Produce Pay, Inc. v. FVF Distributors Inc.

District Court, S.D. California·Decided May 3, 2022·No. 3:20-cv-00517·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRODUCE PAY, INC., Case No. 20-cv-517-MMA (BGS)

12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART PLAINTIFF’S MOTION FOR JUDGMENT 14 FVF DISTRIBUTORS INC., et al., 15 Defendants. [Doc. No. 62] 16 17 On September 13, 2021, Plaintiff Produce Pay, Inc. (“Plaintiff”) filed a motion for 18 judgment pursuant to California Code of Civil Procedure § 664.6. The motion is 19 unopposed to date. For the reasons set forth below, the Court GRANTS IN PART and 20 DENIES IN PART Plaintiff’s motion. 21 I. BACKGROUND 22 This case has an unusual history, factually and procedurally. On March 19, 2020, 23 Plaintiff filed a Complaint against FVF Distributors Inc. (“FVF”), Veg-Fresh Farms, 24 LLC, Mark C. Widder, Robert L. Whitney, Jr., Lawrence D. Cancellieri, Randy J. 25 Cancellieri, Adam T. Cancellieri, and F. David Avila (“Mr. Avila”) pursuant to the 26 Perishable Agricultural Commodities Act, 7 U.S.C. §§ 499a et seq. (“PACA”). Doc. 27 No. 1 (“Compl.”). Generally speaking, the case arises from the alleged failure to pay 28 Plaintiff for the receipt of produce. See, e.g., Compl. ¶ 10. On June 6, 2020, FVF and 1 Mr. Avila filed answers to the Complaint. Doc. Nos. 26, 27. Thereafter, Veg-Fresh 2 Farms, LLC, Mark C. Widder, Robert L. Whitney, Jr., Lawrence, D. Cancellieri, Jr., 3 Randy J. Cancellieri, and Adam T. Cancellieri were dismissed from the case via 4 stipulation. Doc. No. 32. As such, the case proceeded solely against FVF and Mr. Avila 5 (collectively, “Defendants”). It appears that Mr. Avila was the sole controlling officer of 6 FVF. See, e.g., Doc. No. 63-1 ¶ 6. 7 On October 14, 2020, the parties participated in an Early Neutral Evaluation 8 conference before United States Magistrate Judge Ruth Bermudez Montenegro1 wherein 9 the case settled. See Doc. No. 43. Thereafter, the parties executed a settlement 10 agreement. Doc. No. 62-3 (the “Settlement Agreement” or “SA”). However, issues soon 11 arose relating to Defendants’ ability to perform under the Settlement Agreement. On 12 November 6, 2020, the parties informed Judge Montenegro that the Settlement “fell 13 through.” Doc. No. 46. Namely, Defendants did not make the first $5,000 installment 14 payment. See Doc. No. 48-1 at 3. Consequently, Plaintiff filed a motion to enforce the 15 Settlement Agreement and for entry of judgment, Doc. No. 48, which the Court granted 16 in part, finding that the parties knowingly and voluntarily entered into a valid and binding 17 contract under California law, Doc. No. 56 at 2.2 The Court, however, declined to enter 18 judgment at that time. Id. The Court stated: 19 The issue of the Settlement Agreement’s validity and enforceability is distinct 20 from Defendants’ alleged breach and Plaintiff’s entitlement to judgment. The 21

22 1 Judge Montenegro was the assigned Magistrate Judge during all relevant times, and the present motion 23 for judgment was referred to her for report and recommendation. On March 22, 2022, the United States Senate confirmed Judge Montenegro’s nomination to serve as a United States District Court Judge. See 24 News Release, U.S. Cts. for the Ninth Cir., Ruth Bermudez Montenegro to Serve as U.S. District Judge 25 for Southern District of California (Mar. 22, 2022), https://cdn.ca9.uscourts.gov/datastore/ce9/2022/ Montenegro_Ruth_Bermudez_CAS_Confirmed.pdf. As such, on March 31, 2022, the case was 26 transferred to Magistrate Judge Skomal. See Doc. No. 83. Due to the undersigned’s familiarity with the complicated history of the case, the Court withdraws the referral and instead addresses the merits of the 27 motion without report and recommendation.

