# MSC Trading, S.A. v. Delgado

> District Court, S.D. Florida · July 29, 2024

URL: https://www.frixlaw.com/law-library/cases/10643674

## Case

- **Court:** District Court, S.D. Florida
- **Decided:** July 29, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10643674

## How later opinions describe it (automated extraction)

- finding that, absent an acceleration clause, plaintiff is “entitled to collect only those rents and other payments that had accrued under the lease as of the time of trial”
- noting that “when a party fails to respond to an argument or otherwise address a claim, the Court deems such argument or claim abandoned” and granting defendant’s motion for summary judgment because plaintiffs failed to respond to certain arguments

## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

Case No. 1:22-cv-20075-DPG

MSC TRADING, S.A.,

Plaintiff,

v.

ANDRES PABLO DELGADO and
SOUTH FLORIDA LUMBER CO.,

Defendants.
___________________________________/

ORDER ADOPTING AND AFFIRMING REPORT OF MAGISTRATE JUDGE

THIS CAUSE comes before the Court on Chief Magistrate Judge Edwin G. Torres’ Report
and Recommendation on Plaintiff’s Motion for Summary Judgment (the “Report”). [ECF No. 72].
On April 12, 2024, Plaintiff MSC Trading, S.A. (“MSC Trading”) filed its Motion for Summary
Judgment. [ECF No. 59]. Defendants Andres Delgado (“Delgado”) and South Florida Lumber
Company (“SFL”) filed their response on April 26, 2024. [ECF No. 61]. On May 3, 2024, MSC
Trading filed its reply. [ECF No. 66]. On March 9, 2022, the case was referred to Judge Torres for
a ruling on all pretrial, non-dispositive matters, and for a report and recommendation on any
dispositive matters. [ECF No. 13].
On May 20, 2024, Judge Torres issued his Report recommending that the Court: (1) grant
summary judgment in favor of MSC Trading as to Counts I and III of the Amended Complaint; (2)
dismiss Count II of the Amended Complaint as it was plead in the alternative to Count I; (3) grant
summary judgment in favor of MSC Trading as to Counts I and II of the Counterclaim; (4) grant
summary judgment in favor of MSC Trading as to Defendants’ Affirmative Defense Nos. 1, 3–8,
10–20; (5) strike Defendants’ Affirmative Defense Nos. 2 and 9; and (6) deny summary judgment
as to Defendants’ Affirmative Defense Nos. 21–22. [ECF No. 72]. On June 3, 2024, Defendants filed
their Objections to the Report (“Objections”). [ECF No. 76]. MSC Trading filed its response on June
14, 2024. [ECF No. 79].

A district court may accept, reject, or modify a magistrate judge’s report and
recommendation. 28 U.S.C. § 636(b)(1). Those portions of the report and recommendation to which
objection is made are accorded de novo review, if those objections “pinpoint the specific findings
that the party disagrees with.” United States v. Schultz, 565 F.3d 1353, 1360 (11th Cir. 2009); see
also Fed. R. Civ. P. 72(b)(3). Any portions of the report and recommendation to which no specific
objection is made are reviewed only for clear error. Liberty Am. Ins. Grp., Inc. v. WestPoint
Underwriters, L.L.C., 199 F. Supp. 2d 1271, 1276 (M.D. Fla. 2001); accord Macort v. Prem, Inc.,
208 F. App’x 781, 784 (11th Cir. 2006).
Defendants argue that the Report errs in four ways: (1) the Report improperly concluded
that the at-issue contract between MSC Trading and SFL (the “Agreement”) and the personal

guaranty executed by Delgado (the “Guaranty”, together with the Agreement, the “Contracts”)
are valid and enforceable;1 (2) the Report incorrectly concluded that the merger and modification
clauses in the Agreement bar Defendants’ fraudulent inducement counterclaim and affirmative
defense; (3) the Report improperly weighed the credibility of Defendants’ evidence and
determined that evidence to be “flimsy”; and (4) the Report erroneously suggests that MSC
Trading could recover damages for installment payments not yet due when this action
commenced and that have accrued in the interim. [ECF No. 76].

