United States District Court, N.D. California, San Jose Division
ORDER ADOPTING IN PART REPORT AND RECOMMENDATION OF
MAGISTRATE JUDGE THAT DEFAULT JUDGMENT BE GRANTED IN PART
[Re: ECF 22]
LAB SON FREEMAN, United States District Judge
the Court is Magistrate Judge Howard R. Lloyd's Report
and Recommendation (“R&R”) regarding
Plaintiff Chong's Produce, Inc.
(“Chong's”)'s motion for default judgment
recommending that the Court enter judgment in favor of
Plaintiff and awarding Chong's the total amount of $73,
680.05. See R&R, ECF 22. The time for
objecting to the Report and Recommendation has elapsed, and
no objections were filed. Fed.R.Civ.P. 72(b)(2). Having read
and considered Judge Lloyd's R&R, the Court adopts
his recommendation in part.
a California corporation with its principal place of business
in San Jose, California, is in the business of buying and
selling wholesale quantities of perishable agricultural
commodities (“Produce”) in interstate commerce.
Compl. ¶ 1, ECF 1. Chong's brings this suit against
Pushpak Restaurants, Inc. (“Pushpak”) and Prasad
Vasireddy (collectively, “Defendants”), alleging
that although Pushpak, which is alleged to be owned and
controlled by Vasireddy, ordered and accepted Produce from
Chong's but failed to pay the invoices related to those
¶¶ 3, 9. Chong's asserts three claims against
Defendants: violation of the Perishable Agricultural
Commodities Act of 1930 (“PACA”), 7 U.S.C.
§§ 499a-499t, against Pushpak for failure to
maintain PACA trust assets and failure to pay promptly;
breach of contract against Pushpak; and breach of fiduciary
duty against Vasireddy. See generally Compl.
Chong's seeks the following remedies: (1) declaratory
relief validating its PACA trust claim in the amount of $52,
843.17, plus interest from the date each invoice became past
due, costs, and attorneys' fees; (2) an order directing
Pushpak to immediately turn over to Plaintiff, as a
beneficiary of this trust, an amount of the PACA Trust Assets
equal to the sum of $52, 843.17, plus interest from the date
each invoice became past due, costs, and attorneys' fees;
(3) an order directing Pushpak to maintain PACA Trust Assets
equal to the sum of $52, 843.17, plus claims of all other
unpaid suppliers of Produce that properly preserved their
PACA trust claims, directing Pushpak to replenish the PACA
trust to a level sufficient to satisfy all qualified PACA
trust claims, and enjoining Pushpak from dissipating PACA
Trust Assets; (4) an order directing Pushpak to immediately
pay Plaintiff the sum of $52, 843.17 plus interest from the
date each invoice became past due, costs, and attorneys'
fees; and (5) an order entering judgment in favor of
Plaintiff and against Vasireddy-jointly and severally-in the
amount of $52, 832.17, plus interest from the date each
invoice became past due, costs, and attorneys' fees, less
any monies Plaintiff receives from the PACA Trust Assets,
i.e., from Pushpak. Id. ¶¶ 49-54.
R&R, Magistrate Judge Lloyd concluded that Chong's
“fairly pled meritorious claims against Pushpak for
trust violations and breach of contract and against Vasireddy
for breach of fiduciary duty[.]” R&R 8. Judge Lloyd
further concluded that Chong's “proved damages of
$52, 667.15, interest of $18, 419.00, attorney[s'] fees
of $2, 250.00, and costs of $343.90[, ] and recommended that
default judgment be entered in favor of Chong's and
against Defendants. Id. at 8-9. Judge Lloyd did not
address any other remedies Plaintiff sought in its
complaint-i.e., declaratory relief, an order
regarding maintenance of a PACA trust, or an order creating a
common fund-because the motion for default judgment did not
address remedies other than those already mentioned. See
generally Mot., ECF 15-1.
Court finds the R&R well reasoned and thorough, and
adopts it with one exception. In his R&R, Judge Lloyd
correctly concluded that Chong's was entitled to recover
attorneys' fees pursuant to the terms of the contract
between Pushpak and Chong's. R&R 6-7. Judge Lloyd did
not clarify, however that Chong's may not recover
attorneys' fees from Vasireddy because the claim against
Vasireddy sounds in tort, not contract, and because the
attorney fees provision contained in the invoices expressly
limits the recovery of prevailing-party attorneys' fees
to those incurred in seeking to enforce that agreement.
See Suppl. Br. 3, ECF 21; Casella v. SouthWest
Dealer Servs., Inc., 157 Cal.App.4th 1127, 1132 (2007)
(upholding trial court decision declining to award
attorneys' fees plaintiff incurred in prosecuting his
tort claims because of the scope of the attorneys' fees
provision contained in the contract at issue).
foregoing reasons, the Court GRANTS IN PART Plaintiffs motion
for default judgment against Defendants as follows:
1. Plaintiff s motion for default judgment is GRANTED IN
2. Defendants are in default.
3. Plaintiff is awarded judgment against Defendants. It is
HEREBY ORDERED that
shall recover from Pushpak (1) $52, 667.15 in damages, (2)
$18, 419 interest, (3) $2, 250 in attorneys' fees, and
(4) $343.90 in costs, for a total of $73, 680.05. Plaintiff
shall recover $52, 667.15 in damages and $18, 419 in interest
from Vasireddy, less any monies received from Pushpak.