Primo Broodstock, Inc. v. American Mariculture, Inc. et al

Filing 285

OPINION and ORDER granting in part and denying in part counter/third-party defendants' 235 Motion for Partial Summary Judgment. See Opinion and Order for details. Signed by Judge John E. Steele on 1/23/2020. (CMG)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PB LEGACY,
Corporation
USA, LLC,

INC, a
and TB

Texas
FOODS

Plaintiffs,
v.

Case No:

2:17-cv-9-FtM-29NPM

AMERICAN MARICULTURE, INC.,
a
Florida
corporation,
AMERICAN PENAEID, INC., a
Florida
corporation,
and
ROBIN PEARL,
Defendants.
AMERICAN MARICULTURE, INC.,
a Florida corporation,
Counter-Plaintiff,
v.
PB LEGACY, INC, a Texas
Corporation,
KENNETH
GERVAIS, and RANDALL AUNGST,
Counter/Third-Party
Defendants.
OPINION AND ORDER
This matter comes before the Court on counter/third-party
defendants PB Legacy, Inc. and Kenneth Gervais’ Motion for Partial
Summary Judgment (Doc. #235) filed on October 30, 2019.
plaintiff

American

Mariculture,

Inc.

filed

a

Counter-

Response

in

Opposition (Doc. #259) on November 26, 2019.

For the reasons set

forth below, the motion is granted in part and denied in part.
I.
Summary

judgment

is

appropriate

only

when

the

Court

is

satisfied that “there is no genuine dispute as to any material
fact and that the movant is entitled to judgment as a matter of
law.”

Fed. R. Civ. P. 56(a).

“An issue of fact is ‘genuine’ if

the record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”

Baby Buddies, Inc. v. Toys “R” Us,

Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).

A fact is “material”

if it may affect the outcome of the suit under governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“A

court must decide ‘whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004)(quoting Anderson, 477 U.S. at 251).
In ruling on a motion for summary judgment, the Court views
all evidence and draws all reasonable inferences in favor of the
non-moving party.

Scott v. Harris, 550 U.S. 372, 380 (2007); Tana

v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).

However, “if

reasonable minds might differ on the inferences arising from
undisputed facts, then the court should deny summary judgment.”
St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198

2

F.3d 815, 819 (11th Cir. 1999)(quoting Warrior Tombigbee Transp.
Co.

v.

M/V

Nan

Fung,

695

F.2d

1294,

1296-97

(11th

Cir.

1983)(finding summary judgment “may be inappropriate even where
the parties agree on the basic facts, but disagree about the
factual inferences that should be drawn from these facts”)).

“If

a reasonable fact finder evaluating the evidence could draw more
than one inference from the facts, and if that inference introduces
a genuine issue of material fact, then the court should not grant
summary judgment.”

Allen v. Bd. of Pub. Educ., 495 F.3d 1306,

1315 (11th Cir. 2007).
II.
The relevant undisputed material facts are as follows: At all
relevant

times,

Primo

Broodstock,

Inc.

(Primo)

operated

a

commercial shrimp breeding business1 and American Mariculture, Inc.
(AMI) operated a large indoor grow-out facility for shrimp in St.
James City, Florida.

Because Primo had great success in breeding

shrimp with dramatically improved survival rates, it decided to
market its disease-resistant shrimp on a global scale.

This

required more grow-out space than Primo’s Texas facility provided,

Primo Broodstock, Inc. was the original plaintiff in this
case. However, on February 17, 2017, TB Foods, USA, LLC acquired
ownership of Primo Broodstock, Inc. and changed its name to PB
Legacy, Inc. (Doc. #86, ¶¶ 4-5.) While PB Legacy, Inc. is now a
named plaintiff in this case, the Court refers to Primo Broodstock,
Inc. where appropriate.
1

3

and brought Primo into discussions with AMI.

To facilitate these

discussions, on December 11, 2014, Primo and AMI, through their
corporate officers, executed a Mutual Nondisclosure Agreement
(NDA).

