Taylor & Fulton Packing, LLC v. Marco International Foods, LLC et al, No. 1:2009cv02614 - Document 34 (E.D.N.Y. 2011)

Court Description: ORDER granting 23 Motion for Summary Judgment. Ordered by Senior Judge I. Leo Glasser on 12/16/2011. (Green, Dana)

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Taylor & Fulton Packing, LLC v. Marco International Foods, LLC et al Doc. 34 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x TAYLOR & FULTON PACKING, LLC Plaintiff, Mem orandum and Order 0 9-cv-2614 - against MARCO INTERNATIONAL FOODS, LLC and STEVEN J . POSA, J R. Defendants. ------------------------------------------------------x GLASSER, United States District J udge: This is an action for breach of contract and for enforcement of the statutory trust provisions of the Perishable Agricultural Com m odities Act of 1930 (“PACA”), 7 U.S.C. §§ 499a-499t. Plaintiff, Taylor & Fulton Packing, LLC (“Taylor & Fulton” or “plaintiff”), is a produce wholesaler that sold fresh tom atoes to defendant, Marco International Foods, LLC (“Marco”), a corporation also engaged in the wholesale produce business. Taylor & Fulton m oves for sum m ary judgm ent against Marco and Steven J . Posa, J r. (“Posa”), the Managing Mem ber of Marco (collectively, “defendants”), contending that under PACA and New York state law, both defendants are liable for non-paym ent on produce Taylor & Fulton delivered to Marco. Plaintiff seeks to enforce its PACA trust rights and recover $ 125,818.44 plus additional interest, pursuant to 7 U.S.C. § 499a. Plaintiff also brings claim s for (1) failure to account and pay prom ptly pursuant to 7 U.S.C. § 499b(4); (2) breach of Posa’s fiduciary duty to PACA trust beneficiaries; and (3) state law breach of contract by Marco. Defendants have counterclaim ed for losses they allegedly suffered 1 Dockets.Justia.com due to the poor quality of the tom atoes. For the reasons set forth below, plaintiff’s m otion is GRANTED. BACKGROU N D Unless otherwise noted, the following facts are not in dispute. Taylor & Fulton is a corporation with offices in Florida, licensed under PACA and in the business of selling wholesale quantities of perishable agricultural com m odities. Com pl. ¶¶ 1-2. Marco is also a corporation licensed under PACA and operates in New York as a broker in wholesale quantities of produce. Plaintiff’s Rule 56.1 Statem ent of Material Facts (“Pl.’s R. 56.1”) ¶¶ 1-2; Transcript of Order to Show Cause Hearing held J uly 2, 20 0 9 (“Trans.”) 16, 46. Posa is the Managing Mem ber of Marco. Trans. 46. Plaintiff alleges that, as a result of his position, Posa was a “principal,” able to control the com pany and any PACA trust assets. Com pl. ¶¶ 2(b), 32; Pl.’s R. 56.1 ¶¶ 13-16. Between J anuary 7, 20 0 9 and February 19, 20 0 9, Taylor & Fulton sold ten shipm ents of Florida tom atoes to defendants with an aggregate value of $ 118,748.0 0 . Com pl. ¶¶ 8-11 & Ex. A; Trans. 4; Pl.’s R. 56.1 ¶¶ 3, 10 . Plaintiff sent and defendants received an invoice for each load of tom atoes, invoices that included the following language: The perishable agricultural com m odities listed on this Invoice are sold subject to the statutory trust authorized by section 5c of the Perishable Agricultural Com m odities Act, 1930 (7) U.S.C. 499e(c). The seller of these com m odities retains a trust claim over these com m odities, all inventories of food or other products derived from these com m odities, and any receivables or proceeds from the sale of these com m odities until full paym ent is received. 2 Pl.’s R. 56.1 ¶ 8; Declaration of Ed Angrisani dated J une 18, 20 0 9 (“First Angrisani Decl.”) ¶ 8 & Ex. A. Defendants did not m ake paym ent on any of these shipm ents. Pl.’s R. 56.1 ¶¶ 11-12; Trans. 11-12. On J uly 2, 20 0 9, this Court conducted a hearing on plaintiff’s m otion for a prelim inary injunction. At that hearing, defendant Posa testified under oath that due to frosts in Florida, the tom atoes were “sub-standard and either had to be dum ped or had to be sold at greatly reduced prices.” Trans. 