JOE AND ELLEN LEE, APPELLANTS,
v.
SMITH BARNEY, HARRIS UPHAM & CO., INC., AND RICHARD W. JOHNSON, APPELLEES
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The court held that the Federal Arbitration Act does not preempt Florida law which reserves the determination of attorney's fees to the trial court, even when arbitration is involved.
[1] Under Florida law, the resolution of attorney's fees is deferred to trial judges and excluded from the authority of arbitrators.
[2] The Federal Arbitration Act does not preempt state laws that require judicial resolution of issues, such as attorney's fees, that parties have not agreed to submit to arb…
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Join FLexlaw to unlock all legal intelligenceAn arbitration panel denied all claims and ordered parties to bear their own costs and attorney's fees. The prevailing party, Smith Barney, sought att…
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FRANK, Chief Judge.
Joe and Ellen Lee appeal the trial court’s final judgment awarding Smith Barney, Harris Upham and Company, Inc. (Smith Barney), an attorney’s fee of $20,000. We have considered the two points raised by the Lees; only one merits discussion. We affirm.
The Lees demanded arbitration pursuant to Smith Barney’s membership in the American Stock Exchange, whose constitution provides that members “shall arbitrate all controversies arising in connection with their business ... between them and their customers ..., if the customer chooses to arbitrate.” After a three day proceeding a panel of arbitrators appointed by the American Arbitration Association entered an award denying all claims filed by the Lees and ordered that the parties “bear their own costs and expenses, including attorney’s fees.” Thereafter Smith Barney sought modification of the arbitral award in the trial court, contending that the arbitrators had no power under Florida law to decide entitlement to attorney’s fees. Smith Barney simultaneously requested fees in a separate motion filed pursuant to section 517.211(6), Florida Statutes (1991), the statute entitling the prevailing party “[i]n any action brought under this section,” to reasonable attorney’s fees so long as such an award is not deemed “unjust.” The trial court agreed with Smith Barney and modified the arbitral award.
Thus, it expunged the language that the parties bear their own attorney’s fees and awarded Smith Barney a reasonable fee of $20,000. The Lees appealed.
The Lees assert that the Federal Arbitration Act (FAA) grants authority to arbitrators to determine entitlement to attorney fees and that the FAA’s provisions supersede or preempt the provisions of the Florida Arbitration Code, which removes attorney’s fee questions from the range of arbitrable issues. See § 682.11, Fla.Stat. (1989).
The Lees rely upon Todd Shipyards Corp. v. Cunard Line, Ltd., 943 F. 2d 1056, 1064 (9th Cir.1991), for the proposition that federal arbitrators are entitled to pass upon the propriety of attorney’s fees “in light of the broad power of arbitrators to fashion appropriate remedies.” We are mindful of the FAA’s arguable preeminence over Florida’s arbitration code in circumstances where, as here, interstate commerce is involved, see United Services General Life Co. v. Bauer, 568 So. 2d 1321 (Fla. 2d DCA 1990), but we cannot ignore the notion “that the proper approach is to reconcile ‘the operation of both statutory schemes with one another rather than holding one completely ousted.’” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.S. 117, 128, 94 S.Ct. 383, 389-90, 38 L.Ed.2d 348 (1973) (quoting Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963)).
The Florida Legislature has expressly provided that attorney’s fees for time spent in arbitration are recoverable but only in the trial court upon a motion for confirmation or enforcement of the award. § 682.11, Fla.Stat. (1989).
In conformity with the statute, our court’s long-established policy has been to exclude the resolution of attorney’s fee demands from the arbitrators’ authority; Florida defers instead to the expertise of trial judges. See Tassinari v. Loyer, 189 So. 2d 651 (Fla. 2d DCA 1966) (“That the legislature chose to exclude [the attorney’s fee] question from the arbitrator’s determination is a credit to its wisdom”); see also, Fewox v. McMerit Constr. Co., 556 So. 2d 419 (Fla. 2d DCA 1989) (en banc), approved sub. nom., Insurance Co. of North America v. Acousti Engineering Co. of Florida, 579 So. 2d 77 (Fla.1991).
