Double Green Produce, Inc. v. Forum Supermarket Inc.

387 F. Supp. 3d 260
CourtDistrict Court, E.D. New York
DecidedMay 17, 2019
Docket18-CV-2660 (MKB) (SJB)
StatusPublished
Cited by33 cases

This text of 387 F. Supp. 3d 260 (Double Green Produce, Inc. v. Forum Supermarket Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Double Green Produce, Inc. v. Forum Supermarket Inc., 387 F. Supp. 3d 260 (E.D.N.Y. 2019).

Opinion

MARGO K. BRODIE, United States District Judge

Plaintiff Double Green Produce, Inc. commenced the above-captioned action on May 4, 2018, against Defendants Forum Supermarket Inc. ("Forum") and Hong Wen Cai, asserting claims pursuant to the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq. ("PACA"), and claims for failure to pay for goods sold, breach of contract, unlawful dissipation of trust assets by a corporate official, and breach of a personal guaranty. (Compl., Docket Entry No. 1.) Plaintiff alleges that Defendants accepted wholesale quantities of produce but have refused to pay for the goods. (Id. ¶¶ 7-8.) Plaintiff served Forum and Cai with a summons and Complaint on May 22, and 30, 2018, respectively. (Summons Returned for Forum, Docket Entry No. 5; Summons Returned for Cai, Docket Entry No. 7.) The Clerk of Court entered a certificate of default against Defendants on June 22, 2018. (Entry of Default, Docket Entry No. 10.)

On June 27, 2018, Plaintiff moved for a default judgment against Defendants solely pursuant to its PACA claim. (Pl. Mot. for Default J. ("Pl. Mot."), Docket Entry No. 11; Pl. Mem. of Law in Supp. of Pl. Mot. ("Pl. Mem."), Docket Entry No, 14.) By Order dated June 27, 2018, the Court referred Plaintiff's motion to Magistrate Judge Sanket J. Bulsara for a report and recommendation. (Order dated June 27, 2018.) By report and recommendation dated January 29, 2019, finding that the Court lacks subject matter jurisdiction, Judge Bulsara recommended that the Court deny Plaintiff's motion for default judgment and dismiss the Complaint without prejudice (the "R&R"). (See generally R&R, Docket Entry No. 17.) Plaintiff filed an objection to the R&R on February 5, 2019. (Pl. Obj., Docket Entry No. 18.)

By Order dated March 27, 2019, the Court denied Plaintiff's motion for default judgment but granted Plaintiff thirty (30) days to submit additional information that would establish that Forum is a "dealer" within the meaning of PACA. (Order dated Mar. 27, 2019.) On April 25, 2019, Plaintiff submitted a declaration attaching evidence in further support of its motion for default judgment. (Supplemental Declaration of Gregory Brown ("Brown Suppl. Decl."), Docket Entry No. 21.) For the reasons set forth below, the Court grants Plaintiff's motion for default judgment.

I. Background

a. Factual background

The Court assumes the truth of the factual allegations in the Complaint for purposes of determining Defendants' liability.

Plaintiff and Defendant Forum are New York corporations with their principal places of business in Brooklyn, New York, *265and are in the business of buying and selling wholesale quantities of produce. (Compl. ¶¶ 3-4.) During the relevant time period, Cai was "an officer, director and/or shareholder of Forum," who "controlled the operations of Forum," and "upon information and belief was in a position of control over the PACA trust assets belonging to Plaintiff." (Id. ¶ 5.)

From November 20, 2017 to January 6, 2018, Plaintiff sold and delivered produce worth $23,080.75 to Defendants. (Id. ¶ 7.) Defendants accepted the produce but failed to pay for the goods when payment was due. (Id. ¶ 8.) At the time Defendants received the produce, Plaintiff became a beneficiary of a PACA statutory trust designed to assure payment to produce suppliers."1 (Id. ¶ 9.) Plaintiff "preserved its interest in the PACA trust in the amount of $28,080.75 and remains a beneficiary" until full payment is made on the balance owed. (Id. ¶ 10.) Plaintiff alleges that Defendants' failure to pay Plaintiff is an indication that Defendants have not "maintain[ed] sufficient assets in the statutory trust to pay [Plaintiff] and are dissipating trust assets." (Id. ¶11.)

Plaintiff seeks $23,080.75 in damages, as well as pre-judgment interest, costs, and attorneys' fees. (Id. at 6.)

II. Discussion

a. Standard of review

Pursuant to Rule 55 of the Federal Rules of Civil Procedure, there is "a 'two-step process' for the entry of judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment." City of New York v. Mickalis Pawn Shop, LLC , 645 F.3d 114, 128 (2d Cir. 2011) (citing New York v. Green , 420 F.3d 99, 104 (2d Cir. 2005) ). However, the Second Circuit has an "oft-stated preference for resolving disputes on the merits," Enron Oil Corp. v. Diakuhara , 10 F.3d 90, 95 (2d Cir. 1993), and therefore "[a] plaintiff is not entitled to default judgment as a matter of right, merely because a party has failed to appear or respond," LG Funding, LLC v. Florida Tilt, Inc. , No. 15-CV-631, 2015 WL 4390453, at *2 (E.D.N.Y. July 15, 2015) (citing Erwin DeMarino Trucking Co. v. Jackson , 838 F. Supp. 160, 162 (S.D.N.Y. 1993) ). "[T]he court may, on plaintiffs' motion, enter a default judgment if liability is established as a matter of law when the factual allegations of the complaint are taken as true." Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC , 779 F.3d 182, 187 (2d Cir. 2015). "A default ... only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendant." Taizhou Zhongneng Imp. & Exp. Co., Ltd. v. Koutsobinas , 509 F. App'x 54, 56 (2d Cir. 2013) ; LG Funding , 2015 WL 4390453, at *2 ("To determine whether the default judgment should issue, the [c]ourt examines whether 'the factual allegations, accepted as true, provide a proper basis for liability and relief.' " (quoting Rolls-Royce PLC v. Rolls-Royce USA, Inc. , 688 F. Supp. 2d 150

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387 F. Supp. 3d 260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/double-green-produce-inc-v-forum-supermarket-inc-nyed-2019.