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MIAMI BUSINESS LITIGATION: ARBITRATION AND APPEALS

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).

The sole concern in a Rule 9.130(a)(3)(C)(iv) appeal is whether the trial court properly determined a party’s right to arbitration.  Tenet Healthcare Corp. v. Maharaj, 859 So.2d 1209, (Fla. 4th DCA 2003) (“Rule 9.130(a)(3)(C)(iv) does allow for appellate review in arbitration cases but only as to the essential issue whether a party is entitled to arbitration”); S.D.S. Autos, Inc. v. Chrzanowski, 976 So. 2d 600 (Fla. 1st DCA 2007) (“To the extent either order denied a motion to dismiss on grounds that have nothing to do with arbitration, we lack jurisdiction”).

Rule 9.130(a)(3)(C)(iv) applies to any order which effectively determines whether a party is entitled to arbitration.  This includes non-final appeals of orders which find that a party waived its right to arbitration.  Amour & More N. Am. Licensing, Inc. v. Zammatta, 659 So. 2d 1387 (Fla. 3d DCA 1995) (permitting review of a non-final order determining that a party waived its right to arbitrate, stating, “[c]ontrary to the trial court’s determination, we conclude that the defendants did not waive their contractual right to arbitration by bringing a prior suit against the plaintiffs in Illinois seeking to enforce a promissory note”).  Additionally, non-final orders staying arbitration are also subject to appellate review.  Alphagraphics Franchising, Inc. v. Stebbins, 617 So. 2d 463 (Fla. 4th DCA 1993) (“We believe an order staying arbitration is an order determining the entitlement of a party to arbitration”).

Even non-final orders which technically do not determine a party’s entitlement to arbitration in business litigation, but effectively have the same result, are properly appealable pursuant to Rule 9.130(a)(3)(C)(iv).  This principle is reflected in BDO Seidman, LLP v. Bee, 970 So. 2d 869 (Fla. 4th DCA 2007), which in pertinent part held:

Here, the court’s non-final order did not exactly determine the entitlement of a party to arbitration, as Bee agreed that he would submit to arbitration. However, the court did not enforce the arbitration clause but permitted an arbitration proceeding outside of the agreement. As the essence of the court’s ruling is to deny BDO’s motion to compel arbitration under the agreement, we conclude that the order is appealable under the rule.

The sole factor that matters is whether the Trial Court determined whether a party is entitled to arbitration.  A motion by any other name would be just as reviewable, as long as the resulting order determined a party’s right to arbitration.  As reflected in Hopewell, LLC v. Alarion Bank, 84 So. 3d 1073 (Fla. 1st DCA 2012),

The Court’s jurisdiction turns on whether the order on appeal determined the appellants’ entitlement to arbitration.  A trial court may construe a motion to dismiss as a motion to compel arbitration and make a determination on a party’s entitlement to arbitration in its order on the motion.  Alternatively, a trial court may decide a motion to dismiss that asserts an entitlement to arbitration without reaching the arbitration issue.

See Cirrus Holdings USA, LLC v. Welch, 199 So. 3d 558 (Fla. 4th DCA 2016) (holding that an order on a “1.140 motion to dismiss” is reviewable because “the order determines the entitlement of a party to arbitration”); see e.g. S.D.S. Autos, Inc. v. Chrzanowski, 976 So. 2d 600 (Fla. 1st DCA 2007) (“The trial court construed their motions to dismiss as in part motions to compel arbitration. To the extent Brumos and S.D.S. sought dismissal on the ground that automobile lessees were contractually obligated to pursue their claims (on an individual basis) in arbitration, we have jurisdiction to review the orders”); Kel Homes, LLC v. Burris, 933 So. 2d 699 (Fla. 2d DCA 2006) (evaluating a motion to dismiss based on Rule 9.130(a)(3)(C)(iv)).

A party litigating the issue of arbitration can take action to preserve their appellate rights by carefully drafting the motion and ensuring that the ultimate order is appealable under the Florida Rules of Appellate Procedure.  Peter Mavrick is a Miami-Dade business litigation attorney who also practices business litigation in Fort Lauderdale, 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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