Shotts v. OP Winter Haven, Inc.
86 So. 3d 456
| Fla. | 2011Background
- Edward Clark sustained brain damage in a 1977 car accident and received long‑term care from his niece Gayle Shotts before being placed in a Florida nursing facility.
- Clark died in 2003 and Shotts, as personal representative, sued OP Winter Haven for negligence and fiduciary breaches; arbitration motion was filed pursuant to an admission‑era arbitration agreement.
- Arbitration agreement required AHLA rules, barred punitive damages, and contained a severability clause; it also stated governing law and confidentiality, among other terms.
- The trial court granted, and the district court affirmed, an order to compel arbitration, ruling the agreement was enforceable, not unconscionable, and partially severable.
- The Florida Supreme Court granted discretionary review to resolve whether the court or the arbitrator determines public‑policy validity of the arbitration agreement, and related questions about remedies and severability.
- The majority ultimately held that the trial court must decide public‑policy validity, that the remedial limitations violate public policy and are not severable, and that Rent‑A‑Center v. Jackson is inapplicable; the district court’s rulings were quashed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides public policy validity? | Court must decide validity of public policy. | Arbitrator may decide if delegation/public‑policy issues exist. | Court must decide public‑policy issue |
| Do the remedial limitations violate public policy? | Limitations undermine statutory remedies for nursing home residents. | Remedies provisions may be enforceable; public policy not violated. | Remedial limitations violate public policy |
| Are the remedial limitations severable from the arbitration agreement? | Severability should allow remaining contract to stand if invalid portions are removed. | Severability should permit removal of offending portions without rewriting the contract. | Remedial limitations not severable |
| Is Rent‑A‑Center Jackson applicable here? | Jackson reasoning should control arbitrator vs court allocation. | Jackson is distinguishable or inapplicable because no delegation clause. | Rent‑A‑Center inapplicable |
Key Cases Cited
- Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla.1999) (court decides if a valid written agreement to arbitrate exists)
- Global Travel Marketing, Inc. v. Shea, 908 So.2d 392 (Fla.2005) (no valid arbitration if unenforceable on public policy grounds)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Supreme Court 2006) (two types of challenges to arbitration; severability; contract law governs validity)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (Supreme Court 1967) (fraud in inducement of arbitration clause goes to arbitration; contract validity stays with arbitrator)
- Southland Corp. v. Keating, 465 U.S. 1 (Supreme Court 1984) (FAA creates federal substantive law governing arbitration)
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010) (arbitrator, not court, decides enforceability when delegation clause exists)
- Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (Supreme Court 1996) (FAA precludes states from singling out arbitration provisions for special treatment)
- Seifert v. U.S. Home Corp. (cited again for related principle), 750 So.2d 633 (Fla.1999) (court decides validity of arbitration agreement under Florida law)
- Local No. 234 v. Henley & Beckwith, Inc., 66 So.2d 818 (Fla.1953) (test for severability of contract provisions)