CONSIDER ARBITRATION PROVISION IN HOMEBUILDER’S WARRANTY AND PURCHASE-AND-SALE AGREEMENT

Posted on November 17, 2024November 17, 2024 by David Adelstein

When you enter into a contract with a homebuilder, particularly a tract homebuilder, please consider two things when it comes to dispute resolution: (1) your purchase-and-sale agreement likely contains an arbitration provision, and (2) your limited warranty agreement you get in connection with closing likely also reinforces the arbitration provision, especially with warranty claims governed by the limited warranty agreement. This dispute resolution is important because it means the homebuilder wants disputes resolved through the arbitration process and NOT through the litigation process (where the nature of disputes and allegations are public).

Look, there are pros and cons with arbitration, no different than litigation. Arbitrating a dispute is not necessarily a bad thing, and with certain disputes, ideal. There is no right to appeal in arbitration, but the dispute should resolve itself quicker than litigation, and you’ll have more control over the decision maker, i.e., the arbitrator.

In a recent case, Osborne v. Drees Home of Florida, Inc., 49 Fla.L.Weekly D215a (Fla. 5^th DCA 2024), a buyer purchased a home from a homebuilder. The purchase-and-sale agreement and limited warranty contained arbitration provisions. The buyer, years later, sold the home to a subsequent buyer / purchaser and assigned the limited warranty it received from the homebuilder. The subsequent buyer then sued the homebuilder under theories of negligence and violation of Florida’s building code for defective stucco, windows, and painting. (There was no contract between the subsequent buyer and the homebuilder.) The homebuilder moved to compel mediation under the limited warranty agreement. The trial court granted the homebuilder’s motion; however, the appellate court reversed.

“[T]here are three elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” “The general rule is that where an arbitration agreement exists between the parties, arbitration is required only of those controversies or disputes which the parties have agreed to submit to arbitration.” “[T]he question whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability’ is an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.” To determine whether a dispute must be submitted to arbitration, the scope of the arbitration provision governs. The scope of an arbitration clause is a pure matter of contract interpretation, and the determination of whether an arbitrable issue exists requires the court to examine the plain language of the arbitration agreement. “Although any doubts regarding the scope of an arbitration clause should be resolved in favor of arbitration, where the contract provision is not doubtful, arbitration should not be ordered.”

Osborne, supra (internal citations omitted).

The appellate court found the defect claims raised by the subsequent buyer were NOT covered by the limited warranty agreement, where the only warranty remaining was structural (load bearing) in nature: “Because the [plaintiffs’] claims are not within the scope of the Limited Warranty’s arbitration provision and the [plaintiffs] have not otherwise agreed to arbitrate their claims, we reverse the order compelling arbitration…..” Osborne, supra.

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.

BE STRATEGIC WHEN SUING A MANUFACTURER UNDER A WARRANTY WITH AN ARBITRATION PROVISION

Posted on August 20, 2023August 20, 2023 by David Adelstein

I’ve said this before, and I’ll say it again: arbitration is a creature of contract. If you don’t want to arbitrate, don’t agree to an arbitration provision as the means to resolve your dispute. Now, with that said, there are times you may not have a choice. An arbitration provision in a warranty from a manufacturer of a product is an example. If you are procuring the product, you are agreeing to the terms of the express warranty. Manufacturers are not negotiating their product warranty on a case-by-case basis considering they are not typically the ones selling the product directly to the end user. This does not mean that is a bad thing. It just means if you elect to sue the manufacturer directly for an alleged product defect or under the terms of the warranty, you should read the warranty and consider the strategic aspect that suing the manufacturer will have on your case.

