United States District Court, D. Idaho
BRAD JANICEK d/b/a JANICEK FARMS and BLUE DIAMOND TURF, LLC, Plaintiffs,
FIRST FRUITS HOLDINGS, LLC d/b/a FOUR RIVERS ONION PACKING, Defendant.
MEMORANDUM DECISION AND ORDER
Benson United States District Judge.
Dee Benson Before the Court is Defendant's Motion to
Dismiss Plaintiff's fifth and sixth causes of action
pursuant to Federal Rule of Civil Procedure 12(b)(6). The
motion has been fully briefed and a hearing was held before
the Court in Boise, Idaho on June 8, 2017. Plaintiffs were
represented at the hearing by Julie Klein Fischer. Defendant
was represented by Patrick Mahoney and Gregory Brown. Based
on the parties' written and oral arguments and on the
relevant facts and the law, the Court enters the following
Brad Janicek is an onion grower who resides in Ada County,
Idaho and does business as Janicek Farms. Complaint, Dkt. 1
at ¶1. Plaintiff Blue Diamond Turf, LLC is an Idaho
company with its principle place of business in Ada County,
Idaho. Id. at ¶2. Defendant First Fruits
Holdings, LLC is a North Carolina company in the business of
purchasing, packing and reselling perishable agricultural
commodities, including onions. Id. at ¶¶
3, 7. In June 2015, First Fruits purchased the assets of Four
Rivers Packing Co., an Idaho corporation. Id. at
September 25, 2015 and July 20, 2016, Plaintiffs and First
Fruits entered into agreements with each other, both of which
are entitled “Contract to Buy or Handle, ” for
the sale, purchase and delivery of yellow onions. The
agreements constitute the contract (“the
Contract”) between the parties and provide that
Plaintiffs would deliver to Defendant 100, 000 hundredweight
of onions in exchange for payment from Defendants to be made
as follows: $100, 000 within 10 days of the completion of the
first delivery; $100, 000 within 40 days of the completion of
the first delivery; one-quarter of the balance due on
November 20, 2016; one-quarter of the balance due on December
20, 2016; $100, 000 due on January 20, 2017; $100, 000 on
February 20, 2017 and the remaining balance due on March 20,
2017. See Complaint at ¶¶ 9-11 & Exhs.
A & B.
to the terms of the Contract, Plaintiffs delivered onions to
Defendant's facility in Weiser, Idaho from August 10
through August 27, 2016. Id. at Exh. C. Accordingly,
Defendant's first payment was due on August 28, 2016 in
the sum of $100, 000 and the second payment was due on
September 27, 2016, also in the sum of $100, 000.
Id. at ¶ 24. Defendant failed to make the first
payment on the date due and instead made a payment of $50,
000 on September 5, 2016 and a payment of $25, 000 on
September 8, 2016. Id. at ¶¶ 27 & 32.
First Fruits failed to make the second payment of $100, 000
which was due on September 27, 2016. Complaint at ¶ 31.
September 30, 2016, Defendant emailed the following to
I need to inform you that we are rejecting the contract
signed on July 20th, 2016 and intend to run your
onions and take deductions according to shrink weight.
Payment will begin on November 20, 2016 but deductions will
be across the 5 payments remaining.
Id. at ¶ 33-34. On September 30, 2016,
Plaintiffs made demand for full payment then due under the
Contract. See Exh. D. On October 7, 2017, Defendant's
counsel delivered a letter to Plaintiffs' counsel in
which Defendant alleged Plaintiffs had breached the Contract
due to the condition of the onions delivered.
October 14, 2016, Plaintiffs sent a Notice of Intent to
Preserve Trust Benefits Under the Perishable Agricultural
Commodities Act (“Trust Notice”). On the same
date, Plaintiffs accelerated all amounts due under the
Contract. Id. at ¶ 36 and Exh. E.
filed this lawsuit on November 8, 2016. The Complaint asserts
seven causes of action: (1) breach of contract; (2) breach of
the covenant of good faith and fair dealing; (3) violation of
the uniform commercial code; (4) unjust enrichment; (5)
declaratory judgment for violation of the Trust provisions of
the Perishable Agricultural Commodities Act
(“PACA”); (6) enforcement of Plaintiffs' PACA
Trust rights; and (7) violation of the unfair conduct
provisions of PACA.
move to dismiss Plaintiffs' fifth and sixth causes of
action on the basis that Plaintiffs are not entitled to
relief under PACA's Trust provisions for two independent
reasons: (1) the Contract's payment terms do not comply
with the requirements necessary for PACA trust benefits; and
(2) Plaintiffs did not preserve any PACA trust rights. Both
of these positions are discussed below.
Eligibility for ...