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Food Team International, Ltd v. Unilink

May 18, 2012

FOOD TEAM INTERNATIONAL, LTD, PLAINTIFF
v.
UNILINK, LLC, GARY GREGORY, MARC BEHAEGAL, AKBAR BOUTARABI, MIKE MOORE, AND PENNSYLVANIA FOOD GROUP, LLC, DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner United States District Judge

OPINION

INTRODUCTION

The matter before the court is Plaintiff's Motion for Summary Judgment filed December 9, 2011. For the reasons expressed herein, Plaintiff's Motion for Summary Judgment is granted in part and denied in part.

Summary of Decision

Specifically, I grant Plaintiff's Motion for Summary Judgment to the extent that plaintiff seeks summary judgment in its favor concerning the unpaid balances due for the produce billed on invoices 29CFF04115 and 29CFF01017 because it is undisputed that the produce billed on those invoices was accepted and that payment for produce billed on those invoices was not tendered to plaintiff.

I further grant Plaintiff's Motion for Summary Judgment to the extent that plaintiff seeks contractual interest at the rate of 1.5% per month on the balances due on invoices 29CFF04115 and 29CFF01017 because the interest provision on those invoices became an enforceable term of the Broccoli and Cauliflower Contracts pursuant to Section 2207 of the Pennsylvania Uniform Commercial Code.

However, I deny Plaintiff's Motion for Summary Judgment to the extent that it seeks contractual attorneys' fees in connection with its efforts to collect the amounts due on invoices 29CFF04115 and 29CFF01017 because the attorneys' fee provision on those invoices did not became an enforceable term of the Broccoli and Cauliflower Contracts pursuant to Section 2207 of the Pennsylvania Uniform Commercial Code.

In addition, I grant Plaintiff's Motion for Summary

Judgment to the extent that it seeks summary judgment in its favor concerning the unpaid balances due for the produce billed on invoice 29CFF02901 because it is undisputed that the payment tendered to plaintiff directed toward this and other invoices, were insufficient to cover the amount due for produce accepted and billed on invoice 29CFF02901.

In addition, I grant Plaintiff's Motion for Summary Judgment to the extent that plaintiff seeks a declaratory ruling that defendant Unilink accepted, and has a duty to pay for, invoices 28CFF01019, 29CFF04111, 29CFF01008, 29CFF01012, 29CFF01014 and 29CFF01015 and because it is undisputed that plaintiff unloaded, inspected, and diverted the produce billed on those invoices to its cold storage facility before pulling that produce from storage for further inspection and production, thereby accepting that produce.

I enter judgment in favor of plaintiff Food Team International, LTD and against defendants Unilink, LLC; Gary Gregory; Marc Behaegal; and Akbar Boutarabi in the sum of $104,843.37, as follows:

(A) in the sum of $44,452.60 for the unpaid balance due for produce billed on invoices 29CFF04115, 29CFF01017 and 29CFF02901; and

(B) in the sum of $29,294.10 for contractual interest on the balances due on invoices 29CFF04115 and 29CFF01017;

(C) in the sum of $26,115.70 for the unpaid balance due for produce billed on invoice 29CFF02901; and

(D) in the sum of $4,980.97 for statutory interest on the balance due on invoice 29CFF02901.

In addition, I enter judgment in favor of plaintiff Food Team International, LTD and against defendant Unilink, LLC in the sum of $46,608.20 for the unpaid balance due on invoices 29CFF01008 and 29CFF01015.

Finally, I enter judgment in favor of defendants Unilink, LLC; Gary Gregory; Marc Behaegal; Akbar Boutarabi; Mike Moore; and Pennsylvania Food Group, LLC and against plaintiff Food Team International, LTD on plaintiff's claims for contractual attorneys' fees in connection with plaintiff's efforts to collect the amounts due on invoices 29CFF04115 and 29CFF01017.

JURISDICTION

This court has jurisdiction over the subject matter of plaintiff's federal claims pursuant to the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499e(c)(5), *fn1 and 28 U.S.C. § 1331. This court has supplemental jurisdiction over plaintiff's state-law claims pursuant to 28 U.S.C. § 1367.

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events giving rise to plain-tiff's claims occurred within this district and because a substantial part of the property which is the subject of this action is located in this district.

