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Anthony Marano Company v. Ms-Grand Bridgeview

December 23, 2010

ANTHONY MARANO COMPANY, PLAINTIFF,
v.
MS-GRAND BRIDGEVIEW, INC., AN ILLINOIS CORPORATION, D/B/A MELROSE FRESH MARKET, PETER LIMPERIS, AND MAKIS LIMPERIS, DEFENDANTS.
JACK TUCHTEN WHOLESALE PRODUCE, INC., INTERVENING PLAINTIFF,
v.
MS-GRAND BRIDGEVIEW, INC., AN ILLINOIS CORPORATION, D/B/A MELROSE FRESH MARKET, PETER LIMPERIS, AND, MAKIS LIMPERIS DEFENDANTS.



The opinion of the court was delivered by: Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

I. BACKGROUND

Plaintiff, Anthony Marano Company ("Marano"), and Intervening Plaintiffs, Jack Tuchten Wholesale Produce, Inc. ("Tuchten"), Auster Acquisitions LLC a/t/a The Auster Company ("Auster"), Inc., and Michael H. Navilio & Son, Inc. ("Navilio") (collectively, "Tuchten Plaintiffs"), are suppliers of agricultural produce to Defendants, who owned and operated MS-Grand Bridgeview, Inc. ("MS-Grand"), doing business as Melrose Fresh Market, a grocery store in Bridgeview, Illinois. Marano commenced this action on July 25, 2008 to enforce payment from the trust established by the provisions of the Perishable Agricultural Commodities Act, 7 U.S.C. § 499e(c) ("PACA"). The Tuchten Plaintiffs intervened also asserting trust claims against Melrose Market and its principals. The total amount of unpaid produce claims is about $1.3 million.

Marano moved for entry of a temporary restraining order to prevent dissipation of trust assets, which I granted on August 14, 2008. On September 19, 2008, I entered a preliminary injunction which ordered that all banking institutions holding funds belonging to MS-Grand turn them over to Tuchten's counsel for the benefit of Tuchten and all similarly situated creditors. Pursuant to the temporary injunction, $10,720.20 was turned over to Tuchten. Accordingly, the issue of secondary liability of MS-Grand's principals for the trust debt is of paramount concern to MS-Grand's creditors.

Three motions for summary judgment are pending before me. Plaintiff Marano moves for summary judgment against Defendants MS-Grand and Peter Limperis ("Limperis"). Intervening Plaintiffs Tuchten, Auster, and Navilio also move for summary judgment against Defendants MS-Grand, Limperis, and Efstravius Vitogiannis a/k/a Steven R. Vitogiannis ("Vitogiannis"). Vitogiannis has moved for summary judgment against the Tuchten Plaintiffs as to his personal liability. For the foregoing reasons, Marano, Tuchten, and Auster's summary judgment motions are granted. Navilio's motion for summary judgment as to MS-Grand and Limperis is granted, but denied as to Vitogiannis. Vitogiannis' motion for summary judgment is denied as to Tuchten and Auster, and granted as to Navilio.

II. PRELIMINARY ISSUES

Vitogiannis has moved to strikethe declarations of Thomas Bastounes ("Bastounes"), and Dawn E. Arkin ("Arkin") pursuant to Federal Rule of Civil Procedure 56.*fn1 Pursuant to this rule, "a supporting [] affidavit must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated." FED. R. CIV. PRO. 56(e)(1). "An affidavit that does not measure up to the standards of F.R.Civ.P. 56(e) is subject to a motion to strike." In re Associated Bicycle Service, Inc., 128 B.R. 436, 441 (Bankr. N.D. Ind. 1990). Specifically, Vitogiannis moved to strike paragraphs 6 and 14 from the Declaration of Bastounes, and paragraphs 6 and 12 from the Declaration of Arkin on grounds that they do not have any personal knowledge regarding their assertions.

Intervening Plaintiffs oppose Vitogiannis' motion to strike on two grounds. First, they argue that personal knowledge can be based on reasonable inference. Next, they contend that Vitogiannis' signing of MS-Grand checks is evidence of control of PACA trust assets. Personal knowledge can be based on reasonable inference. As recognized by the Seventh Circuit, all perception is inferential to some degree. Agfa-Gevaert, AG. v. A.B. Dick Co., 879 F.2d 1518, 1522 (7 th Cir. 1989). Knowledge acquired from others may still be personal knowledge rather than hearsay, and likewise, inferences that business executives customarily draw can constitute personal knowledge. Id.

In his motion, Vitogiannis takes issue with three propositions contained in each respective affidavit: (1) Vitogiannis' position or activities at MS-Grand; (2) whether Vitogiannis was in a position of control over Intervening Plaintiffs' PACA trust assets; and (3) whether Vitogiannis is liable to Intervening Plaintiffs in any amount. Specifically, Vitogiannis argues that because the Declarants did not state in their declaration that they personally witnessed or observed the daily activities of MS-Grand and its employees, officers, directors, and shareholders, they have no personal knowledge of Vitogiannis' being an owner or employee at MS-Grand, or signatory on its accounts, whether Vitogiannis was in a position of control over PACA trust assets, or whether he is liable to Intervening Plaintiffs for any amounts.