The discussions proved fruitful, and on January 1, 2015,

Primo entered into a three-year shrimp farming Agreement (the GrowOut Agreement) with AMI.

(Doc. #20-2.)

Among other things, the

Grow-Out Agreement provided that AMI would grow-out post-larva
“Primo shrimp” for Primo at its facility, which Primo would then
harvest and sell to third parties.

(Doc. #20-2, p. 3.)

In January of 2016, Primo and AMI became involved in a dispute
regarding Primo’s performance under the Grow-Out Agreement and
AMI’s billing.

At some point between January 1 and January 20,

2016, Kenneth Gervais (Mr. Gervais), the President of Primo, and
Randall Aungst (Mr. Aungst), the Vice President of Primo, informed
Robin Pearl (Mr. Pearl), the AMI Chief Executive Officer, that
Primo had contracted to sell 100,000 Primo shrimp to a Chinese
company, which would result in $750,000 in revenue for AMI pursuant
to the Grow-Out Agreement.

(Doc. #80, pp. 3-4; Doc. #235, p. 3.)

The transaction never materialized, Primo did not harvest or sell
the shrimp, and AMI never received payment.

AMI therefore

notified Primo that it intended to harvest the Primo shrimp at its
facility.

(Doc. #80, p. 4; Doc. #235, pp. 2-3.)

Primo filed suit

against AMI in state court to enjoin AMI from harvesting its
shrimp.

(Id.)

4

On January 28, 2016, Mr. Pearl and Mr. Aungst met to resolve
the state-court litigation and their disputes under the Grow-Out
Agreement.

(Doc. #80, pp. 4-5; Doc. #235, p. 3.)

As a result of

that meeting, Mr. Pearl and Mr. Aungst signed a one-page, untitled
handwritten document (the Term Sheet).
contains

nine

numbered

bullet

points;

(Id.)
three

bullet points were also written on the page.

The Term Sheet
other

unnumbered

In part, the Term

Sheet stated that Primo had until April 30, 2016 to remove all of
its shrimp from AMI’s facility.

(Doc. #80-2, p. 2.)

Primo did not remove the shrimp from AMI’s facility by April
30, 2016.

AMI retained the Primo shrimp and began breeding and

selling the shrimp on the open market.

(Doc. #80, p. 5; Doc. #235,

p. 3.)
Primo filed this federal action against defendants AMI,
American Penaeid, Inc. (API), and Mr. Pearl on January 9, 2017.
(Doc. #1.)

A nine-count Amended Complaint (Doc. #20) includes a

claim that AMI breached both the NDA and the Grow-Out Agreement
(Count I).
On April 6, 2017, defendants filed an Answer and Affirmative
Defenses which included the defenses that both the NDA and the
Grow-Out Agreement were no longer valid contracts because the Term
Sheet had terminated those contracts, or represented an accord and
satisfaction of both, or was a novation of both.
20, ¶¶ 1-3.)

5

(Doc. #81, p.

Also on April 6, 2017, AMI filed a four-count Counterclaim
(Doc. #80) against PB Legacy and non-parties Mr. Gervais and Mr.
Aungst.2

In Count I, AMI seeks a declaratory judgment against

Primo and Mr. Gervais delineating certain rights under the Term
Sheet, which it refers to as a Settlement Agreement; in Count II,
AMI sues Primo and Mr. Gervais for breach of contract (the Term
Sheet/Settlement Agreement) for failing to remove the shrimp from
AMI’s facility by April 30, 2016; in Count III, AMI sues Primo,
Mr. Gervais, and Mr. Aungst for fraudulent inducement for making
false statements which induced AMI to continue to maintain Primo’s
shrimp broodstock at its expense instead of harvesting the shrimp;
and in Count IV, AMI sues Primo in the alternative for breach of
the Grow-Out Agreement (assuming that agreement was not terminated
by

the

Term

Sheet/Settlement

Agreement)

for

failing

to

ship

developed broodstock, failing to provide shrimp breeders, failing
to implement a breeding program, and failing to make timely payment
of amounts due.
III.
Mr. Gervais now moves for summary judgment on Counts I and
II, and both PB Legacy and Mr. Gervais move for summary judgment
on Count III, of the Counterclaim.

