Underwood & Wong, Inc v. Enriquez, No. 2:2009cv01686 - Document 18 (E.D. Cal. 2010)
Court Description: FINDINGS and RECOMMENDATIONS, recommending that 1) plaintiff's 11 Motion for Entry of Default be granted; 2) plaintiff be awarded $10,000.00 in actual damages; 3) plaintiff be awarded interest in amount of $4,320.96 through 7/1/2010 and 0.49% per day day thereafter until paid in full, and; 4) plaintiff be awarded $4,537.00 in attorneys' fees and costs, signed by Magistrate Judge John F. Moulds on 7/20/2010. Within 10 days after being served with these F/Rs, any party may file written Objections with Court and serve a copy on all parties. (Marciel, M)
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Underwood & Wong, Inc v. Enriquez Doc. 18 1 2 3 4 5 6 7 8 9 IN THE UNITED STATES DISTRICT COURT 10 FOR THE EASTERN DISTRICT OF CALIFORNIA 11 UNDERWOOD & WONG, INC., 12 13 14 15 16 Plaintiff, No. 2:09-cv-1686 MCE JFM vs. RICARDO ENRIQUEZ, Defendant. FINDINGS AND RECOMMENDATIONS / Plaintiff’s motion for entry of default judgment came on regularly for hearing on 17 July 15, 2010. Marion Quesenbery appeared for plaintiff. No appearance was made for 18 defendant Ricardo Enriquez. Upon review of the motion and the supporting documents, upon 19 hearing the arguments of counsel and good cause appearing therefor, the court recommended 20 entry of default judgment in open court. Therefore, THE COURT MAKES THE FOLLOWING 21 FINDINGS AND RECOMMENDATIONS: 22 Plaintiff Underwood & Wong, Inc., is a California corporation with its principal 23 place of business in Los Angeles, CA. Plaintiff sues Ricardo Enriquez for money due for 24 shipments of perishable agricultural commodities made to defendant between July 23, 2008 and 25 September 12, 2008. The complaint contains claims for violations of the Perishable Agricultural Dockets.Justia.com 1 2 Commodities Act (“PACA”), 7 U.S.C. § 499e(c)(5), breach of fiduciary duty by a PACA trust 3 trustee, and state claims of breach of contract and unjust enrichment. 4 5 Defendant Enriquez is an individual doing business as Sacramento Valley Produce in Sacramento, CA. 6 Plaintiff seeks recovery in excess of $10,000.00. 7 Jurisdiction is proper under 28 U.S.C. § 1331. Venue is proper in this district 8 9 because defendant is located within the division of this district. Plaintiff asserts that defendant is a United States Department of Agriculture 10 (“USDA”) licensed dealer of perishable agricultural commodities in interstate and/or foreign 11 commerce and is subject to PACA. (See Quesenbery Decl., ¶ 4 and Ex. A.) 12 Plaintiff submits that it entered into contracts of sale with defendant from July 23, 13 2008 through September 12, 2008 for the purchase and sale of agricultural commodities. 14 (Quesenbery Decl., Ex. A, Parts 1 and 2; Underwood Decl., ¶¶ 6, 8.) Pursuant to those contracts, 15 plaintiff sold and shipped fresh fruit and vegetables to defendant in Sacramento, CA, for which 16 defendant agreed to pay plaintiff $20,000.00. Payment was due within ten days of delivery of 17 the merchandise. Although defendant received and accepted the produce listed on plaintiff’s 18 invoices, defendant has only paid plaintiff $10,000.00 of the total sum due. (Underwood Decl., 19 ¶¶ 6, 8, 9, 12, and 13.) 20 Plaintiff maintains that it is licensed by the USDA as a commission merchant, 21 dealer and/or broker of perishable agricultural commodities. (Quesenbery Decl. ¶ 5.) Pursuant 22 to 7 U.S.C. § 499e(c)(4), plaintiff printed on the face of the invoices that it gave to defendant the 23 following statutory language: 24 25 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 2 1 2 or other products derived from these commodities and any receivables or proceeds from the sale of these commodities until full payment is received. 3 (See Quesenbery Decl., Ex. A, Parts 1 and 2.) 