Specifically, the perishable agricultural commodities which are at the center of the parties' dispute were delivered to defendant Unilink, LLC's facility in Rheems, Pennsylvania and were and or are stored in a cold-storage facility in Lancaster, Pennsyl-vania. Both Rheems and Lancaster are within Lancaster County, which is within this judicial district.

PROCEDURAL HISTORY

Plaintiff initiated this action by filing its Complaint on July 21, 2010 (Document 1). On August 17, 2012 defendants filed an Answer to Complaint with Affirmative Defenses and Counterclaims (Document 4). On September 15, 2012, pursuant to a court-approved stipulation expanding plaintiff's time to respond to defendants' counterclaims, plaintiff filed its Answer and Affirmative Defenses to Counterclaims (Document 12).

On February 18, 2011 I conducted a Rule 16 status conference by telephone with counsel for the parties. At that conference, I attached the non-jury trial of this matter for a two-week trial term commencing January 17, 2012, and set other appropriate pretrial deadlines. *fn2

My February 18, 2011 Order established August 31, 2011 as the deadline for either party to file dispositive motions, including motions for summary judgment, and set October 26, 2011 as the date for oral argument on any dispositive motion filed.

By Order dated August 24, 2011 and filed August 25, 2011 (Document 34), I granted plaintiff's uncontested motion to extend discovery and accordingly modified in part my February 18, 2011 Rule 16 Status Conference Order. Specifically, I extended the discovery deadline until October 17, 2011, established December 9, 2011 as the modified deadline for any dispositive motions, and re-scheduled oral argument on dispositive motions for February 3, 2012. Finally, I re-attached the non-jury trial of this matter for my two-week trial term commencing May 14, 2012.

Plaintiff's Motion for Summary Judgment was filed December 9, 2011 (Document 38). Defendants' Opposition to Plaintiff's Motion for Partial Summary Judgment was filed January 3, 2012 (Document 45). On February 3, 2012 Plaintiff's Reply to Defendants' Response to Motion for Summary Judgment (Document 52) and Defendants' Surreply Memorandum of Law in Opposition to Plaintiff's Motion for Partial Summary Judgment (Document 54) were filed.

Oral argument was conducted on Plaintiff's Motion for Summary Judgment on February 3, 2012. At the conclusion of oral argument, I took the matter under advisement. Hence this Opinion.

STANDARD OF REVIEW

In considering a motion for summary judgment, the court must determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-2510, 91 L.Ed.2d 202, 211 (1986); Federal Home Loan Mortgage Corporation v. Scottsdale Insurance Company, 316 F.3d 431, 443 (3d Cir. 2003).

Only facts that may affect the outcome of a case are "material". Moreover, all reasonable inferences from the record are drawn in favor of the non-movant. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513, 91 L.Ed.2d at 216.

Although the movant has the initial burden of demonstrating the absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See Watson v. Eastman Kodak Company, 235 F.3d 851, 857-858 (3d Cir. 2000).

FACTS

Based upon the pleadings, record papers, exhibits, and the parties' statements of undisputed material facts, the pertinent undisputed facts for purposes of the motion for summary judgment are as follows.

Plaintiff Food Team International, LTD ("Food Team") and defendant Unilink, LLC ("Unilink") each held a valid United States Department of Agriculture Perishable Agricultural Commodities Act ("PACA") license from January 1, 2008 through January 1, 2010.

Broccoli Contract

On October 29, 2008 defendant Unilink submitted purchase order number 0006122 to plaintiff Food Team for 999,990 pounds of broccoli florets from Food Team at the contract price of 53.5 cents per pound. On November 14, 2008 Food Team sent an email to Unilink seeking confirmation that purchase order number 0006122 should have ordered 1,100,000 pounds of brocolli florets, rather than the 999,990 pounds specified in the original purchase order. On November 15, 2008 Unilink emailed the following response: "Confirmed." Uninlink purchase order number 0006122 was properly issued from Unilink to Food Team.