As to Counts I and II, Mr.

Technically, the claims against Mr. Gervais and Mr. Aungst
would be third-party complaints. See Fed. R. Civ. P. 14(a)(1).
2

6

Gervais argues he is entitled to summary judgment because he
“cannot be held personally responsible” under the Term Sheet
because he “did not sign the Term Sheet . . . in his individual
capacity.”

(Doc. #235, p. 5.)

As to Count III, PB Legacy and Mr.

Gervais argue they are entitled to summary judgment because (1)
AMI

failed

to

plead

its

fraudulent

inducement

claim

with

particularity; and (2) “there is no proof whatsoever that [Mr.]
Gervais and [Mr.] Aungst’s representations were false.”3
#235, p. 13.)
A.

(Doc.

The Court will address each claim in turn.

Counts I and II:

Mr. Gervais’ Personal Liability

Count I of the Counterclaim seeks a declaratory judgment
defining AMI’s rights under the Term Sheet.

Specifically, AMI

seeks a declaration “(i) that Point 8 of the Settlement Agreement
required Primo to remove all of its animals from AMI’s facilities
by

April

30,

2016;

and

(ii)

that

the

Settlement

Agreement

establishes that the subject shrimp broodstock was the property of
AMI as of the date of execution of the Settlement Agreement.”
(Doc. #80, p. 7.)4

Count II asserts that Primo and Mr. Gervais

PB Legacy and Mr. Gervais also argue they are entitled to
summary judgment on Count III because AMI’s claim is legally
inapplicable because it “contradicts a subsequent written
contract.” (Doc. #235, p. 12.) For the reasons set forth infra,
however, the Court need not reach that issue.
3

For purposes of this motion, the Court need not concern
itself with the seeming inconsistency of these two positions, i.e.,
4

7

breached the Term Sheet/Settlement Agreement by failing to remove
the Primo shrimp from AMI’s facility by April 30, 2016.
Mr. Gervais argues he is entitled to summary judgment on these
claims because he cannot be held individually liable since he “did
not sign the Term Sheet . . . in his individual capacity.”
#235, p. 5.)

(Doc.

Actually, Mr. Gervais did not sign the document at

all, but Mr. Aungst did so, and added the words “on behalf of Ken
Gervais” under his signature.

AMI contends that “[t]he addition

of ‘on behalf of Ken Gervais’ under Randall Aungst’s signature was
intentional and made it clear that Kenneth Gervais was personally
bound to the [Term Sheet] through his agent Randall Aungst.” (Doc.
#259, p. 6.)
Initially, the Court notes that even if Mr. Gervais is deemed
to have signed the Term Sheet in his personal capacity (discussed
further below), there is no basis for him to be a proper defendant
in

the

declaratory

judgment

action.

AMI

does

not

seek

any

declaration which affects Mr. Gervais in his personal capacity.
Rather, it seeks a declaration that Primo was required to remove
the shrimp by a certain date, a declaration which would not impact
Mr. Gervais in a personal capacity.

The only other declaration

which AMI seeks is that the remaining shrimp broodstock was the

the shrimp were Primo’s until April 30, 2016, and the shrimp were
AMI’s as of January 28, 2016.

8

property of AMI.

Mr. Gervais has never claimed that the shrimp

were his personal property,

and he

therefore has no

personal interest in this declaration either.

adverse

Accordingly, Mr.

Gervais in his personal capacity would not be a proper defendant
under Count I, and judgment will be entered dismissing Count I as
to Mr. Gervais in his personal capacity.
The breach of contract claim in Count II does require the
Court to determine whether the signature binds Mr. Gervais in his
personal capacity.

If the contract5 does not bind Mr. Gervais

personally, he can have no liability for its alleged breach, and
also is not a proper defendant in the Count I declaratory judgment
action.
Under Florida law,6 “[a] corporate officer may not be held
individually liable on a contract unless he signed in an individual
capacity . . . .”

