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Mavrick Law Firm has written extensively about conflicts concerning the right to have a dispute decided in arbitration.  Parties will often believe that there is strategic advantage in pursuing or avoiding arbitration, and consequently, the arbitrability of a dispute is often litigated.  This hotly contested issue can lead to an appeal from the aggrieved party.  Litigants should be aware of their potential appellate relief to ensure that they have a way to appeal an adverse order prior to an appeal being necessary.  The Florida Rules of Appellate Procedure permit non-final appeals of orders adjudicating entitlement to arbitration, however, that rule is narrower than it appears to be, becoming a potential trap for the unwary.  Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Nuances on the way that a motion to compel arbitration and the resulting order is written can mean the difference between whether the order can be appealed. Florida Rule of Appellate Procedure 9.130(a)(3)(C)(iv) states in pertinent part, “[a]ppeals to the district courts of appeal of nonfinal orders are limited to those that: […] determine […] the entitlement of a party to arbitration.”  The test for determining whether an order is appealable pursuant to Rule 9.130(a)(3)(C)(iv) is simply to review the subject order and evaluate whether it determines if a party has a right to arbitrate.  Cohen v. D.R. Horton, Inc., 121 So. 3d 1121 (Fla. 5th DCA 2013) (“the first issue to be addressed is whether the trial court’s order denying Appellants’ motion for relief is an order ‘determining entitlement of a party to arbitration’”); Mel Smith, Inc. v. St. Catherine Laboure Manor, Inc., 752 So. 2d 1253 (Fla. 1st DCA 2000) (“Initially,  we deny appellee’s motion to dismiss the appeal. The order was properly appealable as a non-final order because it determined appellee’s entitlement to proceed with arbitration”).

The purpose of Rule 9.130(a)(3)(C)(iv) is to ensure that the parties in business litigationdo not waste their time trying their case in a forum which ultimately is found to be improper after an appeal of a final judgment. See State, Dept. of Health & Rehab. Services v. Elec. Data Sys. Corp., 664 So. 2d 332 (Fla. 1st DCA 1995) (“[T]he purpose of rule 9.130(a)(3)(C)(v) is to afford appellate review before a party enters into arbitration”).  The alternative is an appeal after final judgment. Episcopal Diocese of Cent. Florida v. Prudential Sec., Inc., 925 So. 2d 1112 (Fla. 5th DCA 2006) (“A non-final order compelling arbitration may be appealed. […] Notwithstanding, having failed to take a non-final appeal, the appellant is permitted to pursue a final appeal after arbitration is completed”).  “This rule provides a method of obtaining an early decision on the proper forum for resolving a dispute, […] and thereby avoids the possibility that a party might be forced to litigate the entire controversy in the wrong forum before the error can be corrected.” Powertel, Inc. v. Bexley, 743 So. 2d 570 (Fla. 1st DCA 1999).

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Litigants wishing to preserve their right to arbitration in commercial disputes should have a strong understanding of that right and take actions to zealously preserve that right. The right to arbitration may be waived, and the question as to whether a party unintentionally waived arbitration arises often in litigation.  Parties opposing arbitration often try to pounce on any perceived opportunity to challenge the arbitrability of a dispute so that the matter may be heard in their preferred forum.  Preservation of the right to arbitration requires careful process and drafting.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete  agreement litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

Florida courts look to the written terms of the agreement to arbitrate define what disputes are arbitrable.  “‘[W]here parties bargain for and/or contemplate exceptions to arbitration in their contracts, their intentions should control.’” Apartment Inv. & Mgmt. Co. v. Flamingo/S. Beach 1 Condo. Ass’n, Inc., 84 So. 3d 1090 (Fla. 3d DCA 2012). “[T]here are three elements for courts to consider in ruling on a motion to compel arbitration: (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 (Fla.1999).  “Whether or not an arbitrable issue exists is determined by the scope of the particular arbitration provision, and determination of the scope ‘requires consideration of the relationship between the contract and the claim at issue.’”  Olson v. Florida Living Options, Inc., 210 So. 3d 107 (Fla. 2d DCA 2016).

In business litigation, the analysis of arbitrability completely depends on the terms of the parties’ agreement.  “[A]rbitration is simply a matter of contract between the parties; it is a way to resolve those disputes—but only those disputes—that the parties have agreed to submit to arbitration.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995).

