Casa Express Corp v. Bolivarian Republic of Venezuela

Filing 217

ORDER ADOPTING REPORT AND RECOMMENDATIONS re The Report and Recommendation, ECF No. 198 , is ADOPTED. Casa's Objections, ECF No. 211 , are OVERRULED. Casas Motion for Default Judgment, ECF No. 149 , is GRANTED IN PART AND DENIED IN PART consistent with this Order. Default Judgment against Andrade Cedeno and Partial Default Judgment against Venezuela will be entered by separate Order. Signed by Judge Beth Bloom on 7/17/2023. See attached document for full details. (nan)

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 1 of 7

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
CASA EXPRESS CORP, as Trustee
of Casa Express Trust,
Judgement Creditor,
v.
BOLIVARIAN REPUBLIC OF VENEZUELA,
Judgment Debtor.
________________________________________/
ORDER ADOPTING REPORT & RECOMMENDATION
THIS CAUSE is before the Court upon Judgment Creditor Casa Express Corp’s (“Casa”)
Motion for Default Final Judgment Against Impleaded Defendant Alejandro Andrade Cedeno
(“Andrade Cedeno”) and Judgment Debtor the Bolivarian Republic of Venezuela (“Venezuela”).
ECF No. [149] (“Motion”). All post-judgment matters, including the instant Motion, were referred
to United States Magistrate Judge Alicia Otazo-Reyes. ECF No. [148]. On May 24, 2023, Judge
Otazo-Reyes issued a Report and Recommendation, ECF No. [198] (“R&R”), recommending that
the Motion be granted in part and denied in part to enter a partial default final judgment against
Venezuela and a default final judgment against Andrade Cedeno. See id. at 6. The R&R advised
the parties that objections to the R&R must be filed within fourteen (14) days of the R&R. Id. Casa
thereafter timely filed Objections to the Magistrate Judge’s R&R, ECF No. [211] (“Objections”).
Respondents Raul Gorrin Belisario (“Gorrin”), RIM Group Investments Corp., RIM Group
Investments I Corp., RIM Group Investments II Corp., RIM Group Investments III Corp., Posh 8

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 2 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
Dynamic Inc., and Planet 2 Reaching Inc. (“Respondents”) filed a Response to the Objections,
ECF No. [213]. For the reasons that follow, the Objections are overruled and the R&R is adopted.
I.

BACKGROUND
On August 27, 2021, Casa commenced this action by registering an Amended Final

Judgment issued by the Southern District of New York against Judgment Debtor Bolivarian
Republic of Venezuela (“Venezuela”). ECF No. [1]. Casa thereafter filed its Ex Parte Expedited
Motion to Commence Proceedings Supplementary, to Implead Defendants, and for Issuance of
Statutory Notices to Appear, ECF No. [3], on September 10, 2021. On June 7, 2022, Casa filed its
First Motion to Amend, ECF No. [42]. That Motion was granted by Judge Otazo-Reyes, see ECF
No. [59], and Casa thereafter filed its Amended Ex Parte Expedited Motion to Commence
Proceedings Supplementary, ECF No. [60]. Statutory Notices to Appear were issued to
Respondents. ECF Nos. [63]-[71].
On December 19, 2022, Casa moved for Clerk’s Default as to Venezuela, ECF No. [110],
and Andrade Cedeno, ECF No. [111]. On December 20, 2022, the Clerk entered Default against
Venezuela, ECF No. [112], and Andrade Cedeno, ECF No. [113]. On January 30, 2023, Casa filed
the instant Motion for Default Final Judgment. ECF No. [149]. On March 15, 2023, Judge OtazoReyes issued an Order to Show Cause requiring Respondents to show cause in writing why Casa’s
Motion should not be granted or alternatively to file responses to the Motion. ECF No. [175]. On
April 4, 2023, Respondents filed a Response to the Order to Show Cause in which they argued that
the Motion should be denied as to Venezuela. ECF No. [176]. Casa filed a Reply in support of its
Motion on April 26, 2023. ECF No. [185].
On May 24, 2023, Judge Otazo-Reyes issued the R&R recommending that the Motion be
granted in part and denied in part, recommending that this Court enter a partial default final

2

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 3 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
judgment against Venezuela and a default final judgment against Andrade Cedeno. ECF No. [198].
Casa timely filed Objections, arguing that the R&R incorrectly concluded that factual issues raised
in Respondents’ affirmative defenses preclude the Court from granting certain requested
declaratory relief. ECF No. [211]. Respondents assert that Casa’s Objections to the R&R should
be overruled. See generally ECF No. [213].
II.