White-Wilson Med. Ctr. v. Dayta Consultants,

Inc., 486 So. 2d 659, 661 (Fla. 1st DCA 1986).

“[T]he mere signing

of an agreement as a corporate officer does not impose personal
liability on that officer . . .”

Bugware, Inc. v. Williams, 188

So. 3d 49, 51 (Fla. 1st DCA 2016)(citation omitted).

Rather, it

In his motion, Mr. Gervais does not contest that the Term
Sheet is a contract. Therefore, the Court assumes for purposes of
this motion only that the Term Sheet is a binding contract.
5

The parties agree that the Counterclaim’s state law claims
are governed by Florida law.
6

9

has long been Florida law that determining whether a corporate
officer signed a contract in an individual or corporate capacity
is determined by the content of the contract as a whole.

Falsten

Realty Co. b. Kirksey, 137 So. 267, 269-70 (Fla. 1931); MacKendree
& Co., P.A. v. Pedro Gallinar & Associates, P.A., 979 So. 2d 973,
976 (Fla. 3d DCA 2008).

Thus, a contract’s meaning “is not to be

gathered from any one phrase, but from a general view of the whole
writing, with all of its parts being compared, used, and construed,
each with reference to the others.”

Specialized Mach. Transp.,

Inc. v. Westphal, 872 So. 2d 424, 426 (Fla. 5th DCA 2004)(citation
omitted).
The document at issue is a one-page untitled handwritten
document

containing

nine-bullet

unnumbered bullet points.

points

and

three

additional

It is signed by Robin Pearl without any

corporate title referenced, and by Mr. Aungst “on behalf of Ken
Gervais,” also without any corporate title referenced as to either
Mr. Aungst or Mr. Gervais.

Mr. Gervais does not dispute that Mr.

Aungst signed as his agent, so Mr. Gervais is deemed to have signed
the document, without any corporate title reference (as did Mr.
Pearl).

The absence of a corporate title is not dispositive of

whether

the

parties

intended

personal

liability,

since

the

document as a whole and the context in which it was signed must be
examined.

Westphal, 872 So. 2d at 426(citation omitted).

10

The context of the untitled document includes the two prior
written contracts between two corporate entities.
2014,

the

Mutual

Nondisclosure

between AMI and Primo.

Agreement

(Doc. #20-1.)

(NDA)

In December,
was

executed

The NDA is a four-page typed

document signed by Robin Pearl as “President” of AMI and by Kenneth
Gervais as “Primo Broodstock, Inc.”

(Id. p. 4.)

The first

paragraph of the NDA states that the contract is between the two
corporate entities, Primo and AMI.

(Id. p. 2.)

On January 1,

2015, AMI and Primo entered into the Grow-Out Agreement.
#20-2.)

(Doc.

The Grow-Out Agreement is a four-page typed document

signed by Robin Pearl as “President” of AMI and by Kenneth Gervais
as “President” of Primo.

Again, the first paragraph of the Grow-

Out agreement states that it is between the corporate entities
Primo and AMI.

(Id. at p. 2.)

None of the parties assert that

personal liability attaches to either of these contracts, and the
Court agrees.
The Term Sheet contains no language relating to individual
duties or liabilities of either Mr. Gervais or Mr. Pearl, but
instead only recites corporate actions to be performed by Primo
and/or AMI.

For instance, the crux of AMI’s breach of contract

claim is that “Mr. Gervais breached the [Term Sheet] by failing to
remove all Primo animals from AMI facilities by April 30, 2016.”
(Doc. #80, p. 7.)

However, the Term Sheet contains no language

requiring Mr. Gervais to remove such animals from AMI’s facility.

11

Instead, the Term Sheet states that “AMI will give Primo [until]
April 30th, 2016 to remove all animals.”

(Doc. #20-2, p. 2.)

The Court finds no ambiguity in the Term Sheet as to Mr.
Gervais’ lack of individual liability because AMI’s interpretation
is not “reasonably inferred from the [language] of the” agreement.
Commercial Capital Res., LLC v. Giovannetti, 955 So. 2d 1151, 1153
(Fla. 3d DCA 2007).

