ADR CORNER
Arbitration Case Law Update
DONNA GREENSPAN SOLOMON
Badgerow v . Walters , 142 S . Ct . 1310 ( 2022 ). Employee terminated as financial advisor sought in state court to vacate FINRA arbitration award . After removal to federal court , the district court denied employee ’ s motion to remand and granted employer ’ s application to confirm award . Employee appealed and the Fifth Circuit affirmed . The US Supreme Court granted certiorari and a nearly unanimous court reversed on jurisdictional grounds . The Court explained that 9 USC § 4 of the Federal Arbitration Act (“ FAA ”) instructs federal courts to “ look through ” a motion to compel arbitration to the underlying claims and controversy . Conversely , sections 9 and 10 , which pertain to motions to confirm or vacate an award , do not provide for this “ lookthrough ” approach to jurisdiction .
Garcia v . Church of Scientology Flag Serv . Org ., Inc ., 18-13452 , 2021 WL 5074465 , at * 1 ( 11th Cir . Nov . 2 , 2021 ). In dispute between two former members of Church of Scientology and church entities , the district court compelled arbitration before a panel of Scientologist arbitrators and subsequently denied the former members ’ motion to vacate the award . The Eleventh Circuit affirmed , finding that the former Church members had “ agreed to a method of arbitration with inherent partiality and cannot now seek to vacate that award based on that very partiality .” Justice Rosenbaum dissented , stating : If a party to the arbitration can create the rules . . . as the arbitration progresses , it enjoys an insurmountable advantage that effectively guarantees its victory . That ' s not an arbitration ; it ' s just plain arbitrary . . . and we should not stamp it with the imprimatur of the federal courts .
Juarez v . Drivetime Car Sales Co ., LLC , 21- 11972-CC , 2021 WL 5984924 , at * 1 ( 11th Cir . Nov . 29 , 2021 ). Federal court does not allow for an appeal from interlocutory order compelling arbitration ; compare with Fla . R . App . P . 9.130 ( 3 )( c )( iv ) ( allowing nonfinal review ).
Airbnb , Inc . v . Doe , 47 Fla . L . Weekly S100 ( Fla . Mar . 31 , 2022 ). Vacationing couple sued AirBnb and unit owner after learning that owner had secretly recorded their stay . AirBnb moved to compel arbitration pursuant to the clickwrap agreement that the couple executed in creating their AirBnb account . The trial court granted the motion but the Second District reversed . The Supreme Court quashed , finding that where an agreement incorporates a set of arbitral rules , such as the AAA Rules , those rules become part of the agreement . And where those rules specifically empower the arbitrator to resolve questions of arbitrability , incorporation of the rules is sufficient to clearly and unmistakably evidence the parties ’ intent to empower an arbitrator to resolve questions of arbitrability .
Hayslip v . U . S . Home Corp ., SC19-1371 , 2022 WL 247073 , at * 1 ( Fla . Jan . 27 , 2022 ). The Florida Supreme Court answered in the affirmative to the following rephrased certified question :
DOES A DEED COVENANT REQUIRING THE ARBITRATION OF ANY DISPUTE ARISING FROM A CONSTRUCTION DEFECT RUN WITH THE LAND , SUCH THAT IT IS BINDING UPON A SUBSEQUENT PURCHASER OF THE REAL ESTATE WHO WAS NOT A PARTY TO THE DEED ?
Palm Court NH , L . L . C . v . Dowe , 47 Fla . L . Weekly D108 ( Fla . 4th DCA Jan . 5 , 2022 ). FAA , rather than Florida Arbitration Code (“ FAC ”), governed arbitration of wrongful death claim against nursing home where resident ' s care was paid in part by Medicare , thus involving interstate commerce .
BREA 3-2 LLC v . Hagshama Florida 8 Sarasota , LLC , 327 So . 3d 926 ( Fla . 3d DCA 2021 ). A “ narrow ” agreement to arbitrate claims or controversies “ arising out of ” a contract limits arbitration to those claims with a direct relationship to the contract ' s terms and provisions . In contrast , a “ broad ” agreement to arbitrate claims or controversies “ arising out of or relating to ” the contract broadens the scope of arbitration to include claims having a “ significant relationship ” to the contract ,
PBCBA BAR BULLETIN 6 whether founded in tort or contract law .
Lennar Homes , LLC v . Martinique at Oasis Neighborhood Ass ' n , Inc ., 332 So . 3d 1054 ( Fla . 3d DCA 2021 ). Homeowner association ’ s right to proceed in its representative capacity in dispute with developer required compliance with individual members ' agreements to arbitrate .
Gambrel v . Sampson , 330 So . 3d 114 ( Fla . 2d DCA 2021 ). Where parties agreed to nonbinding arbitration pursuant to section 44.103 , Florida Statutes , trial court was required to enter judgment on arbitration award after no party requested trial de novo within statutory 20-day deadline , even though court found paralegal ’ s calendaring mistake was due to an “ excusable and reasonable misunderstanding .”
Donna Greenspan Solomon was the first attorney certified by The Florida Bar as both Business Litigator and Appellate Specialist . Donna is a Member of the National Academy of Distinguished Neutrals and serves as a Chair on AAA ( Commercial Panel ) and FINRA arbitrations . She is also a Certified Circuit , Appellate , and Family Mediator and Florida Supreme Court Qualified Arbitrator . Donna is also a Member of the Florida Supreme Court Committee on Standard Jury Instructions — Contract and Business Cases . Donna can be reached at ( 561 ) 762-9932 or Donna @ SolomonAppeals . com or by visiting www . solomonappeals . com .