Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Paisano Capital SA DE CV v. 23 Texas Produce, Inc.

United States District Court, N.D. Texas, Dallas Division

July 18, 2019

23 TEXAS PRODUCE, INC., a Texas corporation; JOEL SALAZAR, an individual; and MARICELA SALAZAR, an individual, Defendants.



         Before the Court is Plaintiff Paisano Capital SA de CV's, doing business as Productos Paisano, Motion for Entry of Default Judgment (Doc. 14), filed on June 14, 2019, against Defendants 23 Texas Produce Inc., Joel Salazar, and Marciela Salazar. For the reasons discussed below, the Court ENTERS an ORDER OF DEFAULT JUDGMENT against Defendant 23 Texas Produce, Inc.. Further, the Court GRANTS Plaintiff's request for damages.


         BACKGROUND [1]

         This case arises from a series of contracts (the Agreements) between Plaintiff and Defendants for the purchase and sale of produce. Plaintiff, Paisano Capital SA de CV, doing business as Productos Paisano, entered into the Agreements with Defendants-a Texas corporation that buys produce (“Texas Produce”) and two individual corporate officers-to ship and sell certain quantities of limes. Doc. 1, Compl., ¶ 1, 27-29; e.g., Doc. 1-1, Ex. A, 2 (invoice for limes). Plaintiff shipped the agreed-upon quantities, which Texas Produce accepted without objections. Doc. 1, Compl., ¶¶ 7-8. Plaintiff then forwarded invoices to Texas Produce that reflected the quantity shipped and amounts owed by Texas Produce, which Texas Produce failed to pay. Id. ¶¶ 9, 12. Texas Produce never denied receiving the invoices and nor objected to the terms and conditions contained therein. Id. ¶¶ 10-11.

         Plaintiff filed this case on April 5, 2019, alleging that Texas Produce's failure to pay the invoices despite accepting delivery of the limes constituted a breach of contract and a violation of the Perishable Agricultural Commodities Act of 1930 (“PACA”), 7 U.S.C. § 499b(4). Id. ¶¶ 12, 19-20. The complaint further alleged that the actions of the two individual corporate officers constituted a breach of fiduciary duties to creditors. Id. ¶ 25-45. On April 16, 2019, process was served on all Defendants. Docs. 9-11, Executed Summons. Defendants failed to answer or otherwise defend this lawsuit within the time allowed. Consequently, on May 21, 2019, the Clerk of the Court entered a default (Doc. 13) against Defendants. Plaintiff filed its present motion (Doc. 14) on June 14, 2019. In its motion, Plaintiff acknowledged that the two corporate officers have filed individual Chapter 13 Bankruptcy Petitions in the United States District Court for the Eastern District of Texas, and as a result, the action is stayed as to the two corporate officers only.[2] Doc. 14, Pl.'s Mot. Default J., 1-2. In support of its motion, Plaintiff filed Exhibits that included: the Declarations of Luis A. Camacho Guzman, General Counsel for Plaintiff (Doc. 14-1), and Steven M. De Falco, Attorney for Plaintiff (Doc. 14-2); copies of invoices sent directly to Texas Produce (Doc. 14-1, Ex. 1); and documentation showing expenses incurred by Plaintiff for attorney's fees and court costs (Doc. 14-2, Exs. 2-3). Texas Produce has again failed to respond. Plaintiff's motion is now ripe for review.



         A. Default Judgment

         “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, . . . the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Once default has been entered, the court may enter a default judgment against the defaulting defendant upon motion of the plaintiff. Fed.R.Civ.P. 55(b). Through the entry of default judgment, the “conduct on which liability is based may be taken as true as a consequence of the default.” Frame v. S-H Inc., 967 F.2d 194, 205 (5th Cir. 1992). In considering a motion for default judgment, the court accepts as true the well-pleaded allegations of facts in the complaint. Nishimatsu Constr., 515 F.2d at 1206.

         In determining whether a default judgment should be entered against a defendant, courts have developed a two-part analysis. See, e.g., Ins. Co. of the W. v. H & G Contractors, Inc., No. C-10-390, 2011 WL 4738197, at *2-3 (S.D. Tex. Oct. 5, 2011). First, the court must consider whether the entry of default judgment is appropriate under the circumstances. See Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). The factors relevant to this inquiry include whether: (1) material issues of fact exist; (2) there has been substantial prejudice; (3) the grounds for default are clearly established; (4)the default was caused by a good faith mistake or excusable neglect; (5) the harshness of a default judgment; and (6) the court would think itself obliged to set aside the default on the defendant's motion. Id. Second, the court must assess the merits of the plaintiff's claims and find sufficient basis in the pleadings for the judgment. See Nishimatsu Constr., 515 F.2d at 1206. Although the defendant may be in default, “[t]he defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Id.



         A. Whether Default Judgment is Appropriate

         In deciding whether default judgment is appropriate, the Court considers the six factors outlined in Lindsey. Applying them to this case, the Court finds that they weigh in favor of default. First, Texas Produce has not filed any responsive pleadings. Consequently there are no material facts in dispute. Lindsey, 161 F.3d at 893; Nishimatsu Constr., 515 F.2d at 1206 (noting that “[t]he defendant, by his default, admits the plaintiff's well pleaded allegations of fact”). Second, Texas Produce's “failure to respond threatens to bring the adversary process to halt, effectively prejudicing Plaintiff's interests.” Ins. Co. of W., 2011 WL 4738197, at *3 (citing Lindsey, 161 F.3d at 893). Third, the grounds for default have been clearly established by Texas Produce's failure to respond to the Complaint and the entry of default by the clerk. Fourth, there is no evidence before the Court to indicate that Texas Produce's silence is the result of a “good faith mistake or excusable neglect.” Lindsey, 161 F.3d at 893. Indeed, Texas Produce has had plenty of time-approximately three months-to answer and has filed nothing with the Court to explain its reticence. C.f. Elite v. The KNR Group, 216 F.3d 1080 (Table), 2000 WL 729378, at *1 (5th Cir. May 19, 2000) (per curiam) (holding default judgment to be inappropriate where defendant sent a letter to court explaining his failure to appear was due to financial privation). Fifth, Plaintiff only seeks the relief to which it is entitled under law, mitigating the harshness of default judgment. And sixth, the Court is not aware of any facts that would give rise to “good cause” to set aside the default if challenged by Texas Produce. See Id. Therefore, the Court concludes that default judgment is proper.

         B. Whether There is a Sufficient Basis for Judgment on the Pleadings

         Due to its default, Texas Produce is deemed to have admitted the allegations of breach of contract and violation of PACA set forth in the Complaint. Nonetheless, the Court must review the pleadings to determine whether Plaintiff can establish a viable claim for relief. See Nishimatsu Constr., 515 F.2d at 1206 (noting that “default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover”).

         1. Breach of Contract

         Plaintiff first moves for default judgment on its claim for breach of contract. Doc. 1, Compl., ¶¶ 6-14. Under Texas law, the elements of a breach of contract claim are: “‘(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.'” Smith Int'l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.