Glasswall, LLC v. Monadnock Construction, Inc. , 187 So. 3d 248 ( 2016 )

Third District Court of Appeal
State of Florida
Opinion filed January 27, 2016.
Not final until disposition of timely filed motion for rehearing.
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No. 3D15-1652
Consolidated: 3D15-1124
Lower Tribunal No. 15-6405
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Glasswall, LLC,
Appellant,
vs.
Monadnock Construction, Inc., et al.,
Appellees.
Appeals from non-final and final orders from the Circuit Court for Miami-
Dade County, John W. Thornton, Jr. and William Thomas, Judges.
Crabtree & Auslander, John G. Crabtree, Charles Auslander, George R.
Baise, Jr., and Brian C. Tackenberg, for appellant.
Duane Morris LLP, Alvin D. Lodish and Richard D. Shane, for appellees.
Before WELLS, ROTHENBERG and EMAS, JJ.
WELLS, Judge.
In this consolidated appeal1, Glasswall, LLC appeals from a non-final order
denying its motion for a temporary injunction to stay a New York arbitration and
from a non-final order granting the appellees’ motion to stay the underlying cases
in this matter pending conclusion of the New York arbitration. We have
jurisdiction. See Fla. R. App. P. 9.130(a)(3)(B), (a)(3)(C)(iv). Finding that the
construction contracts at issue sufficiently demonstrate the parties’ intent that an
arbitrator decide issues of arbitrability, we affirm.
Glasswall is the manufacturer of impact-resistant windows and door systems
used in high-rise commercial and residential buildings. Manadnock Construction,
Inc. is the general contractor for two high-rise apartment buildings being
constructed on the waterfront in Queens, New York. On January 3, 2013,
Monadnock and Glasswall entered into AIA-modified contracts2 pursuant to which
Glasswall agreed to manufacture window assemblies for the New York project in
return for $13 million. When a dispute arose over Glasswall’s ability to timely
deliver its product, Monadnock instituted an arbitration proceeding with the
American Arbitration Association (“AAA”) in New York, seeking various
1The parties to 3D15-1124 are Glasswall, LLC and Monadnock Contruction, Inc.
The parties to 3D15-1652 are Glasswall, Monadnock, HPS 50th Avenue
Associates, LLC, HPS Borden Avenue Associates, LLC, The Related Companies,
and Bruce Beal.
2 “AIA” stands for The American Institute of Architects. AIA contracts are
“commonly used in the construction industry.” Higley S. Inc. v. Park Shore Dev.
Co., 494 So. 2d 227, 228 (Fla. 2d DCA 1986).
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remedies and damages for Glasswall’s purported breaches of the parties’ contracts.
For their part, Glasswall, its owner Ugo Colombo, and Colombo’s wife, Sara Jayne
Kennedy, each filed suits in Miami-Dade County Circuit Court challenging the
propriety of the arbitration proceeding initiated by Monadnock in New York and
asserting claims against Monadnock and the other appellees, several of which are
the subject of this appeal (lower court case numbers 15-6405, 14-2090, and 14-
5447).3
The parties then filed competing motions, with Glasswall seeking a
temporary injunction to stay the New York arbitration and Monadnock seeking to
stay the instant circuit court cases pending the outcome of the New York
arbitration—the crux of the motions centering on whether the parties had agreed to
submit the issue of arbitrability to an arbitrator. Upon finding that the parties’
contracts evidenced a “clear and unmistakable” intent that an arbitrator decide
issues of arbitrability because the agreements explicitly incorporated the
Construction Industry Arbitration Rules of the AAA, the trial court entered
separate orders denying Glasswall’s motion for a temporary injunction and
granting Monadnock’s motion for a stay of the cases brought here pending
arbitration. Glasswall appealed both orders which this has court consolidated for
all purposes. For the following reasons we affirm.
3 Glasswall voluntarily dismissed lower court case number 15-6017.
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The subject construction contracts contain identical provisions wherein
Glasswall and Monadnock agreed that claims arising out of their agreements
would be subject to mediation followed by binding arbitration, both administered
by the AAA in accordance with its construction industry rules and procedures in
effect on the date of the agreements:
ARTICLE 6 MEDIATION AND BINDING DISPUTE
RESOLUTION
§ 6.1 MEDIATION
§ 6.1.1 Any claim arising out of or related to this Subcontract, except
claims as otherwise provided in Section 4.1.54 and except those
waived in this Subcontract, shall be subject to mediation as a
condition precedent to binding dispute resolution.
§ 6.1.2 The parties shall endeavor to resolve their claims by
mediation which, unless the parties mutually agree otherwise, shall be
administered by the American Arbitration Association in accordance
with its Construction Industry Mediation Procedures in effect on the
date of the Agreement. A request for mediation shall be made in
writing, delivered to the other party to this Subcontract and filed with
the person or entity administering the mediation. The request may be
made concurrently with the filing of binding dispute resolution
proceedings but, in such event, mediation shall proceed in advance of
binding dispute resolution proceedings, which shall be stayed pending
mediation for a period of 60 days from the date of filing, unless stayed
for a longer period by agreement of the parties or court order. If an
arbitration is stayed pursuant to this Section, the parties may
nonetheless proceed to the selection of the arbitrators(s) and agree
upon a schedule for later proceedings.
....
4 No argument is made that this exception is at issue in these consolidated appeals.
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§ 6.2 BINDING DISPUTE RESOLUTION
For any claim subject to, but not resolved by mediation pursuant to
Section 6.1, the method of binding dispute resolution shall be as
follows:
(Check the appropriate box. If the Contractor and . . . Manufacturer do
not select a method of binding dispute resolution below, or do not
subsequently agree in writing to a binding dispute resolution method
other than litigation, claims will be resolved by litigation in a court of
competent jurisdiction.)
