Sea Vault Partners v. Bermello, Ajamil & Partners
274 So. 3d 473
| Fla. Dist. Ct. App. | 2019Background
- BAP (architect) and Sea Vault (developer) contracted in 2014; disputes led BAP to record a lien and seek mediation, then arbitration under the parties' AAA agreement.
- Parallel proceedings: Brisas (non-party) sued to discharge BAP's lien in trial court; BAP filed counterclaims adding Sea Vault.
- Sea Vault sought injunctive relief in trial court to force litigation rather than arbitration; the trial court denied that motion in a one-line “Denied” order (the Injunction Order).
- AAA arbitration proceeded; Sea Vault failed to pay a required $5,000 arbitrator deposit. The arbitrator notified parties and denied BAP’s request in arbitration to sanction Sea Vault; the arbitration was later suspended/terminated for nonpayment.
- BAP then moved in the trial court for monetary sanctions for Sea Vault’s alleged bad-faith failure to arbitrate. The trial court awarded BAP $302,848.03 in sanctions. Sea Vault appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court could award monetary sanctions for Sea Vault’s failure to pay AAA $5,000 fee | BAP argued court could sanction Sea Vault for bad-faith failure to arbitrate and recover arbitration fees/costs | Sea Vault argued the trial court lacked authority to sanction conduct occurring in a voluntary arbitration and that the Injunction Order did not compel arbitration | Reversed: trial court erred to award sanctions for nonpayment because it never ordered arbitration and lacked authority over arbitration procedural matters |
| Whether the Injunction Order required the parties to proceed to arbitration | BAP relied on trial court’s characterization that the order compelled arbitration | Sea Vault argued the Order merely denied its injunctive request and did not direct arbitration | Held: Injunction Order simply denied relief; it did not direct arbitration |
| Whether the court’s inherent authority or Fla. Stat. ch. 682 allowed sanctions after arbitrator declined relief | BAP asserted court could impose sanctions under inherent power and chapter 682 | Sea Vault contended the arbitrator (not the court) decides procedural arbitration matters and §682.031 limits court intervention when arbitrator can act timely | Held: Court’s inherent authority does not reach procedural arbitration matters once parties submit to arbitration; §682.031 does not authorize sanctions where arbitrator was available and acted timely |
| Whether the trial court could award relief not requested in pleadings/proceedings | BAP sought sanctions in court after arbitration denial | Sea Vault argued courts cannot grant relief not pleaded or not requested in the underlying proceedings | Held: Trial court erred to grant sanctions for an obligation (payment of $5,000) that no party had sought to have the court compel |
Key Cases Cited
- Pino v. Bank of New York, 121 So. 3d 23 (Fla. 2013) (de novo review for pure questions of law)
- Wells v. Halmac Dev., Inc., 189 So. 3d 1015 (Fla. 3d DCA 2016) (issues of law in fee determinations reviewed de novo)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (procedural questions presumptively for arbitrator)
- John B. Goodman Ltd. P’ship v. THF Constr., Inc., 321 F.3d 1094 (11th Cir. 2003) (once parties submit to arbitration, court should not decide substantive arbitrability issues)
- Dealer Comput. Servs., Inc. v. Old Colony Motors, Inc., 588 F.3d 884 (5th Cir. 2009) (payment of arbitration fees is a procedural condition precedent for arbitrator to decide)
- Mogler v. Franzen, 669 So. 2d 269 (Fla. 2d DCA 1995) (trial court lacked jurisdiction over issues committed to arbitrator)
- Fla. Fish & Wildlife Conservation Comm’n v. Wakulla Fishermen’s Ass’n, 141 So. 3d 723 (Fla. 1st DCA 2014) (courts may not award relief not requested in pleadings)
- Goldman v. Estate of Goldman, 166 So. 3d 927 (Fla. 3d DCA 2015) (sanctions for bad-faith conduct reviewed for abuse of discretion)