Isabella Marine Holding, LLC v. Purcell et al

Filing 116

REPORT AND RECOMMENDATIONS re 85 Motion to Enforce Settlement Agreement. Signed by Magistrate Judge Jonathan Goodman on 8/8/2017. (jf00)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 15-10168-CIV-MARTINEZ/GOODMAN
ISABELLA MARINE HOLDING, LLC,
Plaintiff,
v.
JOHN PURCELL, et al.,
Defendants.
______________________________________/
REPORT AND RECOMMENDATIONS ON
MOTION TO ENFORCE SETTLEMENT AGREEMENT
Defendants Marine Tech Key West, Inc. (“Marine Tech”) and John Purcell
(“Purcell”) filed a motion to enforce a settlement agreement (the “motion”). [ECF No.
85]. Problems with the alleged settlement agreement ensued after Plaintiff Isabella
Marine Holding, LLC (“Plaintiff”) allegedly failed to sufficiently return fishing rods and
reels to Defendants. [ECF No. 85, p. 3]. United States District Judge Jose E. Martinez
referred Defendants’ motion to the Undersigned. [ECF No. 86].
The issue of whether fishing rods were returned is seemingly straightforward.
However, after Defendants filed their motion, this case entered troubled waters, or,
more accurately, entered unnecessarily cumbersome seas surrounding the procedural
map. Although the Undersigned would like to jettison overboard the flux of

unresponsive and deficient filings that ensued, as the Captain of this Report, I must sail
on.
Upon review of the motion, the related filings, and the record, for the reasons
stated below, the Undersigned respectfully recommends that the District Court deny
Defendants’ motion and enter a default against Marine Tech.
I.

BACKGROUND
In August 2015, Plaintiff filed its complaint in a Florida state court. [ECF No. 1-1].

Plaintiff’s complaint sought damages for breach of contract and injunctive relief arising
from Defendants’ alleged failure to perform adequate repairs on Plaintiff’s vessel. [ECF
No. 1-1]. Defendants then timely removed this case to federal court and asserted
original admiralty jurisdiction under 28 U.S.C. § 1333. [ECF No. 1, p. 2].
On October 27, 2016, six days after Defendants filed their motion, attorney R.
Bruce Wallace moved to withdraw as counsel for Defendants Marine Tech and Purcell.
[ECF Nos. 87; 88]. On December 19, 2016, Mr. Wallace filed another motion to withdraw
as counsel for Counterclaimants Marine Tech and Purcell. [ECF No. 96].
On October 31, 2016, Plaintiff moved for an extension of time to respond to
Defendants’ motion to enforce the settlement agreement. [ECF No. 89]. On December
28, 2016, the Undersigned granted Plaintiff’s motion, giving Plaintiff until January 30,

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2017, to respond to Defendants’ motion to enforcement the settlement agreement. [ECF
No. 99].
On December 28, 2016, the Undersigned also entered Endorsed Orders “granting
[ECF Nos. 88; 96] Attorney Robert Bruce Wallace’s Motion to Withdraw as Attorney for
Defendants[/Counterclaimants] John Purcell and Marine Tech Key West Inc.” [ECF Nos.
97; 100]. These Endorsed Orders required Marine Tech to retain substitute counsel by
January 11, 2017. [ECF Nos. 97; 100]. The Endorsed Orders specified that “[s]ubstitute
counsel must file an appearance by that deadline because Florida law requires a
corporation to appear in court only by counsel. Attorney Robert Bruce Wallace should
immediately provide a copy of this Endorsed Order to John Purcell and Marine Tech
Key West Inc.” [ECF Nos. 97; 100]. The Undersigned also denied as moot [ECF No. 87],
the earlier-filed motion to withdraw, given the existence of another order [ECF No. 97]
affording the same relief. [ECF No. 98].
All parties failed to comply with the Undersigned’s Endorsed Orders. Therefore,
on February 2, 2017, the Undersigned entered two Endorsed Orders to Show Cause.
[ECF Nos. 102; 103].
The first Show Cause Order was directed at Marine Tech, who was required “to
show cause in writing by February 8, 2017” why it had “not complied with the Court’s
Orders requiring it to obtain substitute counsel by January 11, 2017 (D.E. 97) and (D.E

