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Kophamer Farms, Inc. v. Select Onion

May 19, 2010

KOPHAMER FARMS, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
SELECT ONION, LLC, AN OREGON LIMITED LIABILITY COMPANY; FARRELL LARSON, AN INDIVIDUAL; AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

SCHEDULING CONFERENCE ORDER

Discovery Cut-Off: 9/20/10

Non-Dispositive Motion

Filing Deadline: 10/21/10

Non-Dispositive Motion Hearing Date: 11/26/10

9:00

Ctrm. 8

Dispositive Motion Filing Deadline: 12/2/10

Dispositive Motion Hearing Date: 1/3/11 10:00 Ctrm. 3

Settlement Conference Date: 9/22/10 10:00 Ctrm. 8 Pre-Trial

Conference Date: 2/7/11 11:00 Ctrm. 3

Trial Date: 3/22/11 9:00 Ctrm. 3 (JT-2 days)

I. Date of Scheduling Conference. May 19, 2010.

III. Summary of Pleadings.

A. Plaintiff's Factual and Legal Contentions.

1. Plaintiff Kophamer Farms, Inc. ("Plaintiff") is an onion grower and is licensed as a produce dealer under the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq., (the "PACA"). Defendant Select Onion, LLC ("Select Onion") is in the business of buying wholesale quantities of produce and is also a licensed PACA Dealer. Defendant Farrell Larson is the President and CEO of Select Onion.

2. Plaintiff alleges that between June 9, 2009 and September 28, 2009 Plaintiff supplied Defendant Select Onion LLC, at Select Onion's insistence and request, 50 shipments of onions for which Select Onion agreed to pay the principal sum of $185,445.00. Plaintiff promptly invoiced Select Onion for each shipment delivered, and each invoice states that "the perishable agricultural commodities listed on this invoice are sold subject of the statutory authorized by Section 5(c) of the PACA, 1930 (7 U.S.C. § 499e(e))." Each invoice also contains an attorney's fees provision providing that the buyer agrees to pay the seller's attorney's fees if a collection action is necessary.

3. Plaintiff contends that upon Select Onion's receipt of the produce supplied by Select Onion, Plaintiff became a PACA beneficiary of a floating, non-segregated trust over all of Select Onion's produce, products derived from the produce, and all proceeds derived from the sale of the Select Onion's produce and produce related products.

4. Furthermore, Plaintiff asserts that six invoices remain due and unpaid, despite Plaintiff's repeated demands (Invoice Nos. MH 10, MH 11, MH 12, MH 13, MH 14 and MH 15), in the total principal amount of $33,716.44. These invoices are almost 10 months overdue.

5. As such, Plaintiff has brought suit for inter alia, Breach of Contract and Enforcement of the Statutory Trust Provisions of the PACA. Plaintiff has brought action against Mr. Larson, because under Ninth Circuit case law, individuals who are in positions to control PACA trust assets and fail to do so are personally liable under the PACA. Because Mr. Larson is the President and CEO of Select Onion, Plaintiffs allege that Mr. Larson was in a position to control the PACA trust assets that are the subject of this Complaint. Thus, Plaintiff seeks from Defendants damages of $33,716.44, interest, contractual attorney's fees, and court costs.

B. Defendant's Factual and Legal Contentions.

1. Select Onion did agree to purchase onions from Plaintiff. However, as is customary with onion sales, and as was the course of dealing between the parties here, and as was the agreement of the parties, tare was deducted from the total weight purchased. Tare is the dirt, rocks, and other foreign debris that must be deducted from the gross weight of the onions purchased. After deducting the tare amount for the shipments at issue in the present complaint, there is nothing further due and owing to Plaintiff as Select has paid in full all required amounts.

IV. Orders Re Amendments To Pleadings.

1. The parties contemplate that the pleadings may need to be amended and agree that they must be filed on or before October 4, 2010, without the necessity of a motion.

V. Factual Summary.

A. Admitted Facts Which Are Deemed Proven Without Further Proceedings.

1. Select Onion is a limited liability company validly formed and existing under the laws of the State of Oregon.

2. During the period on or about June 9, 2009 to on or about September 28, 2009 Plaintiff shipped onions ...


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