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Progressive Produce Corporation v. Wild West Produce

May 9, 2013


The opinion of the court was delivered by: Honorable Ronald S. W. Lew U.S. District Court Judge


Currently before the Court is Plaintiff Progressive Produce Corporation's ("Plaintiff") Motion for Default Judgment [15]. The Court, having considered all papers submitted pertaining to this Motion, NOW FINDS AND RULES AS FOLLOWS:

Plaintiff's Motion for Default Judgment is GRANTED.


Plaintiff brings the present Motion for Default Judgment against Defendants Wild West Produce, LLC, Mario G. Luera, and Amy Luera (collectively "Defendants") [15]. Plaintiff alleges that on December 12, 2012, it sold and shipped perishable agricultural commodities to Defendants, who initially agreed to pay $13,600 for said goods but have since failed and refused to do so despite Plaintiff's repeated demands for payment. Plaintiff instigated the present Action against Defendants in January 2013 in order to enforce Plaintiff's rights under the Perishable Agricultural Commodities Act of 1930 ("PACA"). First Amended Complaint ("FAC"). ¶ 1. Despite Plaintiff's service of the Summons and Complaint on Defendants, none of them have appeared in this Action. Accordingly, Plaintiff filed the instant Motion for Default Judgment against all Defendants on April 19, 2013.


As a matter of initial concern, the Court finds that it has proper subject matter and personal jurisdiction in this case. Pursuant to 28 U.S.C. §§ 1331 and 1367, the Court has subject matter jurisdiction because this Action was brought, in part, under the Perishable Agricultural Commodities Act of 1930 ("PACA"). Personal jurisdiction arises from Defendants' commercial activities within California.

Additionally, Plaintiff has met the procedural requirements of Local Rule 55-1 for default judgment. Specifically, the Court Clerk entered default against Defendants as to the First Amended Complaint on April 17, 2013 [14]. Defendants are not minors, incompetent, in the military, or otherwise exempted under the Servicemembers Civil Relief Act. Read Decl. ¶ 20. Lastly, Plaintiff attached a Certificate of Service to the instant Motion indicating that Plaintiff provided Defendants with notice of the Motion.

Furthermore, the Court finds that the substantive factors set forth in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), weigh in favor of granting default judgment. First, the Plaintiff will likely be prejudiced if the Court denies the instant Motion because Plaintiff will be left without any other remedy and probably will not recover the amount that Defendant owes. See Elektra Entm't Group Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 2005). Second, Plaintiff sufficiently alleges facts in the FAC to support claims for violation of PACA (claims 2-5), breach of contract (claim 1), unjust enrichment (claim 6), conversion and unlawful detention of PACA trust assets (claim 7), and declaratory relief (claim 8).

Third, there is nothing to suggest the possibility of a dispute over material facts because Defendant has not filed an answer to the FAC. Additionally, where a plaintiff has filed a well-pled complaint, the possibility of a dispute over material facts is remote. Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 916, 921-22 (C.D. Cal. 2010). Fourth, there is no evidence that Defendants' failure to respond was the result of excusable neglect.

Fifth, although federal policy favors decisions on the merits, Federal Rule of Civil Procedure 55(b) permits the entry of default judgment in situations, such as this, where the defendant has refused to litigate. In addition, a defendant's failure to answer a complaint "makes a decision on the merits impractical, if not impossible." Elektra, 226 F.R.D. at 393; Pepsico, Inc. v. Cal. Security Cans., 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).

Accordingly, the Court finds that default judgment against Defendants is warranted in this case.

As to damages, Plaintiff has sufficiently established through the declaration of Sue Cadena, Credit Manager of Progressive Produce Corporation, and the invoice attached thereto that Defendants are liable to Plaintiff for $13,600 in principal damages. See generally Cadena Decl. Thus, the Court grants Plaintiff's request for recovery of the same.

According to the Ninth Circuit, pre-judgment interest may be included in a PACA trust claim if it is supported by a contractual right. Middle Mountain Land & Produce Inc. v. Sound Commodities Inc., 307 F.3d 1220, 1225-26 (9th Cir. 2002). Here, the invoice confirming Plaintiff's sale to Defendants states: "A FINANCE CHARGE calculated at the rate of 1 1/2% PER MONTH (18% ANNUALLY) will be applied to all PAST DUE ACCOUNTS." Cadena Decl., Ex. 1 (emphasis in original). Although this provision is an "additional term" to the Parties' agreement, in that it was added after Plaintiff shipped the produce to Defendant, it still became a part of the contract (see Cal. Com. Code ยง 2207(2)) and created a contractual right among the Parties. See C.H. Robinson Co v. Marina Produce Co., Inc., No. C05-04032 WHA, 2007 WL 39311, at *4 (N.D. Cal. Jan. 4, 2007). Therefore, although interest normally accrues at the legal rate, the correct prejudgment interest rate to apply here is 18%. See Wahluke Produce, Inc. v. Guerra Mktg. Int'l Inc., No. 1:11-CV-1981 LJO-BAM, 2012 WL 1601876, at *5, (E.D. Cal. May 7, 2012) (citing Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 1108 (9th Cir. 1998)); Church Bros., LLC. v. Garden of Eden Produce, LLC, No. 5:11-CV-04114 EJD, 2012 WL 1155656, at *3 (N.D. Cal. Apr. 5, 2012); Abbate Family Farms Ltd. P'ship v. P.Y. Produce, No. C-11-00319 EDL, 2011 WL 7081569 at *4 ...

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