SACHSE CONSTRUCTION AND DEVELOPMENT CORPORATION, a Florida corporation, Appellant,
AFFIRMED DRYWALL, CORP., a Florida corporation, and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, a foreign insurance company, Appellees.
FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF
pursuant to Fla. R. App. P. 9.130 from the Circuit Court for
Collier County; Lauren L. Brodie, Judge.
Richard B. Akin, II, and J. Matthew Belcastro of Henderson,
Franklin, Starnes & Holt, P.A., Fort Myers, for
M. Siegfried and Nicholas D. Siegfried of Siegfried, Rivera,
Hyman, Lerner, De La Torre, Mars & Sobel, P.A., Coral
Gables, for Appellee Affirmed Drywall Corp.
appearance for remaining Appellee.
on a subcontract to perform drywall work (the Subcontract),
Affirmed Drywall Corp. filed a two-count complaint for (1)
breach of contract against Sachse Construction and
Development Corporation and (2) an action against bond naming
Sachse and Travelers Casualty and Surety Company. Sachse
appeals a nonfinal order determining that the arbitration
clause in the Subcontract is void and unenforceable because
it requires arbitration in Michigan of a contract dispute
relating to the improvement of real property in Florida, in
violation of section 47.025, Florida Statutes (2016). We
reverse that order because if the Federal Arbitration Act
(FAA) applies, it preempts section 47.025. However, because
the trial court did not first determine whether the contract
involves interstate commerce so as to make the FAA
applicable, on remand the trial court must address the
question of interstate commerce.
October 2016, Sachse, as contractor, and Affirmed Drywall, as
subcontractor, entered into the Subcontract. The Subcontract
reflects that Sachse is a Michigan Limited Liability Company
(LLC) with an address in Detroit and reflects an address in
Coral Gables, Florida, for Affirmed Drywall. Affirmed Drywall
was to provide all labor, materials, and equipment associated
with drywall work for the improvement of real property in
Naples, Florida. Paragraph 23 of the Subcontract states that
any dispute between Sachse and Affirmed Drywall "in any
way relating to the Work or this Subcontract may be submitted
to mediation and/or arbitration pursuant to the Construction
Industry Rules of the American Arbitration Association then
in effect." Paragraph 23 also provides that arbitration
"shall take place at the American Arbitration
Association's Southfield, Michigan, office or within 20
miles thereof." Paragraph 21 provides that the
"Subcontract shall be governed by and construed in
accordance with the laws of the State of Michigan."
March 20, 2017, Affirmed Drywall filed its two-count
complaint for breach of contract and an action against bond.
Sachse filed a motion to dismiss or to compel arbitration in
which it argued that the Subcontract is governed by and
enforceable in accordance with the FAA. It contended that the
FAA supersedes any inconsistent state law, that Florida
courts must enforce valid arbitration agreements within the
scope of the FAA, and that the trial court should compel the
parties to proceed to arbitration in Michigan pursuant to the
Drywall opposed the motion and contended that Sachse failed
to adequately allege facts that evidence interstate commerce.
Affirmed Drywall also argued that under Florida law the venue
provision requiring arbitration in Michigan was void as
against public policy and cited, among other things, section
hearing on the motion, Sachse argued that the Subcontract
provides that the laws of Michigan control the contract, so
section 47.025 does not even apply. But counsel stated that
"far more importantly," as argued in Sachse's
motion to compel arbitration, the contract involves
interstate commerce because the contract shows that
Sachse's principal place of business is in Detroit,
Michigan, and Affirmed Drywall's principal place of
business is Coral Gables, Florida; thus, Sachse's counsel
argued that the FAA applies. In its motion to compel and on
appeal, Sachse cites federal and Florida law, and neither
party mentions what Michigan law provides. Sachse argued to
the trial court that the FAA preempts section 47.025.
Drywall argued that an evidentiary hearing would be necessary
to determine if the contract involved interstate commerce.
Affirmed Drywall further argued that section 47.025
prohibited the enforcement of a provision that requires venue
outside the State of Florida in a contract concerning
improvements to real property. Thus, Affirmed Drywall argued
that the arbitration agreement violated public policy, a
generally applicable contract defense that could be used to
invalidate the agreement, relying upon Shotts v. OP
Winter Haven, Inc., 86 So.3d 456 (Fla. 2011).
trial court stated that if it decided the agreement violated
public policy, then arbitration would not be compelled. If it
did not, then the trial court recognized that the issue of
whether interstate commerce was involved would need to be
determined. The trial court took the matter under advisement.
the trial court denied the motion to compel arbitration. In
its order, the trial court determined that "the
arbitration clause that required arbitration of disputes
arising out of the improvement to real property within the
state of Florida to take place in the state of Michigan"
was void and unenforceable, citing to Shotts and
section 47.025. The trial court implicitly rejected
Sachse's preemption argument because the order did not
mention the FAA or preemption. Apparently, the court did not
consider whether ...