REGENCY ISLAND DUNES, INC., A DELAWARE CORPORATION, AND ATLANTIC GULF COMMUNITIES CORPORATION, A DELAWARE CORPORATION, APPELLANTS,
v.
FOLEY AND ASSOCIATES CONSTRUCTION COMPANY, INC., APPELLEE
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The trial court erred in compelling a parent corporation to arbitrate based on an unsupported alter ego theory without evidence and without providing notice to the nonparty.
A nonparty to an arbitration agreement cannot be compelled to arbitrate unless there is evidence that the nonparty is bound to the agreement, such as through a valid alter ego relationship, and the matter cannot be decided ex parte.
[1] A nonparty to an arbitration agreement cannot be compelled to arbitrate based on an unsupported alter ego theory, and such a determination cannot be made in an ex parte p…
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Join FLexlaw to unlock all legal intelligence“One who has not agreed, expressly or implicitly, to be bound by an arbitration agreement cannot be compelled to arbitrate.”
Court stating the fundamental principle governing arbitration agreements and nonparties.
Regency Island Dunes and Atlantic Gulf Communities sued Foley and Associates Construction Company. The trial court determined that claims were covered…
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FARMER, Judge.
In a nonfinal order, the trial court determined that the claims in suit were covered by an arbitration agreement and that the parent corporation of one of the two parties to the agreement was bound thereby as an alter ego. The order resulted from an ex parte proceeding by the party seeking to compel the nonparty to arbitrate. We reverse.
One who has not agreed, expressly or implicitly, to be bound by an arbitration agreement cannot be compelled to arbitrate. Tartell v. Chera, 668 So. 2d 1105 (Fla. 4th DCA 1996). In this case, the order is based on the theory that the parent corporation is an alter ego of the subsidiary corporation that actually signed the agreement. Even assuming that an alter ego to the signing party could be compelled to arbitrate, there is no evidence in the record to support a finding that this parent was an alter ego of the subsidiary. A mere allegation in an un-sworn complaint does not constitute the necessary evidence to support a finding of alter ego.
As it was necessary to adduce evidence showing that the nonparty was somehow bound to arbitrate under the agreement, it also follows that it was error to hear the matter ex parte and without notice.
REVERSED.
STONE, C.J., and GLICKSTEIN, J., concur.
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Stalley v. Transitional Hosps. Corp. OF Tampa, Inc., 44 So. 3d 627 (Fla. 2d DCA 2010)…re Corp. v. Estate of Linton ex rel. Graham, 953 So. 2d 574, 579 (Fla. 1st DCA 2007); Extendicare Health Servs., [*630] Inc. v. Estate of Patterson, 898 So. 2d 989, 991 (Fla. 5th DCA 2005); Regency Island, Dunes, Inc. v. Foley & Assocs. Constr. Co., 697 So. 2d 217, 218 (Fla. 4th DCA 1997). However, an exception to this general rule exists when the signatory of the arbitration agreement is authorized to act as the agent of the person sought to be bound, and “[n]on-signatories may be bound by an arbitration agr…
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Alterra Healthcare Corp. & Deanne M. Smith as to Alterra Sterling House of Tallahassee v. The Est. OF Jeanette Kelley Linton, 953 So. 2d 574 (Fla. 1st DCA 2007)…ent to arbitrate that was binding on Mrs. Linton, because she did not sign the agreement. In general, arbitration provisions are personal covenants that bind only the parties thereto. See Regency Isl. Dunes, Inc. v. Foley & Assocs. Contr. Co., Inc., 697 So. 2d 217, 218 (Fla. 4th DCA 1997); Karlen v. Gulf & Western Indus., Inc., 336 So. 2d 461, 462 (Fla. 3d DCA 1976). But the trial court correctly concluded that Mrs. Linton was an intended third-party beneficiary of the agreement in the present case. A nonsig-…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Tartell v. Chera, 668 So. 2d 1105 (Fla. 4th DCA 1996)