SEVILLE CONDOMINIUM # 1, INC., ET AL., APPELLANTS,
v.
CLEARWATER DEVELOPMENT CORPORATION ET AL., APPELLEES

Fla. 2d DCA | 1976-12-17
No. 76-913
BOARDMAN, Acting C. J., and GREEN, OLIVER L., Associate Judge, concur.
340 So. 2d 1243 Florida District Court of Appeal, Second District (1976) Positive Treatment
Cited by 37 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

In this interlocutory appeal, the Florida District Court of Appeal reversed an order compelling arbitration between condominium associations and their management corporation, holding that the management corporation waived its right to arbitration through inconsistent pre-suit conduct and by initiating litigation on related matters without requesting arbitration.


Holding

The court held that the management corporation waived its right to arbitration. The corporation's inconsistent positions during pre-suit negotiations, combined with its decision to initiate court proceedings seeking broad relief without any prayer for arbitration of arbitrable issues, constituted waiver. The fact that the corporation only raised arbitration after obtaining an injunction and after consolidating the suits further demonstrated the waiver.


Headnotes

[1] A party may waive its right to arbitration through conduct inconsistent with the intent to arbitrate.

[2] Initiating litigation on issues subject to arbitration, without seeking arbitration, can constitute a waiver of the right to arbitrate.

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Key Quotes

“It is well settled that a party may waive its right to arbitration by inconsistent conduct.”

Establishes the legal standard for waiver of arbitration rights.

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Facts & Procedural History

Eight condominium associations contracted with a management corporation for maintenance and management services. In 1975, a dispute arose when the man…

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Opinion of the Court
GRIMES, Judge.

GRIMES, Judge.

This interlocutory appeal involves a dispute between eight condominium associations at the Seville Condominium complex in Pinellas County on the one hand (hereinafter called the Associations) and the developer and the management corporation for the complex on the other (hereinafter called the Management Corporation).

The Associations had previously entered into contracts with the Management Corporation providing for the maintenance and management of the condominiums, their recreational facilities and the common areas. In 1975, the parties fell into an acrimonious dispute. The Management Corporation notified the Associations that it was raising its fees pursuant to an escalation clause in the contracts. The Associations contended that the Management Corporation had no right to raise the fees and further that it was not properly performing the services required of it under the contracts.

Most of the residents of the Associations did not pay the increased maintenance fees. Premised upon the view that the Management Corporation was not properly performing its contracts, the Associations recommended to their members that no fees be paid whatsoever. Further, the Associations took steps toward bringing in a new management corporation. At this point, the Management Corporation brought suit seeking to enjoin the Associations and their principals from interfering with the collection of maintenance fees and seeking damages on a theory of tortious interference of contract. Two weeks later the court entered a temporary injunction directing that all management fees be paid according to the contract documents until further order and providing for an escrow of certain disputed payments.

In the meantime, the Associations had brought a class action on behalf of all the condominium residents against the Management Corporation. This suit was filed several hours after the Management Corporation’s suit and requested a variety of relief including the cancellation of the management contract, an accounting of the maintenance fees and damages. Upon motion of the Management Corporation and with the concurrence of the Associations, the two suits were consolidated by an order entered a week after the entry of the temporary injunction. Ten days later the Management Corporation filed motions to dismiss the Associations’ complaint. The following day the Management Corporation filed a motion to compel arbitration in the suit brought by the Associations. The court entered an order granting this motion, and one of the points on this appeal involves the propriety of this order. While conceding that the subject matter of their complaint is within the scope of the arbitration provision of the contracts, the Associations insist that the Management Corporation waived its right to arbitration. Our analysis of this complicated proceeding compels us to agree.

In an exchange of correspondence which took place over a period of several months before the suits were filed, both sides through their attorneys had demanded arbitration of certain disputes pursuant to the arbitration clause in the contracts. At the same time both sides dragged their feet with respect to implementing the arbitration proceedings, and each side contended that only certain of the disputes were arbi-trable. In essence, both sides took positions either in support of or opposing arbitration depending upon when and under what circumstances it was deemed to be in their own best interests.

