Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 1 of 12
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF PENNSYLVANIA
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`__________________________________________
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`RYECO, LLC and
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`T.M. KOVACEVICH - PHILADELPHIA, INC.
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`Plaintiffs,
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`CORRADO’S SPECIALTY GOODS, INC. t/a
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`CORRADO’S FAMILY AFFAIR;
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`GERALD CORRADO, SR., an individual;
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`PETER CORRADO, an individual;
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`JOSEPH CORRADO, an individual;
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`JAMES J. CORRADO, an individual; and
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`Defendants.
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`__________________________________________:
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`Civil Action No.________________
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` COMPLAINT
`(To Enforce Payment From Produce Trust)
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`Plaintiffs, Ryeco, LLC (“Ryeco”) and T.M. Kovacevich - Philadelphia Inc. (“Kovacevich”),
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`through their undersigned counsel, by way of Complaint against Defendants, Corrado’s Specialty
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`Goods, Inc. t/a Corrado’s Family Affair (“Specialty Goods”), Gerald Corrado, Sr. (“G. Corrado”), Peter
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`Corrado (“P. Corrado”), Joseph Corrado (“Joseph Corrado”), and James J. Corrado (“James Corrado”),
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`state and allege:
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`JURISDICTION AND VENUE
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`1.
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`This Court has jurisdiction over the subject matter of this action under Section 5(c)(5) of the
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`Perishable Agricultural Commodities Act, 7 U.S.C. § 499e(c)(5) (“PACA”), 7 U.S.C. § 499(e)(b), and 28
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`U.S.C. § 1331. Personal jurisdiction exists over each Defendant as they transact business in this district and
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 2 of 12
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`have sufficient minimum contacts such that this proceeding does not offend traditional notions of fair play
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`and justice.
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`2.
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`Venue in this District is proper under 28 U.S.C. § 1391 because a substantial part of
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`Plaintiffs’ claims arose in this District.
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`3.
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`PARTIES
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`a.
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`Plaintiff Ryeco is a Pennsylvania limited liability company with its office and
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`principal place of business at Philadelphia Wholesale Produce Market, Units C-3 through C-7, 6700
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`Essington Avenue, Philadelphia, Pennsylvania 19153. Ryeco is engaged in the business of selling
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`wholesale quantities of perishable agricultural commodities (“Produce”) and is licensed as a dealer under
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`PACA.
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`b.
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`Plaintiff Kovacevich is a Pennsylvania corporation with its office and principal place
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`of business at Philadelphia Wholesale Produce Market, Units A-1 through A-6, 6700 Essington Avenue,
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`Philadelphia, Pennsylvania 19153. Kovacevich is engaged in the business of selling wholesale quantities of
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`Produce and is licensed as a dealer under PACA.
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`4.
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`a.
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`At all times relevant hereto, Defendant Specialty Goods was and is a New Jersey
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`corporation with a principal place of business located at 1578 Main Avenue, Clifton, New Jersey 07011,
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`that was engaged in the business of buying wholesale quantities of Produce in interstate commerce as well
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`as other specialty goods, and that was operating subject to license as a dealer under PACA.
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`b.
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`Upon information and belief, Defendant G. Corrado was at all relevant times an
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`owner, officer, and/or director of Defendant Specialty Goods during the period of time in question, who
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`controlled the operations of Defendant Specialty Goods and was in a position of control over the PACA
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`trust assets belonging to Plaintiffs. Upon information and belief, G. Corrado resides at 370 Algonquin
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`Road, Franklin Lakes, New Jersey 07417.
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 3 of 12
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`c.
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`Upon information and belief, Defendant P. Corrado was at all relevant times an
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`owner, officer, and/or director of Defendant Specialty Goods during the period of time in question, who
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`controlled the operations of Defendant Specialty Goods and was in a position of control over the PACA
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`trust assets belonging to Plaintiffs. Upon information and belief, P. Corrado resides at 740 Ocean
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`Boulevard, Sea Bright, New Jersey 07760.
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`d.
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`Upon information and belief, Defendant Joseph Corrado was at all relevant times an
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`owner, officer, and/or director of Defendant Specialty Goods during the period of time in question, who
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`controlled the operations of Defendant Specialty Goods and was in a position of control over the PACA
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`trust assets belonging to Plaintiffs. Upon information and belief, Joseph Corrado resides at 297 Crest
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`Place, Franklin Lakes, New Jersey 07417.
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`e.
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`Upon information and belief, Defendant James Corrado was at all relevant times the
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`person who ordered the Produce at issue and the warehouse manager where product and inventory was
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`stored for Defendant Specialty Goods during the period of time in question, who controlled the operations
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`of Specialty Goods and was in a position of control over the PACA trust assets belonging to Plaintiffs.
