Connecting Waves Water Taxi Sevices, N.A. v. Jedison Power Catamarans, Inc.
Filing
30
ORDER granting in part and denying in part 24 Motion for Summary Judgment, and directing the parties to show cause why summary judgment should not be entered under Fed. R. Civ. P. 56(f). See Order for details. Signed by Judge James I. Cohn on 4/22/2015. (dvh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 14-62067-CIV-COHN/SELTZER
CONNECTING WAVES WATER
TAXI SERVICES, N.A.,
Plaintiff,
vs.
JEDISON POWER CATAMARANS, INC.,
Defendant.
__________________________________/
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT, AND DIRECTING PARTIES TO
SHOW CAUSE WHY SUMMARY JUDGMENT SHOULD NOT BE ENTERED
PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 56(f)
THIS CAUSE is before the Court upon Plaintiff’s Motion for Summary Judgment
[DE 24] (“Motion”), Defendant’s Response [DE 28], and Plaintiff’s Reply [DE 29]. The
Court has considered these papers and the record in this case, and is otherwise
advised in the premises. For the reasons set forth below, the Court will GRANT in part
and DENY in part Plaintiff’s Motion. The Court will further order the parties to SHOW
CAUSE why summary judgment should not be entered on grounds other than those
raised in the Motion, pursuant to Federal Rule of Civil Procedure 56(f).
I.
Standard
A.
Summary Judgment
The Court will grant summary judgment if the pleadings, the discovery and
disclosure materials on file, and any affidavits show “that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56. The movant “bears the initial responsibility of informing the district court of
the basis for its motion, and identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). “The burden on the moving party may be discharged by
‘showing’—that is, pointing out to the district court—that there is an absence of
evidence to support the nonmoving party’s case.” Id. at 325.
After the movant has met its burden under Rule 56, the burden of production
shifts to the nonmoving party who “must do more than simply show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986). The non-moving party may not rely merely on
allegations or denials in its own pleading, but instead must come forward with specific
facts showing a genuine issue for trial. Fed. R. Civ. P. 56; Matsushita, 475 U.S. at 587.
As long as the non-moving party has had ample opportunity to conduct
discovery, it must come forward with affirmative evidence to support its claim.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). “A mere ‘scintilla’ of
evidence supporting the opposing party’s position will not suffice; there must be enough
of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911
F.2d 1573, 1577 (11th Cir. 1990). If the evidence advanced by the non-moving party is
merely colorable, or is not significantly probative, summary judgment may be granted.
Anderson, 477 U.S. at 249–50.
B.
Applicability of Florida Law
This case is before the Court on diversity grounds. See 28 U.S.C. § 1332. It is
an action for breach of contract and related claims under Florida law. In applying
substantive law, this Court is therefore bound by decisions of the Florida Supreme
2
Court. See Shapiro v. Associated Int’l Ins. Co., 899 F.2d 1116, 1118 (11th Cir. 1990). If
the Florida Supreme Court has not spoken on an issue, Florida District Court of Appeals
decisions control absent persuasive indication that the Florida Supreme Court would
rule otherwise. See Blanchard v. State Farm Mut. Auto. Ins. Co., 903 F.2d 1398, 1399
(11th Cir. 1990).
II.
Background
The parties agree on many of the facts pertinent to this suit. In or around June
2013, Plaintiff Connecting Waves Water Taxi Services, N.A. (“Connecting Waves”)
purchased a catamaran from Defendant Jedison Power Catamarans, Inc. (“Jedison”).
[DE 24 at 1; DE 28-1 at 1.] Connecting Waves intended to use the catamaran in St.
Maarten, to ferry passengers from a cruise ship dock to downtown, and Defendant was
so advised. [DE 24 at 2; DE 28 at 2.] Jedison built the vessel and Connecting Waves
paid for it. Connecting Waves’ agents took possession in Fort Lauderdale and piloted
the vessel to St. Maarten. [DE 24-3 at 15–16.]
