Odyssey Marine Exploration, Inc. v. Unidentified, Shipwrecked Vessel, CASE NO: 8:06-cv-1685-T-23MAP
| Decision Date | 15 August 2012 |
| Docket Number | CASE NO: 8:06-cv-1685-T-23MAP |
| Parties | ODYSSEY MARINE EXPLORATION, INC., Plaintiff v. THE UNIDENTIFIED, SHIPWRECKED VESSEL, its apparel, tackle, appurtenances and cargo located within center point coordinates 49', 25' N, 6', 00' W; radius: 5 nautical miles, Defendant, in rem, and THE KINGDOM OF SPAIN, Claimant. KEITH BRAY, Intervening Plaintiff, v. ODYSSEY MARINE EXPLORATION, INC., Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Odyssey Marine Exploration, Inc., an underwater salvage company, six years ago brought this maritime action against an unidentified wreck located under thewest side of the English Channel off Land's End. Believing the vessel to be the Merchant Royal, a British ship that foundered in 1641 while transporting a cargo purportedly worth $500 million, Keith Bray intervened (Doc. 72) on December 3, 2007. Bray (along with Odyssey and the Kingdom of Spain) later concluded that the vessel is not the Merchant Royal, which remains undiscovered. Bray amends (Doc. 214) his intervenor's complaint and sues for "fraud in the inducement," "rescission," "mutual mistake," and declaratory judgment. In sum, Bray seeks a declaratory judgment of his contractual rights upon the hypothetical discovery of the Merchant Royal. Odyssey moves (Doc. 215) to dismiss.
A citizen of the United Kingdom, Keith Bray researches shipwrecks. In an effort to locate the wreck of the Merchant Royal, Bray invested "considerable" time, money, and effort in "reviewing records of antiquity, visiting foreign countries, and translating historical works." During a trip to Paris, Bray met Greg Stemm, the co-chairman of Odyssey, who orally agreed that in exchange for Bray's research Odyssey would upon discovery of the lost vessel pay Bray 7.5% of the recovery value.
After the Paris agreement but before the discovery of the wreck, Stemm "represented to [Bray] that there was either some legal, institutional, or corporate reason why Odyssey must back out of" the Paris agreement. Additionally, Stemm"represented" that Odyssey had neither used Bray's research nor searched for the Merchant Royal and that Odyssey "had no plans to do so." Thus, "in lieu of" the Paris oral agreement, Bray accepted a cash payment, which was confirmed in writing. The written confirmation states that in exchange for the previous research, Odyssey paid Bray £1,500 and agreed to pay an additional £9,500.1 (Doc. 215, ¶¶ 1-3)
Later, using Bray's research, Odyssey found a wreck "within the expected area projected by Bray." After testing cargo found at the site, Odyssey concluded that the wreck was not the Merchant Royal and abandoned the site.
Bray alleges that Stemm's "representations" fraudulently induced the written contract and Bray's acceptance of the cash payment. In the alternative, Bray alleges that Stemm's and his "mistaken belief that Odyssey could not perform under the Paris agreement" caused the parties to enter the written agreement by mutual mistake. Bray seeks rescission of the written contract, a reimbursement of Bray's $20,000 "research cost," and a declaration "reinstating" the Paris oral agreement and awarding Bray "the legal right to the [7.5%] share even before the vessel is located."
Ultimately, Bray seeks an authoritative declaration rescinding the written agreement and construing the Paris agreement. Instead of limiting the complaint to a claim for a declaratory judgment, Bray collaterally alleges "fraud in the inducement," "rescission," and "mutual mistake," none of which is necessary, cogent, or, ultimately, sufficient to state a claim.
First, as noted in an August 18, 2010, order (Doc. 185), neither "rescission" nor "mutual mistake" constitutes a "claim" upon which a plaintiff may sue. Mutual mistake is an avoidance. Rescission is a remedy. The Table of Contents of a preeminent contracts treatise captures the idea— Williston on Contracts (4th ed. 2011). Nonetheless, because "Florida's courts have muddied the waters by confusing the law of remedies with underlying causes of action, a claim [of] 'rescission' is well recognized under Florida law." Ahem Fidelity Nat. Title Ins. Co., 664 F. Supp. 2d 1224, 1229 (M.D. Fla. 2009) (Presnell, J.). "Rescission" requires a plaintiff to allege:
Ahem, 664 F. Supp. 2d at 1229 (quoting Crown Ice Mach. Leasing Co. v. Sam Senter Farms, Inc., 174 So. 2d 614, 617 (Fla. 2d DCA 1965)). The written agreement (Doc. 215-1) confirms that, in exchange for Bray's research, Odyssey paid Bray £1,500 and agreed to pay an additional £9,500. (Doc. 215, ¶¶ 1-3) Absent an allegation of a previous offer by Bray to restore to Odyssey either £1,500 or £11,000 (whichever Bray ultimately received), the amended complaint fails to state a claim of "rescission."
