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Orange International Trading LLC v. Steinhauser, Inc.

United States District Court, D. Massachusetts

November 13, 2018

ORANGE INTERNATIONAL TRADING LLC, Plaintiff,
v.
STEINHAUSER, INC., Defendant. STEINHAUSER, INC., Third-Party Plaintiff,
v.
FRUTAKI INDP. IMP E EXP. LTD, TOTAL JUICE INDUSTRIA DE SUCOS LTDA, and CARLOS LUIZ SAAD, Third-Party Defendants.

          MEMORANDUM AND ORDER

          DENISE J. CASPER UNITED STATES DISTRICT JUDGE

         I. Introduction

         Plaintiff Orange International Trading LLC (“Orange”) brings claims against Steinhauser, Inc. (“Steinhauser”) arising out of claims against Steinhauser that were assigned to Orange by Frutaki Indp. Imp e Exp. Ltd. (“Frutaki”) and Total Juice Industria de Sucos LTDA (“Total”). D. 1. Orange moves for judgment on the pleadings, D. 55, and Steinhauser moves for summary judgment, D. 58. Orange also moves to strike certain portions of Steinhauser's motion for summary judgment. D. 69. Steinhauser moves to strike certain portions of Orange's opposition to Steinhauser's motion for summary judgment. D. 71. For the following reasons, the Court DENIES Orange's motion for judgment on the pleadings, D. 55, ALLOWS IN PART Orange's motion to strike, D. 69, DENIES Steinhauser's motion for summary judgment, D. 58, and DENIES Steinhauser's motion to strike, D. 71.

         II. Factual Allegations

         The following facts are undisputed unless otherwise noted. Total and Frutaki are entities engaged in the business of manufacturing, supplying and selling fruit juice concentrates. D. 1 ¶ 8; D. 11 ¶ 8. Steinhauser had been involved in business dealings with Frutaki beginning in 2013. D. 1 ¶ 9; D. 11 ¶ 9. In 2014, Frutaki was involved in multiple transactions with Steinhauser. D. 1 ¶ 10; D. 11 ¶ 10. In one such transaction, Frutaki sold Steinhauser over $6 million in juice concentrate and related products. D. 1 ¶ 10; D. 11 ¶ 10. In that transaction, as was customary for the dealings between the two parties, Frutaki submitted an invoice to Steinhauser prior to shipping the goods and Steinhauser paid the invoice in full upon receipt of the bill of lading. D. 1 ¶ 10; D. 11 ¶ 10. Three invoices from Frutaki to Steinhauser were not paid by Steinhauser: an invoice from September 28, 2014 for $47, 124; an invoice from October 2, 2014 for $45, 936; and an invoice from October 1, 2014, for $45, 441, for a total of $138, 501. D. 1 ¶ 13; D. 11 ¶ 13. Frutaki demanded payment from Steinhauser for these invoices and Steinhauser did not pay. D. 1 ¶¶ 20-21; D. 11 ¶¶ 20-21. Orange attached copies of each invoice to its complaint. D. 1-2, 1-3, 1-4.

         Total supplied and sold juice concentrates to Steinhauser for distribution in Europe and elsewhere on multiple occasions. D. 1 ¶ 8; D. 11 ¶ 8. On four occasions, Steinhauser ordered fruit juice concentrate products, received the product, was invoiced by Total, and did not pay the invoice. D. 1 ¶ 27-28; D. 11 ¶ 27-28. The invoices were from October 5, 2014, for $47, 949; from October 5, 2014, for $47, 025; from October 5, 2014, for $45, 375; and from October 12, 2014, for $35, 763.75, for a total of $176, 112.75. D. 1 ¶ 27; D. 11 ¶ 27. Total demanded payment from Steinhauser and Steinhauser did not pay. D. 1 ¶ 34-35; D. 11 ¶ 34-35. Orange attached copies of each invoice to its complaint. D. 1-5, 1-6, 1-7, 1-8. Orange alleges, and Steinhauser does not deny, that it is the assignee of the claims regarding the invoices from Frutaki and Total. D. 1 ¶ 3.

