59 So. 3d 1173
Fla. Dist. Ct. App.2011Background
- Retainer Agreement between Feldman, Watkins, Landesman, and Beta Acquisition included a New York arbitration clause for disputes relating to the retainer.
- Feldman and Landesman were New York residents; Watkins resided in Arizona; Beta Acquisition anticipated Florida formation for Beta Drywall asset purchase.
- M & F assisted in forming Beta Acquisition and preparing for the Beta Drywall, Inc. acquisition, but a third entity ultimately completed the purchase.
- Appellees filed suit for legal malpractice and breach of fiduciary duty; M & F moved to compel arbitration in New York under FAA, which the trial court denied.
- The trial court held Florida courts could not compel arbitration in another state; this appeal followed raising FAA applicability and arbitration scope issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FAA apply to compel arbitration here? | Beta asserts the agreement involves interstate commerce and is governed by FAA. | M & F contends FAA governs the arbitration clause and requires enforcement in New York. | Yes; FAA applies because the retainer involved interstate commerce and falls within its scope. |
| Is the arbitration clause enforceable and broad enough to cover malpractice and fiduciary claims? | Clause precludes Florida-law arbitration concerns and is broad under 'arising out of' and 'relating to' terms. | Clause is enforceable but must comply with relevant professional conduct rules and Florida policy. | Yes; the clause is broad, enforceable, and applicable to the asserted claims; the trial court's denial was reversed. |
Key Cases Cited
- Berkowitz, Dick, Pollack & Bryant v. Smith, 49 So.3d 309 (Fla. 4th DCA 2010) (review of arbitration order de novo; arbitration in another state possible under FAA)
- Default Proof Credit Card Sys., Inc. v. Friedland, 992 So.2d 442 (Fla. 3d DCA 2008) (FAA applicability to interstate commerce contracts; broad view of interstate commerce)
- American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88 (4th Cir. 1996) (scope of arbitration when clause covers disputes arising out of relationship)
- J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315 (4th Cir. 1988) (interpretation of arbitration clause breadth)
- Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla. 1999) (broader interpretation of 'arising out of' and 'relating to' in arbitration clauses)
- Feldman v. Davis, 53 So.3d 1132 (Fla. 4th DCA 2011) (retainer agreements cannot include mandatory arbitration that violates professional rules)
- Vargas v. Schweitzer-Ramras, 878 So.2d 415 (Fla. 3d DCA 2004) (New York approach to fair arbitration clauses in retainer agreements)