Movsovitz & Sons of Florida, Inc. v. Axel Gonzalez

Citation367 F.Supp.2d 207
Decision Date20 April 2005
Docket NumberNo. 02-1634(SEC).,02-1634(SEC).
CourtU.S. District Court — District of Puerto Rico
PartiesMOVSOVITZ & SONS OF FLORIDA, INC., Plaintiff v. AXEL GONZALEZ, INC., et al., Defendants.

Orlando Fernandez, Garcia & Fernandez, San Juan, PR, Louis W. Diess, III, McCarron & Diess, Washington, DC, for Plaintiff.

Axel Gonzalez, Arecibo, PR, pro se, Alejandro Oliveras-Rivera, Daniel Morrison, Daniel Morrison Law Office, San Juan, PR, for Defendants.


CASELLAS, District Judge.

Pending before the Court is Plaintiff's motion for summary judgment (Docket # 22). Defendants filed an opposition (Docket # 25) and Plaintiff replied (Docket # 34). After carefully examining the parties' arguments, the case record and the applicable law, Plaintiff's motion will be GRANTED.

Factual Background

Plaintiff in the instant case is a Florida corporation engaged in the business of buying and selling wholesale quantities of perishable agricultural commodities (herein "produce") and is a dealer subject to and licensed under the provisions of the Perishable Agricultural Commodities Act, 7 U.S.C. § 499e(c) (hereinafter "PACA") (Docket # 1 at ¶ 3).1 Defendants are a Puerto Rico corporation, Axel González, Inc. d/b/a North Produce ("North Produce"), and its officers, Axel H. González and Sasha E. Aponte, who allegedly ordered and accepted wholesale amounts of produce worth $116,217.50 and failed to pay Plaintiff for said produce (Docket # 1 at ¶¶ 4-7). Plaintiff asserts that "at the time of the receipt of the produce, plaintiff became a beneficiary in a statutory trust designed to assure payment to produce suppliers" and that as such, it has an interest in said PACA trust in the amount of $116,217.50 and will remain a beneficiary until full payment is made (Docket # 1 at ¶ 8). However, Co-defendant North Produce ceased all operations on April of 2002 and Defendants are unable to pay Plaintiff (Docket # 1 at ¶ 10). Plaintiff then contends that Defendants' failure to pay and the closing of their business indicates that Defendants have failed to maintain sufficient assets in the statutory trust to cover their debt and thus, have dissipated the trust assets in violation of Section 5(c) of the PACA and PACA regulations (Docket # 1 at ¶ 11). Therefore, Plaintiff has filed suit for failure to pay trust funds, failure to pay for goods sold and unlawful dissipation of trust assets against the corporate officials.

Standard of Review

Fed.R.Civ.P. 56(b) provides that: "A party against whom a claim ... is asserted ... may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part [of the claims asserted against him/her]." The Court may grant the movant's motion for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986); NASCO, Inc. v. Pub. Storage, Inc., 29 F.3d 28 (1st Cir.1994). "The principal judicial inquiry required by Rule 56 is whether a genuine issue of material fact exists." 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 3d § 2725, p. 401.

In this regard, the First Circuit Court of Appeals has noted that for a dispute to be "genuine," there must be sufficient evidence to permit a reasonable trier of fact to resolve the issue in favor of the non-moving party. U.S. v. One Parcel of Real Prop., 960 F.2d 200, 204 (1st Cir.1992); see also Boston Athletic Assn. v. Sullivan, 867 F.2d 22, 24 (1st Cir.1989); Medina-Muñoz v. R.J. Reynolds Tobacco, 896 F.2d 5, 8 (1st Cir.1990) ("[a] `genuine' issue is one that must be decided at trial because the evidence, viewed in the light most favorable to the nonmovant, would permit a rational factfinder to resolve the issue in favor of either party.") (citations omitted).

By like token, "material" means that the fact is one that might affect the outcome of the suit under the governing law. Morris v. Gov't Dev. Bank of P.R., 27 F.3d 746, 748 (1st Cir.1994). "A fact is material if it tends to resolve any of the issues that have been properly raised by the parties." Wright, Miller & Kane, supra, § 2725 at p. 419. "Not every genuine factual conflict necessitates a trial. It is only when a disputed fact has the potential to change the outcome of the suit under the governing law if found favorably to the nonmovant that the materiality hurdle is cleared." Martínez v. Colón, 54 F.3d 980, 983-84 (1st Cir.1995).

