HOSPITALITY VENTURES OF CORAL SPRINGS, L.C., A FLORIDA LIMITED LIABILITY CORPORATION, APPELLANT,
v.
AMERICAN ARBITRATION ASSOCIATION INC., A NEW YORK CORPORATION AND AGB CAPITAL PROPERTIES, INC. A FLORIDA CORPORATION D/B/A AGB CAPITAL CONSTRUCTION COMPANY, APPELLEES

Fla. 4th DCA | 2000-03-01
No. 4D99-3313
STONE, KLEIN and GROSS, JJ, concur.
755 So. 2d 159 Florida District Court of Appeal, Fourth District (2000) Positive Treatment
Cited by 4 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Hospitality Ventures sought to enjoin arbitration proceedings between itself and AGB Construction by suing both AGB Construction and the American Arbitration Association. The trial court improperly entered a default judgment against AAA without proper notice to AGB Construction, an indispensable party. The appellate court affirmed the trial court's order vacating the default judgment.


Holding

The trial court properly vacated the default judgment because: (1) the complaint failed to state a valid cause of action against AAA, as only parties to an arbitration agreement are proper parties to disputes concerning arbitrability; (2) AGB Construction was an indispensable party whose interests would be affected by any judgment; and (3) no final judgment could be entered without notice to AGB Construction.


Headnotes

[1] A default judgment admits only well-pleaded factual allegations, not conclusions of law.

[2] A party seeking to compel or stay arbitration must bring a lawsuit against the other party to the arbitration agreement, not the arbitration provider.

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Key Quotes

“A default admits only the well-pleaded factual allegations of a complaint, not conclusions of law.”

Establishes that a default judgment against AAA was improper because the complaint failed to allege valid facts supporting a cause of action.

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Facts & Procedural History

Hospitality Ventures contracted with AGB Construction to build a Marriott hotel. After a dispute, AGB Construction filed a demand for arbitration with…

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Opinion of the Court
PER CURIAM.

PER CURIAM.

Hospitality Ventures of Coral Springs, L.C. (“Hospitality”) contracted with AGB Capital Properties, Inc. d/b/a AGB Capital Construction Company (“AGB Construction”) to build a Marriott hotel. After a dispute between them, AGB Construction filed a demand for arbitration with the American Arbitration Association (“AAA”) pursuant to paragraph 4.5 of the addendum to the parties’ contract.

Hospitality retaliated by filing suit against both AGB Construction and AAA seeking an injunction to stay the arbitration proceedings. The trial court denied Hospitality’s emergency motion to stay arbitration on June 24,1999.

Thereafter, Hospitality filed an ex parte motion for default and default judgment against AAA, which had never filed an answer or otherwise appeared in the lawsuit. On July 28,1999, the court entered a default final judgment against AAA, precluding it from arbitrating the dispute between Hospitality and AGB Construction.

Once it discovered that a default judgment had been entered, AGB Construction filed a motion to vacate it pursuant to Florida Rule of Civil Procedure 1.540(b). Before the court had an opportunity to rule on the motion, Hospitality filed a voluntary dismissal as to AGB Construction. Nevertheless, following a hearing, the trial court granted the motion to vacate the default judgment on the ground that the final judgment was entered without notice to AGB Construction. Hospitality has appealed this order. This court has jurisdiction. See Fla. R.App. P. 9.130(a)(5).

We affirm the trial court’s order for a number of reasons.

First, the entry of a final judgment against AAA was improper, since the complaint did not plead a valid cause of action against it. A default admits only the well-pleaded factual allegations of a complaint, not conclusions of law. See Days Inns Acquisition Corp. v. Hutchinson, 707 So. 2d 747, 749 (Fla. 4th DCA 1997), rev. denied, 717 So. 2d 532 (Fla.1998) (citation omitted). Where there is a dispute between the parties to a contract concerning the propriety of arbitration, the proper remedy is for a party to apply to the court for an order compelling or staying arbitration pursuant to section 682.03, Florida Statutes (1999). The only proper parties to a lawsuit under section 682.03 to determine the propriety of arbitration are the parties to the arbitration agreement, not the potential arbitrators. The law does not require potential arbitrators to expend the time and money to participate in a lawsuit where the parties are fighting over the arbitrability of a dispute.

Second, AGB Construction was obviously an indispensable party to this lawsuit. The crux of the case was its right to arbitrate a claim pursuant to contract. No judgment could be entered without affecting its interest. See Martinez v. Balbin, 76 So. 2d 488, 490 (Fla.1954). As the supreme court has noted, where “omitted parties are truly indispensable, the defect goes to the substance of [the plaintiffs] case, for the action cannot proceed without them.” Id. (citations omitted). It is elementary that no final judgment could be entered in this case without notice to AGB Construction.

Third, contrary to its argument on appeal, Hospitality could not file a voluntary dismissal to deprive AGB Construction of its right to challenge the entry of the default judgment. Because AGB Construction was an indispensable party, there could be no final judgment in this lawsuit unless AGB was a party to it. Had it never been made a party to the lawsuit, AGB Construction could have asserted its rights by intervention or by a motion under Rule 1.540(b) after judgment. See Woginiak v. Kleiman, 523 So. 2d 1209 (Fla. 3d DCA 1988); Zoning Board of Monroe County v. Hood, 484 So. 2d 1331 (Fla. 3d DCA 1986); Fla. R. Civ. P. 1.230.

The legal issues raised by this appeal are frivolous. We remand the case to the trial court to award attorney’s fees to AGB Construction for this appeal pursuant to section 57.105(1) & (2), Florida Statutes (1999).

The order appealed from is affirmed.

STONE, KLEIN and GROSS, JJ, concur.


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Citator

Cited By

  • …opriety of arbitration, the proper remedy is for a party to apply to the court for an order compelling or staying arbitration pursuant to section 682.03, Florida Statutes (1999).” Hospitality Ventures of Coral Springs, L.C. v. Am. Arbitration Ass’n, 755 So. 2d 159, 160 (Fla. 4th DCA 2000). Once a party has filed a motion to compel arbitration: [i]f the court is satisfied that no substantial issue exists as to the making of the agreement or provision, it shall grant the application. If the court shall find th…
  • Sims v. Clarendon Nat'l Ins., 336 F. Supp. 2d 1311 (S.D. Fla. 2004)
    …erning the propriety of arbitration, as here, the proper procedure is for the parly seeking arbitration to apply to the court for an order compelling arbitration. Hospitality Ventures of Coral Springs, L.C. v. American Arbitration Ass’n, Inc., 755 So.2d 159, 160 (Fla. 4th DCA 2000). 8 . Unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that would cover the dispute at issue, then a stay pending arbitration should be granted. Belke…
  • White v. Bombardier Corp., 313 F. Supp. 2d 1295 (N.D. Fla. 2004)
    …l pleaded factual allegations, but not the complaint’s conclusions of law, and may appear and contest the amount of damages prior to the entry of a default judgment. Hospitality Ventures of Coral Springs, L.C. v. Amer. Arbitration Ass’n, Inc., 755 So.2d 159, 160 (Fla. 4th DCA 2000); Days Inns Acquisition Corp. v. Hutchinson, 707 So.2d 747, 749 (Fla. 4th DCA 1997). Where, as here, “an action involves unliq-uidated damages, a party against whom a default has been entered is entitled to notice of an…

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