345 So.3d 365
Fla. Dist. Ct. App.2022Background
- Varela, an attorney, joined Navarro Hernandez, P.L. as a partner in 2018 and signed an addendum to the firm’s Operating Agreement containing a mandatory arbitration clause.
- The Agreement set partner compensation, budgeting, disassociation/expulsion procedures, and delegated many governance matters to shareholders while reserving other disputes (including interpretation of the Agreement) to arbitration.
- Navarro terminated Varela on June 26, 2019. Varela sued alleging breach of contract, accounting, intentional infliction of emotional distress (IIED), fraudulent misrepresentation, and violations of the Florida Civil Rights Act (discrimination based on gender/pregnancy and handicap).
- Navarro moved to compel arbitration and dismiss; the trial court compelled arbitration for breach, accounting, and fraudulent misrepresentation, but denied arbitration for IIED and Florida Civil Rights Act claims.
- On appeal, the court reviewed de novo whether a sufficient nexus existed between the disputed claims and the Agreement’s arbitration clause and affirmed the denial of arbitration for IIED and statutory discrimination claims.
Issues
| Issue | Plaintiff's Argument (Varela) | Defendant's Argument (Navarro) | Held |
|---|---|---|---|
| Whether contract-based claims (breach, accounting, fraudulent misrepresentation) are arbitrable under the Agreement | These claims may be subject to arbitration only if they require construction of the Agreement | All claims arising from the partnership relationship fall within the Agreement’s arbitration clause and must be arbitrated | Court: These claims were arbitrable (trial court’s ruling affirmed as to them) |
| Whether IIED and Florida Civil Rights Act (employment/discrimination) claims are arbitrable | IIED and statutory discrimination claims arise from duties independent of the Agreement and do not require reference to or construction of the Agreement | Those claims arise from the partnership/termination and therefore are subject to the Agreement’s arbitration clause | Court: IIED and FCRA claims are not arbitrable—they lack the necessary nexus to the Agreement (affirmed) |
Key Cases Cited
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999) (establishes the ‘‘nexus’’ test: arbitration applies only when a claim arises from or requires construction of the contract containing the arbitration clause)
- Jackson v. Shakespeare Found., Inc., 108 So. 3d 587 (Fla. 2013) (contractual nexus exists if resolution of the dispute requires reference to or construction of the contract)
- Duty Free World, Inc. v. Miami Perfume Junction, Inc., 253 So. 3d 689 (Fla. 3d DCA 2018) (motion to compel arbitration reviewed de novo)
- Saunders v. St. Cloud 192 Pet Doc Hosp., LLC, 224 So. 3d 336 (Fla. 5th DCA 2017) (employee’s statutory discrimination claims not arbitrable despite employment agreement when claims do not relate directly to contract terms)
- Club Mediterranee, S.A. v. Fitzpatrick, 162 So. 3d 251 (Fla. 3d DCA 2015) (negligence/premises-liability claims by employee were not arbitrable where complaint did not rely on or require the employment agreement)