ADAM BERGER, APPELLANT,
v.
FIREMAN'S FUND INSURANCE COMPANY, APPELLEE
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Adam Berger appeals a summary judgment in favor of his insurer, Fireman's Fund Insurance Company, challenging an arbitration escape clause in his uninsured motorist policy. The court holds that provisions allowing either party to repudiate an arbitration award if it exceeds $10,000 violate Florida's Arbitration Code and public policy, rendering such clauses unenforceable.
The arbitration escape clause is invalid and unenforceable because it contravenes the Florida Arbitration Code and public policy. An agreement to arbitrate necessarily requires that the parties accept the arbitrator's decision as final and binding, and a provision allowing repudiation based on dissatisfaction with the award violates this fundamental principle.
[1] An arbitration provision that allows either party to reject an award exceeding a certain monetary threshold is invalid and unenforceable.
[2] An agreement to arbitrate inherently implies an agreement to accept the arbitrator's decision as final and binding.
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Join FLexlaw to unlock all legal intelligence“An agreement to arbitrate is an agreement to accept the arbitrator's decision as final and binding.”
Establishes the fundamental requirement that arbitration agreements must be binding, forming the basis for striking down the escape clause.
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Join FLexlaw to unlock all legal intelligenceBerger held an automobile insurance policy from Fireman's Fund with $100,000 per person uninsured motorist coverage. The policy contained an arbitrati…
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PER CURIAM.
Plaintiff/insured Adam Berger appeals from a final order entering summary judgment in favor of his insurer, Fireman’s Fund Insurance Company, and denying Berger’s motion for summary judgment.
Fireman’s Fund insured Berger under an automobile policy which included uninsured motorist coverage in the amount of $100,-000 per person and $300,000 per accident. The policy also contained an arbitration escape clause which provided that an uninsured motorist award in excess of $10,000 is not binding and that either party, in such a case, could demand a trial. After Berger was injured in an automobile accident he made a claim for damages and arbitration, notwithstanding the amount, which Fire man’s Fund denied. Berger brought this declaratory action and moved for summary judgment seeking a determination that the arbitration escape provision is invalid and unenforceable. Fireman's Fund filed a cross motion for summary judgment requesting enforcement of the provision as written. The circuit court determined that the nonbinding arbitration provision did not contravene the Florida Arbitration Code, sections 682.01-22, Florida Statutes (1985). We reverse.
An agreement to arbitrate is an agreement to accept the arbitrator’s decision as final and binding. Bankers & Shippers Ins. Co. v. Gonzalez, 234 So. 2d 693, 695 (Fla. 3d DCA 1970) (“very essence of an arbitration is an agreement to be bound by the factual determination of the arbitrator and thus end the factual controversy”); Travelers Ins. Co. v. Luckett, 279 So. 2d 885 (Fla. 3d DCA 1973) (same). The instant arbitration provision which permits either party to repudiate the agreement if dissatisfied with an arbitration award in excess of $10,000, contravenes the Arbitration Code and public policy as expressed in judicial opinions and is therefore null and void. Claims brought under the policy must, therefore, be pursued in a court of law.
Reversed and remanded with instructions to grant Berger’s motion for summary judgment.
Before SCHWARTZ, C.J., and BARKDULL, HENDRY, HUBBART, NESBITT, BASKIN, DANIEL S. PEARSON, FERGUSON and JORGENSON, JJ.
PER CURIAM.
Motion for rehearing en banc is denied.
FERGUSON, Judge,
dissenting to denial of rehearing en banc.
The question presented is a close one on the law, but I am not persuaded by the motions for rehearing that the panel opinion is incorrect. Nevertheless, the question is of great importance because arbitration escape clauses are so prevalent in the automobile insurance industry.
The appellant sought a declaration only that the clause, which makes an arbitration award in excess of $10,000 nonbinding on the insurer, is both unlawful and severable. The panel opinion declares the escape clause unlawful and, essentially, nonseverable from the arbitration agreement. The parties apparently are in accord that the ruling affects many cases now scheduled for arbitration hearings, requiring that those cases now be filed as new court actions. That consequence suffices, I think, to qualify the decision as one of great importance.
DANIEL S. PEARSON, J., concurs.
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ROE v. AMICA Mut. Ins. Co., 533 So. 2d 279 (Fla. 1988)…BARKETT, Justice. We review Arnica Mutual Insurance Co. v. Roe, 515 So. 2d 1370 (Fla. 2d DCA 1987), because of conflict with Berger v. Fireman’s Fund Insurance Co., 515 So. 2d 997 (Fla. 3d DCA), review dismissed, 519 So. 2d 987 (Fla.1987). We have accepted jurisdiction1 to decide whether a clause in an insurance policy authorizing either party to reject at will an arbitration award in excess of a certain sum is contrary to th…
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Anibal Pastor v. Latin Am. Prop. & Cas. Ins. Co., 534 So. 2d 820 (Fla. 3d DCA 1988)…PER CURIAM. The appellee confesses error on the authority of Roe v. Amica Mut. Ins. Co., 533 So. 2d 279 (Fla.1988), decided after this appeal was filed. Roe disapproves of Berger v. Fireman’s Fund Ins. Co., 515 So. 2d 997 (Fla. 3d DCA 1987), invalidating an escape clause in an agreement to arbitrate, which was relied upon by the trial court. Accordingly, the order dismissing the appellant’s motion to compel arbitration is reversed and the cause is remanded for cons…
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The Hartford Ins. Co. v. Granowski, 530 So. 2d 448 (Fla. 4th DCA 1988)…s to the binding effect of the arbitration provisions which have been upheld by the second district in Arnica Mutual Insur. Co. v. Roe, 515 So. 2d 1370 (Fla. 2d DCA 1987), and disapproved by the third district in Berger v. Fireman’s Fund Insur. Co., 515 So. 2d 997 (Fla. 3d DCA), rev. dismissed, 519 So. 2d 987 (Fla.1987). DOWNEY, ANSTEAD and WALDEN, JJ., concur.…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Dubbin v. Equitable Life Assurance Soc'y OF the United States, 234 So. 2d 693 (Fla. 4th DCA 1970)
- The Travelers Ins. Co. v. Luckett, 279 So. 2d 885 (Fla. 3d DCA 1973)