4 Plaintiff maintains that it performed all of its obligations and duties under the 5 contracts. Under the terms of those contracts, in the event an account is not paid when due, it is 6 subject to a 1-1/2% monthly delinquent charge (18% per year) and attorneys’ fees and other 7 costs of collection. (Underwood Decl., ¶¶ 8, 12, and Ex. A.) 8 Plaintiff seeks actual damages in the amount of $10,000.00, the sums remaining 9 due on the contracts. Plaintiff avers that defendant paid only $10,000.00 of the $20,000.00 due. 10 Plaintiff also seeks interest on the debt owed in the amount of $4,320.96 through July 1, 2010 11 and .049% per day thereafter on the outstanding debt until paid in full. (Quesenbery Decl., ¶ 10 12 and Ex. D.) 13 Pursuant to the express language of the contracts, the prevailing party is entitled 14 to an award of attorneys fees, costs and expenses arising out of litigation. Plaintiff seeks 15 attorneys fees and costs in the total amount of $4,537.00. (Quesenbery Decl., ¶¶ 7-9 and Ex. C.) 16 I. Request for Default Judgment 17 The complaint in this matter was served upon defendant by mail on June 24, 18 2009. Pacific Atlantic Trading Co. v. M/V Main Express, 758 F.2d 1325, 1331 (9th Cir. 1985) 19 (default judgment void without personal jurisdiction). Defendant has not filed an answer. The 20 clerk of the court entered default against defendant on September 2, 2009. Notice of the entry of 21 default as well as plaintiff’s motion for entry of default judgment were served by mail on 22 defendant at his last known address. Defendant has filed no opposition to the motion for entry of 23 default judgment. 24 Entry of default effects an admission of all well-pleaded allegations of the 25 complaint by the defaulted party. Geddes v. United Financial Group, 559 F.2d 557 (9th Cir. 3 1 2 1977). Entry of default judgment is proper where, as in the present case, the facts established by 3 the default support the causes of action pled in the complaint. The complaint and the affidavits 4 filed in support of the motion for entry of default judgment also support the finding that plaintiff 5 is entitled to the relief requested in the prayer for default judgment, which does not differ in kind 6 from the relief requested in the complaint. Henry v. Sneiders, 490 F.2d 315, 317 (9th Cir.), cert. 7 denied, 419 U.S. 832 (1974). There are no policy considerations which preclude the entry of 8 default judgment of the type requested. See Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th 9 Cir. 1986). 10 Title 7 U.S.C. § 499b(4) provides in pertinent part that it shall be unlawful in, or 11 in connection with, any transaction in interstate or foreign commerce, for any commission 12 merchant, dealer, or broker to fail or refuse truly and correctly to account and make full payment 13 promptly in respect of any transaction in any perishable agricultural commodity to the person 14 with whom such transaction is had, or to fail, without reasonable cause, to perform any specific 15 action or duty, express or implied, arising out of any undertaking in connection with any such 16 transaction, or to fail to maintain the trust as required under section 499e(c). In pertinent part, 17 § 499e(c)(2) provides for a trust with respect to commodities received: 18 19 20 21 22 2) Perishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents. Payment shall not be considered to have been made if the supplier, seller, or agent receives a payment instrument which is dishonored. 23 7 U.S.C. § 499e(c)(2). The unpaid supplier must retain and preserve the benefits of the trust by 24 giving notice of intent to do so to the commissioner merchant, dealer, or broker, and this may be 25 accomplished by giving written notice on ordinary and usual billing or invoice statements. 4 1 2 § 499e(c)(3), (4). The notice must be given to the buyer within thirty days of a payment default, 3 or by referring to the trust on invoices. Id. 4 The elements of recovery under a PACA trust claim are thus the transaction, here 5 a contract for sale of perishable agricultural commodities; purchase and receipt of the perishable 6 agricultural commodities by a commission merchant, dealer, or broker engaged in the handling 7 of produce in interstate and/or foreign commerce, who is thus subject to PACA; a failure to pay 8 fully and promptly, or a failure to maintain the trust as required by § 499e(c); and preservation of 9 trust rights by the seller by notifying of intent to preserve the benefits of the trust on invoices or 10 billing statements. 