EXECUTIVE LIFE INSURANCE COMPANY, APPELLANT,
v.
JOHN HAMMER & ASSOCIATES, INC., APPELLEE

Fla. 2d DCA | 1990-11-07
No. 90-01308
SCHEB and DANAHY, JJ., concur.
569 So. 2d 855 Florida District Court of Appeal, Second District (1990) Positive Treatment
Cited by 16 cases

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Synopsis

Executive Life Insurance Company appealed an order denying its motion to compel arbitration against its former agent John Hammer & Associates, Inc. The court reversed, holding that Executive Life did not waive its right to arbitration by threatening litigation or refusing to meet in Florida, and that any dispute over whether informal settlement conditions were satisfied should be resolved by the arbitrator.


Holding

Executive Life did not waive its arbitration right. Mere statements concerning litigation do not constitute a waiver, and Executive Life did not actively participate in the lawsuit in a manner inconsistent with arbitration rights. Additionally, whether the informal settlement condition precedent was satisfied is a question for the arbitrator, not the trial court.


Headnotes

[1] A party does not waive its right to arbitration by making statements of intent to litigate if the party has not actively participated in the litigation or taken actions i…

[2] Statements of intent to litigate can be considered a ploy to forestall litigation and do not necessarily constitute a waiver of the right to arbitrate.

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Key Quotes

“[QUOTE REDACTED — failed verbatim audit (paraphrase, not verbatim). See original_text for the text as originally displayed.]”

Establishes the standard for waiver of arbitration rights and applies it to reject the trial court's finding of waiver based on Executive Life's litigation threats.

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Facts & Procedural History

Executive Life Insurance Company and John Hammer & Associates, Inc. had a contract containing an arbitration clause requiring parties to attempt infor…

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Opinion of the Court
SCHOONOVER, Chief Judge.

SCHOONOVER, Chief Judge.

The appellant, Executive Life Insurance Company, challenges an order denying its motion to stay and to compel arbitration. We agree with the appellant’s contention that the trial court erred in finding that the appellant’s actions were inconsistent with its right to arbitrate and that it, therefore, waived arbitration. We, accordingly, reverse and remand.

The appellee, John Hammer & Associates, Inc., a Florida corporation, acted as an agent for the appellant, an insurance company domiciled in California. The contract entered into between the parties provided in part:

15. Arbitration. If any dispute or disagreement shall arise in connection with any interpretation of this agreement, its performance or nonperformance, or the figures and calculations used, the parties shall make every effort to meet and settle their disputes in good faith informally. If the parties cannot agree on a written settlement within ninety (90) days after it arises, or within a longer period agreed upon by the parties, then the matter in controversy shall be settled by arbitration, in accordance with the rules of the American Arbitration Association, and judgement (sic) upon the award rendered by the arbitrator^) may be entered in any court having jurisdiction. The place of any arbitration shall be Los Angeles, California.

A dispute arose when the appellant requested repayment of certain commissions it had paid to the appellee in connection with several life insurance policies. The appellee refused to acknowledge that it had been overpaid and did not agree to settle the matter in response to the appellant’s statements that it would start litigation or initiate legal action. The appellee, however, offered to meet with the appellant in the state of Florida. The appellant refused this request, and the appellee subsequently filed an action for declaratory relief asking the trial court to determine its rights under the contract. After the appellee declined to dismiss the action and proceed to arbitration, the appellant filed a motion to stay and to compel arbitration. The trial court found that the appellant’s continued refusal to meet informally to attempt to resolve the dispute in good faith, together with statements as to its intention to litigate were inconsistent with its right to arbitrate and constituted a waiver. The appellant filed a timely notice of appeal from the court’s order denying the appellant’s motion to stay and to compel arbitration.

Although arbitration may be waived by actively participating in a lawsuit or taking action inconsistent with the right to arbitrate, see Prudential-Bache Securities, Inc. v. Pauler, 488 So. 2d 894 (Fla. 2d DCA 1986), the appellant’s statements concerning litigation did not constitute a waiver. The appellant did not actively participate in the litigation, and its statements did not constitute action inconsistent with the right to arbitrate. See Milton Schwartz & Assoc., Architects v. Magness Corp., 368 F.Supp. 749 (D.Del. 1974). Similar statements are often made as a ploy to forestall litigation. Milton Schwartz.

The arbitration clause in the contract provided that the parties “shall make every effort to meet and settle their dis putes in good faith informally.” To the extent this provision can be interpreted to be a condition precedent, the condition was met. The record shows that, while they did not meet face to face, the appellant and the appellee communicated by letter and telephone in attempts to settle this matter. Furthermore, if indeed this clause is a condition precedent, the issue of whether the condition was satisfied is a question for the arbitrator. See Contracting Northwest, Inc. v. City of Fredericksburg, 713 F. 2d 382 (8th Cir.1983) (the failure to comply with conditions precedent constitutes a procedural objection and procedural prerequisites to arbitration are questions for the arbitrator). See also Siam Feather & Forest Prods., Inc. v. Midwest Feather, Inc., 503 F.Supp. 239 (S.D.Ohio 1980), aff'd, 663 F. 2d 1073 (6th Cir.1981).

Accordingly, we reverse and remand for entry of an order granting the motion to stay and compelling arbitration.

SCHEB and DANAHY, JJ., concur.


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Citator

Cited By

  • Piercy v. The Sch. Bd. OF Wash. Cnty., 576 So. 2d 806 (Fla. 1st DCA 1991)
    …whether a procedural prerequisite was satisfied, such as timeliness of appellant’s request for the initial meeting with Goodman, is an issue to be decided by the arbitrator. Id. See also Executive Life Ins. Co. v. [*809] John Hammer & Assocs., Inc., 569 So. 2d 855, 856-57 (Fla. 2d DCA 1990). The final judgment is REVERSED and the cause REMANDED with directions to dismiss the complaint. BARFIELD, J., concurs. BOOTH, J., dissents without written opinion.…
  • Alderman v. City of Jacksonville, 902 So. 2d 885 (Fla. 1st DCA 2005)
    …bitrator, not a trial court. Piercy v. Sch. Bd. of Washington, 576 So. 2d 806 (Fla. 1st DCA 1991). This is true even if the time requirement for arbitration is labeled a condition precedent. See Executive Life Ins. Co. v. John Hammer & Assoc., Inc., 569 So. 2d 855 (Fla. 2d DCA 1990). White Construction is distinguishable because, there, the arbitration board ruled on the timeliness issue, whereas, in the instant ease, the issue was never submitted to the arbitration board but decided by the City and then by t…
  • …bargaining agreement limited to situation where contract violative of public policy). There are two recent Florida decisions which further indirectly apply the principle set forth in Wiley. See Executive Life Ins. Co. v. John Hammer & Ass’s, Inc., 569 So. 2d 855 (Fla. 2d DCA 1990) (issue of whether condition precedent satisfied question for arbitrator); Federated Dept. Stores, Inc. v. Pavarini Const. Co., Inc., 425 So. 2d 1212 (Fla. 4th DCA 1983) (court may decide question of whether arbitration has been wa…

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