PRUDENTIAL-BACHE SECURITIES, INC., APPELLANT,
v.
STEPHEN F. PAULER AND RITA C. PAULER, HIS WIFE, APPELLEES
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Prudential-Bache appealed the trial court's denial of its motion to compel arbitration, arguing it had not waived its arbitration rights. The appellate court reversed, holding that filing a motion to dismiss on technical grounds does not constitute active participation in litigation sufficient to waive the right to arbitrate.
Prudential-Bache did not waive its right to arbitration. Filing a motion to dismiss for failure to state a cause of action is not sufficiently inconsistent with the right to arbitrate to imply a waiver of that right.
[1] A party waives its right to arbitration by actively participating in a lawsuit.
[2] Filing a motion to dismiss a complaint for failure to state a cause of action does not constitute active participation in the lawsuit sufficient to waive the right to arb…
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Join FLexlaw to unlock all legal intelligence“a party is deemed to have waived arbitration if the right to arbitration is asserted after the party has actively participated in the lawsuit”
Establishes the legal standard for when waiver of arbitration rights occurs
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Join FLexlaw to unlock all legal intelligenceThe Paulers had a joint account agreement with Prudential-Bache containing an arbitration clause requiring disputes to be settled by arbitration. The …
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DANAHY, Judge.
The appellant (Prudential-Bache) appeals from an order denying its motion to compel arbitration, on the ground that Prudential-Bache “by its actions or lack thereof, has waived its right to demand arbitration.” We reverse.
The appellees (the plaintiffs) filed a complaint alleging that Prudential-Bache purchased the wrong stock for their account and, as a consequence, the plaintiffs suffered damages. The plaintiffs’ account with Prudential-Bache was subject to a “joint account agreement” in which the plaintiffs agreed that any controversy arising out of or relating to their account shall be settled by arbitration. The plaintiffs assert that Prudential-Bache failed to respond to the plaintiffs’ complaints and demands prior to the filing of this lawsuit, but there is no allegation by the plaintiffs that they ever demanded arbitration pursuant to their contractual agreement. Instead, they brought this lawsuit.
Prudential-Bache first filed a motion for enlargement of time within which to serve a response to the plaintiffs’ complaint or, alternatively, to serve a motion to compel arbitration. Four days later Prudential-Bache filed a motion to dismiss and to strike, directed to alleged deficiencies in the complaint. That motion did not refer to the arbitration right. However, nine days after filing its motion to dismiss and strike, Prudential-Bache filed a motion to stay the action and compel arbitration. The trial judge’s denial of that motion gave rise to this appeal.
The rule is that a party is deemed to have waived arbitration if the right to arbitration is asserted after the party has actively participated in the lawsuit. Balboa Insurance Co. v. Mills, 403 So. 2d 1149 (Fla. 2d DCA 1981). Thus we are confronted with the specific question whether Prudential-Bache’s motion to dismiss and strike, directed to deficiencies in the complaint, constituted such an active participation in the lawsuit as to constitute a waiver of the right of Prudential-Bache to compel arbitration. We hold that it did not. In Graham Contracting, Inc. v. Flagler County, 444 So. 2d 971 (Fla. 5th DCA 1983), the Fifth District Court of Appeal held that a party’s filing of a motion to dismiss its opponent’s complaint for failure to state a cause of action did not constitute a waiver of that party’s right to arbitrate the dispute. The court observed that the filing of the motion to dismiss was not so inconsistent with the right to arbitrate that a waiver may be implied therefrom. We agree with the reasoning and the holding in Graham Contracting, Inc. v. Flagler County.
Accordingly, we reverse and remand for further proceedings consistent herewith.
SCHEB, A.C.J., and SANDERLIN, J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
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Rosen v. Shearson Lehman Bros., Inc., 534 So. 2d 1185 (Fla. 3d DCA 1988)…/S v. Arison Shipping Co., 280 So. 2d 678, 681 (Fla.1973) (“A party’s contract right [to arbitration] may be waived by actively participating in a lawsuit or taking action inconsistent with that right.”); Prudential-Bache Securities, Inc. v. Pauler, 488 So. 2d 894, 895 (Fla. 2d DCA 1986) (“The rule is that a party is deemed to have waived arbitration if the right to arbitration is asserted after the party has actively participated in the lawsuit.”). The order compelling arbitration is reversed, and the cause…
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Hirschfeld v. Crescent Heights, 707 So. 2d 955 (Fla. 3d DCA 1998)…waiving the right to arbitration. The filing of a motion to dismiss directed at technical deficiencies in the complaint, such as the defendants’ first motion, is not “active participation” amounting to a waiver. See Prudential-Bache Sec. v. Pauler, 488 So. 2d 894 (Fla. 2d DCA 1986); Graham Contracting, Inc. v. Flagler County, 444 So. 2d 971 (Fla. 5th DCA 1983). Additionally, a formal motion to compel arbitration is not required when a movant seeks dismissal based on a contractual right to arbitrate. See Rink…
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Executive Life Ins. Co. v. John Hammer & Assocs., Inc., 569 So. 2d 855 (Fla. 2d DCA 1990)…denying the appellant’s motion to stay and to compel arbitration. Although arbitration may be waived by actively participating in a lawsuit or taking action inconsistent with the right to arbitrate, see Prudential-Bache Securities, Inc. v. Pauler, 488 So. 2d 894 (Fla. 2d DCA 1986), the appellant’s statements concerning litigation did not constitute a waiver. The appellant did not actively participate in the litigation, and its statements did not constitute action inconsistent with the right to arbitrate. Se…
Previewing 3 of 10 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Graham Contracting, Inc. v. Flagler Cnty., 444 So. 2d 971 (Fla. 5th DCA 1983)
- Balboa Ins. Co. v. W. G. Mills, Inc., 403 So. 2d 1149 (Fla. 2d DCA 1981)
- Willey v. State, 403 So. 2d 1149 (Fla. 1st DCA 1981)