Judge: Thomas Falls, Case: 21PSCV01063, Date: 2022-10-25 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Dept. R at 909-802-1117 before 8:30 the morning of the hearing.

Case Number: 21PSCV01063    Hearing Date: October 25, 2022    Dept: R

National Commerce Recovery Inc. v. GP Produce Inc, et al. (21PSCV01063)

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Plaintiff National Commerce Recovery Inc’s APPLICATION FOR DEFAULT JUDGMENT

Tentative Ruling

Plaintiff National Commerce Recovery Inc’s APPLICATION FOR DEFAULT JUDGMENT is GRANTED.

Background

This is a complaint for money owed. Plaintiff National Commerce Recovery Inc. (“Plaintiff”) alleges the following against Defendant GP Produce Inc, Sunshine Fresh Vegetable, and Hao Jian: Defendants became indebted to Plaintiff’s Assignor in the amount of $47,991.50 ($36,167.50 invoiced to GP Produce, Inc. and $11,824.00 invoiced to Sunshine Fresh Vegetable).

On December 20, 2021, Plaintiff filed suit against Defendants and Does 1-10 for:

1. Common Counts—Open Book,

2. Common Counts—Goods Sold and Delivered,

3. Account Stated,

4. Money Due on Dishonored Check, and

5. Violation of Perishable Agricultural Commodities Act

On March 28, 2022, default was entered as to: NATIONAL COMMERCIAL RECOVERY, INC., a California corporation d/b/a BLAIR SMITH and ASSOCIATES, GP PRODUCE, INC., a California corporation; SUNSHINE FRESH VEG ET ABLE, a California corporation; HAO JIANG a/k/a HAO Y. JIANG a/k/a HAOYING JIANG a/k/a KENNY JIANG, an individual.

On April 7, 2022, an application for default judgment was filed, which the court denied.

On July 13, 2022, the court again denied the application.

On September 19, 2022, Plaintiff filed a supplemental declaration.

Discussion

In the court’s July 13, 2022 tentative ruling, the court denied Plaintiff’s application for the failure to explain liability against the individual defendant. A review of the supplemental declaration provides the explanation. According to Plaintiff, Defendant HAO YING JIANG is personally liable because he “owned and controlled defendant GP PRODUCE, INC., and is therefore personally liable for the debt under federal PACA trust law ("Perishable Agricultural Commodities Act", U.S.C.§499a et seq.).”). (Declaration p. 3.)

Indeed, PACA trust law imposes liability on an individual, for whatever reason and however innocent, who has breached a fiduciary duty and is personally liable for that tortious act, namely not preserving the trust assets for the beneficiaries.

Here, Defendant was in a position to control the PACA assets for purposes of PACA trust because he was the (i) agent for service and the sole officer/director of both GP PRODUCE, INC. and SUNSHINE FRESH VEGETABLE and (ii) he was the person who the seller dealt with during the subject transactions, and (iii) he signed the check. (Declaration p. 6.)

Therefore, as a statutory trustee under PACA law and by failing to pay or account for perishable commodities purchased by GP Produce and Sunshine Fresh, Defendant Hao Ying Jiang is personally liable.

Conclusion

Based on the foregoing, entry of default judgment is granted against Defendants.