1 Though Defendants argue this in passing in the background section of their Objections, the Court will fully address
this issue as it is dispositive.
This Court finds no clear error with Judge Torres’ well-reasoned analysis and
recommendations of the portions of the Report for which Defendants did not object. The Court
agrees that MSC Trading is entitled to summary judgment as to Defendants’ Affirmative Defense
Nos. 4–8 and 10–20 and as to Count II of Defendants’ Counterclaim because they were

abandoned by Defendants. The Court also agrees that Defendants’ Affirmative Defense Nos. 2
and 9 should be stricken as they are simply redundant denials of MSC Trading’s claims. Finally,
Defendants’ Affirmative Defense Nos. 21 and 222 should be denied as recommended by the
Report.
Regarding the portions of the Report that were objected to, this Court conducted a de
novo review of the record and agrees with the remainder of Judge Torres’ well-reasoned analysis
and recommendations.
As a threshold matter, the Court finds the Contracts to be valid and enforceable. As
correctly noted by MSC Trading, Defendants misconstrue the basis of the Report’s finding that
Defendants conceded to the validity and enforceability of the Contracts. Contrary to what

Defendants ague, the Report did not state that a party who moves to compel arbitration concedes
to the validity of the whole contract. See [ECF No. 72 at 5–6]; [ECF No. 76 at 4]. Instead, the
Report accurately found that Defendants acknowledged the validity of the Contracts as factual
admissions in support of their successful motion to compel arbitration. [ECF No. 6 at 1–2] (“3.
During the course of this relationship, SFL and MSC entered into an ‘Agreement For
Recognition & Payment of Debt’ dated July 27, 2020 . . . .”); id. at 2 (“5. Delgado, individually,
served as a guarantor to this agreement. . . . Additionally, Delgado’s personal guaranty is part of

2 Defendants raise only a limited objection, addressed below, to the extent that the Report implies the incorrect scope
of damages. Defendants do not disagree with the Report’s recommendation that summary judgment be denied as to
Defendants’ Affirmative Defense No. 22.
the Agreement . . . .”); id. at 7 (“[The Guaranty] is an express acknowledgement and
acquiescence to the terms of the Agreement between MSC and SFL where Delgado agrees to
comply with and assume the same terms that SFL has bound itself to in the Agreement. . . . MSC
and Delgado have entered into an agreement which has incorporated and assumed the full terms

of the Agreement.”) (emphasis added); see [ECF No. 15]. Furthermore, at no point in its motion
to compel arbitration did Defendants reserve the right to challenge the validity of the Contracts.
Defendants original position was clear: both Contracts are valid and enforceable.3 As
such, Defendants are judicially estopped from arguing the contrary. Korman v. Iglesias, 778 F.
App’x 680, 681 (11th Cir. 2019) (“Judicial estoppel is an equitable doctrine intended to protect
the integrity of the courts from parties who seek to manipulate the judicial process by changing
their legal positions to suit the exigencies of the moment.”) (citation and quotation omitted);
New Hampshire v. Maine, 532 U.S. 742, 749 (2001). Moreover, Defendants’ Response to
Plaintiff’s Motion for Summary Judgment failed to refute MSC Trading’s assertion that the
Contracts are valid and enforceable. See [ECF No. 61]; Jones v. Bank of Am., N.A., 564 F. App’x

432, 434 (11th Cir. 2014) (noting that “when a party fails to respond to an argument or otherwise
address a claim, the Court deems such argument or claim abandoned” and granting defendant’s
motion for summary judgment because plaintiffs failed to respond to certain arguments) (citation

