I am pleased to report that, effective Wednesday, June 16, I will be moving my law practice to Akerman Senterfitt LLP. Both of Butzel Long's Florida offices are being merged/absorbed into Akerman, the largest law firm in Florida (with 500+ lawyers nationwide).

My law practice remains 100% the same with all lawyers and staff transferring with me. At Akerman, I will become a shareholder and a member of the Florida litigation group. I continue to handle civil litigation and trial matters, including professional liability, construction, health care, probate, and major injury case. I also am a civil circuit certified mediator (including foreclosures) and a qualified arbitrator.

You can check out the firm at www.akerman.com

My new contact information:

Christopher B. Hopkins
Akerman Senterfitt
222 Lakeview Avenue, Suite 400
West Palm Beach, Florida 33401

Direct: 561-671-3668
Cell: 561-635-3397
Fax: 561-659-6313
Email: christopher.hopkins@akerman.com

In Walter Weisenberg v. Costa Crociere (Cope, Shepherd and Suarez), the forum selection clause read:

For cruises which depart from, return to, or make any
port call at a United States port, Passenger further agrees
that any suit against CARRIER shall be filed exclusively
in the United States District Court for the Southern
District of Florida located in Broward County, Florida,
and that any such suit shall be based exclusively upon the
admiralty jurisdiction of the United States District Court.

In short, it must be in federal court in Ft. Lauderdale and federal jurisdiction is conferred by admiralty law. The Plaintiff claimed that this was not sufficient notice of the need to file in federal court and that there would not be a jury. A prior case from last year, Leslie v. Carnival Cruise, involved a slightly different clause which did not require admiralty jurisdiction.

Question of GPI presented is:

IS A FORUM SELECTION CLAUSE ENFORCEABLE
IN CIRCUMSTANCES WHERE ITS EFFECT IS
THAT PASSENGERS WAIVE THE RIGHT TO A
JURY TRIAL BUT THE CLAUSE DOES NOT
EXPRESSLY SO STATE?

The case of FL-Carrollwood Care Center, LLC; Senior Health Management, LLC; Senior Health Management - Gold Coast LLC et al. v. Loly Jaramillo as PR of Estate of Jerry Jeramillo, Sr. (Morris, Northcutt, and Villanti) holds that a dispute over procedural and substantive unconscionability requires an evidentiary hearing. Indeed, this is not news since the same court, same set of lawyers, and one of the parties were involved in a nearly identical case which came out in late May 2010, FL_Carrollwood Care Center, LLC; Senior Health Management - Gold Coast, LLC et al. v. Estate of Robert Dizon Gordon, Sr. (Davis, Whatley and LaRose).

Note the interesting argument by the plaintiff that severing the alleged offending provisions is only available if the basis for the dispute is public policy. The court did not take up the argument as moot or premature.

Also interesting to see the heavy reliance by the Second DCA on (old) Third and Fourth DCA nursing home arbitration cases (Prieto and Romano) when, overall, the courts still don't see eye-to-eye on a number of arbitration enforcement issues.

Disclaimer: your writer was counsel in Prieto and Romano.

More to come on the severance / public policy issue.

The case is FL_Carrollwood Care Center, LLC; Senior Health Management - Gold Coast, LLC et al. v. Estate of Robert Dizon Gordon, Sr. (Davis, Whatley and LaRose).

In response to a nursing law residents' rights lawsuit, the defendant-facility filed a motion to compel arbitration, which was set for hearing. Some discovery was obviously undertaken as to arbitration issues since the opinion references a deposition of a facility employee who handles admissions. Two days before the hearing, the Plaintiff filed a response, arguing that the Resident lacked capacity to contract.

At the hearing on defendant's motion, defense counsel requested a "full evidentiary hearing" if the court believed the Plaintiff had raised a disputed issue. Curiously, the opinion referenced that "both parties presented argument and some documentary evidence" at the hearing. There was no indication in the opinion as to the length of the hearing; which side set the hearing; and/or why is was (or was not) an evidentiary hearing.

Citing Florida Statute 682.03(1), the Panel held that the Arbitration Code requires an evidentiary hearing if a trial court finds a substantial issues is raised as to the making of the agreement.

Applied herein, it appears the Panel was taking the position that the (first?) hearing was an "expedited" one -- as called for under the statute -- and, at the hearing, it became evident that a factual dispute existed as to the making of the agreement which mandated a (second?) "full" evidentiary hearing.