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100).” [ECF No. 102]. The Show Cause Order stated that “[i]f new counsel does not
appear and if good cause is not shown for the failure to comply, then the Undersigned
will recommend that United States District Judge Jose E. Martinez enter a default
against it and deny its motion to enforce the settlement agreement (D.E. 85).” [ECF No.
102].
The second Show Cause Order was the flip side of the first Show Case Order. It
required Plaintiff “to show cause in writing, by February 8, 2017, why it has not
complied with the Court’s Order giving it until January 30, 2017 to respond to
Defendants’ motion to enforce the settlement agreement (D.E 99).” [ECF No. 103]. The
second Show Cause Order further specified that “[i]f good cause is not shown, then the
Undersigned will recommend that United States District Judge Jose E. Martinez grant
by default Defendant John Purcell’s motion to enforce the settlement agreement (D.E.
85).” [ECF No. 103].
On February 15, 2017, former counsel to Defendants, R. Bruce Wallace, filed a
response, explaining that Marine Tech may not have received notice of the
Undersigned’s first Show Cause Order [ECF No. 102] until just before the Order’s
imposed deadline. [ECF No. 104]. Therefore, on February 15, 2017, in an abundance of
caution, the Undersigned renewed the first Show Cause Order and required Marine
Tech “to show cause in writing by March 1, 2017 why it has not complied with the

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Court’s Orders requiring it to obtain substitute counsel by January 11, 2017 (D.E.97) and
(D.E 100).” The renewed Show Cause Order also stated that “[i]f new counsel does not
appear and if good cause is not shown for the failure to comply, then the Undersigned
will recommend that United States District Judge Jose E. Martinez enter a default
against it and deny its motion to enforce the settlement agreement (D.E. 85).” [ECF No.
105].
However, Marine Tech never responded to the renewed Show Cause Order and
never obtained substitute counsel. Purcell has also failed to indicate if he plans to
proceed pro se or plans to obtain substitute counsel.
On February 15, 2017, Plaintiff filed a late, allegedly verified response to the
Undersigned’s second Show Cause Order. [ECF No. 106]. On May 8, 2017, the
Undersigned struck Plaintiff’s response [ECF No. 106] to the Undersigned’s second
Show Cause Order based on lack of verification and gave Plaintiff until May 10, 2017 to
re-file it. [ECF No. 110]. On this same day, the Undersigned entered another order
requiring Plaintiff to file, by May 15, 2017, its substantive response to Defendants’
motion to enforce the settlement agreement. [ECF No. 111]. On May 10, 2017, Plaintiff
refiled its verified response, and on May 15, 2017, Plaintiff filed its response to
Defendants’ motion to enforce the settlement agreement. [ECF Nos. 114; 115].

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II.

ANALYSIS

Choice-of-law Analysis
Before the Undersigned can make a recommendation, I must first determine the
applicable law governing the contract principles at issue. Although none of the parties
cited any case law regarding which law governs a dispute concerning an effort to
enforce the settlement agreement, or, for that matter, any case law supporting or
opposing Defendants’ motion, the fact remains that the ultimate recommendation
depends on this determination. Thus, the Undersigned must perform a choice-of-law
analysis to reach an equitable and justified conclusion about Defendants’ motion.
When a case is in federal court based on admiralty jurisdiction, like here, federal
maritime, conflict-of-laws principles control. Cooper v. Meridian Yachts, Ltd., 575 F.3d
1151, 1161–62 (11th Cir. 2009). To determine whether federal common law or state law
governs a contract’s interpretation, federal courts must examine the nature of the
contract at issue. Arch Ins. Co. v. NCL (Bahamas), Ltd., No. 11-20577-CIV, 2012 WL
4896045, at *2 n. 2 (S.D. Fla. Oct. 15, 2012). The Supreme Court answered the question
when it explained, “[w]hen a contract is a maritime one, and the dispute is not
inherently local, federal law controls the contract interpretation.” Norfolk S. Ry. Co. v.
Kirby, 543 U.S. 14, 22–23, (2004).

