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

Filing 307

OPINION and ORDER granting third-party defendant's 287 Motion for Summary Judgment. See Opinion and Order for details. Signed by Judge John E. Steele on 5/5/2020. (CMG)

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 1 of 20 PageID 5894

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PB LEGACY, INC, a Texas
Corporation and TB FOOD USA,
LLC,
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 third-party defendant
Randall Aungst’s Motion for Summary Judgment (Doc. #287), filed on
February 3, 2020, to which counter-plaintiff American Mariculture,
Inc. filed a Response in Opposition (Doc. #294) on March 5, 2020.

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 2 of 20 PageID 5895

Randall Aungst filed a Reply (Doc. #300) on March 17, 2020, and
American Mariculture, Inc. filed a Sur-Reply (Doc. #305) on March
25, 2020.

For the reasons set forth below, the motion is granted.
I.

On April 6, 2017, defendant American Mariculture, Inc. (AMI)
filed a four-count Counterclaim (Doc. #80) against plaintiff PB
Legacy

and

non-parties

Aungst (Aungst).1

Kenneth

Gervais

(Gervais)

and

Randall

In relevant part, the Counterclaim alleges the

following:
On or about January 1, 2015, AMI and Primo entered into a
“Grow Out Agreement” authorizing Primo to use AMI facilities to
grow out shrimp broodstock and to produce saleable shrimp.
#80, ¶ 8.)

(Doc.

Over the course of the following year, Primo is alleged

to have repeatedly breached the terms of the Grow Out Agreement,
including by failing to ship developed broodstock from the AMI
facilities, failing to provide shrimp breeders for the hatcheries,
failing to implement a breeding program, and failing to make timely
payment of amounts due.2

(Id. ¶ 9.)

In response, AMI advised

Technically, the claims against Mr. Gervais and Mr. Aungst
would be set forth in a third-party complaint. See Fed. R. Civ.
P. 14(a)(1). Nonetheless, the Court will refer to the pleading as
a Counterclaim.
1

While the details and merits are disputed by the parties,
it is not disputed that there were significant disagreements
between Primo and AMI.
2

2

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 3 of 20 PageID 5896

Primo of its intent to harvest and sell Primo’s shrimp broodstock,
which AMI asserted was its right under the Grow Out Agreement.
(Id. ¶ 10.)
On or about January 6, 2016, Robin Pearl, President of AMI
(Pearl), met with Gervais and Aungst, on behalf of Primo, in
Bokeelia, Florida to discuss the various disagreements and AMI’s
intent to harvest the shrimp broodstock.

(Id. ¶ 11.) During this

meeting, Gervais and Aungst told Pearl that Primo had contracted
for the sale of 100,000 animals of shrimp broodstock to a Chinese
company.

(Id. ¶ 12.)

This shrimp broodstock was to be shipped

from the AMI facility, and pursuant to the terms of the Grow Out
Agreement, AMI was to be paid $7.50 for each animal shipped, for
a total payment to AMI of $750,000.00.
a

deposit

of

$100,000.00

in

order

(Id. ¶ 13.)
to

defray

AMI demanded
its

costs

of

maintaining the animals to be sold, which was orally agreed to by
Primo’s representatives.

(Id. ¶ 14.)

AMI asserts it relied upon the representations of Gervais and
Aungst, and maintained Primo’s shrimp broodstock at its premises
at considerable expense to AMI.

(Id. ¶ 15.)

When Primo made no

deposit, AMI again notified Primo of its intent to harvest the
shrimp broodstock in order to mitigate its damages and the ongoing,
considerable expense of maintaining Primo’s shrimp broodstock.
(Id. ¶ 16.)

3

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 4 of 20 PageID 5897

On or about January 19, 2016, Gervais, on behalf of Primo,
sent AMI a copy of the Chinese contract to support his and Aungst’s
prior representations, along with “a slew” of threats designed to
prevent AMI from harvesting Primo’s shrimp broodstock.
17.)

(Id. ¶

AMI asserts that in reliance upon the representations of

Gervais and Aungst, as well as the contract which was provided, it
continued to maintain Primo’s shrimp broodstock.

(Id. ¶ 18.)