5, 45-57. He further testified that he m ade com plaints by telephone to Taylor & Fulton regarding the poor quality of the tom atoes and sought to re-negotiate the price, after sale. Trans. 6, 8, 15-16. He alleges that an em ployee of Fulton & Taylor, Ed Angrisani, agreed to reduce the bills but that these adjustm ents were never m ade. Trans. 54-55. Plaintiff denies such conversations took place. Declaration of Ed R. Angrisani dated J uly 1, 20 0 9 (“Second Angrisani Decl.”) ¶¶ 10 -12, 15-17. Based on these contentions, defendants seek $ 150 ,0 0 0 .0 0 in dam ages. Ans. & Countercl. ¶¶ 46-48. On J uly 9, 20 0 9, this Court granted a prelim inary injunction, enjoining defendants from dissipating their existing PACA trust assets or disposing of corporate assets until paym ent of $ 126,387.71 plus further interest to the plaintiff or this Court. JU RISD ICTION This Court has original jurisdiction over plaintiff’s PACA claim , a claim arising under federal law. 28 U.S.C. § 1331; 7 U.S.C. § 499(e)(5) (“The several district courts of the United States are vested with jurisdiction specifically to entertain . . . actions by [PACA] trust beneficiaries to enforce paym ent from the trust.”). The Court has 3 supplem ental jurisdiction over plaintiff’s state law breach of contract claim .1 Federal courts have supplem ental jurisdiction over “all other claim s that are so related to claim s in the action within such original jurisdiction that they form part of the sam e case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). A state law claim form s part of the sam e controversy if the state and federal claim “derive from a com m on nucleus of operative fact.” United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). Here, both the federal and state claim s are derived from the sam e alleged delivery and nonpaym ent of ten shipm ents of tom atoes. D ISCU SSION I. Su m m ary Ju d gm e n t Sum m ary judgm ent is appropriate “if the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed R. Civ. P. 56(a). As an initial m atter, the m oving party has the burden of dem onstrating that no genuine dispute of m aterial fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 10 6 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). “A party asserting that a fact cannot be or is genuinely disputed m ust support the assertion by: (A) citing to particular parts of m aterials in the record, including depositions, docum ents, electronically stored inform ation, affidavits or declarations, stipulations (including those m ade for purposes of the m otion only), adm issions, interrogatory answers, or other m aterials; or (B) showing that the m aterials cited do not Because the com plaint does not establish plaintiff or defendants’ citizenship, plaintiff has not dem onstrated there is diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). Therefore, for purposes of this m otion, jurisdiction over plaintiff’s state-law claim m ust be predicated on supplem ental jurisdiction. 1 4 establish the absence or presence of a genuine dispute, or that an adverse party cannot produce adm issible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). Once the m oving party has m et this burden, the opposing party “‘m ust do m ore than sim ply show that there is som e m etaphysical doubt as to the m aterial facts. . . . [T]he nonm oving party m ust com e forward with specific facts showing that there is a genuine issue for trial.’” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 20 0 2) (quoting Matsushita, 475 U.S. at 586– 87 (em phasis in original)). “If a party fails to properly support an assertion of fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the court m ay . . . grant sum m ary judgm ent if the m otion and supporting m aterials — including the facts considered undisputed — show that the m ovant is entitled to it.” Fed. R. Civ. P. 56(e). The Court is com pelled to draw all reasonable inferences in favor of the nonm oving party, Matsushita, 475 U.S. at 586, and a genuine dispute exists if a reasonable jury could find in favor