Unilink's broccoli purchase order number 0006122 included the following terms in addition to the quantity term confirmed by email: "GRADE A", "28 CONTAINERS", "PRODUCT PACKED IN TOTES OR CARTONS", "PRICE $0.535/LB DDP RHEEMS" "SHIPPING SCHEDULE STARTING IN JANUARY 2009: THROUGH JUNE 2009 - 1 CONTAINER PER WEEK". Unilink's November 15, 2012 email further confirmed that the shipping schedule would continued "till wk July 6, 2009 (a little longer than June 30 date at rate of 1 per week)" as specified in the original purchase order 0006122.

Cauliflower Contract

On October 29, 2008 Unilink also submitted purchase order number 0006123 for 450,000 pounds of cauliflower from Food Team at the contract price of 42 cents per pound. On November 14, 2008 Food Team sent an email to Unilink seeking confirmation that purchase order number 0006122 should have ordered 500,000 pounds of cauliflower, rather than the 450,000 pounds specified in the original purchase order. On November 15, 2008 Unilink emailed the following response: "Confirmed." Uninlink purchase order number 0006123 was properly issued from Unilink to Food Team.

Unilink's cauliflower purchase order number 0006123 included the following terms: "GRADE A", "10 P/CT", "PRODUCT PACKED IN TOTES OR CARTONS", "PRICE $0.42/LB DDP RHEEMS" "SHIPPING SCHEDULE STARTING MARCH 2009 THRU AUGUST 2009 -1 CONTAINER EVERY 3 WEEKS".

Interest and Attorneys' Fees

Neither Unilink's purchase orders 0006122 or 0006123, nor the November 14-15, 2008 confirmatory emails exchanged by Food Team and Unilink include provisions for interest or attorneys' fees. The first time that attorneys' fees and interest on past due invoices appear in any correspondence of record between the parties is on invoices 29CFF01017 (broccoli) and 29CFF04115 (cauliflower).

On June 3, 2009 Food Team received an email from Unilink which directed Food Team to "[p]lease stop all shipments". *fn3

The first invoice containing interest and attorneys' fee provisions is invoice 29CFF04115 (cauliflower). Invoice 29CFF04115 is dated June 5, 2009 -- three months after shipments began under the Cauliflower Contract and nearly seven months after the Cauliflower Contract was formed. The second invoice containing the attorneys' fees and interest provisions is invoice 29CFF01017 (broccoli), which is dated June 9, 2009, approximately six months after shipments began under the Broccoli Contract and nearly seven months after the Broccoli Contract was formed.

On June 23, 2009 Food Team received another email from Unilink canceling the balance of the Broccoli Contract and the Cauliflower Contract. Specifically, defendant Gary Gregory, President of Unilink, sent an email to Dale Brunton, a Sales Agent for Food Team, which stated, in pertinent part: "Please cancel the balance of our contracts. This action is taken as a result of numerous quality problems existing on your deliveries." *fn4

Delivery of Produce

Food Team delivered loads of produce corresponding to the following invoices to Unilink: 29CFF01008 (broccoli), 29CFF01015 (broccoli), 29CFF04111 (cauliflower), 28CFF01019 (broccoli), 29CFF01012 (broccoli), *fn5 29CFF01014 (broccoli), 29CFF010242 (broccoli), 29CFF01016 (broccoli), 29CFF04113 (cauliflower), 29CFF02901 (red pepper strips), 29CFF01017 (broccoli), and 29CFF04115 (cauliflower).

"PACA-With-Fees" Invoices *fn6

Unilink received and accepted the produce referred to in invoice 29CFF01017. Unilink then placed that produce in its cold storage. Unilink did not reject the produce referred to in invoice 29CFF01017. Unilink has not paid Food Team on invoice 29CFF01017, but contends that it offered payment on invoice 29CFF01017 on August 28, 2009 and that Food Team rejected the payment.

Unilink received and accepted the produce referred to in invoice 29CFF04115. Unilink then placed that produce in its cold storage. Unilink did not reject the produce referred to in invoice 29CFF01017. Unilink has not paid Food Team on invoice 29CFF01017, but contends that it offered payment on invoice 29CFF01017 on August 28, 2009 and that Food Team rejected the payment.

Inspections

Food Team engaged two different private firms to conduct inspections of samples of produce which was allegedly supplied by Food Team and which Unilink was storing in order to evaluate Unilink's allegations that the produce delivered by Food Team was defective, and/or contained foreign objects or worms. Neither of the inspections concluded that the ...


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