BOARDWALK PROPERTIES MNGMNT. INC. v. EMERALD CLINTON, LLC, etc. and EMERALD PALMS GP, LLC, etc.
16-3818
| Fla. Dist. Ct. App. | Oct 18, 2017Background
- Boardwalk Properties and Emerald Clinton were members of Emerald Palms GP, LLC, which controlled the partnership that owned Emerald Palms Apartments.
- The operating agreement required unanimous member consent for material decisions, including conveyance of property, but allowed submission to arbitration under §15.4 when members could not agree.
- Emerald Clinton wanted to sell the property; Boardwalk withheld consent and disputed its ownership percentage (claimed 50%; Emerald Clinton claimed 10%).
- The parties submitted the matter to arbitration over the sale; the arbitrator ordered the sale and also determined ownership percentages (90% Emerald Clinton, 10% Boardwalk), holding the issues were “inextricably intertwined.”
- Boardwalk moved in circuit court to vacate the portions of the award deciding ownership; the trial court confirmed the award in full. The Fourth DCA reviewed whether the arbitrator exceeded his authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded his authority by deciding members’ ownership percentages | Boardwalk: ownership determination was beyond the arbitration clause and not submitted; arbitrator lacked power to decide ownership | Emerald Clinton: ownership was intertwined with the sale decision and therefore within arbitration authority under §15.4 | The arbitrator exceeded his powers by deciding ownership interests; that portion of the award must be vacated |
Key Cases Cited
- Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla. 1999) (arbitration clause scope requires a nexus between dispute and contract)
- Schnurmacher Holding, Inc. v. Noriega, 542 So.2d 1327 (Fla. 1989) (arbitrator exceeds powers when deciding issues not pertinent to the submitted matter)
- Commc’ns Workers of Am. v. Indian River Cty. Sch. Bd., 888 So.2d 96 (Fla. 4th DCA 2004) (high conclusiveness of arbitration awards; limited judicial review)
- Am. Fed. of State, Cty. v. Miami-Dade Cty. Pub. Schs., 95 So.3d 388 (Fla. 3d DCA 2012) (de novo review of statutory question whether operating agreement conferred arbitrator jurisdiction)