In SICIS North America, Inc. v Sadie’s Hideaway, LLC, 48 Fla.L.Weekly D1581c (Fla. 1^st DCA 2023), an owner elected to sue a tile manufacturer, a general contractor, the architect, and a window and door company. One of the arguments the owner raised was that exterior tiles installed were defective. The tiles were procured by the general contractor. The owner sued the general contractor under various theories and sued the tile manufacturer for breaches of warranty and negligence. The general contractor asserted a crossclaim for indemnification against the tile manufacturer. The tile manufacturer moved to compel the owner’s claim and the general contractor’s crossclaim to arbitration since there was an arbitration provision in the warranty documents and the general contractor’s indemnification claim arose from that transaction. The trial court denied the motion to compel arbitration. On appeal, the appellate court reversed:

First, because [the owner] was suing [the tile manufacturer] based upon the written warranty, it was bound by the arbitration provision contained in [the general contractor’s] agreement with [the tile manufacturer]. As the Florida Supreme Court has explained, “[W]hen a plaintiff sues under a contract to which the plaintiff is not a party . . . we will ordinarily enforce an arbitration clause contained in that contract, absent some other valid defense. . . .” . [The owner] had no valid defense against arbitration, a fact which it apparently realized when it voluntarily dismissed its express warranty claim after the notice of appeal and initial brief were filed.

Second, the trial court erred in not compelling arbitration based upon the agency relationship that existed between [the owner] and [the general contractor]. The essential elements of an actual agency relationship are: (1) acknowledgement by the principal that the agent will act for him; (2) the agent’s acceptance of the undertaking; and (3) control by the principal over the actions of the agent.

***

[T]he record evidence establishes that [the owner] authorized [the general contractor] as its general contractor to act as its agent when purchasing the tiles from [the tile manufacturer]. Article 3 of the parties’ agreement provides that [the general contractor] “accept[ed] the relationship of trust and confidence established by the [a]greement,” it would “exercise [its] skill and judgment in furthering the interests of the Owner,” it would “furnish efficient business administration and supervision,” and it would “furnish at all times an adequate supply of workers and materials.” Section 10.1 authorizes [the general contractor] to obtain bids from “suppliers of materials,” and Section 12.1.9 provides that “the Contractor will not be required to make payments to subcontractors or suppliers unless and until the Owner pays Contractor for their work and materials.” In line with its duties pursuant to the agreement, [the general contractor] alleged below in its indemnification claim that a special relationship existed between it and [the tile manufacturer] because [the tile manufacturer] provided “certain materials” to it to install on the project. In addition, [the tile manufacturer] filed with the trial court a signed copy of its purchase agreement with [the general contractor]. Because [the general contractor’s purchase of the tiles was within the scope of work that [the owner] hired it to do, it was unnecessary for [the owner] to expressly authorize [the general contractor] to enter into the arbitration agreement with [the tile manufacturer]. [The owner] is bound by that agreement by virtue of its agency relationship with [the general contractor].

SICIS North America, supra (internal citations omitted).

The owner did not need to sue the tile manufacturer. It could have just sued the general contractor for the tiles. Also, in numerous cases, it is not the product that is the problem; it is the installation. Did the warranty cover installation or only defects in the product itself? It may likely be the latter and the warranty probably limited the scope of the manufacturer’s liability. It is uncertain in this instance, but even if there was an inherent product defect in the tiles, there are also economic loss rule considerations. The point is – suing the manufacturer was likely overkill in this case by the owner as it could have sued the general contractor that procured the tiles and was responsible for installing the tiles. Now, the owner and general contractor are tasked with arbitrating claims against a manufacturer under a warranty that probably has favorable terms to the manufacturer if indeed the tiles are proven to be defective and the root of the owner’s construction defect claim.

COURTS GENERALLY FAVOR THE ENFORCEMENT OF ARBITRATION PROVISIONS

Posted on April 4, 2021April 4, 2021 by Edward Garber

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.

QUICK NOTE: COMPELLING ARBITRATION BASED ON EQUITABLE ESTOPPEL

Posted on March 28, 2021March 28, 2021 by Edward Garber

In the prior posting, I discussed arbitration provisions and to clearly and unmistakably include in the arbitration provision the person — judge or arbitrator — you want to determine the arbitrability of a given dispute.

In another posting, I discussed how the doctrine of equitable estoppel can be used by a non-signatory to a contract with an arbitration provision to compel arbitration or to compel a non-signatory to arbitration. This occurs “when a signatory to a contract containing the arbitration clause raises allegations of substantially interdependent and concerted misconduct by both a non-signatory [to the contract] and one or more of the signatories to the agreement.” Kratos Investments LLC v. ABS Healthcare Services, LLC, 46 Fla.L.Weekly D603a (Fla. 3d DCA 2021) (internal citations omitted).