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`Upon information and belief, James Corrado resides at 7 Pond VW, Montville, New Jersey 07045-8604.
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`5.
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`6.
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`ALLEGATIONS COMMON TO ALL COUNTS
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`This action is brought to enforce the trust provisions of the PACA, 7 U.S.C. § 499e(c).
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`Upon information and belief, Defendant Specialty Goods is the purchasing or procurement
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`entity for five (5) affiliated supermarkets located in New Jersey that are licensed or operating subject to
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`license under the PACA as follows: James Corrado, Inc. t/a Corrado’s Family Affair of Clifton, a/t/a
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`Corrado’s Market; Corrado’s Family Affair of Denville, Inc. t/a Corrado’s Market; Corrado’s Family Affair
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`of Fairfield, Inc. t/a Corrado’s Market; Corrado’s Family Affair of North Arlington, Inc. t/a Corrado’s
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`Market; and Corrado’s Family Affair of Wayne, Inc. t/a Corrado’s Market.
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 4 of 12
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`7.
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`In calendar year 2021, Plaintiff Ryeco sold and delivered to Defendant Specialty Goods in
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`excess of $230,000.00 worth of Produce, with Ryeco selling and delivering in excess of 2,000 pounds of
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`Produce to Specialty Goods on March 20, 2021.
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`8.
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`Between April 16, 2021, and July 28, 2021, Plaintiff Ryeco sold and delivered, in interstate
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`commerce, wholesale amounts of Produce worth the aggregate amount of $296,023.00 to Defendant
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`Specialty Goods, who accepted the Produce.
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`9.
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`Between April 9, 2021, and May 14, 2021, Plaintiff Kovacevich sold and delivered, in
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`interstate commerce, wholesale amounts of Produce worth the aggregate amount of $163,086.00 to
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`Defendant Specialty Goods, who accepted the Produce.
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`10.
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`At the time Defendant Specialty Goods received and accepted the Produce, Plaintiffs
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`became beneficiaries in a statutory trust under PACA (the “PACA Trust”), which is designed to assure
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`payment to Produce suppliers and which consists of all Produce or Produce-related assets, including all
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`funds commingled with funds from other sources and all assets procured by such funds, in the possession or
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`control of Defendants.
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`11.
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`Plaintiffs timely preserved their respective interests in the PACA Trust in the aggregate
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`principal amount of $459,109.00 by delivering to Defendant Specialty Goods invoices containing the
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`requisite statutory language (“Invoices”), and Plaintiffs remain beneficiaries thereof until full payment is
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`made for the Produce.
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`12.
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`Defendants have not disputed the debt owed to Plaintiffs in any way but despite demand for
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`payment, Defendants have failed to pay Plaintiffs any portion of the aggregate principal amount of
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`$459,109.00 due and owing for the Produce prior to the filing of this lawsuit.
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 5 of 12
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`13.
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`On or about May 26, 2021, Defendant Specialty Goods issued a check, number 146183, to
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`Plaintiff Ryeco in partial payment of the Produce debt owed in the amount of $11,602.00, but the check was
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`returned for insufficient funds and has not been made good by Defendant Specialty Goods.1
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`14.
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`The failure of Defendant Specialty Goods to pay for the Produce purchased from Plaintiffs,
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`as well as the issuance of a check to Plaintiff Ryeco returned for insufficient funds, establishes that
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`Defendants have violated their statutory, regulatory and contractual duties to preserve and turnover the
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`PACA Trust assets belonging to Plaintiffs by dissipating those assets.
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`COUNT ONE
`(Failure to Pay Trust Funds – All Defendants)
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`15.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 through 14
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`of this Complaint as if fully set forth herein.
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`16.
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`Defendants’ continuing failure and refusal to pay Plaintiffs the PACA Trust funds in the
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`aggregate principal amount of $459,109.00 violates PACA and PACA regulations.
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`17.
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`As a direct and proximate result of the Defendants’ continuing violations of PACA and
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`PACA regulations, Plaintiffs have suffered, and are continuing to suffer, damages.
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`WHEREFORE, Plaintiffs demand judgment against Defendants enforcing payment from the PACA
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`Trust by ordering Defendants to pay Plaintiffs the aggregate principal amount of $459,109.00 plus interest,
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`costs, attorneys’ fees, and any other relief deemed just and owing.
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`COUNT TWO
`(Failure to Pay Promptly- Specialty Goods)
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`18.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 through 17
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`of this Complaint as if fully set forth herein.
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`19.
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`Defendant Specialty Goods received each of the shipments of Produce described above.
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`1 In the event this check is made good, Plaintiff Ryeco will adjust its balance owed accordingly.
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 6 of 12
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`20.
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`The PACA requires Defendant Specialty Goods to tender full payment promptly to its
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`unpaid suppliers of Produce.
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`21.
