.(er, ) Modified on 10/1/2013 (er, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FOOD TEAM INTERNATIONAL, LTD,

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Plaintiff
vs.
UNILINK, LLC,
GARY GREGORY,
MARC BEHAEGEL, and
AKBAR BOUTARABI,
Defendants
*

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Civil Action
No. 10-cv-03584

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APPEARANCES:
JOHN C. CREES, ESQUIRE
MICHAEL J. KEATON, ESQUIRE
On behalf of Plaintiff
MARK C.H. MANDELL, ESQUIRE
On behalf of Defendants
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A D J U D I C A T I O N
JAMES KNOLL GARDNER
United States District Judge
The undersigned presided over a non-jury trial on the
Complaint of plaintiff Food Team International (“Food Team”)
against defendants Unilink, LLC (“Unilink”), Gary Gregory, Marc
Behaegel, and Akbar Boutarabi, as well as the counterclaim
asserted by defendant Unilink against plaintiff Food Team.
the close of the trial, I took the matter under advisement.
Hence this Adjudication.

At

SUMMARY OF DECISION
This action arises from a business dispute between
plaintiff Food Team (a supplier of frozen produce) and defendant
Unilink (a purchaser of wholesale quantities of frozen produce
who, in turn, package and sell frozen produce to retail
merchants).
Based upon the findings of fact and conclusions of law
discussed below, I entered a verdict dated September 30, 2013,
which accompanies this Adjudication.
In the Verdict, I find in favor of plaintiff Food Team
International, LTD and against only defendant Unilink, LLC 1 on
plaintiff’s non-PACA claims for failure to pay concerning
invoices 1008, 1015, and 4111, and enter judgment in favor of
plaintiff Food Team and against defendant Unilink in the amount
of $23,281.75.
In the Verdict, I also find in favor of plaintiff Food
Team International, LTD and against only defendant Unilink, LLC
on plaintiff’s claim for wrongful repudiation concerning yet-tobe-shipped broccoli and cauliflower, and enter judgment in favor

1
The reason I found against only defendant Unilink and not against
individual defendants Gary Gregory, Marc Behaegel, and Akbar Boutarabi on
plaintiff’s non-PACA-trust claims for failure to pay invoices is because at
trial plaintiff abandoned its non-PACA-trust claims against the three
individual defendants to the extent plaintiff was asserting such claims.

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of plaintiff Food Team and against defendant Unilink in the
amount of $23,794.73. 2
Finally, in the Verdict, I find in favor of plaintiff
Food Team International, LTD and against defendant Unilink, LLC
on the Second Counterclaim asserted by defendant Unilink against
plaintiff Food Team for breach of contract in supplying
defective produce, seeking incidental damages incurred by
Unilink in storing the allegedly defective produce diverted by
Unilink to a third party cold storage facility, for the reasons
expressed below in the Discussion section under the subsection
headed “Unilink’s Remaining Counterclaim”.
JURISDICTION
This court has jurisdiction over the subject matter of
plaintiff’s federal claims pursuant to the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499e(c)(5), and
28 U.S.C. § 1331.

This court has supplemental jurisdiction over

plaintiff’s pendant state-law claims pursuant to 28 U.S.C.
§ 1367.
VENUE
Venue is proper pursuant to 28 U.S.C. § 1391(b)(2)
because a substantial part of the events giving rise to plain2
On plaintiff’s PACA-trust claims for failure to pay concerning
invoices 2901, 4115, and 1017, judgment was entered in favor of plaintiff
Food Team International, LTD and against defendants Unilink, LLC, Gary
Gregory, Marc Behaegel, and Akbar Boutarabi, by Order granting in part
plaintiff’s motion for summary judgment and accompanying Opinion dated
May 17, 2013, and is not affected by this Adjudication.

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tiff’s claims occurred within this district and because a substantial part of the property which is the subject of this
action is located in this district.
Specifically, the perishable agricultural commodities
which are at the center of the parties’ dispute were delivered
to defendant Unilink, LLC’s facility in Rheems, Pennsylvania and
were and/or are stored in a cold-storage facility in Lancaster,
Pennsylvania.

Both Rheems and Lancaster are within Lancaster

County, which is within this judicial district.
PROCEDURAL HISTORY
Plaintiff initiated this action by filing its
Complaint on July 21, 2010. 3

On August 17, 2012 defendants filed

an Answer to Complaint with Affirmative Defenses and
Counterclaims (“Answer and Counterclaims”). 4

On September 15,

2012, pursuant to a court-approved stipulation expanding
plaintiff’s time to respond to defendants’ counterclaims,
plaintiff filed its Answer and Affirmative Defenses to
Counterclaims. 5
On February 18, 2011 I conducted a Rule 16 status
conference by telephone with counsel for the parties.

3

After

Document 1. (Document numbers cited in this Adjudication refer to
Docket Entries in the official docket Number 10-cv-03584-JKG in this matter.)
4

Document 4.

5

Document 12.

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that status conference, I entered a Rule 16 Status Conference
Order dated February 18, 2011 and filed February 24, 2011. 6

At

that conference and in that order, I attached this case for a
non-jury trial during a two-week trial term commencing
January 17, 2012, and set other appropriate pretrial deadlines.
My February 18, 2011 Order established August 31, 2011
as the deadline for either party to file dispositive motions,
including motions for summary judgment, and set October 26, 2011
as the date for oral argument on any dispositive motion filed.
By Order dated August 24, 2011 and filed August 25,
2011, 7 I granted plaintiff’s uncontested motion to extend
discovery and accordingly modified in part my February 18, 2011
Rule 16 Status Conference Order.

Specifically, I extended the

discovery deadline until October 17, 2011, established
December 9, 2011 as the modified deadline for any dispositive
motions, and re-scheduled oral argument on dispositive motions
for February 3, 2012.

Finally, I re-attached this case for a

non-jury trial during a two-week trial term commencing May 14,
2012.

6

Document 22.

7

Document 34.

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Partial Summary Judgment
Plaintiff’s Motion for Summary Judgment was filed
December 9, 2011 8 and refilled with eleven attachments on
December 10, 2011. 9

Defendants’ Opposition to Plaintiff’s Motion

for Partial Summary Judgment was filed January 3, 2012. 10

On

February 3, 2012 Plaintiff’s Reply to Defendants’ Response to
Motion for Summary Judgment 11 and Defendants’ Surreply Memorandum
of Law in Opposition to Plaintiff’s Motion for Partial Summary
Judgment 12 were filed.

Oral argument was conducted on

Plaintiff’s Motion for Summary Judgment on February 3, 2012.

At

the conclusion of oral argument, I took the matter under
advisement.
By Order and accompanying Opinion dated May 17, 2012
and filed May 18, 2012, 13 I granted in part and denied in part
Plaintiff’s Motion for Summary Judgment.

Specifically, for the

reasons expressed in that Opinion, I granted plaintiff’s motion
to the extent that it sought summary judgment in its favor
concerning the unpaid balance due for the produce billed on

8

Document 38.

9

Document 39.

10

Document 45.

11

Document 52.

12

Document 53.

13

Documents 69 and 68, respectively.

