Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-01846/USCOURTS-caed-1_07-cv-01846-0/pdf.json

Parties Involved:
1 Source Marketing Group, Inc.
Cross Claimant
Dandrea Produce, Inc.
Plaintiff
Norman K. Evans
Cross Claimant
Evans Sales, Inc.
Cross Claimant
Horizon Marketing
Defendant
Sunriver Sales
Defendant
Sunriver Trading Company Limited
Cross Claimant
Scott D. Terry
Cross Claimant
Val-Pro, Inc.
Plaintiff
Valley Fruit and Produce Co.
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DANDREA PRODUCE, INC., and VALPRO, INC. d/b/a VALLEY FRUIT AND

PRODUCE CO.,

Plaintiffs,

v.

1 SOURCE MARKETING GROUP, INC.,

SUNRIVER TRADING COMPANY LIMITED

d/b/a SUNRIVER SALES, EVANS

SALES, INC. d/b/a HORIZON

MARKETING, SCOTT D. TERRY,

NORMAN K. EVANS, and DOES 1-5,

Defendants.

 

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1:07-cv-1846 OWW DLB

SCHEDULING CONFERENCE ORDER 

Discovery Cut-Off: 2/2/09

Non-Dispositive Motion

Filing Deadline: 2/17/09

Dispositive Motion Filing

Deadline: 3/2/09

Settlement Conference Date:

2/12/09 10:00 Ctrm. 9

Pre-Trial Conference

Date: 5/11/09 11:00 Ctrm. 3

Trial Date: 6/23/09 9:00

Ctrm. 3 (JT-6 days)

I. Date of Scheduling Conference.

March 20, 2008.

II. Appearances Of Counsel.

Robert E. Goldman, Esq., appeared on behalf of Plaintiffs. 

Law Offices of Michael J. Lampe by Michael P. Smith, Esq.,

appeared on behalf of Defendants Sunriver Trading Company

Limited, Evans Sales, Inc., and Norman K. Evans. 

Farley Law Firm by Michael L. Farley, Esq., appeared on

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behalf of Defendants 1 Source Marketing Group, Inc., and Scott D.

Terry.

III. Summary of Pleadings. 

1. Dandrea and Val-Pro initiated this action against the

Defendants seeking injunctive relief, declaratory relief and

damages, based on allegations that it sold perishable

agricultural commodities to 1 Source, and that a PACA floating

trust was created pursuant to 7 U.S.C. § 499(e) for their benefit

as to the payment for same, and that 1 Source failed to pay for

same, and that Dandrea and Val-Pro are entitled to recover PACA

trust funds and damages totaling $101,591.25 from 1 Source. The

Complaint further alleges that Scott D. Terry was the owner of 1

Source, and so controlled its finances that he is personally

liable for a breach of the PACA trust. The Complaint further

alleges that Norman Evans was a signatory on 1 Source’s bank

account, and that he signed checks from 1 Source totaling

$841,018.46 which were payable on two companies that he owned and

controlled, SunRiver Trading Company Limited d/b/a Sunriver

Sales, and Evans Sales, Inc., d/b/a Horizon Marketing, and that

such conduct was a violation of the PACA trust and constituted

conversion.

2. Sunriver contends that Dandrea and Val-Pro have

mischaracterized the business relationship between Sunriver and 1

Source, and that the PACA trust does not reach Sunriver, Evans

Sales, Inc., or Norman K. Evans because the lack of a sufficient

nexus between Dandrea and Val-Pro on one hand, and Sunriver on

the other. Sunriver also contends that 1 Source is ultimately

responsible for the non-payment to Dandrea and Val-Pro, since 1

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Source had direct transactions with the produce suppliers, but

failed to pay for the produce.

3. 1 Source contends that Sunriver was ultimately

responsible for Dandrea and Val-Pro’s losses, because pursuant to

the business arrangement between Sunriver and 1 Source, only

Sunriver was responsible for all accounts payable and only

Sunriver had the ability to write checks to pay the produce

vendors, and that Sunriver failed to pay the vendors. 

IV. Orders Re Amendments To Pleadings.

1. No amendments to the pleadings are proposed by any

party at this time. However, Dandrea and Val-Pro will learn more

about the relationship between the other parties as discovery in

this suit progresses, and so it anticipates that it may seek to

amend the pleadings to add new causes of action, possibly to

include a claim that it has the right to be subrogated to 1

Source’s right to obtain funds allegedly transferred by Norman

Evans to his two companies. 

V. Factual Summary.

A. Admitted Facts Which Are Deemed Proven Without Further

Proceedings. 

1. Plaintiff, Dandrea Produce, Inc., is a corporation

incorporated under the laws of the State of New Jersey.

