Free Declaration - District Court of California - California

Case 3:08-cv-00914-JLS-JMA

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LAW OFFICES RYNN & JANOWSKY 4100 NEWPORT PLACE DRIVE SUITE 700 NEWPORT BEACH, CALIFORNIA 92660 (949) 752-2911 FAX (949) 752-0953

PATRICIA J. RYNN State Bar No. 092048 ELISE O'BRIEN, State Bar No. 245967 RYNN & JANOWSKY, LLP 4100 Newport Place Drive, Suite 700 Newport Beach, CA 92660 Telephone: (949) 752-2911 Facsimile: (949) 752-0953 E-Mail: [email protected] E-Mail: [email protected] Attorneys for Plaintiffs SUCASA PRODUCE, et al. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA, SAN DIEGO DIVISION

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SUCASA PRODUCE, an Arizona Partnership; P.D.G. PRODUCE, INC., an Arizona corporation; EXPO FRESH, LLC, a California limited liability company; H.M. DISTRIBUTORS, INC., an Arizona corporation; PRIME TIME SALES, LLC, a California limited liability company; VANAL DISTRIBUTING, INC., an Arizona corporation, DEL CAMPO SUPREME, INC., an Arizona corporation; MEYER, LLC, a California limited liability company, Plaintiffs vs. SAMMY'S PRODUCE, INC., a California corporation; CALIFORNIA PRODUCE EXCHANGE, INC., a California corporation; US FARMS, INC., a California corporation; WORLD GARLIC & SPICE INC., a California corporation; AMERICAN NURSERY EXCHANGE, INC., a California corporation; YAN SKWARA, an individual; SAMUEL V. NUCCI, an individual; DARIN PINES, an individual, Defendants.

CASE NO. 08-cv-914 JLS (JMA) DECLARATION OF ALMA NORIEGA IN SUPPORT OF PLAINTIFFS' MOTION TO EXPAND THE PRELIMINARY INJUNCTION; EXHIBITS IN SUPPORT THEREOF

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LAW OFFICES RYNN & JANOWSKY 4100 NEWPORT PLACE DRIVE SUITE 700 NEWPORT BEACH, CALIFORNIA 92660 (949) 752-2911 FAX (949) 752-0953

I, ALMA NORIEGA, declare and depose as follows: 1. I currently am and during all times mentioned in this declaration have been the

Accounts Receivable Manager of Plaintiff and Moving Party herein, MEYER, LLC ("MEYER"). 2. MEYER is a limited liability company in King City, California which sells

wholesale quantities of perishable agricultural commodities ("produce") under its own name and which is licensed as a dealer under the Perishable Agricultural Commodities Act of 1930, as amended, [7 U.S.C. §499a, et seq.] ("PACA"). 3. I am personally familiar with all matters which are the subject of this declaration

and the facts stated herein are based upon my own personal knowledge, except as to those matters based upon information and belief, and as to those matters, I believe them to be true. If called as a witness in this proceeding, I would and could competently testify to the matters stated herein. 4. MEYER is a produce creditor of Defendant, Sammy's Produce, Inc.

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("SAMMY'S"). SAMMY'S is a produce dealer as defined under 7 U.S.C. §499a, and operates subject to and is licensed under the PACA. SAMMY'S operates as wholesale buyer and seller of perishable agricultural commodities, and in that capacity has purchased perishable agricultural commodities from Plaintiff for resale to SAMMY'S own customers. 5. Defendants Yan Skwara ("SKWARA"), Samuel V. Nucci ("NUCCI"), and Darin

Pines ("PINES") are listed as SAMMY'S President, Vice President of Sales and Vice President of Operations, respectively, with the Blue Book (a credit service for the produce industry). 6. I make this declaration in support of Plaintiffs' Motion to Expand the Preliminary

Injunction, to prevent Defendants' further dissipation of PACA trust assets and to compel immediate turnover of all such trust assets rightfully belonging to Plaintiffs. 7. As the Accounts Receivable Manager of MEYER, my responsibilities include

monitoring its sales of perishable agricultural commodities, including the sales that are the subject of this dispute, and supervising collection of its accounts receivable for such sales. I have custody and control of MEYER'S sales and accounts receivable records as they relate to Defendant SAMMY'S, and I am thoroughly familiar with the manner in which those records are compiled.

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LAW OFFICES RYNN & JANOWSKY 4100 NEWPORT PLACE DRIVE SUITE 700 NEWPORT BEACH, CALIFORNIA 92660 (949) 752-2911 FAX (949) 752-0953

8.

