Phoenix Motor Company v. Desert Diamond Players Club, Inc.
144 So. 3d 694
Fla. Dist. Ct. App.2014Background
- Desert Diamond purchased four new vehicles from Phoenix Motor under printed purchase agreements that included a mandatory multi-step dispute resolution clause culminating in AAA arbitration.
- Each purchase agreement stated the purchaser would sign any additional documents required by the terms of payment and that the agreement’s procedures were the sole dispute-resolution procedures.
- Desert also executed an export policy for each vehicle, which imposed liquidated damages if vehicles were exported outside the U.S. within one year and stated that executing the purchase documents constituted acceptance of the export policy.
- After Desert purchased a fifth vehicle, Phoenix deducted liquidated damages for alleged export violations and Desert sued for declaratory relief, challenging the export-policy deductions.
- Phoenix moved to compel arbitration under the purchase agreements; the trial court denied the motion and Phoenix appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause in the purchase agreements covers disputes arising from the separately signed export policy | Phoenix: agreements were part of the same transaction; purchase agreement contemplated additional documents and thus its arbitration clause governs collateral documents | Desert: export policy contains no arbitration clause and does not incorporate or reference the purchase agreement’s arbitration provision | Court reversed — purchase agreement and export policy construed together; arbitration clause applies to export-policy disputes |
Key Cases Cited
- Morse Operations, Inc. v. Sonar Radio Corp., 449 So. 2d 1002 (Fla. 4th DCA 1984) (buyer’s order that contemplated additional documents controlled the transaction and its arbitration clause applied)
- Passerrello v. Robert L. Lipton, Inc., 690 So. 2d 610 (Fla. 4th DCA 1997) (arbitration in one contemporaneous document can bind related parties when documents are executed together and one incorporates defenses/claims against another)
- Affinity Internet, Inc. v. Consol. Credit Counseling Servs., Inc., 920 So. 2d 1286 (Fla. 4th DCA 2006) (arbitration clause does not extend to another document absent express reference or sufficient description to incorporate it)
- Temple Emanu-El of Greater Fort Lauderdale v. Tremarco Indus., Inc., 705 So. 2d 983 (Fla. 4th DCA 1998) (doctrine of incorporation by reference requires an expression of intent to be bound by the collateral document)
- Lee v. All Fla. Constr. Co., 662 So. 2d 365 (Fla. 3d DCA 1995) (arbitration clause in one contract cannot be extended to a separate contract that lacks arbitration language)