of the non-m oving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 10 6 S. Ct. 250 5, 2510 , 91 L. Ed. 2d 20 2 (1986). However, “[i]f the evidence is m erely colorable, or is not significantly probative, sum m ary judgm ent m ay be granted.” Anderson, 477 U.S. at 249– 50 (citations om itted). “[T]he m ere existence of som e alleged factual dispute between the parties” alone will not defeat a properly supported m otion for sum m ary judgm ent. Id. at 247– 480 5. “Thus, the nonm oving party m ay not rest upon m ere conclusory allegations or denials but m ust set forth ‘concrete particulars’ showing that a trial is needed.” R.G. Grp., Inc. v. Horn & Hardart Co., 751 F.2d 69, 77 (2d Cir. 1984) (quoting S.E.C. v. Res. Autom ation Corp., 585 F.2d 31, 33 (2d Cir. 1978)). It is insufficient for the nonm ovant “‘m erely to assert a 5 conclusion without supplying supporting argum ents or facts.’” BellSouth Telecom m s., Inc. v. W.R. Grace & Co., 77 F.3d 60 3, 615 (2d Cir. 1996) (quoting Res. Autom ation Corp., 585 F.2d at 33). II. Lo cal Civil Ru le 56 .1 In support of its m otion, Taylor & Fulton subm itted a statem ent pursuant to Local Rule 56.1. “Local Rule 56.1 was adopted to aid the courts in deciding sum m ary judgm ent m otions by quickly identifying disputed m aterial facts.” T.Y. v. N.Y. City Dep’t of Educ., 584 F.3d 412, 417 (2d Cir. 20 0 9). The Rule requires that a party m oving for sum m ary judgm ent subm it a list of the m aterial facts as to which there is no genuine issue to be tried, along with “citation to evidence which would be adm issible, set forth as required by Federal Rule of Civil Procedure 56(e).” Loc. Civ. R. 56.1. The party opposing a m otion for sum m ary judgm ent m ust subm it a corresponding statem ent, responding to the m ovant’s facts, and any fact not specifically controverted is deem ed adm itted for purposes of sum m ary judgm ent. Where the nonm ovant opposes a statem ent of fact, his Rule 56.1 statem ent m ust also “be followed by citation to evidence which would be adm issible.” Local Civ. R. 56.1(d). Defendants have failed to subm it an opposing Rule 56.1 statem ent. “A nonm oving party’s failure to respond to a Rule 56. 1 statem ent perm its the court to conclude that the facts asserted in the statem ent are uncontested and adm issible.” T.Y., 584 F.3d at 418 (citing Gubitosi v. Kapica, 154 F.3d 30 , 31 n.1 (2d Cir. 1998)); Loc. Civ. R. 56.1(c) (“Each num bered paragraph in the statem ent of m aterial facts set forth in the statem ent required to be served by the m oving party will be deem ed to be adm itted for 6 purposes of the m otion unless specifically controverted by a correspondingly num bered paragraph in the statem ent required to be served by the opposing party.”). See, e.g., Feis v. United States, No. 0 7 Civ. 270 6 (J S), 20 0 9 WL 29830 26, at *1 n.2 (E.D.N.Y. Sept. 10 , 20 0 9), aff’d in relevant part, 394 Fed. App’x. 797, 799 (2d Cir. 20 10 ) (refusing to consider as ‘disputed’ any of m ovant’s Rule 56.1 statem ents supported by evidence, to which nonm ovant objected without evidentiary support); Transp. Ins. Co. v. AARK Const. Grp., Ltd., 526 F. Supp. 2d 350 , 354 n.1 (E.D.N.Y. 20 0 7) (“Where a responding party fails to subm it a responsive Rule 56.1 Statem ent, the Court m ay deem adm itted all facts in the m ovant’s statem ent.”); AFL Fresh & Frozen Fruits & Vegetables, Inc., No. 0 6 Civ. 2142 (GEL), 20 0 7 WL 430 2514, at *5 (S.D.N.Y Dec. 7, 20 0 7) (m ovant’s Rule 56.1 statem ents adm itted “unless specifically controverted by a correspondingly num bered paragraph in the opposing party’s Rule 56.1 statem ent and followed by citation to evidence.” (em phasis in original) (citations and quotations om itted)). Where a nonm ovant fails to file a statem ent or files a deficient statem ent, courts frequently deem all supported assertions in the m ovant’s statem ent adm itted and find sum m ary judgm ent appropriate.2 T.Y., 584 F.3d at 418 (“In the typical case, failure to 2 Although the Court has broad discretion to overlook defendants’ failure to