John Cox v. Village of Tequesta

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
JOHN COX,
Appellant,
v.
VILLAGE OF TEQUESTA,
Appellee.
No. 4D14-2689
[February 3, 2016]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Thomas H. Barkdull III, Judge; L.T. Case No.
502013CA006575XXXXMB AB.
Isidro M. Garcia of the Garcia Law Firm, P.A., West Palm Beach, for
appellant.
Stephen A. Meck and Leonard A. Carson of Carson & Adkins,
Tallahassee, for appellee.
LEVINE, J.
The issue presented for our review is whether the trial court erred in
determining that the trial court, and not an arbitrator, should determine
whether appellant timely demanded arbitration and whether appellant
waived the right to arbitrate. We find that the trial court erred by making
these determinations, which are the province of an arbitrator. We
therefore reverse and remand.
In June 2012, the Village of Tequesta terminated John Cox’s
employment. A collective bargaining agreement between Cox’s union and
the Village provided for termination “for just cause.” The agreement set
forth a three-step grievance and arbitration procedure to be followed in the
event an employee challenged his or her termination.
First, the employee and/or union could present the grievance to the
Chief within ten working days of the occurrence giving rise to the
grievance:
Step 1. The aggrieved employee with or without a union
representative may present a written grievance to
Chief within ten (10) working days of the occurrence
or knowledge of the matter giving rise to the
grievance. The Chief shall attempt to adjust the
matter within his/her authority and response to the
party presenting the grievance within ten (10)
working days.
Second, if the grievance was not satisfactorily resolved, the employee
and/or the union could appeal the grievance to the Village Manager within
ten working days of the response due in step 1. The Village Manager, in
turn, was required to respond within ten days:
Step 2. If the grievance has not been satisfactorily resolved
in step 1, the [union] representative and/or
aggrieved employee may appeal the grievance to
Village Manager, in writing, within ten (10) working
days of the date the response was due in Step 1.
The Village Manager shall respond to matter within
his/her authority, in writing, within ten (10) working
days to the employee and [the union].
As to both steps 1 and 2:
The time limits set forth may be waived only by mutual
agreement, in writing, between the parties. If the [union] fails
to advance a grievance within these times limits the grievance
will be treated as withdrawn with prejudice. If the Village fails
to respond to the grievance within these time limits, the
grievance will be treated as denied, effective on the date the
response was due.
Third, if the grievance still was not resolved, the employee and/or the
union could initiate arbitration:
Step 3.
1. If the grievance is not resolved at Step 2 of the Grievance
Procedure, the aggrieved employee or the [union] may,
within ten (10) working days of the date the response was
due in Step 2, submit a request for arbitration to the Village
Manager. In general grievances, either the [union] or the
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Village may request to take the issue or grievance to
arbitration.
2. If the parties fail to mutually agree upon an arbitrator
within ten (10) days after the date of receipt of the
arbitration request, a list of seven (7) qualified neutrals
from the Federal Mediation & Conciliation Service (FMCS)
shall be requested by either party, with a copy of the
request sent to the other party. Within five (5) days after
the receipt of the list, the parties shall meet and alternately
cross out the names on the list, and the remaining name
shall be the arbitrator. The party bringing the grievance
shall cross out the first name. Failure of the parties to
select an arbitrator within thirty (30) days of receipt of the
panel from FCMS will be considered a withdrawal of the
grievance with prejudice.
In April 2013, Cox filed a verified complaint in the trial court to compel
arbitration pursuant to the agreement. Cox alleged that he “properly
invoked all of the required steps in the Agreement, including demanding
arbitration on July 9, 2012.” Cox further alleged that the Village held a
meeting during the second step that was contrary to the agreement.
Emails attached to the complaint showed attempts by the Village to set a
meeting, which were initially declined by Cox’s union, but later the union
agreed to a meeting on August 9, 2012. Cox sent an email to the union
opposing the meeting.
The attachments to the complaint also showed that on July 9, 2012,
the union sent the Village a letter requesting arbitration, and
acknowledged receipt of the panel of arbitrators on July 19, 2012. On
August 8, 2012, the union emailed Cox stating that the union’s executive
board decided not to proceed with arbitration and would attend the August
9, 2012 meeting. Cox, who was previously represented by the union,
obtained his own counsel and “reiterated” his demand for arbitration in a
letter dated February 26, 2013. The Village responded that Cox’s July 9,
2012 request for arbitration was premature and invalid because, according
to the Village, Cox failed to complete the steps in the grievance procedure.
