S. Katzman Produce Inc., Plaintiffs-Appellees v. Yadid, Defendant-Appellant, Orel Produce, Inc. t/a Moses, and Moshe Yadid, Defendants* Appeal by defendant Eliran Yadid from so much of a judgment of the United States District Court for the Southern District of New York, Paul A. Crotty, Judge, as orders him, jointly and severally with his codefendants Orel Produce, Inc. t/a Moses (“Orel”), et al., to pay plaintiffs, suppliers of perishable goods, a total of $606,664.87, including principal amounts totaling $473,268.82, plus interest and attorneys’ fees, by reason of Orel’s failure to pay plaintiffs for goods purchased, and the dissipation of the statutory trust imposed on Orel’s assets for the benefit of unpaid suppliers, in violation of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. §499a et seq. The court granted plaintiffs’ motion for summary judgment holding Eliran liable on the ground that he was a person in control of the trust assets. See S. Katzman Produce, Inc. v. Orel Produce, Inc., 18 Civ. 6947, 2019 WL 4303423, *3-*4 (S.D.N.Y. Sept. 11, 2019). On appeal, Eliran, who was neither an owner nor an officer of Orel, contends that summary judgment was inappropriate because there are genuine issues as to whether he had such control. We conclude that partial summary judgment was appropriate with respect to $40,000 of PACA trust assets that were placed in Eliran’s personal bank account, but that whether he had the necessary degree of control over other assets could not be resolved as a matter of law. Accordingly, we vacate the judgment in part and remand for trial of the issue of Eliran’s control over other Orel assets. Affirmed in part, vacated in part, and remanded. AMALYA KEARSE, C.J. Defendant Eliran Yadid (“Eliran” or “E. Yadid”) appeals from so much of a judgment of the United States District Court for the Southern District of New York, Paul A. Crotty, Judge, as orders him, jointly and severally with his codefendants Orel Produce, Inc. t/a Moses (“Orel”), and Moshe Yadid (“Moshe” or “M. Yadid”), to pay plaintiffs, suppliers of perishable goods, a total of $606,664.87, including principal unpaid amounts totaling $473,268.82, plus interest and attorneys’ fees, by reason of Orel’s failure to pay plaintiffs for goods purchased, and defendants’ dissipation of the statutory trust imposed on Orel’s assets for the benefit of unpaid suppliers, in violation of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. §499a et seq. The court granted plaintiffs’ motion for summary judgment holding Eliran liable on the ground that he was a person in control of the trust assets. On appeal, Eliran, who was neither an owner nor an officer of Orel, contends that summary judgment was inappropriate because there exist genuine issues of fact as to whether he had such control. We conclude that partial summary judgment was appropriate with respect to $40,000 of PACA trust assets that were placed in Eliran’s personal bank account, but that whether he had the necessary degree of control over other assets could not be resolved as a matter of law. Accordingly, we vacate so much of the judgment as held Eliran liable for an amount in excess of $40,000, and remand for trial of the issue of his control over other Orel assets. I. BACKGROUND Most of the facts leading to this lawsuit are not in dispute. Plaintiffs S. Katzman Produce Inc. et al. (collectively the “Katzman Companies” or “Katzman”) are licensed interstate suppliers of perishable fruits and vegetables. Orel, until it ceased operations in the summer of 2018, was a wholesale distributor of fruits and vegetables, subject to license under PACA. Orel was wholly owned by Moshe, who was its only officer. Eliran is Moshe’s son. In February-July 2018, Orel purchased from the Katzman Companies wholesale quantities of produce worth more than $516,000, for most of which Orel failed to pay. In August 2018, Katzman, having previously preserved rights in accordance with PACA, commenced the present action against Orel, Moshe, and Eliran, principally alleging violations of PACA, which, in pertinent part (see Part II.A. below), requires dealers in perishable agricultural commodities to make full payment to their suppliers promptly, or to maintain the proceeds or receivables from such commodities in