152 So. 3d 856
Fla. Dist. Ct. App.2014Background
- Global Trustee Services, Inc. (Global Trustee) and America-Indian Enterprises, Inc. (America-Indian) entered a Specific Service Agreement on August 6, 2007; Rajagopalan and Archiprete signed for America-Indian, Vernetti signed for Global Trustee.
- The Agreement authorized Global Trustee to hold a Bank of America Client Trust Account and to disburse funds to America-Indian at its discretion, and contained a broad arbitration clause for disputes arising out of or in connection with the Agreement.
- Raghav Seth sued Vernetti, Global Trustee, and Appellees alleging fraud, breach of contract, conspiracy, breach of fiduciary duty, and RICO violations arising from a $1,000,000 investment held in trust.
- Appellees (America-Indian, Rajagopalan, Archiprete) filed a cross-claim against Vernetti and Global Trustee for fraud, indemnity, and breach of fiduciary duty, alleging unauthorized disbursements from the Bank of America trust account established under the Agreement.
- Vernetti and Global Trustee moved to compel arbitration of the cross-claim under the Agreement’s dispute clause; the trial court denied the motion, and Vernetti/Global Trustee appealed the non-final order.
- The Fourth District reviewed whether the cross-claim was arbitrable (element two of the three-part arbitration test) and concluded the cross-claim arose out of and required reference to the Agreement, so it must be arbitrated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the cross-claim is arbitrable (i.e., arises out of or is sufficiently related to the Agreement) | Appellees argued their common-law claims do not depend on the Agreement and thus are not subject to arbitration | Vernetti/Global Trustee argued the cross-claim’s factual allegations mirror and require interpretation of the Agreement (trust account duties), so arbitration clause applies | Court held the cross-claim is arbitrable because resolution requires reference to the Agreement and there is a sufficient nexus; reversed and remanded to compel arbitration |
Key Cases Cited
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999) (three-part test for motion to compel arbitration)
- Kolsky v. Jackson Square, LLC, 28 So. 3d 965 (Fla. 3d DCA 2010) (claim is arbitrable if it raises issues requiring construction of the contract and has a nexus to the arbitration clause)
- Florida Envtl. Servs., Inc. v. Rentoumis, 950 So. 2d 466 (Fla. 4th DCA 2007) (look beyond the cause of action to the factual allegations to determine scope of arbitration)
- Ibis Lakes Homeowners Ass’n v. Ibis Isle Homeowners Ass’n, 102 So. 3d 722 (Fla. 4th DCA 2012) (appellate review of denial/grant of motion to compel arbitration is de novo)
- Zager Plumbing, Inc. v. JPI Nat’l Constr., Inc., 785 So. 2d 660 (Fla. 3d DCA 2001) (any doubt about arbitration scope resolved in favor of arbitration)