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`Defendant Specialty Goods failed to pay for the Produce supplied by Plaintiffs within the
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`payment terms.
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`22.
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`As a result of Defendant Specialty Goods’ failure to pay promptly, Plaintiffs have incurred
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`damages in the aggregate principal amount of $459,109.00.
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`WHEREFORE, Plaintiffs demand judgment against Defendant Specialty Goods, enforcing prompt
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`payment from the PACA Trust by ordering Defendant Specialty Goods to pay Plaintiffs as follows:
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`a.
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`to pay plaintiff Ryeco the principal amount of $296,023.00 plus interest, costs, attorneys’
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`fees, and any other relief deemed just and owing.
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`b.
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`to pay Plaintiff Kovacevich the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`COUNT THREE
`(Breach of Contract -- Failure to Pay For Goods Sold – Specialty Goods)
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 through 22
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`23.
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`of this Complaint as if fully set forth herein.
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`24.
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`Defendant Specialty Goods’ continuing failure and refusal to pay Plaintiffs the full balance
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`due and owing for the Produce received and accepted by this Defendant constitutes a material breach of the
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`contracts between Plaintiffs and Defendant Specialty Goods.
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`25.
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`As a direct and proximate result of Defendant Specialty Goods’ continuing material
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`breaches of contracts, Plaintiffs have suffered, and are continuing to suffer, damages.
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`WHEREFORE, Plaintiffs demand judgment for damages against Defendant Specialty Goods as
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`follows:
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 7 of 12
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`a.
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`in favor of Plaintiff Ryeco in the principal amount of $296,023.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`b.
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`in favor of Plaintiff Kovacevich in the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`COUNT FOUR
`(Unlawful Dissipation of Trust Assets by
`a Corporate Official – G. Corrado)
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`26.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 to 25
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`above as if fully set forth herein.
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`27.
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`Defendant, G. Corrado, was a principal of Defendant Specialty Goods who operated the
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`corporate defendant during the period of time in question or prior thereto and who, upon information and
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`belief, was in a position of control over the PACA trust assets belonging to Plaintiffs.
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`28.
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`Defendant, G. Corrado, failed to direct Specialty Goods to fulfill its statutory duties to
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`preserve PACA Trust assets and pay Plaintiffs for the Produce supplied.
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`29.
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`Defendant, G. Corrado, knew or should have known that Defendant Specialty Goods was in
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`breach of the PACA Trust.
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`30.
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`Defendant G. Corrado’s failure to direct Defendant Specialty Goods to maintain PACA
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`Trust assets and pay Plaintiffs for the Produce supplied was an unlawful dissipation of trust assets by a
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`corporate official.
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`31.
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`32.
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`Defendant, G. Corrado, participated in the breach of the PACA Trust by Specialty Goods.
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`As a result of said unlawful dissipation of trust assets, Plaintiffs have been deprived of their
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`rights as beneficiaries in the Produce trust and have been denied payment for the Produce supplied.
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`WHEREFORE, Plaintiffs request judgment against Defendant, Gerald Corrado, Sr., as follows:
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 8 of 12
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` a.
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`in favor of Plaintiff Ryeco in the principal amount of $296,023.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`b.
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`in favor of Plaintiff Kovacevich in the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`COUNT FIVE
`(Unlawful Dissipation of Trust Assets by
`a Corporate Official – P. Corrado)
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`33.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 to 32
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`above as if fully set forth herein.
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`34.
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`Defendant, P. Corrado, was a principal of Defendant Specialty Goods who operated the
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`corporate defendant during the period of time in question or prior thereto and who, upon information and
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`belief, was in a position of control over the PACA Trust assets belonging to Plaintiffs.
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`35.
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`Defendant, P. Corrado, failed to direct Defendant Specialty Goods to fulfill its statutory
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`duties to preserve PACA Trust assets and pay Plaintiffs for the Produce supplied.
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`36.
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`Defendant, P. Corrado, knew or should have known that Defendant Specialty Goods was in
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`breach of the PACA Trust.
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`37.
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`Defendant P. Corrado’s failure to direct Defendant Specialty Goods to maintain PACA trust
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`assets and pay Plaintiffs for the Produce supplied was an unlawful dissipation of trust assets by a corporate
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`official.
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`38.
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`39.
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`Defendant P. Corrado participated in the breach of the PACA Trust by Specialty Goods.
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`As a result of said unlawful dissipation of trust assets, Plaintiffs have been deprived of their
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`rights as beneficiaries in the Produce trust and have been denied payment for the Produce supplied.
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`WHEREFORE, Plaintiffs request judgment against Defendant, Peter Corrado, as follows:
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 9 of 12
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`a.
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`in favor of Plaintiff Ryeco in the principal amount of $296,023.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`b.
