                                                                   [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT          FILED
                                  ______________     U.S. COURT OF APPEALS
                                                                       ELEVENTH CIRCUIT
                                                                          MAR 31, 2006
                                       No. 05-10262
                                                                        THOMAS K. KAHN
                                      ______________
                                                                            CLERK

                           D. C. Docket No. 03-21755 CV-SH

UNITED STATES OF AMERICA,

                                                           Plaintiff-Appellant,

                                            versus

AMERITRADE TERMINALS, INC.,

                                                           Defendant-Cross-
                                                           Defendant-Appellee,

WASHINGTON INTERNATIONAL INSURANCE CO.,

                                                           Defendant-Cross-
                                                           Claimant-Appellee.


                      Appeal from the United States District Court
                          for the Southern District of Florida


                                     (March 31, 2006)

Before DUBINA and HULL, Circuit Judges, and RESTANI*, Judge
__________________
*Honorable Jane A. Restani, Chief Judge, United States Court of International Trade, sitting by
designation.
PER CURIAM:

      This is an appeal from the district court’s grant of summary judgment based

on res judicata in favor of Defendant-Appellees Ameritrade Terminals, Inc.

(“Ameritrade”) and Washington International Insurance Co. (“Washington”) in a

civil action brought by the United States to enforce administrative penalties.

                                         I.

      Ameritrade acts as a shipping agent for vessels entering the United States.

Washington provides international maritime bonds for shipping agents such as

Ameritrade. Ameritrade acted as the port agent for a ship called the M.S. Friendly

Express, Inc. (“Friendly Express”). Ameritrade, together with Washington, issued

a $50,000 bond on behalf of the Friendly Express.

      In the summer of 1998, the Friendly Express entered the port of Miami and

customs agents discovered 51 lbs. of cocaine on board. The Friendly Express’s

manifest declared that it had no cargo. The Friendly Express was seized and the

government issued a Notice of Penalty to Friendly Express, Ameritrade, and

Washington. The penalty for Ameritrade and Washington was the forfeiture of the

$50,000 bond.




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       The government then initiated forfeiture proceedings against the Friendly

Express. During the forfeiture proceedings, Ameritrade filed a claim to collect on

the expenses it incurred as a result of the ship’s seizure.

       Subsequently, Ameritrade and the government entered into a settlement in

which Ameritrade received $5,306.93 for monies that the Friendly Express owed

Ameritrade. The case was closed.

       Ameritrade and Washington then pursued administrative remedies

attempting to overturn the $50,000 penalty. The government denied Ameritrade’s

and Washington’s administrative attempts to overturn the $50,000 penalty.

Thereafter, the government filed a civil penalty action against Ameritrade and

Washington pursuant to 19 U.S.C. § 1584(a)(2).1 The civil penalty sought

forfeiture of the $50,000 bond because of cocaine found on the Friendly Express.

       The district court granted summary judgment to Ameritrade and

Washington concluding that the government’s claim was barred under the doctrine

of res judicata. According to the district court, the four criteria for res judicata

were met: (1) the prior decision was from a court of competent jurisdiction; (2) the



       1
          Section 1584(a)(2) makes various entities liable for civil penalties when there are falsities
on a ship’s manifest. The merits of the government’s claim under § 1584(a)(2) are not the subject
of this appeal, and, thus, are not discussed in this opinion.


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prior decision constituted a judgment on the merits; (3) the same parties (or those

in privy with the parties) were litigating the second claim; and (4) the two claims

arose out of the same cause of action. In granting summary judgment, the district

court rejected the government’s argument that res judicata did not apply because

the first cause of action was an in rem proceeding and the second cause of action

was an in personam proceeding. The district court also rejected the government’s

claim that it was unable to bring the in personam cause of action at the same time

of the forfeiture action. The government moved for reconsideration and the

district court denied the motion. The government then perfected this appeal.

                                         II.

      The following issues are presented for appellate review:

      (1) Whether the district court properly granted summary judgment based on

res judicata in favor of Ameritrade and Washington in a civil action brought by

the government to enforce administrative penalties; and

      (2) Whether the district court abused its discretion in denying the

government’s motion for reconsideration of its summary judgment order.

                                         III.

      We review a district court’s grant of summary judgment de novo and, thus,

we must apply the same legal standards used by the district court. Levinson v.

                                          4
Reliance Standard Life Ins. Co., 245 F.3d 1321, 1325 (11th Cir. 2001). We

review for an abuse of discretion the denial of a motion to reconsider. United

States v. Simms, 385 F.3d 1347, 1356 (11th Cir. 2004). A district court abuses its

discretion if it misapplies the law. See Delta Air Lines, Inc. v. Air Line Pilots

Ass’n., Int’l., 238 F.3d 1300, 1308 (11th Cir. 2001). (“[W]e accord no deference

to the district court’s misapplication of the law.”) “Because res judicata

determinations are pure questions of law, we review them de novo.” Norfolk S.

Corp. v. Chevron, U.S.A., Inc., 371 F.3d 1285, 1288 (11th Cir. 2004).

                                         IV.

      The first cause of action in this case was dismissed after the parties entered

into a settlement agreement. When the first cause of action is settled, the res

judicata doctrine applies in a modified form, and the settlement agreement, not the

original complaint, governs the scope of the doctrine. Norfolk, 371 F.3d at 1288

(“A judgment dismissing an action with prejudice based on the parties’ stipulation,

unlike a judgment imposed at the end of an adversarial proceeding, receives its

legitimate force from the fact that the parties consented to it.”). “In determining

the res judicata effect of an order of dismissal based upon a settlement agreement,

we should also attempt to effectuate the parties’ intent. The best evidence of that

intent is, of course, the settlement agreement itself.” Id. at 1289.

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      Paragraph 12 of the settlement agreement provides that “[t]he parties

stipulate and agree that the payment of Ameritrade’s claim in this case will

establish no precedent or basis for payment of any similar future claim of

Ameritrade or any other party.” Settlement Agreement ¶ 12. Furthermore,

immediately after the settlement, Ameritrade and Washington attempted to pursue

administrative remedies to set aside the forfeiture of the $50,000. Given ¶ 12 of

the settlement agreement and the parties’ actions, we conclude that the settlement

agreement in this case does not act as a bar to the government’s subsequent claim

to enforce the civil penalties. Accordingly, the district court committed reversible

error in granting summary judgment against the government in favor of

Ameritrade and Washington on res judicata grounds. Likewise, the district court

abused its discretion in denying the government’s motion for reconsideration

concerning the court’s interpretation of the in rem settlement agreement’s

preclusive effect because, by doing so, it disregarded the law of this circuit which

holds that, when prior litigation is resolved by settlement, res judicata applies only

to those matters specified in the settlement. Here the settlement agreement

resolved the in rem forfeiture claim only and Ameritrade’s maritime lien against

the forfeited vessel. By expressly contemplating that the penalty proceeding

would go forward, the settlement agreement could not have intended to preclude

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the government from enforcing the civil penalty against Ameritrade and

Washington.

      For the foregoing reasons, we reverse the district court’s grant of summary

judgment in favor of Ameritrade and Washington and its order denying

reconsideration, and remand this case to the district court for further proceedings

consistent with this opinion.

      REVERSED and REMANDED.




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