At one point the Management Corporation’s attorney unequivocally stated that the relief requested by the Associations was not arbitrable. The fact that the Associations also sometimes took positions inconsistent with arbitration is not important because the Associations are not now seeking arbitration. Our concern is whether the actions of the Management Corporation were so inconsistent with arbitration as to constitute a waiver. If there was any doubt, we think this was resolved when the Management Corporation was first to initiate legal action concerning the subject matter of the dispute and sought nothing by way of arbitration. Admittedly, some of the relief prayed for was beyond the scope of arbitration, but some of the issues which will have to be decided in that suit appear to be within the scope of arbitration provision. It is significant to note that the Management Corporation’s complaint contained no prayer for arbitration of any matters deemed to be arbitrable, but simply sought a miscellany of relief from the court. Cf. Ojus Industries, Inc. v. Mann, 221 So. 2d 780 (Fla. 3d DCA 1969).

The first time in either suit that the Management Corporation made any contention that arbitration should apply was after the injunction had been granted, after the two suits had been consolidated, and after its motion to dismiss the Associations’ suit had been filed. At no time was any request for arbitration filed in the Management Corporation’s suit. The Management Corporation apparently wants to have the Associations’ suit determined by arbitration and its own suit determined by the court. Be that as it may, we think that the posture of this case and the inconsistent positions taken by the Management Corporation require that the order referring the case to arbitration be set aside.

It is well settled that a party may waive its right to arbitration by inconsistent conduct. Mike Bradford & Co. v. Gulf States Steel Co., 184 So. 2d 911 (Fla. 3d DCA 1966); 6 Williston, Contracts, § 1921A (Rev. Ed.1938); 5 Am.Jur.2d, Arbitration, § 51. The prosecution or defense of a lawsuit on issues subject to arbitration may constitute a waiver. Gettles v. Commercial Bank at Winter Park, 276 So. 2d 837 (Fla. 4th DCA 1973); Mike Bradford & Co. v. Gulf States Steel Co., supra. In both of the foregoing cases the party who was deemed to have waived arbitration had proceeding much further in a lawsuit than the Management Corporation in this case. Nevertheless, when the actions of the Management Corporation in connection with the suits are considered together with the positions it took during pre-suit skirmishing, we conclude that a waiver occurred.

The other order attacked in this appeal relates to the request for notice to be given to all of the condominium residents in order for the court to make a final class determination and to provide appropriate proceedings for class representation and organization. We find no error in the entry of this order. AFFIRMED IN PART, REVERSED IN PART.

BOARDMAN, Acting C. J., and GREEN, OLIVER L., Associate Judge, concur.


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Citator

Cited By (20 total)

  • Lapidus v. Arlen Beach Condo. Ass'n, Inc., 394 So. 2d 1102 (Fla. 3d DCA 1981)
    …he right for arbitration acts as waiver, King v. Thompson & McKinnon, Auchincloss Kohlmeyer, Inc., 352 So. 2d 1235 (Fla. 4th DCA 1977); as does initiating legal action without seeking arbitration, Seville Condominium v. Clearwater Development Corp., 340 So. 2d 1243 (Fla. 2d DCA 1976) and counterclaiming without raising the issue of arbitration, Mike Bradford & Co. v. Gulf States Steel Co., 184 So. 2d 911 (Fla. 3d DCA 1966). Although Florida courts have not ruled directly on point, other jurisdictions have hel…
  • Green Tree Servicing, LLC v. McLEOD, 15 So. 3d 682 (Fla. 2d DCA 2009)
    …right.” Id. A party’s active participation in a lawsuit is inconsistent with arbitration. Thus “[t]he prosecution or defense of a lawsuit on issues subject to arbitration may constitute a waiver.” Seville Condo. # 1, Inc. v. Clearwater Dev. Corp., 340 So. 2d 1243, 1245 (Fla. 2d DCA 1976). It follows that a party may waive his or her right to arbitration by filing a lawsuit without seeking arbitration, id.; by filing an answer to a pleading seeking affirmative relief without raising the right to arbitration,…
  • Beverly Hills Dev. Corp. v. George Wimpey OF Fla., Inc., 661 So. 2d 969 (Fla. 5th DCA 1995)
    …rts Construction Co., Inc., v. Masters & Co., Inc., 403 So. 2d 1114 (Fla. 5th DCA 1981); King v. Thompson & McKinnon, Auchincloss, Kohlmeyer, Inc., 352 So. 2d 1235 (Fla. 4th DCA 1977); Seville Condominium No. 1, Inc. v. Clearwater Development Corp., 340 So. 2d 1243 (Fla. 2d DCA 1976), cert, denied, 348 So. 2d 945 (Fla. 1977); Gettles v. Commercial Bank at Winter Park, 276 So. 2d 837 (Fla. 4th DCA 1973); Ojus Industries, Inc. v. Mann, 221 So. 2d 780 (Fla. 3d DCA 1969).…

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