3 Without any legal support, Defendants liken their motion to compel arbitration to that of a motion to dismiss for the
proposition that their argument in the motion to compel cannot be used as an admission. [ECF No. 76 at 5]. Assuming,
arguendo, this were true, case law is clear that any and all affirmative defenses must be raised in the first responsive
pleading. Thus, Defendants’ failure to raise the affirmative defense that the Contracts are not valid and enforceable in
their “motion to dismiss” constitutes waiver. Gottlieb & Gottlieb, P.A. v. Crants, 657 F. App’x 920, 922 (11th Cir.
2016) (Federal Rules of Civil Procedure “8 and 9 contain specific instructions about alleging affirmative defenses and
conditions precedent. A defendant responding to a pleading . . . must state affirmatively . . . any avoidance or
affirmative defense.”).
and quotation omitted). Therefore, the Court agrees with the Report’s finding that the Contracts
are valid and enforceable.4
The Court also agrees with the Report’s finding that Defendants’ fraudulent inducement
counterclaim and affirmative defense fail as a matter of law. In an attempt to invalidate the

Contracts, Defendants argue that MSC Trading made a representation that, once the Contracts
were executed to placate MSC Trading’s board of directors, the parties could “either renegotiate
or conduct a proper account to determine what, if anything, was due and owing between SFL
and MSC” Trading (the “Representation”). [ECF No. 62-1 ¶ 35]. Defendants argue that this
alleged Representation shows that “no amount was ever agreed to”, [ECF No. 76 at 5], and the
Representation was relied on when signing the Contracts, [ECF No. 62-1 ¶ 36].
The Report correctly found that the alleged Representation is adequately covered by the
terms of the Agreement. The Report acknowledges that under Oceanic Villas, Inc. v. Godson,
148 Fla. 454 (1941), a merger clause alone is insufficient to bar a fraudulent inducement claim
unless the merger clause expressly states that the contract cannot be rescinded for fraud. [ECF

No. 72 at 8]. However, the Report distinguished Oceanic Villas to the facts here with support
from a plethora of legal authority. Article 7 of the Agreement contains both a merger and
modification clause which state, in relevant part, that
This Agreement embodies the entire agreement and understanding between the
Parties with respect to the subject matter of the Agreement and supersedes all
prior agreements and understandings, whether written or oral, unless expressly
provided otherwise herein. No amendment, modification, or termination of this
Agreement, unless expressly provided otherwise herein, shall be valid unless
made in writing and signed by each of the Parties.

[ECF No. 6-1 at 3, Article 7].

4 Defendants did not object to the Report’s findings that there is no genuine dispute that Defendants discontinued
payments to MSC Trading in breach of the Contracts and that MSC Trading suffered damages as a result.
While the Agreement’s merger clause does not expressly disallow for recission based on
fraud, the modification clause here allows the parties to renegotiate. Id. As such, the Agreement
adequately covers the Representation. Yamashita v. Merck & Co., No. 11-62473-CIV, 2013 WL
275536, at *4 (S.D. Fla. Jan. 24, 2013) (“The law is clear: A party cannot recover in fraud for

alleged oral misrepresentations that are adequately covered or dealt with, or expressly
contradicted, in a later written contract.”) (collecting Florida cases).
In their Objections, Defendants argue that “stacking the modification clause on top of the
merger clause is not a valid way to distinguish Oceanic Villas because every contract can be
modified,” and as such, “[t]he R&R basically finds that there can never be fraud if there are
boilerplate merger and modification clauses in a contract because the fraudulent statements can
be later written into the contract . . . .” [ECF No. 76 at 9, 10]. This is a gross mischaracterization
of the Report. The reason that fraud cannot be found in this instance is because the alleged
Representation here was specifically about the possibility of renegotiating the Agreement. Thus,
the modification clause would apply to the conditions of any modification to the Agreement

