CT Miami, LLC v. Samsung Electronics Latinoamerica Miami, Inc.
201 So. 3d 85
| Fla. Dist. Ct. App. | 2015Background
- CT Miami (open-market phone distributor) signed and returned a 2009 Distributor Agreement to SELA, but SELA never countersigned; nonetheless the parties did business together from 2009–2014, transacting ~ $1 billion.
- The Distributor Agreement contains an arbitration clause (AAA, Miami) and defines the effective date as when all parties sign.
- After CT Miami failed to pay roughly $21 million in invoices, SELA filed for arbitration under the Distributor Agreement; CT Miami sued in circuit court and moved to stay arbitration, arguing no binding contract existed because SELA never signed.
- Trial court held (after a non-evidentiary hearing) that the Distributor Agreement was binding based on CT Miami’s signature, parties’ course of performance, emails, and audited financials, and compelled arbitration; CT Miami appealed.
- The appellate court agreed the trial court erred in saying the arbitrator could decide contract formation, but affirmed because the trial court independently found (without an evidentiary hearing) that no substantial issue as to formation was raised and that a binding agreement existed.
Issues
| Issue | CT Miami’s Argument | SELA’s Argument | Held |
|---|---|---|---|
| Who decides whether a contract containing an arbitration clause was ever formed? | Trial court must decide; CT Miami argued no agreement existed because SELA never signed. | SELA argued parties’ conduct and communications show assent so arbitration applies; alternatively arbitrator can decide. | Trial court (not arbitrator) must decide formation disputes; appellate court so holds. |
| Whether an evidentiary hearing was required on contract formation under pre-2013 Fla. Stat. §682.03(1) | CT Miami claimed a ‘‘substantial issue’’ was raised and an evidentiary hearing was required. | SELA argued undisputed record (signature, extensive performance, references to agreement) foreclosed any substantial factual dispute. | No evidentiary hearing required: CT Miami failed to raise a substantial issue; trial court’s factual findings on formation are supported and arbitration was properly compelled. |
Key Cases Cited
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (SCOTUS) (distinguishes challenges to arbitration clause vs. challenges to contract validity; reserves whether formation disputes belong to court or arbitrator)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (SCOTUS) (clarifies allocation of gateway issues between court and arbitrator)
- Chastain v. Robinson-Humphrey Co., 957 F.2d 851 (11th Cir.) (court must decide whether agreement was ever made when signature/formation is contested)
- Dodge of Winter Park, Inc. v. Morley, 756 So. 2d 1085 (Fla. 5th DCA 2000) (a contract may be enforced against the signing party even if the other party did not sign)
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999) (enumerates elements courts consider when ruling on motions to compel arbitration)