Naam Produce, Inc. v. PK Produce, Inc.
| Docket Number | 22-cv-22655-JEM/Becerra |
| Decision Date | 02 August 2023 |
| Parties | NAAM PRODUCE, INC., Plaintiff, v. PK PRODUCE, INC. Defendant. |
| Court | U.S. District Court — Southern District of Florida |
REPORT AND RECOMMENDATION
THIS CAUSE came before the Court on Plaintiff Naam Produce, Inc.'s Motion for Entry of Final Default Judgment Against Defendant PK Produce, Inc. ECF No. [9]. Plaintiff also filed supporting declarations of Larry Puma the sole owner of Plaintiff, and of Robert John McCaffery Jr., Plaintiff's counsel. ECF Nos. [9-1], [9-2]. Defendant did not file a response to the Motion, and the time to do so has passed. Upon due consideration of the Motion supporting declarations, the pertinent portions of the record, and the applicable law, it is hereby RECOMMENDED that the Motion be GRANTED.
This is an action under the Perishable Agricultural Commodities Act, 1930 (“PACA”), 7 U.S.C. § 499a et seq., to enforce a reparation order issued by the Secretary of the U.S. Department of Agriculture against Defendant. ECF No. [1]. The Complaint alleges that Plaintiff is a licensed commission merchant, dealer or broker pursuant to the PACA engaged in the business of selling and shipping perishable agricultural commodities. Id. at ¶ 4. At all relevant times, Defendant was also allegedly a licensed commission merchant, dealer or broker pursuant to the PACA engaged in the business of purchasing and selling perishable agricultural commodities. Id. at ¶ 6.
According to the Complaint, Plaintiff shipped Defendant six loads of watermelons and honeydew melons from Florida to Ohio for an agreed upon price. Id. at ¶¶ 7-8. The sales invoices for these shipments state in pertinent part:
If any action or proceeding is begun to enforce the terms of any transaction, Buyer agrees to pay all costs and expenses of enforcement, including reasonable attorney's fees as additional sums owed under the transaction and the PACA trust. The exclusive jurisdiction and venue for all civil litigation to enforce a transaction shall be only in Miami-Dade County, Florida regardless of conflict of laws. Buyer agrees to pay interest at 1.5% per month on overdue balances.
ECF No. [1-4] at 7-15. Defendant allegedly accepted these six loads of produce, but failed to make full and timely payment despite demand. ECF No. [1] at ¶¶ 8-9.
In October 2018, Plaintiff filed an informal complaint against Defendant with the USDA for failure to pay the remaining balance due for the six loads of produce, which totaled $32,723.80. Id. at ¶ 11. The USDA conducted an investigation and thereafter instructed Plaintiff to file a formal complaint with the USDA if it wished to pursue the matter. Id. at ¶ 14. Plaintiff did so and filed an administrative reparation complaint with the USDA on March 13, 2018, again seeking payment of the remaining balance due for the six loads of produce that Plaintiff sold to Defendant, plus interest. Id. at ¶ 15; ECF No. [1-4].
Defendant was served with a copy of Plaintiff's reparation complaint, but failed to timely file an answer. ECF No. [1-3]. Accordingly, on August 22, 2019, the Secretary entered a Default Order for a reparation award in favor of Plaintiff and against Defendant (the “Reparation Order”).
A copy of the Reparation Order is attached to the Complaint. See ECF No. [1-3]. The Secretary adopted the facts alleged in Plaintiff's reparation complaint as findings of fact in the Reparation Order, and determined that Defendant violated section 2 of the PACA based upon its failure to make full payment to Plaintiff for the six loads of produce delivered. Id. at 1. The Secretary ruled that “[Defendant] shall pay to [Plaintiff], as reparation, the amount set forth in the reparation award, which I find to be the amount of damages to which [Plaintiff] is entitled for [Defendant's] violation or violations of section 2 of the PACA (7 U.S.C. § 499b).” Id. at 3. Specifically, the Reparation Order required that Defendant, within thirty days, pay Plaintiff as reparation the sum of $32,723.80 plus interest at the rate of 18% per annum (which is 1.5% per month) from October 1, 2018 until paid, as well as the filing fee of $500.00. Id. at 3. Defendant was served with a copy of the Reparation Order, Id., but did not appeal or dispute it, nor has Defendant made payment as required. ECF No. [1] at ¶¶ 20-21.
