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Consumers Produce Co., Inc v. Georgiana Produce

November 22, 2011

CONSUMERS PRODUCE CO., INC.,
PLAINTIFFS,
v.
GEORGIANA PRODUCE, INC., ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Ambrose, Senior District Judge

OPINION AND ORDER

Preliminary Statement

Plaintiffs Consumers Produce Co, Inc. ("Consumers"), J.E. Corcoran ("Corcoran") and Coosemans Pittsburgh, Inc. ("Coosemans) move for summary judgment against Defendants Georgiana Produce, Inc., Deserae Hair Georgiana and Christopher J. Georgiana seeking $153,887.10, plus prejudgment interest and attorneys' fees, relating to Defendants' failure to pay for wholesale quantities of agricultural commodities sold and delivered by Plaintiffs. Defendants Georgiana Produce, Inc. and Deserae Hair Georgiana do not oppose the motion. None of the Defendants contest the amount of the judgment sought or Plaintiffs' entitlement to attorneys' fees and prejudgment interest. The only issue before me is whether Christopher Georgiana is liable under the trust provisions of the Section 499e(c) of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. §499a et seq. For the reasons set forth below, I find that he is personally liable and grant summary judgment on behalf of Plaintiffs against all Defendants.

I. Legal Standard

In order to prevail on a motion for summary judgment, the moving party must demonstrate that Athere is no genuine issue of material fact and. . .the moving party is entitled to judgment as a matter of law.@ Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 2007 WL 2153278, at *1 (3d Cir. July 27, 2007) (quoting Fed. R. Civ. P. 56(c)). A[W]here the party opposing a motion for summary judgment bears the ultimate burden of proof, the moving party may discharge its initial burden of showing that there is no genuine of material fact by showing - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party=s case.@ Player v. Motiva Enter., LLC, 2007 WL 2020086, at *9 n.4 (3d Cir. July 13, 2007). AIf the moving party has satisfied its initial burden, the nonmoving party must, in their opposition to the motion, identify evidence of record that creates a genuine issue of material fact.@ Id. Moreover, A[t]o defeat a motion for summary judgment, the non-moving party must >do more than simply show that there is some metaphysical doubt as to the material facts. In the language of the Rule, the non-moving party must come forward with specific facts showing that there is a genuine issue for trial.= at Jurimex Kommerz Transit G.M.B.H., 2007 WL 2153278, at *1 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).

II. Statement of Undisputed Facts*fn1

Plaintiffs are engaged in the business of buying and selling wholesale quantities of produce and are licensed as dealers under the PACA. Consumers sold and delivered to Defendants various wholesale lots of produce worth $30,544.94, for which it has not been paid. Corcoran sold and delivered to Defendants various wholesale lots of produce worth $47,478.91, for which it has not been paid. Coosemans sold and delivered to Defendants various wholesale lots of produce worth $75,863.25, for which it has not been paid. The invoices submitted by Consumers and Coosemans contained the contract terms requiring Plaintiffs to pay interest on all outstanding invoices and attorneys' fees incurred in the collection of debts.

Defendant Deserae Hair Georgiana admits that she was the President and a shareholder of Georgiana Produce, and was in a position to control PACA trust assets, evidenced by the check signing authority she maintained on the Georgiana Produce bank account at Parkvale Bank. She also maintained a corporate credit card on the Georgiana Produce American Express Business Gold Card Account.

Defendant Christopher Georgiana maintained check signing authority on the Georgiana Produce Bank account at Parkvale Bank, where he attested to being an Officer of Georgiana Produce and is identified as the Operations Manager on the Parkvale Bank signature card. He was the signatory on frequent checks made payable to Plaintiffs for the sale of produce. He tendered and signed repeated payroll payments to himself and Deserae Hair Georgiana for their benefit. He also maintained a corporate credit card on the Georgiana Produce American Express Business Gold Card Account. Finally, he is the President of Georgiana Transport, Inc., which maintained a Capital One Visa Business Card which was paid from the Georgiana Produce Parkvale Bank Account with checks signed by Christopher Georgiana.

III. Plaintiffs' Motion for Summary Judgment

As previously stated, Defendants Georgiana Produce, Inc. and Deserae Hair Georgiana do not oppose the motion for summary judgment in any respect. Accordingly, I grant summary judgment on behalf of Plaintiffs against these Defendants.

The only issue before the Court is whether Defendant Christopher J. Georgiana can be held individually liable under PACA based on the undisputed facts in the record. Notably, Christopher Georgiana has submitted no evidence in connection with his opposition to the motion.

Section 499e of PACA imposes a statutory trust on all produce-related assets, including the produce itself, other products derived therefrom, and any receivables or proceeds from the sale thereof, held by agricultural merchants, dealers and brokers which must be maintained for the benefit of all unpaid suppliers and sellers of the produce until full payment has been made. 7 U.S.C. §499e(c)(2). "[A]n individual who is in the position to control the PACA trust assets and who does not preserve them for the beneficiaries has breached a fiduciary duty, and is personally liable for that tortious act." Bear Mountain Orchards, Inc. v. Mich-Kim, Inc., 623 F.2d 163, 167-68 (3d Cir. 2010)(internal quotations omitted). The Third Circuit has established a two-part test to determine whether an individual faces liability under PACA: (1) whether the "individual holds a position that suggests a possible fiduciary duty to preserve the PACA trust assets (e.g. officer, director, and/or controlling shareholder); and 2) whether that individual's involvement with the corporation establishes that [he or] she was actually able to control the PACA trust assets at issue." Id. at 172 (emphasis in original).

Christopher Georgiana argues that, pursuant to Bear Mountain Orchards, there is a question of fact as to whether he can be held individually liable for monies owed to Plaintiffs under PACA. In Bear Mountain Orchards, the Third Circuit affirmed the District Court's finding that an officer and shareholder in the Defendant corporation was not secondarily liable to trust creditors under PACA because she was not actively involved in running the corporation. 623 F.3d at 166. In so affirming, the Third Circuit noted that, notwithstanding Mrs. Fleisher's title as Vice President on the corporation's bank signature cards and other documents listing her as Secretary and Treasurer, and her status as a 50% shareholder in the corporation, the evidence presented at trial established that she did not possess the ...


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