28 1 latter has not been sufficiently briefed. Further, even assuming Plaintiff demonstrated that Defendants breached the Settlement Agreement, Plaintiff 2 does not explain how such a breach entitles it to immediate judgment for the 3 full amount under either the terms of the Settlement Agreement or California law. Moreover, it appears that Defendants have until July 13, 2021 to tender 4 full payment. See Doc. No. 48-2 at 16. And if Defendants do so, the terms set 5 forth in paragraph 7 of the Settlement Agreement seem to indicate that the parties will stipulate to dismissal of the action in lieu of seeking entry of 6 judgment. See id. at 17. 7 8 Id. at 2–3. 9 Thereafter, the parties, through their attorneys, discussed entering into a stipulated 10 judgment. See Doc. No. 62-2 (“Kane Decl.”) ¶ 6. On August 10, 2021, Plaintiff sent 11 Defendants a draft Stipulated Judgment. Kane Decl. ¶ 7. However, on August 17, 2021, 12 Defendants’ attorney, Mr. John F. Lenderman, advised Plaintiff that Mr. Avila had 13 contracted COVID-19 and was admitted to a local hospital. Kane Decl. ¶ 8. 14 Consequently, Mr. Avila did not sign the Stipulated Judgment. On or about August 30, 15 2021, Mr. Avila passed away. Kane Decl. ¶ 14; Doc. No. 63-1 ¶ 2. 16 On September 13, 2021, Plaintiff filed the instant motion for judgment. Doc. 17 No. 62. Two days later, Mr. Lederman filed a motion to withdraw as counsel of record 18 for Defendants. Doc. No. 63. Attached to his motion, Mr. Lenderman offered a 19 declaration, informing the Court of Mr. Avila’s passing. Doc. No. 63-1. The Court 20 issued an interim order on the motion to withdraw, directing Mr. Lenderman to properly 21 serve his motion on his clients pursuant to Civil Local Rule 83.3.f.3.a–b and to file a 22 supplemental declaration demonstrating good cause to withdraw. Doc. No. 64 at 2. On 23 that same day, Judge Montenegro directed Plaintiff to provide a status report regarding its 24 intent to substitute parties under Federal Rule of Civil Procedure 25(a).3 Doc. No. 65. 25 26 27 28 1 Ultimately the Court granted Mr. Lenderman’s motion to withdraw. Doc. No. 68. 2 Upon Mr. Lenderman’s representations, the Court found that good cause existed because 3 Mr. Lenderman never received compensation for his representation and that Mr. Avila’s 4 death made it unreasonably difficult to effectively carry out his legal responsibilities. 5 Doc. No. 68 at 1–2. Mr. Lenderman filed a declaration of service of the Court’s 6 withdrawal order on Mr. Avila’s surviving spouse, Estella Medellin Barraza 7 (“Ms. Barraza”). Doc. No. 69. 8 On October 21, 2021, Plaintiff filed a motion to substitute Ms. Barraza into the 9 action in Mr. Avila’s stead pursuant to Rule 25(a). Doc. No. 71. The Court initially 10 denied the motion as procedurally defective and directed Plaintiff to file a renewed 11 motion and properly serve it on Ms. Barraza. Doc. No. 74. On January 3, 2022, Plaintiff 12 filed a renewed motion to substitute, curing the initial motion’s procedural defect. Doc. 13 No. 75. The Court granted Plaintiff’s motion and substituted Ms. Barraza into the action 14 as a proper party for substitution under Rule 25(a). Doc. No. 78. Ms. Barraza was served 15 with a copy of the substitution order. Doc. No. 80. 16 On March 3, 2022, Judge Montenegro issued an order directing Plaintiff to serve 17 its motion for judgment on Ms. Barraza pursuant to Rule 5. Doc. No. 81. Judge 18 Montenegro’s order gave Ms. Barraza thirty (30) days leave to file a response in 19 opposition. Id. To date, no oppositions have been received. 20 II. DISCUSSION 21 A district court has the inherent power to summarily enforce, by way of motion, a 22 settlement agreement entered into while the litigation is pending before it. In re City of 23 Equities Anaheim, Ltd., 22 F.3d 954, 957 (9th Cir. 1994); Callie v. Near, 829 F.2d 888, 24 890 (9th Cir. 1987).

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Produce Pay, Inc. v. FVF Distributors Inc., (S.D. Cal. 2022).

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