Lion Gables Realty Ltd. v. Randall Mechanical, Inc.
65 So. 3d 1098
Fla. Dist. Ct. App.2011Background
- Lion Gables Realty Limited Partnership seeks review of two non-final orders compelling arbitration of its third-party claims against Trustmark Builders, Randall Mechanical, and T.B.P.M. Plumbing.
- Threshold issue: whether Lion Gables is an intended third-party beneficiary of the subcontracts; trial court referred this dispute to arbitration.
- Second issue: whether Trustmark waived its right to arbitrate by participating in merits discovery; trial court did not find waiver.
- Review is de novo on threshold issues; the court must decide if a valid arbitration agreement exists and if Lion Gables is an intended beneficiary.
- If Lion Gables is an intended beneficiary, the related counts may be referred to arbitration; if not, the counts are to be dismissed.
- The court reverses the arbitration referral on the third-party beneficiary issue and remands for a determination of beneficiary status; it also reverses on Trustmark’s waiver and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Threshold issue: Is Lion Gables an intended third-party beneficiary? | Lion Gables claims it is an intended beneficiary of the subcontracts. | Subcontractors contend Lion Gables is not an intended beneficiary. | Threshold issue decided; trial court to determine beneficiary status; if beneficiary, proceed to arbitration. |
| Waiver of arbitration by Trustmark through merits discovery | Trustmark did not waive arbitration by participating in discovery. | Trustmark did waive arbitration by engaging in merits discovery. | Trustmark’s discovery conduct constitutes waiver; reversal and remand for waiver finding. |
Key Cases Cited
- Technical Aid Corp. v. Tomaso, 814 So.2d 1259 (Fla. 5th DCA 2002) (arb. threshold beneficiary analysis; intent to benefit third party)
- Hirshenson v. Spaccio, 800 So.2d 670 (Fla. 5th DCA 2001) (arbitration issues hinge on third-party beneficiary intent)
- Tartell v. Chera, 668 So.2d 1105 (Fla. 4th DCA 1996) (appellants cannot compel arbitration as non-parties or non-beneficiaries)
- Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla. 1999) (three-threshold issues to compel arbitration)
- Infinity Design Builders, Inc. v. Hutchinson, 964 So.2d 752 (Fla. 5th DCA 2007) (begin with whether contract to arbitrate exists)
- Florida Power & Light Co. v. Road Rock, Inc., 920 So.2d 201 (Fla. 4th DCA 2006) (non-parties cannot compel arbitration without being third-party beneficiaries)
- Nestler-Poletto Realty, Inc. v. Kassin, 730 So.2d 324 (Fla. 4th DCA 1999) (threshold existence of agreement between parties)
- Operis Group Corp. v. E.I. at Doral, LLC, 973 So.2d 485 (Fla. 3d DCA 2007) (challenge to existence of contract is threshold matter)
- Shearson, Lehman, Hutton, Inc. v. Lifshutz, 595 So.2d 996 (Fla. 4th DCA 1992) (evidence of signed arbitration clause required)
- Gordon v. Shield, 41 So.3d 931 (Fla. 4th DCA 2010) (merits discovery can constitute waiver of arbitration)
- Green Tree Servicing, LLC v. McLeod, 15 So.3d 682 (Fla. 2d DCA 2009) (merits discovery can waive arbitration right)
- Olson Electric Co. v. Winter Park Redev. Agency, 987 So.2d 178 (Fla. 5th DCA 2008) (totality of circumstances shows waiver of arbitration)
- Estate of Orlanis ex rel. Marks v. Oakwood Terrace Skilled Nursing & Rehab. Ctr., 971 So.2d 811 (Fla. 3d DCA 2007) (discovery use against arbitration right)