GDG Acquisitions LLC v. Government of Belize

849 F.3d 1299, 2017 WL 766915, 2017 U.S. App. LEXIS 3598
CourtCourt of Appeals for the Eleventh Circuit
DecidedFebruary 28, 2017
Docket16-12397
StatusPublished
Cited by14 cases

This text of 849 F.3d 1299 (GDG Acquisitions LLC v. Government of Belize) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GDG Acquisitions LLC v. Government of Belize, 849 F.3d 1299, 2017 WL 766915, 2017 U.S. App. LEXIS 3598 (11th Cir. 2017).

Opinion

*1302 MARCUS, Circuit Judge:

This is the second time a contract dispute arising out of the lease of telecommunications equipment by the plaintiff GDG Acquisitions, LLC (“GDG”), to the defendant Government of Belize (“Government”), has reached our Court. In Round One, the district court dismissed GDG’s complaint on the grounds of forum non conveniens and international comity; we vacated and remanded for the district court to consider the enforceability of the contract’s forum-selection clause and its significance to the forum non conveniens analysis. Now, in Round Two, the Government appeals the district court’s subsequent denial of its motion to dismiss.

After thorough review, we conclude that the Government waived its sovereign immunity. The Government of Belize claims that the express waiver of sovereign immunity contained in the contract was ineffectual because its Minister of Budget Management, who negotiated and signed the contract on its behalf, lacked the authority to waive sovereign immunity. But despite the Minister’s claimed lack of authority to bind Belize, the Government ratified Fonseca’s actions by fully performing its contract obligations during the lease term, and paying approximately $13.5 million in forty separate payments over a period of nearly six years and spanning two different administrations. This conduct can be explained only on the understanding that the Government intended to be bound to the contract. Accordingly, we affirm the district court’s denial of the Government’s motion to dismiss.

I.

A.

On February 10, 2012, GDG sued the Government of Belize in the United States District Court for the Southern District of Florida, seeking some $10 million in unpaid rent, with the amount growing each month. The complaint and the declarations submitted to the district court alleged these basic facts. As Minister of Budget Management, Investment, and Home Affairs, 1 one of Ralph Fonseca’s tasks was to maximize the Government’s return on its expenditures of tax revenue funds. To do so, Fonseca entered into complex negotiations with a Belizean company, International Telecommunications, Ltd. (“Intel-co”), in order to reduce the Government’s expenditures for telecommunications equipment and services. Intelco was owned and operated by Glenn D. Godfrey, a former Attorney General of Belize. Fonseca and Godfrey met several times in Miami to negotiate a lease of telecommunications equipment from Intelco to the Government. They ultimately closed a deal in Miami on December 18, 2002. The deal was governed by a Master Lease Agreement (MLA), which was negotiated in Miami and signed in Washington, D.C., by Godfrey on behalf of Intelco and by Fonse-ca purportedly on behalf of the Government of Belize.

All rents due under the MLA were evidenced by promissory notes delivered by the Government to Intelco; the financing was supported by the International Bank of Miami. The same day they signed the MLA, the parties signed a first lease schedule and promissory note for $6,748,189.20, to be paid in twenty quarterly payments of $337,409.46 each. That five-year lease was scheduled to end on December 18, 2007, with the final payment being due on that date. On August 27, 2003, the parties agreed to a second lease of additional telecommunications equipment pursuant to a second lease schedule and promissory note, also in the amount of $6,748,189.20, again to be paid in twenty *1303 quarterly payments of $337,409.46 each. The second five-year lease was scheduled to end on August 27, 2008; the final payment was due on that date. After entering into the agreement, Intelco assigned the payments to the International Bank of Miami in exchange for a single upfront cash payment from the bank of $10 million for the two leases.

Three provisions in the MLA are essential to the resolution of this appeal. First, the Master Lease Agreement contained a provision stating that the Government waived its sovereign immunity:

Lessee acknowledges that the activities contemplated by this Master Lease and each Lease Schedule are commercial in nature rather than governmental or public, and therefore acknowledges and agrees that it is not entitled to any right of immunity or defense on the grounds of sovereignty or otherwise with respect to any such action or proceeding arising out of or relating to this Master Lease or any Lease Schedule. Lessee hereby expressly and irrevocably waives any such right of immunity or defense which now or hereafter may exist or claim thereto which may now or hereafter exist in respect of the Master Lease or any Lease Schedule and its obligations arising thereunder, and agrees not to assert any such right or claim in any such action or proceeding, whether in the United States of America or elsewhere. Lessee hereby expressly and irrevocably waives any defense or claim it may have to delay, hinder or stop the enforcement of this Master Lease or any Lease Schedule based directly or indirectly upon the Act of State Doctrine. Neither Lessee nor any of its property enjoys any right of immunity from suit, setoff, judgment, execution on a judgment or attachment prior to judgment or in aid of execution in respect of its obligations under this Master Lease or any Lease Schedule.

Second, the MLA included a forum-selection clause:

Lessee hereby waives any special rights or immunities which it may enjoy under the laws of Belize, and agrees and abides that its rights and obligations under this Master Lease or any Lease Schedule shall be determined exclusively in accordance with the governing laws of the State of Florida, irrespective of conflict of laws principles. Lessee irrevocably submits to the exclusive jurisdiction of any of the federal and state courts in the State of Florida in any action or proceeding arising out of or relating to the Master Lease or any Lease Schedule, and Lessee hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in any court of competent jurisdiction in the State of Florida.

Finally, the MLA contained a waiver of objections to venue or to claims of an inconvenient forum:

Lessee hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Master Lease or any Lease Schedule and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient' forum. Lessee specifically acknowledges that' Miami-Dade County, Florida is a proper venue for the Lessor to bring suit against Lessee pursuant to the Master Lease or any Lease Schedule.

Another provision in the MLA governed the termination or expiration of the leases. Early termination of the leases required 120 days’ written notice of the Government’s intent to return the equipment. The failure to give notice triggered an automatic extension of the applicable lease sched *1304 ule on a month-to-month basis for a period not to exceed twelve months.

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Bluebook (online)
849 F.3d 1299, 2017 WL 766915, 2017 U.S. App. LEXIS 3598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gdg-acquisitions-llc-v-government-of-belize-ca11-2017.