JULIA DIEZ-SIERRA, ETC., APPELLANT,
v.
DOLORES AGUERA, APPELLEE
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The court reversed a trial court's order compelling arbitration in a contract dispute, holding that when a plaintiff seeks rescission of the entire contract—a remedy the arbitration clause explicitly prohibits the arbitrator from awarding—the trial court must retain jurisdiction to determine whether rescission is warranted rather than sending the case to arbitration.
The court reversed the order compelling arbitration. Where a plaintiff seeks rescission of the entire contract, the arbitrator cannot award that remedy even if the plaintiff prevails, so the trial court must retain jurisdiction. The trial court should first determine whether the plaintiff has made a prima facie case for 'true' rescission; if so, arbitration is abated pending trial of the rescission issue.
[1] A trial court errs in compelling arbitration when the sole remedy sought by a party is rescission, and the arbitration agreement prohibits the arbitrator from awarding re…
[2] Where a complaint seeks rescission of a contract in its entirety, the effect is to abrogate the contract, rendering the arbitration clause within it void.
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Join FLexlaw to unlock all legal intelligence“The arbitrator may not alter the contract terms or award any remedy not provided for in this contract.”
Establishes that the arbitration clause expressly prohibits the arbitrator from awarding rescission, a fact undisputed by the parties.
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Join FLexlaw to unlock all legal intelligenceJulia Diez-Sierra, as trustee of her revocable trust, and Dolores Agüera entered into a contract for the sale and purchase of an apartment building. D…
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RAMIREZ, J.
Appellant Julia Diez-Sierra, as Trustee of Julia Diez-Sierra Revocable Trust, and Appellee Dolores Agüera entered into a contract for the sale and purchase of an apartment building. The form contract used by the parties contains a dispute resolution clause. After the trial court ordered arbitration, Diez-Sierra appealed. We reverse because the plaintiff is seeking to rescind the contract, a remedy the arbitrator is prohibited from awarding.
Diez-Sierra sued Agüera in a one-count complaint seeking rescission of the contract based upon Aguera’s allegedly fraudulent representations. • The contract specifically stated that “[t]he arbitrator may not alter the contract terms or award any remedy not provided for in this contract.” Agüera does not dispute that the arbitrator has no authority to award Diez-Sierra the remedy of rescission. We conclude that the trial court erred in granting Agu-era’s motion to compel arbitration because the arbitrator is prohibited from granting the only relief sought by Diez-Sierra.
In Borck v. Holewinski, 459 So. 2d 405 (Fla. 4th DCA 1984), the court stated that where the complaint seeks rescission of the contract in its entirety, the effect of this remedy is to render the contract abrogated and of no force and effect from the beginning. “If there is no contract, there can be no arbitration clause ‘of the contract.’ ” Id. The court then endorsed the holding and rationale in R.B.F. Management Co. v. Sunshine Towers Apartment Residences Ass’n, 352 So. 2d 561 (Fla. 2d DCA 1977), which requires the trial court to make an initial determination as to whether the plaintiff had made a prima facie case for “true” rescission, as opposed to partial rescission. If a prima facie case is made, then arbitration is abated pending trial of the rescission issue. If rescission is granted, the parties are left with no contract and the trial court would exercise its complete jurisdiction.
The circumstances of this case are even stronger for the exercise of jurisdiction by the circuit court because rescission is the only remedy being sought by Diezr-Sierra and is a remedy which the arbitrator cannot award her, even if she prevails.
Reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Beazer Homes Corp. v. Bailey, 940 So. 2d 453 (Fla. 5th DCA 2006)…able. The rationale is similar to that employed by the Prima Paint minority quoted above: If there is no contract, there can be no arbitration clause “of the contract.” See Sanchez v. Criden, 899 So. 2d 326 (Fla. 3d DCA 2005); Diez-Sierra v. Aguera, 762 So. 2d 557 (Fla. 3d DCA 2000); Borck v. Holewinski, 459 So. 2d 405 (Fla. 4th DCA 1984). A trial court, as well as the appellate court, must determine whether “true rescission” is sought, as opposed to partial rescission in conjunction with a claim for damages…
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Simpson v. Cohen, 812 So. 2d 588 (Fla. 4th DCA 2002)…etermine the validity of the arbitration clause before submitting the remainder of the dispute to arbitration. See Chappell, 632 So. 2d at 195. The Simpsons rely on Borck v. Holewinski, 459 So. 2d 405 (Fla. 4th DCA 1984), and Diez-Sierra v. Aguera, 762 So. 2d 557 (Fla. 3d DCA 2000), but they are distinguishable. In both cases, the only relief sought in the complaints was rescission. See R.B.F. Mgmt. Co. v. Sunshine Towers Apartment Residences Ass’n, 352 So. 2d 561, 562 (Fla. 2d DCA 1977) (holding that arbitr…
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Sanchez v. Criden, 899 So. 2d 326 (Fla. 3d DCA 2005)…he arbitration clause, but instead seek to invalidate the entire agreement, “[t]he relief [the buyers seek] falls within the scope of the arbitration clause and should be submitted to arbitration.” Id. We find the decision in Diez-Sierra v. Aguera, 762 So. 2d 557 (Fla. 3d DCA 2000), distinguishable on at least two grounds. First, the only relief sought in Diez-Sierra was rescission. The buyers in this case sought rescission or alternatively specific performance combined with consideration of entitlement to a…
Authorities Cited
- Borck v. Holewinski, 459 So. 2d 405 (Fla. 4th DCA 1984)
- R. B. F. Mgmt. Co. v. Sunshine Towers Apt. Residences Ass'n, Inc., 352 So. 2d 561 (Fla. 2d DCA 1977)