In recent posts (here and here) I have discussed arbitration provisions and cases dealing with the enforceability of arbitration provisions.
The case of Lemos v. Sessa, 46 Fla.L.Weekly D701a (Fla. 3d DCA 2021) deals with two noteworthy principles when it comes to arbitration that warrant another post about arbitration provisions.
First, courts will and should try to resolve any ambiguity in arbitration provisions in favor of arbitration.
Second, when there is an offending arbitration provision or one that includes language that violates public policy, the trial court “should sever the offending provisions from the arbitration clause so long as such severance does not undermine the parties’ intent.” Lemos, supra. This principle is reinforced when the arbitration provision is in an agreement that contains a severability provision.
In Lemos, a client sued her former attorney. The retainer or engagement agreement included an arbitration provision. The arbitration provision contained fee-shifting and cost-shifting provisions that violated pubic policy. The engagement agreement also included a severability provision. The client claimed the arbitration provision should not apply because it was both ambiguous and violative of public policy. On appeal, the appellate court found the arbitration provision was not ambiguous as it required claims regarding the attorney’s representation to be subject to arbitration. While the appellate court did find the fee-shifting and cost-shifting clauses in the arbitration provision to be contrary to public policy, such offending and invalid clauses could be severed from the arbitration provision “because their removal neither subverts the essence of the arbitration clause, nor causes us to drastically rewrite the parties’ agreement.” Lemos, supra.
The gist is that courts generally favor the enforcement of arbitration provisions.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.