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In accordance with these principles, the Eleventh Circuit performs a choice-oflaw analysis in maritime contract cases based on the Second Restatement of Conflicts of
Law, Section 188. See Dresdner Bank AG v. M/V Olympia Voyager, 446 F.3d 1377, 1382
(11th Cir. 2006). When conducting the Restatement’s choice-of-law analysis, a court
must determine which forum has the most significant relationship with the transaction
at issue. Id. The Restatement factors include: “(a) the place of contracting; (b) the place
of negotiation; (c) the place of performance; (d) the locus of the subject matter of the
contract; and (e) the domicile of the parties.” Id. (quoting Restatement (Second)
Conflicts of Law § 188(2)).
Based on the parties’ filings, it appears that the settlement agreement, if one
exists, was allegedly entered into, negotiated, performed (or breached) in Florida. [ECF
Nos. 85; 114; 115]. It also appears from the complaint that the settlement agreement
arose from a dispute regarding the repair work Defendants performed on Plaintiff’s
vessel. [ECF No. 1-1, p. 2]. The repairs performed on the vessel occurred at the vessel’s
location in Florida. [ECF No. 1-2, p. 2]. The exchange of rods and fishing gear at issue in
Defendants’ motion also occurred in Florida. [ECF No. 85]. Furthermore, the parties are
all domiciled in Florida. [ECF No. 1-2, pp. 2-3]. Therefore, every factor favors Florida
law governing the outcome of Defendants’ motion to enforce the settlement agreement.
Accordingly, the Undersigned will apply Florida law.

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No Settlement Agreement to Enforce
Settlement agreements are favored in Florida and are enforced by courts
whenever possible. See, e.g., Spiegel v. H. Allen Homes, Inc., 834 So. 2d 295, 297 (Fla. 4th
DCA 2002) (“Settlement agreements are favored as a means to conserve judicial
resources. Courts will enforce them when it is possible to do so.”) (internal citation
omitted). “The party seeking to enforce a settlement agreement bears the burden of
showing the opposing party assented to the terms of the agreement.” Id. (internal
citation omitted). “To compel enforcement of a settlement agreement, its terms must be
sufficiently specific and mutually agreed upon as to every essential element.” Id.
(internal citation omitted).
However, “[a]lthough settlement agreements are favored by the law, there must
be a meeting of the minds as to the essential settlement terms in order for settlement
agreements to be enforceable.” Schlosser v. Perez, 832 So. 2d 179, 182 (Fla. 2d DCA 2002)
(internal citations omitted). Indeed, “[p]reliminary negotiations or tentative and
incomplete agreements will not establish a sufficient meeting of the minds to create an
enforceable settlement agreement.” Williams v. Ingram, 605 So. 2d 890, 893 (Fla. 1st DCA
1992) (internal citation omitted). Nor is an agreement considered final “where the
record establishes that it is the intent of the parties that further action be taken prior to
the completion of a binding agreement.” Id. (internal citation omitted).

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As outlined in the background section above, Defendants, the parties who filed
the motion to enforce the settlement agreement, have violated many of the
Undersigned’s Orders in this case. Marine Tech, a corporation, is not represented by
counsel, and Purcell has not indicated, one way or the other, whether he has obtained
new counsel or is proceeding pro se. Furthermore, there is no executed settlement
agreement filed on the record. Instead, all that is filed are settlement agreement drafts
and settlement negotiation emails that were exchanged between counsel. [ECF No. 85,
pp. 20-22]. Indeed, both parties admit that no settlement agreement was ever signed.
[ECF Nos. 85, pp. 4-29; 114, p. 2].
In addition, the record shows that all parties have agreed that a condition
precedent to the settlement agreement has not been met. [ECF No. 85; 114]. Plaintiff
states in its verified response that Defendants’ former counsel informed him that
Defendants would not sign the settlement agreement until there was a return of the
rods and reels. [ECF No. 114, pp. 1, 6]. In an email sent from defense counsel to
Plaintiff’s counsel, dated October 17, 2016, Mr. Wallace wrote “[a]s I informed
[Plaintiff’s counsel’s] assistant David, [I] will come to your office myself Thursday
morning, October 20, between 9 and 9:30 to pick up the fishing gear and effectuate the
settlement.” [ECF No. 114, p. 17 (emphasis added)]. In their motion to enforce the
settlement agreement, Defendants argue that after defense counsel made the pick-up,