LEGAL STANDARD
A.

Objections to R&R

“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)) (alterations omitted). The objections must also present “supporting legal
authority.” S.D. Fla. L. Mag. J.R. 4(b). The portions of the report and recommendation to which
an objection is made are reviewed de novo only if those objections “pinpoint the specific findings
that the party disagrees with.” United States v. Schultz, 565 F.3d 1353, 1360 (11th Cir. 2009); see
also Fed. R. Civ. P. 72(b)(3). If a party fails to object to any portion of the magistrate judge’s
report, those portions are reviewed for clear error. Macort, 208 F. App’x at 784 (quoting Johnson
v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999)); see also Liberty Am. Ins. Grp. v. WestPoint
Underwriters, L.L.C., 199 F. Supp. 2d 1271, 1276 (M.D. Fla. 2001). “It is improper for an
objecting party to . . . submit [ ] papers to a district court which are nothing more than a rehashing
of the same arguments and positions taken in the original papers submitted to the Magistrate Judge.
Clearly, parties are not to be afforded a ‘second bite at the apple’ when they file objections to an
R & R.” Marlite, Inc. v. Eckenrod, No. 10-23641-CIV, 2012 WL 3614212, at *2 (S.D. Fla. Aug.
21, 2012) (quoting Camardo v. Gen. Motors Hourly-Rate Emps. Pension Plan, 806 F. Supp. 380,
3

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 4 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
382 (W.D.N.Y. 1992)). A district court may accept, reject, or modify a magistrate judge’s report
and recommendation. 28 U.S.C. § 636(b)(1).
III.

DISCUSSION
As an initial matter, the Court finds the R&R’s recommendation that default judgment be

granted as to Andrade Cedeno to be well reasoned. Because Casa lodged specific objections to
Judge Otazo-Reyes’s recommendation that the Court issue only partial declaratory judgment and
omit declarations that (1) Venezuela waived sovereign immunity and (2) used the properties at
issue for commercial use, the Court reviews those recommendations de novo. The Court does not
consider Respondents’ arguments that the Motion for Default Judgment is procedurally improper
or their substantive arguments about immunity and the Act of State Doctrine, except to the extent
that they respond Casa’s Objections.
A. Waiver of Sovereign Immunity
Casa argues that the Court should interpret the Waiver of Immunity Provisions of the Fiscal
Agency Agreements issued by Venezuela and conclude that Venezuela expressly waived its
sovereign immunity from suit. ECF No. [211] at 2-3. Casa requests in its Objections that the Court
include in its Default Judgment against Venezuela a declaration that “Plaintiff established that
Venezuela expressly waived its immunity from suit and from execution under the Foreign
Sovereign Immunities Act in the fiscal agency agreements that govern the underlying debt
securities that form the basis of Plaintiff’s judgment. ECF Nos. [60-24] at § 14(d); [60-25] at §
14(d).” Id. at 3.
Respondents assert that “the purported contractual waiver of sovereign immunity does not
expand the property subject to attachment beyond: (i) property in the United States; (ii) used for
commercial proposes.” ECF No. [213] at 10 (citing Connecticut Bank of Com. v. Republic of
Congo, 309 F.3d 240, 254 (5th Cir. 2002), as amended on denial of reh’g (Aug. 29, 2002)).
4

