169 So. 3d 138
Fla. Dist. Ct. App.2015Background
- Chiropractor purchased a $1,000,000 liability policy containing a broad arbitration clause that stated: "Any questions as to arbitrability of any dispute or claim shall be decided by the arbitrator."
- Plaintiffs sued the chiropractor for negligent care; plaintiffs later obtained a $1,000,000 judgment against the chiropractor’s employer, which then obtained judgment against the chiropractor.
- Plaintiffs moved to join the insurer under Fla. Stat. § 627.4136 to enforce the judgment and amended to add the chiropractor’s insurance agent for alleged negligent procurement of coverage.
- Insurer objected, then moved to compel arbitration of coverage and related claims under the policy’s arbitration provision, invoking the delegation clause.
- Plaintiffs opposed, arguing (a) they are non‑signatories so cannot be compelled to arbitrate, (b) the clause is unenforceable because it mandates arbitration in California under California law contrary to Florida public policy, and (c) the insured was misled into accepting the clause.
- Trial court denied motions to compel arbitration, finding the clause procured by material omission/misrepresentation and contrary to Florida public policy; insurer appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the delegation clause ("arbitrability decided by arbitrator") is enforceable | Plaintiffs challenged the arbitration agreement generally but did not specifically attack the delegation clause | Insurer: delegation clause is clear and delegates arbitrability to the arbitrator | Court: delegation clause valid and enforceable because plaintiffs did not specifically challenge it; arbitrability must be decided by the arbitrator |
| Whether non‑signatory plaintiffs can be compelled to arbitrate | Plaintiffs: as non‑signatories they cannot be forced to arbitrate | Insurer: plaintiffs are equitably estopped from accepting benefits while avoiding arbitration | Court: estoppel applies; plaintiffs bound to arbitrate because they seek benefits of the policy while avoiding its burdens |
| Whether the arbitration clause violates Florida public policy by requiring California law/venue | Plaintiffs: clause is contrary to Florida public policy and thus unenforceable | Insurer: clause is severable and enforceable; delegation governs arbitrability | Court: declined to decide public‑policy argument on appeal, leaving validity challenges to arbitrator after enforcing delegation clause |
| Whether the trial court erred in denying motion to compel arbitration | Plaintiffs: various factual/contract formation defenses justify denial | Insurer: trial court should have compelled arbitration under FAA and the policy | Court: trial court erred; reversed and remanded to compel arbitrability to arbitrator |
Key Cases Cited
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (party must specifically challenge delegation clause to avoid arbitrator deciding arbitrability)
- BDO Seidman, LLP v. Bee, 970 So.2d 869 (Fla. 4th DCA 2007) (construction of arbitration provisions reviewed de novo)
- Best v. Educ. Affiliates, Inc., 82 So.3d 143 (Fla. 4th DCA 2012) (unchallenged delegation clause leaves arbitrability for arbitrator)
- ATP Flight Sch., LLC v. Sax, 44 So.3d 248 (Fla. 4th DCA 2010) (delegation clauses obligate arbitrator to decide validity challenges unless clause itself is specifically attacked)
- Shotts v. OP Winter Haven, Inc., 86 So.3d 456 (Fla. 2011) (distinguished where no delegation clause exists)
- Stalley v. Transitional Hosps. Corp., 44 So.3d 627 (Fla. 2d DCA 2010) (general rule that only parties to arbitration agreement are compelled to arbitrate)
- Bahamas Sales Assoc., LLC v. Byers, 701 F.3d 1335 (11th Cir. 2012) (equitable estoppel prevents taking contractual benefits while avoiding arbitration)
- Int'l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000) (non‑signatory may be estopped from avoiding arbitration when asserting benefits of the contract)