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Date: 01-08-2020
Case Style:
GUARDIAN AD LITEM, et al., vs VIAJEHOY, LLC, etc., et al.,
Case Number: 3D18-182
Judge: Thomas W. Logue
Court: Third District Court of Appeal State of Florida
Plaintiff's Attorney:
Defendant's Attorney:
Description:
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Appellants are Cuban nationals who reside in Cuba. They filed suit in Florida
circuit court against ViajeHoy, a Florida limited liability company that charters
private flights to Cuba. Appellants alleged that ViajeHoy breached a 2013 oral
agreement, whereby Appellants would negotiate landing rights with the Cuban
government in exchange for a fifty-percent equity interest in ViajeHoy. They sought damages for breach of contract, unjust enrichment, or promissory estoppel.1
ViajeHoy denied the allegations and raised the affirmative defense of illegality.
ViajeHoy ultimately moved for summary judgment and argued that the
Appellees’ cause of action was barred by the provisions of the Cuban Assets Control
Regulations, which prohibit any commerce with Cuba except as expressly
authorized by a license issued by the Office of Foreign Assets Control. In support,
it submitted an affidavit of its principal Mark A. Elias, an affidavit of a United States
1 During the pendency of this appeal, Mr. Rodriguez passed away. Attorney Enrique Zamora has been substituted into the case as guardian ad litem.
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and Cuban aviation compliance specialist, and copies of its licenses from the Office
of Foreign Assets Control. The Appellants cross-moved for summary judgment,
each filing an affidavit. In addition, the depositions of the witnesses were filed in the
record. The crucial issue was whether the licenses authorized the oral partnership or
business agreements alleged by Appellants. Without deciding whether or not those
business relationships actually existed, the trial court determined that, assuming
those relationships existed, Appellees’ claims failed, as a matter of law, because the
transactions they alleged violated the Cuban Assets Control Regulations.
This appeal followed. STANDARD OF REVIEW A trial court’s ruling on a motion for summary judgment is reviewed de novo.
Gonzalez v. Citizens Prop. Ins. Corp., 273 So. 3d 1031, 1035 (Fla. 3d DCA 2019)
(citing Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla.
2000)). In Florida, “[s]ummary judgment is proper if there is no genuine issue of
material fact and if the moving party is entitled to a judgment as a matter of law.”
Gonzalez, 273 So. 3d at 1035. “Summary judgment is designed to test the
sufficiency of the evidence to determine if there is sufficient evidence at issue to
justify a trial or formal hearing on the issues raised in the pleadings.” Id. (quoting
The Fla. Bar v. Greene, 926 So. 2d 1195, 1200 (Fla. 2006)).
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“A court considering summary judgment must avoid two extremes.”
Gonzalez, 273 So. 3d at 1035. “On the one hand, ‘a motion for summary judgment
is not a trial by affidavit or deposition. Summary judgment is not intended to weigh
and resolve genuine issues of material fact, but only identify whether such issues
exist. If there is disputed evidence on a material issue of fact, summary judgment
must be denied and the issue submitted to the trier of fact.’ ” Id. (quoting Perez–
Gurri Corp. v. McLeod, 238 So. 3d 347, 350 (Fla. 3d DCA 2017)). “On the other
hand, a ‘party should not be put to the expense of going through a trial, where the
only possible result will be a directed verdict.’ ” Gonzalez, 273 So. 3d at 1035
(quoting Perez-Rios v. Graham Cos., 183 So. 3d 478, 479 (Fla. 3d DCA 2016)). ANALYSIS A. The Cuban Assets Control Regulations Since the onset of World War I in 1917, Congress has conferred upon the
President the “broad authority to impose comprehensive embargoes on foreign
countries as one means of dealing with both peacetime emergencies and times of
war.” Regan v. Wald, 468 U.S. 222, 225 (1984). See 50 U.S.C.A. § 4305, et. seq. In
1961, faced with Cuba’s efforts to spread communism throughout the Americas,
Congress recognized that “the President is authorized to establish and maintain a
total embargo upon all trade between the United States and Cuba.” 22 U.S.C.A. §
2370.
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In 1962, President John F. Kennedy used these powers to establish the trade
embargo on Cuba. The embargo was necessary, President Kennedy declared, to
“promote national and hemispheric security by isolating the present Government of
Cuba and thereby reducing the threat posed by its alignment with the communist
powers.” Proclamation No. 3447, 3 C.F.R. 157 (Feb. 3, 1962). Under the President’s
direction, the Department of the Treasury promulgated the Cuban Assets Control Regulations (“CACR” or “Regulations”), 31 C.F.R. § 515, et seq. These Regulations, and related regulations, constitute what is commonly referred to as the
“Cuban Embargo.”2
The General Property Transfer provisions of these Regulations “prohibit,
unless specifically authorized, any dealing in any property in which Cuba or a Cuban national has an interest of any nature.” Odebrecht Const., Inc. v. Sec’y, Fla. Dep’t
of Transp., 715 F.3d 1268, 1276 (11th Cir. 2013) (citing 31 C.F.R. § 515.201(a),
(b)). Specifically, they prohibit “[a]ll . . . transactions . . . except as specifically
authorized by the Secretary of the Treasury” that “involve property in which any
[Cuban] national . . . had any interest of any nature, whatsoever.” § 515.201(b). They
also prohibit “[a]ll dealings . . . by any person” and “[a]ll transfers” with respect to
“any property or property interest” that are “subject to the jurisdiction of the United
2 See, e.g., 22 U.S.C. § 2151, et seq.; 22 U.S.C. § 6001-6010, et seq.; 22 U.S.C. § 6021, et seq.; 22 U.S.C. § 7211, et seq.; 31 U.S.C. 321, et seq.; 50 U.S.C. § 4303, et seq.
