Marchella of NY Inc. v. Mejia Tropical Products LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MARCHELLA OF NY INC. No. 22-cv-551 (JS)(ST)

and NORTHEAST BANANA CORP.,

ORDER GRANTING

Plaintiffs, MOTION TO AMEND

- against -

MEJIA TROPICAL PRODUCTS LLC

and MARVIN E. MEJIA,

Defendants.

APPEARANCES

For Plaintiffs: Gregory A. Brown, Esq.

McCarron & Diess

200 Broadhollow Road, Suite 207

Melville, New York 11747

For LLC

Defendant: No appearance.

For Individual

Defendant: Marvin E. Mejia, Pro Se

Mobile Number: (347) 530-0575

(No Address Provided)

SEYBERT, District Judge:

Presently before the Court, in this action brought by

Plaintiffs Marchella of NY Inc. (“Marchella”) and Northeast Banana

Corp. (“NE Banana” and with Marchella, the “Plaintiffs”) pursuant

to the trust provisions of the Perishable Agricultural Commodities

Act, 7 U.S.C. § 499a, et seq. (“PACA”), seeking to recover monies

for wholesale quantities of produce delivered to Defendants Mejia

Tropical Products LLC (“Mejia Tropical”) and Marvin E. Mejia

(“Mejia” and with Mejia Tropical, the “Defendants”), is the

Plaintiffs’ letter motion to further amend their Amended Complaint

to add additional defendants (hereafter, the “Letter Motion”).

(See ECF No. 39 at 2-3.) Defendants have not responded to

Plaintiff’s October 21, 2022 Letter Motion and their time to do so

has expired. For the reasons that follow, the Letter Motion is

GRANTED in part.

BACKGROUND

The Court presumes familiarity with the facts underlying

this case, which are: (1) articulated in its June 22, 2022

Memorandum & Order Re: Motion for Contempt; and (2) incorporated

herein by reference. (See ECF No. 26 at 2-5.1) In sum, Defendants

were found to be in contempt of court for failing to comply with

the Court’s February 10, 2022 Preliminary Injunction Order, i.e.,

failing to turn over PACA trust assets and/or various financial

records relating to the PACA trust assets.

Thereafter, in an attempt to purge his contempt, Mejia

sat for a deposition. (See Status Report,2 ECF No. 39, at 2.) As

a result, Plaintiffs discovered transfers made by Mejia to others

which has led Plaintiffs to “believe that these individuals have

1 Also available electronically on Westlaw: Marchella of NY Inc.

v. Mejia Tropical Prods. LLC, No. 22-CV-0551, 2022 WL 2274781, at

*1-2 (E.D.N.Y. June 22, 2022).

2 The Court notes that, with the Court’s permission, Plaintiffs’

Letter Motion and Status Report were filed as one document, i.e.,

ECF No. 39.

liability to Plaintiffs under a theory of receipt and retention of

PACA trust assets.” (Letter Motion at 3.) Moreover, Mejia’s

limited production of documents led Plaintiffs to subpoena

Defendants’ bank records, which may result in Plaintiffs

requesting additional individuals be added to this action under

the same theory of receipt and retention of PACA trust assets.

(See id.) Finally, based upon Mejia’s deposition testimony that

he is aware that Island Banana Corporation (“Island Banana”), an

alleged successor to Mejia Tropical, was conducting business with

many of Mejia Tropical’s former customers, and related testimony

about Island Banana Corporation, Plaintiff contends that:

Island Banana Corp. has liability to

Plaintiffs under theories of successor

liability and the receipt and retention of

PACA trust assets. Jonathan Mejia, the owner

of Island Banana Corp. and Mejia’s nephew,

also has liability to Plaintiffs under the

same theories, as well as breach of fiduciary

duty of a PACA trustee. [Therefore,]

Plaintiffs would like to add Island Banana

Corp. and Jonathan Mejia to this lawsuit as

defendants as well.

(Id.)

