TROJAN HORSE, INC., AND KATHLEEN O'DONNELL, APPELLANTS,
v.
LAKESIDE GAMES D/B/A LEISURE DYNAMICS, INC., APPELLEE

Fla. 3d DCA | 1988-06-07
No. 88-116
Before HUBBART, BASKIN and DANIEL S. PEARSON, JJ.
526 So. 2d 194 Florida District Court of Appeal, Third District (1988) Positive Treatment
Cited by 19 cases

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Holding

The Federal Arbitration Act supersedes inconsistent provisions of the Florida Arbitration Code, requiring state courts to apply the FAA to contracts involving interstate commerce.


Headnotes

[1] The Federal Arbitration Act supersedes inconsistent provisions of state arbitration codes when contracts involve interstate commerce.

[2] State courts must apply the Federal Arbitration Act to arbitration agreements within the scope of the Act, regardless of contrary state law.

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Facts & Procedural History

Appellants sued for breach of a licensing agreement. The agreement contained a clause requiring arbitration in Minnesota. The trial court granted a mo…

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Opinion of the Court
BASKIN, Judge.

BASKIN, Judge.

Trojan Horse, Inc., [Trojan Horse] and Kathleen O’Donnell seek reversal of an interlocutory order granting a motion to compel arbitration filed by Lakeside Games, d/b/a Leisure Dynamics, Inc., [Lakeside] pursuant to provisions in the parties’ licensing agreement and staying the action pending arbitration in another state. We affirm.

The contract at issue pertains to a board game and involves manufacturing and distribution rights “in the United States of America and elsewhere throughout the world.” The developer of the game, Trojan Horse, filed a three-count complaint seeking compensatory and punitive damages along with injunctive relief, an accounting, and attorney’s fees for Lakeside’s alleged breach of contract. The complaint asserted that Lakeside failed to perform its contractual obligations. Other allegations cited Lakeside’s failure to pay Trojan Horse royalties, or to return the prototype game. Lakeside filed a motion to stay; Trojan Horse filed a memorandum of law in opposition to the motion to stay. In an order granting Lakeside’s motion, the trial court considered the arbitration clause in the contract. It provides:

12.03 — This Agreement was made in the State of Minnesota and shall be construed in accordance with the laws thereof. Any dispute arising out of or in connection with this Agreement or any of the exhibits hereto, their interpretation or enforcement shall be submitted to arbitration in Minneapolis, Minnesota, in accordance with the rules of the American Arbitration Associations, and judgment upon the award of any such arbitration may be entered in any court having jurisdiction thereof.

The issue before us is whether the United States Arbitration Act [Federal Arbitration Act], 9 U.S.C. § 2 (1970), supersedes inconsistent provisions of the Florida Arbitration Code, § 682, Fla.Stat. (1983). We hold that it does and that state courts must apply the Federal Arbitration Act to contracts involving interstate commerce.

Under the Florida Arbitration Code, § 682.02, Fla.Stat. (1983), Florida courts lack statutory authority to enforce agree-mente to arbitrate under the law of other states.1 A contractual agreement to arbitrate in another jurisdiction is voidable by either party, Damora v. Stresscon Int’l, Inc., 324 So. 2d 80 (Fla.1975), unless the contract involves interstate commerce. Old Dominion Ins. Co. v. Dependable Reinsurance Co., Ltd., 472 So. 2d 1365 (Fla. 1st DCA 1985); Donmoor, Inc. v. Sturtevant, 449 So. 2d 869 (Fla. 5th DCA 1984); Butcher & Singer, Inc. v. Frisch, 433 So. 2d 1360 (Fla. 4th DCA 1983); Stebbins, Inc. v. Nystrum, 422 So. 2d 1105 (Fla. 4th DCA 1982); Lipton Professional Soccer, Inc. v. Mijatovic, 416 So. 2d 1236 (Fla. 1st DCA 1982).

Contracts in interstate commerce fall within the purview of federal law.