[X] Arbitration pursuant to Section 6.3 of this Agreement
[ ] Litigation in a court of competent jurisdiction
[ ] Other (specify)
§ 6.3 ARBITRATION
§ 6.3.1 If the Contractor and . . . Manufacturer have selected
arbitration as the method of binding dispute resolution in Section 6.2,
any claim subject to, but not resolved by, mediation shall be subject to
arbitration which, unless the parties mutually agree otherwise, shall be
administered by the American Arbitration Association in accordance
with its Construction Industry Arbitration Rules in effect on the date
of the Agreement. . . .
The relevant Construction Industry Arbitration Rule of the AAA in effect at
the time of the parties’ agreements, which was incorporated by reference into the
subject construction contracts, provides that the arbitrator has the power to rule on
his or her own jurisdiction, including the arbitrability of a claim:
R-9 Jurisdiction
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(a) The arbitrator shall have the power to rule on his or her own
jurisdiction, including any objections with respect to the existence,
scope or validity of the arbitration agreement.
(b) The arbitrator shall have the power to determine the existence or
validity of a contract of which an arbitration clause forms a part. Such
an arbitration clause shall be treated as an agreement independent of
the other terms of the contract. A decision by the arbitrator that the
contract is null and void shall not for that reason alone render invalid
the arbitration clause.
(c) A party must object to the jurisdiction of the arbitrator or to the
arbitrability of a claim or counterclaim no later than the filing of the
answering statement to the claim or counterclaim that gives rise to the
objection. The arbitrator may rule on such objections as a preliminary
matter or as part of the final award.
While arbitrability is generally an issue for a trial court to decide, “courts are
required to enforce privately negotiated agreements to arbitrate.” Rintin Corp.,
S.A. v. Domar, Ltd., 766 So. 2d 407, 408-09 (Fla. 3d DCA 2000). In Rintin, this
court addressed a contract which like the one presently before us, did not include
specific language indicating that the issue of arbitrability of a dispute would be
submitted to an arbitral panel but did incorporate a reference to Florida’s
International Arbitration Act. There, we decided that such reference constituted
“clear and unmistakable” evidence that the parties intended that arbitrability be
determined by the arbitral panel:
. . . Rintin and Domar executed a shareholders’ agreement
containing an arbitration clause that read, in pertinent part, as follows:
Any controversy arising from the interpretation,
performance or termination of this agreement or its
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noncompliance that cannot be settled by the parties . . .
will be submitted to arbitration . . . according to the
provisions of Florida International Arbitration Act
(FIAA) and the rules of the American Arbitration
Association (AAA).
....
In the instant, case, although the parties did not include specific
language indicating that the issue of arbitrability of a dispute will be
submitted to an arbitral panel, they did include a specific reference to
the FIAA which contains such a provision. The inclusion of this
reference is “clear and unmistakable” evidence of the parties’ intent to
be governed by the FIAA and its provision requiring the submission
of the issue of arbitrability of a dispute to the arbitral panel.
Id. at 408, 409.
We find Rintin to be sufficiently analogous to this case to conclude that by
incorporating the Construction Industry Rules of the AAA which make the issue of
arbitrability subject to arbitration, there is “clear and unmistakable” evidence of
Glasswall’s and Monadnock’s intent to submit the issue of arbitrability to an
arbitrator.
In so holding, we note that the parties are in agreement that the majority of
federal courts considering similar circumstances where the AAA’s arbitration rules
have been incorporated by reference into a contract likewise have found that the
parties sufficiently evidenced their intent to have arbitrators, not a court, hear and
decide issues of arbitrability. See, e.g., Oracle Am., Inc. v. Myriad Group A.G.,
724 F.3d 1069, 1074 (9th Cir. 2013) (“Virtually every circuit to have considered
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the issue has determined that incorporation of the American Arbitration
Association’s (AAA) arbitration rules constitutes clear and unmistakable evidence
that the parties agreed to arbitrate arbitrability.”); Petrofac, Inc. v. DynMcDermott
Petroleum Operations Co., 687 F.3d 671, 675 (5th Cir. 2012) (“We agree with
most of our sister circuits that the express adoption of [AAA] rules presents clear
and unmistakable evidence that the parties agreed to arbitrate arbitrability.”);
Terminix Int’l Co., LP v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327, 1332 (11th
Cir. 2005) (“By incorporating the AAA rules . . . into their agreement, the parties
clearly and unmistakably agreed that the arbitrator should decide whether the
arbitration clause is valid.”). To this end, we decline Glasswall’s invitation to side
with those few courts which have found otherwise.5
Accordingly, we find the trial court properly denied Glasswall’s motion for a
temporary injunction and properly entered a stay of the multiple lower court
proceedings pending the New York arbitration.
Affirmed.
5In particular, we disregard the California state appellate decision in Ajamian v.
CantorCO2e, L.P., 137 Cal. Rptr. 3d 773 (Cal. Ct. App. 2012), upon which
Glasswall heavily relies, as that case arose in the wholly non-analogous context of
an un-negotiated employment agreement between an employer and its employee.
There, the court refused to enforce an arbitration provision incorporated into the
employment agreement finding it was “unconscionable” to do so because of the
“unequal bargaining power” of the parties. Id. at 793, 795-96. No argument has
been made here that Glasswall was not on equal footing with Monadnock when it
negotiated and executed the construction agreements at issue here.
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