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Odum v. LP Graceville, LLC

Florida Court of Appeals, First District

July 9, 2019

Mark Odum, Executor de son tort of the Estate of Joseph Norton, Appellant,
v.
LP Graceville, LLC, d/b/a Signature Healthcare of North Florida, a foreign corporation and Signature Healthcare Consulting Services, LLC, a foreign corporation, Appellees.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from the Circuit Court for Jackson County. Christopher N. Patterson, Judge.

          Charles M-P George of the Law Offices of Charles M-P George, Coral Gables, and R. Waylon Thompson of Manuel & Thompson, P.A., Panama City, for Appellant.

          Donna J. Fudge and W. Benjamin Broadwater, of Fudge Broadwater, P.A., St. Petersburg, for Appellees.

          WINOKUR, J.

         Appellant appeals the trial court's order compelling arbitration based on a delegation clause in the arbitration agreement.[1] The order stated that only the arbitrator could determine whether Appellees were parties to the arbitration agreement. We agree with Appellant that this statement is inaccurate, but affirm nonetheless.[2]

         I.

         Appellant brought suit on behalf of his deceased father against Appellees, alleging that they were the owners, operators, managers, and licensees of the nursing home that allegedly neglected his father. Appellees filed a motion to compel arbitration based on an arbitration agreement that included a delegation provision requiring the arbitrator to decide threshold claims such as the agreement's enforceability. Appellant responded that Appellees did not sign the agreement (only a representative of the nursing home did) and only the signatory could enforce it. At a hearing on the motion, Appellant again argued that only the signatory to the agreement-not affiliates- may enforce it. Appellees disagreed, noting that the agreement explicitly included "all affiliates, parents, officers, owners, members, agents, successors and assigns" of the nursing home. After the trial court directed the parties to proceed to Appellant's second argument, Appellant asked for one more word and stated that Appellees had not admitted any evidence that they are affiliates of the nursing home. The trial court granted Appellees' motion to compel arbitration, finding in its order that "any questions about who may have entered [into the] Agreement are to be submitted to an arbitrator" because the "parties have delegated such 'gateway' issues" in the agreement's delegation provision.

         II.

         Arbitration agreements, particularly those governed by the Federal Arbitration Act, are contracts that must be enforced according to their terms, save for applicable contract defenses. Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67-68 (2010). Arbitration agreements may include a "delegation provision," which is an "agreement to arbitrate threshold issues concerning the arbitration agreement." Id. at 68. The United States Supreme Court has made clear that "parties can agree to arbitrate 'gateway' questions of 'arbitrability,' such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy." Id. at 68-69. The Court noted however that it was only addressing the validity of the agreement, not whether one "was ever concluded." Id. at 70 n.2 (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (2006)). In Buckeye, the Court made the same distinction and stated that it did not address questions of whether an agreement "was ever concluded," such as "whether the alleged obligor ever signed the contract[.]" 546 U.S. at 444 n.1.

         This analysis was further explained by the Fifth Circuit Court of Appeals as follows:

Enforcement of an arbitration agreement involves two analytical steps. The first is contract formation- whether the parties entered into any arbitration agreement at all. The second involves contract interpretation to determine whether this claim is covered by the arbitration agreement. Ordinarily both steps are questions for the court. But where the arbitration agreement contains a delegation clause giving the arbitrator the primary power to rule on the arbitrability of a specific claim, the analysis changes.

Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199, 201 (5th Cir. 2016) (citations omitted). The court concluded that "if the party seeking arbitration points to a purported delegation clause," the court "performs the first step-an analysis of contract formation-as it always does," then decides "whether the purported delegation clause is in fact a delegation clause[.]" Id. at 202. If the parties entered into an arbitration agreement and a delegation ...


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