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States.” 31 C.F.R. § 515.201(b)(1). The Securities Transfer provisions prohibit the
“transfer . . . or the endorsement or guaranty of signatures on or otherwise dealing
in any security (or evidence thereof) registered or inscribed in the name of any”
Cuban national “unless authorized by a license expressly referring to this section.”
§ 515.202.
The Regulations define the terms “transaction,” “transfer,” and “property” broadly. See Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 474 (2d Cir. 2005). “Transactions” are defined as “(a) Any payment or transfer to such
designated foreign country or national thereof, (b) Any export or withdrawal from
the United States to such designated foreign country, and (c) Any transfer of credit,
or payment of an obligation, expressed in terms of the currency of such designated
foreign country.” 31 C.F.R. § 515.309. “Transfer” encompasses the transfer of any
value from within the United States to any person or entity residing in Cuba. See Empresa, 399 F.3d at 474 (“Transfer” is broadly defined to include any act the effect
of which is to create any right, remedy, power, privilege, or interest with respect to
property.”) (citing 31 C.F.R. § 515.310). “Property” is defined as anything of value,
including pledges, stocks, indebtedness obligations, both contingent and unvested.
Odebrecht, 715 F.3d at 1276 (11th Cir. 2013) (“ ‘Property’ is expansively defined
to include not only tangible property, but also contracts, securities, and services.”)
(citing 31 C.F.R. § 515.311(a)).
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The Regulations reference licenses which can be issued to authorize limited
commerce with Cuba. These licenses take two forms: a general license authorizes a
category of more general transactions, § 501.801(a); a specific license authorizes
specific transactions that do not fall within the transactions authorized by a general
license, § 501.801(b).
Importantly, any transaction that violates the Regulations is “null and void
and shall not be the basis for the assertion or recognition of any interest in or right,
remedy, power or privilege with respect to such property.” § 515.203(a). B. This Case Appellants first contend that they are not subject to the Cuban Assets Control
Regulations because they are not United States citizens or residents. We have no
difficulty rejecting this argument. To the extent Appellants have filed a lawsuit in a
Florida court making claims under the laws of Florida and the United States, they
and their claims are clearly subject to the laws of the United States, which include the Cuban Embargo. See U.S. Const. Article VI (“This Constitution, and the Laws
of the United States which shall be made in Pursuance thereof . . . shall be the
supreme Law of the Land; and the Judges in every State shall be bound thereby.”).
Indeed, to allow a Cuban national and resident to enforce in a United States’ State
court transactions that violate the Cuban Embargo would essentially nullify the
federal mandate that all such transactions are “void and shall not be the basis for the
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assertion or recognition of any interest in or right, remedy, power or privilege with
respect to such property.” § 515.203(a).
Slightly closer is the issue whether the licenses obtained by ViajeHoy’s from
Office of Foreign Assets Control authorized ViajeHoy to enter into the oral
partnership agreement or business services agreement that they allege existed.
ViajeHoy had three OFAC licenses: a Travel Service Provider (“TSP”) license, a
Carrier Service Provider (“CSP”) license, and an Employee Travel Authorization
license. The Travel Service Provider and Carrier Service Provider licenses both
provide:
SECTION 1—AUTHORIZATION: (a) Subject to the terms and conditions hereof, the Licensee is hereby authorized to operate as a [Travel Service Provider/Carrier Service Provider], as described in the Application, to provide services in connection with travel to, from, and within Cuba on behalf of persons subject to the jurisdiction of the United States who are authorized to engage in travel-related transactions involving Cuba under either a general or specific license issued by the Office of Foreign Assets Control (“OFAC”) pursuant to the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (the “Regulations”). * * * SECTION 3—WARNINGS: (a) Except as authorized in Section 1 above, nothing in this license authorizes any person subject to the jurisdiction of the United States to engage in any transaction or activity prohibited by the Regulations.
(b) This license does not authorize Cuba travel-related transactions for travel by the Licensee or any employee,
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affiliate, agent or other representative of the Licensee. Such transactions require a separate license.
(c) This license does not authorize sponsoring or promoting travel-related transactions for which the Licensee does not hold a separate specific license or for which a different person has been issued an OFAC specific license.