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invoices 4115, 1017 and 2901, each of which contained a PACAtrust-preservation clause. 14

I also granted plaintiff’s motion

to the extent that it sought contractual interest at the rate of
1.5% per month on the balances due on invoices 4115 and 1017.
Furthermore, I granted plaintiff’s motion to the extent that it
sought a declaratory ruling that defendant Unilink accepted, and
had a duty to pay for, invoices 1019, 4111, 1008, 1012, 1014 and
1015. 15
Accordingly, I entered judgment in favor of plaintiff
Food Team International, LTD and against defendants Unilink,
LLC; Gary Gregory; Marc Behaegel; and Akbar Boutarabi on the
PACA-trust claims in the sum of $104,843.37, as follows:
(A)

in the sum of $44,452.60 for the unpaid balance
due for produce billed on invoices 4115 and 1017;

(B)

in the sum of $29,294.10 for contractual interest
on the balances due on invoices 4115 and 1017;

(C)

in the sum of $26,115.70 for the unpaid balance
due for produce billed on invoice 2901; and

14
Throughout the non-jury trial of this case, all invoices were
referred to by their last four digits and Unilink checks were referred to by
their five-digit number. See Transcript of Non-Jury Trial before The
Honorable James Knoll Gardner[,] United States District Judge, May 18, 2012
(Document 77)(“N.T. Day 1”) at page 25. For ease of reference, I will refer
to the daily trial transcripts in the manner indicated in footnote 20, below.
15

The total amount invoiced by Food Team to Unilink on those six
invoices -- 1019 ($23,540.00), 4111 ($21,756.00), 1008 ($23,475.80), 1012
($22,598.40), 1014 ($23,133.40), and 1015 ($23,133.40) -- is $137,637.00.
See Plaintiff’s Trial Exhibit 23 at pages 2, 4, 6-8, 10.

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(D)

in the sum of $4,980.97 for statutory interest on
the balance due on invoice 2901. 16

Additionally, I granted plaintiff’s motion and entered
judgment in favor of plaintiff Food Team International, LTD and
against defendant Unilink, LLC in the sum of $46,608.20 for the
unpaid balance due on invoices 1008 and 1015. 17
However, I denied plaintiff’s motion to the extent
that it sought summary judgment that plaintiff for attorney fees
incurred in connection with its efforts to recover the unpaid
balance on invoices 4115 and 1017. 18
Accordingly, the balance of plaintiff’s claims against
defendants Unilink, LLC, Gary Gregory, Marc Behaegel, Akbar
Boutarabi, Mike Moore, and Pennsylvania Food Group, LLC, and the
counterclaims asserted by defendant Unilink against plaintiff

16

All three of these invoices –- 4115 (cauliflower florets), 1017
(broccoli florets), and 2901 (red pepper strips) -– contained a “PACA-trustpreservation” clause in a text box at the bottom of the invoice. Two of the
three invoices -- 4115 and 1017 -- also contained an interest rate provision
if the for past-due charges. See Plaintiff’s Trial Exhibit 22 at pages 2-4.
17

Neither of these two invoices –- 1008 and 1015 -– contained a
PACA-trust preservation language or a contractual interest provision for
past-due charges. See Plaintiff’s Trial Exhibit 23 at pages 4, 8.
18

In addition to the PACA-trust preservation language and the
interest rate provision, those two invoices -- 4115 and 1017 -- also
contained a provision purportedly entitling plaintiff to attorney fees.
Plaintiff’s Trial Exhibit 22 at pages 2-4.

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See

Food Team remained for disposition at the non-jury trial of this
case. 19
Non-Jury Trial
A non-jury trial was held before the undersigned on
May 18, 21-22, and 24, 2012. 20
Withdrawal of Claims Against Mike Moore and
Pennsylvania Food Group, LLC
On the first day of trial, during its opening
statement, plaintiff made an oral motion, through its lead trial
counsel, Michael J. Keaton, Esquire, to withdraw all claims of
plaintiff against defendants Mike Moore and Pennsylvania Food
Group, LLC with prejudice.

I conducted a colloquy of

plaintiff’s representative, Dale A. Brunton, and determined that
Mr. Brunton had authority to bind plaintiff to the decision to
withdraw the claims and that plaintiff concurred in the oral
motion made by its counsel.
Accordingly, and in the absence of objection from
defendants, I entered an Order granting plaintiff’s oral motion
and dismissing all claims against defendants Mike Moore and
19
The two counterclaims are asserted by defendant Unilink only, and
not by the individual defendants. See Answer and Counterclaims at pages 710; N.T. Day 1 at pages 69-70, and 78-79.
20

A verbatim transcript of the notes of testimony of each day of
the non-jury trial was produced and filed on the docket on June 6, 2012:
Transcript of Non-Jury Trial held May 18, 2012 (Document 77)(“N.T. Day 1”);
Transcript of Non-Jury Trial held May 21, 2012 (Document 78) (“N.T. Day 2”);
Transcript of Non-Jury Trial held May 22, 2012 (Document 79)(“N.T. Day 3”);
and Transcript of Non-Jury Trial held May 24, 2012 (Document 80)(“N.T.
Day 4”).

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Pennsylvania Food Group, LLC from plaintiff’s Complaint with
prejudice. 21
Stipulation to Entry of Judgment on First Counterclaim
Defendant Unilink asserted two counterclaims against
plaintiff Food Team.

The First Counterclaim and Second

Counterclaim asserted by defendant Unilink are separate claims
for different damages flowing from the same alleged breach of
contract by Food Team.
Specifically, at trial, defendant Unilink sought, on
its First Counterclaim, $3,916 for the cost of replacement
broccoli to cover the broccoli which was diverted to third party
cold storage and broccoli which was never shipped because
defendant Unilink cancelled the broccoli contract before the
completion of its term.

On its Second Counterclaim, Unilink

sought $10,398.00 in freight charges, pallet costs, and storage
costs related to the produce diverted to the third party cold
storage facility.
On the first day of trial, again during its opening
statement, plaintiff, through Attorney Keaton, agreed to the
entry of judgment against it in the amount of $3,916.00 on the
First Counterclaim asserted by defendant Unilink.

However, in

agreeing to the entry of judgment against it in that amount on
21

Order of the undersigned dated May 18, 2012 and filed May 22,
2013 (Document 71); see N.T. Day 1 at pages 17-23 (oral motion, colloquy, and
order).

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the First Counterclaim, plaintiff expressly provided that it did
not concede or admit to having committed any breach of contract
as alleged in the First Counterclaim asserted by defendant
Unilink. 22
Plaitiff Food Team did not similarly concede to entry
of judgment in the amount sought by defendant Unilink on the
Second Counterclaim, but rather put Unilink to its proof as to
the alleged breach and damages asserted in the Second
Counterclaim.
Presentation of Evidence and Testimony
Plaintiff did not call any witnesses during the nonjury trial, but did admit Plaintiff’s Exhibits 1-30 into
evidence. 23

Following the admission of those exhibits, plaintiff

rested its case-in-chief. 24
Additionally, on the third day of trial a joint
exhibit -- Plaintiff’s Trial Exhibit 32 and Defendants’ Exhibit 7 -- was admitted into evidence by stipulation of the
parties. 25

22

Order dated May 18, 2012 at page 2 n.1; see N.T. Day 1 at

pages 71-73.
23

N.T. Day 1 at page 43; N.T. Day 2 at pages 8-9, 31, and 34.