On August 21, 2022, Plaintiff filed this lawsuit, asserting one claim against Defendant for “Enforcement of Liability for Reparation Award Issued by the U.S. Secretary of Agriculture, per 7 U.S.C. § 499g(b).” Id. Plaintiff seeks enforcement of the Reparation Order “via the entry of a final judgment” awarding Plaintiff (i) the principal amount of $32,723.80 plus interest at the rate of 18% per annum from October 1, 2018 until fully paid, (ii) PACA filing costs of $500.00, (iii) costs of this action, including the filing fee, and (iv) reasonable attorney's fees incurred prosecuting this action. Id. at ¶ 25. On October 13, 2022, Plaintiff served Defendant with process by serving its registered agent, Milton D. Dahl. ECF No. [4].
Defendant did not timely file a response to the Complaint. On November 21, 2022, Plaintiff's counsel contacted Mr. Dahl to inform him that a default could be entered against Defendant and inquired whether Defendant intended to defend against this action. ECF No. [9] at 4. Plaintiff also emailed Mr. Dahl another copy of the Complaint, as well as a copy of the affidavit of service. Id. Mr. Dahl informed Plaintiff that he forwarded Plaintiff's correspondence to Defendant's current counsel, George Argie, and that Mr. Argie instructed Mr. Dahl to advise Plaintiff that “the information was passed on.” Id. Prior to service, Plaintiff emailed Mr. Argie a copy of the Complaint, proposed summons and waiver of service, but Mr. Argie did not respond. Id. at 3. Plaintiff again emailed Mr. Argie on November 23, 2022 to inquire if he represented Defendant and if Defendant intended to defend against this action. Id. at 4. Plaintiff also informed Mr. Argie that Plaintiff intended to seek a default against Defendant. Id. Mr. Argie did not respond to Plaintiff's email. Id.
On November 28, 2022, the Clerk entered a default against Defendant for failure to appear, answer or otherwise defend against the Complaint. ECF No. [6]. The next day, the Court entered an Order on Final Default Judgment Procedure which, among other things, required Defendant to file a response to the Complaint and a motion to set aside the Clerk's Default by December 12, 2022. ECF No. [7]. On December 1, 2022, Mr. Argie emailed Plaintiff stating only that he would not be entering an appearance in this case on behalf of Defendant. ECF No. [9] at 5. Defendant did not comply with the Court's Order on Final Default Judgment Procedure, nor did any attorney file an appearance on its behalf as is required for a corporation to participate in this action. See Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. July 5, 1985) ().
Plaintiff thereafter filed its Motion for Default Final Judgment. ECF No. [9]. Plaintiff asks the Court to adopt the finding of the Secretary that Plaintiff's damages were incurred by Defendant's violation of 7 U.S.C. § 499b, and award Plaintiff (i) the principal amount of $32,723.80 plus interest at the rate of 1.5% per month from October 1, 2018 through August 22, 2019 and interest at the rate of 18% per annum from August 22, 2019 until fully paid, (ii) $500.00 in PACA filing costs, (iii) taxable costs in the amount of $400.00, which represents the filing fee in this action and (iv) reasonable attorney's fees for prosecuting this action in the amount of $5,337.70. Id. at 13-14.
Federal Rule of Civil Procedure 55 sets forth the procedure for obtaining a default judgment. First, subsection (a) provides that the Clerk of Court must enter default when the defendant fails “to plead or otherwise defend.” Fed.R.Civ.P. 55(a). Next, upon the entry of a clerk's default, the Court must enter a judgment “[i]f the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, the clerk--on the plaintiff's request, with an affidavit showing the amount due ....” Id. at 55(b)(1).
A default admits plaintiff's well-plead allegations of fact. Lary v. Trinity Physician Fin. & Ins. Services, 780 F.3d 1101, 1106 (11th Cir. 2015) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Thus, in determining whether default judgment may be entered, courts must review the allegations in the complaint to determine whether there is a “sufficient basis in the pleadings for the particular relief sought.” United States v. Genesis II Church of Health & Healing, 476 F.Supp.3d 1283, 1289 (S.D. Fla. 2020) (citing Tyco Fire & Sec., LLC v. Alcocer, 218 Fed.Appx. 860, 863 (11th Cir. 2007)); see also Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1245 (11th Cir. 2015) ().
Once liability has been established, “[d]amages may be awarded only if the record adequately reflects the basis for award via a hearing or a demonstration by detailed affidavits establishing the necessary facts.” Adolph Coors Co v. Movement Against Racism and the Klan, 777 F.2d 1538, 1544 (11th Cir. 1985)) (quotations omitted). Rule 55 does not require an evidentiary hearing on damages where the amount claimed is either liquidated or capable of arithmetic calculation. Safari Programs, Inc. v. CollectA Int'l Ltd., 686...
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