Papagni Fruit and Juice, LP v. James Corrado Inc.

District Court, E.D. California·Decided August 27, 2024·No. 1:24-cv-00377·Unknown

Opinion

2 3 4 5 6 7 10 Case No. 1:24-cv-00377-KES-SKO ORDER VACATING HEARING 12 Plaintiff, FINDINGS AND 13 v. RECOMMENDATIONS THAT PLAINTIFF’S MOTION FOR

GRANTED IN PART AND DENIED IN 15 JAMES CORRADO INC., et al., PART

16 Defendants. (Doc. 23)

17 OBJECTIONS DUE: 14 DAYS _________________________________/ 18 I. INTRODUCTION 19 20 Plaintiff Papagni Fruit and Juice, LP asserts that it sold and shipped perishable commodities 21 in interstate commerce to James Corrado Inc., which failed to pay for the produce. Plaintiff seeks 22 to hold James Corrado Inc., Peter Corrado, Gerald Corrado, and Joseph Corrado (collectively, 23 “Defendants”) liable for violations of the Perishable Agricultural Commodity Act, 7 U.S.C. § 499a 24 et seq. (“PACA”), declaratory judgment, breach of contract, and injunctive relief. (See generally 25 Doc. 1) Because Defendants failed to respond to the allegations in the complaint, Plaintiff now 26 seeks default judgment against the defendants. (Doc. 23.) 27 The Court finds the matter suitable for decision without oral argument pursuant to Local 28 Rule 230(g). As such, the hearing on the motion set for September 11, 2024, is VACATED. For 1 the reasons set forth below, the Court RECOMMENDS that Plaintiff’s motion for default judgment 2 be GRANTED IN PART and DENIED IN PART.1 4 Plaintiff initiated this action by filing a complaint on March 29, 2024. (Doc. 1) Plaintiff 5 asserts it sold perishable agricultural commodities, specifically produce, to James Corrado Inc. 6 during September 2023. (Id. at 3, ¶ 11.) It delivered the produce “FOB to Sanger, California,” 7 where it was accepted by Defendant James Corrado Inc. (Id. at 3, ¶ 12.) Plaintiff alleges that 8 Defendant James Corrado Inc. failed to pay for the produce. (Id. at 3, ¶ 18.) It brings claims for 9 violations of PACA, declaratory judgment, breach of contract, and injunctive relief, and seeks 10 damages, interest, costs, and an injunction. (See generally Doc. 1.) 11 Although Defendants were properly served with the summons and complaint (see Docs. 8– 12 11), they failed to respond to the complaint within the time prescribed by the Federal Rules of Civil 13 Procedure. Upon application of Plaintiff, default was entered against Defendants on May 20, 2024. 14 (Docs. 15–19.) Plaintiff filed the motion for default judgment now pending before the Court on 15 July 24, 2024. (Doc. 23.) Defendants have neither appeared nor opposed the motion. 17 The Federal Rules of Civil Procedure govern the entry of default judgment. After default is 18 entered because “a party against whom a judgment for relief is sought has failed to plead or 19 otherwise defend,” the party seeking relief may apply to the court for a default judgment. Fed. R. 20 Civ. P. 55(a)-(b). Upon the entry of default, well-pleaded factual allegations regarding liability are 21 taken as true, but allegations regarding the amount of damages must be proven. See Televideo Sys., 22 Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); see also Geddes v. United Financial Group, 23 559 F.2d 557, 560 (9th Cir. 1977). In addition, “necessary facts not contained in the pleadings, and 24 claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of North 25 Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 26 1978)). 27

28 1 This motion is referred to the undersigned by Local Rule 302(c)(19) for the entry of findings and recommendations. 1 Entry of default judgment is within the discretion of the Court. Aldabe v. Aldabe, 616 F.2d 2 1089, 1092 (9th Cir. 1980). The entry of default “does not automatically entitle the plaintiff to a 3 court-ordered judgment. Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal 4 2002); see Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). The Ninth Circuit determined: 5 Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff, (2) 6 the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 7 the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the 8 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 9 10 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Generally, the issuance of default 11 judgment is disfavored. Id. at 1472. 13 The Court accepts Plaintiff’s factual assertions as true because default has been entered 14 against Defendants. See Televideo Sys., 826 F.2d at 917. With the motion now pending, Plaintiff 15 has also presented evidence, including in declaratory form and exhibits, which support the 16 allegations in the complaint. (See Doc. 24.) 17 Plaintiff “is in the business of selling wholesale quantities of perishable agricultural 18 commodities in interstate commerce.” (Doc. 1 at 1, ¶ 2.) It alleges that Defendant James Corrado 19 Inc. possessed a valid PACA license and “is a commission merchant, dealer, or broker subject to 20 the [PACA].” (Doc. 1 at 2–3, ¶ 10; see also Doc. 24 at 2, ¶ 4.) Plaintiff asserts that in September 21 2023, it “sold to [James Corrado Inc.] in interstate commerce, and [James Corrado Inc.] purchased, 22 perishable agricultural commodities” consisting of 1,080 boxes of fresh grapes “in the total amount 23 of $ 34,105.50.” (Doc. 1 at 3, ¶ 11; see also Doc. 24 at 2, ¶¶ 6, 7.) Upon the produce being shipped, 24 Plaintiff issued an invoice to Defendant James Corrado Inc. “in the amount of $34,105.50.”2 (Doc. 25 24 at 2, ¶ 7; see also Doc. 24 Ex. C.) On the invoice, Plaintiff provided the following written notice 26 2 Although the name on the invoice is “Corrado’s Market,” Plaintiff’s representative avers that this invoice was issued 27 to Defendant James Corrado, Inc. for the produce at issue in this case. (See Doc. 24 at 2, ¶ 7.) The Court further observes that the address indicated on the invoice is the same address where the defendants, including Defendant James 28 Corrado Inc., were served with the summons and complaint in this case, as well as the same address listed on the PACA 1 of the company’s intent to preserve its PACA trust rights: 2 The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural 3 Commodities Act, 1930 (7 U.S.C. § 499e(c)).

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