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

Filing 357

ORDER denying Defendant American Mariculture, Inc.'s 308 Motion for Reconsideration / Clarification. Signed by Judge John E. Steele on 3/31/2021. (TLP)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
TB FOOD USA, LLC, a
Delaware Limited Liability
Company,
Plaintiff,
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 Defendant American
Mariculture, Inc.’s Motion for Partial Relief from the Court’s
Opinion and Order on Summary Judgment (Doc. #308) filed on June 8,
2020. Plaintiff filed a Response in Opposition (Doc. #311) on June
29, 2020, joined in by PB Legacy. (Doc. #312.) Defendants filed a

Reply (Doc. #315) on August 6, 2020, and on August 17, 2020,
Plaintiff filed a Sur-Reply. (Doc. #318.)
I.
Pursuant to Fed. R. Civ. P. 60(b)(6), defendant American
Mariculture, Inc. (AMI or defendant) seeks relief from a portion
of the Court’s Opinion and Order (Doc. # 306) resolving summary
judgment motions.

Rule 60(b)(6) provides that a party may seek

relief from a final judgment, order, or proceeding when there is
“any reason that justifies relief.” FED. R. CIV. P. 60(b)(6).
Rule

60(b)(6)

movant

“must

persuade

the

court

that

A
the

circumstances are sufficiently extraordinary to warrant relief.”
Toole v. Bexter Healthcare Corp., 235 F.3d 1307, 1317 (11th Cir.
2000) (quoting Booker v. Singletary, 90 F.3d 440, 442 (11th Cir.
1996)). Moreover, "[t]he party seeking relief has the burden of
showing that absent such relief, an 'extreme' and 'unexpected'
hardship will result." Griffin v. Swim-Tech Corp., 722 F.2d 677,
680 (11th Cir. 1984).
The reason that justifies relief, AMI asserts, is that the
summary judgment Opinion and Order sua sponte decided an issue not
raised by any party without providing the notice and opportunity
to be heard required by Rule 56(f).

Rule 56(f) provides in

relevant part:
(f) Judgment Independent of the Motion. After giving notice
and a reasonable time to respond, the court may:

2

(1)

grant summary judgment for a nonmovant;

(2)

grant the motion on grounds not raised by a party;
or
consider summary judgment on its own after
identifying for the parties’ material facts that
may not be genuinely in dispute.

(3)

FED.

R.

CIV.

developed,

P.

and

56(f).
the

Where

a

legal
record

evidentiary

issue
is

has

been

complete,

“fully
summary

judgment is entirely appropriate even if no formal notice has been
provided.”

Morningstar Healthcare, LLC v. Greystone & Co., Inc.,

294 F. App’x 542, 544 (11th Cir. 2008) (quoting Artistic Entm’t.
Inc. v. City of Warner Robins, 331 F.3d 1196, 1202 (11th Cir.
2003)).

Additionally, AMI asserts that even if the Court properly

considered the issue, it reached the wrong result.
For the reasons set forth below, the motion is denied.
II.
The Court’s April 10, 2020 Opinion and Order set forth the
underlying facts in some detail (Doc. #306, pp. 3-11), which the
Court

adopts

relevant

to

important:

and
the

incorporates
current

herein

motion,

three

without
written

repeating.
documents

As
are

On December 14, 2014, the relevant parties entered

into a Mutual Non-Disclosure Agreement (the NDA).

On January 1,

2015, the relevant parties entered into a Grow-Out Agreement.

On

January 28, 2016, in an effort to resolve disputes which had
arisen, Randal Aungst, the vice president of Primo, and Robin
Pearl, AMI’s Chief Executive Officer, signed a one-page, untitled
3

handwritten document (which the Court will herein refer to as the
Settlement Term Sheet). (Doc. #20-3; Doc. #120, ¶ 11; Doc. #120-1,
¶ 10.)
AMI’s current motion relates to Count I of the Amended
Complaint, which alleges a breach of contract claim against AMI.
Specifically, Count I asserts

that the NDA and the Grow-Out

Agreement were valid, binding and enforceable contracts which AMI
breached.