24

N.T. Day 2 at pages 38-41.

25

N.T. Day 3 at page 85. Defendants’ objection was sustained to
Plaintiff’s Trial Exhibit 31, which was a partial copy of the complete
document which was eventually admitted jointly as Plaintiff’s Trial Exhibit 32 and Defendants’ Exhibit 7. See N.T. Day 3 at pages 77-84.

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Four witnesses testified in defendants’ case-in-chief:
Nurdin Hasagic (a former employee of Unilink) 26, defendant Gary
Gregory 27, defendant Marc Behaegel, 28 and Sue Haar (a former
employee of Unilink, who is now employed by defendant Gregory at
Frozen Food Development) 29.

Defendants admitted Defendants’

Exhibits 1-4 30 and 6-8 into evidence. 31
Following the completion of defendants’ case-in-chief
on the fourth day of trial, defendants’ rested their case.
Closing arguments were held.

At the conclusion of those

arguments, I took the matter under advisement.

26

See N.T. Day 2 at pages 45-128.

27

See N.T. Day 2 at pages 128-200.

28

See N.T. Day 2 at pages 200-211. Following defendant Behaegel’s
testimony, plaintiff, through Attorney Keaton, made an oral motion to amend
the caption and docket in this matter to accurately reflect the spelling of
defendant Behaegel’s (not, Behaegal) last name. I granted that oral motion
in the absence of objection. Order of the undersigned dated May 21, 2012 and
filed May 23, 2012 (Document 74); see N.T. Day 2 at pages 214-215.
29

N.T. Day 3 at pages 5-134.

30
Defendants’ Exhibit 5 was marked, but was not offered or admitted
into evidence. However, Defendants’ Exhibit 5 is identical to Plaintiffs’
Exhibit 28, which was offered and admitted into evidence at trial.
31

N.T. Day 3 at pages 11-12, 15, 85, 138-141.

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Post-Trial Submissions
Following completion of trial and preparation of the
transcript of the proceedings, the parties submitted proposed
findings of fact and conclusions of law. 32
FINDINGS OF FACT
Based upon the testimony and exhibits received during
the non-jury trial, and the pleadings and record papers in this
matter, I make the following findings of fact. 33
This action arises from a business dispute between
plaintiff Food Team Intenational, LTD (a supplier of frozen
produce) and defendant Unilink, LLC (a purchaser of wholesale
quantities of frozen produce who, in turn, package and sell
frozen produce to retail merchants).
Defendant Unilink is wholly owned by former-defendant
Pennsylvania Food Group LLC, which is, in turn owned by
defendant Gary Gregory, defendant Marc Behaegel, defendant Akbar
Boutarabi, and former-defendant Mike Moore, as well as, three

32

On June 21, 2012, plaintiff filed Plaintiff’s Proposed Findings
of Fact and Conclusions of Law (Document 83)(“Plaintiff’s Proposed Findings
and Conclusions”), and defendants filed Defendants’ Post-Trial Proposed
Findings of Fact and Conclusions of Law (Document 84)(“Defendants’ Proposed
Findings and Conclusions”), together with Defendants’ Post-Trial Memorandum
of Law in Support of Its Proposed Findings of Fact and Conclusions of Law
(Document 85)(“Defendants’ Post-Trial Memorandum”).
33

The Findings of Fact reflect my credibility determinations regarding
the testimony and evidence presented at trial. Credibility determinations
are within the sole province of the finder of fact, in this case the court.
Fed.R.Civ.P. 52; See, e.g., Icicle Seafoods, Inc. v. Worthington,
475 U.S. 709, 715, 106 S.Ct. 1527, 1530, 89 L.Ed.2d 739, 745 (1986).

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other individuals. 34

Although Unilink is wholly owned by

Pennsylvania Food Group, LLC, defendants Gregory, Behaegel, and
Boutarabi are each officers and members of defendant Unilink,
LLC.
In the fall of 2008, Food Team and Unilink entered
into agreements for sale of certain frozen vegetables (frozen
broccoli and cauliflower florets, and frozen red pepper strips)
by Food Team to Unilink.

Accordingly, Unilink submitted three

purchase orders (“P.O.”) to Food Team for the produce in October
2008 (P.O. 6122 for broccoli, and P.O. 6123 for cauliflower) and
December 2008 (P.O. 6238 for red pepper strips)(hereafter
referred to as “broccoli contract”, “cauliflower contract”, and
“red pepper contract”).
The produce was to be shipped from January 2009
through August 2009.

Specifically, the agreement between Food

Team and Unilink was for the shipment of one shipping container
of frozen broccoli per week beginning January 2009 and
continuing through June 2009; 35 one shipping container of frozen
cauliflower every three weeks beginning March 2009 and
continuing through August 2009; 36 and one shipping container of

34

See N.T. Day 4 at pages 47, 50 (testimony of defendant Gary

Gregory).
35

Plaintiff’s Trial Exhibit 4, Unilink P.O. 6122 dated 10/29/08.

36

Plaintiff’s Trial Exhibit 5, Unilink P.O. 6123 dated 10/29/08.

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red pepper strips each month beginning April 2009 and continuing
through July 2009. 37
The agreed-upon amount of broccoli listed on P.O. 6122
was 999,990 pounds.

The agreed-upon amount of cauliflower

listed on P.O. 6123 was 450,000 pounds.

However, the parties

agreed to increase the quantity term for broccoli to 1,100,000
pounds and the quantity term for cauliflower was increased to
500,000 pounds, and to extend the shipments of broccoli through
the first week of July 2009. 38
The poundage of broccoli and cauliflower were
increased to permit Food Team to maximize the capacity of each
shipping container. 39

The purchase order for red pepper strips -

- P.O. 6238 -- was submitted after the adjustment was made to
the broccoli and cauliflower orders and did not need to be
amended to maximize shipping container capacity. 40
The shipments of frozen produce from Food Team to
Unilink commenced in January 2009 and, initially, the frozen
produce was delivered, received, paid for, and utilized by
37

Plaintiff’s Trial Exhibit 10, Unilink P.O. 6238 dated 12/05/08.

38
Plaintiff’s Trial Exhibit 8, copy of confirmatory e-mail sent
from Magdalena Swieton to Dale Brunton on November 15, 2008.
39

Defendant Gregory testified credibly that the change in the
poundage was made to reconcile the poundage with the number of shipping
containers that would be sent during the applicable shipping window at the
applicable rate, and thereby to allow Food Team to maximize the capacity of
each shipping container. See N.T. Day 2 at pages 132-133.
40

See Plaintiff’s Trial Exhibit 10, Unilink P.O. 6238.

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Unilink without incident.

However, the business relationship

between Food Team and Unilink began to erode in March 2009.
On March 10, 2009 the broccoli on invoice 1002 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13170 dated April 17, 2009. 41
On March 12, 2009, Magdalena Swieton (a procurement
employee for Unilink)

42

, sent an e-mail to Dale Brunton (the

sales agent for Food Team who negotiated the produce contracts
with defendant Gary Gregory) which stated:

“Hi Dale, Please

review your pricing for broccoli florets -- PO 6122.
decrease would be appreciated.

