ROBERT K. KESSEL, JERRY S. WOODS, EDWIN H. CHAMBERLAIN AND DOWN EAST DEVELOPERS, INC., APPELLANTS,
v.
ROBERTO DUGAND, HUMBERTO VALDEZ, HERNANDO CELEDON, ENRIQUE GERLEIN, GUILLERMO FERNANDEZ, JOSE ANTONIO PATERNOSTRO, FERNANDO MEMOYO, CONSOLATO MALAVENDA, DILYS CORP., N.V., FLAIRTON CORP., N.V., AND M.B.A. INVESTMENTS, INC., APPELLEES

Fla. 4th DCA | 1987-06-10
No. 4-86-1277
LETTS and GUNTHER, JJ., concur.
508 So. 2d 45 Florida District Court of Appeal, Fourth District (1987) Positive Treatment
Cited by 4 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Appellants challenged a trial court order requiring them to split the initial arbitration fees with appellees. The court held that the party initiating arbitration (here, appellees) must pay the upfront expenses to commence the proceeding, reversing the trial court's directive to split costs.


Holding

The party initiating the arbitration proceeding (the party pursuing the claim) must pay the initial arbitration expenses required to commence the proceeding. The trial court lacks authority to require the parties to split these upfront costs. The arbitrator's award at the conclusion of the proceeding will determine the final allocation of all arbitration expenses.


Headnotes

[1] Unless otherwise provided in the agreement or provision for arbitration, the arbitrators’ and umpire’s expenses and fees, together with other expenses, not including coun…

[2] The initial payment of arbitration expenses required to commence a proceeding should be paid by the party initiating it.

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Key Quotes

“Unless otherwise provided in the agreement or provision for arbitration, the arbitrators' and umpire's expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.”

The controlling Florida statute governing allocation of arbitration fees and expenses

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Facts & Procedural History

Appellees acquired an interest in a limited partnership with appellants under an agreement containing an arbitration clause for dispute resolution. Ap…

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Opinion of the Court
DOWNEY, Judge.

DOWNEY, Judge.

This is a timely appeal from a non-final order of the circuit court directing the parties to proceed to arbitration and providing that each party shall pay one-half of the fee necessary to institute the arbitration proceeding. Appellants contend the trial court has no authority to require them to pay part of the “up front” expense of the arbitration and, thus, have perfected this appeal.

Appellees acquired an interest in a limited partnership with appellants. Their agreement provided that any disputes arising within the partnership should be resolved by arbitration. A dispute did arise as a result of which appellees sued appellants in the circuit court for breach of contract, fraud and deceit. Appellants answered and moved to stay the suit because of the arbitration provisions of the agreement. The trial court granted the stay and, pursuant to appellees’ motion, appointed an arbitrator and ordered the parties to each pay one-half of the required arbitration fee to commence the proceeding.

With reference to fees and expenses incurred in an arbitration proceeding, section 682.11, Florida Statutes (1985), provides:

Fees and Expenses of Arbitration. — Unless otherwise provided in the agreement or provision for arbitration, the arbitrators’ and umpire’s expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.

Thus, it appears that, except for attorney’s fees, the fees and expenses of arbitration are to be determined and allocated by the arbitrators in their award. That provision controls here because there is no provision relative to fees, etc., in the agreement between the parties. This does not, however, resolve the issue between these parties as to who must pay the so-called up front money to commence the proceedings. The trial court said split it; the appellants say that the appellees, having initiated the arbitration, should pay it; and appellees opt for the trial court’s suggestion.

We hold that the initial payment of the arbitration expenses required to commence the proceeding should be paid by the party initiating it, i.e., the party pursuing the claim. This seems to be a logical and reasonable resolution of the problem and one consistent with precedent. The American Arbitration Association Rules provide that the party initiating the proceeding must advance the necessary fee. American Arbitration Association, Commercial Arbitration Rules § 48 (1986). In A.P. Brown Company v. Superior Court, 16 Ariz.App. 38, 490 P. 2d 867 (1971), the Arizona court held the initiator should advance the expense money, and it is commonly the plaintiff or movant in all courts who advances the initial expense to start the suit. The arbitrator’s award made at the close of the proceeding designates who will end up footing the bill. The circuit court, however, has no authority to make any such award at the beginning of the proceeding as was done here. Having so decided, we need not treat appellants’ other points.

That portion of the order appealed from that directs the parties to split the initial expenses is reversed.

LETTS and GUNTHER, JJ., concur.


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Citator

Cited By

  • N. Am. van Lines v. Collyer, 616 So. 2d 177 (Fla. 5th DCA 1993)
    …ies to deposit, “in advance of any hearings,” [emphasis added] such amount that the AAA deems necessary to defray the expense of the arbitration and that the party initiating the arbitration must advance the necessary fee. See also Kessel v. Dugand, 508 So. 2d 45, 46 (Fla. 4th DCA 1987) (“We hold that the initial payment of the arbitration expenses required to commence the proceeding should be paid by the party initiating it, i.e., the party pursuing the claim.”). Given the clear and unambiguous agreement t…
  • Prospec, L.L.C. v. Mazzei, 963 So. 2d 938 (Fla. 4th DCA 2007)
    …ion’s Commercial Arbitration Rules and’ Mediation Procedures states that “[t]he filing fee shall be advanced by the party or parties making a claim or counterclaim, subject to final apportionment by the arbitrator in the award.” In Kessel v. Dugand, 508 So. 2d 45 (Fla. 4th DCA 1987), the parties entered into an agreement that required them to submit all disputes to arbitration. When a dispute arose, the appellees disregarded the arbitration clause and filed a complaint in the trial court. See id. Thereafter,…

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