trust for the suppliers until full payment has been made. Following a period of discovery, in which neither side conducted depositions, Katzman moved for summary judgment. Defendants conceded Orel’s liability; and an initial dispute as to the amount Orel owed was resolved. See S. Katzman Produce, Inc. v. Orel Produce, Inc., 18 Civ. 6947, 2019 WL 4303423, *1 & n.1, *3, *5 (S.D.N.Y. Sept. 11, 2019) (“S. Katzman”). It was also “[n]ot disputed” that “[a]t all relevant times, defendant Moshe Yadid is and was the sole shareholder and officer of [Orel], and is and was in a position of control over the PACA trust assets belonging to Plaintiffs.” (Plaintiffs’ and Defendants’ Rule 56.1 Statements 15 (emphases ours).) Accordingly, neither the district court’s grant of summary judgment against Orel and Moshe nor the amount of the judgment is at issue here. A. Katzman’s Motion for Summary Judgment Against Eliran Notwithstanding plaintiffs’ assertion that “[a]t all relevant times…Moshe” was Orel’s “sole shareholder and officer” (Plaintiffs’ Rule 56.1 Statement 15 (emphasis added)) — which defendants did not dispute — plaintiffs sought judgment against Eliran on the ground that “[a]t all relevant times…Eliran…is and was an officer, director and/or shareholder of [Orel]” (id. 12 (emphases added)), contending that “Eliran” was thus “in a position of control over the PACA trust assets belonging to Plaintiffs” (id.). Eliran denied the 12 assertions. (See Defendants’ Rule 56.1 Statement 12.) Evidence was adduced on both sides. 1. Plaintiffs’ Evidence In support of their motion for summary judgment against Eliran, plaintiffs submitted, inter alia, documents received in discovery from Orel’s bank (see Declaration of Gregory Brown, counsel for Katzman, dated February 1, 2019 (“Brown Declaration”), 3), including the following: a. The bank signature cards for [Orel] which identifies [sic] M. Yadid and E. Yadid as signatories on [Orel's] bank account…. The bank signature cards indicate that M. Yadid has been a signatory on the account since September 13, 2016 and E. Yadid has had signing authority since December 7, 2016; …. c. Checks drawn on [Orel's] bank account signed by E. Yadid as payment to [Orel's] produce suppliers including Katzman Produce, Fierman Produce Exchange Inc., D’Arrigo Bros. of NY Co., Inc. and Fruitco Corp….; d. Checks drawn on [Orel's] bank account signed by E. Yadid and payable to E. Yadid on a semi-weekly basis, presumably as salary….; e. Cash withdrawal receipts reflecting withdrawals made by E. Yadid from [Orel's] bank account….; f. Bank statements reflecting all transactions into and out of [Orel's] account…. The statement reflects an electronic transfer to an account held by E. Yadid on July 27, 2018 in the amount of $40,000.00. Plaintiffs filed this action on August 2, 2018. (Brown Declaration
3(b) and 3(c)-(f) (emphases added), attaching Exhibits H and J-M.) In addition, the Brown Declaration stated that counsel’s investigation had “revealed other documents and things which reflect the role E. Yadid…had in controlling the operations of [Orel],” including [a]n equipment financing agreement entered into between Orel Produce Inc. and Phoenix Rising Corp. which identifies E. Yadid as [Orel's] owner and in connection with which both E. Yadid and M. Yadid guaranty [sic] the debt incurred in [Orel's] name. (Id. 4(b) (emphasis added), attaching Exhibit O.) 2. Eliran’s Response In opposition to plaintiffs’ motion insofar as it related to him, Eliran submitted a sworn declaration stating, inter alia, that his father Moshe “was the owner and the boss” of Orel and that Moshe “controlled the company.” (Declaration of Eliran Yadid dated March 6, 2019 (“Eliran Decl.”), 18). He cited to Orel’s tax returns for 2016 and 2017, excerpts of which were produced by defendants, “show[ing] that Moshe was the 100 percent shareholder of the company.” (Id. 10.) Describing his own role in the company, Eliran stated I was never an owner of [Orel], I did not manage or operate the company, and I had no authority or control over its assets and finances, including the products purchased by [Orel] from the plaintiffs. 4. I did not ever receive any share of the profits or losses of the company, or any dividends or distributions. I only received salary…. (Id.