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It is critical that Florida employers carefully write their non-compete agreements to ensure they are enforceable and prevent employees from performing the types of activities that the employer needs.  Non-compete law in Florida is nuanced and slight deviations in contract wording can sometimes mean the difference between success or failure.  Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach, Florida.  The Mavrick Law Firm represents clients in business litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

While non-compete agreements are interpreted pursuant to principles of general contract law, non-compete law is often considered to be a niche area of law.  Non-compete contracts are governed by Florida Statute § 542.335.  This statute limits the enforcement of non-compete agreements in certain areas, inter alia, limiting enforcement in circumstances where the employer has a legitimate business reason for the non-compete agreement (§ 542.335(1)(b)), limiting the enforceable time period (§ 542.335(1)(d)(1)), and barring enforcement of contract terms limiting the court’s ability to enforce attorneys’ fees (§ 542.335(1)(k).

Particular terms in non-compete agreements often have particular meanings.  For example, determining whether the term “solicitation” applies to certain conduct can be deceptively difficult.  Generally, for an activity to qualify as solicitation under the common meaning of the word, there must be a communication coupled with an underlining intention behind that communication.  Solicit, Merriam-Webster (available at: https://www.merriam-webster.com/) (“to approach with a request or plea” or “to urge (something, such as one’s cause) strongly”);  Solicitation, Black’s Law Dictionary (11th ed. 2019) (“an attempt or effort to gain business”).  Whether a non-compete agreement barring “solicitation” bars particular conduct is determined by the general rules of contract interpretation and cases.

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“Fool me once, shame on you.  Fool me twice, shame on me,” is common sense.  It also is a principle of law recently affirmed by the U.S. Court of Appeals for the Eleventh Circuit.  Parties that claim that they were defrauded by another generally cannot claim fraud a second time based upon later misrepresentations. This is because a party generally cannot reasonably rely on representations from another party which had already been accused of fraud.  Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

“Reasonable reliance” is a critical element of most, if not all, fraud-like claims.  Generally, a plaintiff cannot claim to have been tricked into taking an action by a defendant’s representations if the reliance on those representations was not reasonable.  Whether a plaintiff will prevail in litigation involving fraud often depends on whether it is reasonable that a particular representation would be relied upon.  For example, representations of opinion and “sales puffery” are types of statements which a plaintiff generally cannot rely on.  Puffery is an exaggerated statement to convey a selling point, but which is not a specific factual statement (e.g. a plaintiff would likely be unsuccessful suing Disneyworld for failing to be the “happiest place on earth,” despite that slogan being advertised.  Carvelli v. Ocwen Fin. Corp., 934 F.3d 1307, 1318 (11th Cir. 2019) (“Puffery comprises generalized, vague, nonquantifiable statements of corporate optimism”); Puffery, Black’s Law Dictionary 1428 (10th ed. 2014) (an “expression of an exaggerated opinion—as opposed to a factual misrepresentation—with the intent to sell a good or service”).

Importantly, a business litigation defendant in that is able to show that it was unreasonable for a plaintiff to rely on a statement can get fraud claims dismissed or adjudicated early in summary judgment.  When a defendant disputes whether its agents actually made a particular representation, that issue is often only determinable at trial through the presentation of testimony.  Thus, it will usually be significantly less costly to prevail on an argument that a plaintiff could not have reasonably relied on a statement compared to prevailing on an argument that the statement was never made.  Because of this, even completely honest defendants are incentivized to argue that it would be unreasonable to rely on their statements.

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Parties to a contract can agree to arbitrate certain disputes within a contract.  As discussed in many of our previous articles, resolving a dispute through arbitration can affect the scope and amount of discovery, the speed of resolution, as well as the ultimate result of the case.  Whether a particular dispute between parties is arbitrable is defined by the terms of the parties’ agreement.  Arbitration clauses often narrow the scope of arbitrable issues to particular types of disputes.  As a result, parties involved in a dispute may have both arbitrable and non-arbitrable claims between them.  When this happens, parties are required to address their arbitrable claims in arbitration and their non-arbitrable claims in court.  To the extent that the non-arbitrable claims are inextricably intertwined with claims in arbitration, those non-arbitrable claims are stayed. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Court and arbitration are two alternate methods of dispute resolution.  Because most business litigation disputes are addressed in either court or arbitration, there is a common misconception that all of a parties’ claims must be addressed in only one forum.  However, neither the Federal Arbitration Act (FAA) nor the Revised Florida Arbitration Code (RFAC) require that parties’ disputes be brought in a single forum.