In response to Vitogiannis' motion to strike, Intervening Plaintiffs submitted supplemental declarations regarding the Declarations of Arkin and Bastounes. Arkin's supplemental declarations state that she reviewed checks to Tuchten from MS-Grand that "appear to bear the signature of someone whose first name begins with "S" and last name begins with "V."" After the commencement of this suit, Arkin learned that Vitogiannis was a signatory on MS-Grand's accounts, a one-third owner of MS-Grand, and an employee of MS-Grand. Arkin admits that she "never went to the MS-Grand store premises or personally viewed Steven Vitogiannis' activities," however, Arkin states that she has "personal knowledge" that Vitogiannis was in control of PACA trust assets. The supplemental declaration of Bastounes contains identical statements to those put forth in Arkin's supplemental declaration described supra.

Vitogiannis complains that declarants have no personal knowledge of his status as an owner, employee, and bank account signatory. Their assertions, however, are reasonable inferences that business executives customarily draw that constitute personal knowledge. Furthermore, Vitogiannis has not explained what prejudice he suffers from the admission of these declarations when these facts are undisputed and supported by other evidence. Accordingly, I deny Vitogiannis' motion to strike the portions of the Declarations relating to Vitogiannis' role as owner, manager, and bank account signatory with MS-Grand.

The declarations of Bastounes and Arkin next opine that Vitogiannis was in a position of control over the trust assets. Vitogiannis argues that such statements must be stricken because they never personally visited Melrose Fresh Market nor did they observe Vitogiannis' activities. Furthermore, Defendant notes, the Declarants' opinions are based on knowledge they obtained after the lawsuit began for which there is no foundation. These arguments fail. The Declarants were both recipients of MS-Grand checks signed by Vitogiannis in partial payment of their invoices. Paying over trust assets is evidence of control of trust assets. Declarants have personal knowledge of their receipt of the checks, and can assert personal knowledge based on inferences customarily drawn by business executives. Accordingly, I deny Vitogiannis' motion to strike Declarants' statements as to his position of control over trust assets.

Finally, Vitogiannis moves to strike statements as to the amounts owed to them by MS-Grand. It follows, however, that because the Declarants have personal knowledge of Vitogiannis' position of responsibility as well as the debts owed to them by MS-Grand, they also have sufficient knowledge to conclude that Vitogiannis is liable to them for the amounts due to them.

For the foregoing reasons, Vitogiannis' motion to strike is denied.

III. STATEMENT OF RELEVANT FACTS

The facts of this case are largely undisputed. Tuchten, Auster, Navilio, and Marano are Illinois corporations that sell wholesale quantities of perishable agricultural commodities ("produce"). MS-Grand is an Illinois corporation that operated a grocery store doing business as Melrose Fresh Market. At all relevant times, Limperis was an officer, director and signatory on all bank accounts of MS-Grand who was always in a position of control over the PACA trust assets belonging to the Marano and the Tuchten Plaintiffs and actively involved in the operation and management of MS-Grand.

Vitogiannis was a 33% shareholder of MS-Grand, an employee of MS-Grand, and a signatory of both the payroll and operating bank accounts of MS-Grand. He was employed as a night manager at Melrose Fresh Market from approximately December 5, 2007 though July 31, 2008, and served as Vice President prior to April 2, 2008. Additionally, Vitogiannis attended corporate meetings. He also signed a guaranty regarding an MS-Grand meat vendor on March 27, 2008. Vitogiannis was fired as an employee of MS-Grand on the morning of July 31, 2008, and did not receive wages for the last six weeks of his employment. On August 7, 2008, Vitogiannis wrote to Standard Bank and requested to be notified immediately if any overdrafts or returned checks occurred regarding the MS-Grand accounts, but did not ask to be removed as a signatory from the accounts. Vitogiannis did not sign or place any purchase agreements with the Intervening Plaintiffs, nor did he accept or sign for any produce supplied by them. Numerous MS-Grand payroll checks are dated August 4, 2008, though they were signed in July. After July 30, 2008, Vitogiannis did not sign any checks regarding MS-Grand. Vitogiannis and Limperis paid various non-trust creditors, including $150,000 in rent dated July 28, 2008.

Tuchten, Auster, Navilio, and Marano were licensed under the PACA at all relevant times regarding this lawsuit, and sold and delivered wholesale lots of produce. Tuchten, Auster, Navilio, and Marano preserved their interests under the trust provisions of PACA by sending invoices to MS-Grand which contained the language required by 7 U.S.C. Section 499e(c)(4).

Between April 16, 2008 and July 23, 2008 Marano sold and delivered to MS-Grand and its principals lots of produce worth $959,227.68. Defendants accepted this produce. Marano has not been paid for this produce and is owed $959,227.68 plus interest of $287,768.30, calculated at 18% per month through March 23, 2010. Marano also asks for attorneys' fees. Tuchten, Auster and Navilio also delivered produce to Defendants for which they have not been compensated. Tuchten is owed a principal amount of $28,414.50 plus contract interest at the rate of 18% through April 20, 2010 in the amount of $8,619.52 from MS-Grand. As to Vitogiannis, ...


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