SUNKIST GROWERS, INC., a California Corporation, Plaintiff-Appellant, v. Michael S. FISHER and Meryle Fisher, Defendants-Appellees

TMs appeal involves the applicability of res judicata, or claim preclusion. The district court granted summary judgment, finding that a grower who sold fresh fruit to a juice company and obtained a state court judgment against the juice company for failure to pay in full, was barred from suing the company’s sole shareholders under a federal statute providing a trust remedy against dealers who fail to pay for perishable agricultural commodities. We reverse.

FACTS

In 1991, SunMst Growers, Inc. (“SunMst”), a citrus producer incorporated in California, sold fresh fruit to Quality Fresh Juice Company, Inc. (“Quality Fresh”), a produce dealer incorporated in Arizona. When Quality Fresh failed to pay SunMst most of the money owed for the fruit, SunMst filed suit in Arizona state court alleging breach of contract. [ER tab 11] Quality Fresh offered to .confess judgment, and in July 1993 the state court entered a judgment for SunMst in the amount of $31,500. [Id.]

SunMst also filed a complaint against Quality Fresh with the Secretary of Agriculture under the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq. (“PACA”). After SunMst received the judgment in the state court…