(Doc. #20, ¶¶ 83-97.)

it had breached either contract.

In its Answer, AMI denied that
(Doc. #81, ¶¶ 83-97.)

As part

of its Defenses and Affirmative Defenses, AMI stated that the
breach of contract count failed to state a claim because both the
NDA and the Grow-Out Agreement “were terminated by the Settlement
[Term

Sheet],”

and

stated

that

the

Settlement

constituted a novation of both prior agreements.

Term

Sheet

(Doc. #81, p.

20.)
AMI moved for summary judgment as to Count I, arguing in
relevant part that it did not breach the NDA and the Grow-Out
Agreement as alleged in Count I of the Amended Complaint because
these contracts were no longer in effect. (Doc. #252, pp. 9-11;
Doc. #20, pp. 21-23.) Specifically, AMI asserted the NDA was
superseded by the Grow-Out Agreement, thereby extinguishing AMI’s
obligations under the NDA. (Doc. #252, pp. 9-10.) AMI then asserted
that the Grow-Out Agreement was terminated by the Settlement Term
Sheet, thus ending AMI’s obligations under the Grow-Out Agreement.
4

(Id.) In support of these assertions, AMI pointed to explicit
provisions of the Settlement Term Sheet and the parties’ subsequent
performance.

The

Settlement

Term

5

Sheet

is

reproduced

below:

AMI argued that certain provision of the Settlement Term Sheet
(“Release lawsuit. Terminate agreement.

Mutual release past,

present + future”) demonstrated that both parties understood the
Settlement Term Sheet to constitute an “enforceable agreement”
between them that was a “final and complete statement of terms”
governing the parties’ relationship.

(Doc. #252, pp. 10-11.)

Thus, according to AMI, its only surviving obligations were set
forth in the Settlement Term Sheet.

(Id.)

Count I, however, did

not allege that AMI breached the Settlement Term Sheet.
#20, pp. 21-23.)

Thus, AMI argued, it was entitled to summary

judgment on Count I.
Plaintiff’s

(Doc.

(Doc. #252, pp. 9-11; Doc. #308, p. 3.)

Corrected

Joint

Response

in

Opposition

to

Defendants’ Motion for Final Summary Judgment asserted there were
genuine issues of material fact regarding the Settlement Term
Sheet, and that “[i]ndeed, a fair reading and review of the Term
Sheet alone begs the question, is the Term Sheet an enforceable
agreement?” (Doc. #273, p. 22.) Pursuing the theme that

the

Settlement Term Sheet was not an enforceable agreement, Plaintiff
stated that “[a]lthough a general understanding may have existed
between Primo [PB Legacy] and Defendants as to the termination of
their business relationship in the January 2016 Term Sheet, the
essential specific terms pertaining to the winding down of their
relationship were not addressed or resolved.”

(Id.

at 23.)

Addressing partial performance, Plaintiff stated “[t]he mere fact
6

the Parties partially performed some of the Term Sheet’s provisions
(the portions above the dividing line on the Term Sheet) is not
dispositive on the issue of whether the Term Sheet itself is an
enforceable agreement . . ..” (Id.)

Finally, Plaintiff maintained

that “[i]t is beyond reasonable dispute there is a plethora of
documents and testimony in the record since the inception of the
case demonstrating and underscoring the lack of mutual assent and
clear divide as to what was actually agreed to under the Term
Sheet.” (Id.)
In the Opinion and Order (Doc. #306), the Court stated that
“[e]ssentially, AMI asserts that the Term Sheet is a new contract
which terminated the Grow-Out Agreement, while TB Food asserts
that the Term Sheet is not a contact at all.” (Id., p. 24.) The
Court recognized that Defendant’s assertion - that it was entitled
to summary judgment as to Plaintiff’s breach of contract (Count I)
claim because the Settlement Term Sheet terminated the Grow-Out
Agreement - was implicitly premised on the argument that the
Settlement