Of relevance, given the procedural trajectory of the

case, neither a pretrial conference pursuant to Federal Rule of

Civil Procedure 16(a) has been scheduled, nor has a scheduling

order pursuant to Federal Rule of Civil Procedure 16(b) been

issued.

DISCUSSION

I. Applicable Law

A. Legal Standard Under Rule 15(a)

Pursuant to Rule 15(a) of the Federal Rules of Civil

Procedure, courts have discretion to allow parties to amend their

pleadings “when justice so requires.” FED. R. CIV. P. 15(a)(2);

see also TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d

Cir. 2014) (“Under Fed. R. Civ. P. Rule 15(a), leave to amend shall

be freely given when justice so requires.”); Amaya v. Roadhouse

Brick Oven Pizza, Inc., 285 F.R.D. 251, 253 (E.D.N.Y. 2012)) (“A

court should freely give leave when justice so requires, and such

leave is in the court’s discretion.”) (internal quotation

omitted). The amendment standard is liberal, permitting

plaintiffs “to assert matters that were overlooked or were unknown

at the time of the original complaint or answer.” RCX I, LLC v.

Pitter-Nelson, No. 11-CV-03513, 2014 WL 5809514, at *5 (S.D.N.Y.

Nov. 6, 2014) (internal quotation marks, citation and alterations

omitted; emphasis added).

Where, however, there is “undue delay, bad faith, or

dilatory motive on the part of the movant, repeated failure to

cure deficiencies by amendments previously allowed, undue

prejudice to the opposing party by virtue of allowance of the

amendment, [or] futility of the amendment,” a Rule 15 motion should

be denied. Amaya, 285 F.R.D. at 253; see also Francisco v.

Abengoa, S.A., 559 F. Supp. 3d 286, 310 (S.D.N.Y. 2021) (“[A]

motion to amend should be denied only if the moving party has

unduly delayed or acted in bad faith, the opposing party will be

unfairly prejudiced if leave is granted, or the proposed amendment

is futile.” (quoting Agerbrink v. Model Serv. LLC, 155 F. Supp. 3d

448, 452 (S.D.N.Y. 2016)).

“The party opposing a motion to amend bears the burden

of establishing that the amendment should be denied.” Baptiste v.

Suffolk County., No. 19-CV-0042, 2022 WL 1224570, at *4 (E.D.N.Y.

Apr. 26, 2022); see also Joinnides v. Floral Park-Bellerose Union

Sch. Dist., No. 12-CV-5682, 2015 WL 1476422, at *9 (E.D.N.Y. Mar.

31, 2015) (“With respect to the Rule 15(a) factors, ‘[t]he party

opposing the motion for leave to amend has the burden of

establishing that an amendment would be prejudicial or futile.’”

(citation omitted)).

B. Legal Standard Under Rule 21 for Addition of Parties

Where a plaintiff seeks to add new parties, Rule 21 of

the Federal Rules of Civil Procedure governs; it provides that

“the court may at any time, on just terms, add or drop a party[.]”

Bunay Villa v. Prima Contr. Ltd., No. 16-CV-6266, 2020 WL 3035202,

at *2 (E.D.N.Y. May 29, 2020) (quoting Garcia v. Pancho Villa’s of

Huntington Vill., Inc., 268 F.R.D. 160, 165 (E.D.N.Y. 2010)). Rule

21 is intended to allow joinder of a person “who, through

inadvertence, mistake, or some other reason has not been made a

party and whose presence as a party is later found necessary or

desirable.” Gale v. Smith & Nephew, Inc., No. 12-CV-3614, 2013 WL

9874422, at *5 (S.D.N.Y. Sept. 13, 2013) (citation omitted). In

deciding whether to permit the addition of a party pursuant to

Rule 21, courts apply the “same standard of liberality afforded to

motions to amend pleadings under Rule 15.” Jaigua v. Kayafas

Contracting Co. Inc., No. 18-CV-1941, 2019 WL 1115025, at *2

(E.D.N.Y. Mar. 11, 2019) (internal quotation marks and citation

omitted); see also Romero v. Bestcare, Inc., No. 15-CV-7397, 2018

WL 1702001, at *7 n.12 (E.D.N.Y. Feb. 28, 2018) (quoting State

Farm Mut. Auto. Ins. Co. v. CPT Med. Servs., P.C., 246 F.R.D. 143,

146 (E.D.N.Y. 2007) (“It is generally accepted that no material

difference exists between the standards articulated by Rules 15(a)