Factually, these cases involve underlying state court claims relating to alleged nursing home resident rights violations. The plaintiffs named both the out-of-state facility owner/operator and the local administrators thereby defeating federal diversity jurisdiction. The facility, alone, filed a federal court action to compel arbitration under sect. 4 of the FAA.

Last year, in Vaden v. Discover Bank, the U.S. Supreme Court held that a federal court entertaining a petition to compel arbitration based upon federal question jurisdiction should determine its jurisdiction by looking through a section 4 petition to the underlying substantive controversy.

Herein, the court noted that federal jurisdiction was triggered by diversity, not a federal question, and that the Vaden "look through" analysis was not required. Instead, the court simply needed to confirm diversity of the parties (and any indispensable parties) and the amount in controversy.

A good overall primer on these nursing home arbitration cases is here.

Back in June 2008, a Second District panel (Salcines, Altenbernd, and Kelly) held that a power-of-attorney properly signed a nursing home arbitration agreement which was neither unconscionable nor against public policy.

The dispute which captured the high court's attention involved the fact that the arbitration was to be governed by AHLA / NHLA rules, which set out a higher standard of proof. In Shotts, the Second DCA simply severed those terms. In (alleged, direct) conflict, the Fourth DCA has denied arbitration and declined to sever.

HCR-Manor Care filed an amicus brief (primarily because their case, Lacey v. Healthcare, is one of the cases claimed to be in direct conflict).

The Shotts court docket is here. Assuming the technology works, you can watch oral argument live on Gavel2Gavel.

In this case, plaintiff brought a negligent infliction of emotional distress claim. The defendant served a Proposal for Settlement and then moved for summary judgment under the theory that the plaintiff could not overcome the impact rule. Shortly before the hearing, but after the expiration of the defendant's Proposal, the plaintiff filed a notice of voluntary dismissal without prejudice. Defendant moved for and was awarded fees under the Proposal.

Plaintiff ultimately argued that the voluntary dismissal without prejudice was not an adjudication on the merits and, therefore, the defendant should not prevail on its Proposal. The Panel noted Florida Rule of Civil Procedure 1.420(a)(1) which states that an action may be dismissed by plaintiff a notice of dismissal before a summary judgment hearing and that, unless otherwise stated, it is without prejudice (and not an adjudication of the merits) unless the plaintiff had previously filed a notice of voluntary dismissal. Case law notes this to be "almost an absolute right" to one free dismissal.

Proposals for Settlement, meanwhile, are triggered by (1) no liability judgment, (2) judgment of plaintiff which is 25% less than defendant's offer or (3) dismissal with prejudice. Citing a 1997 Florida Supreme Court case, the Third District noted that involuntary dismissal, dismissal with prejudice, and second voluntary dismissal serves as an adjudication on the merits.

Thus, it appears plaintiffs have the advantage of a "white flag of surrender" notice of voluntary dismissal without prejudice which would avoid the penalties of a Proposal for Settlement (as long as it is the first voluntary dismissal in the case).

The facts in Patricia Frazier v. CitiFinancial Corp. LLC are lengthy and confusing but it will suffice, for our purposes, to acknowledge that the suit arose over the validity and application of a loan. The loan paperwork contained an arbitration clause. The debtor lost and appealed.

The Court held that a trial court must confirm an arbitrator's award unless it is vacated, modified or corrected in accordance with 9 USC 10 or 11. Section 10 sets out the "four narrow circumstances" for vacatur: (1) corruption/fraud, (2) partiality/corruption, (3) arbitrator misconduct, and (4) arbitrators exceeded their powers or imperfectly executed them.

Typically, the Florida Arbitration Code holds that orders on motions to compel arbitration are appealable. Here, there was a written order and a transcribed oral ruling -- but the party seeking appellate relief chose to request jurisdiction through a writ rather than take a "straight up" appeal. While a curiosity, the court didn't bother to explain that either.

In The Gencom Group v. Garcia Stromberg, LLC et al., an architectural firm entered into several contracts with developers which listed Gencom as the owner representative but Gencom never signed. All contracts included arbitration clauses. Disputes arose. Gencom claimed, under F.S. 682.03(4), it never signed the contracts and, as a non-signatory, could not be compelled to arbitrate.

The trial court entered an order compelling arbitration but it did not mention Gencom. At the hearing, the trial court's "oral announcement suggested that Gencom was not required to arbitration..." This explains the basis for the writ although, again, an appeal would likely be a more simple vehicle.