In contrast, there is nothing in the federal code denominating arbitration as the favored means of establishing a reasonable attorney’s fee, nor does the code contain an express preempting provision. As the Supreme Court emphasized in Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 477, 109 S.Ct. 1248, 1254, 103 L.Ed.2d 488 (1989), the FAA does not “occupy the entire field of arbitration” so long as the relevant state law does not require judicial resolution of an issue the parties had agreed to submit to arbitration. The Lees have not demonstrated a conflict between the state and federal codes nor have they shown that the attorney’s fee issue was intended for arbitral determination. We therefore reject the claim that the federal preemption doctrine controls the outcome of this matter. We have not overlooked our state’s prominent regard for arbitration as a favored means of dispute resolution, see Roe v. Arnica Mutual Insurance Company, 533 So. 2d 279, 281 (Fla.1988), but we have found scant authority inconsistent with the construction that section 682.11 precludes arbitrators from awarding fees. It is true that in Pierce v. J.W. Charles-Bush Securities, Inc., 603 So. 2d 625 (Fla. 4th DCA1992), an arbitration award of attorney’s fees was upheld but there the parties stipulated in advance that fees would be an arbitrable issue. The parties here did not agree to submit attorney’s fees to the arbitrators.
We approve the modification of the arbitration award and, accordingly, affirm.
CAMPBELL and THREADGILL, JJ., concur.
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Orkin Exterminating Co., Inc. v. Petsch, 872 So. 2d 259 (Fla. 2d DCA 2004)…see also Cheek v. McGowan Elec. Supply Co., 511 So. 2d 977 (Fla.1987). We note that even when the Federal Arbitration Act governs an arbitration agreement, Florida law controls the award of attorney’s fees.' Lee v. Smith Barney, Harris Upham & Co., 626 So. 2d 969, 971 (Fla. 2d DCA 1993); see also Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 751 So. 2d 143, 146-47 (Fla. 1st DCA 2000). The Florida Arbitration Code, § 682.11, Fla. Stat. (2001), states that “[u]nless otherwise provided in the agreemen…
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Sami Qubty v. Rasiklal Nagda, 817 So. 2d 952 (Fla. 5th DCA 2002)…a Arbitration Code is applied in such cases only to the extent it is not inconsistent with federal law. See Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 751 So. 2d 143, 146-147 (Fla. 1st DCA 2000); Lee v. Smith Barney, Harris Upham & Co., 626 So. 2d 969 (Fla. 2d DCA 1993); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Melamed, 405 So. 2d 790, 792 (Fla. 4th DCA 1981), approved, 476 So. 2d 140 (Fla.1985). Brokerage contracts concerning the sale of securities have been consistently treated as contrac…
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Cassedy v. Merrill Lynch, 751 So. 2d 143 (Fla. 1st DCA 2000)…. We disagree with the first point, but reverse on the second point. PREEMPTION OF SECTION 682.11 Another district court of appeal has rejected the preemption argument Cassedy raises as his first point. See Lee v. Smith Barney, Harris Upham & Co., 626 So. 2d 969 (Fla. 2d DCA 1993). “The Federal Arbitration Act was enacted pursuant to the commerce clause of the United States Constitution and supersedes inconsistent state law.” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Melamed, 405 So. 2d 790, 792 (Fla.…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Silver v. N.Y. Stock Exch., 373 U.S. 341 (U.S. 1963)
- Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 (U.S. 1989)
- Merrill Lynch v. Ware, 414 U.S. 117 (U.S. 1973)
- ROE v. AMICA Mut. Ins. Co., 533 So. 2d 279 (Fla. 1988)
- Fewox v. McMERIT Constr. Co., 556 So. 2d 419 (Fla. 2d DCA 1989)
- Ins. Co. OF N. Am. v. Acousti Eng'g Co. OF Fla., 579 So. 2d 77 (Fla. 1991)
- Pierce v. J.W. Charles-Bush Sec., Inc., 603 So. 2d 625 (Fla. 4th DCA 1992)
- Tassinari v. Valery J. Loyer, 189 So. 2d 651 (Fla. 2d DCA 1966)
- United Servs. Gen. Life Co. v. Bauer, 568 So. 2d 1321 (Fla. 2d DCA 1990)
- Todd Shipyards Corp. v. Cunard Line, Ltd., 943 F.2d 1056 (9th Cir. 1991)