On or about January 26, 2016, Primo filed suit against AMI in
state

court

seeking

injunctive

relief

to

prevent

AMI

from

harvesting or otherwise disposing of Primo’s shrimp broodstock.
(Id. ¶ 19.)

On or about January 29, 2016, Pearl and Aungst met to

discuss their competing claims and a termination of their business
relationship and prior agreements.

(Id. ¶ 20.) At that meeting,

Pearl and Aungst negotiated and signed what AMI refers to as a
settlement agreement comprised of approximately 12 handwritten
terms (the “Settlement Agreement”).

(Id.)

AMI alleges that Point

six of the Settlement Agreement formally terminated all prior
agreements, including the Grow Out Agreement; Point seven of the
Settlement Agreement prevented AMI from harvesting the shrimp
broodstock; and Point eight of the Settlement Agreement required

4

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 5 of 20 PageID 5898

Primo to remove all shrimp broodstock from AMI’s facilities by
April 30, 2016.3

(Id. ¶¶ 21-23.)

AMI alleges that, in breach of Primo’s obligations under the
Settlement Agreement, Primo failed to remove all shrimp broodstock
from AMI’s facilities by April 30, 2016.

(Id. ¶ 24.)

AMI incurred

significant expense in maintaining Primo’s shrimp broodstock from
the date of the Settlement Agreement forward.

(Id. ¶ 25.)

AMI

alleges that, “[i]n fact, Primo never had a valid contract for the
sale of shrimp broodstock to China, and all representations to
that effect were made specifically to induce AMI into maintaining
Primo’s shrimp broodstock (at AMI’s expense) and executing the
Settlement Agreement.”

(Id. ¶ 26.)

Count III of the Counterclaim, the sole claim against Aungst,
incorporates these allegations and asserts a claim for fraudulent
inducement.

Specifically, Count III alleges that, “[i]n a meeting

with Mr. Pearl, on behalf of AMI, on or about January 6, 2016, Mr.
Gervais

and

Mr.

Aungst,

on

behalf

of

Primo,

made

false

representations of material fact in stating that Primo held a valid
contract for the sale of 100,000 animals of shrimp broodstock to
China,

which

would

ship

from

$750,000.00 in revenues to AMI.”

AMI

facilities

(Id. ¶ 29.)

resulting

in

Count III further

While the existence of the “settlement agreement” document
is not disputed, its meaning and effect are disputed by the
parties.
3

5

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 6 of 20 PageID 5899

alleges

that

Gervais,

on

behalf

of

Primo,

furthered

this

misrepresentation by providing a copy of the allegedly valid
contract to Pearl, on behalf of AMI, on or about January 19, 2016.
(Id. ¶ 30.)

Count III continues that both Gervais and Aungst,

acting on behalf of Primo, knew or should have known that their
statements were false at the time they were made, and that they
intended that their false representations would cause AMI to
continue to maintain Primo’s shrimp broodstock at AMI’s expense
and preclude harvesting.

(Id. ¶¶ 31-32.)

AMI alleges that its

reliance

representations

was

on

the

false

reasonable

and

justifiable under the circumstances, and that it suffered damages
in excess of $75,000 as a direct result of Gervais’ and Aungst’s
fraudulent and knowing misrepresentations.

(Id. ¶¶ 33-34.)

II.
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

6

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 7 of 20 PageID 5900

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
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).
III.
“The elements of fraudulent misrepresentation and fraudulent
inducement are: (1) a false statement concerning a material fact;

7

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 8 of 20 PageID 5901

(2) the representor's knowledge that the representation is false;
(3) an intention that the representation induce another to act on
it; and (4) consequent injury by the party acting in reliance on
the representation.”

Moriber v. Dreiling, 194 So. 3d 369, 373

(Fla. 3d DCA 2016)(citations omitted); see also Butler v. Yusem,
44 So.3d 102, 105 (Fla. 2010); GEICO Gen. Ins. Co. v. Hoy, 136
So.3d 647, 651 (Fla. 2d DCA 2013).
a

plaintiff

may

not

rely

on

However, “as a matter of law,

statements

adversaries to establish fraud claims.”
373.

made

by

litigation

Moriber, 194 So. 3d at

The Court addresses each of Aungst’s arguments in turn.
A.