and 21, and, as such, where parties satisfy the requirements under

Rule 15(a) for leave to amend, they will generally be permitted to

add parties under Rule 21.”)), report and recommendation adopted,

2018 WL 1701948 (E.D.N.Y. Mar. 31, 2018).

When evaluating a motion for leave to amend a complaint

to add a defendant, courts evaluate: (1)“whether the amendment to

add . . . a defendant would be futile[, recognizing that a]

proposed amendment is futile if the proposed claim could not

withstand a Rule 12(b)(6) motion to dismiss,” Allstate Ins. Co. v.

Elzanaty, 916 F. Supp. 2d 273, 303 (E.D.N.Y. 2013); (2) “whether

Plaintiffs have exhibited undue delay in bringing the motion to

amend,” id.; (3) whether the amendment would be unfairly

prejudicial, i.e., resulting in undue or substantial prejudice

such as “when the nonmoving party shows that it would be fairly

disadvantaged or deprived of the opportunity to present facts or

evidence that it would have offered,” id. at 304; and (4) whether

a plaintiff has “demonstrated bad faith so that an amendment to

the Complaint should be prohibited,” id. Hence, parties should

“general[ly] . . . be allowed to amend their pleadings to add new

parties unless there is evidence of ‘undue delay, bad faith,

dilatory tactics, undue prejudice to the party to be served with

the proposed pleading, or futility.’” Saravia v. Royal Guard Fence

Co., No. 19-CV-2086, 2020 WL 5231696, at *9 (E.D.N.Y. Sept. 2,

2020) (quoting Bryant v. Carlisle Carrier Corp., No. 13-CV-0578,

2014 WL 712592, at *1 (E.D.N.Y. Feb. 25, 2014)).

II. Application

As an initial matter, because a Rule 16(b) scheduling

order has not yet issued in this action, there is no applicable

deadline limiting the time to join other parties or amend the

pleadings. Cf. Fed. R. Civ. P. 16(b)(3)(A). In turn, Rule

16(b)(4), which states, “[a] schedule may be modified only for

good cause and with the judge’s consent,” is not applicable here.

This is relevant because “[w]here a motion to amend is filed after

the deadline set by the Court to do so, it ‘is subject to the more

demanding standard of Rule 16(b), which requires ‘good cause’ for

leave to amend.’” Baptiste, 2022 WL 1224570, at *4 (quoting CSX

Transp., Inc. v. Emjay Env’t Recycling, Ltd., No. 12-CV-1865, 2013

WL 12329546, at *2 (E.D.N.Y. Sept. 18, 2013); further citation

omitted) (emphasis added). And, to meet the Rule 16(b)(4) good

cause standard, one must show more than “the mere absence of

prejudice, bad faith, futility, or similar factors.” CSX, 2013 WL

12329546, at *2. Thus, because there is no Rule 16(b) scheduling

order here, Plaintiffs’ request to add additional defendants is

subject to “the lenient standard under Rule 15(a) and Rule 21” and

need not “be balanced against the requirement under Rule 16(b)

that the Court’s scheduling order shall not be modified except

upon a showing of good cause.” Villafane on behalf of D.F. v.

City of N.Y., No. 19-CV-1379, 2021 WL 2450612, at *2 (E.D.N.Y.

June 15, 2021) (quoting Mason Tenders Dist. Council of Greater

N.Y. v. Phase Constr. Servs., Inc., 318 F.R.D. 28, 36 (S.D.N.Y.

