F.W.F., Inc. v. Detroit Diesel Corp.
| Decision Date | 25 June 2007 |
| Docket Number | No. 04-81200-CIV.,04-81200-CIV. |
| Citation | 494 F.Supp.2d 1342 |
| Parties | F.W.F., INC., plaintiff, v. DETROIT DIESEL CORPORATION, and Johnson & Towers, Delaware, Inc., defendants. |
| Court | U.S. District Court — Southern District of Florida |
Andrew Warren Anderson, Matthew John Valcourt, Houck Anderson PA, Miami, FL, for Plaintiff.
Scott M. Sarason, Christina Anne McGinley, Rumberger Kirk & Caldwell, Miami, FL, for Defendants.
ORDER ADOPTING MAGISTRATE'S REPORT AND RECOMMENDATION & GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO ENFORCE SETTLEMENT AGREEMENT [DE # 46]
THIS CAUSE is before the court upon the plaintiffs motion to enforce settlement agreement filed May 31, 2006 [DE# 46]. This matter was previously referred to United States Magistrate Judge James Hopkins pursuant to 28 U.S.C. §§ 636-39 and Rule 72 of the Federal Rules of Civil Procedure, for a recommended disposition.
On, May 29, 2007, Magistrate Judge Hopkins filed a report and recommendation upon the motion. [DE # 106]. On June 8, 2007, plaintiff filed its objections to the report and recommendation [DE# 107] and on June 20, 2007, the defendant MTU Detroit Diesel, Inc. f/k/a Detroit Diesel Corporation filed its response to the plaintiff's objections [DE# 108].
Having carefully reviewed the Magistrate Judge's report and recommendation, and having reviewed de novo those portions of the report to which the plaintiff has lodged objection, the court has determined to overrule the objections and adopt the recommendation of the Magistrate Judge.
It is accordingly ORDERED and ADJUDGED:
1. The report and recommendation of Magistrate Judge James Hopkins on the plaintiff's motion to enforce settlement [DE# 107] is ADOPTED.
2. The plaintiff's motion to enforce settlement [DE# 46] is GRANTED in PART and DENIED in PART as follows:
A. The court finds that the defendant did fail to timely reimburse plaintiff for all attorneys fees and costs incurred in the underlying litigation ($205,521.35), but finds that this was not a material breach of the agreement because a partial payment of $189,008.23 was timely tendered, and any delay in remittance of the balance was relatively minor and did not go to the essence of the agreement. See generally Crowley Am Transp. Inc. v. Richard Sewing Machine Co., 172 F.3d 781, 784 (11th Cir.1999).
To the extent it has not already done so, the defendant is obligated to pay plaintiff the outstanding balance of $16,513.16 on this obligation, together with prejudgment interest on this sum running from September 15, 2006, the date it became due, to the date of final payment at the rate of 8.25% per annum, or $3.73 per day. The defendant shall satisfy any remaining portion of this obligation by payment made to plaintiff within, TWENTY (20) DAYS from the date of entry of this order. To this limited extent, the plaintiff's motion to enforce settlement agreement is GRANTED.
B. As the court finds that neither party has materially breached the settlement agreement, the plaintiff's motion to enforce the settlement agreement is otherwise DENIED.
3. Both parties shall bear their own attorneys fees and costs, incurred in the prosecution or defense of the motion to enforce settlement.
REPORT AND RECOMMENDATION AS TO PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT AGREEMENT (DE 46)
THIS CAUSE comes before the Court upon an Order referring Plaintiffs' Motion to Enforce Settlement Agreement, Motion for Sanctions and Motion to Place the Motions and Exhibits Under Seal (DE 46) (the "Motion to Enforce Settlement Agreement") to the undersigned Magistrate Judge for Report and Recommendation (DE 47). This matter, which has been fully briefed and heard during a two-day evidentiary hearing, is now ripe for review. For the reasons stated below, the undersigned RECOMMENDS that the Motion to Enforce Settlement Agreement be GRANTED in part and DENIED in part.
This is the story about the M/Y Lady Jane, a 65 foot Viking Sportfish motor yacht. In June 2001, Plaintiffs F.W.F., Inc. and Gerald Abrams1 purchased the M/Y Lady Jane from HMY Yacht Sales, Inc. They paid additional money for an engine upgrade to the 1800 horsepower, 16V 2000 M90 diesel engines manufactured by Defendant Detroit Diesel Corporation ("Defendant"). Defendant warranted, specified and agreed that the 16V 2000 M90 engines would develop 1800 horsepower at 2300 revolutions per minute.
