United States District Court, M.D. Florida, Orlando Division
REPORT AND RECOMMENDATION
B. SMITH, UNITED STATES MAGISTRATE JUDGE.
before the Court is Defendant Polaris Sales and Service,
Inc.'s Motion to Compel Arbitration and Stay Action (Doc.
27). After due consideration, I respectfully recommend that
the motion be denied.
Kissimmee Motorsports, Inc. describes itself as a
“franchised motor vehicle dealer” as defined in
Fla. Stat. § 320.027(1)(c)(1) (Doc. 1, ¶ 2). Under
Florida law, a “franchised motor vehicle dealer”
is anyone “who engages in the business of repairing,
servicing, buying, selling, or dealing in motor vehicles
pursuant to an agreement as defined in s. 320.60(1).”
Id. “Agreement” “means a contract,
… sales and service agreement, or dealer agreement or
any other terminology used to describe the contractual
relationship between a manufacturer, … distributor, or
importer, and a motor vehicle dealer, pursuant to which the
motor vehicle dealer is authorized to transact business
pertaining to motor vehicles of a particular
line-make.” Fla. Stat. § 320.60(1).
alleges that Defendant Polaris Sales, Inc. is a
“distributor” as defined in Fla. Stat. §
320.60(9) because it sold and offered to sell Victory brand
motorcycles to new motor vehicle dealers, including Plaintiff
(Doc. 1, ¶ 4). Plaintiff's reference to §
320.60(9) is erroneous. That section defines a motor vehicle
“manufacturer.” Florida law defines a
“distributor” in § 320.60(5) as someone who
“sells or distributes motor vehicles to motor vehicle
dealers or who maintains distributor representatives.”
Id. The distinction is not material to the
resolution of this motion.
unknown date, Plaintiff and Defendant entered into a dealer
agreement (“Agreement”) whereby Plaintiff became
an authorized non-exclusive retail dealer of Defendant's
Victory brand of motorcycles. Attached to the complaint is
the 2017-2018 version of the Agreement (Doc. 1-1). On January
9, 2017 Defendant announced that it would be winding down its
Victory motorcycles brand (Doc. 1-2 at 1). Defendant
explained that it had “struggled to establish the
market share needed to succeed and be profitable, ” but
“[t]he competitive pressures of a challenging
motorcycle market have increased the headwinds for the
brand.” (Id.). Defendant said it would assist
its dealers in the liquidation of their existing inventories
while making parts available for ten years (Id.).
learning that Defendant was discontinuing the Victory brand
of motorcycles Plaintiff sent a letter informing Defendant
that it was required to repurchase Plaintiff's inventory
including motorcycles, parts, special tools and signage
pursuant to Fla. Stat. § 320.64(36)(a) (Doc. 1-3).
Plaintiff also claimed that the fair market value of its
Victory motorcycle franchise was $400, 000 (Id.).
March of 2017, Defendant told Plaintiff it would assist in
the liquidation of Plaintiff's inventory while continuing
to supply parts if Plaintiff chose to become a service dealer
(Doc. 1-4 at 1). Defendant also said that when the Agreement
came up for renewal in July of 2018 it would not be renewed
in November 2017 Defendant offered to terminate the Agreement
effective December 31, 2017; repurchase Plaintiff's new,
undamaged and unsold inventory of Victory motorcycles at
original invoice price; repurchase Plaintiff's parts that
were new, unused, undamaged, unsold, still in the original
packaging, and in an unbroken lot that were in the current
parts catalog; repurchase Plaintiff's special tools that
were in usable and good condition (except for reasonable wear
and tear) at fair market value; repurchase Plaintiff's
undamaged Victory motorcycle signs at fair market value; and
issue Plaintiff a one-time payment of $30, 000 (Doc. 1-5).
Plaintiff's complaint alleges that this offer falls short
of what Defendant is required to pay pursuant to Fla. Stat.
§ 320.64 (Doc. 1).
Agreement contains the following arbitration clause which
Defendant is moving the Court to enforce:
a. Place of Arbitration and Applicable Rules. All
disputes, controversies, and claims arising out of, or in
connection with, the execution, interpretation, performance,
nonperformance, or breach of this Agreement (including
without limitation the validity, scope, enforceability, and
voidability under any statute, regulation, ordinance, or
ruling), or termination or non-renewal of this Agreement, or
of any provision of this Agreement (including without
limitation this arbitration provision, the arbitrability of
any issue, and the jurisdiction of the arbitrator), or
arising out of or in connection with any claimed duty, right,
or remedy (whether arising under this Agreement or any
statute, regulation, ordinance, or other rule of law or
otherwise) relating to any of the foregoing, will be solely
and finally settled by arbitration in Minneapolis, Minnesota,
in accordance with the United States Arbitration Act (9
U.S.C. § 1 et. seq.), and the rules of the American
Arbitration Association ("AAA") relating to
commercial arbitration. There will be one arbitrator who will
be a lawyer with at least five years of significant
experience related to business law. The arbitration,
including without limitation all notices, discovery and
exhibits, hearings, deposition, pleadings and other papers,
and all proceedings regardless of form, will be treated as
confidential by the parties, the arbitrator, and the AAA. For
the avoidance of doubt, this confidentiality requirement will
supersede any rules of the AAA. The arbitrator will have the
right to award, or include in any award, the specific
performance of this Agreement; provided, that the arbitrator
will not have the right to issue any award, or include in any
award, that relief which is more than could be awarded by a
federal or state court located in the State of Minnesota. The
arbitrator will have the right to hear and decide any and all
issues or claims asserted in the arbitration through summary
judgment and/or summary disposition motions without the
requirement of any evidentiary hearing. TO BE EFFECTIVE, ANY
CLAIM FOR ARBITRATION UNDER THIS SECTION 19(A) MUST BE FILED
WITH THE AAA WITH A COPY SENT TO POLARIS. Notwithstanding the
above, Polaris will have the right to go to any court to
prevent or seek the remedy of specific performance for any
material breach of this Agreement by Dealer if Polaris
believes such breach relates to Sections l(a), 6, 7, 8, 12 or
20(a) or to prevent any fraud or misrepresentation to any
consumer. Dealer agrees that in such a case, Polaris will be
irreparably harmed and that Polaris would be entitled to the
entry of temporary restraining order or injunction relating
thereto. To the fullest extent permissible, Dealer waives any
requirement for a bond or other security supporting any such
temporary restraining order or injunction.
(Doc. 1-1 at 32).
Eleventh Circuit treats a motion to compel arbitration as a
Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction.” Baptist Hosp. of Miami, Inc. v.
Medica Healthcare Plans, Inc., No. 18-cv-25460-UU, 2019
WL 1915439, at *4 (S.D. Fla. April 29, 2019); Mullinax v.
United Mktg. Grp., LLC, No. 1:10-cv-03585-JEC, 2011 WL
4085933, at *8 (N.D.Ga. Sept. 13, 2011).
Federal Arbitration Act (“FAA”), 9 U.S.C.
§§ 1-16 (2006) controls the validity and
enforcement of arbitration agreements. Caley v.
Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th
Cir. 2005). It preempts state law to the extent state law
treats agreements to arbitrate differently than other
contracts. Id. The FAA “embodies the national
policy favoring arbitration and places arbitration agreements
on equal footing with all other contracts.” Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443
(2006). Agreements to arbitrate are “valid,
irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2. “Federal law