Meuers Law Firm, P.L. v. Reasor's, LLC

District Court, N.D. Oklahoma·Decided September 25, 2020·No. 4:16-cv-00208·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

MEUERS LAW FIRM, P.L., a Florida ) limited liability company, as assignee and ) PACA trustee of Crossroads Fresh ) Connections, Inc., ) ) Plaintiff, ) ) v. ) Case No. 16-CV-208-GKF-JFJ ) REASOR’S, LLC, an Oklahoma limited ) company doing business as Reasor’s Foods, ) ) Defendant. )

OPINION AND ORDER This matter comes before the court on the Motion for Attorney’s Fees and Costs [Doc. 102] of plaintiff Meuers Law Firm, P.L. For the reasons set forth below, the motion is granted in part and denied in part. Plaintiff is awarded attorney fees totaling $190,757.83. I. Background and Procedural History Plaintiff Meuers Law Firm, P.L. brought this case in its capacity as the assignee of Crossroads Fresh Connections, Inc. and trustee of Crossroads’ assets. By way of background, Crossroads engaged in the business of the purchase, sale, and wholesale distribution of perishable agricultural commodities, specifically produce, from its warehouse in Tulsa, Oklahoma, and operated its business subject to the Perishable Agricultural Commodities Act of 1930, as amended, 7 U.S.C. §§ 499a-499t (PACA). In March 2010, Crossroads and Reasor’s entered into an agreement pursuant to which Reasor’s agreed to purchase produce from Crossroads for delivery to Reasor’s stores and Crossroads agreed that Reasor’s was entitled to a quarterly rebate in an amount equal to three percent of Reasor’s total purchases from Crossroads in each calendar quarter. From the inception of their business relationship through the third quarter of 2013, at the end of each calendar quarter, Reasor’s issued an invoice to Crossroads for the rebate in an amount equal to three percent of total produce purchases for the quarter, and Crossroads issued a check to Reasor’s for the invoice amount.

Four years after the inception of the relationship, on March 31, 2014, Reasor’s notified Crossroads that it was terminating the relationship effective April 4, 2014. Between March 23, 2014 and April 7, 2014, Reasor’s purchased produce totaling $409,459.04 from Crossroads. Crossroads issued to Reasor’s, and Reasor’s received, invoices for the $409,459.04 purchases that each contained the following PACA Trust statement: 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 sales of these commodities until the full payment is received.

On April 4, 2014, Crossroads ceased business operations and owed its produce suppliers more than $2,000,000 for produce purchases. Shortly thereafter, on April 9, 2014, Keith Connell, Inc.—one of Crossroads’ suppliers— commenced a lawsuit against Crossroads in the Northern District entitled Keith Connell, Inc. v. Crossroads Fresh Connections, Inc., Case No. 14-cv-00166-CVE-TLW, seeking to enforce its rights under the PACA Trust to payment of $1,003,923.35 for produce it sold and delivered to Crossroads. On April 16, 2014, U.S. District Judge Claire V. Eagan entered a Stipulated Injunction and Agreed Order Establishing PACA Trust Claims Procedure (PACA Order) in that action. On April 18, 2014, Meuers, Crossroads, and Reasor’s entered into a letter agreement regarding Reasor’s payment of amounts owed to Crossroads to Meuers as required under the PACA Order. However, Reasor’s did not pay the $409,459.04 outstanding balance. Rather, Reasor’s deducted $308,721.73 in claimed rebates owed to it (Total Rebate Claims), resulting in a payment of $100,737.31.1 Meuers subsequently initiated this litigation. The original Complaint in this case included sixteen counts: (1) breach of the implied covenant of good faith and fair dealing; (2) breach of

fiduciary duty; (3) breach of contract; (4) tortious interference with contractual relations; (5) fraudulent inducement; (6) fraudulent concealment; (7) violation of PACA: making, for a fraudulent purpose, false or misleading statements in connection with produce transactions; (8) violation of PACA: failure, without reasonable care, to perform any specification or duty, express or implied, arising out of any undertaking in connection with produce transactions; (9) breach of contract; (10) violation of PACA: failure to pay promptly; (11) declaratory relief validating PACA trust claim; (12) declaratory judgment – unlawful set-off; (13) violation of PACA: breach of trust; (14) violation of PACA: breach of duties as PACA trustee; (15) violation of PACA Order; and (16) conversion and unlawful retention of PACA trust assets. See generally [Doc. 2]. Counts One through Eight generally related to the 2010 supply agreement between Crossroads and Reasor’s.

Counts nine through sixteen related to the contracts to purchase produce during the period from March 23, 2014 and April 7, 2014. Reasor’s moved to dismiss the Complaint. [Doc. 12]. Rather than responding to the motion to dismiss, on June 15, 2016, Meuers filed an Amended Complaint. [Doc. 18]. The Amended Complaint included nine counts: (1) breach of contract – supply agreement; (2) breach of contract –produce sales contracts; (3) declaratory relief validating PACA Trust claim – produce sales contracts; (4) violations of PACA statute: failure to pay promptly – produce sales contracts;

1 The Total Rebate Claims consisted of the following: $141,962.16 for the fourth quarter of 2013; $126,303.90 for the first quarter of 2014; $9,514.69 for the second quarter of 2014; and $30,940.98 for under-paid rebates for 2012 and 2013 after an audit conducted by Reasor’s. (5) violation of PACA Order; (6) declaratory judgment – unlawful set-off – produce sales contracts; (7) violation of PACA statute: breach of trust – produce sales contracts; (8) violation of PACA statute: breach of duties as PACA Trustee – produce sales contracts; and (9) unlawful retention of PACA Trust assets – produce sales contracts. Only Count One—breach of contract—

related to the supply agreement. The remaining counts related to the produce sales contracts. [Id.]. Reasor’s moved to dismiss the Amended Complaint. [Doc. 23]. This court dismissed Count Five, but otherwise denied defendant’s motion. [Doc. 30]. On May 10, 2017, the parties attended a settlement conference before U.S. Magistrate Judge Frank H. McCarthy, but the litigation did not settle. [Doc. 43]. By agreement, the parties submitted the matter for decision of this court on stipulated facts. See [Doc. 50, Doc. 53, Doc. 54, and Doc. 55]. In the seven-page Stipulation of Undisputed Facts submitted by the parties, Meuers stipulated that it was no longer pursuing Count One. [Doc. 53, p. 1]. On September 29, 2017, the court entered Judgment in plaintiff’s favor in the amount of $135,818.59 on Counts 3, 4, 6, and 8. [Doc. 65]. However, the court entered Judgment in Reasor’s

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