219 So. 3d 246
Fla. Dist. Ct. App.2017Background
- Mary Miley was admitted to Rockledge Health & Rehabilitation in Sept. 2013 and signed an admission agreement containing an arbitration addendum.
- The arbitration addendum required arbitration of disputes arising from Miley’s residency and contained a provision that each party would bear its own attorneys’ fees.
- The addendum also included an express severability clause stating invalid provisions could be treated as omitted while preserving the rest of the agreement.
- In June 2015 Miley (through her attorney-in-fact) sued the facility, management company, and administrator under Florida’s Nursing Home Residential Rights Act, the Adult Protective Services Act (including the Act’s prevailing-party attorneys’ fees provision), and for breach of fiduciary duty.
- Defendants moved to compel arbitration; the trial court denied the motion, finding the attorneys’ fees clause conflicted with the APSA prevailing-party fee provision and was not severable. Defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration agreement’s attorneys’ fee clause that makes each party bear its own fees violates public policy by displacing the APSA prevailing-party fee remedy | The clause improperly supplants the statutory prevailing-party fee remedy under section 415.1111, so it is unenforceable | The parties agreed to allocate fees and arbitration; the fee clause should be enforced as written | The clause violates public policy because it effectively precludes the statutory prevailing-party attorneys’ fee remedy under the APSA and is unenforceable (court follows Hochbaum) |
| Whether the offending attorneys’ fee provision is severable from the arbitration agreement so that arbitration may proceed | The entire arbitration agreement should be invalidated because the fee provision is integral | The arbitration agreement contains an express severability clause and the fee provision does not go to the essence of the arbitration agreement | The attorneys’ fee provision is severable (per the severability clause and Shotts standard); the trial court erred in denying the motion to compel arbitration |
Key Cases Cited
- Hochbaum v. Palm Garden of Winter Haven, LLC, 201 So. 3d 218 (Fla. 2d DCA 2016) (arbitration clause limiting statutory attorneys’ fees under APSA violates public policy)
- Shotts v. OP Winterhaven, Inc., 86 So. 3d 456 (Fla. 2011) (severability analysis: invalid clause only voids entire agreement if it goes to the essence)
- Estate of Novosett v. Arc Villages II, LLC, 189 So. 3d 895 (Fla. 5th DCA 2016) (severability clause not dispositive; determine whether offending clause affects essence)