Term

Sheet

had

to

be

an

enforceable

“subsequent

agreement.” (Id., pp. 22-23.)
The Court first determined that the Grow-Out Agreement did
not supersede the NDA, finding each agreement addressed different
subject matters. (Doc. #306, p. 22.) Accordingly, the Court denied
Defendants’ Motion for Final Summary Judgment as to the alleged
breach of the NDA in Count I. (Id.)
7

The Court then rejected AMI’s assertion that the Settlement
Term Sheet is an “enforceable” contract which displaced AMI’s
duties under the Grow-Out Agreement. (Id., p. 28.) The Court found
the Settlement Term Sheet did not include essential specific terms
pertaining to the parties’ purported agreement. (Id., pp. 22, 28.)
Consequently, the Court found the Settlement Term Sheet did not
supersede the Grow-Out Agreement as a “subsequent agreement” and
therefore denied, in part, Defendants’ Motion as to Count I. (Id.,
pp. 23-24, 28.)
Additionally, the Court considered whether the Settlement
Term Sheet was a valid “modification” of AMI’s responsibilities
under the Grow-Out Agreement, which demonstrated that AMI did not
breach the Grow-Out Agreement. (Doc. #306, pp. 23-24, 28-29.) The
Court found disputed issues of material fact concerning this issue,
and therefore denied the Defendants’ Motion for Final Summary
Judgment on that ground. (Id., pp. 28-29.)
III.
Defendant argues that the Court went beyond the arguments of
the parties and decided sua sponte that the Settlement Term Sheet
does not constitute an enforceable agreement.
7.)

Defendant

argues

that

no

party

(Doc. #308, pp. 2-

affirmatively

sought

a

determination that the Settlement Term Sheet was unenforceable.
(Id., p. 2.) Rather, Defendant maintains its argument was that the
Settlement Term Sheet superseded the Grow-Out Agreement and the
8

NDA, while Plaintiff simply argued there are genuine issues of
material fact regarding whether the Term Sheet constitutes an
enforceable agreement between the parties. (Id., pp. 2-3.) Because
the grant of summary judgment was independent of the motion before
the Court, defendant argues, the notice and response requirements
of F. R. Cv. P. 56(f) were applicable but were not afforded by the
Court. (Id., pp. 8-10.)
Plaintiff responds that the Court did not sua sponte grant
summary judgment because it ruled on an issue that was a key
“component of the arguments of the parties,” that being, whether
the Settlement Term Sheet was an enforceable agreement which
superseded the NDA and Grow-Out Agreement. (Doc. #311, pp. 2-3.)
The Court did not violate Rule 56(f). Plaintiff and Defendant
disagreed about whether the Settlement Term Sheet terminated AMI’s
obligations under the Grow-Out Agreement. If the Court was to
resolve whether AMI was correct in its assertion that it no longer
had

obligations

follows

that

under

the

the

Court

Grow-Out

was

Agreement,

required

to

it

resolve

necessarily
whether

the

Settlement Term Sheet was an enforceable “subsequent agreement.”
Thus, the Court ruled on a “component of the arguments made by
both parties,” by resolving the effect of the Settlement Term
Sheet. Morningstar, 294 F. App’x at 544.
AMI had adequate notice and opportunity to argue the issue of
whether