The Panel hinted that there was a legal argument that Gencom fell into the "exceptional situation in which a contract can be enforced against a nonparty" but then gave little information other than a few cites. We are guessing that this case will return, on a more complete order, with a dispute over third party beneficiary status.

The dissent takes the position that the Court should have denied the case on procedural as well as substantive grounds -- castigating the opinion as "premature" and "indulging."

Procedurally, the dissent avers that the arbitration panel only issued a "clause construction award" which was "abstract and highly interlocutory" and therefore not justifying judicial intervention. In simpler terms, the dissent felt that the Panel's decision was more like an order which would not meet the standards for an appeal. The fact that the Panel slapped the label "award" on the paper did not, in their perspective, merit the finality of a reviewable decision (the dissent claims, "it cannot be true that parties or arbitrators can gain instant review by slicing off a preliminary decision or procedural order and declaring its resolution a 'partial award'").

Substantively, the dissent claimed that the arbitration panel was specifically asked by the parties to interpret the clause and therefore, even if their decision failed due to "serious error," it still was not an act of exceeding their power. Various alternative options or "stopping points" were suggested.

Of note, this was a 5-3 decision with Justice Sotomayor sitting out. Assuming, as it has been argued, that this is an ideological split in the Court, one might speculate that Justice Sotomayor would have joined the liberal dissenters, thus keeping the 5-4 division. If that is correct, then Justice Stevens' forthcoming replacement could make an interesting impact on future arbitration decisions since neither the now-discredited Green Tree v. Bazzle or Stolt-Nielsen set a controlling precedent.

We'll let this sink in for a few days and then provide an overview of the analysis from various scholars, courtwatchers, lawyers, and the media.

The Florida Legislature passed SB 1114 and companion HB821 which replaces the Florida International Arbitration Act (FIAA) with the Florida International Commercial Arbitration Act (FICAA). The latter is premised upon model rules used in over 60 countries and a half dozen U.S. states (developed by U.N. Commission on International Trade Law or UNCITRAL). In short, the law repeals current Chapter 684 with a new version.

The effect on "everyday" arbitrations? None, since the FIAA and FICAA only apply to international disputes.

The effect on state law arbitration code or the FAA? Likely none, given there is nominal to no pre-emption in this area of the law and, anecdotally, there are practically no appellate decisions relating to the current FIAA (case in point, see the detailed but inactive Miami International Arbitration Society blog -- which presumably will kick up with activity soon.

The overall effect? Potential that Florida could be a hub for international arbitration since the rules are harmonized with already existing standards AND we have the weather and hotels to make dispute resolution a bit more comfortable experience.

The bill was supported by the Florida Bar, Florida Chamber of Commerce, and others. Attorney Burton Landy of Akerman Senterfitt, who was credited in the DBR article with writing some of Florida's current international arbitration laws twenty years ago, testified in support of the change.

For detailed analysis of the 50-section soon-to-be law, which would be effective July 1, 2010, see the judiciary committee staff analysis, here.

The new decision, Stolt-Nielsen, appears to essentially gut the significance of Bazzle but Stolt-Nielsen itself is a weak replacement -- further hobbled by the narrow majority with Justice Sotomayor, who ideologically might have joined the dissent, not participating. What is clear, however, is that lawyers may need to clean up their clients' arbitration agreements.

The Stolt-Nielsen opinion is dense with maritime facts and repeated attacks on the arbitration panel's decision making steps. We'll set that aside. Here are the nuts-and-bolts of the opinion:

Facts: two parties had an agreement which contained an arbitration provision which referenced the FAA but was silent about class action arbitration. Importantly, the parties stipulated to the "silence" as to whether class action arbitration was permitted.

Procedural History: A dispute arose and the arbitration panel was given the question of whether class action arbitration was permissible. They said it was, relying on other arbitration outcomes post-Bazzle. The District Court vacated on the grounds that the panel acted with "manifest disregard of the law." The Second Circuit reversed. Now, the US Supreme Court reversed, asserting its own grounds why class action arbitration was not appropriate.

Key Issues:
1. There was a question of whether the panel should have followed New York or maritime law. The procedural failure to first address the choice-of-law question was error by the panel (error to the point of exceeding its powers).

2. Private arbitration can be reasonably structured however the parties wish however courts and arbitrators must give effect to the parties' intent. The "task of an arbitrator is to interpret and enforce a contract, not to make public policy" decisions.

