United States District Court, D. Delaware
January 15, 2010, Fresh Direct, Inc. ("Fresh
Direct") filed suit against Harvin Foods, Inc. and its
principal officer, Grady Keith Harvin, (collectively,
"Harvin Foods"). In its initial complaint, Fresh
Direct sought a temporary restraining order ("TRO")
and preliminary injunction to freeze Harvin Foods'
assets, based on that company's, alleged violation of
Section 5(c) of the Perishable Agricultural Commodities Act
(the "PACA"), 7 U.S.C. §499e(c). Specifically,
Fresh Direct alleged that Harvin Foods failed to compensate
it for produce received and accepted by Harvin Foods and, in
so doing, violated the statutory trust ensured by PACA. (D.I.
1 at 3.)
February 1, 2010, Fresh Direct filed an amended Complaint,
adding Whitmore Distributing Co. ("Whitmore"),
Philadelphia Produce Credit Bureau ("PPCB"), and
Champion Produce Sales Inc. ("Champion") as
Plaintiffs. (D.I. 15). Plaintiffs filed an amended motion for
preliminary injunction. (D.I. 16). The court granted
Plaintiffs motion in part by freezing Harvin Foods'
assets in the amount allegedly owed to Plaintiffs-$170,
720.57. (D.I. 53). On December 8, 2010, Foodsource filed a
motion to consolidate its case, Case No. 1:10-cv-00439-GMS,
with the present action. (D.I. 66). The court
granted Foodsource's motion on April 5, 2011. (D.I. 75).
After riling another amended Complaint, Plaintiffs again
filed an amended motion for preliminary injunction. (D.I.
70). On March 30, 2012, the court granted Plaintiffs'
amended motion for preliminary injunction, ordering that
"all funds belonging or owing to Harvin Foods, Inc. ...
up to and including $294, 543.62, shall be immediately paid
to Kate Ellis, Esq., McCarron & Diess, attorneys for
Plaintiffs, to be held for the benefit of Plaintiffs pending
further court order." (D.I. 102).
amended Complaint was filed, adding Wilmington Savings Fund
Society, FSB ("WSFS") as defendant. (D.I. 111).
Plaintiffs and Defendant WSFS came to an agreement on
November 13, 2013, whereby WSFS agreed to settle
Plaintiffs' claims against WSFS for a total payment of
$300, 301.47. (D. I. 164 at 1). Pursuant to the stipulation
Plaintiffs and WSFS filed, WSFS was dismissed from the case.
(D.I. 147). On December 29, 2014, the court granted in-part
and denied in-part Plaintiffs' Motion for Default
Judgment and for Disbursement of Trust Funds. (D.I. 161).
Plaintiffs' request for default judgment was denied as to
Mr. Harvin, but granted as to Harvin Foods, Harvin Partners,
Harvin Properties, and KH Foods. Id. The court
ordered that "Defendants owed Plaintiffs the aggregate
sum of $214, 146.64 as a trust debt under Section 5(c) of the
Perishable Agricultural Commodities Act, 7 U.S.C. §
499e(c)(2)." (D.I. 162 at 1). Presently before this
court is Plaintiffs' motion for summary judgment against
the sole remaining Defendant, Grady Keith Harvin ("Mr.
Harvin"), filed on April 29, 2016. (D.I. 163). For the
reasons that follow, the court will grant Plaintiffs'
plaintiffs are produce dealers licensed under PACA. (D.I. 17
at 4). Harvin Foods is a licensed produce wholesale dealer
and broker under PACA. (D.I. 9, Ex. 1). Mr. Harvin is the
President, (D.I. 21 ¶ 2), and sole owner of Harvin
Foods. (D.I. 153 ¶ 5(e)). He was also the only principal
reported on Harvin Foods' PACA license. (D.I. 9, Ex. 1).
The produce that Harvin Foods receives is stored in Harvin
Foods' warehouse before it is sold and delivered to
restaurants and other customers of Harvin Foods. (D.I. 20 at
5-6). The plaintiffs claim that they collectively delivered
$246, 901.47 worth of produce to Harvin Foods, and Harvin
Foods accepted those deliveries. (D.I. Ill. ¶ 7). Harvin
Foods, however, failed to pay the amount it owed to for the
produce. Id. The produce delivered is subject to the
PACA and the plaintiffs note that they preserved their rights
in the statutory trust as required under PACA, 7 U.S.C.
