United States District Court, D. Nevada
before the court is plaintiff Produce Pay, Inc.'s motion
for attorneys' fees. (ECF No. 22). Defendants Producers
International, Inc. d/b/a Producers Fruit and Vegetable (the
“company”) and Eduardo Reyes (the
“principal, ” and collectively, the
“defendants”) have not filed a response, and the
time for doing so has since passed.
an action for breach of contract and violation of the
Perishable Agricultural Commodities Act (“PACA”)
arising out of defendants' failure to pay for mangoes
subject to PACA protection, which defendants purchased from
plaintiff. (ECF Nos. 1, 17, 20). On October 20, 2016,
plaintiff filed its complaint. (ECF No. 1). Defendants
neither appeared nor filed an answer to the complaint. (ECF
No. 17). Plaintiff subsequently filed an application for
entry of default judgment against defendants on August 3,
2017, which the court granted on March 14, 2018.
Id.; (ECF No. 20).
requests the court grant its motion for attorneys' fees
against defendants, individually, and joint and severally, in
the amount of $40, 682.25. (ECF No. 22).
Plaintiff is entitled to recover under the UCC
allows for the recovery of attorneys' fees as “sums
owing in connection with” perishable commodities
transactions under PACA. See 7 U.S.C. §
499e(c)(2) (2010); see also Middle Mountain Land &
Produce v. Sound Commodities, 307 F.3d 1220, 1222-25
(9th Cir. 2002). In produce transactions, the prevailing
party has a contractual right to recover attorneys' fees
and collection costs where such additional terms are included
in an enforceable contract created by the invoices related to
the transaction. U.C.C. § 2-207 (2002); Coosemans
Specialties, Inc. v. Gargiulo, 485 F.3d 701, 709 (2d
to section 2-207 of the UCC, additional terms stated on the
face of invoices relating to a produce transaction are
binding upon the parties to the transaction. Diamond
Fruit Growers, Inc. v. Krack Corp., 794 F.2d 1440,
1443-45 (9th Cir. 1986). Generally, under section 2-207,
acceptance of terms that are additional to the original terms
of an offer are treated as counteroffers, and operate as a
rejection of the original offer. U.C.C. § 2-207 (2002).
However, between merchants, the additional terms become part
of the contract unless (i) acceptance is expressly limited to
the terms of the original offer, (ii) the additional terms
are objected to within commercially reasonable time, or (iii)
the additional terms materially alter the terms of the
contract. U.C.C. § 2-207(2) (2002); see also Diamond
Fruit Growers, Inc., 794 F.2d at 1443-45.
case, the defendants' offer to buy was not expressly
limited to its terms, and the defendants did not object
within a commercially reasonable time. Id.; (ECF
Nos. 1, 17, 21, 22). Thus, the only issue is whether the
“additional terms” materially altered the terms
of the contract. Id.
defining the types of additional terms that could
“materially alter” the existing contract, the UCC
looks for provisions which would “result in surprise or
hardship if incorporated without express awareness by the
other party[.]” Official Comment 4 to U.C.C. §
2-207 (2002). The official comments to this UCC provision
Examples of clauses which involve no element of unreasonable
surprise and which therefore are to be incorporated in the
contract unless notice of objection is seasonably given are:
. . . a clause providing for interest on overdue invoices or
fixing the seller's standard credit terms . . .
If no answer is received within a reasonable time after
additional terms are proposed, it is both fair and
commercially sound to assume that their inclusion has been
See Official Comments 5 & 6 to U.C.C. §
under the UCC, the additional terms on the face of each of
the plaintiff's invoices became agreed upon terms of the
parties' contracts. The terms regarding attorneys'
fees and collection costs on the face of the invoices are the
plaintiff's standard credit terms upon which the
plaintiff sells goods to any purchaser. (ECF Nos. 1, 17, 21,
22). These terms are standard contract terms throughout the
produce industry and are generally expected to be present on
invoices or other billing statements. Id. Given the
general inclusion of these terms throughout the industry and
plaintiff's regular use of the additional terms on its
invoices, the additional terms regarding attorneys' fees
and costs did not materially alter the existing contracts.
Diamond Fruit Growers, Inc., 794 F.2d at 1443-45.
defendants never objected to the additional terms when they
received and accepted the produce identified on the unpaid
invoices. Id. As a result, the amounts due under
these additional provisions became a part of the
plaintiff's PACA trust claim as sums owing in connection
with the produce transactions between the plaintiff and the
defendants by virtue of 7 U.S.C. § 499e(c)(2) (2010)
(trust survives until debtor makes “full payment of the
sums owing in connection with such transactions”).
Accordingly, plaintiff is entitled to recover under U.C.C.
Plaintiff is entitled to recover under PACA
Ninth Circuit has held that additional terms included on the
face of invoices for the sale of goods are considered terms
of the contract. U.S. ex rel. Hawaiian Rock Prods. Corp.
v. A.E. Lopez Enters. Ltd., 74 F.3d 972, 976
(9th Cir. 1996). Terms on invoices, including attorneys'
fees and costs of collection contained on the face of the
invoice, are enforceable as additional terms of contract
because they are sums “owing in connection with such
transactions, ” as provided under PACA § 5(c)(2)
Weis-Buy Servs., et al. v. Christopher Ranch, et
al., 361 F.3d 629, 632 (11th Cir. ...