3. In this case, with the parties stipulating that the contract was silent on class action arbitration, the Court held that the arbitrators had no way to interpret intent since silence presumes there is no agreement and thus the panel's decision was in error.

4. Bazzle involved three class action questions (court or arbitrator; which standard applies; whether class action properly ordered) but no majority answered those questions -- only a plurality arrived at an answer to the first question (arbitrator). In the Court's words: "Bazzle did not yield a majority decision on any of these questions" and "Bazzle did not establish the rule to be applied in deciding whether class arbitration is permitted."

5. Procedural disputes which arise out of the dispute itself and bear on its final disposition shall be decided by arbitrator. Class action arbitration should not be inferred by the arbitration agreement alone. This appears to suggest that the Court maintains that procedural issues are for the arbitrator and the interpretation of the contract as to whether it includes class arbitration is one of them.

6. Class action is different than bilateral arbitration because the relative benefits of class action arbitration are much less assured; there is no longer a single dispute to be resolved but presumably hundreds; presumption of privacy and confidentiality is different in class arbitration; class arbitration adjudicates rights of absent parties; and the commercial stakes are different. These differences are too big for a presumption based upon silence.

Practice Points Post-Stolt:

1. Don't read much of anything into Bazzle relative to whether or not class action applies ("Bazzle did not establish the rule to be applied in deciding whether class arbitration is permitted").

2. Parties to an arbitration agreement implicitly authorize the arbitrator (and therefore NOT the court) to determine procedure. This appears to include class action status. But arbitrators are to interpret the agreement and intent, not make public policy decisions.

3. The court hints that "manifest disregard" may, or many not, be grounds for vacating arbitration awards post-Hall Street v. Mattel. Nonetheless, the court then notes that, if such a standard did exist, it was satisfied here. THAT SAID, section II(A) of the opinion seems to indicate the reversal here was based upon the panel "exceeding its powers."

4. Drafters of contracts should note that the Court claimed, "parties may specify with whom they choose to arbitrate their disputes." It is not "shall" and, indeed, there are mechanisms in the FAA and FAC for how to resolve a dispute over who should arbitrate.

5. Drafters should approach their agreements with the notion that a failure to mention class arbitration likely indicates it is not allowed (unless there is some parole evidence or post-dispute agreement). An arbitration agreement should expressly address class action if you want to include it.

We'll address the dissent and review other commentator's assessments in subsequent posts.

The Court held that the arbitrators exceeded their powers by allowing class arbitration stating, more formally, "imposing class arbitration on parties who have not agreed to authorize class arbitration is inconsistent with the FAA."

We're still waiting on a decision in Rent-A-Center West, Inc. v. Jackson, which is still pending at the High Court.

The Wall Street Journal is already heralding this decision as "Time to Tighten Up Those Arbitration Agreements." USAToday briefly knocked the opinion as a 5-3 "ideologically split decision."

We will have more detailed coverage and analysis shortly. For the moment, the opinion (Alito) and dissent (Ginsburg) are here and here.

In Tennessee Health Management, Inc. v. Carol J. Rousseau Johnson as Personal Representative of Dolores J. Rousseau, the resident was competent at the time of admission but was never presented with the paperwork. Instead, the adult daughter received the paperwork and signed in various places (under various titles, such as "representative" and "responsible party"), including a non-binding arbitration provision.

A lawsuit ensued over care issues and the adult daughter-turned-plaintiff denied she had authority to sign such documents. The facility/defendant countered, relying on Carraway v. Beverly, asserting that "apparent agency" only required passive non-objection by the principal to establish agency.

The key factual elements here appear to involve the fact that the resident was competent (see, alternatively, Mariner v. Ferguson which contrasts with the Pagarian case out of California and the In Re Ledet case in Texas). A bit dated, but in 2007 we covered some cases from around the country regarding these scenarios here.

An interesting quote from the opinion:

"Because [Resident] enjoyed the ease of checking into [nursing home] without the requirement that she sign anything, under circumstances in which no reasonable person could consider the admission possible without the intervention of an agent to act on [Resident's] behalf, she thereby passively permitted [daughter] to appear to [facility] to have the authority to act on her behalf and [daughter's] apparent authority is, therefore, implied."

One may contrast this opinion with a prior Nebraska Supreme Court decision, Koric/Baker v. Beverly, which concluded the same however detoured at the last moment by determining that reasonable people might not anticipate an ADR clause and therefore that part of the admission paperwork was not enforceable.

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