Quality Foods sued by insurer for unpaid product invoices


On Monday, insurance wholesaler Euler Hermes North America Insurance Company filed a lawsuit in the Southern District of Florida – West Palm Beach Division against Quality Foods Produce, Inc. and Jose Perez for failure to pay Euler’s insurance assignees Hermes the appropriate invoices for their products. .

Euler Hermes is the insurance provider to Produce Team, LLC and La Casa Del Aguacate, LLC assignees who trade in fresh fruits and vegetables covered by the Perishable Agricultural Commodities Act (PACA). The defendant would have ordered, received and accepted products from the assignees, but would not have paid the invoices. Quality Foods has accumulated a balance of $75,281.00 with Produce Team and $48,960.00 with La Casa Del Aguacate with an interest rate of 18% per annum. According to the plaintiff, this constitutes bad faith because the defendant “did not retain sufficient funds to fully satisfy all qualified PACA claims” and “failed to ensure that its funds were freely available to satisfy its obligations pending against the transferors’ PACA trust rights”.

The complaint further claimed that Quality Foods “lacks liquidity or free cash flow to pay assignors” for the products they purchased and “inappropriately shifts” the risk of their undercapitalization onto assignees and Euler Hermes. . In PACA, sellers “keep a fiduciary claim on the[ir] raw materials” that Euler Hermes uses to recover lost payments. Accordingly, plaintiff sues for performance of the PACA trust, breaches of the PACA and breach of duty, breach of contract, interference with receipt of trust assets, and breach of fiduciary duty. .

Plaintiff seeks an injunction requiring Quality Foods to pay Euler Hermes $124,241, interest, damages, attorneys’ fees and costs, and other relief.
Euler Hermes is represented by McGlinchey Stafford, PLLC.


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