In addition, when determining whether to grant summary judgment, the Court may not weigh the evidence. Casas Office Machs., Inc. v. Mita Copystar Am., Inc., 42 F.3d 668 (1st Cir.1994). Summary judgment "admits of no room for credibility determinations, no room for the measured weighing of conflicting evidence such as the trial process entails." Id. (citing Greensburg v. P.R. Mar. Shipping Auth., 835 F.2d 932, 936 (1st Cir.1987)). Accordingly, if the facts permit more than one reasonable inference, the court on summary judgment may not adopt the inference least favorable to the non-moving party. Casas Office Machs., 42 F.3d at 684.

While the moving party has the burden of initially establishing that there is "an absence of evidence to support the nonmoving party's case," Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.1994); the nonmovant has a "corresponding obligation to offer the court more than steamy rhetoric and bare conclusions." Lawton v. State Mut. Life Assurance Co. of Am., 101 F.3d 218, 223 (1st Cir.1996). Furthermore, "the nonmovant must `produce specific facts, in suitable evidentiary form' sufficient to limn a trialworthy issue.... Failure to do so allows the summary judgment engine to operate at full throttle." Id.; see also Kelly v. United States, 924 F.2d 355, 358 (1st Cir.1991) (warning that "the decision to sit idly by and allow the summary judgment proponent to configure the record is likely to prove fraught with consequence."); Medina Muñoz, 896 F.2d at 8, (quoting Mack v. Great Atl. & Pac. Tea Co., 871 F.2d 179, 181 (1st Cir.1989)) (holding that "[t]he evidence illustrating the factual controversy cannot be conjectural or problematic; it must have substance in the sense that it limns differing versions of the truth which a factfinder must resolve.")

Local Rule 56(b), moreover, requires the moving party to file annexed to the motion "a separate, short, and concise statement of material facts, set forth in numbered paragraphs, as to which the moving party contends there is no genuine issue of material fact to be tried." Unless the non-moving party controverts this statement, all the material facts set forth therein "shall be deemed to be admitted." Id.; Cosme-Rosado v. Serrano-Rodriguez, 360 F.3d 42 (1st Cir.2004). This is the so-called "anti-ferret rule." See, e.g., Orbi, S.A. v. Calvesbert & Brown, 20 F.Supp.2d 289, 291 (D.P.R.1998). While failure to comply with this rule does not automatically warrant the granting of summary judgment, "it launches the nonmovant's case down the road toward an early dismissal." Tavárez v. Champion Prods., Inc., 903 F.Supp. 268, 270 (D.P.R.1995).

Although Defendants have filed an opposition to Plaintiffs' motion for summary judgment, they have failed to address Plaintiff's entire statement of uncontested facts. Defendants have simply filed a two-page motion disputing only two issues: (1) that Co-defendant Aponte has never been an officer of Co-defendant North Produce, and (2) that the attorney's fees demanded by Plaintiff are unreasonable and excessive and the clause in which these attorney's fees were agreed upon in case of delinquency was not freely negotiated by Defendants (i.e. contract of adhesion) (Docket # 25 at ¶¶ 2-3). Thus, with the exception of these two issues, Plaintiff's statement of uncontested facts is deemed admitted. Accordingly, the following material facts are undisputed:

1. Plaintiff, Movsovitz & Sons of Florida, Inc. ("Movsovitz"), is a Florida corporation engaged in the business of buying and selling wholesale quantities of perishable agricultural commodities, in interstate commerce. It was at all time pertinent herein a produce dealer subject to and licensed under the Perishable Agricultural Commodities Act of 1930, as amended, 7 U.S.C. § 499a et seq.

2. Plaintiff Movsovitz sold and delivered to defendants in interstate commerce, various wholesale lots of produce worth $116,217.50 of which $116,217.50 remains unpaid.

3. Defendants accepted said produce.

4. Plaintiff Movsovitz preserved its interests under the trust provisions of the PACA by sending invoices to defendants which contained the language required by 7 U.S.C. § 499e(c)(4) and is presently owed $116,217.50.

5. Defendant Axel Gonzalez, Inc. d/b/a North Produce ("North Produce"), is a Puerto Rican corporation that was engaged in the business of buying and selling wholesale quantities of produce in interstate commerce and was at all times pertinent herein, a dealer subject to and licensed under the PACA as a dealer.

6. Defendant Axel H. Gonzalez was an officer and director of defendants North Produce, responsible for its day-to-day office operations, and in a position to control the PACA trust assets belonging to plaintiffs.

7. On November 2, 1999, defendant North Produce executed plaintiff's Account Information in which it agreed to be responsible for attorney's fees and costs in the event the account became delinquent.

(Docket # 22).

Applicable Law and Analysis

The purpose of PACA was "primarily to eliminate unfair practices in the marketing of perishable agricultural commodities in interstate commerce in the case of a declining market by making it...

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