Marshall R. Cassedy, Jr. v. Kevin M. Hofmann, John N. Patronis, and Anne L. etc
153 So. 3d 938
| Fla. Dist. Ct. App. | 2014Background
- Appellees suffered financial losses allegedly due to willful misconduct by Appellant Cassedy, their former stockbroker.
- In 2009 Appellees sued Cassedy in state court to recover losses and Cassedy moved to compel arbitration based on account documents.
- Appellees opposed arbitration, arguing the arbitration provisions were not binding or enforceable.
- In 2013, after minimal movement, Appellees voluntarily dismissed the 2009 case without prejudice, then filed a FINRA arbitration claim.
- Cassedy sought a court injunction to stop arbitration, arguing Appellees waived their right by litigating in court in 2009.
- The trial court granted summary judgment that waiver issues should be resolved by the arbitrator under Howsam, a view this Court reverses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides waiver by prior litigation? | Cassedy argues waiver is for arbitrator. | Appellees argue waiver is a court issue due to litigation conduct. | Presumptively for the court to decide. |
| Does Howsam apply to waiver-by-prior-litigation claims? | Howsam governs procedural gateway questions and thus arbitration. | Howsam's framework applies to this dispute. | Howsam does not apply to waiver-by-prior-litigation claims. |
| Was the trial court correct in applying Howsam to require arbitration for waiver? | Waiver issues belong to arbitrator under Howsam. | Waiver by litigation is a court issue. | Incorrect application; reversal warranted. |
Key Cases Cited
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (distinguishes gateway questions from dispute-related procedural defenses)
- Marie v. Allied Home Mortgage Corp., 402 F.3d 1 (1st Cir. 2005) (waiver by litigation conduct preserved for court; 60-day contract limit treated as procedural)
- Ehleiter v. Grape Tree Shores, Inc., 482 F.3d 207 (3d Cir. 2007) (waiver-by-litigation disputes remain with the court per Third Circuit)
- JPD, Inc. v. Chronimed Holdings, Inc., 539 F.3d 388 (6th Cir. 2008) (court-to-decide forum for waiver consistent with other circuits)
- Grigsby & Associates, Inc. v. M Securities Investment, 664 F.3d 1350 (11th Cir. 2011) (presumes court adjudication of waiver-by-prior-litigation to curb forum shopping)
- Nat’l Am. Ins. Co. v. Transamerica Occidental Life Ins. Co., 328 F.3d 462 (8th Cir. 2003) (example where waiver issue treated as court-based)
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (U.S. 2003) (context for arbitrability defenses; not directly controlling waiver by litigation)