file a Rule 56.1 statem ent , Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 73 (2d Cir. 20 0 1), and m ay consider other adm issible evidence subm itted in opposition, defendants have failed to subm it any adm issible evidence. Defendant Posa has filed two “declarations” in this case. See Decl. of Stephen J . Posa, J une 29, 20 0 9 (Dkt No. 5); Decl. of Stephen J . Posa, May 22, 20 11 (Dkt No. 26). These declarations are not adm issible evidence because they are neither sworn nor m ade under penalty of perjury, pursuant to 28 U.S.C. § 1746. To be adm issible in a sum m ary judgm ent proceeding, an affidavit m ust be sworn to before an officer authorized to adm inister oaths, such as a notary public. See Pfeil v. Rogers, 757 F.2d 850 , 859 (7th Cir. 1985). Alternatively, under 28 U.S.C. § 1746, an unsworn declaration m ade under the penalty of perjury has the sam e evidentiary weight as an affidavit if it includes language in substantially the sam e form as “I declare (or certify, verify, or 7 respond results in a grant of sum m ary judgm ent once the court assures itself that Rule 56’s other requirem ents have been m et.” (citation om itted)); see, e.g., Millus v. D’Angelo, 224 F.3d 137, 138 (2d Cir. 20 0 0 ) (affirm ing grant of sum m ary judgm ent where plaintiff failed to deny defendants’ allegations, in accordance with Rule 56.1); EQ Transp., Inc. v. TNT Transp., Inc., No. 0 4 Civ. 5711 (ILG), 20 0 5 WL 1492379, at *2 (E.D.N.Y. J une 24, 20 0 5) (deem ing plaintiff’s unopposed Rule 56.1 statem ent adm itted and granting sum m ary judgm ent). Nevertheless, defendants’ failure does not relieve plaintiff “of the burden of showing that it is entitled to judgm ent as a m atter of law, and a Local Rule 56.1 statem ent is not itself a vehicle for m aking factual assertions that are otherwise unsupported in the record.” Holtz, 258 F.3d at 74; see also Verm ont Teddy Bear Co., Inc. v. 1-80 0 Beargram Co., 373 F.3d 241, 244 (2d Cir. 20 0 4) (“[T]he district court m ay not rely solely on the statem ent of undisputed facts contained in the m oving party’s Rule 56.1 statem ent. It m ust be satisfied that the citation to evidence in the record supports the assertion.” (citing Giannullo v. City of New York, 322 F.3d 139, 142 (2d Cir. 20 0 3)). state) under penalty of perjury that the foregoing is true and correct” followed by a signature and date of execution. See, e.g., LeBoeuf, Lam b, Greene & MacRae, L.L.P. v. Worsham, 185 F.3d 61, 65– 66 (2d Cir.1999) (unsworn letter that m et requirem ents of 28 U.S.C. § 1746 deem ed adm issible as affidavit in sum m ary judgm ent); William s v. Elzy, No. 0 0 Civ. 5382 (HBP), 20 0 3 WL 2220 8349, at *5 (S.D.N.Y. Sept. 23, 20 0 3) (sam e). Quintero v. Rite Aid of New York, Inc., No. 0 9 Civ. 60 84 (J LC), 20 11 WL 5529818, at *5 (E.D.N.Y. Nov. 10 , 20 11); see also United States v. All Right, Title & Interest in Real Prop. & Appurtenances, 77 F.3d 648, 657– 58 (2d Cir.1996) (“[U]nsworn letter was an inappropriate response to the . . . m otion for sum m ary judgm ent, and the factual assertions m ade in that letter were properly disregarded by the court.”). Because the Posa declarations are not adm issible evidence, they cannot create genuine issues of m aterial fact and the Court will not take them into consideration in deciding this m otion. 8 Accordingly, the Court will only deem adm itted those assertions in Taylor & Fulton’s Rule 56.1 statem ent that are supported by adm issible evidence. III. Th e Pe ris h able Agricu ltu ral Co m m o d itie s Act ( PACA) PACA was enacted in 1930 to regulate the interstate sale of perishable agricultural com m odities (essentially, fruits and vegetables). The Act was am ended in 1984 “upon a finding by Congress that a burden on com m erce in perishable agricultural com m odities was caused by certain financial arrangem ents, whereby dealers would receive goods without having m ade paym ent for them .” Morris Okun, Inc. v. Harry Zim m erm an, Inc., 814 F. Supp. 346, 347 (S.D.N.Y. 1993). To rem edy this burden, Congress created an