Validsa, Inc. v. Pdvsa Services Inc.

• Citation: 632 F.Supp.2d 1219
• Decision Date: 10 July 2009
• Docket Number: Case No. 08-21682-CV.
• Parties: VALIDSA, INC. d/b/a Dexton Validsa and Dexton, S.A., a Florida corporation, Plaintiff, v. PDVSA SERVICES INC., a Delaware corporation, and Bariven S.A., an agency or instrumentality of a foreign state, Defendants.
• Court: U.S. District Court — Southern District of Florida

Page 1219

632 F.Supp.2d 1219

VALIDSA, INC. d/b/a Dexton Validsa and Dexton, S.A., a Florida corporation, Plaintiff, v. PDVSA SERVICES INC., a Delaware corporation, and Bariven S.A., an agency or instrumentality of a foreign state, Defendants.

Case No. 08-21682-CV.

United States District Court, S.D. Florida.

July 10, 2009.

Holland & Knight LLP, Brian A. Briz, Esq., Adolfo Enrique Jimenez, Esq., George Mencio, Jr., Esq., Miami, FL, for Plaintiff.

Law Firm of Foley Hoag, Neil Austin, Esq., Thomas J. Bone, Esq., Janis H. Brennan, Esq., Ronald E.M. Goodman, Esq., Anthony D. Mirenda, Esq., Boston, MA, for Defendants PDVSA Services Inc., and Bariven S.A.

Brian Mark Silverio, Esq., Miami, FL, Local counsel for Defendants.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

JAMES LAWRENCE KING, District Judge.

THIS CAUSE is before the Court upon (i) Plaintiff, Validsa, Inc. d/b/a Dexton Validsa and Dexton, S.A.'s ("Plaintiff['s]" or "Validsa['s]") Motion for Partial Summary Judgment as to Liability Against Defendants ("Plaintiff's Motion") (D.E. 53); (ii) Defendant, PDVSA Services Inc.'s ("PSI['s]") Motion for Summary Judgment ("PSI's Motion") (D.E. 47); and (iii) Defendant, Bariven S.A.'s ("Bariven['s]") Motion for Partial Summary Judgment as to Counts I and II of its Counterclaim and Counts IV and V of Plaintiff's Amended Complaint ("Bariven's Motion") (D.E. 50) all filed on December 16, 2008. All discovery in the case has been completed in accordance with the Scheduling Order of July 7, 2008 setting a discovery deadline of December 11, 2008. At oral argument held on these cross-motions for summary judgment on January 14, 2009, counsel for the parties advised the Court that notwithstanding the then scheduling of this case for bench trial, no issues of fact material to the disposition of these motions remained in dispute and this Court could proceed to resolve these motions purely as a matter of law.

After careful consideration of the written submissions and relevant case and statutory law, the Court grants Plaintiffs Motion and denies Defendants' Motions pursuant to Rule 56 Fed.R.Civ.P. and Local Rule 7.5, and enters a partial summary judgment in favor of Plaintiff as to liability on Counts I, II, III, IV and V of the Amended Complaint.

I. MATERIAL FACTS AS TO WHICH THERE IS NO GENUINE ISSUE

A. The Parties.

Plaintiff, Validsa, is a Florida corporation that operates as an international food commodities trader, buying and selling food commodities such as beef, chicken, pork and black beans. (See Exhibit 1— Am. Compl. ¶¶ 2, 9). Plaintiff's principals are Tomas Gonzalez and Pablo Cardenas. (See Joint Exhibit 9—Gonzalez Dep. 15:5-20:5). Bariven is an agency and instrumentality of the Bolivarian Republic of Venezuela and is a wholly-owned subsidiary of Petroleos de Venezuela, S.A., the Venezuelan national oil company. (See Exhibit 1—Am. Compl. ¶¶ 4, 10; Exhibit 2—Answer ¶¶ 4, 10). PSI, a wholly-owned (100%) subsidiary of Bariven, is a Delaware corporation, headquartered in Houston, Texas. (See Exhibit 1—Am. Compl. ¶¶ 3, 11; Exhibit 2—Answer ¶¶ 3, 11; Exhibit 3—PSI's Supp. Response to 2nd Int. No. 2). Georges Kabboul is the President and Chairman of the Board of Directors of both Defendants PSI and Bariven. (See Exhibit 3—PSI's Supp. Response to 2nd Int. Nos. 1-2; Joint Exhibit 13—Kabboul Dep. 12:25-13:20; 123:10-12).