At the time of delivery, in July 2001, Plaintiffs ascertained that the port engine was unable to generate the specified horsepower and torque as warranted, annotated the delivery paperwork to that effect and rejected the engine as unsatisfactory. Over the next several years, Defendant attempted to cure and correct the power problem. Indeed, Defendant rebuilt the port engine on five separate occasions. Defendant, however, did not acknowledge any defect in the port engine and took the position that the inability of the engine to develop full power was caused by propellers that were not properly matched to the engines and offered to pay for propeller modifications. Defendant proposed other solutions while attempting to diagnose the problem.
Plaintiffs ultimately sued Defendant and Johnson & Towers, Inc.,2 the yacht broker, for damages related to the port engine's failure to produce the guaranteed, specified engine power output. (DE 1). They invoked admiralty jurisdiction under 28 U.S.C. § 1333(1) and Rule 9(h) of the Federal Rules of Civil Procedure ),3 asserting claims for revocation of acceptance (Count I), breach of warranty (Count II), breach of warranty of workmanlike performance (Count III), breach of express and implied warranties pursuant to the Magnuson-Moss Warranty — Federal Trade Commission Improvement Act (the "Magnuson-Moss Warranty Act"), 15 U.S.C. §§ 2301-12 (Count V) and violations of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. §§ 501.201 to .213 (Count VI). Plaintiffs sought to recover, among other things, compensatory damages, punitive damages, attorneys' fees and costs, and pre-judgment interest.
After the lawsuit was filed, and before the lawsuit was settled, Defendant determined that the port engine was "slightly retarded" as a result of a mechanical or manufacturing defect. In other words, it concluded that the port engine was not producing full power because the fly wheel hub, when placed on the crank shaft, probably shifted a couple of degrees out of properly timed position. Because the issue of liability, for all intents and purposes, was apparent, the only matter then in dispute was the issue of damages.
On November 18, 2005, the parties attended mediation in Miami, Florida. Plaintiffs were represented by Gerald Abrams, and their attorneys, Andrew W. Anderson and Matthew J. Valcourt, and in-house employee, Christopher Karentz. Defendant was represented at mediation by Ulrich Kemnitz, Scott Woodruff, Brian Howe, and its attorneys, Scott M. Sarason and Christina McGinley Paul. The parties reached a compromise during mediation and memorialized the terms of their agreement in a handwritten, memorandum of settlement (hereinafter "settlement agreement").
The settlement agreement consists of four pages (with the first page bearing the style of this action), and was jointly drafted by (and was the joint product of) the parties and their counsel in, attendance. The settlement agreement states:
MEMORANDUM OF SETTLEMENT
THIS CAUSE, having been submitted to mediation before James A. McCauley, Mediator, upon Order of the above-styled Court and/or stipulation between the parties, it is hereby stipulated and agreed between said parties that settlement has been reached as follows:
1.) Detroit Diesel to install [two] new factory built 2000HP [16V 2000 M91 engines], including:
A) All new gears and accessories for engines;
B) All costs for install including all accessories.
2.) Detroit Diesel to have [two] calendar months to build engines.
3.) Detroit Diesel to have [two] months to install [and] test new engines.
4.) Detroit Diesel to pay for shipyard cost for removal of engines, and all accessories.
5.) Detroit Diesel to commence installation after July 31, 2006. However, if either the port or starboard engines require material repair or warranty work, Detroit Diesel, at its option in lieu of warranty work, can install both new engines at that time.
6.) Detroit Diesel to pay up to and including $150,000 in attorneys fees and costs. Invoices to be provided [within sixty] days from November 18, 2005.
7.) Detroit Diesel to pay up to and including $60,000 of expert technical fees and costs. Invoices to be provided [within sixty] days from November 18, 2005.
8.) Payment of attorneys fees, costs and expert fees and costs to be made [within sixty] days of receipt of invoices.
9.) Installation of engines and gears and. removal of engines and gears to be performed at a mutual agreeable shipyard(s) by the parties in writing.
10.) Plaintiffs agree to sign a reasonable confidentiality agreement upon settlement.
11.) Plaintiffs to grant the existing engines to Detroit Diesel and execute documents to franker ownership of engines.
12.) Detroit Diesel is allowed a [two-week] period to go aboard the Lady Jane, to conduct, at their expense, tests by a mutually agreed protocol [and] Plaintiffs allowed to have a captain aboard during testing at Detroit Diesel's expense.
13.) Detroit Diesel to grant a [five-year] warranty to Plaintiffs commencing after installation and successful seatrial of vessel engines.
14.) The parties, upon full settlement, agree to execute mutual releases.
15.) The parties stipulate that the court remove the case from trial docket, and stay the case pending full implementation of the settlement.
(DE 94 [Ex. 1] [hereinafter "SA ¶ _"]). The parties signed or...
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