unusual statutory schem e where, “produce sellers becom e the beneficiaries of a constructive, statutory trust that lasts until they get paid. This trust consists of all produce-related assets, including produce inventory, receipts, and accounts receivable.” Food Auth., Inc. v. Sweet & Savory Fine Foods, Inc., No. 10 Civ. 1783 (J S), 20 11 WL 477714, at *1 (E.D.N.Y. Feb. 4, 20 11); 7 U.S.C. § 499e(c)(2); see also Am . Banana Co., Inc. v. Republic Nat’l Bank of N.Y., 362 F.3d 33, 36-38 (2d Cir. 20 0 4) (detailing the legislative history and statutory structure of PACA). As a PACA trustee, “a produce buyer is charged with a duty ‘to ensure that it has sufficient assets to assure prom pt paym ent for produce and that any beneficiary under the trust will receive full paym ent.’” Coosem ans Specialities, Inc. v. Gargiulo, 485 F.3d 70 1, 70 5 (2d Cir. 20 0 7) (quoting D.M. Rothm an & Co. v. Korea Com m er. Bank of N.Y., 411 F.3d 90 , 94 (2d Cir. 20 0 5)). The buyer has a “fiduciary obligation under PACA to repay the full am ount of the debt owed to the PACA beneficiary.” C.H. Robinson Co. v. Alanco Corp., 239 F.3d 483, 488 (2d Cir. 20 0 1). Under the statute, the trust is form ed 9 at the m om ent the buyer receives the produce and rem ains in effect until the seller is paid in full. See 7 C.F.R. § 46.46(c)(1); In re Kornblum & Co., 81 F.3d 280 , 286 (2d Cir. 1996). PACA also m akes it unlawful for a recipient dealer or broker to fail to m ake paym ent prom ptly or to fulfill any other conditions of the parties’ agreem ent. See 7 U.S.C. § 499b(4). It is this final violation – failure to m ake paym ent – upon which plaintiff’s m otion for sum m ary judgm ent is prem ised. a. Plaintiff Has Established a PACA Trust To establish the existence of a PACA trust, a num ber of statutory prerequisites m ust be m et. [T]he seller m ust dem onstrate that: (1) the com m odities sold were perishable agricultural com m odities; (2) the purchaser of the perishable agricultural com m odities was a com m ission m erchant, dealer or broker; (3) the transaction occurred in interstate or foreign com m erce; (4) the seller has not received full paym ent on the transaction; and (5) the seller preserved its trust rights by giving written notice to the purchaser of its intention to do so. S. Katzm an Produce, Inc. v. Won, No. 0 8 Civ. 240 3 (KAM), 20 0 9 WL 244840 8, at *4 (E.D.N.Y. Aug. 7, 20 0 9) (citing 7 U.S.C. § 499e; Fam ily Tree Farm s, LLC v. Alfa Quality Produce, Inc., No. 0 8 Civ. 481, 20 0 9 WL 565568 (E.D. Ca. Mar. 5, 20 0 9)). None of these elem ents are in dispute: fresh tom atoes are clearly a “perishable agricultural com m odity” pursuant to the statute; the purchaser, Marco, is a broker pursuant to PACA, Pl.’s R. 56.1 ¶ 2; the tom atoes, grown in Florida, m oved in interstate com m erce, Pl.’s R. 56.1 ¶ 2; no paym ent has been m ade, R. 56.1 ¶¶ 11-12; and Taylor & Fulton preserved its trust rights through the “invoice m ethod,” by including the statutory 10 language of 7 U.S.C. § 499e(c)(4) in each invoice, First Angrisani Decl. ¶ 8 & Ex. A. Thus, as a m atter of law, plaintiff has established a statutory trust under PACA. Equally, as a m atter of law, plaintiff has established that Posa was a “principal” of Marco and personally liable for any breach of the PACA trust. The standard for a breach of fiduciary duty under PACA is distinct from the standard for piercing the corporate veil. Morris Okun, 814 F. Supp. at 348. Under PACA, the question is whether the trustee was “in a position to control the assets of the PACA trust.” Coosem ans Specialities, 485 F.3d at 70 5 (exhaustive citations om itted). If the trustee “‘in any way encum bered the funds or rendered them less freely available to PACA creditors,’” then he m ay be personally liable. Id. at 70 6 (quoting D.M. Rothm an & Co., 411 F.3d at 99). Not only do defendants fail to oppose plaintiff’s assertion on this m atter, but Posa’s testim ony before this Court am ply dem onstrated the type of control over the corporation’s operations, bank accounts, and other assets to render him a principal, personally liable under PACA. See Trans. 