2. Plaintiff, Val-Pro, Inc., d/b/a Valley Fruit and

Produce Company, is incorporated under the laws of the State of

California, licensed to do and doing business in California and

in the Eastern District of California, Fresno Division. 

3. 1 Source Marketing Group, Inc., is a corporation

incorporated under the laws of the State of California and doing

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business in the Eastern District of California, Fresno Division. 

4. Scott D. Terry is an individual resident of Fresno

County, State and Eastern District of California. 

5. Sunriver Trading Company, Ltd., d/b/a Sunriver

Sales, is a corporation licensed under the laws of the State of

California doing business in the Eastern District of California.

6. Evans Sales, Inc., d/b/a Horizon Marketing is a

corporation incorporated under the laws of the State of

California doing business in the Eastern District of California.

7. Norman K. Evans is an individual resident of the

Eastern District of California, Fresno Division. 

8. Dandrea Produce, Inc., and Val-Pro, Inc., each

separately sold commodities for interstate shipment to 1 Source

Marketing Group, Inc. 

9. Each transaction is represented by a discrete

invoice. 

10. The sum of $101,591.25 exclusive of interest,

cost, or attorney’s fees, is the approximate amount owed by one

or more of the Defendants for produce sold and delivered. 

B. Contested Facts.

1. Whether and to what extent Defendants Norman K.

Evans, Sunriver Trading Company, Ltd., d/b/a Sunriver Sales,

and/or Evans Sales, Inc., d/b/a Horizon Marketing, Inc., have any

financial responsibility for payment of sums due and owing to

Plaintiffs, according to proof. 

2. Whether the business relationship between Norman

K. Evans and 1 Source Marketing Group, Inc., was such that any

PACA liability should be imposed on Norman K. Evans as a PACA

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principal. 

3. Whether, by virtue of the prior dealings and

transactions at issue, PACA liability should be imposed upon

Evans Sales, Inc., d/b/a Horizon Marketing and/or Sunriver

Trading Co., Ltd., d/b/a Sunriver Sales. 

4. Whether and in what amounts, Plaintiffs are

entitled to recovery of damages, costs and attorney’s fees. 

5. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that they were aware of the

details of the transactions between Dandrea Produce, Inc., ValPro, Inc., 1 Source Marketing Group, Inc., and Scott D. Terry,

but it appears that the produce sales between 1 Source Marketing

Group, Inc., Scott D. Terry, Dandrea Produce, Inc., and Val-Pro

Inc., did take place, and that Dandrea Produce, Inc., and ValPro, Inc., were not paid for the produce. 

6. Defendant 1 Source Marketing Group, Inc., and

Scott D. Terry do not contest that Dandrea Produce, Inc., and

Val-Pro, Inc., were not paid, but contends that the non-payment

was the responsibility and failure of Sunriver Trading Company

Limited, Evans Sales, Inc., and Norman K. Evans.

7. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Norman K. Evans controlled

the finances of 1 Source.

8. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that all conditions precedent

to this action have occurred or have been waived or excused. 

9. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Sunriver Trading Company

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Limited, Evans Sales, Inc., and Norman K. Evans would consign

Chilean fruit to 1 Source.

10. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that 1 Source Marketing Group,

Inc., and Scott D. Terry would incur charges related to the

transportation and storage of the Chilean fruit (such as ocean

freight, land transportation, cold storage, inspections, and

repacking). 

11. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that 1 Source Marketing Group,

Inc., and Scott D. Terry would send invoices to customers which

provided that payments to 1 Source Marketing Group, Inc., and

Scott D. Terry were to be mailed to an address that was

Sunriver’s address. 

12. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Norman Evans would sign 1

Source Marketing Group, Inc., checks to pay 1 Source Marketing

Group, Inc., and Scott D. Terry for commissions on the gross

sales with the balance going to growers.

13. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Norman Evans’ primary job

was to sign 1 Source Marketing Group, Inc., checks to vendors and

Sunriver Trading Company Limited. 

14. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that from April through June of

2007, Norman Evans directed Sunriver Trading Company Limited’s

staff to wire the funds set forth in the chart in paragraph 32 of

the complaint, which constituted PACA trust assets, to pay either

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Sunriver Trading Company Limited or Evans Sales, Inc., which two

entities then diverted some of the PACA trust assets to Norman

Evans.

15. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Norman Evans knew that his

diversion of the PACA trust funds would result in 1 Source

Marketing Group, Inc., and Scott D. Terry lacking sufficient PACA

trust assets to pay its PACA trust suppliers, including without

limitation, Dandrea Produce, Inc., and Val-Pro, Inc., and that

the diversion of PACA trust assets rendered 1 Source Marketing

Group, Inc., and Scott D. Terry, unable to timely pay its PACA

trust beneficiaries. 

16. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that 1 Source Marketing Group,

Inc., and Scott D. Terry’s continuing failure to maintain PACA

trust funds will result in irreparable harm to Dandrea Produce,

Inc., and Val-Pro, Inc.

17. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that Norman K. Evans had

sufficient knowledge and control over the transactions between 1

Source Marketing Group, Inc., Scott D. Terry, Dandrea Produce,

Inc., and Val-Pro, Inc., to be responsible for controlling PACA

funds and make sure that they were paid.

18. Sunriver Trading Company Limited, Evans Sales,

Inc., and Norman K. Evans contest that they converted assets

belonging to Dandrea Produce, Inc., and Val-Pro, Inc.

19. 1 Source Marketing Group, Inc., and Scott D. Terry

contend that Sunriver Trading Company Limited, Evans Sales, Inc.,

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and Norman K. Evans are responsible for all accounts payable.

20. 1 Source Marketing Group, Inc., and Scott D. Terry

contend that their relationship with Sunriver Trading Company

Limited, Evans Sales, Inc., and Norman K. Evans was an

arrangement whereby 1 Source Marketing Group, Inc., and Scott D.

Terry sold produce for an agreed commission or salary and that

Sunriver Trading Company Limited, Evans Sales, Inc., and Norman

K. Evans paid all accounts payable in return for a share of the

profits. 

VI. Legal Issues.

A. Uncontested.

1. Jurisdiction exists under 28 U.S.C. § 1331 and the

Perishable Agricultural Commodities Act. 

2. Venue is proper under 28 U.S.C. § 1391.

3. To the extent State law applies, the parties agree

that the substantive law of the State of California provides the

rule of decision. 

B. Contested. 

1. Whether a valid, perfected, floating PACA trust

was created in favor of Dandrea and Val-Pro and, if so, which

Defendants are liable for 1 Source’s failure to pay the trust

funds to these trust beneficiaries, and which of their assets can

be the subject of injunctive relief.

2. Whether Defendants Norman Evans, Sunriver Trading

Company Limited, and Evans Sales, Inc., are liable to Dandrea and

Val-Pro for conversion.

3. Whether 1 Source is required to indemnify Sunriver

for any relief recovered against it by Dandrea and Val-Pro.

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4. Whether Sunriver, Evans Sales or Norman Evans are

required to indemnify 1 Source for any relief against it by

Dandrea and Val-Pro. 

VII. Consent to Magistrate Judge Jurisdiction.

1. The parties have not consented to transfer the 

case to the Magistrate Judge for all purposes, including trial.

VIII. Corporate Identification Statement.

1. Any nongovernmental corporate party to any action in

this court shall file a statement identifying all its parent

corporations and listing any entity that owns 10% or more of the

party's equity securities. A party shall file the statement with

its initial pleading filed in this court and shall supplement the

statement within a reasonable time of any change in the

information. 

IX. Discovery Plan and Cut-Off Date.

1. 1 Source Marketing Group, Inc., and Scott D. Terry

shall respond to Plaintiffs’ Complaint on or before April 9,

2008. These same Defendants shall respond to the cross-claim of

the Co-Defendants on or before April 9, 2008. 

2. Plaintiffs shall make their initial disclosures on or

before March 27, 2008. Defendants shall make their initial

disclosures on or before April 10, 2008. 

3. The parties are ordered to complete all non-expert

discovery on or before December 8, 2008.

4. The parties are directed to disclose all expert

witnesses, in writing, on or before December 1, 2008. Any

supplemental or rebuttal expert disclosures will be made on or

before January 2, 2009. The parties will comply with the

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provisions of Federal Rule of Civil Procedure 26(a)(2) regarding

their expert designations. Local Rule 16-240(a) notwithstanding,

the written designation of experts shall be made pursuant to F.

R. Civ. P. Rule 26(a)(2), (A) and (B) and shall include all

information required thereunder. Failure to designate experts in

compliance with this order may result in the Court excluding the

testimony or other evidence offered through such experts that are

not disclosed pursuant to this order.

5. The parties are ordered to complete all discovery on or

before February 2, 2009.

6. The provisions of F. R. Civ. P. 26(b)(4) shall 

apply to all discovery relating to experts and their opinions. 

Experts may be fully prepared to be examined on all subjects and

opinions included in the designation. Failure to comply will

result in the imposition of sanctions. 

X. Pre-Trial Motion Schedule.

1. All Non-Dispositive Pre-Trial Motions, including any

discovery motions, will be filed on or before February 17, 2009,

and heard on March 20, 2009, at 9:00 a.m. before Magistrate Judge

Dennis L. Beck in Courtroom 9. 

2. In scheduling such motions, the Magistrate

Judge may grant applications for an order shortening time

pursuant to Local Rule 142(d). However, if counsel does not

obtain an order shortening time, the notice of motion must comply

with Local Rule 251. 

