ANDREW J. RUSSELL
v.
HYDROPROCESSING ASSOCIATES, LLC; BREATHING SYSTEMS INC.; AND PETER THEW

Fla. 1st DCA | 2021-06-10
No. 20-1387
Florida District Court of Appeal, First District (2021)

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Synopsis

The appellate court reversed a trial court's order compelling arbitration, finding that the trial court erred by failing to determine the existence of a valid arbitration agreement with one of the appellees. The court emphasized that it is the trial court's responsibility to decide such issues, not to pass them to an arbitrator.


Holding

Yes, the trial court erred by failing to determine the existence of a valid arbitration agreement between the Appellant and Breathing Systems, Inc. It is the trial court's responsibility to decide such issues, not to delegate this determination to an arbitrator.


Headnotes

[1] A trial court must determine as a threshold matter whether a valid written arbitration agreement exists before compelling arbitration, and this determination is a matter…

[2] When an arbitration clause itself is challenged, the trial court has the responsibility to resolve the dispute and cannot delegate the threshold determination of arbitrab…

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Key Quotes

“Appellate courts review a trial court’s determination of whether a valid written agreement to arbitrate exists de novo.”

Establishes the standard of review for arbitration agreement existence.

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Facts & Procedural History

Appellant entered into two employment agreements, one with Hydroprocessing Associates, LLC (which included an arbitration provision) and another with …

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Opinion of the Court

Appellant challenges the trial court’s order granting Appellees’ motion to compel arbitration. We reverse the portion of the order requiring Appellant’s claims against Breathing Systems, Inc. to be determined through arbitration.

Appellate courts review a trial court’s determination of whether a valid written agreement to arbitrate exists de novo. HHH Motors, LLP v. Holt, 152 So. 3d 745, 747 (Fla. 1st DCA 2014). The Florida Arbitration Code controls the proceedings to compel and stay arbitration and states, in relevant part:

(2) On motion of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.

(3) If the court finds that there is no enforceable agreement to arbitrate, it may not order the parties to arbitrate pursuant to subsection (1) or subsection (2).

§ 682.03, Fla. Stat. (2020). “Absent a valid written agreement to arbitrate, no party may be forced to submit to arbitration.” Holt, 152 So. 3d at 747.

Here, Appellant executed two contemporaneous employment agreements, one with Breathing Systems, Inc. and the other with Hydroprocessing Associates, LLC. The employment agreement with Hydroprocessing Associates, LLC included an arbitration provision. However, the employment agreement with Breathing Systems, Inc. did not include an arbitration provision and included an integration clause stating that the agreement was the entire agreement between the parties and it superseded all prior agreements.

Evidentiary hearings were held and the focus of the argument during the hearings was whether Appellant had signed the Hydroprocessing Associates, LLC employment agreement. As a result, the trial court’s written order failed to address whether there was a valid arbitration agreement between Appellant and Breathing Systems, Inc. and how the Hydroprocessing Associates, LLC agreement affected the agreement. At the conclusion of the second evidentiary hearing, the trial court stated that it was going to “send [this issue] to the arbitrator and let him look at it.” By passing this issue to the arbitrator, the trial court determined that it did not have jurisdiction to consider whether there was a valid arbitration agreement between Appellant and Breathing Systems, Inc. The trial court’s ruling that it lacked jurisdiction to determine this issue was incorrect.

It is the trial court’s responsibility to determine whether a valid arbitration agreement exists, especially where the arbitration clause itself is being challenged. See Henry Schein, Inc. v. Archer and White Sales, Inc., 139 S. Ct. 524, 530 (2019); Schotts v. OP Winter Haven, Inc., 86 So. 3d 456, 465 (Fla. 2011); CEFCO v. Odom, 278 So. 3d 347, 351 (Fla. 1st DCA 2019); see also Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006). Here, Appellant challenged the existence of an arbitration agreement between himself and Breathing Systems, Inc., which related only to the arbitration provision of the agreement and not the agreement in general. As a result, it was the trial court’s responsibility to determine whether a valid arbitration agreement existed.

This responsibility was not altered by the conflicting arbitration provision contained in the employment agreement submitted by Hydroprocessing Associates, LLC, because typically where multiple documents containing conflicting arbitration provisions are submitted to the court, the court will determine whether a valid arbitration agreement exists. See Holt, 152 So. 3d at 748 (finding no legal error in the trial court’s conclusion that a retail installment sales contract and its merger clause operated to negate an arbitration clause in a separate retail purchase agreement); see also Duval Motors Co. v. Rogers, 73 So. 3d 261, 268–69 (Fla. 1st DCA 2011); Careplus Health Plans, Inc. v. Interamerican Med. Ctr. Grp., LLC, 124 So. 3d 968, 972 (Fla. 3d DCA 2013). As a result, the trial court erred by failing to determine whether a valid arbitration agreement existed between Appellant and Breathing Systems, Inc. before ordering their claims be determined through binding arbitration.

We reverse and remand for the trial court to determine whether a binding arbitration agreement exists between Appellant and Breathing Systems, Inc. REVERSED and REMANDED. TANENBAUM, J., concurs; MAKAR, J., concurs in result with opinion.


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