The Term Sheet does not “contain any specific

language subjecting [Mr. Gervais] to [individual] liability . . .
and does not explicitly indicate an intention for [Mr. Gervais]
to”

personally

guarantee

the

agreement.

Porlick,

Poliquin,

Samara, Inc. v. Compton, 683 So. 2d 545, 547 (Fla. 3d DCA 1996).
Similarly, Mr. Pearl signed the Term Sheet as “Robin Pearl,”
without specifying his signing capacity, and the Term Sheet does
not indicate that Mr. Pearl agreed to individual liability under
the agreement.

Although AMI argues otherwise, the Term Sheet

contains no language evidencing an intent to ascribe separate
meanings to Mr. Pearl’s and Mr. Aungst’s non-descriptive signature
lines.

The fact that AMI “ascribe[s] [such a] different meaning[]

to the language” in the Term Sheet signature lines “does not mean
the language is ambiguous.”

Kipp v. Kipp, 844 So. 2d 691, 693

(Fla. 4th DCA 2003)(citation omitted).
Because the Court finds no ambiguity in the Term Sheet based
upon the signature lines, the Court must “give full force to the
plain and clear language of the governing documents and not turn

12

to parol evidence to interpret the language.”

Lambert v. Berkley

S. Condo. Ass'n, Inc., 680 So. 2d 588, 590–91 (Fla. 4th DCA
1996)(citations omitted).
For the foregoing reasons, assuming the Term Sheet is a valid
contract,

the

Court

finds

that

Mr.

Gervais

cannot

be

held

individually liable under its provisions. Mr. Gervais is therefore
entitled to summary judgment on Counts I and II.
Co.

v.

Kraft

Foods,

Inc.,

351

F.3d

1067,

Whetstone Candy
1073

(11th

Cir.

2003)(Absent limited exceptions not present here, “a contract does
not bind one who is not a party to the contract, or who has not in
some

manner

agreed

to

accept

its

terms.”

(citations

omitted)(applying Florida law)).
B.

The Fraudulent Inducement Claim (Count III)
Count III asserts a claim for fraudulent inducement against

PB Legacy and Mr. Gervais.

It alleges that Mr. Gervais and Mr.

Aungst, on behalf of Primo, falsely represented to AMI that Primo
“held a valid contract for the sale of . . . shrimp broodstock to
China,” which would have “result[ed] in $750,000.00 in revenues to
AMI.”

(Doc. #80, p. 8.)

Count III further alleges that Mr.

Gervais and Mr. Aungst made such false representations in order to
“cause AMI to continue to maintain Primo’s shrimp broodstock” at
its facility.

Id.

Both PB Legacy and Mr. Gervais now move for

summary judgment on Count III, arguing that (1) AMI failed to plead
its claim with particularity; and (2) “there is no proof whatsoever

13

that [Mr.] Gervais and [Mr.] Aungst’s representations were false.”
(Doc. #235, p. 13.)
(1)

Whether Count III Was Pled With Particularity

The “essential elements” of a claim for fraudulent inducement
under Florida law are: “(1) a false statement of material fact;
(2) the maker of the false statement knew or should have known of
the falsity of the statement; (3) the maker intended that the false
statement induce another's reliance; and (4) the other party
justifiably relied on the false statement to its detriment.”

Rose

v. ADT Sec. Servs., Inc., 989 So. 2d 1244, 1247 (Fla. 1st DCA
2008)(citation omitted). PB Legacy and Mr. Gervais assert that AMI
failed to plead its fraudulent inducement claim with particularity
because

AMI

has

only

made

“self-serving

and

conclusory”

allegations that Mr. Gervais and Mr. Aungst knew or should have
known that their statements regarding a contract for the sale of
shrimp broodstock in China were false.

(Doc. #235, p. 10.)

The

Court disagrees.
Rule 9(b) of the Federal Rules of Civil Procedure requires
that a party plead “the circumstances constituting fraud” with
“particularity.”

Fed. R. Civ. P. 9(b).