The Village filed a response in opposition to Cox’s motion to compel
arbitration and motion to dismiss petition for declaratory relief. The
Village argued that Cox waived any right to arbitration when he failed to
comply with the specific timeframes set forth in the collective bargaining
agreement. The Village filed various documents supporting its argument
that Cox failed to comply with the timeliness requirement of the
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agreement.
These documents showed that Cox filled out a grievance form on June
14, 2012, which the department head denied on June 22, 2012. Following
the denial, Cox elected to proceed to step 2 of the grievance procedures,
and the Village received the grievance on June 28, 2012. On July 3, 2012,
the Village sent the union a letter acknowledging receipt of the step 2
grievance and requesting to meet with the union and Cox to discuss the
matter. On July 9, 2012, the union sent a letter requesting arbitration.
On August 13, 2012, the Village sent Cox a letter denying the grievance
following the August 9, 2012 meeting with the union and Cox. The letter
concluded by stating, “You have the right to appeal this decision by filing
for arbitration.” In January 2013, the union asked the Village its position
on arbitrating “at this stage, as Grievance Procedure Step time limits have
now naturally expired,” and the Village declined to arbitrate.
The trial court entered a final judgment disposing of the complaint to
compel arbitration and for declaratory relief. The trial court determined
that the court, and not an arbitrator, should make the determination of
whether the demand for arbitration was timely and whether the demand
for arbitration was waived. The trial court determined that Cox’s July 9,
2012 demand for arbitration was premature and therefore invalid to invoke
arbitration. The trial court further determined that the July 9 demand for
arbitration was also ineffective since the Village had not made a decision
pursuant to step 2 of the grievance procedure, nor had the ten-day period
expired for the Village to issue a decision. Finally, the trial court
determined Cox was not entitled to arbitration since an arbitrator was not
selected from the panel in a timely fashion. Thus, the trial court denied
Cox’s request to compel arbitration and dismissed the complaint. Cox
appeals the trial court’s decision.
“The standard of review for denial of a motion to compel arbitration is
de novo.” Shetty v. Palm Beach Radiation Oncology Associates-Sunderam
K. Shetty, M.D., P.A., 915 So. 2d 1233, 1234 (Fla. 4th DCA 2005). In order
to determine whether the trial court properly resolved the issues in this
case, or whether an arbitrator should have resolved them, we first look at
the basic standards within the law.
“[D]oubts concerning the scope of arbitrable issues should be resolved
in favor of arbitration, whether the problem at hand is the construction of
the contract language itself or an allegation of waiver, delay, or a like
defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24-25 (1983). “Florida public policy favors arbitration,
and any doubts concerning the scope of an arbitration agreement should
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be resolved in favor of arbitration.” BKD Twenty-One Mgmt. Co. v.
Delsordo, 127 So. 3d 527, 530 (Fla. 4th DCA 2012).
A trial court’s determination of whether an arbitrable issue exists is
“limited [in] scope” and applies in the “narrow circumstance where
contracting parties would likely have expected a court to have decided the
gateway matter.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83
(2002). There is no “question of arbitrability” “where parties would likely
expect that an arbitrator would decide the gateway matter” such as
“‘procedural’ questions which grow out of the dispute and bear on its final
disposition,” and “allegation[s] of waiver, delay, or a like defense to
arbitrability.” Id. at 84 (alteration in original) (citations omitted). Issues
of procedure include “whether a condition precedent to arbitrability has
been fulfilled” as well as “whether prerequisites such as time limits, notice,
laches, estoppel, and other conditions precedent to an obligation to
arbitrate have been met.” Id. at 85 (citation omitted).
Significantly, “[a]n arbitrator should decide whether the first two steps
of a grievance procedure were completed, where these steps are
prerequisites to arbitration.” Id. at 84 (citing John Wiley & Sons, Inc. v.
Livingston, 376 U.S. 543, 557 (1964)). In John Wiley, a company that
merged with another company refused to recognize a collective bargaining
agreement the union had with the original company. The union brought
an action to compel arbitration, and the Supreme Court held that
arbitration was warranted. The Supreme Court rejected the employer’s
argument that the union did not follow the grievance procedure steps
before seeking arbitration and that such “procedural” conditions to
arbitration that must be decided by the court and not the arbitrator. The
Court explained:
We think that labor disputes of the kind involved here
cannot be broken down so easily into their ‘substantive’ and
‘procedural’ aspects. Questions concerning the procedural
prerequisites to arbitration do not arise in a vacuum; they
develop in the context of an actual dispute about the rights of
the parties to the contract or those covered by it. . . .
Doubt whether grievance procedures or some part of them
apply to a particular dispute, whether such procedures have
been followed or excused, or whether the unexcused failure to
follow them avoids the duty to arbitrate cannot ordinarily be
answered without consideration of the merits of the dispute
which is presented for arbitration. . . . It would be a curious
rule which required that intertwined issues of ‘substance’ and
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‘procedure’ growing out of a single dispute and raising the
same questions on the same facts had to be carved up
between two different forums, one deciding after the other.
