13 PARCELS LLC, ET AL., APPELLANTS,
v.
EDIE LAQUER, ET AL., APPELLEE

Fla. 3d DCA | 2012-12-26
Nos. 3D12-608, 3D12-601, 3D12-605, 3D12-606
Before CORTIÑAS, FERNANDEZ and LOGUE, JJ.
104 So. 3d 377 Florida District Court of Appeal, Third District (2012) Positive Treatment
Cited by 9 cases

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Synopsis

The Third District Court of Appeal reversed the trial court's denial of defendants' motions to compel arbitration in a dispute arising from foreclosure lawsuits. The court held that the defendants did not waive their contractual right to arbitrate the issue of whether they owed a duty to defend the plaintiffs in the underlying bank foreclosure actions, despite parallel litigation between the parties.


Holding

The court held that the appellants did not waive their right to arbitrate because they took no action in the Iberia Lawsuits inconsistent with arbitration, and their participation in a separate joint venture lawsuit and filing of a motion to transfer did not constitute a waiver of the arbitration right regarding an issue that arose for the first time in relation to the foreclosure lawsuits.


Headnotes

[1] A party does not waive its contractual right to arbitration by filing a motion to dismiss a cross-claim and compel arbitration.

[2] A motion to transfer related litigation cases does not constitute a waiver of the right to arbitrate when the motion explicitly states that the arbitration proceeding sho…

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Key Quotes

“the contractual right to arbitrate can 'be waived by actually participating in a lawsuit or taking action inconsistent with that right.'”

Establishes the legal standard for waiver of arbitration rights, which requires affirmative inconsistent conduct.

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Facts & Procedural History

Appellant entities and Arthur Falcone were defendants in foreclosure lawsuits filed by IberiaBank based on notes secured by mortgages on specific prop…

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Opinion of the Court
CORTIÑAS, J.

CORTIÑAS, J.

Appellants, 13 Parcels, LLC, 46 NE 10th, LLC, 44 NW 11th LLC, 700 NE 1st, LLC, (collectively “appellant entities”) and Arthur Falcone (“Falcone”), were defendants in separate foreclosure actions by IberiaBank (“Iberia Lawsuits”).1 The Iberia Lawsuits were premised upon notes that had been executed by each of the appellant entities and were each secured by a mortgage on a specific property. Falcone2 and appellee, Edie Laquer (“La-quer”), executed personal guarantees in conjunction with each of the notes. La-quer is the manager of Ladies and Gentlemen, LLC (“L & G”) and asserts L & G has a 10% ownership interest in each of the appellant entities. L & G and Laquer were also named defendants in the Iberia Lawsuits.

After receiving motions for default filed by IberiaBank on each of the Iberia Law*379suits, Laquer’s counsel sent an email to appellants’ counsel demanding that the appellants “immediately undertake the defense of [the Iberia Lawsuits] on behalf of the borrowers,” which included both La-quer and L & G. On July 29, 2011, two days after receiving the demand from La-quer and L & G, the appellants filed a demand for arbitration in accordance with the arbitration provision found in the operating agreement of each of the appellant entities. The demand for arbitration identified the nature of the dispute as a “[request for declaration of the [appellants’] contractual obligations, if any, to the respondent LLCs. See Exhibit A.”3 Exhibit A to the demand for arbitration specifically set forth the “Relief Sought”:

30. Claimants seek a declaration of whether, under Florida statutory or common law, they are obligated to defend the foreclosure proceedings, as Respondent Laquer demanded, even though, as Laquer acknowledges, the LLCs have no assets, income or liquidity-
31. Should the arbitrator declare that the LLCs are not obligated to defend the foreclosure proceedings, Claimants request that the arbitrator enter an award against Respondents for the Claimants’ arbitration costs, as well as their reasonable attorneys’ fees and costs.

Appellees opposed the arbitration proceeding and, approximately two months later, filed their answers and affirmative defenses to the Iberia Lawsuits and asserted a cross-claim in each case against the respective appellant entity and Falcone. The appellants did not file answers to their respective complaints and default judgments were entered against each of them on December 1, 2011. The appellants subsequently filed motions to dismiss the cross-claims, compel arbitration and stay further proceedings on the cross-claims (“Motions to Compel”). Following a hearing, the trial court denied the motions. We reverse.

We review the denial of the motions to compel arbitration de novo. The Hillier Grp., Inc. v. Torcon, Inc., 932 So.2d 449 (Fla. 2d DCA 2006). The sole issue we address on appeal was the only issue before the trial court: Must the parties arbitrate the matter “of whether, under Florida statutory or common law, [the appellants] are obligated to defend the foreclosure proceedings, as [the appellees] demanded.... ” The operating agreements of the appellant entities each contain the following arbitration provision:

13.1 Dispute Resolution. In the case of any dispute between the parties which has not been resolved through negotiation between the parties, such dispute shall be settled and determined through arbitration in accordance with the Rules of Commercial Arbitration of the American Arbitration Association (“AAA”). Any arbitration pursuant to this Agreement shall be held in Palm Beach, Florida, and shall be conducted by a single arbitrator to be selected by other arbitrators, one of whom shall be selected by each Member. The written decision of the arbitrator so selected shall be binding, final, and conclusive on the parties. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The fees and expenses shall be part of the award. The prevailing party in any arbitration shall recover its expenses and costs in-*380eluding reasonable attorney’s fees from the other party.

(Emphasis added).