Beginning in 2007, Bariven began purchasing food commodities in the international markets for consumption in Venezuela. (See Exhibit 1—Compl. ¶ 12; Exhibit 2—Answer ¶ 12; Joint Exhibit 13—Kabboul Dep. 37:19-38:2; 50:13-51:23). Its subsidiary, PSI, was responsible for and handled the operations for the purchases of food commodities outside of Venezuela. (See Joint Exhibit 13—Kabboul Dep. 50:13-21; 51:12-18; 65:25-66:2).

B. The Contracts.

In November 2007, Defendants began purchasing food commodities from Plaintiff. (See Exhibit 1—Am. Compl. ¶¶ 15-16; Exhibit 2—Answer ¶¶ 15-16). The parties entered into eight contracts for the sale of food commodities in November 2007, three of which are at issue, and two contracts for the sale of food commodities in March 2008, both of which are at issue. For the five contracts at issue (the "Contract[s]"), Defendants submitted a purchase order for each, and Plaintiff submitted an acknowledgment for each. (See Exhibit 1—Am. Compl. ¶ 1; Exhibit 2— Answer ¶ 1).¹

1. The November 2007 Contracts.

The first Contract, based on Purchase Order No. 5100058326 and its Acknowledgment, was entered into in November 2007 and was for 5,000 metric tons of bovine beef at a unit price of $4,928.58 per metric ton for a total value of $24,642,900.00 ("Contract 326"). (See Exhibit 1—Am. Compl. ¶¶ 26, 27, 64; Exhibit 2—Answer ¶¶ 26, 27, 64). The second Contract, based on Purchase Order No. 5100058368 and its Acknowledgment, was entered into in November 2007 and was for 480 metric tons of whole chicken at a unit price of $2,257.15 per metric ton for a total value of $21,397,782.00 ("Contract 368"). (See Exhibit 1—Am Compl. ¶¶ 31, 32, 68; Exhibit 2—Answer ¶¶ 31, 32, 68). The third Contract, based on Purchase Order No. 5100058405 and its Acknowledgment, was entered into in November 2007 and was for 300 metric tons of ground beef at a unit price of $4,999.75 per metric ton for a total value of $1,499,925.00 ("Contract 405"). (See Exhibit 1—Am. Compl. ¶¶ 36, 37, 72; Exhibit 2—Answer ¶¶ 36, 37, 72).²

2. The March 2008 Contracts.

The fourth Contract, based on Purchase Order No. 5100061632 and its Acknowledgment, was entered into in March 2008 and was for 100,000 metric tons of refined sugar at a unit price of $446.92 per metric ton for a total value of $44,692,000.00 ("Contract 632"). (See Exhibit 1—Am. Compl. ¶¶ 42, 43, 76; Exhibit 2—Answer ¶¶ 42, 43, 76). The fifth Contract, based on Purchase Order No. 5100061757 and its Acknowledgment, was entered into in March 2008 and was for 24,000 metric tons of bovine beef at a unit price of $4,329.58 per metric ton for a total value of $103,909,920.00 ("Contract 757"). (See Exhibit 1—Am. Compl. ¶¶ 51, 52, 82; Exhibit 2—Answer ¶¶ 51, 52, 82).