3-6, 9-28. Finally, plaintiff has established that defendants failed to m ake paym ent on any of the produce deliveries. Not only do defendants fail to controvert plaintiff’s Rule 56.1 statem ent on this m atter, but Posa testified that no paym ent was m ade. Although defendants have repeatedly and m isleadingly stated in their pleadings that paym ent was m ade on the first two shipm ents, see First Posa Decl. (Dkt No. 5) ¶¶ 10 -11; Second Posa Decl. (Dkt No. 26) ¶¶ 10 -13, Posa adm itted in his testim ony those paym ent were for two shipm ents prior to J anuary 7, 20 0 9 that are not the subject of this suit. Trans. 11-12; see also Trans. 38 (testim ony of J ohn Moon, confirm ing paym ent was m ade on two deliveries that are not the subject of this suit). Posa conceded that no paym ent had been 11 m ade for any of the ten shipm ents that are the subject of the com plaint. Trans. 11-12. For the above reasons, the Court finds that plaintiff has established, as a m atter of law, the existence of a PACA trust and defendants’ breach of that trust, through failure to m ake prom pt paym ent. b. Defendants’ Defenses and Counterclaim In opposing sum m ary judgm ent, defendants raise state law defenses and a counterclaim . Defendants claim that they are not liable to Taylor & Fulton because plaintiff delivered non-conform ing, dam aged tom atoes and, as a result of the poor quality, Marco was unable to sell the tom atoes to its clients and suffered econom ic dam ages. Ans. ¶¶ 39-48. Although PACA does not address these m atters, PACA did not repeal the UCC or abrogate the rights and defenses of contracting parties under state law. The provisions of PACA apply to [produce] transactions to the extent that the Act contains pertinent requirem ents or standards. See, e.g., Tray– Wrap, Inc. v. Meyer, [No. 90 Civ. 7688 (DLC),] 1994 WL 710 80 4, at *4 (S.D.N.Y. Dec. 20 , 1994), aff’d, 71 F.3d 40 4 (2d Cir. 1995). Otherwise, state law controls—in this case in the form of the Uniform Com m ercial Code (“UCC”), codified in New York as N.Y. U.C.C. Law § 4– 10 1 et seq. See, e.g., Genecco Produce, Inc. v. Sol Group Mktg. Co., [No. 0 4 Civ. 6282 (CJ S),] 20 0 6 WL328385, at *4 (W.D.N.Y. Feb. 9, 20 0 6); Tray– Wrap, 1994 WL 710 80 4, at *4. Condado Agroexportadora Ltda. v. USA Tropical, Inc., No. 0 7 Civ. 9370 (MHD), 20 0 9 WL 2568435, at *4 (S.D.N.Y. J uly 6, 20 0 9). Because this was an “f.o.b.” transaction, see First Angrisani Decl. Ex. A (listing “Sale Term s: FOB”), Trans. at 58-59, Marco bore the risk of dam ages caused during transportation of the tom atoes from Florida to New York. See Tray-Wrap, 1994 WL 12 710 80 4, at *4. The term “f.o.b.” is defined in the applicable section of the Code of Federal Regulations as m eaning: that the produce quoted or sold is to be placed free on board the boat, car or other agency of the through land transportation at shipping point, in suitable shipping condition . . . , and that the buyer assum es all risk of dam age and delay in transit not caused by the seller irrespective of how the shipm ent is billed. 7 C.F.R. 46.43(i). Here, plaintiff states that it “delivered conform ing goods to the Com pany and has otherwise satisfied all conditions of the contracts.” Pl.’s R. 56.1 ¶ 7. In other words, plaintiff states that it fulfilled its obligation to deliver tom atoes in suitable shipping condition to defendants’ transport com pany. In support, plaintiff cites to the sworn testim ony of J ohn Moon, an em ployee of Taylor & Fulton, who testified that the tom atoes at issue were subject to a USDA “m arketing order,”3 were “inspected at shipping point by inspectors em ployed by the federal and state inspection service,” and that all of the shipm ents passed inspection. Trans. 39. Under PACA, “inspection certificates . . . are ‘prim a-facie evidence of the truth of the statem ents therein contained,’” Koam Produce, Inc. v. Dim are Hom estead, Inc., 329 F.3d 123, 128 (2d Cir. 20 0 3) (quoting 7 U.S.C. § 499n(a)). Moon brought copies of those inspection reports with him to the hearing. Trans. 