Royal Insurance Co. of America v. BHRS, LLC

333 F. Supp. 2d 1293, 2004 A.M.C. 1192, 2004 U.S. Dist. LEXIS 13411, 2004 WL 1948645
CourtDistrict Court, S.D. Florida
DecidedApril 6, 2004
Docket03-20554-CIV
StatusPublished

This text of 333 F. Supp. 2d 1293 (Royal Insurance Co. of America v. BHRS, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Royal Insurance Co. of America v. BHRS, LLC, 333 F. Supp. 2d 1293, 2004 A.M.C. 1192, 2004 U.S. Dist. LEXIS 13411, 2004 WL 1948645 (S.D. Fla. 2004).

Opinion

ORDER

TURNOFF, United States Magistrate Judge.

This matter is before the Court on Defendant’s Motion for Summary Judgment. (D.E.14.) A hearing on the Motion was held on August 21, 2003. (D.E.31.) For the reasons stated below, Defendant’s Motion for Summary Judgment is GRANTED.

BACKGROUND

Plaintiff Yale M. Samóle (“Dr.Samole”) owns a vessel named “Big Daddy”. The vessel has at all relevant times been insured by Plaintiff Royal Insurance Company of America (“Royal Insurance”). On August 31, 2002, Dr. Samole’s son was operating the Big Daddy when the vessel ran aground in Miami Beach, Florida and started taking on water. Consequently, Big Daddy issued a distress call. Defendant BHRS, LLC d/b/a Sea Tow (“Defendant” or “Sea Tow”) responded to the scene and successfully patched, de-wa-tered, and towed the Big Daddy to a marina-repair facility on the Miami River.

Dr. Samóle, who was not on board the vessel at the time of the incident, later arrived at the marina repair facility. Upon arrival, an employee of Sea Tow presented a document to Dr. Samóle and asked for his signature. In turn, Dr. Sam-óle asked if he owed any money for the salvage services. Defendant’s representative responded as follows: “No, don’t worry, the insurance company will pay.” (D.E. 1, Complaint. Dr. Samole’s Affidavit.) Based on this statement, Dr. Samóle presumed that the document he signed was nothing more than his acknowledgment of ownership of the vessel. (D.E. 1, Complaint. Dr. Samole’s Affidavit.) Dr. Samóle did not read the document and proceeded to sign it.

The document signed by Dr. Samóle was a “no cure no pay” agreement (“Agreement”) which included an arbitration clause. The agreement provided, in part, that Defendant would be compensated for its salvage efforts pursuant to the provisions of Articles 13 and 14 of the 1989 International Convention on Salvage. Additionally, the Agreement provided that should there be any dispute as to the amount to be paid to Sea Tow, the parties would be referred to arbitration. Finally, *1295 the Agreement provided that any awards may include attorney’s fees and costs.

On September 24, 2002, Sea Tow sent a written “invoice” to Royal Insurance seeking to be paid $64,500.00 for the salvage services rendered. Royal Insurance disputed the reasonableness of this “invoice”. Consequently, Sea Tow demanded arbitration consistent with the terms and conditions of the Agreement.

Once the arbitration demand was made, the parties had fifteen days to select an arbitrator. However, Royal Insurance refused to accept the demand for arbitration and took no action to select an arbitrator. Defendant proceeded to timely name the arbitrator for this dispute, who then took over the arbitration. Plaintiffs did not contest the selection of this arbitrator.

The arbitration proceedings began on November 24, 2002. The parties were instructed to submit their position on or before December 23, 2002. Royal Insurance and Dr. Samóle initially refused to participate in the process. However, as the arbitrator advised that the proceedings would continue with or without Royal Insurance and/or Dr. Samole’s participation, Plaintiffs finally submitted a response without waiver of their right to contest the Agreement. During the arbitration proceedings, Plaintiffs asserted as their defense that the Agreement, was not enforceable since Dr. Samóle had. been fraudulently induced into entering the Agreement. On February 20, 2003, the arbitrator issued his written Final Award in favor of Defendant and ordering Royal Insurance and Dr. Samóle to pay Defendant $64,454.59 for services rendered and for attorney’s fees and costs.

On March 11, 2003, Royal Insurance and Dr. Samóle filed the instant action seeking declaratory relief. Specifically, Plaintiffs requested that this Court declare the Agreement, the Arbitration clause contained therein and- the Arbitration Award not enforceable. Plaintiffs’ complaint was based on the same argument that was raised during the arbitration proceedings. In turn; Defendant filed a Counter-Claim seeking the Court’s confirmation of the Arbitration Award pursuant to the Federal Arbitration Act, 9 U.S.C. § 9 and pursuant to the Agreement at issue in this action. 1

Additionally, Defendant filed the instant Motion for Summary Judgement. Therein, Defendant argued the Agreement is enforceable and that the Arbitration Award should be confirmed. Defendants *1296 also requested an award for attorney’s fees and costs relating to this action.

A hearing on Defendant’s Motion was held on August 21, 2003. At that time, counsel for Plaintiffs represented that their sole defense to the Arbitration Award was based on the allegation that Dr. Samóle was fraudulently induced into entering the Agreement. However, Plaintiffs’ counsel admitted that at no time did Defendant make any statements directly addressing the nature of the document being offered for signature or the terms contained therein. Rather, Dr. Samóle concluded on his own that the document was a simple acknowledgment of ownership. Upon further questioning by the Court, counsel for the parties agreed that the statement “don’t worry, your insurance will pay” was ultimately correct since payment of the award would be made by the insurance company and not by Dr. Samóle.

SUMMARY JUDGMENT STANDARD

Rule 56(c) of the Federal Rules of Civil Procedure authorizes entry of summary judgment where the pleadings and supporting materials demonstrate there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue of fact is “material” if it is a legal element of a claim under the applicable substantive law and is one that might affect the outcome of the suit under the governing law. Id. at 248, 106 S.Ct. 2505. A material fact is “genuine” if “the record taken as a whole could lead a rational trier of fact to find for the non-moving party.” Id. at 261 n. 2, 106 S.Ct. 2505 (citations omitted).

In reviewing a motion for summary judgment, the Court focuses on “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997) (quoting Anderson, supra). The non-moving party’s failure to prove an element essential to that party’s case, and on which that party will bear the burden of proof at trial, is fatal, warranting summary judgment for the movant. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

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Bluebook (online)
333 F. Supp. 2d 1293, 2004 A.M.C. 1192, 2004 U.S. Dist. LEXIS 13411, 2004 WL 1948645, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royal-insurance-co-of-america-v-bhrs-llc-flsd-2004.