Section 2 of the Federal Arbitration Act,2 enacted pursuant to the commerce clause, U.S. Const, art. I, § 8, cl. 3, “is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary. The effect of the section is to create a body of federal substantive law of arbitrability applicable to any arbitration agreement within the coverage of the Act.” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983).

The Arbitration Act is enforceable in both state and federal courts, Southland Corp. v. Keating, 465 U.S. 1, 11-12, 104 S.Ct. 852, 858-59, 79 L.Ed.2d 1 (1984). “[I]n enacting § 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration." Perry v. Thomas, — U.S. -, 107 S.Ct. 2520, 2525, 96 L.Ed.2d 426 (1987), quoting Keating, 465 U.S. at 10, 104 S.Ct. at 858, 79 L.Ed.2d at 12. Nothing in the Act indicates that “the broad principle of enforceability is subject to any additional limitations under state law.” Perry v. Thomas, — U.S. -, 107 S.Ct. 2520, 2525, 96 L.Ed.2d 426 (1987), quoting Keating, 465 U.S. at 11, 104 S.Ct. at 858, 79 L.Ed.2d at 12.

The supremacy clause, U.S. Const, art. VI, cl. 2, mandates that federal statutes enacted pursuant to the United States Constitution supersede inconsistent state law; accordingly, any inconsistency between section 682.02 and the Federal Arbitration Act must be resolved in favor of federal law. Because the contract in question involves interstate commerce, see Riverfront Properties, Ltd. v. Max Factor III, 460 So. 2d 948, 954 (Fla. 2d DCA 1984), we affirm the trial court’s Order Granting Motion to Stay.

Affirmed.

. Section 682.02, Fla.Stat. (1983), provides:

Arbitration agreements made valid, irrevocable, and enforceable; scope. — 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. Such agreement or provision shall be valid, enforceable, and irrevocable without regard to the justiciable character of the controversy; provided that this act shall not apply to any such agreement or provision to arbitrate in which it is stipulated that this law shall not apply or to any arbitration or award thereunder. . The Federal Arbitration Act, 9 U.S.C. § 2 (1970), provides:
Validity, irrevocability, and enforcement of agreements to arbitrate

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or inquiry for the revocation of any contract.


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  • Marine Env't P'rs, Inc. v. Johnson, 863 So. 2d 423 (Fla. 4th DCA 2003)
    …. We disagree with this analysis, since Florida courts were clearly required to follow federal law even before Seifert (at least in the vast majority of cases where interstate commerce is implicated). See, e.g., Trojan Horse, Inc. v. Lakeside Games, 526 So. 2d 194 (Fla. 3d DCA 1988). The problem here is not any attempted non-compliance with federal law but rather the fact that the federal circuits are themselves split on whether a showing of prejudice is required. See Raymond James, 851 So. 2d at 857-58 (and…
  • Rosen v. Shearson Lehman Bros., Inc., 534 So. 2d 1185 (Fla. 3d DCA 1988)
    …t between the Rosens and Shear-son Lehman Brothers, Inc. deals with transactions in interstate commerce, and the case is therefore governed, as the stockbroker correctly observes, by the Federal Arbitration Act. Trojan Horse, Inc. v. Lakeside Games, 526 So. 2d 194 (Fla. 3d DCA 1988). Under the Federal Arbitration Act, as Shearson again correctly points out, several federal circuit courts of appeals have held that a defendant must show prejudice before it can be said that the plaintiff’s institution of suit is…
  • Thomson McKINNON Sec., Inc. v. Kerrean Slater, 615 So. 2d 781 (Fla. 1st DCA 1993)
    …dings. SMITH and BARFIELD, JJ., concur. . Florida courts have held that the Federal Arbitration Act supersedes inconsistent provisions of the Florida Arbitration Code, Chapter 682, Florida Statutes. See, e.g., Trojan Horse, Inc. v. Lakeside Games, 526 So. 2d 194 (Fla. 3d DCA 1988). Under the facts of the case at bar, the statutes at issue, 9 U.S.C.S. § 9, and Sections 682.12 and 682.19, Florida Statutes (1991), do not conflict. . Section 9 of the federal act is merely a venue provision, and does not confer…

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