(e.g., that it shall be in writing and signed by the parties). The Report in no way suggests that
any misrepresentation, no matter the kind, can be covered by a modification clause.
Furthermore, to the extent that the Representation implies that no amount was ever agreed
to, the expressly defined sum of the debt owed to MSC Trading––a sum Defendants agreed to in
writing––directly contradicts that implication. Yamashita, 2013 WL 275536, at * 5 (dismissing,
with prejudice, plaintiff’s fraudulent inducement claim because “the unambiguous language of
the Separation Agreement directly negates Plaintiff's fraud in the inducement claims”).
Defendants could not have reasonably relied on the Representation or the implication that a sum
was never agreed to when signing the Contracts.
Defendants only rebuttal is to argue, without any legal authority, that the Report “prefers
the contract language over the fraudulent inducement counterclaim”, a function only to be done
by an impartial jury. [ECF No. 76 at 11]. However, “[i]n the absence of an ambiguity on the face
of a contract, it is well settled that the actual language used in the contract is the best evidence

of the intent of the parties, and the plain meaning of that language controls.” Ferox, LLC v.
ConSeal Int'l, Inc., 175 F. Supp. 3d 1363, 1371 (S.D. Fla. 2016). It is clear that the Agreement’s
express terms––i.e., the merger clause, the modification clause, and the defined sum owed to
MSC Trading––bar Defendants’ fraudulent inducement counterclaim and affirmative defense.5
Additionally, the Court disagrees with Defendants’ contention that the Report errs in
improperly weighing the credibility of Defendants’ evidence regarding its fraudulent inducement
counterclaim, thereby entering the purview of a jury. Defendants buttress this argument by
referencing the Report’s use of the term “flimsy”. [ECF No. 76 at 6]. Again, Defendants misread
the Report. Judge Torres states that “the gravamen of the defense in this case is a legally flawed
theory” and “[i]f it seems like a flimsy fraud theory, that’s because it is.” [ECF No. 72 at 3]

(emphasis added). Clearly the Report found Defendants’ legal theory to be flimsy based on the
evidence presented, not that the evidence itself was implausible. Clay v. Equifax, Inc., 762 F.2d
952, 956 (11th Cir. 1985) (in the context of summary judgment, “[t]he court may draw legal
presumptions”); Stewart v. VSMB, LLC, No. 1:19-CV-22593-UU, 2020 WL 4501937, at *2 (S.D.
Fla. June 29, 2020) (“[S]ummary judgment requires an application of undisputed facts to law, in

5 The Report also found that Defendants’ fraudulent inducement affirmative defense is barred for an additional reason:
the parol evidence rule. Defendants contend that the Report contradicts itself because on the one hand the Report finds
that the Contracts adequately cover the Representation, but on the other hand states that Defendants’ evidence is barred
because it contradicts the terms of the Contracts. [ECF No. 76 at 11]. Again, Defendants misinterpret the Report and
conflate the Representation with the implication Defendants themselves advance. The Report clearly states that the
merger and modification clauses adequately cover the Representation. However, to the extent that Defendants present
evidence to support the implication that an amount was never agreed to––something Defendants do in their
Objections––that implication is directly contradicted by the defined sum in the Contracts. These two findings are not
contradictory.
order to reach a legal conclusion.”). In fact, the Report made sure to express that “[o]n summary
judgment the inferences to be drawn from the underlying facts must be viewed in the light most
favorable to the party opposing the motion.” [ECF No. 72 at 4] (citation and quotation omitted).
For example, the Report specifically presumes the Representation to be true and still finds

Defendants’ theory of fraudulent inducement as legally insufficient. Id. at 9–10. Thus,
Defendants’ contention that the Report engages in the function of the jury and improperly weighs
evidence is without any credence.6
In its Amended Complaint, MSC Trading seeks to recover the full amount of the unpaid
debt it’s owed. [ECF No. 52-1 at 6]. The Report, in noting the Contracts do not contain an
acceleration clause, found that Defendants have not yet breached the Contracts as it concerns
future installment payments not yet due. [ECF No. 72 at 26]. Thus, the Report recommends
denying summary judgment as to Defendants’ Affirmative Defense No. 22. Defendants maintain
that, to the extent the Report suggests otherwise, MSC Trading would only be entitled to the
installment payments due at the time this action was filed and not the installment payments that