Failure to State Claim

Aungst argues that “AMI failed to state a claim for which
relief may be granted . . . .”

(Doc. #287, p. 2.)

This seems to

be a motion to dismiss allegation under Fed. R. Civ. P. 12(b)(6).
The Court concludes that Count III is sufficiently pled under Rule
12(b)(6) standards to state a claim upon which relief may be
granted.
B.

This portion of the motion is denied.
Liability of Corporate Officer

Aungst argues that summary judgment must be entered in his
favor because, as a corporate officer of Primo, he can have no
personal liability for statements he made on behalf of Primo.
Aungst points to various paragraphs of the Counterclaim which
allege

he

was

acting

“on

behalf”

precludes personal liability.

of

Primo,

which

(Doc. #287, pp. 6-7.)

8

he

argues

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 9 of 20 PageID 5902

Aungst concedes that it is possible for a corporate officer
to have personal liability for a tortious act committed in the
scope of his employment with a corporation.

(Id. p. 6.)

As the

case he cites states:
A director or officer of a corporation does
not incur personal liability for its torts
merely by reason of his official character; he
is not liable for torts committed by or for
the corporation unless he has participated in
the wrong. Accordingly, directors not parties
to a wrongful act on the part of other
directors are not liable therefor. If,
however, a director or officer commits or
participates in the commission of a tort,
whether or not it is also by or for the
corporation, he is liable to third persons
injured thereby, and it does not matter what
liability attaches to the corporation for the
tort. A contrary rule would enable a director
or officer of a corporation to perpetrate
flagrant injuries and escape liability behind
the shield of his representative character,
even though the corporation might be insolvent
or irresponsible.”
Orlovsky v. Solid Surf, Inc., 405 So.2d 1363 (Fla. 4th DCA 1981)
(emphasis added)(citation and quotation omitted).

Nothing in the

language of the Counterclaim would necessarily preclude personal
liability.

Indeed,

the

Counterclaim

alleges

that

personally participated in the allegedly wrongful conduct.

Aungst
This

basis for summary judgment is denied.
C.

Falsity of Statement

The crux of the motion is that the statement was not false or
known to be false when made.

(Doc. #287, pp. 8-10.)

9

“[A] false

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 10 of 20 PageID 5903

statement of material fact” is one of “[t]he essential elements to
establish a claim for fraudulent inducement.”
Services,

Inc.,

989

So.

2d

1244,

1247

(Fla.

Rose v. ADT Sec.
1st

DCA

2008).

Additionally, AMI must show that Aungst knew the statement was
false when made.

Butler v. Yusem, 44 So.3d at 105.

First, some preliminary matters.
The falsity at issue in Count III is not the representation
that a contract existed, but the representation that it was a
“valid” contract.

The record clearly establishes the existence of

the Broodstock Sales Agreement to sell 100,000 shrimp in China
(Doc. #41-2, pp. 26-29) and that a copy of this contract was given
to AMI.
Aungst correctly points out that a promise to do something in
the future normally cannot be a false statement of fact, and that
Count III does not allege that Aungst knew at the time he made the
statement there was no contract to sell 100,000 shrimp to a Chinese
purchaser.

(Doc. #287, pp. 8-9.)

Neither of these is relevant to

the claim in Count III, which is not based on future conduct (it
is based on the current existence of a valid contract) and does
not assert that the contract was non-existent (only that it was
not valid).
Additionally, the Court rejects Aungst’s argument that AMI
must show he forged the Chinese contract.

(Doc. #300, p. 3.)

Count III contains no suggestion that the contract was a forged

10

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 11 of 20 PageID 5904

document, only the assertion that it was not a “valid” contract.
Similarly, Aungst’s position that the fraudulent inducement claim
is premised on the failure of the Chinese contract to culminate in
an actual transaction, (Doc. #287, pp. 9-10), misstates the nature
of the claim.

AMI does not claim fraud because the deal fell

through; it claims fraud because (it asserts) the contract was not
“valid.”
Finally, the Court rejects Aungst’s argument that AMI’s lack
of standing to challenge the validity of the contract affects its
ability to assert the fraud claim.