§499(e)(c), and the relevant accompanying
regulations. (D.I. Ill. ¶¶ 8-9). The
plaintiffs allege that Harvin Foods has refused to pay them,
because of an internal dispute with former Harvin Foods'
employees. (D.I. 17 at 3-4; D.I. 20 at 2-4).
Foods does not contest that its refusal to pay the plaintiffs
results from a dispute with former employees. (D.I. 20 at
6-7). Specifically, Harvin Foods states that the produce
purchased from the plaintiffs was ordered by two individuals,
Raymond Maragni, Jr. ("Maragni") and Vincenzo
Giuffrida ("Giuffrida"), with whom Harvin Foods
briefly entered into a food brokerage business. Id.
at 6. Harvin Foods notes that in or around July 2009, it
agreed to enter into a limited affiliation brokerage business
with Maragni and Giuffrida, wherein the brokerage business
would buy product from vendors that would then be transported
by a trucking company from the vendor to the customer.
Id. at 2. Harvin Foods indicates that the brokerage
business initially went well, and Maragni and Giuffrida
worked from Harvin Foods' office. Id. Maragni
and Giuffrida later stopped working from the Harvin
Foods' office, however, and became unresponsive when
business began to "pick up." Id. Soon
after, Harvin Foods began receiving complaints from the
brokerage business vendors that had not been paid for produce
they shipped to Harvin Foods. Id. Harvin Foods notes
that it had not done business with many of these vendors in
the past. Id. Upon investigating the complaints,
Harvin Foods learned that Maragni and Giuffrida were
fraudulently ordering produce from growers and/or vendors on
Harvin Foods' credit, but having brokerage business
customers send their payment checks directly to them.
Id. Harvin Foods then terminated its affiliation
with Maragni and Giuffrida and filed a criminal complaint
with the Wilmington Police Department to alert them of the
fraudulent scheme. Id. at 3.
14, 1999, Harvin Foods granted WSFS, a security interest in
all of its accounts, inventory, equipment, specific property,
records, securities, and proceeds. (D.I. 164, Ex. A). On
November 13, 2013, ?laintiffs and WSFS came to an agreement
to settle Plaintiffs' claims against WSFS for a total
payment of $300, 301.47. (D. I. 164 at 1). The settlement
with WSFS allowed Plaintiffs to recoup the amount owed to
them for their produce. Id. at 14. Plaintiffs seek
to recover only interest and attorneys' fees from Mr.
III. STAND ARE OF REVIEW
judgment is appropriate "if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). A fact is material if it "could
affect the outcome" of the proceeding. Lamont v. New
Jersey, 637 F.3d 177, 181 (3d Cir. 2011). A genuine
dispute exists "if the evidence is sufficient to permit
a reasonable jury to return a verdict for the non-moving
party." Id. The moving party bears the burden
of proving that summary judgment should be granted.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 585 n.10 (1986). The district court
must view the evidence in the light most favorabl e to the
nonmoving party and draw inferences in that party's
favor. Wishkin v. Potter, 476 F.3d 180, 184 (3d Or.
mere existence of some evidence in support of the nonmoving
party will not be sufficient for denial of a summary judgment
motion. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). Rather, the nonmoving party must present
enough evidence to enable a jury to reasonably find for it on
that issue. Id. The party opposing, summary judgment
must present more than just "mere allegations, general
denials, or . . . vague statements" to show the
existence of a genuine issue. Quiroga v. Hasbro,
Inc., 934 F.2d 497, 500 (3d Cir. 1991). The moving party
is entitled to judgment as a matter of law if the nonmoving
party fails to make a sufficient showing on an essential
element of its case for which it has the burden of proof.
Celotex Corp. v. Catrett, 477 U.S. 317, 322(1986).
court has jurisdiction under 28 U.S.C. § 1331. This
matter arises under the trust provision of the Perishable
Agricultural Commodities Act. • 7 U.S.C §
499e(c)(2). That provision requires:
[p]erishable agricultural commodities received by a
commission merchant, dealer, or broker in all transactions,
and all inventories of food or other products derived from
perishable agricultural commodities, and any receivables or
proceeds from the sale of such commodities of products, shall
be held by such commission merchant, dealer, or broker in
trust for the benefit of all unpaid suppliers or sellers of
such commodities or agents involved in the transaction, until
full payment ...