KRATOS INVESTMENTS LLC, ET AL.,

v.

ABS HEALTHCARE SERVICES, LLC, ET AL.,

Third District Court of Appeal State of Florida

Opinion filed March 17, 2021. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D20-1280 Lower Tribunal No. 20-8460 ________________

Kratos Investments LLC, et al., Appellants,

vs.

ABS Healthcare Services, LLC, et al., Appellees.

An Appeal from a non-final order from the Circuit Court for Miami-Dade County, William Thomas, Judge.

Cozen O’Connor, and James A. Gale, Samuel A. Lewis, David M. Stahl, Matthew N. Horowitz and Jonathan E. Gale, for appellants.

Boies Schiller Flexner LLP, and James Fox Miller (Hollywood); Boies Schiller Flexner LLP, Carlos M. Sires and Sigrid S. McCawley (Fort Lauderdale), for appellees.

Before FERNANDEZ, LOGUE and GORDO, JJ.

GORDO, J.

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The appellants, defendants in the suit below, appeal the trial court’s nonfinal order denying their motion to compel arbitration and denying their alternative motions to stay litigation or to transfer venue. We have jurisdiction. See Fla. R. App. R. 9.130(a)(3)(A), (a)(3)(C)(iv). For the following reasons, we reverse the portion of the order denying the appellants’ motion to compel arbitration. We affirm without further discussion the portions of the order denying the stay of litigation and the transfer of venue.

FACTS & PROCEDURAL HISTORY

The appellees, ABS Healthcare Services, LLC and Heath Option One, LLC, doing business as Insurance Care Direct (collectively, “ICD”), sued the appellants, Kratos Investments LLC, Health Team One, LLC, Complete Vital Care LLC, Health Essential Care LLC and Richard Ryscik over an alleged scheme to steal ICD’s business. ICD is a health and life insurance agency that contracts with licensed insurance agents to market and sell benefit plans. ICD’s relationship with its licensed agents is governed by ICD Exclusive Agent Agreements, pursuant to which ICD authorizes agents to solicit customers and to use ICD’s confidential and trade secret information in connection with the marketing and sale of its plans. The Agreements prohibit agents from inducing

3 customers to discontinue business with ICD and prohibits agents from selling non-ICD plans. On April 15, 2020, ICD filed a complaint against the appellants alleging they conspired with ICD agents in a scheme to steal ICD’s business by setting up sham competing entities, interfering with the ICD Exclusive Agent Agreements, illicitly soliciting ICD’s customers and prospective customers, and misappropriating ICD’s confidential information and trade secrets. ICD’s five-count complaint was for conspiracy to breach the ICD Exclusive Agent Agreements, tortious interference with Agent Agreements, tortious interference with business relationships, misappropriation of trade secrets and conspiracy to misappropriate trade secrets. ICD prayed for the following relief: “All compensatory damages for all injuries suffered as a result of Defendants’ wrongdoing, including special damages such as consequential damages, lost profits, and disgorgement of Defendants’ ill-gotten gains.” ICD separately commenced actions against eight of its licensed agents individually in Broward County alleging breach of contract, tortious interference with contract, claims for permanent injunctive relief, misappropriation of trade secrets and unjust enrichment. ICD sought both legal and equitable relief in the form of compensatory damages, permanent injunctive relief, disgorgement and imposition of a constructive trust.

The appellants argued they were entitled to enforce the arbitration provision against the signatory under the doctrine of equitable estoppel. ICD opposed the motion claiming there was no basis to compel it to arbitrate its claims against non-signatories under the doctrine of equitable estoppel because

STANDARD OF REVIEW

“This Court reviews an order granting or denying a motion to compel arbitration de novo.” Duty Free World, Inc. v. Miami Perfume Junction, Inc., 253 So. 3d 689, 693 (Fla. 3d DCA 2018).

LEGAL ANALYSIS

“[N]ot every dispute that arises between contracting parties will be subject to arbitration . . . .” Kolsky v. Jackson Square, LLC, 28 So. 3d 965, 968 (Fla. 3d DCA 2010) (quoting Roth v. Cohen, 941 So. 2d 496, 499 (Fla. 3d DCA 2006)). “An obligation to arbitrate is based on consent . . . .” Marcus v. Fla. Bagels, LLC, 112 So. 3d 631, 633 (Fla. 4th DCA 2013). “[F]or this reason ‘a non-signatory to a contract containing an arbitration agreement

1 The ICD Exclusive Agent Agreement provided the following exception: “ICD may pursue its equitable remedies, including specific performance, injunctions and restraining orders in any court of competent jurisdiction.”

2 “Disgorgement is an equitable remedy . . . .” Duty Free World, 253 So. 3d at 698 (quoting S.E.C. v. Monterosso, 756 F. 3d 1326, 1337 (11th Cir. 2014)); see Cushman & Wakefield, Inc. v. Office Depot, Inc., No. 08-80321-CIV- MIDDLEBROOKS/JOHNSON, 2008 WL 11409887, at *3 (S.D. Fla. Nov. 3, 2008) (“Disgorgement is a remedy . . . and not an independent cause of action.”); Waldrop v. S. Co. Servs. Inc., 24 F. 3d 152, 157 (11th Cir. 1994) (“[D]amages are equitable when ‘they are restitutionary, such as in “action[s] for disgorgement of improper profits.”’” (citation omitted)).

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CONCLUSION

For the foregoing reasons, we determine the trial court erred in denying the motion to compel arbitration. We reverse, in part, the order and remand the cause to the trial court with instructions to grant the motion to compel arbitration of all claims against the appellants. We affirm the order in all other respects.

Affirmed in part, reversed in part and remanded with instructions.