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 5 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
Respondents have directly challenged whether Venezuela waived its sovereign immunity through
their asserted affirmative defenses. See ECF No. [127] at 3-6.
Judge Otazo-Reyes determined that “[g]iven the factual issues regarding Venezuela’s
waiver of immunity” issuing a “Partial Default Final Judgment as to Venezuela that only directly
quotes the Southern District of New York’s factual finding regarding Venezuela’s waiver of
immunity” is appropriate. ECF No. [198] at 6. Granting a complete Default Judgment would create
the risk of inconsistent judgments and be improper. See Drill S., Inc. v. Int’l Fid. Ins., 234 F.3d
1232, 1237 n.8 (11th Cir. 2000) (“where multiple defendants are jointly liable, it would be
‘incongruous’ for judgment to be entered against a defaulting defendant prior to the decision on
the merits as to the remaining defendants”).
However, the findings in the proposed Partial Default Judgment, ECF No. [198] at 8-10,
do not present the issue of possible inconsistency because it adopts only the findings with regard
to sovereign immunity. Those findings were already articulated by the Southern District of New
York which issued the underlying judgment registered with this Court. See ECF No. [198] at 6;
ECF No. [1-1]. The Court therefore agrees with Judge Otazo-Reyes that a Partial Default Judgment
which limits its declarations to the findings of the Southern District of New York court which
issued the underlying judgment is appropriate to avoid the possibility of inconsistent verdicts in
this case.
B. Commercial Use of the Properties
Casa further contends that the “undisputed facts establish that Venezuela used the
Properties to enter into an agreement with Plaintiff.” ECF No. [211] at 4 (emphasis omitted). Casa
objects to the omission of the following paragraph from the Default Judgment:
Plaintiff established that Venezuela [used] the Properties for a commercial activity,
as defined by 28 U.S.C. § 1610(a). Specifically, Venezuela contracted with Plaintiff
(a private party) an assignment of its litigation rights against Raul Gorrin Belisario
5

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 6 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
and his related entities guaranteeing that the real properties that are the subject of
this action would be used to repay Plaintiff’s judgment in exchange for Plaintiff’s
assumption of risk and cost of litigation and an express waiver of additional
collection efforts against other public assets. By guaranteeing that the properties
would be used to repay Plaintiff’s judgment, Venezuela used the Properties for a
commercial activity.
ECF No. [211] at 2.
Respondents respond that Casa did not allege that Venezuela used the properties for
commercial activity. Id. (citing ECF No. [60]). Respondents further submit that their affirmative
defenses raised in response to the Amended Ex Parte Expedited Motion specifically challenge
whether the properties at issue were used for a commercial purpose. ECF No. [127] at 4-6.
The Court agrees with Judge Otazo-Reyes that it should not make a dispositive finding on
the commercial use issue at this point given the need to fully resolve and adjudicate the issue on
its merits. The Court finds that adding the declaratory language requested by Casa will present the
possibility of inconsistent judgments within the same case. ECF No. [198] at 5-6; see also Frow
v. De La Vega, 82 U.S. 552, 554 (1872) (“A final decree on the merits cannot be made separately
against one of several defendants upon a joint charge against all, where the case is still pending as
to the others.”).
However, consistent with the R&R’s recommendation, the Court finds that entering a
partial default judgment in the form proposed and attached to the R&R as Exhibit A is appropriate.
Such partial default judgment includes only the specific findings articulated by the Southern
District of New York and omits the potentially inconsistent findings, avoiding the risk of
inconsistent liability.
IV.

CONCLUSION
Accordingly, it is ORDERED and ADJUDGED as follows:
1. The Report and Recommendation, ECF No. [198], is ADOPTED.
6

Case 1:21-cv-23103-BB Document 217 Entered on FLSD Docket 07/17/2023 Page 7 of 7
Case No. 21-cv-23103-BLOOM/Otazo-Reyes
2. Casa’s Objections, ECF No. [211], are OVERRULED.
3. Casa’s Motion for Default Judgment, ECF No. [149], is GRANTED IN PART AND
DENIED IN PART consistent with this Order.
4. Default Judgment against Andrade Cedeno and Partial Default Judgment against
Venezuela will be entered by separate Order.
DONE AND ORDERED in Chambers at Miami, Florida, on July 17, 2023.

BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

7