JOHN VERNETTI AND GLOBAL TRUSTEE SERVICES, INC., A NEVADA CORPORATION, APPELLANTS,
v.
AMERICA-INDIAN ENTERPRISES, INC., A WYOMING CORPORATION, KUMAR RAJAGOPALAN, JOSEPH ARCHIPRETE, AND RAGHAV L. SETH, APPELLEES

Fla. 4th DCA | 2014-12-17
No. 4D14-2360
GROSS and MAY, JJ., concur.
152 So. 3d 856 Florida District Court of Appeal, Fourth District (2014) Positive Treatment
Cited by 4 cases

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Holding

The court held that a cross-claim is arbitrable if it raises issues requiring reference to the contract and has a nexus to the contract containing the arbitration clause.


Headnotes

[1] A claim is arbitrable if it raises an issue requiring reference to or construction of the contract containing the arbitration clause and there is a nexus between the clai…

[2] When determining whether a claim falls within the scope of an arbitration agreement, courts must examine the factual allegations of the claim, not just the legal cause of…

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Facts & Procedural History

Appellees filed a cross-claim against Appellants for fraud, indemnity, and breach of fiduciary duty. Appellants sought to compel arbitration based on …

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Opinion of the Court
DAMOORGIAN, C.J.

DAMOORGIAN, C.J.

John Vernetti and Global Trustee Services, Inc. (“Global Trustee”) appeal the trial court’s non-final order denying their motion to compel arbitration of a cross-claim filed by Appellees, America-Indian Enterprises, Inc. (“America-Indian”), Ku-mar Rajagopalan, and Joseph Archiprete.1 Vernetti and Global Trustee maintain that the cross-claim is arbitrable because it *858arose out of and is directly related to their agreement with Appellees. We agree and reverse.

By way of background, Global Trustee and America-Indian entered into a Specific Service Agreement (“the Agreement”) in August 2007. Rajagopalan and Arehiprete signed the Agreement as co-owners of America-Indian and Vernetti signed as president of Global Trustee. The Agreement authorized Global Trustee to provide pass-through consulting services to America-Indian and to disburse funds from a Bank of America Client Trust Account to America-Indian at America-Indian’s discretion. The Agreement contains the following arbitration clause:

4. DISPUTE: In the event of any dispute arising out of or in connection with this Agreement, the parties agree to resolve such dispute through binding arbitration to be held in the domicile of [Global Trustee], in accordance with the rules of the Arbitration Board in Las Vegas, Nevada. The prevailing party in such arbitration shall be entitled to recover its legal fees and costs, which shall be awarded by the arbitrator, whose award shall be final and binding.

In April 2013, Raghav Seth filed an action for damages against Vernetti, Global Trustee, and Appellees. The complaint alleged that Appellees induced Seth to invest $1,000,000 in a business venture involving the purchase and sale of gold. Seth advanced the funds to America-Indian pursuant to a promissory note. The funds were to be held in trust by Vernetti and Global Trustee. When Seth did not receive payment of the amounts due and owing under the note he initiated the underlying lawsuit, asserting claims for fraud in the inducement, breach of contract, civil conspiracy, breach of fiduciary duty, and violation of the Florida and Federal RICO statutes. Appellees filed a cross-claim against Vernetti and Global Trustee for fraud, indemnity, and breach of fiduciary duty. Vernetti and Global Trustee moved to compel arbitration of the cross-claim based on the Dispute clause in the Agreement. The trial court denied their motion. This appeal follows.

We review an order granting or denying a motion to compel arbitration de novo. Ibis Lakes Homeowners Ass’n v. Ibis Isle Homeowners Ass’n, 102 So.3d 722, 727 (Fla. 4th DCA 2012) (quoting Best v. Educ. Affiliates, Inc., 82 So.3d 143, 145 (Fla. 4th DCA 2012)). “[T]here are three elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999). This appeal only concerns the second element-whether the cross-claim is arbitrable.

A claim is arbitrable if, “‘at a minimum, [it] raise[s] some issue the resolution of which requires reference to or construction of some portion of the contract itself and there [is] some nexus between the claim and the contract containing the arbitration clause.” Kolsky v. Jackson Square, LLC, 28 So.3d 965, 969 (Fla. 3d DCA 2010) (quoting Seifert, 750 So.2d at 638). “ ‘To determine whether a claim falls within the scope of an arbitration agreement, we must look beyond the legal cause of action and examine the factual allegations of the complaint.’ ” Florida Envtl. Servs., Inc. v. Rentoumis, 950 So.2d 466, 470 (Fla. 4th DCA 2007) (quoting Singer v. Gaines, 896 So.2d 851, 854 (Fla. 3d DCA 2005)). Any doubt concerning the scope of an arbitration clause should be resolved in favor of arbitration. Kolsky, 28 So.3d at 969 (citing Zager Plumbing, Inc. v. JPI Nat’l Constr., Inc., 785 So.2d 660, 662 (Fla. 3d DCA 2001)).

*859In this case, the factual allegations in the cross-claim mirror the terms of the Agreement. Without directly referring to the Agreement, the cross-claim asserts that Global Trustee released funds from a Bank of America trust account established in August 2007 without America-Indian’s permission. The Agreement is dated August 6, 2007 and specifically established a Bank of America Client Trust Account for America-Indian’s benefit. Appellees cannot escape their agreement to arbitrate simply because they asserted claims for common law indemnity, fraud, and breach of fiduciary duty instead of breach of contract. See Florida Envtl. Servs., Inc., 950 So.2d at 470. The cross-claim cannot be resolved without reference to the Agreement because the Agreement defines the duties Global Trustee owed to America-Indian. See Kolsky, 28 So.3d at 969. For these reasons, we conclude that the cross-claim is arbitrable. We reverse and remand for the trial court to enter an order granting the motion to compel arbitration of the cross-claim.

Reversed and Remanded.

GROSS and MAY, JJ., concur.


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Cited By

  • McKENZIE Check Advance OF Fla., LLC v. Betts, 191 So. 3d 530 (Fla. 4th DCA 2016)
    …P. 9.130(a)(3)(C)(iv) (2015) (“Appeals to the district courts of appeal of non-final orders are limited to those that ... determine ... the entitlement of a party to arbitration. .!.”). Our review is de novo. See Vernetti v. Am-Indian Enters., Inc., 152 So. 3d 856, 858 (Fla. 4th DCA 2014) (“We review an order granting- or denying- a motion to compel arbitration de novo.”). The defendants argue that the circuit court’s order circumvents the Florida Supreme Court’s unambiguous ruling in McKenzie II holding tha…
  • Cirrus Holdings USA, LLC v. Welch, 199 So. 3d 558 (Fla. 4th DCA 2016)
    …Whether a valid written agreement to arbitrate exists; (2) Whether an arbitrable issue exists; and (3) Whether the right to arbitration was waived. See Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla.1999); Vernetti v. Am.-Indian Enters., Inc., 152 So. 3d 856, 858 (Fla. 4th DCA 2014); Estate of Blanchard v. Cent. Park Lodges (Tarpon Springs), Inc., 805 So. 2d 6, 8 (Fla. 2d DCA 2001). The trial court did not decide whether an arbitration agreement existed. We reverse and remand for further proceedings. T…

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