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Arbitration is a private legal dispute resolution process that generally relies on the consent of its participants.  Florida courts have considered cases where a person or business that never signed an arbitration contract (which the law typically refers to as a “non-signatory” to the contract) demands arbitration because there is an arbitration contract between the opposing party and someone else.  This is an unusual scenario.  As Florida’s Fourth District Court of Appeal explained in Marcus v. Fla. Bagels, LLC, 112 So.3d 631 (Fla. 4th DCA 2013), “[a]n obligation to arbitrate is based on consent” and “[f]or this reason a ‘non-signatory to a contract containing an arbitration provision ordinarily cannot compel a signatory to submit to arbitration.'”  As with many legal principles, there are exceptions.  The Marcus decision explained that “courts ‘have been willing to estop a signatory from avoiding arbitration with a nonsignatory when the issues the nonsignatory is seeking to resolve in arbitration are intertwined with the agreement that the estopped party has signed.'”  Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

Following the Marcus decision, a more recent appellate decision in Greene v. Johnson, 276 So.3d 527 (Fla. 3d DCA 2019), explained that “[t]he doctrine of equitable estoppel on the basis of intertwined claims…applies when a signatory to a contract containing the arbitration clause raises allegations of substantially interdependent and concerted misconduct by both a non-signatory and one or more of the signatories to the agreement.”  For this reason, “Florida and federal courts have recognized principles of equitable estoppel sometimes allow a nonsignatory to compel arbitration against someone who had signed an arbitration agreement.”  Beck Auto Sales, Inc. v. Asbury Jax Ford, LLC, 249 So.3d 765 (Fla. 1st DCA 2018).

To assess whether the doctrine of equitable estoppel applies, Florida courts generally look at whether the claims implicating the non-signatories are based on the same operative facts and are premised upon substantially interdependent and concerted misconduct between the non-signatories and signatories to an arbitration contract.  For example, Florida’s Third District Court of Appeal in Kolsky v. Jackson Square, LLC, 28 So.3d 965 (Fla. 3d DCA 2010), held that equitable estoppel was warranted where the plaintiff (who signed the arbitration agreement) had claims against non-signatories that “arise out of the same allegations of concerted conduct among the non-signatory appellants and [signatory], are based on the same facts, and are inherently inseparable.”  Similarly, the Greene decision held that the plaintiff was estopped from avoiding arbitration where the plaintiff’s claims against the non-signatory defendants “are based on teh same set of operative facts” that plaintiff alleged against the signatory defendant, and “the defenses of the non-signatory defendants will be dependent upon, if not the same as, [the signatory’s] defenses.”

Courts also evaluate whether the issues in dispute fall within the scope of the arbitration clause.  For example, Florida courts  interpret agreements to arbitrate which contains the key words “relating to” are broad in scope and encompass all controversies which are connected to the contract between the parties, whether founded in contract law or not.  Precedent from the Supreme Court of Florida in Jackson v. Shakespeare Found., Inc., 108 So. 3d 587, 593 (Fla. 2013), explained that, “an arbitration provision that is considered to be broad in scope typically requires arbitration for claims or controversies “arising out of or relating to” the subject contract.  The addition of the words “relating to” broadens the scope of an arbitration provision to include those claims that are described as having a “significant relationship” to the contract—regardless of whether the claim is founded in tort or contract law.”

Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.

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