Reunion West Development Partners, LLLP v. Guimaraes

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
REUNION WEST DEVELOPMENT PARTNERS, LLLP,
Appellant,
v. Case No. 5D16-3665
AFRANIO SANFORD GUIMARAES, JR.
AND SANDRA FALCAO AURELIANO S. GUIMARAES,
Appellees.
________________________________/
Opinion filed July 7, 2017
Non-Final Appeal from the
Circuit Court for Osceola
County,
Kevin B. Weiss, Judge.
Jose G. Sepulveda and Veronica L. De
Zayas, of Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A., Miami, for
Appellant.
Scott R. Rost, of South Milhausen, P.A.,
Orlando, for Appellees.
PALMER, J.
Reunion West Development Partners (Reunion) appeals the order entered by the
trial court denying its Motion to Compel Arbitration.1 We reverse.
1 Appellate jurisdiction is proper pursuant to rule 9.130 of the Florida Rules of
Appellate Procedure.
The Guimaraes (the buyers) filed a breach of contract action against Reunion. The
complaint alleged a claim of breach of a Home Purchase Agreement and a claim for
declaratory relief regarding the arbitration provision contained in said agreement. The
arbitration provision provides, in relevant part:
ARBITRATION. BY ENTERING INTO THIS AGREEMENT,
BUYER AND SELLER AGREE THAT ANY CONTROVERSY,
CLAIM OR DISPUTE, ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR BUYER’S PURCHASE OF THE
PROPERTY OR ANY RIGHTS AND OBLIGATIONS
BETWEEN THE PARTIES WILL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES
CODE). THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE CONSTRUCTION INDUSTRY
ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION (“AAA”) AND THE TERMS OF THIS
AGREEMENT.
Importantly, the Construction Industry Arbitration Rules of the American Arbitration
Association authorizes the arbitrator to rule on the arbitrability of a dispute:
R-9. Jurisdiction
(a) The arbitrator shall have the power to rule on his or her
own jurisdiction, including any objections with respect to the
existence, scope or validity of the arbitration agreement.
The buyers filed a Motion to Determine Arbitrability, and Reunion responded by
filing a Motion to Compel Arbitration and to Stay the Proceedings. The trial court
conducted a hearing on the parties' motions. Counsel for the buyers argued that the
arbitration clause was not enforceable because there was no meeting of the minds and
because its terms were unconscionable, citing to Basulto v. Hialeah Automotive, 141 So.
3d 1145 (Fla. 2014). Counsel for Reunion asserted that the issue of arbitrability was
expressly reserved for the arbitrator to decide, citing to Glasswall, LLC v. Monadnock
2
Construction, Inc., 187 So. 3d 248 (Fla. 3rd DCA 2016). The trial court entered an order
denying Reunion’s Motion to Compel Arbitration, citing to Basulto.
Reunion argues that the trial court reversibly erred in relying on Basulto and in
rejecting its claim that the issue of arbitrability was for the arbitrator to decide. We agree.
Appellate courts "review de novo a trial court's ruling on a motion to compel
arbitration, but . . . defer to the trial court's factual findings provided that they are supported
by competent, substantial evidence." Timber Pines Plaza, LLC v. Zabrzyski, 211 So. 3d
1147, 1150 (Fla. 5th DCA 2017).
While arbitrability is generally an issue for trial courts to decide, courts must
delegate the authority to the arbitrator if the parties' contract so provides. Morton v.
Polivchak, 931 So. 2d 935, 938–39 (Fla. 2d DCA 2006); accord Glasswall, 187 So. 3d at
251; Grant v. Rotolante, 147 So. 3d 128, 130-31 (Fla. 5th DCA 2014); Rintin Corp., S.A.
v. Domar, Ltd., 766 So. 2d 407, 409 (Fla. 3d DCA 2000). "[W]hen . . . parties explicitly
incorporate rules that empower an arbitrator to decide issues of arbitrability, the
incorporation serves as clear and unmistakable evidence of the parties' intent to delegate
such issues to an arbitrator." Contec Corp. v. Remote Solution, Co., Ltd., 398 F. 3d 205,
208 (2nd Cir. 2005); accord Glasswall. Where, like here, the language of the contract
clearly states that AAA rules govern, then said rules are expressly incorporated into the
contract. Younessi v. Recovery Racing, LLC, 88 So. 3d 364, 365 (Fla. 4th DCA 2012)
(citing Terminix Int'l Co. v. Palmer Ranch Ltd., 432 F. 3d 1327, 1333 (11th Cir. 2005)).
Based on this case law, the trial court erred in denying Reunion's Motion to
Compel Arbitration because the parties' contract expressly incorporates the Construction
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Construction, Inc., 187 So. 3d 248 (Fla. 3rd DCA 2016). The trial court entered an order
denying Reunion’s Motion to Compel Arbitration, citing to Basulto.
Reunion argues that the trial court reversibly erred in relying on Basulto and in
rejecting its claim that the issue of arbitrability was for the arbitrator to decide. We agree.
Appellate courts "review de novo a trial court's ruling on a motion to compel
arbitration, but . . . defer to the trial court's factual findings provided that they are supported
by competent, substantial evidence." Timber Pines Plaza, LLC v. Zabrzyski, 211 So. 3d
1147, 1150 (Fla. 5th DCA 2017).
While arbitrability is generally an issue for trial courts to decide, courts must
delegate the authority to the arbitrator if the parties' contract so provides. Morton v.
Polivchak, 931 So. 2d 935, 938–39 (Fla. 2d DCA 2006); accord Glasswall, 187 So. 3d at
251; Grant v. Rotolante, 147 So. 3d 128, 130-31 (Fla. 5th DCA 2014); Rintin Corp., S.A.
v. Domar, Ltd., 766 So. 2d 407, 409 (Fla. 3d DCA 2000). "[W]hen . . . parties explicitly
incorporate rules that empower an arbitrator to decide issues of arbitrability, the
incorporation serves as clear and unmistakable evidence of the parties' intent to delegate
such issues to an arbitrator." Contec Corp. v. Remote Solution, Co., Ltd., 398 F. 3d 205,
208 (2nd Cir. 2005); accord Glasswall. Where, like here, the language of the contract
clearly states that AAA rules govern, then said rules are expressly incorporated into the
contract. Younessi v. Recovery Racing, LLC, 88 So. 3d 364, 365 (Fla. 4th DCA 2012)
(citing Terminix Int'l Co. v. Palmer Ranch Ltd., 432 F. 3d 1327, 1333 (11th Cir. 2005)).
Based on this case law, the trial court erred in denying Reunion's Motion to
Compel Arbitration because the parties' contract expressly incorporates the Construction
3