DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ALLIED PROFESSIONALS INSURANCE COMPANY,
A RISK RETENTION GROUP, INC.,
Appellant,
v.
BRIAN FITZPATRICK and LAI FONG FITZPATRICK, his wife, and
KELLY M. MEREDITH, D.C.,
FLORIDA SPINE AND DISC CENTER, INC., and
ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.,
Appellees.
No. 4D13-3961
[May 6, 2015]
Appeal of a non-final order from the Circuit Court for the Nineteenth
Judicial Circuit, St. Lucie County; Dwight L. Geiger, Judge; L.T. Case No.
562011CA000898.
John B. Marion, IV of Sellars, Marion & Bachi, P.A., West Palm
Beach, for appellant.
Jane Kreusler-Walsh, Rebecca Mercier Vargas and Stephanie L.
Serafin of Kreusler-Walsh, Compiani & Vargas, P.A., West Palm Beach,
and Christopher M. Larmoyeux of Larmoyeux & Bone, P.L., West Palm
Beach, for appellees Brian Fitzpatrick and Lai Fong Fitzpatrick.
GERBER, J.
A chiropractor’s insurer appeals from the circuit court’s order denying
its motions to compel arbitration of the plaintiffs’ lawsuit against the
chiropractor pursuant to the insurance policy’s arbitration provision.
The insurer argues the court erred in denying the motions because,
among other reasons, the arbitration provision specifically delegated the
issue of arbitrability to the arbitrator. We agree with this argument and
reverse for an order compelling the issue of arbitrability to the arbitrator.
Procedural History
The chiropractor’s insurance agent sold her the insurer’s policy. The
policy had a $1,000,000 limit and contained an arbitration provision
which stated, in pertinent part:
All disputes or claims involving the [insurer] shall be
resolved by binding arbitration, whether such dispute or
claim arises between the parties to this Policy, or between
the [insurer] and any person or entity who is not a party to
the Policy but is claiming rights either under the Policy or
against the [insurer]. This provision is intended to, and
shall, encompass the widest possible scope of disputes or
claims, including any issues a) with respect to any of the
terms or provisions of this Policy, or b) with respect to the
performance of any of the parties to the Policy, or c) with
respect to any other issue or matter, whether in contract or
tort, or in law or equity . . . . If the person or entity
asserting the dispute or claim refuses to arbitrate, then any
other party may, by notice as herein provided, require that
the dispute be submitted to arbitration within fifteen (15)
days. All procedures, methods, and rights with respect to
the right to compel arbitration pursuant to this Article shall
be governed by the Federal Arbitration Act. The arbitration
shall occur in Orange County, California. The laws of the
State of California shall apply to any substantive, evidentiary
or discovery issues. Any questions as to arbitrability of any
dispute or claim shall be decided by the arbitrator.
(emphasis added).
During the policy period, the plaintiffs filed a lawsuit against the
chiropractor and the chiropractor’s employer. The lawsuit alleged that
the chiropractor was liable for her negligent care of plaintiff Brian
Fitzpatrick and that the chiropractor’s employer was vicariously liable for
such negligent care. The lawsuit sought compensatory damages for
plaintiff Brian Fitzpatrick and consortium damages for plaintiff Lai Fong
Fitzpatrick. The chiropractor tendered the claim to the insurer.
Later, the plaintiffs and the chiropractor’s employer agreed to the
entry of a final judgment by which the plaintiffs would recover
$1,000,000 from the employer. After the circuit court entered that final
judgment, the employer filed a cross-claim against the chiropractor for
indemnification of the judgment.
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The employer and the chiropractor then agreed to the entry of a final
judgment by which the employer would recover $1,000,000 from the
chiropractor.
After the circuit court entered that final judgment, the plaintiffs filed a
motion to join the insurer as a party defendant to the plaintiffs’ action
pursuant to section 627.4136, Florida Statutes (2011). Section
627.4136 states, in pertinent part:
(1) It shall be a condition precedent to the accrual or
maintenance of a cause of action against a liability insurer
by a person not an insured under the terms of the liability
insurance contract that such person shall first obtain a
settlement or verdict against a person who is an insured
under the terms of such policy for a cause of action which is
covered by such policy.
....
(4) At the time a judgment is entered or a settlement is
reached during the pendency of litigation, a liability insurer
may be joined as a party defendant for the purposes of
entering final judgment or enforcing the settlement by the
motion of any party, unless the insurer denied coverage
under the provisions of s. 627.426(2) or defended under a
reservation of rights pursuant to s. 627.426(2) . . . .
§ 627.4136, Fla. Stat. (2011).
The plaintiffs also filed a motion to amend their complaint to add, as
another party defendant, the chiropractor’s insurance agent who
obtained the policy for the chiropractor. The proposed amended
complaint alleged that the agent negligently failed to obtain adequate
coverage for the chiropractor, and that the plaintiffs were third-party
beneficiaries of the coverage which the agent should have obtained.
The insurer objected to the joinder motion on several grounds,
including that the plaintiffs, by claiming rights under the policy against
the insurer, became bound by the policy’s arbitration provision.
The circuit court entered an order granting the plaintiffs’ motion to
join the insurer as a party defendant to the plaintiffs’ action pursuant to
section 627.4136. However, in the order, the court added that it had not
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ruled on any defenses which the insurer may otherwise have, and had
not made any determination concerning coverage for the final judgments.
The court entered a separate order granting the plaintiffs’ motion to
amend their complaint to add the chiropractor’s insurance agent as
another party defendant.
The insurer then filed motions to compel the plaintiffs, the
chiropractor, and the employer to arbitrate all coverage claims pursuant
to the policy’s arbitration provision. The insurer argued the court should
grant the motions because, among other reasons, the arbitration
provision specifically delegated the issue of arbitrability to the arbitrator.