Second, "fraud in the inducement" requires a resulting injury. Pulte Home Corp. v. Osmose Wood Preserving, Inc., 60 F.3d 734, 742 (11th Cir. 1995). Bray alleges that Odyssey's "misrepresentations" caused him to enter the written agreement, which caused damages of $20,000, an amount calculated by Bray's alleged "research costs." (¶ 30). In light of the other alleged facts, the allegation of damages lacks both plausibility and coherence. As alleged, the written agreement was simply a modification of the Paris agreement. The research was complete at the time of the Paris agreement, long before the written agreement. In Paris, Bray allegedly gave theresearch to Odyssey in exchange for 7.5% of the prospective treasure. Consequently, the written agreement replaced a 7.5% share of the salvage with £11,000 and therefore changed only the consideration due to Bray.2 The written agreement was simply a modification and produced no legal detriment to Bray. Instead, Bray received £11,000, which is £11,000 more than he would have received under the Paris agreement. Suffering no injury to date (and ahead £11,000), Bray fails to state a claim for fraud in the inducement. The claims for "rescission," "mutual mistake," and "fraudulent inducement" are dismissed. Only the declaratory judgment count remains.
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If federal jurisdiction appears doubtful, a sua sponte inquiry is required. Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1542 (11th Cir. 1993) (citing cases). Preventing an advisory opinion, Article III of the United States Constitution limitsthe exercise of federal judicial power to a Golden v. Zwickler, 394 U.S. 103, 108 (1969); Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937). "The case or controversy requirement must be met throughout the entirety of the proceeding[]." ACLU v. The Florida Bar, 999 F.2d 1486, 1490 (11th Cir. 1993). The dispute must be "definite and concrete, touching the legal relations of parties having adverse legal interests'" and must "admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." Aetna Life Ins., 300 U.S. at 240-41; Emory v. Peeler, 756 F.2d 1547, 1552 (11th Cir. 1985) ().
A comparison of MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), and Atlanta Gas Light v. Aetna Casualty and Surety Co., 68 F.3d 409 (11th Cir. 1995), exhibits the range of controversies presenting a suitable for declaratory judgment. In MedImmune, the plaintiff, a drug manufacturer, entered a patent license agreement with the patent licensor. When the licensor asserted that one of the licensor's patents covered one of the manufacturer's drugs, the manufacturer decided to pay royalties "under protest" rather than risk treble damages and attorneys' fees for infringement. The manufacturer disputed the drug's infringement and the patent's validity. While paying royalties "under protest," themanufacturer sued for a declaratory judgment. Reasoning that the manufacturer's decision to continue paying royalties prevented a "reasonable apprehension of imminent litigation," the district court dismissed, and the appellate court affirmed.
The Supreme Court reversed; rejected the conclusion that the manufacturer needed to risk treble damages, attorneys' fees, and an injunction from a breach of contract before filing suit; and stated, "[B]ut for [the manufacturer's] continuing to make royalty payments, nothing about the dispute would render it unfit for judicial resolution." MedImmune, 549 U.S. at 128. Thus, because the threat of harm to the manufacturer was "real" and "imminent," the manufacturer alleged a under Article III and an "actual controversy" under the Declaratory Judgment Statute, 28 U.S.C. § 2201.3
On the other hand, the plaintiff in Atlanta Gas Light v. Aetna Casualty and Surety Co., 68 F.3d 409 (11th Cir. 1995), established no case or controversy. During theearly twentieth century, the plaintiff operated twelve manufactured gas plants, which the plaintiff razed or dismantled long before the commencement of an EPA investigation in the 1980's. In 1990, the EPA "revised the 'toxicity characteristics' used to identify hazardous wastes." Atlanta Gas, 68 F.3d...
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