Upon the vessel’s arrival in St. Maarten the deal began to go bad. According to
Connecting Waves, the Section Head of the Maritime Affairs Department in St. Maarten,
Claudius Carty, surveyed the vessel. [DE 24 a 2.] Mr. Carty issued a report on January
27, 2014, detailing numerous problems with the vessel. He concluded that these
problems “are considered to be very unacceptable for a new built passenger carrying
vessel, and therefore [the vessel] can’t be registered in the passenger vessel registry
until all of the above-mentioned are rectified.” [DE 24-4 at 7.]
Importantly for the purposes of this Order, the parties appear to disagree over
whether Mr. Carty is an agent of St. Maarten’s government or hired by Connecting
Waves. Neither party supplies competent evidence on the point. Connecting Waves
3
includes Mr. Carty’s report [DE 24-4], in which Mr. Carty identifies himself as “Section
Head of the Maritime Affairs, St. Maarten, Dutch Caribbean.” [Id. at 8.] But Connecting
Waves attaches no affidavit or other sworn statement attesting to the report’s
authenticity or to Mr. Carty’s role. Jedison’s Response characterizes Mr. Carty as “their
surveyor,” referring to Connecting Waves. [DE 28 at 2.] Further, Jedison Knowles—the
principal and owner of Defendant Jedison—testified at deposition that Mr. Carty was
Connecting Waves’ surveyor. [DE 24-3 at 21.] But he does not provide the basis for
his belief and it does not appear to be based upon his first-hand knowledge. [Id.] For
the purposes of the instant Motion, the Court will resolve this dispute in Jedison’s favor
as the nonmoving party. See Anderson, 477 U.S. at 255 (holding that on a summary
judgment motion, “[t]he evidence of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.”) The Court will assume that Plaintiff hired Mr.
Carty to perform the survey.
Either way, Connecting Waves demanded Jedison fix the issues. Through its
attorneys, Connecting Waves gave Jedison two options: either (1) repair the vessel
without further payment or (2) provide Connecting Waves with the funds to do so on its
own. [DE 24-6 at 8.] Jedison disputed its liability for the repairs. [DE 24-5 at 2–4.] It
argued that many of the issues that Mr. Carty identified either were not required for
registration or were not the builder's responsibility under the building contract. [Id.]
Jedison further argued that any structural damage that the vessel sustained occurred
when Connecting Waves piloted it to St. Maarten from Fort Lauderdale, a voyage the
vessel was expressly not designed to make. [Id.]
4
The parties eventually settled their dispute. On March 14, 2014, the parties
entered into a written agreement “for the purpose of making a full and final compromise,
adjustment and settlement of any and all claims for the express purpose of precluding
forever any further or additional suits arising out of the aforesaid occurrences whether
the damages are known or unknown at this time.” [DE 24-7 at 2–3.] This Settlement
Agreement also states that “no promise, inducement or agreement not herein
expressed has been made to the undersigned.” [Id. at 3.] Under this settlement,
Jedison agreed to take back the vessel and refund its purchase price. [Id. at 3.]
Jedison would pay Connecting Waves $532,684.00 within four months after return of
the vessel. [Id. at 2.] Connecting Waves subsequently agreed to reduce this amount by
$49,061.07 for items that it retained from the vessel, and the parties agreed that
Jedison would make payment by August 6, 2014. [DE 24-8 at 2.]
August 6, 2014, came and went, but Jedison did not pay. [DE 24-3 at 22.]
According to Knowles’s deposition testimony, Jedison anticipated that it would be able
to sell the vessel in the four months following its return. [Id.] But in fact the boat did not
sell. [Id.] However, Jedison performed some light repairs on the vessel [Id. at 23] and
was able to lease it to a Bahamas company for use as a passenger ferry. [Id. at 24.]
As part of this process, “the local Bahamian surveyor for the port,” Cyril Morley
inspected the vessel and cleared it for operation as a passenger ferry. [Id.] Jedison
contends that the applicable passenger ferry standards in St. Maarten and the Bahamas
are identical. Jedison also attaches an affidavit from Mr. Morley attesting that he is
familiar with the standards for passenger ferries in St. Maarten and that the vessel
5
“complies with the requirements for registration as a passenger ferry” there. [DE 28-2 at
1–2.]