have accrued since. [ECF No. 76 at 12–13]. While it is true that MSC Trading is not entitled to
the full sum of the debt owed, it is entitled to the payments that have become due through the
date of the entry of judgment. Adkinson v. Nyberg, 344 So. 2d 614, 616 (Fla. 2d DCA 1977)
(allowing plaintiff to amend her pleading to claim any sums then due under the agreement on
remand); Onal v. BP Amoco Corp., 275 F. Supp. 2d 650, 670 (E.D. Pa. 2003), aff'd sub nom.,

6 As another example of the Report’s supposed improper credibility determination, Defendants point to the Report’s
“stilted distillation” of the facts and characterization of Defendants’ fraudulent inducement counterclaim as “a
suggestion that the contract can be ‘renegotiated in the future’”. [ECF No. 76 at 5–6]. The Court is not persuaded. The
Report’s summary of Defendants’ version of the facts is just that, a summary, which included specific citations to
Defendants’ affidavit. The Report stated that Defendants allegedly relied on the representation that the Contracts could
be “renegotiated at a later date to reflect a proper accounting of what SFL owed MSC” Trading. [ECF No. 72 at 3]
(emphasis added). This accurately reflects Defendants’ affidavit, [ECF No. 62-1 ¶ 35], and Defendants’ argument in
their Objections that “no amount was ever agreed to,” [ECF No. 76 at 5]. The Report’s summation in no way stilted
or negatively skewed Defendants’ argument.
134 F. App’x 515 (3d Cir. 2005) (finding that, absent an acceleration clause, plaintiff is “entitled
to collect only those rents and other payments that had accrued under the lease as of the time of
trial”). To hold otherwise would be inefficient and impractical. Because the Amended Complaint
already seeks all future payments, it is unnecessary to amend the pleadings to include the sums

that have become due since this action has been filed.
CONCLUSION
Accordingly, after careful consideration, it is ORDERED AND ADJUDGED as follows:
(1) Defendants Andres P. Delgado and South Florida Lumber Co.’s Objections to Report
and Recommendation on Plaintiff’s Motion for Summary Judgment, [ECF No. 76],
are OVERRULED;
(2) Chief Magistrate Judge Torres’ Report and Recommendation on Plaintiff’s Motion

for Summary Judgment, [ECF No. 72], is AFFIRMED AND ADOPTED and
incorporated into this Order by reference;
(3) Plaintiff MSC Trading, S.A.’s Motion for Summary Judgment, [ECF No. 59], is
GRANTED, in part, and DENIED, in part, as follows:
a. GRANTED as to Counts I and III of the Amended Complaint, [ECF No. 52-1];
b. GRANTED as to Counts I and II of the Counterclaim, [ECF No. 54];

c. GRANTED as to Affirmative Defense Nos. 1, 3–8, 10–20 of the Answer and
Affirmative Defenses, [ECF No. 53]; and
d. DENIED as to Affirmative Defense Nos. 21–22 of the Answer and Affirmative
Defenses, [ECF No. 53];
(4) Affirmative Defense Nos. 2 and 9 of the Answer and Affirmative Defenses, [ECF
No. 53], are STRICKEN;
(5) Count II of Plaintiff MSC Trading, S.A.’s Amended Complaint, [ECF No. 52-1], is
DISMISSED; and
(6) In accordance with Federal Rule of Civil Procedure 58, final judgment shall be entered
separately. Plaintiff MSC Trading, S.A. shall submit a proposed final judgment within
fourteen (14) days of this Order.
DONE AND ORDERED in Chambers at Miami, Florida, this 29th day of July, 2024.

. 12 &
DARRIN P. GAYLES
UNITED STATES DIST JUDGE

10

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10643674. Public record. Not legal advice.