The appellees argued to the trial court that prior and existing litigation between the appellants and appellees constituted a waiver of the right to arbitrate under the operating agreements. We disagree. The appellants seek only a declaration of the contractual duty to defend they owe, if any, to the appellees under the operating agreements and as they pertain to the Iberia Lawsuits. The appellees place particular emphasis on the lawsuit styled Laguer, et al. v. Falcone, Case No. 08-11213 CA 20, presently pending in the circuit court (“Joint Venture Lawsuit”). While the appellants are all named defendants in the Joint Venture Lawsuit, we note that there, in the pertinent counts, appellees were seeking a declaratory judgment as to their equity interests in the appellant entities and other subsequently-formed entities, as well as damages for breach of an alleged oral agreement also related to the purported equity interests. There is nothing in the record to suggest that the issue of whether the appellants owed a duty to defend the appellees in the Iberia Lawsuits has been raised or addressed in the Joint Venture Lawsuit or in any of the other litigation matters.

It is well-established that the contractual right to arbitrate can “be waived by actually participating in a lawsuit or taking action inconsistent with that right.” Raymond James Fin. Servs., Inc. v. Saldukas, 896 So.2d 707, 711 (Fla.2005) (citing Klosters Reden A/S v. Arison Shipping Co., 280 So.2d 678, 680 (Fla.1973)). The record discloses no action taken by the appellants in the Iberia Lawsuits that is inconsistent with the right to arbitrate. Appellants filed a motion to dismiss the appellees’ cross-claim and compel arbitration; however, doing so did not constitute a waiver of the contractual right to arbitrate their claims. See Hirschfeld v. Crescent Heights, X, Inc., 707 So.2d 955 (Fla. 3d DCA 1998).

The appellees also argue here, as they did below, that a motion to transfer filed by the appellants was sufficient to waive the right to arbitrate. Again, we disagree. The record demonstrates that the appellants and several related entities attempted to transfer all of the related pending litigation cases, including the Joint Venture Lawsuit, to the same civil division. However, although the motion to transfer references the Iberia Lawsuits, it specifically provides that the appellants are

NOT taking the position that the AAA should relinquish jurisdiction of the Arbitration Proceeding or requesting this Court transfer the Arbitration proceeding to the Complex Business Division. Falcone is merely advancing the position that should an award be rendered, it be adopted in a judgment to be entered by the same judge who has the responsibility to administer the balance of these complex matters.

As we have previously held, “[tjhere is ... a strong public policy favoring arbitration. ‘All questions concerning the scope or waiver of the right to arbitrate under contracts should be resolved in favor of arbitration rather than against it.’ ” Zager Plumbing, Inc. v. JPI Nat’l Constr., Inc., 785 So.2d 660, 662 (Fla. 3d DCA 2001) (internal citations omitted). The appellants filed their demand for arbitration before filing their motion to transfer. Moreover, the motion to transfer, while specifically referencing the Iberia Lawsuits, did so, on its face, to advise the trial court of the pending demand for arbitration and for the logical purpose of ensuring that in the event the pending litiga*381tion cases were transferred to the same division, any potential arbitration award be adopted by trial judge ultimately presiding over the other cases. This is simply insufficient to constitute a waiver of the right to arbitrate.

Appellees are unable to identify any action taken by the appellants in the Iberia Lawsuits that is inconsistent with the intent to arbitrate and are likewise unable to demonstrate that the appellants’ participation in the Joint Venture Lawsuit, or any of the other pending or prior lawsuits, waived the contractual right to arbitrate an issue that arose for the first time in relation to the Iberia Lawsuits. Accordingly, we reverse the trial court’s orders denying the Motions to Compel and remand for further proceedings consistent with this opinion.4

Reversed and remanded.


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Citator

Cited By

  • Truly Nolen OF Am., Inc. v. King Cole Condo. Ass'n, Inc., 143 So. 3d 1015 (Fla. 3d DCA 2014)
    …undisputed. Mora v. Abraham Chevrolet-Tampa, Inc., 913 So. 2d 32, 33-34 (Fla. 2d DCA 2005) (holding that a trial court’s ruling on a motion to compel arbitration when the facts are undisputed is reviewed de novo); see also 13 Parcels LLC v. Laquer, 104 So. 3d 377, 379 (Fla. 3d DCA 2012). The waiver of a contractual right requires the “voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right.” Raymond James Fin. Servs., I…
  • …the County/City Equity Payment were required to be heard in the first instance by an arbitration panel as provided by the pertinent agreements. II. Analysis We review the denial of a motion to compel arbitration de novo. 13 Parcels LLC v. Laquer, 104 So. 3d 377, 379 (Fla. 3d DCA 2012). Arbitration provisions “are favored by the courts and . . . all doubts should be resolved in favor of arbitration.” CT Miami, LLC v. Samsung Elecs. Latinoamerica Miami, Inc., 201 So. 3d 85, 90 (Fla. 3d DCA 2015). The test…
  • Falcone v. Edie Laquer, 132 So. 3d 1171 (Fla. 3d DCA 2014)
    …rd amended complaint, and we provide this opinion simply to clarify that we have not in any way receded from our prior opinion requiring arbitration of certain specific cross-claims in four foreclosure cases, as detailed in 13 Parcels LLC v. Laquer, 104 So. 3d 377 (Fla. 3d DCA 2012). Parties and Claims The underlying circuit court case (the “Joint Venture Lawsuit”) was brought by the appellees, Edie Laquer and two Florida companies controlled and managed by her (collectively, “Laquer”), against appellants,…
    1 / 2

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