155 So. 3d 1160
Fla. Dist. Ct. App.2014Background
- Bari Builders (subcontractor) sought to compel arbitration under a subcontract with Hovstone Properties (developer) after Hovstone was sued in a condominium construction-defect action and impleaded Bari.
- The subcontract contains an explicit arbitration clause requiring AAA Construction Industry Arbitration Rules for “any controversy or claim arising out of or relating to this contract.”
- The subcontract also contains separate jury-waiver language: “IN ALL ACTIONS THE PARTIES WAIVE THE RIGHT TO JURY AND AGREE TO DETERMINATION OF ALL FACTS BY THE COURT.”
- Hovstone opposed arbitration, arguing the jury-waiver language created an ambiguity requiring disputes to be resolved by bench trial in court rather than arbitration.
- The trial court denied Bari’s motion to compel arbitration, finding the provisions conflicted; Bari appealed solely on whether a valid written arbitration agreement exists.
- The Fourth District reversed, holding the arbitration clause is unambiguous and can be read compatibly with the jury-waiver provision, so Hovstone’s subcontract claims must be arbitrated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid written agreement to arbitrate exists | Bari: subcontract’s arbitration clause covers any controversy or claim and is enforceable | Hovstone: jury-waiver language conflicts with arbitration clause, creating ambiguity that defeats arbitration | Court: arbitration clause is clear and harmonizable with jury waiver; arbitration compelled |
| How to interpret competing dispute-resolution provisions | Bari: read clauses together; arbitration governs disputes and court entry of award precludes jury | Hovstone: clauses point to court resolution and bench trial, so arbitration ambiguous | Court: clauses read complementary — arbitration for disputes, bench trials only if parties waive arbitration |
| Applicability of Seifert’s arbitration test | Bari: first-element (valid agreement) satisfied | Hovstone: factual ambiguity prevents finding a valid agreement | Court: under contract interpretation principles, valid agreement exists (focus on first element) |
| Relevance of Basulto decision | Hovstone: Basulto supports denying arbitration when dispute-resolution provisions conflict | Bari: Basulto concerned mutual understanding and factual findings, not pure contract interpretation | Court: Basulto inapposite because it turned on facts showing lack of meeting of minds, not clause interpretation |
Key Cases Cited
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999) (sets three-element test for motions to compel arbitration)
- BDO Seidman, LLP v. Bee, 970 So. 2d 869 (Fla. 4th DCA 2007) (arbitration-clause interpretation reviewed de novo)
- BallenIsles Country Club, Inc. v. Dexter Realty, 24 So. 3d 649 (Fla. 4th DCA 2009) (ambiguities in arbitration scope resolved in favor of arbitration)
- J.C. Penney Co. v. Koff, 345 So. 2d 732 (Fla. 4th DCA 1977) (contract must be read as a whole without fragmentation)
- Saturna v. Bickely Constr. Co., 555 S.E.2d 825 (Ga. Ct. App. 2001) (judicial-proceedings clause did not invalidate broad arbitration clause)
- Sims v. Clarendon Nat’l Ins. Co., 336 F. Supp. 2d 1311 (S.D. Fla. 2004) (clauses allowing legal proceedings can be reconciled with an arbitration requirement)