the

Settlement

Term

Sheet
9

was

a

valid,

enforceable

“subsequent agreement.” Indeed, AMI raised the issue in its summary
judgment

motion,

asserting

that

the

Settlement

Term

Sheet

“constituted an enforceable agreement between them.” (Doc. #252,
pp. 10-11.) Plaintiff responded that, at the very least, “there is
a genuine issue of material fact as to whether the January 2016
Term Sheet constitutes an enforceable agreement,” and that a “fair
reading” of the Settlement Term Sheet called into question whether
the Term Sheet was an enforceable contract. (Doc. #273, pp. 2223.) Plaintiff emphasized that it believed the Settlement Term
Sheet was missing essential specific terms, and that there was a
“lack of mutual assent and clear divide as to what was actually
agreed to under the Term Sheet.” (Id., p. 23.) Defendant replied,
setting forth certain facts and concluding:
Based on the foregoing, a preponderance of the evidence
demonstrates that the Settlement Agreement [Term Sheet]
was and is a valid agreement that released the parties
from any prior claims, including Plaintiffs’ Count I for
breach of contract.
(Doc. #282, pp. 6-7.)(emphasis added.)
AMI

also

characterized

the

Settlement

Term

Sheet

as

“a

novation of both prior agreements.” (Doc. #81, p. 20.) (emphasis
added). A novation is defined as a “mutual agreement between the
parties for the discharge of a valid existing obligation by the
substitution of a new valid obligation.” Aronowitz v. Health-Chem
Corp., 513 F.3d 1229, 1237 (11th Cir. 2008) (emphasis added). Under
Florida law, “[t]o prove the substitution of the new contract for
10

the old, four elements must be shown: (1) the existence of a
previously valid contract; (2) the agreement of the parties to
cancel the first contract; (3) the agreement of the parties that
the second contract replace the first; and (4) the validity of the
second contract.” Thompson v. Jared Kane Co., 872 So. 2d 356, 361
(Fla. 2d DCA 2004) (emphasis added).
IV.
In the alternative, Defendant argues the Court’s finding that
the Settlement Term Sheet is not a valid subsequent agreement was
simply wrong, and is contradicted both by Plaintiff’s allegations
and the available evidence. (Doc. #308, pp. 10-19.) Defendant
points to Plaintiff’s descriptions of the Settlement Term Sheet in
the initial and amended complaints. (Id., pp. 10-12.) The initial
and amended complaints which state, in part:
28. On January 28, 2016, Primo and AMI signed a one-page
handwritten list of terms by which they would settle
their differences and disengage from one another (the
“Term Sheet”).
29. While not a model of clarity, the Term Sheet is
fairly interpreted as providing that the parties would
wind down operations and terminate their business
relationship on April 30, 2016.
(Doc. #1, p. 9.)
48. The Term Sheet was intended to provide an outline
for a more formal and detailed agreement by which the
parties would wind down their relationship and terminate
the Grow-Out Agreement on April 30, 2016, or 20 months
earlier than originally contemplated by the Grow-Out
Agreement. No further agreement was executed by the
parties, however.
11

49. In the Term Sheet, (i) AMI and Primo agreed to
terminate the Grow-Out Agreement early and provide
mutual releases of one another, (ii) Primo agreed to
dismiss the lawsuit, leave the premises by April 30,
2016, pay $40,000 up front and $35,000 three weeks later,
and provide AMI certain labor and health related
documentation requested by AMI, and (iii) AMI agreed it
would not destroy any Primo broodshrimp prior to April
30, 2016.
(Doc. #20, pp. 10-11.) While these statements provide evidence of
the parties’ intent to “wind down their business relationship and
terminate the Grow-Out Agreement” in the future, they do not change
the fact that the Settlement Term Sheet was lacking essential terms
to the parties’ alleged agreement, and thus, as a matter of law,
is not an enforceable contract. Jacksonville Port Auth., City of
Jacksonville v. W.R. Johnson Enters., Inc., 624 So. 2d 313, 315
(Fla. 1st DCA 1993)(“[I]f there has been no agreement as to
essential terms, an enforceable contract does not exist.”).
The Court found the form and substance of the Settlement Term
Sheet were inconsistent with “the degree of formality attending
similar contracts” intended to settle complex business disputes
and

litigation,

and

to

terminate

a

contractual

relationship

involving hundreds of thousands of dollars. (Doc. #306, pp. 2526.) In sum, the Court concluded “it is not reasonable to believe
that the one-sheet handwritten, sometimes cryptic note sets forth
all terms to terminate a contract with a business which just ten

12

months later sold for over $2.7 million.” (Id., p. 26.)