Price

Thank you.” 43

Neither Dale Brunton, nor any other Food Team employee
or agent, agreed to a reduction in the contract price for
broccoli florets requested by Unilink through Ms. Swieton at
defendant Gregory’s behest.

41

See Plaintiff’s Trial Exhibit 11, copy of spreadsheet re.
Accepted, Processed and Resold Loads; Defendants’ Trial Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.
42
Plaintiff’s Trial Exhibit 28, Transcript of Deposition of
Magdalena Swieton taken October 26, 2011 (“Swieton Deposition”), at page 7.
43

Plaintiff’s Trial Exhibit 12, copy of e-mail from Magdalena
Swieton to Dale Brunton sent March 12, 2009.

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On March 17, 2009 the broccoli on invoice 1004 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13214 dated April 22, 2009. 44
On March 25, 2009 the broccoli on invoice 1020 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13409 dated May 13, 2009. 45
On April 6, 2009 the broccoli on invoice 1009 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13409 dated May 13, 2009. 46
On April 7, 2009 the cauliflower on invoice 4106 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13382 dated May 7, 2009. 47
On April 16, 2009 Magdalene Swieton sent an e-mail to
Dale Brunton which stated, “Dale, Please stop shipping broccoli
florets until further notice.

Thank you[.]” 48

Ms. Swieton’s

April 16, 2009 e-mail gave no reason for the hold requested on
broccoli shipments, but she testified during her deposition that
“[i]f there was a big drop in the demand from our [(Unilink’s)]
44

See Plaintiff’s Trial Exhibit 11, copy of spreadsheet re.
Accepted, Processed and Resold Loads; Defendants’ Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.
45

See footnote 44, supra.

46

See Id.

47

See Id.

48

Plaintiff’s Trial Exhibit 13, copy of e-mail from Magdalena
Swieton to Dale Brunton sent April 16, 2009.

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customers, then we would stop the shipments” from Unilink’s
suppliers. 49
On April 17, 2009 Magdalena Swieton sent an e-mail to
Dale Brunton which stated:
Dale,
We found a lot of nails and other metal objects in
products from China, including yours [(Food Team’s)].
I[n] addition we found cardboard pieces, worms in many
cases with broccoli florets. We are also rejecting a
load for worms received on 4/14/09.
We had serious complaints from our customers.
This has to stop!
Please send us your action plan how you want to avoid
it. Awaiting your reply.
Thank you. 50
On April 20, 2009 the broccoli on invoice 1013 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13481 dated May 28, 2009. 51
On May 1, 2009 Magdalena Swieton sent an e-mail to
Dale Brunton which stated:
Dale,
We received cauliflower on 4/28/09, PO 6123.

49

Plaintiff’s Trial Exhibit 28, Swieton Deposition at page 19.

50

Plaintiff’s Trial Exhibit 15, copy of copy of e-mail from
Magdalena Swieton to Dale Brunton sent April 17, 2009 (bold and underline in
original).
51

See Plaintiff’s Trial Exhibit 11, copy of spreadsheet re.
Accepted, Processed and Resold Loads; Defendants’ Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.

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Florets have freezer burn – up to 37% and minor
blemishes – up to 19%. Product was graded as B.
can use it only for blends.

We

Please reply.
Thanks. 52
On May 7, 2009 Unilink issued check number 13382 in
the amount of $103,700 -- with $23,540.00 against invoice 1019
(broccoli); $28,122.00 against invoice 2302 (sugar snaps);
$31,878.00 against invoice 3102 (water chestnuts); and
$20,160.00 against invoice 4106 (cauliflower). 53
On May 11, 2009 the broccoli on invoice 1016 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13627 dated June 11, 2009. 54
Also on May 11, 2009, the broccoli on invoice 1024-2
was delivered to Unilink.

That invoice was paid by Unilink

check number 13698 dated June 19, 2009. 55
On May 12, 2009 the cauliflower on invoice 4113 was
delivered to Unilink.

That invoice was paid by Unilink check

number 13627 dated June 19, 2009. 56
52

Plaintiff’s Trial Exhibit 16, copy of copy of e-mail from
Magdalena Swieton to Dale Brunton sent May 1, 2009.
53
Defendants’ Trial Exhibit 1, copy of Unilink checks with payment
stubs and computer screen shots; Defendants’ Trial Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.
54

See Plaintiff’s Trial Exhibit 11, copy of spreadsheet re.
Accepted, Processed and Resold Loads; Defendants’ Trial Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.
55

See footnote 54, supra.

56

See id.

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On May 13, 2009 the red pepper strips on invoice 2901
were delivered to Unilink. 57

Invoice 2901 is the first of the

invoices submitted to Unilink by Food Team that contains the
PACA trust-preservation provision on it. 58
On May 24, 2009, after an inspection conducted on
May 14, 2009, which was commissioned by plaintiff Food Team, a
report was issued by Trans-Port Marine Surveyors, Inc. (“TransPort Marine”) concerning the cauliflower on invoice 4111 which
defendant Unilink had diverted to the third-party cold storage
facility operated by Kreider Foods Inc. in Lancaster,
Pennsylvania.
Defendant Unilink used 1,872 pounds of the cauliflower
invoiced on 4111 and diverted the remaining 49,928 pounds to the
third-party cold storage because of alleged freezer burn and
riceyness. 59

The third-party inspection report produced by

Trans-Port Marine based upon its inspection of the cauliflower
on invoice 4111 which Unilink diverted to Kreider’s cold storage
facility concluded that there was no evidence that the shipment
of cauliflower concerning invoice 4111 had sustained transit-

57

Plaintiff’s Trial Exhibit 11, copy of spreadsheet re. Accepted,
Processed and Resold Loads.
58

Plaintiff’s Trial Exhibit 22 at page 2, copy of Food Team Invoice
2901 dated May 13, 2009.
59

See Defendants’ Trial Exhibit 2G, Unilink Frozen Cauliflower
Score Sheet re. Invoice 4111; Defendants’ Trial Exhibit 4, copy of
spreadsheet prepared by Sue Haar, at page 1.

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related damages, or otherwise suffered from freezer burn or
dehydration. 60
On May 28, 2009 Unilink issued check number 13481 in
the amount of $70,323.61 -- with $1,458.41 (partial payment) 61
against invoice 1008; $22,598.40 against invoice 1012;
$23,133.40 against invoice 1013; and $23,133.40 against
invoice 1014.
On June 3, 2009 Magdalena Swieton sent an e-mail to
Dale Brunton which stated:
Good morning,
Please stop all shipments.
Will notify you when [to] resume shipments. It will
probably be within 2-3 weeks. If you have any
questions, please do not hesitate to call me.
Thank you. 62
On June 5, 2009 the cauliflower on invoice 4115 was
delivered to Unilink. 63

Invoice 4115 is the first invoice

submitted to Unilink by Food Team which contains both a PACA
trust-preservation provision, as well as a provision for 18%

60
Plaintiff’s Trial Exhibit 17, Report of Survey issued May 24,
2010 by Trans-Port Marine Surveyors, Inc., at page 4.
61

The total amount charged on invoice 1008 is $23,475.80.

