United States District Court, D. New Jersey
the Court is Plaintiff Eagle Fruit Traders, LLC's
(“Plaintiff”) Motion for a Preliminary Injunction
against Defendants Ultra Fresh, LLC (“Ultra
Fresh”), Michael Felix, and William Hidalgo
(collectively “Defendants”). (D.E. No. 4).
Plaintiff seeks to enjoin Defendants from dissipating the
assets of Ultra Fresh. Defendants have not opposed
Plaintiff's Motion for Preliminary Injunction, and on
November 7, 2018, the Clerk of Court entered default against
Defendants for failing to answer the Complaint. As such, the
Court deems the Motion unopposed. This Court has jurisdiction
pursuant to 7 U.S.C. § 499E (c)(5)(i) and 28 U.S.C.
§ 1331. For the reasons set forth below, Plaintiff's
Motion for Preliminary Injunction is
brings this action under the Perishable Agricultural
Commodities Act of 1930 (“PACA”), 7 U.S.C. 499a,
et seq. (D.E. No. 1, Complaint
(“Compl.”) ¶ 7). Plaintiff is a
Massachusetts limited liability company engaged in the
business of selling wholesale quantities of perishable
agricultural commodities (“Produce”) in
interstate commerce, and is a licensed as a Produce dealer
under PACA. (Compl. ¶ 3). Defendant Ultra Fresh is a New
Jersey limited liability company engaged in the business of
buying wholesale quantities of Produce in interstate
commerce. (Id. ¶ 4). Defendants Felix and
Hidalgo are principals, officers, and owners of Ultra Fresh.
(Id. ¶¶ 5-6).
May 15, 2018 and June 5, 2018, Plaintiff sold and delivered
to Defendants, in interstate commerce, $44, 800 worth of
Produce, which Defendants accepted but failed to pay for.
(Id. ¶ 8). Soon after, Plaintiff delivered to
Defendants invoices dated May 15, May 16, May 23, and June 5,
2018, which contained certain language required under 7
U.S.C. § 499e(c)(4). (Id. ¶ 9; D.E. No.
4-3, Declaration of Michael Giglio (“Giglio
Decl.”) ¶ 8 & Exs. 3-4). Additionally, the
invoices contain a provision requiring Defendants to pay
Plaintiff interest at a rate of 1.5% monthly (18% annually)
on all unpaid amounts, as well as attorneys' fees and
costs associated with collecting the unpaid amount. (Compl.
¶¶ 10-11; Giglio Decl. ¶ 9). As such,
Plaintiff alleges it is the beneficiary of the “PACA
Trust” created by operation of 7 U.S.C. § 499e(c).
(Compl. ¶ 9).
alleges that Defendants acknowledged the PACA Trust debt,
have admitted they lack the funds to pay the balance in full,
and have breached promises to make partial payments.
(Id. ¶ 13; Giglio Decl. ¶ 11).
Particularly, Defendants have told Plaintiffs representatives
that Defendants lack the money to pay the balance of the debt
in full and need a payment plan to pay the debt, because
other creditors have filed numerous claims with the USDA for
failure to pay against Ultra Fresh. (Giglio Decl. ¶ 11).
alleges that there are accounts receivable owed to Ultra
Fresh, which are likely impressed with the PACA Trust.
(Id. ¶ 14). Plaintiff states that unless
Defendants are enjoined, Defendants will continue to
dissipate the trust, causing Plaintiff immediate and
irreparable harm. (Id. ¶ 15).
October 1, 2018, Plaintiff filed the instant Complaint
(See Compl.), and on October 9, 2018, Defendants
were served with process (D.E. No. 3). On or about October
11, 2018, the parties reached a tentative agreement for a
payment plan where Defendants would make the first payment of
$11, 200 on or before October 15, 2018. (Id. ¶
12). However, Defendants failed to execute the agreement and
failed to make this payment. (Id.). On October 23,
2018, Plaintiff filed a request for an Order to Show Cause
with Temporary Restraints against Defendants. (D.E. No. 4).
On October 25, 2018, the Court held oral argument on
Plaintiff's request. The Court permitted Defendants'
out-of-state counsel to appear via telephone. (See
D.E. No. 7). After hearing arguments, the Court reserved its
decision pending settlement talks before the Honorable
Magistrate Judge Steven C. Mannion. (Id.). That
afternoon, the parties reached a tentative settlement which
was placed on the record.
October 31, 2018, however, Plaintiff's counsel filed a
letter indicating Defendants had failed to execute the agreed
stipulated judgment. (D.E. No. 8). Further, Defendants'
counsel informed Plaintiff that he did not anticipate the
execution of the stipulated judgment to be forthcoming.
(Id.). Consequently, Plaintiff requested that the
Court issue the requested temporary restraints and order
Defendants to show cause. (Id.).
November 1, 2018, the Court read into the record its Opinion
and issued an Order to Show Cause with Temporary Restraints
temporarily retraining Ultra Fresh and its officers,
including Defendants Felix and Hidalgo, from dissipating the
PACA Trust assets. (D.E. Nos. 9 & 10). Particularly, the
Court found that Plaintiff was likely to succeed on the
merits of its PACA claims, that Plaintiff had and would
suffer immediate irreparable harm if the restraints were not
imposed because it was likely Defendants were dissipating the
PACA Trust assets, and that the equities supported the grant
of the temporary restraints. Therefore, Defendants were
ordered to show cause why a preliminary injunction should not
be issued and were ordered to file any opposition to the
preliminary injunction by November 8, 2018. (D.E. No. 10).
Plaintiff's counsel certified that he served this Order
upon Defendants via email to Defendants' out-of-state
counsel and via two separate business of emails to Ultra
Fresh on November 1, 2018, as well as via overnight mail to
Ultra Fresh's principal place of business and Felix's
home address on November 1 and again on November 6, 2018.
(D.E. No. 14, at 1-2).
November 5, after Defendants failed to timely answer the
Complaint, Plaintiff moved for default, and on November 7,
2018 the Clerk of Court entered default against Defendants.
(D.E. No. 11). As of today, Defendants have not filed an
opposition to the Preliminary Injunction, have not answered
the Complaint, and have otherwise failed to make any formal
appearance before this Court since the October 25, 2018
relief is an “‘extraordinary remedy' and
‘should be granted only in limited
circumstances.'” Kos Pharm., Inc. v. Andrx
Corp., 369 F.3d 700, 708 (3d Cir. 2004) (quoting Am.
Tel. & Tel. Co. v. Winback & Conserve Program,
Inc., 42 F.3d 1421, 1427 (3d Cir. 1994)). The Court may
grant an injunction only if a party shows: “(1) a
likelihood of success on the merits; (2) that it will suffer
irreparable harm if the injunction is denied; (3) that
granting preliminary relief will not result in even greater
harm to the nonmoving party; and (4) that the public interest