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certain rods were missing and certain reels received were not up to par. [ECF No. 85, p.
3].
Because defense counsel has stated both that the exchange of the rods and reels
were a condition precedent to Defendants’ signing and effectuating the settlement
agreement, and that the rods and reels were not properly exchanged, under Florida law,
there is no settlement agreement for this Court to enforce. Accordingly, the
Undersigned finds that the record establishes that a further action, the proper exchange
of the reels and rods, was required before a binding agreement was completed.
Williams, 605 So. 2d at 893. Thus, the Undersigned recommends that Judge Martinez
deny Defendants’ motion.
Default against Marine Tech as Sanctions
The Undersigned also recommends that Judge Martinez enter a default against
Marine Tech because a corporation cannot appear pro se under Florida law and defense
counsel has withdrawn from this case. Punta Gorda Pines Dev., Inc. v. Slack Excavating,
Inc., 468 So. 2d 438, 439 (Fla. 5th DCA 1985) (“A corporation must be represented by an
attorney when it appears in the courts of the State of Florida.) (citing Quinn v. Hous.
Auth. of Orlando, 385 So. 2d 1167 (Fla. 5th DCA 1980); Nicholson Supply Co. v. First Fed.
Savs. & Loan Ass'n, 184 So. 2d 438 (Fla. 2d DCA 1966)).

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The Eleventh Circuit permits a district court to default a corporate defendant
under Federal Rule of Civil Procedure 55 for violating a district court’s order to retain
new counsel after the district court permitted its former counsel to withdraw. Compania
Interamericana Export, Import, S.A., v. Compania Dominicana de Avaiacion, 88 F.3d 948, 95152 (11th Cir. 1996). Indeed, the district courts in this Circuit have followed suit and
routinely enter defaults against defendant corporations as a sanction for their failure to
obtain counsel. See, e.g., Kaplun v. Lipton, No. 06–20327–CIV, 2007 WL 707383, at *1 (S.D.
Fla. Mar. 5, 2007) (entering default judgment against corporate defendant for failure to
obtain counsel per court order); Tumi v. Wally’s Waterfront, Inc., No. 2:05–cv–551–FtM–
29SPC, 2007 WL 678013, at *1 (M.D. Fla. Mar. 5, 2007) (finding entry of default judgment
appropriate after corporate defendant failed to obtain counsel as directed by court).
The Undersigned gave Marine Tech ample opportunity to comply with the
Undersigned’s Orders, and as of the date of this Report, Marine Tech remains in
noncompliance. Therefore, the Undersigned finds that the record establishes that
Marine Tech’s lack of compliance is constructively willful, and thus a default is an
appropriate

sanction.

See

Citadel

Commerce

Corp.

v.

Cook

Sys.,

Inc.,

No.

8:08CV1923T33TGW, 2009 WL 1515736, at *1 (M.D. Fla. June 1, 2009) (“This Court need
not inquire into [corporate defendant’s] subjective intent. Default is appropriate because
[corporate defendant]’s objective actions are constructively willful.”).

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Alternatively, the Undersigned also recommends that Judge Martinez, under his
inherent authority, find that Marine Tech is not permitted to proceed in this case
because it failed to respond to numerous Court orders seeking clarification as to its
representative status. Barash v. Kates, 585 F. Supp. 2d 1347, 1361 (S.D. Fla. 2006) (finding
that court may impose sanctions against a party that violates a court order based on the
Court’s inherent authority).
Accordingly, the Undersigned respectfully recommends that the District Court
deny Defendants’ motion and enter a default against Marine Tech.
III.

OBJECTIONS
The parties will have ten (10) days from the date of being served with a copy of

this Report and Recommendations within which to file written objections, if any, with
the District Judge. Each party may file a response to the other party’s objection within
ten (10) days of the objection. 1 Failure to file objections timely shall bar the parties from
a de novo determination by the District Judge of an issue covered in the Report and shall
bar the parties from attacking on appeal unobjected-to factual and legal conclusions
contained in this Report except upon grounds of plain error if necessary in the interest

The Undersigned is shortening the time for the objections and responses because
Judge Martinez must enter an Order on this Report before he can rule on the other
pending motions on the docket, e.g., the motion for default judgment.
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1

of justice. See 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149 (1985); Henley v.
Johnson, 885 F.2d 790, 794 (1989); 11th Cir. R. 3-1 (2016).
RESPECTFULLY RECOMMENDED in Chambers, in Miami, Florida, on August
8, 2017.

Copies furnished to:
Honorable Jose E. Martinez
All Counsel of Record

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