62
Plaintiff’s Trial Exhibit 18, copy of e-mail from Magdalena
Swieton to Dale Brunton sent June 3, 2009 (emphasis added).
63

Plaintiff’s Trial Exhibit 11, copy of spreadsheet re. Accepted,
Processed and Resold Loads.

-21-

annual interest on past due accounts and a provision for
attorney fees incurred in connection with past due invoices. 64
On June 9, 2009, the broccoli on invoice 1017 was
delivered to Unilink. 65

Like invoice 4115, invoice 1017 contains

both a PACA trust-preservation provision, as well as a provision
for 18% annual interest on past due accounts and a provision for
attorney fees incurred in connection with past due invoices. 66
On June 19, 2009 Unilink issued check number 13698 in
the amount of $44,749.10 -- with $22,778.40 against invoice 1024
(broccoli); $26,330.40 against invoice 2901 (red pepper strips
with PACA trust language); $786.24 67 against invoice 4111
(cauliflower); and $21,756.00 against invoice 4113
(cauliflower).
The sum of the amounts purportedly paid by check
number 13698 is $71,651.04, an amount which is $26,901.94
greater than the actual amount for which check number 13698 was
issued.

The difference between face value of check 13698 and

the value of the amount of payment it allegedly represents is
based upon credits claimed unilaterally by Unilink for
64
Plaintiff’s Trial Exhibit 22 at page 3, copy of Food Team Invoice
4115 dated June 5, 2009.
65

Plaintiff’s Trial Exhibit 11, copy of spreadsheet re. Accepted,
Processed and Resold Loads.
66

Plaintiff’s Trial Exhibit 22 at page 3, copy of Food Team Invoice
4115 dated June 5, 2009.
67

The total amount on invoice 4111 is $21,756.00.

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allegedly-worm-infested broccoli on invoice 1012 ($3,768.54 for
broccoli diverted to Kreider’s cold storage) and invoice 1014
($23,133.40 for the same).
When the $44,749.10 actually paid by check number
13698 is applied in chronological order from earliest to latest
against the invoices to which Unilink directed it, the following
results: $786.24 is applied against invoice 4111 (leaving
$43,962.86 of the $44,749.10), then $22,778.40 is applied
against invoice 1024 (leaving $21,184.46 of the $44,749.10), and
then that remaining $21,184.46 is applied against the $21,756.00
charged on invoice 4113.
After the funds actually conveyed by check 13698 are
exhausted, a balance of $571.54 remains due on invoice 4113, and
there are no funds remaining from check 13698 to apply toward
payment of the $26,330.40 charged for the produce on invoice
2901 (red pepper strips) which is covered by the PACA trustpreservation on invoice 2901.
On June 23, 2009, at 7:42 p.m., Dale Brunton sent an
e-mail to Magdalena Swieton conveying a message to defendant
Gary Gregory:
Dear Gary,
We have discussed this at great lengths among
ourselves as well as reviewed what our legal rights
are when goods are rejected without substantiation.

-23-

So, I have to reiterate our position once again.
[Because] Unilink accepted the shipments, it can only
claim damages against Food Team: (1) if it notified
Food Team within a reasonable time of the alleged
quality problems; and (2) it obtained an inspection by
a neutral third party that proves the produce shipped
by Food Team on these loads did not meet the contract
grade A on arrival. Since Unilink met neither of
these two requirements to assert damages, it owes Food
Team the total due on these below-mentioned shipments
[(invoices 4111, 1015, 1014, 1012, 1008)] of
$93,022.49. Please pay this amount due no later than
Friday, June 26th.
*

*

*

Regarding unfulfilled contracts for broccoli, red
pepper, and cauliflower. Please inform us of your
intention as to resumption of shipment. We expect
your answer no later than tomorrow.
Best Regards,
Dale Brunton 68
On June 23, 2009, at 9:10 p.m., Magdalena Swieton sent
an e-mail to Dale Burnton, conveying a message from defendant
Gary Gregory, which stated:
Dear Dale,
Please cancel the balance of our contracts.
This action is taken as a result of numerous quality
problems existing on your deliveries. Please
acknowledge receipt of this correspondence.
Thank you!
Gary 69

68

Plaintiff’s Trial Exhibit 19 at page 3, copy of e-mail from Dale
Brunton to Magdalena Swieton sent June 23, 2009 at 7:42 p.m.
69

Plaintiff’s Trial Exhibit 19 at page 1, copy of e-mail from
Magdalena Swieton to Dale Brunton sent June 23, 2009 at 9:10 p.m.

-24-

On June 27, 2009 Dale Brunton further responded to the
June 23, 2009 cancellation e-mail as follows:
Dear Gary,
1. Regarding your cancellation of outstanding
contracts, it represents a breach of contract, based
on unsubstantiated claims. We will hold Unilink LLC
responsible for all damages.
2. Regarding cargo referred to in [Magdalena
Swieton]’s e-mail of 6/19 as rejected. The rejections
are not in accordance with commercial law and are
unsubstantiated. However to protect our fiduciary
interest we will take possession of these goods. We
will hold Unilink LLC responsible for any damages
sustained no[t] limited to the re-sale of this
product.
Best Regards,
Dale Brunton 70
Unilink diverted to the Kreider’s third-party cold
storage facility some, or all, of the produce which arrived
between March 25 and April 28, 2009 relating to six invoices:
invoice 1019 (broccoli) delivered March 25, 2009; 71 invoice 1008
(broccoli) delivered April 13, 2009; 72 invoice 1012 (broccoli)
delivered April 15, 2009; 73 invoice 1014 (broccoli) delivered

70

Plaintiff’s Trial Exhibit 19, e-mail from Dale Brunton to
Magdalena Swieton.
71

Defendants’ Trial Exhibit 2C, Unilink Scoring Sheet dated
March 25, 2009 re. invoice 1019.
72

Defendants’ Trial Exhibit 2A, Unilink Scoring Sheet dated
April 13, 2009 re. invoice 1008; Defendants’ Trial Exhibit 2B, Scoring Sheet
dated April 14, 2009 re. invoice 1008.
73

Defendants’ Trial Exhibit 2D, Unilink Scoring Sheet dated April
15, 2009 re. invoice 1012.

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April 21, 2009; 74 invoice 1015 (broccoli) delivered April 28,
2009; 75 and invoice 4111 (cauliflower) delivered April 28, 2009. 76
It is unknown on precisely which date or dates each of
these six loads was diverted to the third-party cold storage
facility, but invoice 4111 (cauliflower) was diverted to
Kreider’s prior to May 14, 2009, and invoices 1019, 1008, 1012
1014, and 1015 (each broccoli) were diverted to Kreider’s prior
to July 13, 2009.
In July 2009, following Unilink’s June 23, 2009
cancellation of the balance of the its contracts with Food Team,
Food Team arranged for two additional third-party inspections of
the Food Team produce which Unilink had diverted to Kreider’s
cold storage facility.
On July 13, 2009 an inspection was conducted for the
produce on invoices 4111 (cauliflower), 1019 (broccoli), 1015
(broccoli), 1014 (broccoli), 1012 (broccoli), and 1008
(broccoli).