         In or about 2012, Frutaki was run by Carlos Saad (“Saad”) and entered into a joint venture with a company named Frutaki BV (“BV”). D. 60 ¶ 3; D. 68 ¶ 3. Pursuant to that joint venture agreement, Frutaki was to provide BV with various fruit juices. D. 60 ¶ 4; D. 68 ¶ 4. Over the course of the joint venture, funds were transferred from BV to Frutaki and Saad, although the parties dispute whether that funds transfer was a loan or a contribution to the joint venture. D. 60 ¶ 5; D. 68 ¶ 5. Steinhauser contends, and Orange disputes, that the loans were sometimes repaid via invoice forgiveness. D. 60 ¶ 6; D. 68 ¶ 6. In 2013, there was a payment by BV of $780, 169.18, which Steinhauser characterizes as a loan and which Orange characterizes as a contribution to the joint venture which was to be repaid from Frutaki's portion of the profits from the joint venture. D. 60 ¶ 8; D. 68 ¶ 8; D. 65 ¶¶ 18, 19. Steinhauser contends, and Orange disputes, that BV assigned the right to collect on its $780, 169.18 loan or contribution to Steinhauser shortly before BV made that loan or contribution. D. 60 ¶ 10; D. 68 ¶ 10.[1] Steinhauser contends that in 2014, Saad changed the name of Frutaki to Total, whereas Orange contends that Total was a separate entity. D. 60 ¶ 11; D. 68 ¶ 11. In 2017, BV assigned to Steinhauser the right to collect any remaining debts owed by Frutaki to BV. D. 60 ¶ 17; D. 68 ¶ 17.

         III. Procedural History

         On June 1, 2016, Orange filed its complaint against Steinhauser. D. 1. On June 28, 2017, Steinhauser filed a third-party complaint against Frutaki, Total and Saad, the third-party defendants. D. 28. Orange subsequently moved for judgment on the pleadings. D. 55. Steinhauser has moved for summary judgment. D. 58. In response, Orange moved to strike portions of Steinhauser's motion for summary judgment, D. 69, and Steinhauser moved to strike portions of that motion, D. 71. The Court heard argument on the motions and took the matters under advisement. D. 77.

         IV. Orange's Motion for Judgment on the Pleadings

         A. Standard of Review

         In adjudicating a motion for judgment on the pleadings, the Court “view[s] the facts contained in the pleadings in the light most flattering to the nonmovant[] . . . and draw[s] all reasonable inferences therefrom in [its] favor.” Aponte-Torres v. Univ. of Puerto Rico, 445 F.3d 50, 54 (1st Cir. 2006). The Court does not engage in “any resolution of contested facts; rather, a court may enter judgment on the pleadings only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment.” Id. Granting a motion for judgment on the pleadings to a plaintiff is an “extraordinary remedy.” Robert Reiser & Co. v. Scriven, 130 F.Supp.3d 488, 498 (D. Mass. 2015). “Public policy, affording each litigant a full and fair hearing on the merits, warrants against imprudent use of this motion.” Nelson v. Univ. of Maine Sys., 914 F.Supp. 643, 647 (D. Me. 1996).[2]

         B. Orange is Not Entitled to Judgment on the Pleadings

         Orange contends it is entitled to judgment on the pleadings because Steinhauser does not deny in its answer, that it received goods, was invoiced for those goods, and never paid for those goods. D. 55 at 2-3. Orange argues that it is undisputed that Steinhauser did not receive an assignment of any claims held by BV until 2017. D. 28. Orange further contends that, under Massachusetts law, Steinhauser would, at best, only be entitled to offset its assigned claims against Frutaki and Total if Steinhauser received its assignment of those claims prior to receiving notice that Frutaki and Total had assigned their claims to Orange. D. 55 at 5-6. Under Massachusetts law, the rights of an assignee are subject to “any . . . claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by ...


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