BGT Group, Inc. v. Tradewinds Engine Services, LLC
62 So. 3d 1192
Fla. Dist. Ct. App.2011Background
- BGT Group, Inc. sold used gas turbine parts to Tradewinds Engine Services, LLC and a dispute arose over payment and alleged misrepresentation of part condition.
- Tradewinds demanded arbitration after BGT filed a demand for arbitration in January 2009; Tradewinds then sued for breach of contract and later fraud.
- BGT asserted an arbitration clause in its General Terms & Conditions of Sale, claimed to be incorporated by reference via the quote and purchase order.
- Tradewinds did not attach or reference the terms and conditions during negotiations; it first saw them after a contract dispute.
- The circuit court conducted an evidentiary hearing, denied BGT’s motion to compel arbitration, and stayed arbitration; reviewing court analyzes de novo.
- Opinion rejects incorporation by reference because the quote/PO did not sufficiently describe the collateral document containing the arbitration clause and Tradewinds never agreed to or had access to the terms at contract formation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement exists by incorporation by reference | BGT argues the quote and PO incorporated the terms and conditions containing arbitration. | Tradewinds contends the collateral terms were not described or attached and thus not incorporated. | No valid incorporation; arbitration not compelled. |
Key Cases Cited
- Kantner v. Boutin, 624 So.2d 779 (Fla.4th DCA 1993) (establishes incorporation-by-reference prerequisites)
- Hurwitz v. C.G.J. Corp., 168 So.2d 84 (Fla.3d DCA 1964) (collateral document must be sufficiently described)
- OBS Co. v. Pace Construction Corp., 558 So.2d 404 (Fla.1990) (express references must describe collateral document for incorporation)
- Affinity Internet, Inc. v. Consolidated Credit Counseling Services, Inc., 920 So.2d 1286 (Fla.4th DCA 2006) (website reference insufficient to describe collateral terms)
- Gustavsson v. Washington Mutual Bank, 850 So.2d 570 (Fla.4th DCA 2003) (informational side of terms must be located/attached)
- Kaye v. Macari Building & Design, Inc., 967 So.2d 1112 (Fla.4th DCA 2007) (collateral document described with industry standard or explicit reference)
- Avatar Properties, Inc. v. Greetham, 27 So.3d 764 (Fla.2d DCA 2010) (warranty disclosure requirement signaled incorporation)
- Mgmt. Computer Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627 (Fla.1st DCA 1999) (software license reference indicated where to obtain terms)