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FILLIPPO v. S. BONACCURSO & SONS

September 15, 1978

Frank A. FILLIPPO
v.
S. BONACCURSO & SONS, INC., Continental Bank, Samuel Bonaccurso, and Mary Bonaccurso



The opinion of the court was delivered by: HANNUM

MEMORANDUM

Plaintiff, a cattle seller, brings this action *fn1" in three counts to recover for damages arising from the sale of cattle from April 6 through June 2, 1977, Complaint, Docket Entry No. 1. Count I against S. Bonaccurso & Sons, Inc., (SBI) seeks recovery of the price of cattle sold and delivered to SBI as ordered and accepted and for which plaintiff has not been paid. The price was $ 79,212.52. Count I also bases liability on SBI's violations of the Packers and Stockyards Act, as amended, 7 U.S.C. § 181 Et seq. (the Act) and seeks an accounting for all livestock shipped by plaintiff to SBI and proceeds therefrom. Count II against Continental Bank claims that livestock delivered by plaintiff to SBI and proceeds therefrom are impressed with a statutory trust in plaintiff's favor under the Act which defeats the Bank's perfected security interest in these assets. Count II claims that this trust obligation continued when Continental Bank seized his trust assets pursuant to its security agreement upon SBI's default in repaying the Bank's loan. Count III claims Mary Bonaccurso and Samuel Bonaccurso as officers, employees, agents, directors of SBI violated the Act and are liable to plaintiff for $ 79,212.52.

 Continental Bank admits SBI was, prior to July, 1977, in the business of buying and slaughtering cattle and packing and selling meat products, Answer of defendant Continental Bank at P 9, Docket Entry No. 4, admits SBI defaulted on loans made by the Bank, Id., at P 26, and admits that the Bank seized SBI's inventory, accounts receivables and other assets pursuant to its security interest. Id. Continental Bank denies that plaintiff's were "cash sales" under the Act and claims plaintiff was thus not entitled to next day payment under the Act. Id., at P 13. The Bank asserts that its perfected security interest in SBI's inventory, receivables and other proceeds is superior to plaintiff's interest, Id., at Fourth Affirmative Defense, and attacks the constitutionality of Congress creating a "secret lien" in favor of plaintiff superior to the Bank's perfected security interest. Id., at Seventh Affirmative Defense. *fn2"

 Presently before the Court are the following five motions:

 
1) Motion of Plaintiff for Judgment on the Pleadings Against Defendant S. Bonaccurso & Sons, Inc., under Fed.R.Civ.P. 12(c). Docket Entry No. 21.
 
2) Motion of Plaintiff for Summary Judgment Against Defendants Samuel Bonaccurso and Mary Bonaccurso under Fed.R.Civ.P. 56(a) and for Costs under Fed.R.Civ.P. 11. Docket Entry No. 33.
 
3) Motion of Defendants Mary Bonaccurso and Samuel Bonaccurso for Summary Judgment Against Plaintiff under Fed.R.Civ.P. 56(b) and for Costs under Fed.R.Civ.P. 11. Docket Entry No. 22.
 
4) Motion of Plaintiff for Summary Judgment Against Defendant Continental Bank under Fed.R.Civ.P. 11. Docket Entry No. 38.

 PART 1: Motion Of Plaintiff For Judgment On The Pleadings Against Defendant SBI, Docket Entry No. 21.

 By appropriate Order following this memorandum, judgment on the pleadings is entered in favor of plaintiff and against defendant SBI on the debt of $ 79,212.52.

 (1.1) The test for ruling on a motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) was stated in M. L. Lee & Co. v. American Cardboard & Packaging Corp., et al., 36 F.R.D. 27, 29 (E.D.Pa.1964):

 
"It is settled law that a party will be granted judgment upon a motion for judgment on the pleadings only if there are no disputed facts, which, if proven adversely to the moving party, would defeat recovery. For purposes of this rule, all the allegations of the defendant('s) answer which are well pleaded are taken as true and all averments by the plaintiff which are denied by the defendant are taken as false. (Moore's Federal Practice P 12.15) . . . It is no answer that the defendant, at the trial of the cause, might be unable to prove the facts alleged in an effort to defeat recovery. Weinrich v. Retail Credit Co., 186 F. Supp. 392 (W.D.Pa.1960) (Fed.R.Civ.P. 12(b) motion to dismiss complaint). In deciding the motion for judgment on the pleadings, the court will not look beyond the pleadings themselves to decide whether certain facts exist on which a substantive rule of law will operate to exclude proof of other facts."

 Only if matters outside the pleadings are presented to and not excluded by the court, may the motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) be treated as a motion for summary judgment under Fed.R.Civ.P. 56. Plaintiff has relied solely on matters within the pleadings to support his motion for judgment on the pleadings against SBI. SBI has filed no response to this motion.

 (1.2) Plaintiff has moved for judgment on the pleadings as to so much of Count I as alleges that SBI owes him $ 79,212.52. Complaint at PP 10, 11, Docket Entry No. 1; Plaintiff's Motion for Judgment on the Pleadings Against S. Bonaccurso & Sons, Inc., at PP 3-5, Docket Entry No. 21. SBI's answer admits the indebtedness but by way of clarification avers that $ 79,212.52 represents the price of cattle SBI purchased from plaintiff on a "dressed weight" basis. Answer to Complaint on Behalf of S. Bonaccurso & Sons, Inc., and Mary Bonaccurso at PP 10, 11, Docket Entry No. 5. Throughout its answer, SBI asserts that plaintiff's sales were on credit and not "cash sales" entitled to the guarantee of next day payment under the Act. Id., at PP 13, 16.

 (1.3) Even granting the truth of SBI's assertion that plaintiff's were not "cash sales" under the Act but were sales on credit on a "dressed weight" basis, SBI's admission that it owes plaintiff $ 79,212.52 entitles plaintiff to recover on the debt. The federal Act does not preempt enforcement by way of debt and only supersedes state law which places conflicting prompt payment requirements on packers. 7 U.S.C. § 228c. SBI's denials go to whether plaintiff may invoke the additional enforcement machinery of the federal Act, but do not defeat his right to recover as a matter of state law. This Court has pendent jurisdiction over plaintiff's claim under Count I which alleges the SBI debt and derives from a "nucleus of operative fact" common to his claims under the federal Act. Compare, PAAC v. Rizzo, 502 F.2d 306, 313 (3d Cir. 1974), Cert. denied, 419 U.S. 1108, 95 S. Ct. 780, 42 L. Ed. 2d 804. Accordingly, plaintiff is entitled to judgment on the pleadings that SBI owes him $ 79,212.52. Fed.R.Civ.P. 12(c). However, this judgment is not final since all claims, rights and liabilities of all the parties have yet to be determined. Fed.R.Civ.P. 54(b).

 The remainder of this opinion relies on matters outside the pleadings considered by the Court for purposes of disposing of the remaining four cross motions for summary judgment. Fed.R.Civ.P. 56(c).

 It appearing that genuine issues of material fact exist, plaintiff's motion for summary judgment against defendants Samuel Bonaccurso and Mary Bonaccurso is, by appropriate order following this memorandum, denied.

 (2.1) The rule for deciding motions for summary judgment is stated at Fed.R.Civ.P. 56(c):

 
"The judgment sought shall be rendered forthwith if 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."

 The rule has been interpreted as follows:

 
"Any doubt as to the existence of a genuine issue of (material) fact is to be resolved against the moving party * * * The law is clear that one who moves for a summary judgment has the burden of demonstrating that there is no genuine issue of (material) fact."

 Krieger v. Ownership Corporation, 270 F.2d 265, 270 (3d Cir. 1959) (citations omitted).

 
"Inferences to be drawn from the underlying facts contained in the evidential sources submitted to the trial court must be viewed in the light most favorable to the party opposing the motion. The non-movant's allegations must be taken as true and, when these assertions conflict with those of the movant, the former must receive the benefit of the doubt."

 Goodman v. Mead Johnson & Co., et al., 534 F.2d 566, 573 (3d Cir. 1976). The rule has been amended to accomplish "(t)he very mission of the summary judgment procedure (which) is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Robin Construction Company, et al., v. United States of America, 345 F.2d 610, 615 (3d Cir. 1965). Fed.R.Civ.P. 56(e) now states that:

 
"(w)hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

 "Documents filed in support of a motion for summary judgment are to be used to determine whether issues of fact exist and Not to decide the fact issues themselves." Krieger, supra, at 270, cited in Manetas v. International Petroleum Carriers, Inc., 541 F.2d 408, 414 (3d Cir. 1976).

 (2.2) Turning from the narrow view of the facts presented by the pleadings to the more complete one appearing in the depositions and other sources used for summary judgment purposes, the Court states the following additional facts. Fed.R.Civ.P. 56(c).

 In separate transactions from the 6th through the 22d of April, 1977, plaintiff sold cattle to SBI on a "dressed weight" basis with a purchase price of over $ 107,000. Deposition of Frank A. Fillippo at 18-21, Docket Entry No. 20. In response to plaintiff's continuing requests Samuel Bonaccurso paid plaintiff $ 40,000 by check toward the end of May, 1977. Id., at 10, 13. The check cleared and reduced SBI's indebtedness to some $ 67,000. Deposition of Samuel Bonaccurso at 56-57, Docket Entry No. 27.

 From the week after April 22, 1977, through his last purchases for SBI on June 2, 1977, plaintiff bought cattle on a commission basis receiving $ 3.00 per head. Deposition of Frank A. Fillippo at 6, Docket Entry No. 20. Under this arrangement, plaintiff would go to various livestock auction houses and stables, purchase cattle at the price SBI wanted to pay, and SBI would make payment directly to the auction houses and truckers. Deposition of Samuel Bonaccurso at 18-19, 26, Docket Entry No. 27. For the first two weeks of the commission purchases, SBI paid plaintiff his commissions. In the third and fourth weeks SBI failed to pay plaintiff approximately $ 700 in commissions. Deposition of Frank A. Fillippo at 26-28; See, Deposition of Samuel Bonaccurso at 57. At two livestock sales on June 1, 1977, and at one sale on June 2, 1977, plaintiff purchased some $ 12,000 worth of cattle for SBI's account with New Holland, Leesport, and Quakertown sales companies. Deposition of Frank A. Fillippo at 36-37, 78. SBI never paid for these purchases. Id.; Answer to Complaint on Behalf of S. Bonaccurso & Sons, Inc., and Mary Bonaccurso at PP 10, 11, Docket Entry No. 5; deemed admitted by Samuel Bonaccurso's failure to deny under Fed.R.Civ.P. 8(d), Answer to Complaint on Behalf of Samuel Bonaccurso at PP 10, 11, Docket Entry No. 8. At the demand of the three ...


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