In fact, both the FAA and RFAC require that parties’ arbitrable disputes be addressed in arbitration and non-arbitrable disputes be addressed in court, even when those claims are related.  To the extent that arbitrable and non-arbitrable claims are so intertwined that it would be impossible independently resolve the parties’ disputes in both forums simultaneously, the court proceedings should be stayed pending arbitration.  RFAC states this explicitly at § 682.03(7), Florida Statutes, which provides, “[i]f the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration.  If a claim subject to the arbitration is severable, the court may limit the stay to that claim.”

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The decision whether to bring a case in federal court or Florida state court can have significant consequences to the disposition of non-compete litigation.  While both federal and Florida will usually apply the same substantive law, the procedure applied differs.  This is particularly pertinent in non-compete litigation.  Florida courts, when considering whether to enjoin a former employee from competing, will not consider particular categories of evidence because of a Florida statute (§ 542.335(g)(1-3).  Federal courts are free of this limitation, and may consider nearly any admissible and relevant evidence.  This distinction can ultimately mean the difference between whether an employee or an employer will prevail in non-compete litigation. Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach, Florida. The Mavrick Law Firm represents clients in business litigation, trade secret litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

Non-compete litigation can be heard in both federal courts and state courts.  While a Florida court almost always has jurisdiction to hear a Florida non-compete case, there are certain requirements before a matter may be heard in federal court.  The primary method by which a federal court would have jurisdiction is that a “federal question” is raised.  This can happen when a non-compete claim is brought along with a trade secret claim under the federal Defend Trade Secrets Act.  18 U.S.C. § 1836, et seq.  While it is technically possible that a federal court can have jurisdiction over the parties because a “diversity of citizenship” between the plaintiff and defendant, this would rarely happen because both a company attempting to enforce a non-compete and the employee will usually qualify as a citizens of Florida.

Federal courts and Florida courts have their own rules of civil procedure.  While the Florida Rules of Civil Procedure were derived in significant part from the federal rules, the differences between them are substantial, and include different pleading and discovery requirements.  There are also differences between federal and Florida courts which do not arise from the differences in procedural rules.  Generally, federal courts have a greater budget and fewer cases, and so may have more time and staff to address complex and nuanced issues.  Federal courts also tend to place more time constraints which are less flexible than their Florida counterpart.

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Commercial relationships are governed, in significant part, by contract law.  When disputes arise between businesses, the interpretation of the terms of the parties’ agreement often will determine which side prevails.  Litigants in contract disputes will often seek to gain advantage by bringing in testimony and evidence which supports their own interpretation of a contract.  Testimony and evidence may not be introduced to interpret contracts which are unambiguous.  As reflected by the recent case, Thompson o/b/o R.O.B. v. Johnson, 45 Fla. L. Weekly D2710 (Fla. 5th DCA Dec. 4, 2020), this principle applies even when there exists significant evidence that a party likely did not consider a particular term to have that meaning. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Generally, when a contract is unambiguous, contract interpretation is accomplished by applying the principles of contract interpretation to the text of the contract.  “Where a contract is clear and unambiguous, it must be enforced pursuant to its plain language” without resort to outside evidence. Hahamovitch v. Hahamovitch, 174 So. 3d 983 (Fla. 2015).  “In such a situation, ‘the language itself is the best evidence of the parties’ intent, and its plain meaning controls.’” Crawford v. Barker, 64 So.3d 1246 (Fla.2011).

In business litigation, ambiguous contracts may be interpreted by the judge without considering outside evidence or the expense of a jury.  Langford v. Paravant, Inc., 912 So. 2d 359 (Fla. 5th DCA 2005) (“Contract interpretation is generally a question of law for the court, rather than a question of fact”).  When the language of the contract is ambiguous, the parties are allowed to bring in evidence from outside the contract to help with interpreting the contract.  For example, a party would likely be able to testify what the parties really meant when using a term with multiple meanings, such as “light bulb.”  However, a party would likely not be permitted to testify about what was meant by a specific term, “4 pin Gx24q base 10-watt LED bulb.”