7 U.S.C. §§ 499b, 499e(c); Sunkist Growers, Inc. v. Fisher, 104 F.3d 280, 11 284 (9th Cir. 1997). 12 Here, plaintiff properly alleged that defendant Enriquez was engaged in the 13 handling of produce in interstate and/or foreign commerce as a commission merchant, dealer 14 and/or broker. Plaintiff alleged that it shipped perishable agricultural commodities to defendant 15 at defendant’s request and pursuant to agreements by defendant to $20,000.00. Defendant paid 16 $10,000.00 of the amount due, but failed to pay the remaining balance of $10,000.00. Plaintiff 17 also alleged the creation of the trust by submitting evidence that the invoices sent to defendant 18 reflected the language required by 7 U.S.C. § 499e(c). 19 Accordingly, the undersigned concludes that the complaint is legally sufficient to 20 state a claim or claims under PACA against defendant Enriquez for enforcement of the statutory 21 trust based on a failure to perform the duty to account and pay fully and promptly, and to 22 conserve the trust assets for the benefit of plaintiff. The complaint is also legally sufficient to 23 state a claim for breach of contract. Cal. Civ. Code §§ 1549, 1550; Acoustics, Inc. v. Trepte 24 Construction Co., 14 Cal. App. 3d 887, 913 (Cal. Ct. App. 1971). 25 5 1 As to the state claim of unjust enrichment, plaintiff has not briefed the legal 2 3 sufficiency of this claim and has not explained what disposition is to be made of the claim upon 4 which judgment is not sought. Good cause appearing, it is the recommendation of this court that plaintiff be 5 6 granted default judgment as to plaintiff’s PACA and breach of contract claims. 7 II. Relief Requested It is specifically provided in PACA that the remedies created by the Act are in 8 9 10 addition to, and are not intended to in any way abridge or alter, the remedies existing at common law or by statute. § 499e(b). A. Actual Damages 11 Defendant is liable to plaintiff for actual damages in the amount of $10,000.00. 12 B. Interest 13 Plaintiff seeks prejudgment and post judgment interest. In diversity cases, state 14 15 law governs awards of interest. Lund v. Albrecht, 936 F.2d 459 (9th Cir. 1991). Plaintiff 16 submits that the interest due to it is $4,320.96 through July 1, 2010, and 0.49% per day thereafter 17 until paid in full. Plaintiff argues that post-judgment interest should be set at the same 18 contractual rate as prejudment interest. See Rey Rey Produce SFO, Inc. v. M&M Produce & 19 Food Services, 2006 LEXIS 47949 at *10-11 (N.D. Cal. 2006). The court agrees. C. Attorneys’ Fees and Costs. 20 The written agreement entitled the prevailing party to an award of attorney’s fees, 21 22 costs and expenses arising from litigation. Plaintiff requests that the court award $4,537.00 in 23 attorneys’ fees and costs. The affidavit provided by counsel as to attorneys fees and costs is 24 supported by detailed billings. 25 ///// 6 1 2 Accordingly, IT IS HEREBY RECOMMENDED that: 3 1. Plaintiff’s June 4, 2010 motion for entry of default judgment be granted as to 4 plaintiff’s PACA and breach of contract claims; 5 2. Plaintiff be awarded $10,000.00 in actual damages; 6 3. Plaintiff be awarded interest in the amount of $4,320.96 through July 1, 2010, 7 and 0.49% per day thereafter until paid in full; and 8 4. Plaintiff be awarded $4,537.00 in attorneys’ fees and costs. 9 These findings and recommendations are submitted to the United States District 10 Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within ten days 11 after being served with these findings and recommendations, any party may file written 12 objections with the court and serve a copy on all parties. Such a document should be captioned 13 “Objections to Magistrate Judge's Findings and Recommendations.” The parties are advised that 14 failure to file objections within the specified time may waive the right to appeal the District 15 Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 16 DATED: July 20, 2010. 17 18 19 20 /014;unde1686.def 21 22 23 24 25 7
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