The plaintiffs opposed the motions to compel arbitration on three
grounds: (1) because the plaintiffs and the chiropractor’s employer were
not named in the policy, no valid agreement to arbitrate existed with the
plaintiffs; (2) because the arbitration provision required the arbitration to
occur in California under California law, the arbitration provision
violated Florida public policy regulating insurance and was
unenforceable; and (3) the chiropractor’s insurance agent “twisted” her
into agreeing to the insurer’s policy by not giving her a pro forma copy of
the contract to review and not disclosing to her the policy’s terms,
including the need to arbitrate in California under California law.
The circuit court entered an order denying the insurer’s motions to
compel arbitration. In the order, the court reasoned, in pertinent part:
The Court has determined that the arbitration clause was
procured by a material omission or misrepresentation in the
contract-making process, and . . . the contract provision for
compelling arbitration is contrary to Florida public policy
because it requires arbitration under California law, thus
precluding any enforcement by the insured or judgment
holder of rights guaranteed under Florida law . . . .
The Court further finds that the arbitration clause contained
in the contract of insurance is severable from the remainder
of the insurance contract and that [the insurer] has not
waived its right to arbitrate or mandate arbitration by its
conduct.
This appeal followed.
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Analysis
The insurer argues the court erred in denying the motions to compel
arbitration because, among other reasons, the arbitration provision
specifically delegated the issue of arbitrability to the arbitrator. Our
review of this argument is de novo. See BDO Seidman, LLP v. Bee,
970
So. 2d 869, 874 (Fla. 4th DCA 2007) (“[T]he standard of review applicable
to the trial court’s construction of an arbitration provision, and to its
application of the law to the facts found, is de novo.”) (citation omitted).
We agree with the insurer’s argument. The plain language of the
arbitration provision states, in pertinent part: “Any questions as to
arbitrability of any dispute or claim shall be decided by the arbitrator.”
Although the plaintiffs challenged the arbitration provision as a whole,
the plaintiffs did not challenge this delegation provision specifically.
Because the plaintiffs did not challenge the delegation provision
specifically, the delegation provision remains enforceable as a matter of
law. See Rent-A-Center, W., Inc. v. Jackson,
130 S. Ct. 2772, 2779 (2010)
(unless the plaintiff “challenged the delegation provision specifically, we
must treat it as valid . . . , leaving any challenge to the validity of the
[arbitration] [a]greement as a whole for the arbitrator.”); Best v. Educ.
Affiliates, Inc.,
82 So. 3d 143, 147 (Fla. 4th DCA 2012) (where “[t]he
appellants did not challenge the delegation provision itself . . . Rent–A–
Center requires that the arbitrator determine issues of the validity of the
contract.”); ATP Flight Sch., LLC v. Sax,
44 So. 3d 248, 253 (Fla. 4th DCA
2010) (“[U]nless a claimant specifically challenges the delegation of
authority to the arbitrator, any challenge to the validity of the entire
arbitration agreement, which the parties have assented to, was subject to
arbitration and must be left to the arbitrator to resolve.”) (citing Rent-A-
Center,
130 S. Ct. at 2775, 2777-79); cf. Shotts v. OP Winter Haven, Inc.,
86 So. 3d 456, 480 (Fla. 2011) (distinguishing Rent-A-Center on the basis
that “because the arbitration agreement [in Shotts] contained no
delegation provision, there was no such provision . . . to challenge,” and
thus challenging the arbitration agreement itself was the proper course
of action).
The plaintiffs argue that they cannot be compelled to arbitrate under
the policy because they are non-signatories to the policy. In support, the
plaintiffs cite case law standing for the proposition that “[a]s a general
rule, only the actual parties to the arbitration agreement can be
compelled to arbitrate.” Stalley v. Transitional Hosps. Corp.,
44 So. 3d
627, 629 (Fla. 2d DCA 2010). However, the plaintiffs candidly
acknowledge that a non-signatory may be bound to arbitrate under
certain circumstances: (1) incorporation by reference; (2) assumption; (3)
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agency; (4) veil piercing/alter ego; and (5) estoppel. Johnson v. Pires,
968
So. 2d 700, 701 (Fla. 4th DCA 2007) (citations omitted).
We conclude that estoppel applies here to bind the plaintiffs to
arbitration. More specifically, the plaintiffs cannot claim they are
entitled to the benefit of the policy’s coverage provision while
simultaneously attempting to avoid the burden of the policy’s arbitration
provision. See Bahamas Sales Assoc., LLC v. Byers,
2012 WL 6012972
(11th Cir. Dec. 4, 2012) (“In essence, equitable estoppel precludes a party
from claiming the benefits of some of the provisions of a contract while
simultaneously attempting to avoid the burdens that some other
provisions of the contract impose.”); Stalley,
44 So. 3d at 632 (“It is true
that an individual who makes use of a contract as long as it works to his
or her advantage is estopped from avoiding the contract’s provisions
concerning the forum in which any dispute should be resolved.”); Int’l
Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH,
206 F.3d 411,
418 (4th Cir. 2000) (“In the arbitration context, . . . a party may be
estopped from asserting that the lack of his signature on a written
contract precludes enforcement of the contract’s arbitration clause when
[the party] has consistently maintained that other provisions of the same
contract should be enforced to benefit [the party].”).
Based on the foregoing, we reverse the circuit court’s order denying
the insurer’s motions to compel arbitration, and remand for entry of an
order compelling the issue of arbitrability to the arbitrator. We decline to
comment on the insurer’s and the plaintiffs’ remaining arguments on
appeal, as we leave any challenge to the validity of the arbitration
provision for the arbitrator. See Rent-A-Center,
130 S. Ct. at 2779.
Reversed and remanded.
WARNER and CIKLIN, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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