LUMBERMENS MUTUAL CASUALTY COMPANY, APPELLANT,
v.
KENNETH W. FLORCZYK, ET AL., APPELLEES
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Lumbermens Mutual Casualty Company sought to enforce an indemnity agreement against the principals of a contractor. The defendants sought arbitration based on a later agreement containing an arbitration clause. The court held that the surety's claim, being based on the original indemnity agreement without an arbitration provision, was not subject to arbitration merely because a subsequent agreement between the parties contained such a clause.
The court held that the surety's right to file an action at law to enforce its rights under the 1981 General Agreement of Indemnity was not waived or modified by the arbitration provision in the 1985 agreement, because the arbitration clause clearly related only to disagreements regarding the 1985 agreement itself, not the original indemnity agreement.
[1] An arbitration provision in a subsequent agreement does not waive or modify a party's right to pursue legal action to enforce rights under a prior agreement that does not…
[2] A party's cause of action based on a contract without an arbitration provision is not automatically subject to arbitration merely because a subsequent agreement between t…
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Join FLexlaw to unlock all legal intelligence“The surety's complaint states a cause of action based on the General Agreement of Indemnity which does not provide for arbitration.”
Establishes that the legal claim is grounded in a non-arbitrable agreement
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Join FLexlaw to unlock all legal intelligenceIn 1981, a surety required a contractor's principals to sign a General Agreement of Indemnity (dated August 3, 1981) with no arbitration provision. In…
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COWART, Judge.
In 1981, as consideration for the issuance of certain construction performance bonds to a contractor, the surety required the principals of the contractor to enter into a General Agreement of Indemnity dated August 3, 1981, by which the indemnitors agreed to indemnify and save the surety harmless from all claims and expenses the surety might be required to pay as a result of executing the bonds. This General Agreement of Indemnity contains no provision for arbitration. Later the contractor encountered cash flow problems in connection with certain bonded projects as a result of which, at the request of the contractor and indemnitors, the surety advanced certain funds to evidence an agreement between the surety, the contractor, and the indemnitors relating to the surety advancing certain funds to enable the contractor to complete performance on certain bonded projects. The parties entered into an agreement dated December 30, 1985 in which agreement the contractor and the indemnitors reaffirmed their obligations under a General Agreement of Indemnity dated October 7, 1980.1 The agreement of December 30, 1985 contained an arbitration provision and also provided that except to the extent set forth therein, nothing in the agreement waived, prejudiced, or affected any right of the surety under the General Agreement of Indemnity executed by the contractor and indemnitors. This latter agreement provided that “[a]ny disagreement or dispute regarding this Agreement shall be determined by arbitration ...
The surety filed a law action basing its cause of action on the General Agreement of Indemnity dated August 3, 1981. The defendants filed a Notice of Intent to Arbitrate and Demand for Arbitration on the basis that the surety’s claim was based on the subsequent agreement which provided for arbitration. The trial court entered an order compelling arbitration. The surety appeals. We reverse. See Kelsey & Son, Inc. v. Architectural Openings, Inc., 484 So. 2d 610 (Fla. 5th DCA 1986), rev. denied, 492 So. 2d 1330 (Fla.1986) and Paine, Webber, Jackson & Curtis, Inc. v. Lucas, 411 So. 2d 1369 (Fla. 5th DCA 1982). The surety’s complaint states a cause of action based on the General Agreement of Indemnity which does not provide for arbitration. Merely because the 1985 agreement, which provided for arbitration, arose out of the relationship of the parties, to which the General Agreement of Indemnity also related, does not mean that the surety’s right to file an action at law to enforce its rights under the General Agreement of Indemnity dated August 3, 1981 was waived or modified by the arbitration provision contained in the 1985 agreement which provision clearly related to disagreements or disputes regarding the 1985 agreement.
The order compelling arbitration is reversed and this cause is remanded for further proceedings.
REVERSED AND REMANDED.
ORFINGER and DANIEL, JJ., concur. . We note, but do not understand, the inconsistency between the General Agreement of Indemnity dated August 3, 1981, which is in the record, and the reference in the subsequent agreement, dated December 30, 1983 to a General Agreement of Indemnity dated October 7, 1980.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Paine v. Lucas, 411 So. 2d 1369 (Fla. 5th DCA 1982)
- Eugene W. Kelsey & SON, Inc. v. Architectural Openings, Inc., 484 So. 2d 610 (Fla. 5th DCA 1986)