An Inspection Report was generated for the produce

by invoice.

The report for invoice 4111 did not indicate the

presence of any freezer burn.

Moreover, the reports for each of

the broccoli invoices for which an inspection was done -- 1019,
74

Defendants’ Trial Exhibit 2E, Unilink Scoring Sheet dated
April 21, 2009 re. invoice 1014.
75

Defendants’ Trial Exhibit 2F, Unilink Scoring Sheet dated
April 28, 2009 re. invoice 1015.
76

Defendants’ Trial Exhibit 2G, Unilink Scoring Sheet dated
April 28, 2009 re. invoice 4111.

-26-

1015, 1014, 1012, and 1008 -- indicate that each was checked for
the presence of worms (which defense witnesses described to be
visible to the naked eye) and that none were found.

Photographs

of the broccoli samples taken during this inspection do not show
any worms. 77
During her deposition, Magdalena Swieton stated that
photographs of the alleged worms were taken and that those
photographs, and some worms themselves, were sent by Unilink
through Federal Express to Food Team. 78

However, at trial,

defendants did not offer and admit into evidence any such
photographs, actual worms, or documentation showing that such
items were sent by Unilink to Food Team.
On July 15, 2009 an inspection of the produce from
Food Team diverted to Kreider’s cold storage facility by Unilink
was conducted by the Agricultural Division of SGS North America
Inc.

Each of the diverted shipments of Food Team broccoli sent

by Unilink to Kreider’s cold-storage facility were inspected and
no worms were found or observed. 79

Similarly, the Unilink

cauliflower (invoice 4111) diverted to Kreider’s cold storage

77

See Plaintiff’s Trial Exhibit 20, Inspection Reports by Ms. Zhu
dated July 13, 2009 and accompanying photographs.
78

Plaintiff’s Trial Exhibit 28, Swieton Deposition at page 26.

79

Plaintiff’s Trial Exhibit 21, Inspection Report of SGS North
America Inc., Agricultural Division, dated July 21, 2009, at page 1.

-27-

was inspected and the report does not indicate the presence of
freezer burn. 80
All of Unilink’s checks issued to Food Team cleared
banking channels and Food Team did not refund any payments made
by Unilink.
The broccoli delivered by plaintiff Food Team to
defendant Unilink and subsequently diverted by Unilink to
Kreider’s cold-storage facility did not contain worms and was
not otherwise compromised by the presence of nails or other
foreign objects.

The cauliflower delivered by plaintiff Food

Team to defendant Unilink and subsequently diverted by Unilink
to Kreider’s cold-storage facility was not compromised in
quality by the presence of freezer burn, or otherwise.
Unilink did not divert the produce on invoices 2901,
4115, or 1017 to the third-party storage facility.

Unilink

attempted to assert a credit toward payment on invoice 2901 in
check number 13698.

Unilink did not issue a check to Food Team

for payment against invoices 4115 or 1017, nor did Unilink
assert a credit toward payment toward invoice 4115 or 1017 in
any check issued to Food Team.
In August 2010, Seneca Food purchased all of Unilink’s
assets, including Unilink’s inventory, machinery, and accounts
receivable and payable.

More specifically, the actual produce

80

Plaintiff’s Trial Exhibit 21, Inspection Report of SGS North
America Inc., Agricultural Division, dated July 21, 2009, at page 2.

-28-

billed on the three PACA-protected invoices –- namely, invoice
2901 (red pepper strips), invoice 4115 (cauliflower), and
invoice 1017 (broccoli) -- or the money received from the sale
of that produce by Unilink to its customers, was among the
assets sold to Seneca Foods for $1,400,000.00.
All proceeds from Unilink’s sale of its assets to
Seneca Foods were transferred to, and are still held by, formerdefendant Pennsylvania Food Group LLC (Unilink’s sole
shareholder).
CONCLUSIONS OF LAW
1.

Defendant Unilink breached its agreements with

plaintiff Food Team by (A) failing to pay for the produce which
was delivered to, and accepted by, defendant Unilink, and (B)
repudiating the balance of the produce which remained to be
shipped pursuant to the provisions of the broccoli and
cauliflower contracts.
2.

Accordingly, defendant Unilink is liable to

plaintiff Food Team for $23,281.95 for the delivered-andaccepted non-PACA-trust loads of produce.
3.

Plaintiff Food Team did not breach the broccoli

contract or the cauliflower contract because plaintiff Food Team
did not deliver to defendant Unilink broccoli infested with
worms or contaminated by other foreign material or cauliflower
damaged by freezer burn.
-29-

4.

Accordingly, plaintiff Food Team is not liable to

defendant Unilink on the Second Counterclaim for breach of
contract seeking recover of freight charges, pallet costs, and
storage costs related to the produce diverted to the third party
cold storage facility.
5.

Defendant wrongfully-repudiated the yet-to-be-

shipped produce under the broccoli and cauliflower contracts.
6.

Plaintiff resold the wrongfully-repudiated

broccoli and cauliflower to replacement buyers and defendant
Unilink did not carry its burden to establish that plaintiff’s
mitigation resale was unreasonable.
7.

Accordingly, defendant Unilink is liable to

plaintiff Food Team for $23,794.73 for the delivered-andaccepted non-PACA-trust loads of produce.
For the reasons expressed below, I find in favor of
plaintiff Food Team and against defendants Unilink, Gary
Gregory, Marc Beheagel, and Akbar Boutarabi on plaintiff’s PACAtrust claims for failure to pay; and against defendant Unilink
on plaintiff’s non-PACA failure to pay claim and wrongful
repudiation claim.

Moreover, I find in favor of plaintiff Food

Team and against defendant Unilink on the Unilink counterclaim
pursued at trial.

An accompanying Verdict dated September 30,

2013 is entered in accordance with this Adjudication.

-30-

DISCUSSION
Burden of Proof
A plaintiff asserting a breach of contract claim bears
the burden of proof concerning the elements of its claim and
must establish them by a preponderance of evidence.

Bohler-

Uddeholm America, Inc. v. Ellwood Group, Inc., 247 F.3d 79, 102
(3d Cir. 2001)(applying Pennsylvania law); see 23 Williston on
Contracts § 63:14 (4th ed. 2013).
Where a defendant alleges a breach of contract in a
counterclaim, that defendant, as the party asserting the claim,
bears the burden of proving the requisite elements at trial.
Yellowbook Inc. v. Always in Service Inc., 2013 WL 4051263, at
*9 (E.D.Pa. Aug. 12, 2013)(Robreno, J.)(citing Omicron Systems
v. Weiner, 860 A.2d 554, 564 (Pa.Super.Ct. 2004)).
Once the elements of the breach of contract claim are
established, a defendant has the burden of proof as to any
affirmative defenses which it asserts.

See Prusky v. ReliaStar

Life Insurance Company, 532 F.3d 252, 258 (3d Cir. 2008); see
also 23 Williston on Contracts § 63:14 (4th ed. 2013).
Under Pennsylvania law, mitigation (or, rather, a
claimant’s failure to mitigate its damages) is an affirmative
defense, for which the breaching party bears the burden of
proof.