44. As discussed previously, because plaintiff has supported its Rule 56.1 statem ent with adm issible evidence and because defendants 3 See 7 C.F.R. § 966 (establishing a m arketing order for tom atoes grown in Florida). “Marketing orders” are: regulations, initiated by industry and enforced by USDA, bind[ing] the entire industry in the geographical area regulated if approved by producers and the Secretary of Agriculture. Marketing orders and agreem ents (1) m aintain the high quality of produce that is on the m arket; (2) standardize packages and containers; (3) regulate the flow of product to m arket; (4) establish reserve pools for storable com m odities; and (5) authorize production research, m arketing research and developm ent, and advertising. USDA, “Marketing Orders and Agreem ents,” available at: http:/ / www.am s.usda.gov/ AMSv1.0 / FVMarketingOrderLandingPage (last visited Dec. 9, 20 11). 13 failed to file an opposing Rule 56.1 statem ent, defendants are deem ed to have adm itted that plaintiff delivered conform ing goods. For these reasons, plaintiffs are entitled to judgm ent as a m atter of law. However, even if the Court were to overlook defendants’ failure to file a Rule 56.1 statem ent, the record does not support defendants’ defenses and counterclaim . To m aintain a claim that goods are non-conform ing under an f.o.b. contract, defendants have the burden of showing the tom atoes were not in “suitable shipping condition” at the tim e they were placed on the truck in Florida: that is, “‘in such a condition at the tim e of shipm ent that it will m ake good delivery at contract destination.’” Tray-Wrap, 1994 WL 710 80 4, at * 4 (quoting Lookout Mountain Tom ato & Banana Co., Inc. v. Case Produce, Inc., 51 Agric. Dec. 1471, at *4 (U.S.D.A. Sept. 30 , 1992)). Obviously, the m ost relevant evidence is the inspection at shipping point. Id. Lacking evidence of the tom atoes’ condition at the point of origin, defendants have two available alternatives: defendants’ could present evidence that the tom atoes were transported under norm al conditions and nevertheless arrived dam aged, perm itting the inference that they were not in suitable condition; or – lacking evidence of transportation conditions – defendants could present evidence, such as a U.S.D.A. inspection report, dem onstrating that “‘the nature of the dam age found at destination was such as could not have been caused or aggravated by the faulty transportation service.’” Id. at *5 (quoting J ack T. Baillie Co., Inc. v. S & K Farm s, Inc., 32 Agric. Dec. 1874 (1973), citing Nikadem os Dist. Co., Inc. v. D & J Tom ato Co., Inc., 50 Agric. Dec. 1884 (1991), and discussing grounds for sellers’ liability in the f.o.b. context); see also Frankie Boy Produce Corp. v. Sun Pacific Enter., No. 99 Civ. 10 158 (DLC), 20 0 0 WL 99150 7, at *3 (S.D.N.Y. J uly 19, 20 0 0 ). 14 Defendants have presented no adm issible evidence to support their claim s. Defendants presented no evidence of the tom atoes’ condition at the point of origin, did not obtain “Ryan tapes,” recording the tem perature of the truck transporting the tom atoes or present any other evidence of transportation conditions, Trans. at 6, and did not obtain a USDA inspection, assessing the condition of the tom atoes on arrival in Brooklyn, Trans. at 5. The only adm issible evidence in the record is Posa’s testim ony in which he estim ated that, at som e unspecified tim e after the tom atoes arrived in New York, he observed 30 -40 % decay in som e of the tom atoes and “som e num ber ones, som e num ber twos, num bers that didn’t qualify to be in the box. In m y looking at them , that’s what I thought.” Trans. at 51. Posa also testified that after Marco delivered som e shipm ents to clients, som e clients called to com plain. Trans. at 4, 51. Even viewed in the light m ost favorable to the defendant, this testim ony does not perm it the inference that the tom atoes were not in “suitable shipping condition” at the