2016)); cf. Holmes v. Grubman, 568 F.3d 329, 334 (2d Cir. 2009)

(“Where, as here, a scheduling order governs amendments to the

complaint, the lenient standard under Rule 15(a), which provides

leave to amend shall be freely given, must be balanced against the

requirement under Rule 16(b) that the Court’s scheduling order

shall not be modified except upon a showing of good cause.”

(cleaned up)).

Here, upon careful review of the record, the Court finds

no evidence of undue delay, bad faith, dilatory tactics, undue

prejudice to the parties to be served with the proposed second

amended complaint, or futility. Rather, Plaintiffs have been

diligent in their pursuit of this case. For example, Plaintiffs

moved quickly to subpoena Defendants’ bank records after receiving

limited financial documents from Mejia (which Mejia produced in an

attempt to purge his contempt), finding Mejia’s production

wanting. Thereafter, Plaintiffs used the responsive production of

one of the Defendants’ banking institutions as a basis for a line

of questioning of Mejia at his October 2022 deposition, which may

warrant the addition of further individuals. (See Letter Motion

at 3 (discussing intending to subpoena a purported payroll company,

Gusto, to determine who received a salary from Mejia Tropical and

“[i]f it turns out that the recipients of those funds did not

actually perform services for Mejia Tropical” being inclined to

add those individuals).) Moreover, it is apparent that the

information elicited from Mejia during his deposition -- in

particular, the names of persons who received transfers from Mejia,

and information regarding Island Banana -- is the impetus for

Plaintiffs’ Letter Motion, which was made only eight days after

the deposition. Further, the Court finds that while zealously

representing Plaintiffs, Plaintiffs’ council has been

appropriately solicitous to, and transparent with, pro se Mejia;

there is no indication of bad faith or dilatory tactics in how

this case has proceeded to date. Nor, given the relative nascent

stage of this action, would the addition of defendants to this

action cause undue prejudice to the parties to be served with the

proposed second amended complaint. Finally, based upon

Plaintiffs’ proffered reasons for adding defendants to this PACA

action, i.e., the likelihood that the additional defendants

improperly received PACA trust assets and/or are successors to

Mejia Tropical, thereby making them liable to the Plaintiffs, the

Court finds that allowing the requested amendments would not be

futile. Thus, given (1) that Plaintiffs were unaware of the

potential liability of the proposed defendants at the time of the

original and amended complaints, (2) the inclusion of the proposed

defendants is desirable, (3) the absence of undue delay, bad faith,

unfair prejudice, futility, and (4) the lack of any opposition by

the Defendants’ to the Letter Motion, the Court finds justice

requires permission to amend should be given.

CONCLUSION

Accordingly, IT IS HEREBY ORDERED that Plaintiff’s

Letter Motion (ECF No. 39) is GRANTED. At this junction, and

subject to further additions (see below), Plaintiffs are permitted

to amend their Amended Complaint to add the following defendants:

(1) Lourdes Gomez;

(2) Lucero Ardiles;

(3) Jose Mejia;

(4) Fidel Rivas;

(5) Jonathan Mejia; and

(6) Island Banana Corporation.

IT IS FURTHER ORDERED that a deadline for Plaintiffs to

file and serve their Second Amended Complaint will not be set until

the December 5, 2022 Status Conference scheduled in this matter so

that Plaintiffs may provide the Court with an updated status on

the results of their subpoena upon Gusto and whether production

from the Gusto subpoena will result in Plaintiffs seeking to add

further defendants to this action under a theory of receipt and

retention of PACA trust assets. Any such request to add further

defendants will be heard at the December 5 Status Conference.

IT IS FURTHER ORDERED that Plaintiffs serve Mejia with

a copy of this Order; service via text message to Mejia’s mobile

number, as Plaintiffs have previously done, is acceptable.

Plaintiffs are to file proof of said service forthwith.

SO ORDERED.

/s/ JOANNA SEYBERT

Joanna Seybert, U.S.D.J.

Dated: November 17, 2022

Central Islip, New York