3. All Dispositive Pre-Trial Motions are to be

filed no later than March 2, 2009, and will be heard on April 6,

2009, at 10:00 a.m. before the Honorable Oliver W. Wanger, United

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States District Judge, in Courtroom 3, 7th Floor. In scheduling

such motions, counsel shall comply with Local Rule 230. 

XI. Pre-Trial Conference Date.

1. May 11, 2009, at 11:00 a.m. in Courtroom 3, 7th Floor,

before the Honorable Oliver W. Wanger, United States District

Judge. 

2. The parties are ordered to file a Joint PreTrial Statement pursuant to Local Rule 281(a)(2). 

3. Counsel's attention is directed to Rules 281 

and 282 of the Local Rules of Practice for the Eastern District

of California, as to the obligations of counsel in preparing for

the pre-trial conference. The Court will insist upon strict

compliance with those rules.

XII. Trial Date.

1. June 23, 2009, at the hour of 9:00 a.m. in Courtroom 3,

7th Floor, before the Honorable Oliver W. Wanger, United States

District Judge. 

2. This is a jury trial.

3. Counsels' Estimate Of Trial Time:

a. 6 days.

4. Counsels' attention is directed to Local Rules

of Practice for the Eastern District of California, Rule 285. 

XIII. Settlement Conference.

1. A Settlement Conference is scheduled for February 12,

2009, at 10:00 a.m. in Courtroom 9 before the Honorable Dennis L.

Beck, United States Magistrate Judge. 

2. Unless otherwise permitted in advance by the

Court, the attorneys who will try the case shall appear at the

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Settlement Conference with the parties and the person or persons

having full authority to negotiate and settle the case on any

terms at the conference. 

3. Permission for a party [not attorney] to attend

by telephone may be granted upon request, by letter, with a copy

to the other parties, if the party [not attorney] lives and works

outside the Eastern District of California, and attendance in

person would constitute a hardship. If telephone attendance is

allowed, the party must be immediately available throughout the

conference until excused regardless of time zone differences. 

Any other special arrangements desired in cases where settlement

authority rests with a governing body, shall also be proposed in

advance by letter copied to all other parties. 

4. Confidential Settlement Conference Statement. 

At least five (5) days prior to the Settlement Conference the

parties shall submit, directly to the Magistrate Judge's

chambers, a confidential settlement conference statement. The

statement should not be filed with the Clerk of the Court nor

served on any other party. Each statement shall be clearly

marked "confidential" with the date and time of the Settlement

Conference indicated prominently thereon. Counsel are urged to

request the return of their statements if settlement is not

achieved and if such a request is not made the Court will dispose

of the statement.

5. The Confidential Settlement Conference

Statement shall include the following: 

a. A brief statement of the facts of the 

case.

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b. A brief statement of the claims and 

defenses, i.e., statutory or other grounds upon which the claims

are founded; a forthright evaluation of the parties' likelihood

of prevailing on the claims and defenses; and a description of

the major issues in dispute.

c. A summary of the proceedings to date.

d. An estimate of the cost and time to be

expended for further discovery, pre-trial and trial.

e. The relief sought.

f. The parties' position on settlement,

including present demands and offers and a history of past

settlement discussions, offers and demands. 

XIV. Request For Bifurcation, Appointment Of Special Master, 

Or Other Techniques To Shorten Trial. 

1. None. 

XV. Related Matters Pending.

1. There is a related matter entitled 1 Source, et al., v.

Sun River Sales, et al., Tulare County Superior Court Case 07-

224861, pending. 

XVI. Compliance With Federal Procedure.

1. The Court requires compliance with the Federal

Rules of Civil Procedure and the Local Rules of Practice for the

Eastern District of California. To aid the court in the

efficient administration of this case, all counsel are directed

to familiarize themselves with the Federal Rules of Civil

Procedure and the Local Rules of Practice of the Eastern District

of California, and keep abreast of any amendments thereto.

XVII. Effect Of This Order.

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1. The foregoing order represents the best

estimate of the court and counsel as to the agenda most suitable

to bring this case to resolution. The trial date reserved is

specifically reserved for this case. If the parties determine at

any time that the schedule outlined in this order cannot be met,

counsel are ordered to notify the court immediately of that fact

so that adjustments may be made, either by stipulation or by

subsequent scheduling conference. 

2. Stipulations extending the deadlines contained

herein will not be considered unless they are accompanied by

affidavits or declarations, and where appropriate attached

exhibits, which establish good cause for granting the relief

requested. 

3. Failure to comply with this order may result in

the imposition of sanctions. 

IT IS SO ORDERED.

Dated: March 20, 2008 /s/ Oliver W. Wanger 

emm0d6 UNITED STATES DISTRICT JUDGE

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