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Royal Palms Senior Apartments L.P. v. Construction Enterprises, Inc.

Florida Court of Appeals, Fifth District

July 23, 2019

ROYAL PALMS SENIOR APARTMENTS LIMITED PARTNERSHIP, Appellant,
v.
CONSTRUCTION ENTERPRISES, INC. OF TENNESSEE D/B/A CONSTRUCTION ENTERPRISES, INC. FORUM ARCHITECTURE & INTERIOR DESIGN INC., BH-FFS, LLC D/B/A BRADCORP FLORIDA II, LLC, ET AL., Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

          Nonfinal Appeal from the Circuit Court for Brevard County, Jeffrey Mahl, Judge.

          James. C. Prichard, Evan J. Small, Megan A. Picataggio, and Greg K. Demers, of Ball Janik LLP, Orlando, for Appellant.

          Jeffrey M. Paskert and Dara L. Dawson, of Mills Paskert Divers P.A., Tampa, for Appellee, Construction Enterprises Inc. of Tennessee d/b/a Construction Enterprises, Inc.

          No Appearance for Other Appellees.

         ON MOTION FOR REHEARING OR CLARIFICATION

          COHEN, J.

         We grant in part Construction Enterprises Inc. of Tennessee d/b/a Construction Enterprises, Inc.'s ("CEI") motion for rehearing or clarification, withdraw our prior opinion, and substitute the following corrected opinion.

         Royal Palms Senior Apartments Limited Partnership ("Royal Palms") appeals the nonfinal order entered in favor of CEI staying Royal Palms's lawsuit pending mediation and arbitration. Royal Palms argues that the trial court erred in finding that a valid arbitration agreement existed and that its claim was subject to arbitration.[1] We affirm the trial court's finding that the parties had a valid agreement to arbitrate certain claims. However, because it is unclear whether Royal Palms's claim was one subject to arbitration, we remand for a determination of that issue.

         In December 2006, the parties entered into a contract for CEI to construct the Royal Palms Senior Apartments. The agreement was comprised of the "AIA Document A201-1997 General Conditions of the Contract for Construction" ("General Conditions") and a supplementary document ("Supplementary Conditions"), which modified and deleted portions of the General Conditions and controlled if the two documents conflicted.

         In October 2017, Royal Palms filed a complaint against CEI alleging negligence, vicarious liability, breach of contract, and breach of applicable building codes. CEI moved to dismiss or alternatively, to compel mandatory and exclusive dispute resolution procedures, including mediation and arbitration. After a hearing on CEI's motion, the trial court determined that the mediation and arbitration provisions of the General Conditions were binding and enforceable. It stayed the case and ordered mediation followed by arbitration if mediation was unsuccessful. This appeal followed.

         "Under both federal statutory provisions and Florida's arbitration code, there are three elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived." Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla. 1999) (quoting Terminix Int'l Co. v. Ponzio, 693 So.2d 104, 106 (Fla. 5th DCA 1997)). Here, Royal Palms's arguments implicate only the first two prongs of the Seifert test.

         Although courts generally favor arbitration, "no party may be forced to submit a dispute to arbitration that the party did not intend and agree to arbitrate." Id. (citing Seaboard Coast Line R.R. v. Trailer Train Co., 690 F.2d 1343, 1352 (Fla. 1982)). Thus, while ambiguities regarding prong two-the scope of an arbitration clause-should be resolved in favor of arbitration, prong one-the existence of an enforceable arbitration clause-should not. See Seaboard, 690 F.2d at 1352 ("Although Federal policy requires us to resolve any doubt about the application of an arbitration clause in favor of arbitration, the Federal policy cannot serve to stretch a contract beyond the scope originally intended by the parties." (citations omitted)).

         While the Supplemental Conditions eliminated some of the General Conditions related to arbitration, ...


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