point of origin in Florida. Thus, even looking beyond defendants’ failure to file a Rule 56.1 counterclaim , defendants have failed to present adm issible evidence to support their counterclaim or defenses and plaintiffs are entitled to judgm ent as a m atter of law. IV. In te re s t Plaintiff has requested an award of pre-judgm ent interest in the am ount of 1.5% per m onth after thirty days from the date on which paym ent was due, pursuant to the term s of the invoices. PACA itself does not create a right to prejudgm ent interest but the Second Circuit has held that courts have broad discretion to award prejudgm ent interest to PACA claim ants. See Coosem ans Specialities, 485 F.3d at 70 9; Endico Potatoes, Inc. v. CIT Grp./ Factoring, Inc., 67 F.3d 10 63, 10 71– 10 72 (2d Cir.1995). Courts have found that prejudgm ent interest is consistent with Congressional intent to protect agricultural 15 suppliers. See, e.g., Endico Potatoes, Inc., 67 F.3d at 10 71-72; Morris Okun, 814 F. Supp. at 351 (prejudgm ent interest awarded on overdue accounts based on congressional intent reflected in PACA). Courts typically look to the contractual term s contained in the invoices when determ ining the appropriate award. See, e.g., J ohn Georgallas Banana Distrib. of N.Y., Inc. v. N & S Tropical Produce, Inc., 0 7 Civ. 50 93, 20 0 8 WL 2788410 , at *4– 5 (E.D.N.Y. J uly 15, 20 0 8); Top Banana LLC v. Dom ’s Wholesale & Retail Ctr., No. 0 4 Civ. 2666 (GBD), 20 0 5 WL 1149774, at *2 (S.D.N.Y. May 16, 20 0 5) (“Where the parties’ contracts include [interest rate] term s, they can be awarded (and are subject to the PACA trust) as sum s owing in connection with perishable com m odities transactions under PACA.”). Here, Taylor & Fulton included the following language in its invoices: “NET DUE 21 DAYS FROM INVOICE DATE; Thereafter 1-1/ 2% Additional Each 30 Day Period or Portion Thereof.” First Angrisani Decl. Ex. B. The Court finds that the term s set forth in plaintiff’s invoices are enforceable. “Between m erchants such as plaintiff and defendant, ‘inclusion of term s in the seller’s invoice, without protest from the buyer on receipt, m akes the invoice term s the term s of the contract.’” S. Katzm an Produce, Inc., 20 0 9 WL 244840 8 at *5 (citing Top Banana, 20 0 5 WL 1149774, at *3 (in a PACA case, granting plaintiff-seller, inter alia, interest as specified in its invoices, which had been accepted by defendant-buyer without protest); N.Y. U.C.C. § 2– 20 1(2)); see also Dayoub Mktg., Inc. v. S.K. Produce Corp., No. 0 4 Civ. 3125, 20 0 5 WL 30 0 60 32 (S.D.N.Y. Nov. 9, 20 0 5) (sam e); Brigiotta’s Farm land Produce & Garden Ctr., Inc. v. Przykuta, Inc., No. 0 5 Civ. 273S, 20 0 6 WL 3240 729, at *5 16 (W.D.N.Y. J uly 13, 20 0 6) (awarding pre-judgm ent interest at a rate specified in the seller’s invoices, to which the defendant had not objected)). There is no indication that defendants ever objected to the term s of plaintiff’s invoices and a service charge of 1.5% per m onth is within the range of trade practice. See Northeast Trading, Inc. v. Ven-Co Produce, Inc. No. 0 9 Civ. 7767 (PGG), 20 11 WL 4444511, at *5 (interest charge of 1.5% per m onth, or 18% per annum , is within the range of trade practice); S. Katzm an Produce, Inc., 20 0 9 WL 244840 8, at *6 (sam e); Brigiotta’s Farm land, 20 0 6 WL 3240 729, at *5-6 (sam e); Dayoub Mktg., 20 0 5 WL 30 0 60 32, at *4-5 (sam e). Accordingly, the court finds that plaintiff is entitled to recover prejudgm ent interest at the rate of 1.5% per m onth, as specified in its invoices, in addition to the original principal am ount of $ 118,748.0 0 . CON CLU SION For the foregoing reasons, plaintiff’s m otion for sum m ary judgm ent is GRANTED in the principal am ount of $ 118,748.0 0 . The Clerk of Court is directed to calculate the interest due, at the rate of 1.5% per m onth. SO ORD ERED . Dated: Brooklyn, New York Decem ber 16, 20 11 _ _ / s/ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I. Leo Glasser, U.S.D.J . 17

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