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`in favor of Plaintiff Kovacevich in the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`COUNT SIX
`(Unlawful Dissipation of Trust Assets by
`a Corporate Official – Joseph Corrado)
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`40.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 to 39
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`above as if fully set forth herein.
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`41.
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`Defendant, Joseph Corrado, was a principal of Defendant Specialty Goods who operated the
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`corporate defendant during the period of time in question or prior thereto and who, upon information and
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`belief, was in a position of control over the PACA Trust assets belonging to Plaintiffs.
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`42.
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`Defendant, Joseph Corrado, failed to direct Defendant Specialty Goods to fulfill its statutory
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`duties to preserve PACA Trust assets and pay Plaintiffs for the Produce supplied.
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`43.
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`Defendant Joseph Corrado knew or should have known that Defendant Specialty Goods was
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`in breach of the PACA Trust.
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`44.
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`Defendant Joseph Corrado’s failure to direct Defendant Specialty Goods to maintain PACA
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`trust assets and pay Plaintiffs for the Produce supplied was an unlawful dissipation of trust assets by a
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`corporate official.
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`45.
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`46.
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`Defendant Joseph Corrado participated in the breach of the PACA trust by Specialty Goods.
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`As a result of said unlawful dissipation of trust assets, Plaintiffs have been deprived of their
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`rights as beneficiaries in the Produce trust and have been denied payment for the Produce supplied.
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`WHEREFORE, Plaintiffs request judgment against Defendant, Joseph Corrado, as follows:
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`Case 2:21-cv-04149-GEKP Document 1 Filed 09/20/21 Page 10 of 12
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`a.
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`in favor of Plaintiff Ryeco in the principal amount of $296,023.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`b.
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`in favor of Plaintiff Kovacevich in the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`COUNT SEVEN
`(Unlawful Dissipation of Trust Assets by
`a Corporate Official – James Corrado)
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`47.
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 to 46
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`above as if fully set forth herein.
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`48.
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`Defendant, James Corrado, was the person who ordered the unpaid Produce at issue and the
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`warehouse or distribution center manager of Defendant Specialty Goods, who operated the corporate
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`defendant during the period of time in question and who, upon information and belief, was in a position of
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`control over the PACA trust assets belonging to Plaintiffs.
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`49.
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`Defendant, James Corrado, failed to direct Defendant Specialty Goods to fulfill its statutory
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`duties to preserve PACA trust assets and pay Plaintiffs for the Produce supplied.
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`50.
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`Defendant James Corrado knew or should have known that Defendant Specialty Goods was
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`in breach of the PACA trust.
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`51.
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`Defendant, James Corrado’s, failure to direct Defendant Specialty Goods to maintain PACA
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`trust assets and pay Plaintiffs for the Produce supplied was an unlawful dissipation of trust assets by a
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`corporate official.
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`52.
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`Defendant James Corrado participated in the breach of the PACA trust by Defendant
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`Specialty Goods.
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`53.
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`As a result of said unlawful dissipation of trust assets, Plaintiffs have been deprived of their
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`rights as beneficiaries in the Produce trust and have been denied payment for the Produce supplied.
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`WHEREFORE, Plaintiffs request judgment against Defendant, James Corrado, as follows:
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`a.
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`in favor of Plaintiff Ryeco in the principal amount of $296,023.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`b.
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`in favor of Plaintiff Kovacevich in the principal amount of $163,086.00 plus interest, costs,
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`attorneys’ fees, and any other relief deemed just and owing.
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`54.
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`COUNT EIGHT
`(Interest and Attorneys’ Fees – All Defendants)
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`Plaintiffs repeat and reassert each and every allegation contained in paragraphs 1 through
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`53 of this Complaint as if fully set forth herein.
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`55.
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`PACA, 41 Pa. Stat. § 202, and the Invoices at issue entitle Plaintiff Ryeco to recover interest
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`at the rate of six percent (6%) per annum plus costs and attorney’s fees in the event that Defendants violate
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`their obligations by failing to pay Plaintiff Ryeco for the Produce sold to Defendant Specialty Goods.
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`56.
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`PACA and the Invoices at issue entitle Plaintiff Kovacevich to recover interest at the rate of
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`18% per annum plus costs and attorney’s fees in the event that Defendants violate their obligations by
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`failing to pay Plaintiff Kovacevich for the Produce and other items sold to Defendant Specialty Goods.
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`57.
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`The continuing failure and refusal to pay Plaintiffs the aggregate principal amount of
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`$459,109.00 due and owing for the Produce sold to and accepted by Defendant Specialty Goods entitles
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`Plaintiffs to recover interest, costs, and attorney’s fees incurred in enforcing the PACA Trust.
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`WHEREFORE, Plaintiffs demand judgment against all Defendants, jointly and severally, for
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`prejudgment interest, costs, attorneys’ fees, and any other relief deemed just and owing.
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