“Particularity means that

a plaintiff must plead facts as to time, place, and substance of
the defendant's alleged fraud, specifically the details of the
defendant['s] allegedly fraudulent acts, when they occurred, and
who engaged in them.”

U.S. ex rel. Atkins v. McInteer, 470 F.3d

14

1350, 1357 (11th Cir. 2006)(citations and quotations omitted).

In

other words, a party alleging fraud must plead facts as to “the
who,

what,

when

newspaper story.”

where,

and

how:

the

first

paragraph

of

any

Garfield v. NDC Health Corp., 466 F.3d 1255,

1262 (11th Cir. 2006)(citation and quotations omitted).
The Court finds that Count III meets the heightened pleading
standard set forth in Rule 9(b).

Count III asserts that in a

meeting with Mr. Pearl on or about January 6, 2016, Mr. Gervais
and Mr. Aungst, on behalf of Primo, falsely alleged that Primo had
entered into a contract for the sale of shrimp broodstock in China,
which would have resulted in $750,000 in revenue for AMI.
#80, p. 8.)

(Doc.

Count III further alleges that Mr. Gervais and Mr.

Aungst made such false representations in order to cause “AMI to
continue to maintain Primo’s shrimp broodstock at” its facility.
(Id.)

Thus, Count III sufficiently alleges facts as to “the who,

what, when where, and how.”
and quotations omitted).

Garfield, 466 F.3d at 1262 (citation

Therefore, this portion of the motion is

denied.
(2) Falsity of Statement of Material Fact
As noted

supra, to succeed on a claim for fraudulent

inducement under Florida law, a plaintiff must establish that the
defendant made “a false statement of material fact.”
So. 2d at 1247(citation omitted).

Rose, 989

PB Legacy and Mr. Gervais argue

they are entitled to summary judgment on Count III because “there

15

is no proof whatsoever that [Mr.] Gervais and [Mr.] Aungst’s
representations were false.”

(Doc. #235, p. 13.)

The Court

agrees.
In its Counterclaim, AMI alleges that Mr. Gervais and Mr.
Aungst falsely represented that Primo had entered into a contract
for the sale of 100,000 Primo shrimp broodstock in China.

AMI

also alleges in its Counterclaim that Primo “sent AMI a copy of
the China sales agreement . . . .”

(Doc. #80, p. 4.)

While it is

undisputed that this Primo shrimp broodstock sale in China never
materialized, AMI has set forth no evidence establishing that Primo
had not entered into the shrimp broodstock contract in China, or
that the copy of “the China sales agreement” that Primo sent to
AMI was fabricated, or that $750,000 would not go to AMI if the
contract had been performed.

Because AMI has not set forth

evidence creating a disputed issue of material fact as to this
element of its fraudulent inducement claim, PB Legacy and Mr.
Gervais are entitled to summary judgment on Count III. See Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986)(“[T]he plain language
of Rule 56(c) mandates the entry of summary judgment . . . against
a party who fails to make a showing sufficient to establish the
existence of an element essential to that party's case.”).

16

Accordingly, it is now
ORDERED:
1.

PB Legacy, Inc. and Kenneth Gervais’ Motion for Partial

Summary Judgment (Doc. #235) is GRANTED IN PART AND DENIED IN PART.
(a)

The motion is granted as to Count I, which is dismissed
as to Kenneth Gervais in his personal capacity.

(b)

The motion is granted as to Count II, which is dismissed
as to Kenneth Gervais in his personal capacity.

(c)

The motion is denied as to the assertion that Count III
of

the

Counterclaim

fails

to

satisfy

the

pleading

standards.
(d)

The motion is granted as to Count III and judgment is
entered in favor of PB Legacy, Inc. and Kenneth Gervais
for failure of counterclaim plaintiff to present any
evidence

as

to

an

essential

element

of

fraudulent

inducement.
2.

The Clerk shall withhold the entry of judgment until the

conclusion of the case.
DONE AND ORDERED at Fort Myers, Florida, this
January, 2020.

17

23rd

day of

Copies: Counsel of record

18