Whether or not to include an arbitration provision in your contract is a dispute resolution consideration that should be factored in on the frontend. Further, whether or not to compel a given dispute to arbitration based on an arbitration provision (whether or not you are a non-signatory to the contract with the arbitration provision and want to raise equitable estoppel) is another dispute resolution consideration that should be factored in when the dispute arises. It is always best to consult with counsel during the contract drafting and negotiation process and when the dispute arises to best prepare for your dispute resolution options moving forward

CLEARLY DETERMINING IN CONTRACT WHO DETERMINES ARBITRABILITY OF DISPUTE

Posted on March 27, 2021March 27, 2021 by Edward Garber

As you know from prior postings: “Arbitration provisions are creatures of contract and must be construed ‘as a matter of contract interpretation.’ ” Fallang Family Limited Partnership v. Privcap Companies, LLC, 46 Fla.L.Weekly D639e (Fla. 4^th DCA 2021) (citation omitted). Thus, if you prefer to arbitrate potential disputes, instead of litigating potential disputes, you want to include an arbitration provision in your contract. While there are positives and negatives to arbitration, no different than litigation, these positives and negatives should be considered during the contract negotiation process when dealing with the dispute resolution process in the contract.

Generally, under the law, the arbitrability of a dispute is determined by the court. However, this can be deferred to the arbitrator with clear and unmistakable language in the contract.

By way of example, the American Arbitration Association includes a rule that allows an arbitrator to rule on the arbitrability of the dispute, i.e., the claims asserted are subject to the governing arbitration provision in the contract. Recent law has suggested that if the objective is to authorize an American Arbitration Association arbitrator to make this determination, the contract clearly and unmistakably needs to state this intent and generally referring to the American Arbitration Association rules is not good enough. For this reason, I have included in arbitration provisions language that specifically states, “In the event of any dispute as to the arbitrability of any claim or dispute, the parties agree that an appointed arbitrator within the American Arbitration Association shall make this determination.” I have also included in arbitration provisions the converse so that if there is a dispute as to the arbitrability of a claim or dispute, the court, and not the arbitrator, will make this determination.

In Fallang Family Limited Partnership, the arbitration provision simply read: “In the event of any dispute under this agreement the parties agree to submit to binding arbitration in the state of Florida with a panel of one arbitrator. The arbitrator shall be chosen by the AAA [American Arbitration Association] and the AAA rules and procedure shall apply, and the arbitration will be governed by the law of the state of Florida.” A lawsuit was filed and the court compelled certain claims to arbitration finding that such claims were arbitrable; however, the court authorized the arbitrator to make the final determination as to the arbitrability of the claims.

As mentioned, the rules of the American Arbitration Association allow the arbitrator to rule on the arbitrability of claims subject to the arbitration provision. However, the simple arbitration provision did not clearly and unmistakably specify this intent. The Fourth District concluded “that the general reference to the ‘AAA rules’ in this case left ambiguity as to whether the arbitrator has authority to decide arbitrability to the exclusion of the trial court.” Fallang Family Limited Partnership, supra. Based on this ambiguity, the Fourth District held that the trial court’s ruling was right making the initial determination as to which claims were arbitrable with the final decision left to the arbitrator. Fallang Family Limited Partnership, supra (“[W]e conclude that the trial judge’s order in this case properly made a preliminary decision as to which counts of the complaint are covered by the arbitration agreement, based on a limited showing of the facts in this multiple count, factually complex case, and properly left the final decision as to what was arbitrable to the arbitrator.”).

The bottom line is that, naturally, it may not be the most efficient for the trial court to make a preliminary determination as to the arbitrability of the claim with a final decision left to the arbitrator. However, this ruling was due to the fact that the American Arbitration Association’s rules were incorporated into the contract but did NOT clearly and mistakably say that the arbitrator, and the arbitrator alone, would rule on the arbitrability of claims. For this reason, there is value taking the extra step in the contract to clearly and mistakably reflect this intent, one way or the other.