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An “implied contract” is a principle of law whereby courts will bind a party to an implied agreement when the elements of a contract are not otherwise met (an offer by one party over a matter which each party must provide some form of consideration which is accepted by another party).  It is a fundamental principle of  law that an implied contract cannot supplant an express contract.  However, an implied contract can exist when parties to an express contract act in a way which exceeds the scope of the express contract.  A recent case before the Fourth District Court of Appeal clarified this principle.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

An implied contract (aka implied-in-law contract or quasi-contract) is a legal principle which can establish liability when the parties did not actually agree to terms.

The elements of a cause of action for a quasi contract are that: (1) the plaintiff has conferred a benefit on the defendant; (2) the defendant has knowledge of the benefit; (3) the defendant has accepted or retained the benefit conferred and (4) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying fair value for it.  Because the basis for recovery does not turn on the finding of an enforceable agreement, there may be recovery under a contract implied in law even where the parties had no dealings at all with each other.

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Florida law permits a person or company to sue under a business contract which that party did not actually agree to because that person or business is a “third-party beneficiary” to the contract.  A third-party beneficiary is an entity which receives a benefit under a contract but is not one of the parties that signed that contract.  The status of third-party beneficiary permits the non-party standing to sue even though the third-party beneficiary has no obligations under the contract.  Generally, for a third-party beneficiary to have standing to sue, the contract itself must clearly express that a benefit is intended to a non-party to the contract.  If the contract expressly states that the parties are the only intended beneficiaries to the contract, then there can be no third-party beneficiary.  A recent case before Florida’s Fourth District Court of Appeals upheld this principle.  Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, employment litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

“The doctrine of third-party beneficiaries provides that under certain circumstances, a person may sue to enforce a contract, even though the person is not a party to the contract.”  Mendez v. Hampton Court Nursing Ctr., LLC, 203 So. 3d 146 (Fla. 2016).  In business litigation, a non-party may qualify as a third-party beneficiary when the following elements are met: “(1) existence of a contract; (2) the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party; (3) breach of the contract by a contracting party; and (4) damages to the third party resulting from the breach.” Mendez v. Hampton Ct. Nursing Ctr., LLC, 203 So. 3d 146 (Fla. 2016).

The law of third-party beneficiaries is an issue of contract interpretation.  Parties to a business contract are free to enter into nearly any kind of contract.  Whether the parties intended to allow a third-party to sue under a contract is a ultimately a question as to whether the parties intended to give that third-party the right to sue for violations under the contract. Contracts cannot reasonably contemplate every possible dispute or circumstantial permutation which may arise.  Thus, courts apply the “gap-filler” rules of contract interpretation when the contract does not directly address the dispute.   “The parties’ intention governs contract construction and interpretation; the best evidence of intent is the contract’s plain language.”  Whitley v. Royal Trails Prop. Owners’ Ass’n, Inc., 910 So. 2d 381 (Fla. 5th DCA 2005).

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Attorneys’ fee provisions in contracts can significantly influence how a dispute will be resolved.  An aggrieved party can become emboldened if an attorneys’ fees award is available as a prevailing party.  At first blush, it may appear prudent for a business to have its contract contain an attorneys’ fee provision which allows it to claim attorneys’ fees if it prevails, but not allow the other party to claim attorneys’ fees if the opposing party prevails.  Florida law generally requires that all attorneys’ fee provisions be treated as if they are mutual.  The Florida Supreme Court recently resolved a “circuit split” which appeared to permit some litigation parties to continue to gain the benefit of a unilateral attorneys’ fee provision without that provision being applied mutually.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete  agreement litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

The default “American Rule” generally provides that parties pay for their own attorneys’ fees unless there is a contract or statute governing attorneys’ fees.  When litigants in business litigation sue for bogus claims or engage in litigation misconduct, courts may order that the other party be compensated for their attorneys’ fees.  § 57.105(1)-(4), Florida Statutes (describing the standard by which attorneys’ fees may be awarded against a party that brought improper claims or defenses).  In contrast, traditional English law allows courts to order losers in litigation to pay the attorneys’ fees of the victors.

The character of business litigation can change dramatically depending upon whether litigants can be awarded their attorneys’ fees.  It may not make economic sense for a plaintiff to pursue a claim when the potential recovery is outweighed by the cost of retaining counsel and prosecuting litigation.  When a litigant can potentially be awarded his or her attorneys’ fees, it may incentivize litigation over smaller claims which would not have otherwise been worth pursuing.  It is not uncommon for the attorneys’ fee awards in such cases to dwarf the matter at issue.

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