Neither logic nor considerations of policy compel such a
result.
Once it is determined, as we have, that the parties are
obligated to submit the subject matter of a dispute to
arbitration, ‘procedural’ questions which grow out of the
dispute and bear on its final disposition should be left to the
arbitrator.
Id. at 556-57. See also Howsam, 537 U.S. at 85 (finding that “the
applicability of the NASD time limit rule is a matter presumptively for the
arbitrator, not for the judge”).
Florida law allows a party to bring an action to compel arbitration when
the other party refuses to arbitrate a dispute in accordance with the
applicable arbitration clause. Section 682.03, Florida Statutes (2012),
provides:
(1) A party to an agreement or provision for arbitration
subject to this law claiming the neglect or refusal of another
party thereto to comply therewith may make application to the
court for an order directing the parties to proceed with
arbitration in accordance with the terms thereof. If the court
is satisfied that no substantial issue exists as to the making
of the agreement or provision, it shall grant the application. If
the court shall find that a substantial issue is raised as to the
making of the agreement or provision, it shall summarily hear
and determine the issue and, according to its determination,
shall grant or deny the application.
....
(5) An order for arbitration shall not be refused on the
ground that the claim in issue lacks merit or bona fides or
because any fault or grounds for the claim sought to be
arbitrated have not been shown.
Specifically, under section 682.03, a trial court may consider only three
issues: “(1) whether a valid written agreement to arbitrate exists; (2)
whether an arbitrable issue exists; and (3) whether the right to arbitration
was waived.” Gren v. Gren, 133 So. 3d 1066, 1068 (Fla. 4th DCA 2014)
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(quoting Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999)).
In the instant case, with respect to the first factor, it is undisputed that
a valid written agreement to arbitrate exists. As to the second factor, an
arbitrable issue exists regarding whether Cox was fired for good cause.
Finally, as to the third factor—whether the right to arbitration was
waived—no issues of waiver were present that would warrant trial court
intervention. In determining waiver, a trial court’s consideration is limited
to whether a party waived arbitration by “active participation in a lawsuit
or from taking action inconsistent with that right.” O’Keefe Architects, Inc.
v. CED Constr. Partners, Ltd., 944 So. 2d 181, 185 n.4 (Fla. 2006). Clearly,
in this case Cox did not participate in any lawsuit that would constitute a
waiver of his right to arbitrate. To the contrary, Cox did everything
possible to compel arbitration in this case, including filing a motion to
compel arbitration in the trial court pursuant to section 682.03.
The trial court incorrectly made a determinination that Cox “waived”
the right to arbitrate by failing to timely make a demand for arbitration.
In doing so, the trial court conflated the concept of the waiver of arbitration
by actively participating in a lawsuit, with the concept of waiver that would
occur where a party to an agreement does not invoke parts of that
agreement in a timely fashion. Under the law of this court, it is clear that
an arbitrator decides whether a party has timely invoked the key parts of
an agreement.
In Thenet v. Jenne, 968 So. 2d 46 (Fla. 4th DCA 2007), a terminated
deputy sheriff filed a request for arbitration under a collective bargaining
agreement. The deputy then filed a suit to compel arbitration. The trial
court determined that the deputy’s request was untimely, and as a result,
the trial court granted the sheriff’s motion to dismiss the deputy’s motion
to compel arbitration. This court reversed, finding that timeliness is “a
question for an arbitrator.” Id. at 46. See also Gren, 133 So. 3d at 1068(stating that “factual issues . . . including the timeliness in initiating the
arbitration proceeding, belonged to the arbitrator”); Cooper v. Fine, 705 So.
2d 131, 131 (Fla. 4th DCA 1998) (finding that “whether conditions
precedent to arbitration were fulfilled . . . is a question for the arbitrator”);
O’Keefe Architects, Inc., 944 So. 2d at 188 (holding that a statute of
limitations defense was to be decided by the arbitrator).
In this case, the trial court determined waiver of arbitration by finding
several points where Cox’s actions were not timely, and as such, “waived”
his right to arbitration. As we found in Thenet, only the arbitrator should
determine questions of “timeliness.” To rule otherwise would expand the
concept of waiver from its present limited inquiry to the point where every
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question of dispute would be decided by a trial court where the party
disputing arbitration would claim that the other party’s action effectively
constituted “waiver.”
In conclusion, we reverse and remand to the trial court to grant the
motion to compel arbitration.
Reversed and remanded.
CONNER and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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