ARBITRATION PROVISIONS ARE CHALLENGING TO CIRCUMVENT

Posted on April 13, 2019April 24, 2020 by Edward Garber

Arbitration provisions are enforceable and they are becoming more challenging to circumvent, especially if one of the parties to the arbitration agreement wants to arbitrate a dispute versus litigate a dispute. Remember this when agreeing to an arbitration provision as the forum for dispute resolution in your contract. There is not a one-size-fits-all model when it comes to arbitration provisions and how they are drafted. But, there is a very strong public policy in favor of honoring a contractual arbitration provision because this is what the parties agreed to as the forum to resolve their disputes.

By way of example, in Austin Commercial, L.P. v. L.M.C.C. Specialty Contractors, Inc., 44 Fla.L.Weekly D925a (Fla. 2d DCA 2019), a subcontractor and prime contactor entered into a consultant agreement that contained the following arbitration provision:

Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be subject to the dispute resolution procedures, if any, set out in the Prime Contract between [Prime Contractor] and the [Owner]. Should the Prime Contract contain no specific requirement for the resolution of disputes or should the [Owner] not be involved in the dispute, any such controversy or claim shall be resolved by arbitration pursuant to the Construction Industry Rules of the American Arbitration Association then prevailing, and judgment upon the award by the Arbitrator(s) shall be entered in any Court having jurisdiction thereof.

The prime contract between the owner and prime contractor did not require arbitration.

The prime contractor initially hired the subcontractor during the design phase of the project as a consultant. The consultant agreement contained the aforementioned arbitration provision. Then, during the construction phase, the prime contractor and subcontractor entered into a work order that incorporated the terms of the consultant agreement, meaning the arbitration provision was incorporated into the work order.

A payment dispute arose during the construction phase and the subcontractor sued the prime contractor. The prime contractor moved to compel the dispute to arbitration per the terms of the arbitration provision in the consultant agreement. The trial court denied the prime contractor’s motion to compel. This was reversed on appeal – and it was probably an easy reversal for three main reasons:

One: Florida has a strong public policy in favor of enforcing arbitration provisions, as mentioned above. Remember this.

Two: the work order between the prime contractor and subcontractor for the construction phase incorporated the terms of the consultant agreement that contained an arbitration provision. Thus, the consultant agreement with the arbitration provision had to be interpreted together with the work order. Remember that a document or contract can incorporate another document or contract.

Three: the dispute was between the subcontractor and prime contractor. The owner was NOT “involved” in the dispute because it was not a party to the lawsuit and the payment dispute the subcontractor initiated against the prime contractor did not involve the owner considering the owner did not need to participate in the dispute. “[O]ne would not ordinarily understand an entity to be ‘involved’ in a dispute where that entity is neither drawn into the dispute nor affected by the dispute. Only an impermissible, strained textual interpretation of ‘involved in the dispute’ would yield a conclusion that HCAA [Owner] would be affected by a financial dispute between Austin [Prime Contractor] and Mims [Subcontractor].” Austin Commercial, supra. Remember this that the word “involve,” as this word is used in the arbitration provision, is not going to be read so broadly to render inconsequential the prime contractor’s right to arbitrate disputes with its subcontractor.

DRAFTING A CONTRACTUAL ARBITRATION PROVISION

Posted on December 24, 2018April 24, 2020 by Edward Garber

A recent Florida case discussing a contractual arbitration provision in a homebuilder’s contract discussed the difference between a narrow arbitration provision and a broad arbitration provision. See Vancore Construction, Inc. v. Osborn, 43 Fla.L.Weekly D2769b (Fla. 5th DCA 2018). Understanding the distinction between the two types of arbitration provisions is important, particularly if you are drafting and/or negotiating a contractual arbitration provision.

A narrow contractual arbitration provision includes the verbiage “arises out of” the contract such that disputes arising out of the contract are subject to arbitration. Arbitration is required for those claims the have a direct relationship with the contract.