The Court

continues to be of that view.
Additionally, the Court examined “the relationship of the
parties” in finding that the Settlement Term Sheet lacked essential
terms of a termination agreement. (Doc. #306, pp. 26-27.) Given
the parties’ business history of executing two written agreements
(the NDA and Grow-Out Agreement),

as compared to the sparse

language of the Term Sheet, the Court concluded this omission
provided further evidence that the Term Sheet was lacking one of
the most essential terms to the parties’ alleged agreement. (Id.,
pp. 26-27.) It is well-settled under Florida law, “where the
essential terms of an agreement remain open, subject to future
negotiation,

there

can

be

no

enforceable

contract.”

See

CSX

Transp., Inc. v. Prof'l Transp., Inc., 467 F. Supp. 2d 1333, 1340
(M.D. Fla. 2006) (quoting Suggs v. DeFranco's, Inc., 626 So. 2d
1100, 1101 (Fla. 1st DCA 1993)).
Robin Pearl’s February 7, 2017 affidavit and Randall Aungst’s
January 26, 2017 and February 28, 2017 affidavits do not remedy
the omission of essential terms in the Settlement Term Sheet.
Similarly, the newly submitted email exchange between Plaintiff’s
counsel, Roger Miller, and Robin Pearl (Doc. #308-1), even if
properly considered,

does not

change the result.1 Indeed, on

Notably, Defendants provided no reason as to why the January 29,
2016 email between Mr. Miller and Mr. Pearl was not provided
1

13

January 29, 2016, just one day after execution of the Settlement
Term

Sheet,

Mr.

Miller

stated

in

an

email

to

Mr.

Pearl

“I

understand we are close to an agreement,” and Mr. Miller stated
that he was working on “draft revised agreements.”

(Doc. #308-1,

p. 3.) Subsequent emails show the two individuals continue to
bicker over the terms of their “agreement.”

(Doc. #308-1, pp. 1-

7.) If anything, Mr. Pearl and Mr. Miller’s email exchange further
demonstrates the parties were not in agreement about the terms of
the Settlement Term Sheet.
Defendant also argues that the Settlement Term Sheet is a
binding contract because of the parties performance under it, such
as AMI allowing

the release of

Primo’s

Plaintiff

April

to

until

30,

2016

animals and granting

remove

all

animals,

and

Plaintiff, on the other hand, paying $40,000.00 to AMI, along with
providing proof of workers’ compensation insurance and health
certificates for animals. (Doc. #308, pp. 17-19); See Stouffer
Hotel Co. v. Teachers Ins. Annuity Ass’n, 737 F. Supp. 1553, 1559
(M.D. Fla. 1990) (holding that several factors, including whether
there has been partial performance, must be evaluated to determine
whether a preliminary commitment should be considered binding).
Partial performance, however, is just one aspect in determining

earlier. It is noted that a motion for reconsideration should not
be used to “present evidence that could have been raised prior to
the entry of judgment.” Bey v. Carrington Mortg. Servs., LLC, 805
F. App'x 981, 984 (11th Cir. 2020).
14

whether a contract exists and is binding; see also Midtown Realty,
Inc., 712 So. 2d at 1252 (also considering the type of contract,
the relationship of the parties, and degree of formality attending
similar contracts in determining whether a contract encompasses
all essential terms and is therefore binding). The Court continues
to find that the parties’ performance under the Term Sheet cannot
overcome the deficiencies of the purported agreement as “neither
a contract nor any of its provisions come into existence” when
essential terms are lacking. Gibson v. Courtois, 539 So. 2d 459,
460 (Fla. 1989).
Accordingly, it is hereby
ORDERED:
Defendants’ Motion for Partial Relief (Doc. #308) from the
Court’s Opinion and Order on Summary Judgment is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this __31st__ day of
March 2021.

Copies: Counsel of record

15