The Third District issued a fact-dense opinion regarding a real estate development project which involved a non-signatory to a contract invoking an arbitration clause. Florida courts have not addressed "equitable estoppel" in this context since late 2007.

In Debra Sinkle Kolsky v. Jackson Square, LLC (Shepherd, Suarez and Lagoa), various individuals and business entities find themselves enmeshed in a development project where there are several contracts among the various parties, the key one being an amended operating agreement which states, "in the event any dispute arise between the Members... all parties to this Operating Agreement agree that such disputes will be referred to binding arbitration..." Note, in particular, the "any dispute arise between the Members" language.

A member brought suit against another member as well as individuals and entities who are involved in the project but who were not signatories, claiming that there was fraud.

The court set forth that "equitable estoppel is warranted when the signatory to the contract containing the arbitration clause raises allegations of substantially interdependent and concerted misconduct by both the non-signatory and one or more of the signatories" (interestingly, the state court cited federal 11th Circuit authorities relating to "inherently inseparable" acts and "same factual allegations"). Applied to the (dense) facts, the panel held that there was a sufficient nexus in this case and arbitration was compelled.

Political season is upon us and we pick up the thread of the enforceability of parental liability waivers signed on behalf of their children who participate in commercial activities. Florida's legislative session begins this week.

Fourteen months ago, in January 2009, the Florida Supreme Court rocked the state's entertainment industries by ruling that parents do not have the authority to sign liability waivers / release-of-negligence forms on behalf of their children who want to participate in commercial (entertainment or sporting) activities. This includes everything from motorcross, theme parks, fishing trips, almost any racing, and even safaris. The landmark case was Kurton v. Fields.

Since that time, there has been little to no appellate law in the area and the courts seemingly have fallen silent. Still unclear is what happens with non-commercial activity liability waivers and a clear indication as to what is or is not "commercial." Riding that line would be activities such as summer camps.

Still untested is our legal theory of how (your?) business can draft contracts which parents can sign waivers which serve the same, or similar, purpose.

Some business-oriented state legislators tried to wrest the issue away from the courts by presenting bills to the Florida legislature which empowered parents and guardians with that legal authority. At the end of 2009, however, those efforts failed.

But the issue is not forgotten. According to the Orlando Sentinel, "Theme Park Industry Again Seeks Parental Waivers." According to the article, some smaller tourism outfits have stopped serving minors (such as dive shops) while the larger theme parks have not changed policies.

Following that article, reporter Jason Garcia penned another piece, "Race Track Operator at Disney Says It May Raise Age Limits if Legal Waivers Aren't Reinstated." Previously, the Richard Petty Driving Experience lowered its age limit from 16 to 14 which opponents charged was an example that the Fields case was not a significant change.

I'm expecting we will see proposed bills by the end of March 2010.

We travel to Colorado for this state supreme court case in yet another nursing home arbitration / agreement-signed-by-adult-children case.

In Moffett v. Life Care Centers of America, the adult son of a nursing home resident signed the admission agreement and a separate arbitration agreement two days after the resident was admitted to the facility. He had both a power of attorney and a medical durable power of attorney. A dispute arose about the quality of care.

In disputing arbitration, the family argued that Colorado's Health Care Availability Act would only validate arbitration agreements between the provider and "the patient" -- not the patient's POA. Moreover, the family claimed that the Act was violated because the son stated in an affidavit that he was told he had to sign the arbitration agreement to gain his mother's admission.

In short, the family's argument would essential prevent an attorney in fact from signing health care documents for an incapacitated patient (recognizing that so many health care providers use arbitration in their agreements).

The Colorado Supreme Court held that a person possessing a POA is permitted to agree to arbitrate on behalf of an incapacitated patient under the Act, as long as there is no restriction or limitation on authority in the POA documents.

In its analysis, the court held that the family's argument was "illogical" and employed an interpretation which "frustrates the purpose of the HCAA, Colorado's public policy favoring arbitration, and the right of an individual to authorize [a power of attorney]."

Quick notes:

Arbitration clause at issue: "..any claims, including but not limited to, any claim that medical services... were improperly, negligently, or incompletely rendered or omitted... [and] all disputes... arising out of or in any way related or connected to the resident's stay and care provided at the Facility..."

The paperwork contained a "comprehensive explanation of arbitration" and "makes explicit that 'the execution of [the Agreement] is voluntary and not a precondition to receiving medical treatment at or for admission to [facility]."

The last section of the agreement provided a 90-day rescission period: "You have the right to seek legal counsel and you have the right to rescind this agreement within ninety days from the date of signature of both parties."

The matter was remanded to the trial court for an evidentiary hearing over the family's claim that the son was told he had to sign the agreement. Likely as not-so-subtle guidance to the trial judge on remand, the court gratuitously pointed out (1) the son signed the documents AFTER admission, (2) the paperwork is contrary to the affidavit, and (3) the paperwork references getting legal counsel and rescinding in 90 days.