Connecting Waves sues Jedison under two theories. First, Connecting Waves
sues Jedison for Breach of Contract for failing to make the August 6, 2014, payment
required by the Settlement Agreement. [DE 1 at 3.] Second, Connecting Waves sues
Jedison for Fraudulent Inducement, alleging that Jedison never intended to honor the
Settlement Agreement. [Id. at 3–4.] Jedison argues that the Settlement Agreement
should be rescinded because Connecting Waves wrongfully induced it into making the
agreement “based upon the fraudulent misrepresentation from the Counter Defendant
Connecting Waves that the vessel could not be registered or certified in St. Martin [sic]
as a commercial passenger vessel.” [DE 20 at 4.] Jedison also counterclaims for
Fraudulent Inducement on this ground, and on the alternative ground that Connecting
Waves “misrepresented and/or concealed the condition of the vessel,” upon returning it.
[Id. at 3.] Connecting Waves moves for Summary Judgment in its favor on its Breach of
Contract claim, and upon Jedison’s claims of Fraudulent Inducement.
III.
Discussion
A.
The Instant Motion
Although neither party employs the term in their pleadings or motion papers, this
suit is one for breach of a settlement agreement. “Any consideration of [a] settlement
agreement must commence with the recitation of two basic rules of analysis.” Reed v.
United States, 717 F. Supp. 1511, 1515 (S.D. Fla. 1988). First, “compromises of
disputed claims are favored by the courts.” Id. Second, “[w]here the parties acting in
good faith, settle a controversy, the courts will enforce the compromise without regard to
what result might, or would have been, had the parties chosen to litigate rather than
6
settle.” Id. (internal quotation marks omitted). Further, under Florida law, “settlements
are highly favored and will be enforced whenever possible.” Robbie v. City of Miami,
469 So. 2d 1384, 1385 (Fla. 1985).
There is no dispute that Jedison breached the Settlement Agreement’s terms. It
took the vessel, but did not pay. Instead, Jedison attacks the Settlement Agreement’s
validity, alleging Fraudulent Inducement by Connecting Waves. Under Florida law, the
elements of Fraudulent Inducement are as follows: (1) “[a] misrepresentation of a
material fact;” (2) “[t]hat the representor knew or should have known of the statement’s
falsity;” (3) “[t]hat the representor intended that the representation would induce another
to rely on it;” and (4) “[t]hat the plaintiff suffered injury in justifiable reliance on the
representation.” Output, Inc. v. Danka Bus. Sys., Inc., 991 So. 2d 941, 944 (Fla. Dist.
Ct. App. 2008).
In its Motion for Summary Judgment, Connecting Waves argues that Jedison has
produced no evidence that Connecting Waves made any misrepresentation at all. [DE
24 at 7–9.] Connecting Waves contends that (1) the vessel in fact could not be
registered in St. Maarten and (2) it never concealed any damage to the vessel. [Id.]
The Court will address Connecting Waves’ second argument first, as it is the
easier to dispense with. The Court will enter summary judgment in Connecting Waves’
favor on this issue. Connecting Waves points out in its Motion that Jedison has
produced no evidence to support its contention that Connecting Waves concealed
damage to the vessel. Jedison’s Response does not address this deficiency. Jedison
has therefore failed to carry its burden to come forward with specific facts showing a
genuine issue for trial. See Matsushita, 475 U.S. at 587. The Court’s own review of
7
Knowles’s deposition testimony also reveals that the only additional damage Jedison
discovered following the return of the vessel “were tire marks on the side [of the vessel]
and cuts and scratches on the vinyl and under the vinyl.” [DE 24-3 at 25.] Knowles
acknowledged that this damage was merely cosmetic and that the damage was readily
discovered by workers removing stenciling from the vessel’s hull. [Id.] Therefore, “the
record taken as a whole could not lead a rational trier of fact to find for the non-moving
party” on the issue of whether Connecting Waves concealed damage to the vessel.