The sales and accounts receivable records of Plaintiffs, including invoices, billing

statements and other related documents, are made in the ordinary course of business and are made at or near the time of the occurrence of the event of which they are a record. These sales records are made either by me or under my direction and supervision by MEYER'S employees whose duty it is to make such documents. 9. The produce that is the subject of this dispute was sold and shipped in or in

contemplation of interstate or foreign commerce. 10. The total balance due to MEYER from Defendants results from one (1) transaction

involving tomatoes, a perishable agricultural commodity, shipped on February 14, 2008, which Defendant SAMMY'S accepted without objection, for the agreed-upon selling price as reflected on MEYER'S invoice, of which the principal amount of $5,892.00 remains outstanding and seriously past due. 11. An invoice for the shipment was prepared and mailed to Defendant SAMMY'S by

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MEYER on or about the day of the transaction. A true and correct copy of Plaintiff MEYER'S invoice confirming the sale is appended hereto and incorporated herein by reference as Exhibit 1. 12. Although Defendant SAMMY'S received and accepted the produce shipment

without objection, Defendant SAMMY'S has failed to pay for the produce that it purchased from MEYER, with the exception of one payment in the amount of $3,000.00 which was made on May 8, 2008. 13. As the Accounts Receivable Manager of Plaintiff MEYER, I review and approve any price adjustments, credits or discounts issued by MEYER in connection with the sales that are the subject of this dispute. As of the date of this Declaration, no price adjustments of any amount have been issued to Defendants. 14. Further, as the Accounts Receivable Manager of MEYER, it is my responsibility to make certain that MEYER complies with all requirements necessary to preserve its trust rights under PACA for all unpaid shipments of produce, including the shipments that are the subject of this dispute. MEYER is now, and during all times herein has been a PACA licensee, operating under PACA license no. 20041021. In compliance with the statutory filing requirements, I made 3

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LAW OFFICES RYNN & JANOWSKY 4100 NEWPORT PLACE DRIVE SUITE 700 NEWPORT BEACH, CALIFORNIA 92660 (949) 752-2911 FAX (949) 752-0953

certain that each of MEYER'S invoices set forth the following statutory language required by PACA to preserve MEYER'S PACA trust benefits: "The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities and any receivables or proceeds from the sale of these commodities until full payment is received."

See, Exhibit 1, which shows that the above-quoted language appears on the face of the invoice sent to Defendants concerning the transaction that is the subject of this dispute. 15. For the above-stated reasons, I am confident that MEYER has taken all steps

necessary to preserve its PACA trust rights in connection with its outstanding invoices in this proceeding. 16. As of the date of this declaration, the principal balance of $5,892.00 due to MEYER

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from Defendants remains delinquent. Because of Defendants' failure to pay, and the seriously delinquent status of its account with our Company, and SAMMY'S admitted lack of sufficient funds to pay the amount it owes MEYER, I believe that there is a great risk that MEYER will not recover the balance due to it without this Court's intervention and issuance of an injunction restraining Defendants from further dissipation of PACA trust assets. 17. In or about March 2008, I began placing weekly telephone calls to SAMMY'S

requesting the payment of the amount due to MEYER. Initially I spoke with a woman named Tiffany who worked in the accounts payable department at SAMMY'S. Each time I spoke with Tiffany, she told me that the "check has been cut" and "the check is in the mail." After several broken promises of payment from Tiffany, I attempted to call Darin PINES, as he was the VicePresident of SAMMY'S and I felt that I needed to speak to someone in management in order to secure payment. Mr. PINES never returned any of my phone calls. 18. On April 28, 2008, MEYER filed an informal complaint against SAMMY'S with

PACA. A true and correct copy of that letter is attached as Exhibit 2.

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LAW OFFICES RYNN & JANOWSKY 4100 NEWPORT PLACE DRIVE SUITE 700 NEWPORT BEACH, CALIFORNIA 92660 (949) 752-2911 FAX (949) 752-0953

19.

In or about early May, 2008, I received a phone call from Yan SKWARA. Mr.

SKWARA explained that SAMMY'S was in currently in financial trouble, but assured me that SAMMY'S would bounce back and would pay MEYER. Mr. SKWARA did not want MEYER to pursue it's PACA claim. During this time period, MEYER received a check from SAMMY'S, dated May 8, 2008 in the amount of $3,000.00. Deducting this amount from the original invoice price of $8,892.00, SAMMY'S still owes a balance of $5,892.00 to MEYER. 20. During the month of May I spoke with Mr. SKWARA on a weekly basis, on

Tuesday or Wednesday of each week. Each time I spoke with Mr. SKWARA, he assured me that MEYER would be paid, despite the fact that SAMMY'S did not make any further payments. In or about the beginning of June, Mr. SKWARA stopped taking my phone calls or returning my phone calls. 21. At no time have any of the Defendants, or anyone acting on behalf of Defendants,

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ever denied owing Plaintiff MEYER money for the produce it received, nor have they disputed that the principal balance of $5,892.00 remains due to MEYER from SAMMY'S. 22. Because Defendants have (a) admitted that they cannot promptly and fully pay the

PACA trust debt to MEYER and (b) repeatedly failed to remit payments as promised, I am quite certain that Defendants have dissipated the PACA trust assets they control in violation of PACA. Absent immediate intervention from this Court, I believe those trust assets, which rightfully belong to the Plaintiffs in this action, will continue to be dissipated and will remain beyond the reach of the Plaintiffs herein. 23. MEYER relies upon its customers' prompt payment for produce sales so that it can

effectively and adequately manage its current payables to its own vendors, monitor its cash flow, and make informed business decisions. The failure of Defendants to adequately preserve

Plaintiffs' PACA trust assets and to pay the amounts due has jeopardized and will continue to jeopardize the ability of MEYER to properly operate its business, to make informed business decisions, to make necessary purchases and acquisitions, and to pay some of its own suppliers. 24. For the above reasons, MEYER has been economically harmed and will likely be

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