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Jacobs Silver K Farms, INC. v. Taylor Produce, LLC

United States District Court, D. Idaho

September 24, 2016

JACOBS SILVER K FARMS, INC., et al., Plaintiffs,
v.
TAYLOR PRODUCE, LLC, et al., Defendants.

          MEMORANDUM DECISION

          B. Lynn Winmill Chief Judge United States District Court

         INTRODUCTION

         The Court has before it a motion for entry of final judgment under Rule 54(b) against certain defendants. The motion is fully briefed and at issue. For the reasons set forth below, the Court will grant the motion.

         LITIGATION BACKGROUND

         Plaintiffs delivered over $1 million worth of agricultural produce to defendant Taylor Produce LLC but were never paid. To recover their loss, plaintiffs - referred to collectively as “Jacobs” - brought this lawsuit against Taylor Produce under the Perishable Agricultural Commodities Act of 1930 (PACA).

         In addition to their claims against Taylor Produce[1], Jacobs sued a group of defendants referred to as the Nonpareil Defendants. Jacobs claims that the produce it delivered to Taylor Produce was turned over to the Nonpareil Defendants for sale, but that the Nonpareil Defendants never remitted the sale proceeds to Taylor Produce, who in turn was unable to pay Jacobs. Jacobs sues the Nonpareil Defendants for conversion of PACA Trust assets, arguing that the Nonpareil Defendants breached a duty to hold the sale proceeds in trust for the PACA beneficiaries, specifically Jacobs. While there are a number of entities comprising the Nonpareil Defendants, [2] Jacobs asserts that they are all alter-egos of each other and should be equally liable.

         Thus, there are two sets of defendants for the purposes of the motion at issue: (1) Taylor Produce, and (2) Nonpareil Defendants. The threshold issue between these parties was whether Jacobs was entitled to a PACA Trust as against Taylor Produce.

         Jacobs filed a motion for summary judgment against Taylor Produce arguing that it had satisfied all the legal requirements for establishing a PACA Trust against Taylor Produce. While Taylor Produce did not file a cross-motion for summary judgment, it did seek dismissal of the PACA Trust claims in its response brief on the ground that Jacobs' PACA notices were insufficient.

         At the same time, the Nonpareil Defendants filed a motion for summary judgment against Jacobs, making arguments identical - word-for-word identical - to those advanced by Taylor Produce that Jacobs' PACA notices were insufficient. Compare Taylor Produce Brief (Dkt. No.120-1) with Nonpareil Defendants Brief (Dkt. No. 103-5)

         Judge Lodge, who was presiding at the time, granted Jacobs' motion for summary judgment finding as a matter of law that (1) the PACA notices were sufficient, and (2) Jacobs had a valid PACA Trust claim over Taylor Produce in the amount of $1, 327, 478.16. See Order (Dkt. No. 136). On the same day, Judge Lodge issued a separate decision denying the motion for summary judgment filed by the Nonpareil Defendants, incorporating by reference his other decision finding a valid PACA Trust had been established against Taylor Produce. See Order (Dkt. No. 135) at p. 13.

         Thereafter the case was transferred to this Court and a trial date was set for November 7, 2016. Jacobs filed the motion now before the Court to enter a final Judgment under Rule 54(b) against Taylor Produce declaring that Jacobs has a valid PACA Trust against Taylor Produce in the amount of $1, 327, 478.16.

         ANALYSIS

         The Nonpareil Defendants object to Jacobs' motion, arguing that further issues remain for trial and that Rule 54(b) certification is therefore inappropriate. The Nonpareil Defendants argue that Judge Lodge's decision cannot be deemed final because they are entitled to challenge the sufficiency of the PACA notices at trial.

         The Nonpareil Defendants offer no reason to reconsider Judge Lodge's ruling. They argue simply that because summary judgment was not granted against them specifically, they retain the right to challenge the PACA notices at trial. The Court disagrees. The Nonpareil Defendants had a full and fair opportunity to challenge the PACA notices in the summary judgment proceedings, and made arguments in their brief that were word-for-word identical with those made by Taylor Produce. Judge Lodge rejected those arguments and held as a matter of law that the PACA notices were sufficient and that a valid PACA Trust was established. To allow the Nonpareil Defendants to plow this same ground in the trial would be to ignore ...


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