SMITH BARNEY SHEARSON, INC., APPELLANT,
v.
HOWARD E. BERMAN, ET AL., APPELLEES
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Smith Barney Shearson appeals a temporary injunction prohibiting it from proceeding with a New York state court action to stay arbitration. The Florida appellate court reversed the injunction, holding that the party seeking to compel arbitration lacked a viable cause of action because the opposing party had not yet refused to arbitrate.
The court held that Berman failed to demonstrate a substantial likelihood of success on the merits of his compel arbitration claim because his cause of action had not accrued at the time he filed suit. A cause of action to compel arbitration accrues only when the respondent unequivocally refuses to arbitrate, and at the time Berman filed his complaint, Shearson had not refused to arbitrate. Therefore, Berman's claim was fatally defective and could not support a temporary injunction.
[1] A temporary injunction requires a showing of a substantial likelihood of success on the merits.
[2] An action to compel arbitration under the Federal Arbitration Act accrues only when the respondent unequivocally refuses to arbitrate.
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Join FLexlaw to unlock all legal intelligence“[A]n action to compel arbitration under the Federal Arbitration Act accrues only when the respondent unequivocally refuses to arbitrate, either by failing to comply with an arbitration demand or by otherwise unambiguously manifesting an intention not to arbitrate the subject matter of the dispute.”
Establishes the legal standard for when a cause of action to compel arbitration accrues under federal law
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Join FLexlaw to unlock all legal intelligenceBerman purchased investments from Shearson pursuant to agreements requiring arbitration of disputes through NASD. When a dispute arose, Berman filed a…
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PER CURIAM.
Defendant-appellant Smith Barney Shear-son, Inc. (Shearson) appeals from an order temporarily enjoining it from proceeding with an action in a New York state court. We reverse.
Plaintiffs-appellees (collectively “Berman”) purchased various investments from Shear-son. Berman’s investment agreements with Shearson provided that any disputes arising out of the agreements were to be submitted to arbitration in front of the National Association of Securities Dealers, Inc. (NASD). A dispute arose and Berman filed an action in the lower court seeking to compel Shearson to submit to arbitration under section 4 of the Federal Arbitration Act.
Soon thereafter, Berman filed a statement of claim with the .NASD. On receipt of that claim from the NASD, Shearson filed an action in New York state court and obtained an order requiring Berman to show cause why the arbitration proceeding should not be permanently stayed on the grounds that the claims were not arbitrable because they were time barred under section 15 of the NASD Code of Arbitration Procedure. In response to that action, Berman returned to the lower court and obtained an order temporarily enjoining Shearson from proceeding in its New York action. That order is the subject of the instant appeal.
“[A] temporary injunction can be granted only when there is a showing of (1) the likelihood of irreparable harm; (2) the unavailability of an adequate remedy at law; (3) substantial likelihood of success on the merits; and (4) considerations-of the public interest.” Naegele Outdoor Advertising Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla.1995). In the instant ease, Berman did not demonstrate a substantial likelihood of success on the merits, that is, that he would prevail on his claim to compel arbitration.
“[A]n action to compel arbitration under the Federal Arbitration Act accrues only when the respondent unequivocally refuses to arbitrate, either by failing to comply with an arbitration demand or by otherwise unambiguously manifesting an intention not to arbitrate the subject matter of the dispute.” PaineWebber Inc. v. Faragalli, 61 F. 3d 1063,1066 (3d Cir.1995). It is indisputable that at the time Berman filed his complaint in the lower court Shearson had not refused to arbitrate Berman’s claims. Thus, at the time Berman commenced the action, his cause of action had not accrued. This renders his claim fatally defective. See Hasam Realty Corp. v. Dade County, 178 So. 2d 747, 748 (Fla. 3d DCA 1965), cert. dismissed, 192 So. 2d 499 (Fla.1966)(“If a plaintiff has no valid cause of action on the facts existing at the time of' filing suit, the defect cannot ordinarily be remedied by the accrual of one while the suit is pending.”); see also Rolling Oaks Homeowner’s Ass’n, Inc. v. Dade County, 492 So. 2d 686 (Fla. 3d DCA 1986), rev. denied, 503 So. 2d 328 (Fla.l987)(same); Orlando Sports Stadium, Inc. v. Sentinel Star Co., 316 So. 2d 607 (Fla. 4th DCA 1975)(stating the general rule that a “plaintiff may not be permitted to cure the defect of non-existence of a cause of action when suit was begun, by amendment of his pleadings to cover subsequently accruing rights”).
Consequently, because of the defects in Berman’s claim to compel arbitration, he clearly did not, and could not, demonstrate a substantial likelihood of success on the merits. Accordingly, the order granting Ber-man’s motion for a temporary injunction is reversed.
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Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084 (Fla. 3d DCA 1998)…n adequate remedy at law; (3) a substantial likelihood of success on the merits; and (4) public interest considerations. See Naegele Outdoor Adver. Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla.1995); Smith Barney Shearson, Inc. v. Berman, 678 So. 2d 376, 377 (Fla. 3d DCA 1996). The critical issue in this appeal concerns the burden which must be met by C & T in establishing a substantial likelihood of success in its challenge to the commission’s decision rejecting C & T’s bid protest. In approachin…
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Heslop v. Earnest Moore, Jr., 716 So. 2d 276 (Fla. 3d DCA 1998)…ment.”) At best, it can only be said that the former husband has a “mere color-able claim” to a share of the former wife’s lottery winnings and this is insufficient to support the issuance of an injunction. See Smith Barney Shearson, Inc. v. Berman, 678 So. 2d 376, 377 (Fla. 3d DCA 1996); City of Jacksonville v. Naegele Outdoor Adver. Co., 634 So. 2d 750, 753 (Fla. 1st DCA 1994), approved, 659 So. 2d 1046 (Fla.1995); Cushman & Wakefield, Inc. v. Cozart, 561 So. 2d 368, 371 (Fla. 2d DCA 1990). Thus, given the…
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Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Orlando Sports Stadium, Inc. v. Sentinel Star Co., 316 So. 2d 607 (Fla. 4th DCA 1975)
- Naegele Outdoor Adv. Co. v. Jacksonville, 659 So. 2d 1046 (Fla. 1995)
- Hasam Realty Corp. v. Dade Cnty., 178 So. 2d 747 (Fla. 3d DCA 1965)
- Rolling Oaks Homeowner's Ass'n, Inc. v. Dade Cnty., 492 So. 2d 686 (Fla. 3d DCA 1986)
- Goldstein v. Marsha Kay Co., 192 So. 2d 499 (Fla. 1966)
- Crooke v. Wainwright, 192 So. 2d 499 (Fla. 1966)