(Doc. #300, p. 4.)

AMI clearly

would have no standing in a breach of contract claim concerning
the Chinese contract, but that is not the nature of the claim in
Count III.

Rather, AMI says that Aungst lied to it when he said

Primo had a “valid” contract with a Chinese customer.

AMI is

entitled to litigate the alleged falsity of the representation in
the fraud claim.
On the merits, the core of AMI’s fraud claim is stated as
follows:

“In a meeting with Mr. Pearl, on behalf of AMI, on or

about January 6, 2016, Mr. Gervais and Mr. Aungst, on behalf of
Primo, made false representations of material fact in stating that
Primo held a valid contract for the sale of 100,000 animals of
shrimp broodstock to China, which would ship from AMI facilities
resulting in $750,000.00 in revenues to AMI.”

11

(Doc. #80, ¶ 29.)

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 12 of 20 PageID 5905

The only portion of this representation which is alleged to have
been knowingly false is that the contract was “valid.”
The Court has previously granted summary judgment in favor of
the other two defendants in Count III because there was no evidence
that Aungst’s representation was false. (Doc. #285, p. 16.)

AMI

asserts that since then, Aungst provided a deposition in which he
“testified on two separate occasions that the contract presented
to Mr. Pearl in order to convince him not to harvest Primo’s
animals was not a valid and enforceable contract.”

(Doc. #294, p.

7.)
AMI first asserts that the Broodstock Sales Agreement was “de
facto unenforceable” because “according to Mr. Aungst’s testimony,
the material terms of the Chinese contract could be changed by the
buyer at any time.”

(Id.)

At deposition, the following exchange

ensued between Aungst and AMI’s counsel:
[Counsel]: Is this the contract that you were describing
earlier where Primo agrees to supply 100,000 shrimp to
a Chinese customer?
[Aungst]: What it is, it's an initial agreement, supply
contract that China would like to have 100,000
broodstock provided by Primo.
[Counsel]: Right.
[Aungst]: That's what it is.
[Counsel]: And there's a delivery date on here, right?
[Aungst]: The delivery dates are always there, but they
always can be changed. I mean, they change them all the
time. There's no specific date. Anyway, go ahead.

12

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 13 of 20 PageID 5906

[Counsel]: So you're saying this -- the delivery date
here, even though it's part of a contract, is not an
enforceable provision or –
[Aungst]: What I'm saying is, if this date expires, they
can always renew it. But this is the date you have to
provide the $100,000 -- or 100,000. But as you see here,
the quantity per shipment, right, well, at any time the
buyer can say, well, I don't need this many anymore or
I have problems in my hatchery so we have to reduce the
number animals. So there's no fix really. I mean, even
though you have a contract, until you get paid for it,
until you deliver, until what they really want, they can
change their mind, too. And then you go by it. So it's
not a -- even though it's there, things happen. You're
dealing with live animals. Okay? So when you have these
animals in your facility and you say, oh, my facility's
not working, I can't take no more, what are you going to
do?
. . .
[Counsel]: So even though it says sales agreement and it
looks like a contract, this isn't really an enforceable
contract between the parties, it might change at any
point?
[Aungst]: It could change with both parties agreeing to
it.
[Counsel]: And what if one party didn't agree to it?
[Aungst]: Well, I never had that happen, so obviously I
don't know what would happen I'm not a lawyer or any -I don't know what would happen, to be honest with you.
(Doc. #294-2, p. 35.)4
Contrary to AMI’s characterization, Aungst did not state the
contract

was

subject

to

modification

solely

at

the

buyer’s

When citing to the transcript of Aungst’s deposition, the
Court refers to the page number placed at the top of the document
by the Clerk’s Office.
4

13

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 14 of 20 PageID 5907

discretion.

Instead, Aungst testified “[i]t could change with

both parties agreeing to it.”

(Doc. #294-2, p. 35.)