Prusky, 532 F.3d at 258.

-31-

To prove a failure to mitigate, the party asserting
the defense must show: “(1) what reasonable actions the
plaintiff ought to have taken, (2) that those actions would have
reduced the damages, and (3) the amount by which the damages
would have been reduced.”

Prusky, 532 F.3d at 258.

Failure to Pay PACA Invoices
Plaintiff Food Team seeks to enforce payment to
plaintiff Food Team from the PACA trust pursuant to 7 U.S.C. §
499e(c)(4). 81
Here, three of the invoices for delivered produce
which were submitted by plaintiff Food Team to defendant Unilink
contain the requisite language to provide notice of, and trigger
protection under, section 499e(C) of the PACA: namely,
invoices 2901 (red pepper strips), invoice 4115 (cauliflower),
and invoice 1017 (broccoli).
My May 17, 2012 Order, for the reasons expressed in
the accompanying Opinion, granted plaintiff’s motion for summary
judgment with respect to invoices 2901, 4115, and 1017, the
PACA-trust invoices, and entered judgment against defendant

81

Section 499e(c)(4) provides, in pertinent part, that where a
plaintiff-seller includes sufficient PACA-trust-preservation language on its
invoices (as with invoices 2901, 4115, and 1017 here), “[t]he 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) Section 499e(c)(5), in turn, provides that such a
seller (the trust beneficiary) may bring an action to enforce payment of the
invoice from the trust. 7 U.S.C. § 499e(c)(5).

-32-

Unilink, LLC, as well as individual defendants Gregory,
Behaegel, and Boutarabi.
On the first day of the non-jury trial, plaintiff
dismissed with prejudice all claims (including the PACA-trust
enforcement claim in Count I) against defendants Pennsylvania
Food Group, LLC and Mike Moore.

Therefore, plaintiff’s claim in

Count I has been disposed of with respect to all defendants.
Nonetheless, I will address again the issue of individual
liability as to defendants Gregory, Behaegel, and Boutarabi in
light of the position taken in Defendants’ Post-Trial Memorandum
that the basis for their individual liability has not been
sufficiently established. 82
Individual Liability Under the PACA
While a plaintiff-seller pursues primary liability
against a PACA-licensed buyer-defendant (typically, as with
Unilink here, a business entity), a seller-plaintiff may seek to
recover payment on the balance of its PACA trust claims against
persons who may be found secondarily or individually liable to
the PACA trust beneficiary.

Bear Mountain Orchards, Inc. v.

Mich-Kim, Inc., 623 F.3d 163, 167-168, 170-172 (3d Cir. 2010);
Weis-Buy Services, Inc. v. Paglia, 411 F.3d 415, 418-421
(3d Cir. 2005).

82

Defendants’ Post-Trial Memorandum at pages 7-8.

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“Individual liability in the PACA context is not
derived from the statutory language, but from common law breach
of trust principles.”

Weis-Buy, 411 F.3d at 421 (citing Sunkist

Growers v. Fisher, 104 F.3d 280, 282 (9th Cir.1997)).

“Under

the common law, the trustee of a trust is under a duty to the
beneficiary in administering the trust to exercise such care and
skill as a man of ordinary prudence would exercise in dealing
with his own property.”

Id.

The Third Circuit explained in Weis-Buy that liability
arising from this duty is distinct from the liability that
arises when the corporate veil is pierced:
An individual who is in the position to control the
[PACA] trust assets and who does not preserve them for
the beneficiaries has breached a fiduciary duty, and
is personally liable for that tortious act. This legal
framework is to be distinguished from the piercing the
veil doctrine, where the corporate form is disregarded
because the individual has either committed a fraud,
or because the corporation is a “shell” being used by
the individual shareholders to advance their own
purely personal rather than corporate ends.
Id. (quoting Morris Okun, Inc. v. Harry Zimmerman, Inc.,
814 F.Supp. 346, 348 (S.D.N.Y. 1993))(emphasis added).
Although the mere failure to pay a PACA-protected
invoice on time does not demonstrate a “dissipation or misuse of
trust assets”, ZAS International Agriculture, B.V. v. ZAS USA,
Inc., 1998 WL 469958, at *2 (E.D.Pa. Aug. 7, 1998)(Waldman, J.),
the regulations promulgated by the United States Department of

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Agriculture (“USDA”) pursuant to the PACA define “dissipation”
as “any act or failure to act which could result in the
diversion of trust assets or which could prejudice or impair the
ability of unpaid suppliers, sellers, or agents to recover money
owed in connection with produce transactions.”

7 C.F.R.

§ 46.46(a)(2).
The USDA regulations further require PACA-trust assets
to be maintained “in a manner that such assets are freely
available to satisfy outstanding obligations to sellers of
perishable agricultural commodities” and that “[a]ny act or
omission which is inconsistent with this responsibility,
including dissipation of trust assets, is unlawful and in
violation of [7 U.S.C. § 499b].”

7 C.F.R. § 46.46(d)(1).

In August 2010, Seneca Food purchased all of Unilink’s
assets, including Unilink’s inventory, machinery, and accounts
receivable and payable.

More specifically, the actual produce

billed on the three PACA-protected invoices –- namely, invoice
2901 (red pepper strips), invoice 4115 (cauliflower), and
invoice 1017 (broccoli) -- or the money received from the sale
of that produce by Unilink to its customers, was among the
assets sold to Seneca Foods for $1,400,000.00.
The entirety of the proceeds from Unilink’s sale of
its assets to Seneca Foods were transferred to, and are still
held by, former-defendant Pennsylvania Food Group LLC (Unilink’s
-35-

sole shareholder).

In other words, Unilink sold all of its

assets (including PACA-protected assets) to Seneca Foods in
exchange for $1.4 million (now including PACA-protected assets)
and directed the $1.4 million (now including PACA-protected
assets) to another entity, namely Pennsylvania Food Group, LLC.
Moreover, defendants Gregory, Behaegel, and Boutarabi were
members of Unilink, LLC (which transferred $1.4 million,
including PACA-trust assets) and among the seven shareholders of
Pennsylvania Food Group, LLC (which received $1.4 million from
Unilink, including PACA-trust assets).
Accordingly, to the extent that defendants seek,
through their post-trail memorandum, to have the court alter its
prior ruling on Plaintiff’ Motion for Summary Judgment that
defendants Gregory, Beheagel, and Boutarabi are subject to
secondary, individual liability on plaintiff’s PACA-trust
claims, that request is denied.
Failure to Pay Non-PACA Invoices
In my May 17, 2012 Order, and for the reasons
expressed in the accompanying Opinion, I granted Plaintiff’s
Motion for Summary Judgment to the extent that it sought a
declaratory ruling that defendant Unilink accepted, and had a
duty to pay, six invoices which did not contain PACA trustpreservation language: namely, invoices 4111 (cauliflower),
1019, 1008, 1012, 1014, and 1015 (each broccoli).
-36-

Moreover, by

my May 17, 2012 Order, I entered judgment in favor of plaintiff
Food Team International, LTD and against defendant Unilink, LLC
on invoices 1008 ($23,475.80) and 1015 ($23,133.40).
Defendant Unilink asserted payment of those invoices
as an affirmative defense and pursued that defense at trial.
Invoices 1012 ($22,598.40) and 1014 ($23,133.40) were paid in
full by Unilink check number 13481, and invoice 1019
($23,540.00) was paid in full by check number 13382.
Additionally, invoice 1008 was paid in part
($1,458.41) 83 by check number 13481, leaving an unpaid balance
due on invoice 1008 of $22,017.39.