In order to meet its obligations under Contracts 632 and 757, Plaintiff entered into supply contracts with Pacific Atlantic Trading Company ("PATC") and Quatro Marcos Ltda. ("Quatro Marcos"). (See Exhibit 5—PATC Contract (D.E. 51-9); Exhibit 6—Quatro Marcos Contract (D.E. 51-8)). Plaintiff was contractually obligated to pay PATC $29,500,000 for the purchase of 100,000 metric tons of sugar (see Exhibit 5—PATC Contract (D.E 51-9)),³ and Quatro Marcos $87,600,000 for the purchase of 24,000 metric tons of beef (see Exhibit 6—Quatro Marcos Contract (D.E. 51-8)).⁴

3. Analysis of the Contracts.

Upon receiving Plaintiffs acknowledgments of the purchase orders, Defendants were required to remit advance payments to Plaintiff calculated as a certain agreed-upon percentage of the total price of the purchase orders, respectively. (See Exhibit 1—Am. Compl. ¶ 17; Exhibit 2— Answer ¶ 17). For the March 2008 Contracts (Contracts 632 and 757), Plaintiff and PSI negotiated that the advance payments would equal thirty percent (30%) of the entire value of the contracts, respectively. (See Exhibit 1—Am. Compl. ¶¶ 44, 53; Exhibit 2—Answer ¶¶ 44, 53). Thus, the required advance payment for Contract 632 was $13,407,600, and the required advance payment for Contract 757 was $31,172,976. Plaintiff, however, was required to cause the issuance of performance bonds (known as Letters of Guarantee) from insurance companies in favor of PSI to secure the advance payments made by Defendants in the event that Plaintiff breached Contracts 632 or 757. (See Exhibit 4—Gonzalez 2nd Decl., ¶ 4; Exhibit 9—Letters of Guarantee (D.E. 73-9)).

Due to a delay that Defendants incurred in allocating funds, Defendants delayed remitting the advance payments under Contracts 632 and 757 to Plaintiff. (See Joint Exhibit 13—Kabboul Dep. 99:11-101:22; Joint Exhibit 10—Gravina Dep. 100:14-102:23). Defendants' delay in paying the advances under Contracts 632 and 757 extended Plaintiffs delivery obligations under the Contracts, as performance by Plaintiff and that of its food suppliers was not required to begin until the corresponding advances were paid. (See Joint Exhibit 10—Gravina Dep. 100:14-102:23: Joint Exhibit 9—Gonzalez Dep. 105:17-107:10: Joint Exhibit 13—Kabboul Dep. 99:11-19; 100:19-101:17).

Defendants understood their delay in paying the advances would extend Plaintiffs delivery obligations under Contracts 632 and 757, and Defendants even recognized the effect the delays by late March 2008. (See Joint Exhibit 13—Kabboul Dep. 95:9-101:22; Joint Exhibit 10—Gravina Dep. 100:14-102:23). For example, on March 27, 2008, Mr. Kabboul sent an email stating that if the advances were not received by Plaintiff, Defendants could lose the deliveries of food. (See Joint Exhibit 13—Kabboul Dep. 101:9-101:21). In addition, PSI's International Purchasing Supervisor, Alfonzo Gravina, sent an internal email stating: "I'm informing them that this is one of the reasons why we haven't been able to receive the delivery schedules. Until these [advance] payments, or L.C.'s, are received by the suppliers, they will not deliver those [delivery] schedules." (See Joint Exhibit 10—Gravina Dep. 102:8-12).⁵ Due to the size of the Contracts (i.e., the tonnage requirements), deliveries were made in installments. (See Joint Exhibit 13—Kabboul Dep. 55:13-18). In general, Plaintiff and other suppliers would provide PSI with delivery schedules known as "cronogramas," indicating when and how future deliveries would take place. (See Joint Exhibit 10—Gravina Dep. 92:8-93:17). The delivery schedules would occasionally change over time for reasons such as vessel availability, container availability, capacity at ports of call, production capacity and inspections. (Id.; Exhibit 11—Rios Aff. ¶ 59). Upon receiving modified schedules, PSI would either accept the schedules and the changes made, request...