A broad contractual arbitration provision includes the verbiage “arises out of or relating to” the contract such that disputes arising out of or relating to the contract are subject to arbitration. Arbitration is required for those claims that have a significant relationship to the contract. A significant relationship exists if there is a nexus between the claim and the contract meaning the “claim presents circumstances in which the resolution of disputed issues requires either reference to, or construction of, a portion of the contract.” See Vancore Construction, Inc., supra, (citation omitted).

When drafting or negotiating an arbitration provision, make sure you understand those claims that will be subject to arbitration and those potential claims that will not. Typically, if you want a arbitration provision in your contract, you more than likely prefer a broad arbitration provision such that claims arising out of or relating to the contract will be subject to arbitration.

QUICK NOTE: UNENFORCEABLE LANGUAGE IN ARBITRATION PROVISION

Posted on October 19, 2018April 24, 2020 by Edward Garber

Although arbitration is a dispute resolution provision provided for in a contract, the scope of judicial review of an arbitrator’s award is still governed by law. There are limited circumstances in which an arbitrator’s award can be challenged under the law. One of those circumstances is not because a party believes that an arbitrator applied the incorrect law.

In a recent construction case, discussed in more detail here, an arbitration provision provided that a party can essentially appeal/challenge an arbitrator’s award to the circuit court if the arbitrator applied the incorrect law. The appellate court held this language was unenforceable because it attempted to expand the legal scope of judicial review of an arbitration award. The issue, here, became more than just the unenforceable language but whether the entire arbitration clause should be deemed unenforceable. In other words, the issue became whether the unenforceable language that expanded the scope of judicial review of an arbitration award could be severed from the provision such that the parties would still be required to arbitrate (hence, the importance of a severability provision in a contract) OR the entire arbitration provision should be deemed unenforceable. This is a HUGE difference because in one instance the parties still can arbitrate absent the expanded scope of judicial review and in the other instance the arbitration clause is unenforceable in entirety and the parties would be required to litigate.

DOES ARBITRATION APPLY TO CONTEMPORANEOUSLY EXECUTED CONTRACTS (WHEN ONE OF THE CONTRACTS DOES NOT HAVE AN ARBITRATION PROVISION)?

Posted on January 6, 2018January 6, 2018 by Edward Garber

Binding arbitration is an alternative to litigation. Instead of having your dispute decided by a judge and/or jury, it is decided by an arbitrator through an arbitration process. Arbitration, however, is a creature of contract, meaning there needs to be a contractual arbitration provision requiring the parties to arbitrate, and not litigate, their dispute. Just like litigation, there are pros and cons to the arbitration process, oftentimes dictated by the specific facts and legal issues in the case.

What happens when a person executes two (or more) contemporaneous contracts, one with an arbitration provision and one without? Are the parties required to arbitrate the dispute arising out of the contract that does not contain the arbitration provision?

The reality is that this has become an unnecessary over-complicated situation that should be avoided by specifically incorporating all of the contracts into an operative contract or, conversely, expressing the intent in each contract whether arbitration applies. Being specific will avoid the over-compilation of this issue.

In an example of what really amounts to an over-complicated opinion regarding an arbitration provision, the case of Lowe v. Nissan of Brandon, Inc., 43 Fla. L. Weekly D103b (Fla. 2d DCA 2017) dealt with a consumer automobile transaction where a consumer challenged the sale price of an automobile. The consumer purchased a car and signed three contemporaneous contracts: a purchase agreement, an installment sale contract (i.e., the purchase was subject to the condition that the installment contract would be accepted by a financing institution), and an arbitration agreement. The purchase agreement incorporated the arbitration agreement. The arbitration agreement incorporated the installment contract. The installment contract (quite confusingly, in my opinion), however, did not incorporate the arbitration agreement or the purchase contract.

The consumer claimed that because the installment contract did NOT incorporate the arbitration agreement, arbitration did not apply to disputes involving the installment contract. Notwithstanding, the trial court compelled arbitration. The appellate court affirmed.