See Matsushita, 475 U.S. at 587.
Jedison’s argument concerning Connecting Waves’ ability to register the vessel
in St. Maarten is more complicated. As discussed above, there appears to be a factual
dispute over whether Mr. Carty was a St. Maarten official with the authority to disallow
the vessel’s registration, or a surveyor hired by Connecting Waves. If the former,
Connecting Waves must prevail because it would not have made a misrepresentation
concerning its ability to register the vessel. If the latter, it is possible that Connecting
Waves erred in concluding that the vessel could not be registered. At this stage, the
Court must resolve this controversy in Jedison’s favor. And Mr. Morley’s affidavit,
attesting that the vessel could properly be registered in St. Maarten, creates a genuine
issue as to whether Connecting Waves in fact erred. [DE 28-2.] Accordingly,
Connecting Waves’ Motion for Summary Judgment will be denied on the issue of
whether Connecting Waves misrepresented its ability to register the vessel in
connection with the Settlement Agreement.
8
B.
Federal Rule of Civil Procedure 56(f)
That said, another ground for summary judgment is readily apparent. Under
Federal Rule of Civil Procedure 56(f), the Court may enter summary judgment on a
ground not raised in the parties’ motion papers. However, the Court must first afford the
negatively impacted party notice and a reasonable opportunity to respond.
To prevail upon a theory of Fraudulent Inducement, the theory’s proponent must
show that the alleged tortfeasor “knew or should have known of the statement’s falsity.”
Output, Inc., 991 So. 2d at 944. Even adopting Jedison’s view that Mr. Carty was
merely a surveyor employed by Connecting Waves and that he and Connecting Waves
were wrong about the vessel’s eligibility for registration, Jedison has adduced no
evidence tending to show that Connecting Waves knew or should have known that Mr.
Carty’s assessment was incorrect. The Court will therefore allow Jedison an
opportunity to demonstrate that sufficient evidence exists on this issue to allow its
claims to proceed to a jury. If no such showing is made, the Court will enter summary
judgment in Connecting Waves’ favor on Jedison’s Fraudulent Inducement and
Rescission claims, and on Connecting Waves’ claim for Breach of Contract.
Finally, the Court notes that no evidence appears in the record to support
Connecting Waves’ claim for Fraudulent Inducement based upon Jedison’s alleged
intention never to live up to the Settlement Agreement’s terms [see DE 1 at 3–4].
Instead, Knowles’s unchallenged deposition testimony reveals that Jedison believed it
would be able to sell the vessel in short order and intended to pay Connecting Waves
from these proceeds. [DE 24-3 at 21–22.] Connecting Waves does not reference its
Fraudulent Inducement claim in the instant Summary Judgment Motion. The Court will
9
accordingly also order Connecting Waves to show cause why summary judgment
should not be entered against it on its Fraudulent Inducement claim.
Accordingly, it is ORDERED AND AJUDGED as follows:
1.
Plaintiff’s Motion for Summary Judgment [DE 24] is GRANTED in part
and DENIED in part consistent with the foregoing.
2.
On or before April 29, 2015, Jedison shall SHOW CAUSE in writing why
summary judgment should not be entered against it on its claims for Rescission and
Fraudulent Inducement, and in Connecting Waves’ favor on its Breach of Contract
claim, for the reasons identified in this Order. Jedison may submit additional supporting
evidence with this response.
3.
Also on or before April 29, 2015, Connecting Waves shall SHOW CAUSE
in writing why summary judgment should not be entered against it on its claim for
Fraudulent Inducement for the reasons identified in this Order. Connecting Waves may
likewise submit additional supporting evidence with its response.
4.
Failure to show cause in response to this Order will result in the entry of
summary judgment on the relevant claims.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, this 22nd day of April, 2015.
Copies provided to counsel of record via CM/ECF.
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?