The ability

of the parties to modify a contract by their consent does not
render the contract invalid or unenforceable.
[A] modification merely replaces some terms of
a valid and existing agreement while keeping
those not abrogated by the modification in
effect. See Franz Tractor Co. v. J.I. Case
Co., 566 So.2d 524, 526 (Fla. 2d DCA 1990).
“It is well established that the parties to a
contract can discharge or modify the contract,
however
made
or
evidenced,
through
a
subsequent agreement.” St. Joe Corp. v.
McIver, 875 So.2d 375, 381–82 (Fla. 2004).
Bornstein v. Marcus, 275 So. 3d 636, 639 (Fla. 4th DCA 2019). It
appears that this is no different than Chinese law, which provides
that parties may subsequently modify the terms of a contract.
Contract

Law

of

the

People’s

Republic

of

China,

See

Art.

77

(promulgated by Nat’l People’s Cong., Mar. 15, 1999)5 (“A contract
may be amended if the parties have so agreed.”).
AMI’s

second

assertion

is

that

deposition

testimony

demonstrates Aungst knew the Chinese contract was “not valid
because it had not been ‘stamped’ by the Chinese government.”
(Doc.

#294,

p.

7.)

AMI

relies

on

the

following

deposition

testimony:
[Counsel]: If we turn back to the broodstock agreement
that you have here, do you see any witnesses on the
signature page?
Available at https://www.wipo.int/edocs/lexdocs/laws/en/
cn/cn137en.pdf.
5

14

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 15 of 20 PageID 5908

[Aungst]: Huh? This document would be stamped and sent
to the China government. It has binded.
[Counsel]: And what, otherwise to you it's not a valid
agreement?
[Aungst]: Huh? Do you see -- I mean, I can't see because
it's all whited out, but this is a binded document to
China.
[Counsel]: But are there witnesses?
[Aungst]: No, but there is -- there are -- there are
stamps, there are company stamps, you know, registration
stamp numbers and all that stuff. It's not just a
handwritten agreement. This is not a handwritten
agreement. It's -- it's -- well, it's handwritten, but,
I mean, it's -- it's binded.
[Counsel]: So until this receives the stamps that you're
talking about, you're saying this is not a valid
agreement?
[Aungst]: For it to be bounded, I think it has to have
a stamp by the Chinese government. It goes to China and
they get stamped. Right? They get approval. See, they
can't just simply -- is that correct? I don't know.
[Counsel]: No, you can't ask questions.
[Aungst]: Yeah, I understand. But,
thought that these were stamped.

yeah,

I

always

[Counsel]: So even though you represented to Mr. Pearl
that this was a valid agreement, you're saying until
it's stamped -[Aungst]: At this time this -- well –
[Counsel]: -- it's not a valid agreement?
[Aungst]: From my understanding, there is a stamp that
goes with it.
[Counsel]: And until that stamp is on there, it's not a
valid agreement?

15

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 16 of 20 PageID 5909

[Aungst]: To my understanding.
(Doc. #294-2, p. 37.)
The Court finds that Aungst’s lay opinion regarding Chinese
contract law is insufficient to raise a genuine issue of material
fact as to whether Aungst falsely represented that the Broodstock
Sales Agreement was a “valid contract.”

As Aungst testified at

deposition, he is “not a lawyer” and has limited understanding of
the legal principles relevant to this analysis.
35.)

Circuitously,

AMI

relies

on

Aungst’s

(Doc. #294-2, p.
understanding

of

contract law for its assertion that the Broodstock Sales Agreement
was “not valid” because it lacked a stamp issued by the Chinese
government.

While AMI cites to Aungst as a legal authority, the

Court is unpersuaded by Aungst’s lay opinion as to this purely
legal issue, which cannot form a basis for a false representation
claim.

Chino Elec., Inc. v. U.S. Fid. & Guar. Co., 578 So. 2d

320, 323 (Fla. 3d DCA 1991)(“It is, of course, well settled in
Florida

that

in

order

to

be

actionable

a

fraudulent

misrepresentation must be of a material fact, rather than a mere
opinion or a misrepresentation of law.”).
AMI’s reliance on Zhongshan Hengfu Furniture Co., Ltd. v.
Home Accents All., Inc., No. EDCV1400038VAPDTBX, 2014 WL 12561625,
at *3 (C.D. Cal. Oct. 20, 2014), is misplaced.