ViajeHoy’s Employee Travel Authorization license provides: C. All transactions listed in 515.560(c) of the Cuban Asset Control Regulations, 31 C.F.R. Part 515 (the “Regulations”) and such additional transactions that are directly incident to travel to, from, and within Cuba, for the purposes of providing the travel-related services authorized by § 515.572 of the Regulations, provided that such travel occur no more frequently than once every three months, by the following employees of Licensee: Mark A. Elias and David A. Nesslein.
D. This license does not authorize more than one employee to engage in travel-related transactions at the same time.
E. This license does not authorize the carriage of currency to Cuba for Licensee’s customers. All payments made by Licensee on behalf of its customers in connection with the customers’ authorized transactions with Cuba must be made via checks or bank wire transfers.
Appellants argued that the language in the licenses that authorized ViajeHoy
“to provide services in connection with travel to, from, and within Cuba”
encompassed by implication the business arrangements that form the basis of their
claims. The trial court rejected this argument, reasoning:
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The plain language of the TSP/CSP and Employee travel licenses does not establish the authorization of either the purported oral partnership agreement with [Appellants] or the agreement for the rendering of business services to [ViajeHoy]. On the contrary, the licenses and the 2006 Circular make clear that apart from transactions directly incident to authorized travel (such as lodging, purchase of food, etc.) no transaction is authorized unless expressly authorized therein. . . . . [Appellants] point to 31 C.F.R. § 515.572 (2009), which is titled “Authorizations of transactions incident to the provision of travel services, carrier services, and remittance forwarding services.” Section 515.572 is referenced in Defendants’ CSP and Employee Travel licenses, and therefore [Appellants] maintain that “transactions incident to” contemplated the types of transactions alleged to have occurred in Cuba between the [Appellants and ViajeHoy]. The Court finds such an interpretation incongruous not only with the plain language of [ViajeHoy’s] TSP/CSP and Employee Travel licenses, but also with the plain language of §§ 515.201, 202 and 203. Simply put, [Appellants] reliance upon the title of section 515.572 is misplaced. The regulation itself does not authorize all transactions that may be “incidental to” authorized travel to Cuba. On the contrary, the regulation specifically prohibits such an interpretation: “Authorization, whether a grant of provisional authorization or a license issued pursuant to this part, does not permit a travel or carrier service provider to provide services in connection with any individual’s transactions incident to travel which are prohibited by this part.” 31 C.F.R. [§] 515.572(b) (emphasis added). . . . . [Appellants] further argue that 31 C.F.R. § 515.421(a) expands the limited scope of ViajeHoy’s OFAC licensure, since that provision authorizes “[a]ny transaction ordinarily incident to a licensed transaction and necessary to give effect thereto . . . .” While it is questionable
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whether such a provision would expand the limited scope . . . the Court need not address this issue. Section 515.421 was first promulgated on September 21, 2015 . . . . No such regulation was in effect when Appellees allegedly contracted with [ViajeHoy] in 2013.
Order Granting Final Summary Judgment at 8-9, Fuentes v. ViajeHoy, Case No.
20116-12617 CA 01 (22) (Fla. Cir. Ct. Dec. 22, 2017). We adopt the trial court’s
reasoning as our own.
Appellants next contend that their claims for unjust enrichment and
promissory estoppel should have survived as a matter of public policy to prevent
ViajeHoy from profiting from its alleged bad faith and its own possible violation of
the Cuban Embargo. The trial court properly held that such State public policy
concerns could not override the express language of the federal statutes and
regulations. In doing so, the trial court explained:
permitting . . . public policy concerns to prevail would inappropriately abrograte legislatively declared policy enshrined in the Code of Federal Regulations, which declares the transactions at issue in this case to be “null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power or privilege with respect to such property.” 31 C.F.R. § 515.203. The United States Supreme Court has repeatedly upheld the CACR provisions, declaring them to be “justified by weighty concerns of foreign policy[,]” and “largely immune from judicial inquiry or interference.” Regan, 468 U.S. at 242 (quoting Harisiades v. Shaughnessy, 342 U.S. 580, 589 (1952)). . . . Given that the CACR provisions concern foreign policy legislatively delegated by Congress to the President . . . public policy must yield in this case. Moreover, this
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Court has found no legal basis to interpret the CACR regulatory scheme in a manner that would permit Plaintiffs’ equitable claims to survive. As Justice Jackson observed, “any policy toward aliens is vitally and intricately interwoven with contemporaneous policies in regard to the conduct of foreign relations, the war power, and the maintenance of a republican form of government. Such matters are so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference . . . [N]othing in the structure of our Government or the text of our Constitution would warrant judicial review by standards which would require us to equate our political judgment with that of Congress.” Harisiades, 342 U.S. at 589.
Order at 10-12, Fuentes, Case No. 20116-12617 CA 01 (22). We have considered
the other grounds raised by Appellants and find them without merit.
In sum, ViajeHoy met its burden to establish that no genuine issue of material
fact existed and that the cause of action was barred as a matter of law by the Cuban
Assets Control Regulations Act, 31 C.F.R. § 515.201., et. seq. and the Trading with
the Enemy Act, 50 U.S.C. § 4303, et. seq.
Outcome: Affirmed.
Plaintiff's Experts:
Defendant's Experts:
Comments: