Bari Builders, Inc. v. Hovstone Properties Florida, Hovesite Monteverde 1&2, and Town & Country Builders, Inc. , 2014 Fla. App. LEXIS 12031 ( 2014 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2014
BARI BUILDERS, INC., a Florida corporation,
Appellant,
v.
HOVSTONE PROPERTIES FLORIDA, LLC, HOVESITE MONTEVERDE
1&2, LLC, and TOWN & COUNTRY BUILDERS, INC.,
Appellees.
No. 4D14-765
[August 6, 2014]
Appeal of non-final order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Catherine M. Brunson, Judge; L.T.
Case No. 502011CA019089XX.
Kenneth L. Minerley and Andrew K. Fein of Minerley Fein, P.A., Boca
Raton, for appellant.
Steven H. Osber of Kelley, Kronenberg, P.A., Fort Lauderdale, for
appellees.
DAMOORGIAN, C.J.
Appellant, Bari Builders, Inc., appeals the trial court’s denial of its
motion to compel arbitration pursuant to a subcontract between it and
Appellee, Hovstone Properties Florida, LLC. Because the subcontract
contains an unambiguous arbitration provision, we reverse.
This dispute stems from a construction defect lawsuit brought by a
condominium association against Appellees, the condominium’s
developers. In turn, Appellees brought a third-party complaint against
their subcontractors, including Appellant. Appellant moved to compel
arbitration based on the following provision in the subcontract:
The parties hereto agree to binding Arbitration of any
controversy or claim arising out of or relating to this contract,
or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association under its
Construction Industry Arbitration Rules, and judgment on the
award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. The Arbitration panel will adhere
to the requirements and terms contained in this Agreement.
Appellees opposed arbitration, pointing out that the subcontract also
stated: “IN ALL ACTIONS THE PARTIES WAIVE THE RIGHT TO JURY AND
AGREE TO DETERMINATION OF ALL FACTS BY THE COURT.” Appellees
maintained that, based on this language (the “jury waiver language”),
disputes under the subcontract must be resolved via bench trial. Thus,
the jury waiver language rendered the scope of the arbitration provision
ambiguous, making it unenforceable. The trial court agreed and denied
Appellant’s request to compel arbitration. This appeal now follows.
“[T]here are three elements for courts to consider in ruling on a motion
to compel arbitration of a given dispute: (1) whether a valid written
agreement to arbitrate exists; (2) whether an arbitrable issue exists; and
(3) whether the right to arbitration was waived.” Seifert v. U.S. Home Corp.,
750 So. 2d 633, 636 (Fla. 1999). This appeal only concerns the first
element—whether a valid written agreement to arbitrate exists. As this
determination rests on the construction of the arbitration provision, we
review it under the de novo standard of review. BDO Seidman, LLP v. Bee,
970 So. 2d 869, 874 (Fla. 4th DCA 2007).
Arbitration clauses are construed according to basic contract
interpretation principles. Seifert, 750 So. 2d at 636. The plain language
of the agreement containing the arbitration clause is the best evidence of
the parties’ intent. Royal Oak Landing Homeowner’s Ass’n v. Pelletier, 620
So. 2d 786, 788 (Fla. 4th DCA 1993). The arbitration clause must be read
together with the other provisions in the contract. See J.C. Penney Co. v.
Koff, 345 So. 2d 732, 735 (Fla. 4th DCA 1977) (stating that a court must
review the contract “without fragmenting any segment or portion”).
“Arbitration is a preferred method of dispute resolution, so any doubt
regarding the scope of an arbitration clause should be resolved in favor of
arbitration.” BallenIsles Country Club, Inc. v. Dexter Realty, 24 So. 3d 649,
652 (Fla. 4th DCA 2009).
Applying these rules of construction, we hold that the jury waiver
language in the subcontract does not render the arbitration provision
ambiguous, as the two provisions can be reconciled in favor of arbitration.
Read together, the provisions provide that the parties agree to submit any
“controversy or claim” to arbitration and, thereafter, any award may be
reduced to judgment in court without the right to a jury trial. Additionally,
in the event that the parties choose to waive their right to arbitrate, the
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clause provides that any “action” in court will be in the form of a bench
trial.
We find support for this interpretation in case law from other
jurisdictions. For example, in Saturna v. Bickely Construction Co., the
Georgia Court of Appeals held that a provision in a construction contract
allowing the builder to “institute judicial proceedings” in certain
circumstances did not invalidate an otherwise unambiguous arbitration
clause pertaining to “[a]ll claims or disputes arising out of [the]
agreement.” 555 S.E.2d 825, 826 (Ga. Ct. App. 2001). The court reasoned
that the provisions could be read together to mean that the parties agreed
to submit disputes arising out of the contract to arbitration, but that the
builder could institute judicial proceedings if certain conditions were met.
Id. at 826−27.
Similarly, the United States District Court for the Southern District of
Florida ruled that a contract containing a clear arbitration clause as well
as an additional clause governing “legal proceedings” could be reconciled
in favor of arbitration. Sims v. Clarendon Nat’l Ins. Co., 336 F. Supp. 2d
1311, 1318−20 (S.D. Fla. 2004). The court explained:
Read together, [the clauses] provide the parties with the election
of remedies. The parties agree to arbitrate any dispute arising
under the Policy prior to the institution of “legal
proceedings.” . . . However, in the event the parties are in
agreement to waive their right to arbitrate, then any legal
proceedings must be instituted [as specified].
Id. at 1318−19.
We are not persuaded by the one case on which Appellees rely in
support of their position, Basulto v. Hialeah Automotive, 39 Fla. L. Weekly
S140 (Fla. Mar. 20, 2014). In Basulto, the Florida Supreme Court affirmed
the trial court’s factual finding that the parties to a vehicle sales agreement
did not have a meeting of the minds regarding arbitration for several
reasons, including that: the buyers did not speak English, some of the
documents were blank when signed by the buyers and information was
filled in later, the seller misinformed the buyers about the nature of
arbitration, and there were three competing dispute resolution provisions
in the agreement. Id. at S143. The competing dispute resolutions were
but one factor in the court’s determination, and its determination was
based on the parties’ lack of mutual understanding, not contractual
interpretation. Id. Accordingly, Basulto is not instructive on the issue of
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how to interpret an arbitration clause in light of a somewhat competing
alternative dispute resolution clause.
In sum, we hold that under the laws of contract interpretation,
specifically the law favoring the enforcement of an arbitration provision,
the presence of an additional dispute resolution clause does not render an
otherwise valid arbitration clause ambiguous if the two can be read in a
complementary fashion. As the arbitration provision here is quite clear
and can be read in a complementary fashion with the jury waiver language,
the trial court erred in finding the arbitration provision invalid, and
Appellees’ claims under the subcontract are subject to arbitration.
Accordingly, we reverse and remand for the entry of an order granting
Appellant’s motion to compel arbitration.
Reversed and Remanded.
FORST, J., and HANZMAN, MICHAEL, Associate Judge, concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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