Besides being a

non-binding decision, Zhongshan provides no such support for AMI’s

16

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 17 of 20 PageID 5910

position.

In that case, the court noted that a Chinese company’s

stamp “is a substitute for a signature, [so] due care must be
exercised to ensure that the [stamps] are maintained in a safe
location

and

authority.”

are

not

subject

to

misuse

by

persons

without

Id., at *3 n.3 (citation and quotation omitted).

Zhongshan does not support the assertion that the Broodstock Sales
Agreement was “not valid” for lacking a stamp issued by the Chinese
government.
In addition, AMI also appears to rely on an affidavit executed
by Pearl as evidence that Aungst falsely represented that the
Broodstock Sales

Agreement was a “valid contract.”

In that

affidavit, Pearl averred that Neil Gervais told Pearl that Ken
Gervais had testified in another lawsuit “that this contract for
100,000 animals was not a ‘real’ contract.”
Aungst

asserts

this

statement

(Doc. #41, ¶ 75.)

constitutes

inadmissible

hearsay, while AMI argues it is admissible hearsay under Rule
804(b)(3).

Assuming its admissibility, the Court finds such

hearsay insufficient to raise an issue of fact as to whether Aungst
falsely represented that the Broodstock Sales Agreement was a
“valid contract.”

As noted earlier, neither the Court nor AMI may

rely on the opinions of lay persons to determine the validity or
enforceability of a contract - a purely legal opinion.
The Court continues to find that AMI has produced no evidence
supporting the claim in Count III that counter-defendants made a

17

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 18 of 20 PageID 5911

material false statement of fact when they represented they had a
valid contract for the sale of 100,000 shrimp broodstock to a
Chinese customer.

Therefore, this portion of the motion is

granted.
D.

No Inducement

Aungst

also

argues

that

there

is

no

evidence

that

the

statement about the Chinese contract induced AMI to maintain the
live shrimp at its facility.

This is so, Aungst argues, because

AMI was already bound by the Grow Out Agreement to keep the shrimp
alive, and there was a pending state case in which AMI could have
been ordered to maintain the status quo.

Thus, Aungst argues,

there can be no fraudulent inducement to do something it was
“already unequivocally required to do.”

(Doc. #287, p. 10.)

It may be that a person cannot be fraudulently induced to do
something which is already unequivocally required, but the record
in this case contains material factual disputes as to AMI’s prior
obligation to maintain the live shrimp during certain time periods.
Therefore, this cannot form a basis for summary judgment.
E.

Subsequent Written Contract

Aungst
inducement
written

argues
where

contract

that

the

there

alleged

because,

in

can
fraud
such

be

no

tort

of

fraudulent

a

subsequent

contradicts
a

situation,

reliance

on

fraudulent representations is unreasonable as a matter of law.
The subsequent contract is what Aungst refers to as the “Term

18

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 19 of 20 PageID 5912

Sheet” and AMI refers to as the “Settlement Agreement”.

(Doc.

#287, pp. 10-11.)
The only binding authority cited by Aungst is Englezios v.
Batmasian, 593 So. 2d 1077, 1078 (Fla. 4th DCA 1992), which related
to an alleged oral representation made during the negotiation of
a written contract.

In that context, the court stated, “[a] party

may not recover in fraud for an alleged oral misrepresentation
which is adequately dealt with in a later written contract.”

Id.

This is not the context of the current case, and the binding effect
of the “Settlement Agreement”/”Term Sheet” is disputed by the
parties. As such, this argument does not support summary judgment.
For the foregoing reasons, the Court finds AMI has failed to
set forth evidence demonstrating that Aungst made a false statement
of material fact regarding the validity of the Broodstock Sales
Agreement.

Aungst is thus entitled to summary judgment on Count

III.
Accordingly, it is now
ORDERED:
Defendant’s

Motion

for

Summary

Judgment

(Doc.

#287)

is

GRANTED. The Court will withhold entry of judgment until the
completion of the case.

19

Case 2:17-cv-00009-JES-NPM Document 307 Filed 05/05/20 Page 20 of 20 PageID 5913

DONE AND ORDERED at Fort Myers, Florida, this
May, 2020.

Copies: Counsel of record

20

5th

day of