We note that Life Care recently made pro-arbitration law in two Florida appellate courts: the Second and Fifth Districts both agreed that the AAA's refusal to hear matters based upon pre-dispute health care arbitration agreements does not prevent arbitration when the agreement referred disputes to the AAA (the cases are Perez v. Life Care and Life Care v. Stern). On the flip side, see this Georgia case with a slightly different set of facts and an inopposite outcome.

The Third DCA issued a fairly obvious and non-groundbreaking decision in Francisco F. Galvez Lopez v. Atlas Financial Group, LLC (Ramirez, Rothenberg, and Schwartz) -- although the case may hold the interest of those in investments and/or parties seeking to employ "third party beneficiary" status as a means to invoke arbitration as a non-party to the arbitration agreement.

An individual investor (the plaintiff) claimed that the defendant investment advisor mismanaged account #1. The documents relating to that account do not include an arbitration clause.

The individual investor had also opened account #2 with another institution (a "clearing broker") where the defendant-advisor was the "introducing broker." That account included an arbitration clause; the defendant-advisor signed as the "introducing broker" but was not deemed a party to the contract because of its limited role.

The defendant convinced the trial court that the arbitration clause relating to account #2 applied to account #1. The Third DCA was not so convinced, pointing to an old Fifth Circuit case and the instant facts, circumstances, and wording of the arbitration agreement in account #1.

Looks like the U.S. Supreme Court is going to do some weeding in the garden of arbitration cases. Will they clarify issues to the point that they put a lowly blog like us outta business? I doubt it. But we've got an interesting Spring to look forward to.

SCOTUS took up the case of Rent-A-Center West, Inc. v. Jackson, on an expedited briefing schedule (see SCOTUS docket here), which comes out of this September 9, 2009 Ninth Circuit opinion.

Previously we mentioned the Stolt-Nielsen v. AnimalFeeds case which involves the question of what to do when an arbitration clause is silent as to a class action claim.

In Rent-A-Center, the arbitration clause gives the arbitrator the ability to decide "any dispute relating to the interpretation, applicability, enforcement or formation of this Agreement..." The situation involves a discrimination claim in the employment context. The plaintiff-employee claims that the agreement is procedurally and substantively unconscionable and wants the court to decide. The Ninth Circuit agreed.

First stop in the analysis was the fact that Buckeye Check Cashing, Inc. v. Cardegna calls for challenges to the whole contract to go to the arbitrator whereas challenges to the arbitration clause goes to the court. The rationale is that, where parties agree there is a contract, a party still can't be compelled to arbitration without a court determining there is a duty to arbitrate.

This arises from 9 U.S.C. 4, which says that a court can't compel arbitration until the court is satisfied that the making of the arbitration is not at issue.

We talked about these very issues in this post regarding Life Receiveables Trust v. Goshark and (in Florida) Jaylene v. Steuer.

So says Judge Cohen in a special concurrence in George T. Andrews v. Thomas J. and Sandra R. McPartland (5th DCA, Per Curiam).

In an auto accident where defendant-driver was sued as was the (purely vicarious) auto owner, the plaintiff made the mistake of serving an undifferentiated Proposal for Settlement on two defendants.

Under Florida Supreme Court precedent, it fails (although the special concurrence suggested that it should not apply to cases involving undisputed pure vicarious cases).

As we've previously mentioned, the Third and Fourth DCAs have shot down Proposals for this shortcoming -- just within the last year.

A donut franchise dispute erupted into an arbitration, then trial de novo, and then an appeal. The extensive dispute concluded... over the interpretation of civil procedure rules and the nettlesome Chapter 44.

The case is Dunkin' Donuts Franchised Restaurants, LLC v. 330545 Donuts, Inc. (Gross, Taylor, and May). Of note, the Fourth DCA last addressed Chapter 44 back in September 2009 in this case.

Several corporations and at least one individual sued as plaintiffs in a franchise dispute and won, at arbitration, $90,000. The Plaintiffs determined that they may do better at trial and sought trial de novo under F.S. 44.103(5). Note, we're presuming that the parties were sent to arbitration (or agreed) post-dispute since that is typically not an option under most pre-dispute arbitration clauses.

Leading up to trial, the individual plaintiff was dismissed via a signed stipulation of dismissal where both sides would bear their own fees and costs. The pleadings were also amended and, at trial, it was one plaintiff and one defendant.

Upon a defense verdict, the defendant sought fees under F.S. 44.103(6) against both the remaining plaintiff and the (dismissed) individual. As the Panel put it, "section 44.103(6) is directed at the miscalculation of the strength of a case after an arbitration award; the purpose of the statute is to encourage acceptance of the arbitration award, not to punish litigation misconduct."

The trial and appellate court agreed that this would not work and that fees were only assessable against the remaining plaintiff. Under Florida Rule of Civil Procedure 1.420(a)(1), a voluntary dismissal removes the court's ability to enter an order (equivalent to lacking jurisdiction). Nontheless, the court could retain jurisdiction under Rule 1.540, but that jurisdiction is limited.

Because of the stipulated dismissal under Rule 1.420, the former individual plaintiff was no longer a "party." Chapter 44 involves assessing fees against a "party." Thus, the court has no jurisdiction.