The opinion of the court was delivered by: Judge James M. Munley United States District Court
(Magistrate Judge Blewitt)
Before the court for disposition is the report and recommendation of Magistrate Judge Thomas M. Blewitt regarding the motions to dismiss filed by the individual defendants. Defendants John, Paul and Angela Cooper filed objections to the Magistrate Judges report and recommendation. The matter is ripe for disposition.
Between July 1, 2005 and July 13, 2005, Plaintiff West Coast Distributing, Inc. made three shipments of fresh grapes to Defendant Preferred Produce & Food Service, Inc. ("Preferred") pursuant to partly oral/partly written, price-after-sale contracts made between July 1, 2005 and July 13, 2005. (Doc. 24, Amended Complaint at ¶ 9). Plaintiff avers that the shipments were made and delivered according to the contracts. (Id. at ¶ 9; see also Doc. 2, Plaintiff's Ex. A, invoices). The terms of the price-after-sale agreement(s), as well as the rules and regulations governing produce shipments, required Preferred to promptly sell the produce at prevailing market prices, to "truly and promptly account" to the provider within twenty (20) days after arrival and acceptance of the produce, and to negotiate a price to be paid to the provider within ten (10) days after setting the sale price. (Id. at ¶ 15).
After the delivery and acceptance of the grape shipments, plaintiff sent Preferred invoices covering the shipments, which contained the sale terms and the language required for the grapes to be covered under the Perishable Agricultural Commodities Act, (hereinafter "PACA"). (Id. at ¶ 19).
Congress enacted PACA "in 1930 to promote fair trading and practices in the marketing of perishable agricultural commodities, largely fruits and vegetables." Consumer Produce Co., Inc. v. Volante Wholesale Produce Inc., 16 F.3d 1374, 1377-78 (3d Cir. 1994). The statute was amended in 1984 to create a statutory trust for the benefit of unpaid produce suppliers. Id. at 1378. "Under the trust provision, commission merchants, dealers, and brokers who receive perishable agricultural commodities hold them in trust for produce suppliers until the suppliers are fully paid. " Id.
Plaintiff asserts that its shipments of grapes are entitled to the protections of a PACA statutory trust. (Doc. 24, Amended Complaint at ¶ 18). Plaintiff alleges that Defendant Preferred has failed to pay for the shipments of grapes and continues to hold and use Plaintiff's assets. (Id. at ¶ 20). Plaintiff claims that Defendants Philip and Maurice Abdalla were the "corporate officers and directors" of Preferred during the time these actions took place, and that Defendants John, Angela and Paul Cooper were "principals" of Preferred during that time (hereinafter the Abdalla Defendants and Cooper Defendants will be referred to collectively as the "individual defendants") (Id. ¶¶ 5 - 6). The individual defendants are alleged to be "responsibly connected" with Preferred, and to have operated, managed, and controlled Preferred. (Id.) Assets resulting from the grape shipments have allegedly been removed from a statutorily created PACA trust to which Defendant Preferred was trustee, and have been transferred illegally and/or commingled with the personal property of the individual defendants for their own benefit. (Id. ¶¶ 25 - 26).
Plaintiff West Coast filed a complaint on July 10, 2009 naming Corporate Defendant Preferred and Individual Defendants Philip Abdalla, Maurice J. Abdalla, and Maurice Abdalla (Doc. 1, Complaint).*fn1 On December 9, 2009, Plaintiff filed an amended complaint adding John Cooper, Paul Cooper, and Angela Cooper, who were not named as defendants in the original complaint. The complaint is comprised of the following five counts: Count 1, Contract/PACA claims; Count II, PACA Trust claim; Count III, Resultant/Commingled Trust claim; Count IV, Individual Joint and Several PACA Liability claim; and Count V, Constructive Trust and Disgorgement/Illegal Transfer of Assets claim. Counts I and II are directed at the corporate defendant and Counts III, IV and V are directed at the individual defendants.
The individual defendants filed three separate motions to dismiss. (Docs. 26, 34, and 46). Magistrate Judge Blewitt addressed all three motions in the instant report and recommendation. Magistrate Judge Blewitt recommends dismissing Count IV based upon the statute of limitations and denying the motions to dismiss with regard to Counts III and V. The Cooper Defendants filed objections to the recommendation that Counts III and V be dismissed. (Doc. 53).*fn2
As this case is brought pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e, et seq. for unlawful employment discrimination, we have jurisdiction under 28 U.S.C. § 1331 ("The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."). We have ...