ENFORCEABILITY OF ARBITRATION CLAUSES

By: Randall Gilbert, Esq. ♦

♦ Randall L. Gilbert, was born in Miami, Florida, has argued to the Supreme Court of Florida and the District Courts of Appeal, Recipient of the National Institute of Trial Advocacy Award, 2003. Florida Certified Master Plumbing Contractor’s license, 1993; Member of Attorneys’ Title Fund, Vice Chairman of the Broward County Construction Lawyer's Association, 2005-2006; Broward County Bar Association; Licensed Florida Real Estate Agent, 2005; Admitted to Florida Bar, 1999, Practices in U.S. District Court, Southern and Northern Districts of Florida, 2000. Education: University of Florida (B.A., 1996); Nova Southeastern University, Shepard Broad Law Center (J.D., 1999). Practice Areas: Construction Litigation; Commercial Litigation; Contracts; Corporate; Appeals, and Real Property. Email: Randall L. Gilbert

 Firm Profile: The Firm counsels the construction industry primarily dealing with all sizes of State and Federal litigation and arbitration. Typical claims include licensure, construction liens and bonds, Non-payment, DBPR complaints, bidding, delays, defects, contract preparation and negotiation. 

Arbitration is an alternative method of having a dispute determined and which is final and binding. It is done in lieu of going to court, and thus the court will not hear nor determine the merits of a dispute where there is a valid arbitration clause.

Arbitrators are the persons to whom the dispute is submitted and are in effect private extraordinary judges, usually selected by the parties themselves.[1]

The Florida Arbitration Code provides that two or more parties may agree in writing to submit any controversy existing between them to arbitration at the time of the agreement, or may include a provision in a written contract for the settlement by arbitration of any controversy thereafter arising between them relating to such contract or the failure or refusal to perform the whole or any part thereof.[2]

An agreement to arbitrate, or a provision in a contract providing for the arbitration of disputes, is valid, enforceable, and irrevocable without regard to the justiciable character of the controversy.[3] The only question for a court to determine when looking to see whether an arbitration clause is enforceable is

(1) Whether the parties have a valid arbitration agreement;

(2) Whether an arbitrable issue exists; and

(3) Whether the right to arbitrate has been waived.[4]

Although public policy favors arbitration as an alternative to litigation,[5] because of the ability to expedite claims, reduce expenses usually incurred in litigation, and the concurrent validity of the agreement to substitute arbitrators of the parties own choosing for the one established by law;[6] the supreme court has stated that despite arbitration provisions being generally favored by the courts, the right to arbitration must be safeguarded by a party who seeks to rely upon that right and the party must not act inconsistently with the right. [7]

If under the totality of the circumstances, the defaulting party has acted inconsistently with the arbitration right, has voluntarily and intentionally relinquished the right to arbitrate, or engaged in conduct which implies the voluntary and intentional relinquishment of the right to arbitrate (e.g. filing suit or actively defending a lawsuit filed in the courts), then that party will have waived their right to arbitration.

But if the arbitration clause is determined to be valid, then to preserve the integrity of the arbitration process as a means of alternate dispute resolution, this Court may not allow itself to intervene where it is completely devoid of jurisdiction or authority. [8]

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[1] 4 Am. Jur. 2d, Alternative Dispute Resolution § 8.

[2] Florida Statute §682.02 regarding Arbitration agreements made valid, irrevocable, and enforceable; scope states: "Two or more parties may agree in writing to submit to arbitration any controversy existing between them at the time of the agreement, or they may include in a written contract a provision for the settlement by arbitration of any controversy thereafter arising between them relating to such contract or the failure or refusal to perform the whole or any part thereof."

[3] E.g., Roe v. Amica Mut. Ins. Co., 533 So. 2d 279, 281 (Fla. 1988); accord, Fla. Stat. §682.02 (2000).

[4] Raymond James Financial Services, Inc. v. Saldukas  896 So.2d 707, 711 (Fla. 2005); See also, Fla. Stat. 682.03.

[5] See, Larry Kent Homes, Inc. v. Empire of America FSA, 474 So. 2d 868, 869 (Fla. 5th DCA 1985), review denied, 484 So. 2d 7 (Fla. 1986); see also, City of Mount Dora v. Central Fla. Police Benev. Ass'n Inc. 600 So. 2d 520, 522 (Fla. 5th DCA 1992).

[6] See, Midwest Mut. Ins. Co. v. Santiesteban, 287 So. 2d 665, 667 (Fla. 1973)

[7] Raymond James Financial Services, Inc. v. Saldukas  896 So.2d 707, 711 (Fla. 2005).

[8] Value Car Sales, Inc. v Bouton 608 So 2d 860, 861 (Fla. 5th DCA 1992) (Arbitration agreements have consistently passed constitutional muster because the parties agreeing to arbitration have agreed to arbitration in lieu of litigation) See, generally, Art. I. §21, Fla. Const.