United States District Court, W.D. Pennsylvania
JE CORCORAN COMPANY and COFACE NORTH AMERICA INSURANCE COMPANY, Plaintiffs,
REED SAUL, INC., d/b/a Green Grocer, and DAVID GOLOMB, Defendants.
NORA BARRY FISCHER, District Judge.
Pending before the Court are the combined motions to disallow (Docket No. 21) and to dismiss (Docket No. 22) filed by Reed Saul, Inc., d/b/a Green Grocer ("Reed Saul"), and David Golomb ("Golomb") ( collectively "Defendants"), requesting that this Court preclude Coface North America Insurance Company ("Coface") and JE Corcoran Company ("JE Corcoran") ( collectively "Plaintiffs") from maintaining an action against Defendants pursuant to the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a, et seq. ("PACA"). Presently, Plaintiffs allege several violations of PACA in Counts 1 through 4 of their Amended Complaint of February 2, 2015 (Docket No. 19). This court exercises subject-matter jurisdiction over Plaintiffs' claims pursuant to 7 U.S.C. § 499e(c)(5)(i) (actions by trust beneficiaries) and 28 U.S.C. § 1331 (federal question jurisdiction). For the following reasons, Defendants' Motion to Disallow will be DENIED; however, the Motion to Dismiss will be GRANTED.
II. PROCEDURAL AND FACTUAL BACKGROUND
JE Corcoran is a buyer and seller of wholesale perishable agricultural commodities ("produce") in interstate commerce, and was a dealer licensed in accordance with PACA at all times pertinent to the current litigation. (Docket Nos. 19 at 2; 19-1). Reed Saul is a business engaged in the purchase of wholesale produce in interstate commerce, and was also a dealer licensed in accordance with PACA at all times pertinent to the current litigation. (Docket Nos. 19 at 2; 19-2). Golomb was the owner, officer, and director of Reed Saul and controlled the day to day operations of Reed Saul, including PACA trust assets allegedly belonging to JE Corcoran. (Docket No. 19 at 3).
Between November 7, 2013 and December 30, 2013, JE Corcoran sold and delivered wholesale produce valued at $402, 810.35 to Defendants. (Docket No. 19 at 3). JE Corcoran provided Defendants with invoices evidencing the amount due and owing. (Docket Nos. 19 at 3 -4; 19-3). Defendants never reimbursed JE Corcoran for $356, 410.35 of the total amount owed for the wholesale produce received. (Docket No. 19 at 3).
On February 5, 2014, JE Corcoran filed a claim in the amount of $402, 810.35 with its insurer, Coface, a company engaged in providing credit insurance. (Docket Nos. 19 at 2; 22-1 at 4). The insurance policy limit was $250, 000.00. (Docket No. 22-1 at 4). After accounting for various payments made by Defendants toward their $402, 810.35 debt, Coface paid JE Corcoran $191, 038.64. (Id. ). On April 7, 2014, JE Corcoran then entered into an "Assignment of Account" ("Assignment") agreement with Coface. (Docket Nos. 19 at 2; 19-4). By the terms of the Assignment, Coface received "absolute title" to the outstanding $356, 410.35 debt owed by Defendants to JE Corcoran, as well as "full power and authority" as assignee to "take all proceedings that it may deem necessary for the collection" of the debt. (Docket No. 19-4). The Assignment further states that JE Corcoran is entitled to 44.14% of the net proceeds collected by Coface. (Docket Nos. 19 at 4; 19-4).
A Complaint was thereafter filed in this Court by JE Corcoran on August 6, 2014, seeking damages in the amount of the unpaid balance of $356, 410.35 for wholesale produce delivered. (Docket No. 1). Pursuant to PACA, JE Corcoran sought to collect from both Defendants at Count 1 for failure to pay trust funds; from Reed Saul at Count 2 for failure to pay for goods sold; from Golomb at Count 3 for unlawful dissipation of trust assets by a corporate official; and again, from both Defendants at Count 4 for interest and attorney's fees. (Docket No. 1 at 3-5). The Complaint was subsequently amended on February 2, 2015 to include Coface as an additional plaintiff. (Docket No. 19). Defendants filed the present motions, pro se, on February 20, 2015. (Docket Nos. 21; 22). The issues have been fully briefed. (Docket Nos. 24; 25). The matter is now ripe for disposition.
III. STANDARD OF REVIEW
Although not explicitly styled as such in their motions, Defendants' arguments for dismissal and disallowance are attacks on Plaintiffs' standing to bring the claims contained in the Amended Complaint. "A motion to dismiss for want of standing is... properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Constitution Party of Pennsylvania v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014) (quoting Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)). Whether such a motion is a "facial" or "factual" attack on standing determines how the pleadings are to be reviewed. Id. at 357-58 (citing In re Schering Plough Corp. Intron, 678 F.3d 235, 243 (3d Cir. 2012)).
A facial attack considers only "a claim on its face and asserts that it is insufficient to invoke the subject matter jurisdiction of the courts" due to some jurisdictional defect. Id. at 358. This type of attack occurs prior to the filing of an answer or a challenge to the factual allegations of a complaint. Id. (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 889-92 (3d Cir. 1977)). A factual attack concerns "the actual failure of a plaintiff's claims to comport factually with the jurisdictional prerequisites." Id. (quoting CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008)). A defendant's challenge must go to the actual facts supporting a claim, "not merely how those facts were pled." U.S. ex rel. Atkinson v. PA Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007).
Although Defendants have filed an Answer to Plaintiffs' original Complaint denying various statements of fact contained therein, Defendants did not file an answer to the Amended Complaint, and in the motions presently before this Court, Defendants' arguments are not based upon conflicting factual accounts. Defendants contest only the import of the facts pled; i.e. whether the Assignment is sufficient to confer standing to either of the Plaintiffs. Given that there is no factual attack, here, the Court may "only consider the allegations of the complaint and documents referenced therein and attached thereto... in the light most favorable" to Plaintiffs. Id. (citing In re Schering, 678 F.3d at 243).
Defendants begin by arguing in their Motion to Disallow that Coface should not be able to bring suit pursuant to PACA provisions, because Coface is not "a seller, grower, or supplier of fresh fruits and vegetables, " and is "not a registered PACA licensee." (Docket No. 21 at 1). As such, Coface is arguably not entitled to the protections afforded to licensees under PACA. (Id. ). Nevertheless, as Defendants clearly articulate in their concurrent Motion to Dismiss, JE Corcoran assigned to Coface "full power and authority" to file the present action. (Docket No. 22 at 1). Moreover, the Assignment ...