Invoice 1015 was not paid by

Unilink, leaving an unpaid balance due on invoice 4111 of
$23,133.40.

Invoice 4111 was paid in part ($786.24) by Unilink

check number 13698, leaving an unpaid balance due on invoice
4111 of $20,969.76.
Accordingly, after applying the payments which
defendant Unilink proved at trial, the remaining balance due on
the six non-PACA loads which defendant Unilink accepted and for
which it has a duty to pay is $66,120.55, which sum is comprised
of $22,017.39 remaining on invoice 1008, $23,133.40 remaining on
invoice 1015, and $20,969.76 remaining on invoice 4111.
However, defendant Unilink owes $44,837.82 to
plaintiff Food Team for produce which was subsequently diverted
83

The total amount charged on invoice 1008 is $23,475.80.

-37-

to Kreider’s cold-storage facility and then resold by plaintiff
Food Team to replacement buyers for $42,838.60.

Accordingly,

defendant Unilink is entitled to an offset in the amount of
$42,838.60 against the $66,120.55 due on outstanding invoices
for the wrongfully-diverted produce.

Therefore, the total

amount due to plaintiff Food Team from defendant Unilink for
outstanding invoices on wrongfully-diverted produce is reduced
to $23,281.95.
Wrongful Repudiation of Yet-to-be-Shipped Loads
Plaintiff Food Team claims that by directing it, on
June 3, 2009, to stop shipments until further notice, and by
cancelling, on June 23, 2009, all remaining shipments, defendant
Unilink wrongfully repudiated the remaining broccoli and
cauliflower which was to be shipped under the contracts.
Because Unilink cancelled the balance of the shipments
under the broccoli and cauliflower contracts, and because I am
not persuaded by the evidence and testimony adduced at trial
that, in fact, the broccoli which Food Team shipped to Unilink
actually contained worms and the cauliflower was damaged by
freezer burn, I conclude that defendant Unilink cancelled the
balance of those contracts without reasonable cause.
Based upon defendant Unilink’s direction to stop
shipments and its subsequent cancellation of all further
shipments, defendant Unilink wrongfully repudiated 557,200 of
-38-

the 1,100,000 pounds of broccoli to be shipped under the
broccoli contract (P.O. 6122) at the price of $0.535 per pound;
and 297,640 of the 500,000 pounds of cauliflower to be shipped
under the cauliflower contract at the price of $0.42 per pound.
Accordingly, the contract value of the wrongfully-repudiated
broccoli is $298,102.00, and the contract value of the
wrongfully-repudiated cauliflower is $125,008.80.
Resale of the Wrongfully-Repudiated Loads
The contract value of the wrongfully-repudiated (and,
thus, not shipped to Unilink) broccoli was $298,102.00, and that
broccoli was sold and shipped to other buyers for a total price
of $284,868.03, for a loss on the mitigation resale of the
repudiated broccoli of $13,233.97. 84
The contract value of the wrongfully-repudiated
cauliflower was $125,008.80, and that cauliflower sold and
shipped to other buyers for a total price of $114.448.04, for a
loss on the mitigation resale of $10,560.76.
Plaintiff, through Attorney Keaton, withdrew its claim
for expenses incurred in the mitigation resale of the diverted
and wrongfully-repudiated produce. 85
Defendants are correct that plaintiff Food Team had an
affirmative duty to mitigate its damages, 86 plaintiff satisfied
84

See Plaintiff’s Trial Exhibit 24.

85

N.T. Day 1 at page 43.

-39-

that duty by obtaining buyers for all wrongfully diverted and
wrongfully repudiated broccoli and cauliflower.
To prove a failure to mitigate, the party asserting
the defense must show: “(1) what reasonable actions the
plaintiff ought to have taken, (2) that those actions would have
reduced the damages, and (3) the amount by which the damages
would have been reduced.”

Prusky, 532 F.3d at 258.

I conclude that defendants have not carried their
burden of proof on the failure-to-mitigate defense.

Plaintiff

Team resold all of the diverted and wrongfully-repudiated -–
some at prices above, and some at prices below, the prices
negotiated the between Food Team and Unilink the previous year.
Accordingly, plaintiff Food Team has sustained its claim for
wrongful repudiation of the unshipped balance of produce under
the broccoli and cauliflower contracts and has demonstrated
damages in the amount of $23,794.73, comprised of $13,233.97 on
wrongfully-repudiated broccoli and $10,560.76 on wrongfullyrepudiated cauliflower.
Unilink’s Remaining Counterclaim
As noted in the Non-Jury Trial subsection of the above
Procedural History, plaintiff Food Team agreed to the entry of
judgment against it in the amount of $3,916.00 on the First
Counterclaim asserted by defendant Unilink without conceding or
86

Defendants’ Proposed Findings and Conclusions at ¶ A.

-40-

admitting to having committed any breach of contract as alleged
by defendant Unilink.
Defendant Unilink pursued its Second Counterclaim
against plaintiff Food Team seeking $10,398.00 incidental
damages incurred by Unilink in storing the produce from the six
invoices which were diverted by Unilink to the third-party cold
storage facility after they were unloaded and accepted at
Unilink’s facility.
As the party asserting the counterclaim, defendant
Unilink had the burden at trial of proving a breach entitling it
to those incidental damages.

Here, that required defendant

Unilink to prove by a preponderance of evidence that the
broccoli delivered by Food Team and later diverted by Unilink
was contaminated by the presence of worms, and that the
cauliflower delivered by Food Team and later diverted by Unilink
suffered from freezer burn.

Based upon the evidence submitted

at trial, I conclude that defendant Unilink did not carry that
burden.

Accordingly, I enter judgment in favor of plaintiff

Food Team and against defendant Unilink, LLC on the Second
Counterclaim.
CONCLUSION
For all the forgoing reasons, I enter the accompanying
Verdict in favor of plaintiff Food Team International, LTD, and

-41-

against defendant Unilink, LLC, in the amount of $23,281.75 on
plaintiff’s non-PACA-trust claims for failure to pay invoices.
I also find in favor of plaintiff and against
defendant Unilink in the amount of $23,794.73 on plaintiff’s
non-PACA-trust claim for wrongful repudiation concerning yet-tobe-shipped broccoli and cauliflower.
On plaintiff’s non-PACA-trust claims for failure to
pay, I find in favor of individual defendants Gary Gregory, Marc
Beheagel, and Akbar Boutarabi, and against plaintiff Food Team.
Finally, on the Second Counterclaim asserted by
defendant Unilink, LLC, for breach of contract in supplying
defective produce, I find in favor of plaintiff and against
defendant Unilink.

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