John the Greek Co. v. Eaternity LLC

233 F. Supp. 3d 355, 2017 WL 563981, 2017 U.S. Dist. LEXIS 19424
CourtDistrict Court, E.D. New York
DecidedFebruary 10, 2017
Docket16-cv-919 (ADS)(AYS)
StatusPublished
Cited by1 cases

This text of 233 F. Supp. 3d 355 (John the Greek Co. v. Eaternity LLC) 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
John the Greek Co. v. Eaternity LLC, 233 F. Supp. 3d 355, 2017 WL 563981, 2017 U.S. Dist. LEXIS 19424 (E.D.N.Y. 2017).

Opinion

Decision & Order

SPATT, District Judge:

In this case, the Plaintiff John the Greek Co., Inc. (the “Plaintiff’) alleges that the [357]*357Defendant Eaternity LLC d/b/a Local Thyme (“Eaternity”) and its principal, the individual Defendant Stefan Hilderbrandt (“Hilderbrandt”), failed to pay for certain wholesale quantities of produce, in violation of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499a et seq.

Presently before the Court is a motion by the Plaintiff for summary judgment under Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 56.

For the reasons that follow, the Plaintiffs motion is granted in part and denied in part.

I. Background

The Plaintiff is a resident corporation with a principal place of business in Port Washington, New York.

Between July 17, 2014 and March 6, 2015, the Plaintiff sold to the corporate Defendant wholesale quantities of perishable agricultural commodities in the total amount of $73,643.47. However, to date, Eaternity has not paid for these goods.

On those facts, the Plaintiff seeks to enforce the provisions of PACA in order to recover from the Defendants the unpaid sum, together with statutory interest and attorneys’ fees.

Apparently, the reason for Eaternity’s non-payment is the fact that it is currently in financial straits and on the verge of bankruptcy.

Nevertheless, the Plaintiff contends that the individual Defendant Hilderbrandt is sufficiently connected with Eaternity to render him personally liable for the amounts owed. In this regard, the Plaintiff asserts that Hilderbrandt is the chief executive officer, director, and shareholder of the corporate Defendant. In this capacity, the Plaintiff asserts that Hilderbrandt signs checks on behalf of Eaternity and determines which of the company’s creditors to pay. The Plaintiff asserts that Hil-derbrandt is the sole person responsible for determining the conduct of the business and payment to creditors.

In support of its motion, the Plaintiff submits a document entitled “Movant’s Statement of Material Facts and Non-Movants’ Counterstatement,” dated June 15, 2016 (the “June 2016 Counterstatement”), in which the Defendants concede some of these facts.

However, in opposition to the present motion, the Defendants submit a different document, entitled “Defendants’ Counter-statement of Material Facts,” which is dated October 6, 2016 (the “October 2016 Counterstatement”), and which disputes some of the same facts they apparently conceded four months earlier.

In particular, the October 2016 Counter-statement refers to an affidavit by Hilder-brandt, in which he denied that he is an owner of the corporate Defendant. In support of this denial, he submitted a copy of Eatemity’s December 13, 2013 operating agreement indicating that Marita Hilder-brandt and Juanita Korelitz are the company’s sole members. Thus, in his affidavit, Hilderbrandt stated that he has no authority over the payment of invoices, and that the company’s owners control all financial decisions. Further, in his affidavit, Hilder-brandt stated that his role is to oversee Eaternity’s operations. In that capacity, he concedes that he has check-writing authority to pay company debts, but asserts that all such payments require final approval by the company’s owners.

Based on these factual averments, the Defendants contend that Hilderbrandt’s role in the company is too remote from any financial decision-making to hold him personally liable for the alleged PACA violations in this case.

[358]*358II. Discussion

A. The Standard of Review

Under Fed. R. Crv. P. 56(a), “[t]he court shall grant summary judgment if the mov-ant shows that there is no genuine dispute as.to any material fact and the movant is entitled to judgment as a matter of law.” As noted above, “[t]he Court ‘must draw all reasonable inferences and resolve all ambiguities in favor of the non-moving party.’ ” Castle Rock Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132, 137 (2d Cir. 1998) (quoting Garza v. Marine Transp. Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988)).

■. “ ‘[A]t the summary judgment stage the judge’s function is not himself [or herself] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’ ” Redd v. N.Y. State Div. of Parole, 678 F.3d 166, 173-74 (2d Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

B. The Plaintiffs Claims under PACA

.At the outset, the Court notes that, in an apparent effort to preserve its few remaining assets, the corporate Defendant Eater-nity does not oppose the relief sought by the Plaintiff. See Defs. Memo of Law at 5 (stating that .“Eaternity is on the verge of bankruptcy and while it could dispute the amount Plaintiff asserts is due[,] Eaternity does not oppose Plaintiffs instant motion in any [sic],effort to preserve whatever assets it still has”).

Accordingly, there being no genuine issues of material fact regarding the liability of the>,corporate Defendant under PACA, the .Plaintiffs motion for summary judgment, on its claims against Eaternity LLC is granted in its entirety.

■Rather, the sole contested issue in this motion is whether summary judgment is warranted on the Plaintiffs PACA claims against the individual Defendant Hilder-brandt. As set forth more fully below, the Court answers this question in the negative.

1. The Applicable Legal Principles

Congress enacted PACA “to provide unpaid produce sellers with greater protection from the risk of default by buyers.” C.H. Robinson Co. v. Alanco Corp., 239 F.3d 483, 488 (2d Cir. 2001).

To that end, “purchasers of produce on credit are required to hold the produce and its proceeds, including accounts receivable and derivatives, ‘in trust for the benefit of all unpaid suppliers or sellers of such commodities ... until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers [or] sellers.’ ” Id. at. 486 (quoting 7 U.S.C. § 499e(c)(2)).

In general, a PACA trust “ ‘arises from the moment perishable goods are delivered by the seller,’” Belleza Fruit, Inc. v. Suffolk Banana Co., No. 12-cv-3033, 2012 WL 2675066, at *5, 2012 U.S. Dist. LEXIS 93117 at *16 (E.D.N.Y. July 5, 2012) (quoting Hiller Cranberry Prods., Inc. v. Koplovsky,

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233 F. Supp. 3d 355, 2017 WL 563981, 2017 U.S. Dist. LEXIS 19424, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-the-greek-co-v-eaternity-llc-nyed-2017.