EGI-VSR, LLC v. Coderch Mitjans

Filing 474

Order on Objections to Magistrate Judge's Report and Recommendation. Signed by Judge Robert N. Scola, Jr on 12/1/2021. See attached document for full details. (lbc)

United States District Court
for the
Southern District of Florida
EGI-VSR, LLC, Petitioner,
v.
Juan Carlos Celestino Coderch
Mitjans, Respondent.

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Civil Action No. 15-20098-Civ-Scola
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Order on Objections to Magistrate Judge’s Report and Recommendation
This matter is before the Court on the Respondent’s objections to United
States Magistrate Judge Alicia M. Otazo-Reyes’s Report and Recommendation
(ECF No. 470), in which Judge Otazo-Reyes recommended denying the
Respondent’s motion to stay (ECF No. 458). For the reasons stated below, the
Court overrules the Respondent’s objections, adopts the Report and
Recommendation (ECF No. 470), and denies the motion to stay (ECF
No. 458).
1. Legal Standard
“In order to challenge the findings and recommendations of the
magistrate judge, a party must file written objections which shall specifically
identify the portions of the proposed findings and recommendation to which
objection is made and the specific basis for objection.” Macort v. Prem, Inc., 208
F. App’x 781, 783 (11th Cir. 2006) (quoting Heath v. Jones, 863 F.2d 815, 822
(11th Cir.1989)). The objections must also present “supporting legal authority.”
See Local Mag. J. R. 4(b). Once a district court receives “objections meeting the
specificity requirement set out above,” it must “make a de novo determination
of those portions of the report to which objection is made and may accept,
reject, or modify in whole or in part, the findings or recommendations made by
the magistrate judge.” Macort, 208 F. App’x at 783–84 (quoting Heath, 863 F.2d
at 822) (alterations omitted). To the extent a party fails to object to parts of the
magistrate judge’s report, those portions are reviewed for clear error. See
Macort, 208 F. App’x at 784 (quoting Johnson v. Zema Sys. Corp., 170 F.3d 734,
739 (7th Cir.1999)). A court, in its discretion, need not consider arguments
that were not, in the first instance, presented to the magistrate judge. See
Williams v. McNeil, 557 F.3d 1287, 1291 (11th Cir. 2009).
As an initial matter, the Court agrees with the Magistrate Judge that the
requirements of Rule 62(d) apply, as the Amended Final Judgment is properly
construed as an injunction under Rule 65(d). Therefore, to obtain a stay

pending appeal under Rule 62(d), a movant must show that (1) they are likely
to prevail on the merits on appeal, (2) absent a stay, the movant will suffer
irreparable damage, (3) the adverse party will not suffer substantial harm from
issuance of a stay, and (4) the public interest will be served by issuing the stay.
See Garcia-Mir v. Meese, 781 F.2d 1450, 1453 (11th Cir. 1986). In general, a
stay of an injunction pending appeal constitutes “extraordinary relief” that
carries with it a “heavy burden.” See Winston-Salem/Forsyth Cnty. Brd. of Educ.
v. Scott, 404 U.S. 1221, 1231 (1971).
2. Analysis
As the parties are familiar with the facts of this case, the Court will not
recount the relevant background. First, Coderch argues that the Magistrate
Judge erred by “undervalu[ing]” his likelihood of success on appeal. (ECF
No. 471 at 9.) A movant must make a showing of “only likely or probable,
rather than certain, success.” See Schiavo ex rel. Schindler v. Schiavo, 403 F.3d
1223, 1232 (11th Cir. 2005). Here, Coderch argues that the “emergence of the
Mary Carter agreement between EGI and the Hubers” is enough to warrant a
likelihood of success on appeal. (ECF No. 471 at 10.) Coderch also argues that
there is a likelihood of success on his remaining arguments, namely that the
Hubers settlement was undervalued, that the law of the case doctrine did not
bar his renewed public policy defense to confirmation of the arbitration award
at issue, that post-judgment interest is not available in these circumstances,
that the adjustment of the award was improperly calculated, and that EGI did
not perform under the Amended Final Judgment. (ECF No. 470 at 5; ECF
No. 471 at 10–11.) As Magistrate Judge Otazo-Reyes stated, the Court has
previously conducted a detailed analysis of these issues, and for the reasons
previously discussed and noted by the Magistrate Judge, the Court finds that
Coderch does not have a likelihood of success on appeal. 1
Next, Coderch argues that the Report and Recommendation “omit[ted]
serious consideration of comity” with respect to an analysis of Coderch’s
pending bankruptcy proceeding in Paraguay. (ECF No. 471 at 12.) Coderch
argues that his assets are tied up in this foreign bankruptcy and that failure to
stay the current proceeding would cause irreparable harm to the Paraguay
bankruptcy. (Id. at 13–14.) Moreover, Coderch presses that the public interest
factor weighs in favor of a stay because of the need to respect the Paraguayan
On November 24, 2021, Coderch filed a declaration and a Chilean criminal Particular
Instruction, arguing that the Chilean police are investigating the Hubers in connection with
their activities during the underlying arbitration. (ECF No. 473.) The mere fact that some
investigation of the Hubers is taking place in Chile does not equal a likelihood of success on
Coderch’s claim.

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bankruptcy. (Id. at 16.) While comity with respect to recognition of judicial
process in foreign countries is laudable and often desirable, courts will only
grant comity where the Plaintiff meets its burden to establish that comity is
appropriate. See Daewoo Motor Am., Inc. v. Gen. Motors Corp., 459 F.3d 1249,
1257–58 (11th Cir. 2006) (setting forth factors that courts must consider before
granting comity); see also Allstate Life Ins. Co. v. Linter Grp. Ltd., 994 F.2d 996,
999 (2d Cir. 1993). Coderch does not attempt to argue the comity factors as set
out in Daewoo; rather, Coderch rests on generalized principles that comity is
usually appropriate when dealing with foreign bankruptcy proceedings. (ECF
No. 458 at 12.) As Coderch has not met his burden to show that the comity
factors set out in Daewoo weigh in favor of a stay, the Court agrees with
Magistrate Judge Otazo-Reyes and holds that comity is not warranted here.
Coderch also argues that irreparable harm is likely, as EGI “wants to use
its contempt sanctions motion as a way to go after third-party assets.” (ECF
No. 471 at 13.) But as Magistrate Judge Otazo-Reyes found, these arguments
are defenses that Coderch can raise against enforcement of the Amended Final
Judgment. (ECF NO. 470 at 6.) Coderch’s fears that EGI may seek to recover
third-party property does not warrant a stay pending appeal.
Last, Coderch argues that no party will be substantially harmed by a
stay. Coderch argues that EGI can pursue its claim in the Paraguayan
bankruptcy and that a stay would preserve the status quo and protect third
parties. (ECF No. 471 at 15–16.) However, as Magistrate Judge Otazo-Reyes
held, a stay could harm EGI, as EGI would be forced to litigate in a foreign
country without Coderch posting any security in this proceeding. The mere fact
that EGI may be able to bring a claim in the Paraguayan bankruptcy, alone,
does not lessen the harm that EGI would face if this case were stayed pending
appeal without the posting of security.
For these reasons, the Court overrules the Respondent’s objections,
adopts the Magistrate Judge’s Report and Recommendation (ECF No. 470),
and denies the motion to stay (ECF No. 458).
Done and ordered at Miami, Florida, on December 1, 2021.
________________________________
Robert N. Scola, Jr.
United States District Judge