TENET HEALTHCARE CORPORATION, FMC HOSPITAL, LTD. D/B/A FLORIDA MEDICAL CENTER, BONE MARROW/STEM CELL TRANSPLANT INSTITUTE, LTD. F/K/A BONE MARROW/STEM CELL TRANSPLANT INSTITUTE OF FLORIDA LTD., AND BONE MARROW/STEM CELL TRANSPLANT INSTITUTE OF FLORIDA, INC., F/K/A BONE MARROW/STEM CELL INSTITUTE OF FLORIDA, INC., APPELLANTS,
v.
DIPNARINE MAHARAJ M.D. AND STEM CELL, INC., A FLORIDA CORPORATION, APPELLEES
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Tenet Healthcare and affiliated entities appealed a denial of their motion to compel arbitration of a dispute with Dr. Maharaj and Stem Cell, Inc. over termination and alleged breaches arising from a limited partnership agreement and physician employment agreement. The court reversed, holding that the claims were arbitrable under the broad arbitration clauses in the underlying agreements.
The court held that all of Dr. Maharaj's claims must be submitted to arbitration because there was a sufficient nexus between the disputes and the contracts containing the arbitration clauses. The court also held that Tenet and Hospital, though not signatories, were enforceable parties to the arbitration clauses because they received rights and accepted obligations under the agreements and the claims against them arose from the same operative facts as those against the signatory parties.
[1] Arbitration clauses are subject to contract law, and the intent of the parties must be discerned from the language used in their agreement.
[2] Mandatory arbitration applies only when the subject matter of the controversy falls within what the parties have agreed will be submitted to arbitration.
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Join FLexlaw to unlock all legal intelligence“the determination of whether a particular claim must be submitted to arbitration necessarily depends on the existence of some nexus between the dispute and the contract containing the arbitration clause”
Establishes the legal standard for determining arbitrability under Seifert v. U.S. Home Corp.
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Join FLexlaw to unlock all legal intelligenceDr. Maharaj was terminated as Medical Director of the Transplant Institute, which was a wholly owned subsidiary of Tenet. Dr. Maharaj and Stem Cell, I…
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PER CURIAM.
Tenet Healthcare Corporation (“Tenet”), FMC Hospital, Ltd. (“Hospital”), Bone Marrow/Stem Cell Transplant Institute, Ltd. (“Transplant Institute”), and Bone Marrow/Stem Cell Transplant Institute of Florida, Inc. timely appeal from a non-final order denying their motion to stay the action below and compel arbitration. We reverse.
The instant action arose after the appel-lees terminated Dr. Dipnarine Maharaj as Medical Director of the Transplant Institute. Dr. Maharaj and his corporation, Stem Cell, Inc., which founded the Transplant Institute, sued appellees, alleging several counts, including breach of contract. The breach of contract dispute centered on a limited partnership agreement entered into by Stem Cell and the Transplant Institute, which became a wholly owned subsidiary of Tenet. The limited partnership agreement also incorporated a physician employment agreement entered into by Dr. Maharaj and Bone Marrow/Stem Cell Transplant Institute of Florida, Inc. (“General Partner”), the General Partner of the Transplant Institute, which later became Tenet’s subsidiary as well. Both agreements contained arbitration clauses. The employment agreement provided:
The parties firmly desire to resolve all disputes without resort to litigation in order to protect their respective business reputations and the confidential nature of Program operations. Accordingly, and except as otherwise provided herein, any controversy or claim arising out of or in connection with this Agreement, or the alleged breach thereof, shall be settled by arbitration....
The limited partnership agreement provided:
All disputes between the parties arising under this Agreement shall be resolved through binding arbitration....
The agreements also provided for interim injunctive or other similar relief:
Notwithstanding anything to the contrary contained herein, if, due to a breach or threatened breach or default, a party is suffering irreparable harm for which monetary damages are inadequate, such party may petition a court of competent jurisdiction ... for injunctive relief, specific performance or equitable relief....
Dr. Maharaj later amended his complaint to delete the count alleging breach of the limited partnership agreement. The amended complaint, however, still alleged that the Hospital breached its bylaws in revoking the doctor’s privileges without a prior hearing; that all the appel-lees tortiously interfered with the doctor’s business relationships by wrongfully appropriating his medical practice; that the General Partner breached its fiduciary duty to Dr. Maharaj “by virtue of the limited partnership arrangement among them;” and that the appellees fraudulently transferred the Transplant Institute’s partnership assets.
The appellees moved to dismiss the amended complaint, or alternatively, to stay the action and compel arbitration. The court summarily denied the motions. This appeal followed.
In Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla.1999), the supreme court explained that the determination of whether a particular claim must be submitted to arbitration necessarily depends on the existence of some nexus between the dispute and the contract containing the arbitration clause. As Justice Anstead opined,
After analyzing the governing principles surrounding the determination of whether a particular claim is subject to arbitration, and keeping in mind the general policy favoring arbitration, we believe it is fair to presume that not every dispute that arises between contracting parties should be subject to arbitration. As the prevailing case law illustrates, even in contracts containing broad arbitration provisions, the determination of whether a particular claim must be submitted to arbitration necessarily depends on the existence of some nexus between the dispute and the contract containing the arbitration clause.
Disputes arise in many and varied contexts and the mere coincidence that the parties in dispute have a contractual relationship will ordinarily not be enough to mandate arbitration of the dispute. In other words, the mere fact that the dispute would not have arisen but for the existence of the contract and consequent relationship between the parties is insufficient by itself to transform a dispute into one “arising out of or relating to” the agreement.
Id. at 638. The court in Seifert approved our decision in Terminix International Co. v. Michaels, 668 So. 2d 1018 (Fla. 4th DCA 1996) in which we held that the tort claims did not arise out of or relate to the “interpretation, performance, or breach of any provision of this agreement” and, therefore, such claims were not subject to the contract’s arbitration provision.
Here, the arbitration agreements did contemplate the claims alleged by the respective parties. The allegations in Dr. Maharaj’s complaint implicate the various obligations allegedly owed by the appellees “by virtue of the limited partnership arrangement” among them. In other words, the agreement placed them in a unique relationship that created duties not otherwise imposed by law, such that there was a sufficient nexus between the dispute and the agreement as contemplated by Seifert. Interpreting the arbitration clauses broadly as we must, see Ocwen Fin. Corp. v. Holman, 769 So. 2d 481, 483 (Fla. 4th DCA 2000), we hold the dispute is arbitrable.
In reaching our conclusion, we necessarily reject Dr. Maharaj’s argument that the arbitration clause does not reach Tenet and the Hospital. While these entities were not signatories to the two agreements, we hold they were “parties” within the meaning of the arbitration clauses. As was the case in Holman, they “received rights and accepted obligations” under the agreements. Id. They were entitled to the protection of the arbitration clause not only because the claims against them arose solely in connection with their activities as officers and directors of the Transplant Institute, but also because the claims against them arose from the same set of operative facts as those claims against the Transplant Institute and the General Partner. See id. Because the arbitration clauses in this case are expansive provisions, encompassing “any controversy or claim arising out of or in connection with this Agreement, or the alleged breach thereof,” and because the factual allegations in the complaint relied on the contract between the parties, we resolve the issue in favor of arbitration. See id.
REVERSED and REMANDED for entry of an order submitting this dispute to arbitration.
DELL, GROSS, and TAYLOR, JJ., concur.
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Urs Koechli v. BIP Int'l, Inc., 870 So. 2d 940 (Fla. 1st DCA 2004)…ration by a signatory to the underlying agreement, we find persuasive the reasoning of the Fourth District Court of [*946] Appeal in Ocwen Financial Corp. v. Holman, 769 So. 2d 481, 483 (Fla. 4th DCA 2000) and Tenet Healthcare Corp., FMC v. Maharaj, 787 So. 2d 241 (Fla. 4th DCA 2001). In Holman, Ocwen, a non-signatory of the underlying contract but the parent corporation of a signatory, sought to compel arbitration. The court held that, even though Ocwen and other individual defendants were not signatories to…1 / 2
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Gita Shetty v. Palm Beach Radiation Oncology Associates-Sunderam K. Shetty, M.D., P.A., 915 So. 2d 1233 (Fla. 4th DCA 2005)…tly, we found no nexus upon which the buyer of the car could compel arbitration for the theft claim. There are, however, circumstances in which a non-signatory’s right to compel arbitration has been recognized. In Tenet Healthcare Corp. v. Maharaj, 787 So. 2d 241, 243 (Fla. 4th DCA 2001), we held that non-signatories could compel arbitration because the claims against the non-signatories arose due to their activities as officers and directors, and the claims against them arose from the same set of operative…
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Waterhouse Constr. Grp., Inc. v. 5891 SW 64TH St., LLC., 949 So. 2d 1095 (Fla. 3d DCA 2007)…o received rights and obligations under a contract were permitted to compel signatories to arbitration, despite the express language in the contract that only “parties hereto” were subject to arbitration); see also Tenet Healthcare Corp. v. Maharaj, 787 So. 2d 241 (Fla. 4th DCA 2001); Ocwen Fin. Corp. v. Holman, 769 So. 2d 481 (Fla. 4th DCA 2000). In Turner Construction Co. v. Advanced Roofing, Inc., 904 So. 2d 466 (Fla. 3d DCA 2005), we recognized the principle set forth in Koechli, Tenet, and Ocwen, and con…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999)
- Ocwen Fin. Corp. v. Holman, 769 So. 2d 481 (Fla. 4th DCA 2000)