The general contract principle regarding construing contemporaneously executed documents together has been reiterated in many cases. See, e.g., Dodge City, 693 So. 2d at 1035; Phoenix Motor Co., 144 So. 3d at 696 (quoting Collins, 641 So. 2d at 459). “But if the parties execute ‘two separate contracts and only one contract contains an arbitration clause, the parties cannot be compelled to arbitrate disputes arising from the contract that does not call for arbitration.’ ” Phoenix Motor Co., 144 So. 3d at 696 (quoting Lee v. All Fla. Constr. Co., 662 So. 2d 365, 366 (Fla. 3d DCA 1995)). The exception is where the contract with the arbitration clause incorporates by reference the contract which does not contain an arbitration clause, such that the latter could be “interpreted as part of the [former] contract.” Id. at 697 (citing Affinity Internet, Inc. v. Consol. Credit Counseling Servs., Inc., 920 So. 2d 1286, 1288-89 (Fla. 4th DCA 2006)).

To incorporate by reference a collateral document, the incorporating document must (1) specifically provide “ ‘that it is subject to the incorporated [collateral] document’ ” and (2) the collateral document to be incorporated must be “ ‘sufficiently described or referred to in the incorporating agreement’ ” so that the intent of the parties may be ascertained. Kantner v. Boutin, 624 So. 2d 779, 781 (Fla. 4th DCA 1993) (quoting Hurwitz v. C.G.J. Corp., 168 So. 2d 84, 87 (Fla. 3d DCA 1964)). The [s]upreme [c]ourt set forth the second requirement for incorporation by reference in OBS Co. v. Pace Construction Corp., 558 So. 2d 404, 406 (Fla. 1990): “It is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing.”

Lowe, supra.

Here, there was no dispute regarding the contemporaneous execution of the contracts. The appellate court found that while the installment contract did not incorporate the arbitration provision, this contract was a condition precedent to the purchase agreement. Thus, once the installment contract was accepted by a financing institution, the purchase agreement with the arbitration provision became the operative contract without any conditions precedent. (The case actually has a more complicated legal analysis to affirm the trial court’s ruling that the parties should be compelled to arbitration).

In my opinion, this is nothing more than a basis to compel the parties to arbitrate when the installment contract that was sued upon did not contain an arbitration provision or incorporate the arbitration agreement or purchase agreement. All of this could have been avoided had specificity occurred in the installment contract or had the purchase agreement specifically incorporated the installment contract. But, if arbitration is a creature of contract, and the dealership prepared (which it did) the contracts it wanted the consumer to contemporaneously execute, compelling the parties to arbitrate based on what is perceived to be the “operative contract” seems to go against the grain that parties cannot be compelled to arbitrate disputes arising from a contract that does not contain an arbitration provision.

BE CAUTIOUS WHEN FILING YOUR LAWSUIT IF YOU REALLY WANT TO ARBITRATE

Posted on November 25, 2014November 8, 2024 by Edward Garber

If you really want to arbitrate your construction dispute pursuant to your contract, DO NOT file a lawsuit without at least contemporaneously moving to stay the lawsuit and compel arbitration. Otherwise your right to arbitration will be waived. The determination as to whether a party waived their right to arbitrate is a determination for the court (not the arbitrator) as demonstrated in the non-construction case of Cassedy, Jr. v. Hofmann, 39 Fla. L. Weekly D2450a (1^st DCA 2014).

In this case, the plaintiffs filed a lawsuit against their stockbroker that they voluntarily dismissed without prejudice years later. The plaintiffs then initiated arbitration with the Financial Industry Regulatory Authority. The defendant filed a lawsuit to prevent the arbitration from going forward arguing that the plaintiffs waived their right to arbitration by initiating the lawsuit that they subsequently dismissed. The First District Court of Appeals held the trial court must conclude whether a party waived their right to arbitrate by acting inconsistently with the right to arbitrate a dispute. The First District did not decide whether the right to arbitration had been waived; however, considering the plaintiffs filed the very lawsuit that they subsequently dismissed, it would appear that this right was waived or should be deemed waived. If the plaintiffs really wanted to arbitrate, they should not have first filed a lawsuit without preserving their right to arbitrate through a contemporaneous motion to stay the lawsuit and compel arbitration.